EAS Fully Funded in House
Both the House Appropriations Committee and the Senate Transportation, Housing and Urban Development, and Related Agencies Appropriations Subcommittee have funded EAS at $110 million, according to Regional Airline Partners, which earlier reported that the House bill was initially funded at $109.4 million. The group added that, if enacted, $15 million would be added to the EAS pot for a total of $125 million for Fiscal 2008. The additional $15 million is authorized under the 2005 Deficit Reduction Act which contained language providing the EAS program with an additional $15 million in funding for FY07 and FY08 with the additional dollars made available from the government’s sale of signal spectrum. However, the Act also stipulated that in order for the program to receive the additional funds, Congress, in those years, must fund EAS at no less than $110 million.
“The importance of this additional funding cannot be overstated,” said RAP Executive Director Maurice Parker. “This will give the DOT the needed resources to implement the beneficial provisions of EAS which are currently law and those we hope to include during this year’s reauthorization process. Among those provisions are: subsidy adjustments to account for significant increases in jet fuel costs, the Marketing Incentive Program, and the Enhanced EAS Program.” A full report on hearings into the rural air service as well as what House and Senate bills set down for EAS will be in next week’s issue of Regional Aviation News.

Senators Stubborn on User Fees
While the House has already rejected user fees, senators to so entrenched on user fees, which would add $100 million to the cost of regional airline operations, they have threatened to restrict business and general aviation from congested airspace unless they embrace them. Senators John Rockefeller (D-W.Va) and Trent Lott (R-Miss.) took the lead during last week’s reauthorization hearing before Senate Finance Committee. The FAA calculated business/general aviation flights account for less than four percent of all operations at the nation's 10-busiest airports. Related Story  .
“Commercial airline passengers shouldn't continue to subsidize corporate jets," said aviation subcommittee Chairman John D. Rockefeller (D-W.Va.) during the hearing. "If we don't restore equity, then as chairman of this aviation subcommittee, I will address the equity issue by looking for ways to limit general aviation access to congested airspace." Business and general aviation constitute only four percent of traffic at such airports.
Lott indicated that unless user fees are accepted the bill could fail. “We're going to have a fair bill or no bill, and I'm prepared to go to the mat.” Meanwhile, some in Congress questioned dropping the 4.3 cent per gallon commercial fuel tax indicated it, too, would be needed for modernization.
Peter R. Orszag, director of the Congressional Budget Office, forecast seven percent annual growth in aviation tax revenues, which would yield $159 million over a decade. "We [the FAA] don't feel starved for funds," said FAA Administrator Marion Blakey in response to a question from Sen. Charles Schumer (D-N.Y.).
Blakey recounted what the FAA and airlines contend make the case for increasing costs for business aviation, despite the fact, it would also cripple regional airlines. She indicated FAA estimates show airlines now cover about 94 percent of industry's ATC costs through taxes and fees while using 73 percent of the system's assets. General aviation uses 16 percent of the system and pays three percent of the ATC cost. Business jets account for about two thirds of general aviation traffic.
“Under the current tax system, corporate jets contribute very little tax revenue despite often using virtually the same airspace and services as a commercial airliner,” she said. “For example, a typical commercial airliner flying from LaGuardia to Miami would pay approximately $2,015 in taxes. In contrast, a large private jet, flying the same distance, through the same airspace, using the same air traffic services, would pay roughly $236 in fuel taxes. This boils down to the passengers flying on commercial airlines subsidizing the flights of corporate executives and others who fly private jets, and a system that incentivizes incredible growth in general aviation traffic. On a system-wide basis, our cost allocation found that general aviation drives about 16 percent of the costs of the air traffic control system, while only paying about three percent of the taxes…And it’s important to note that in the Administration’s proposal, we only proposed that GA users pay 11 percent of the total tax burden, with 10 percent coming from turbine users and one percent from piston users. That’s a particular break for piston users, who would pay less than one-quarter of the air traffic costs allocated to them.”
However, those statistics fly in the face of generally accepted statistics, including those from the National Air Traffic Controllers Association, that show business jet hours have been fairly flat over the past few years while airlines have substantially increased flights. In addition, NBAA noted the last time FAA looked at this, its results showed that if general aviation were grounded, it would yield only a 7-9 percent increase in capafcity, for which it currently pays 8.6 percent.

Blakey also noted that commercial taxes are currently not cost-based. “The primary source of the commercial tax revenue comes from the 7.5 percent excise tax,” she said. “This results in different passengers on the same airplane paying different amounts into the Airport and Airway Trust Fund. The same flight on two different days would generate two different amounts of revenue depending on how many passengers are on the plane and what they paid for their tickets. In short, tying the aviation system’s revenue to the price of a ticket may have made some sense before airline deregulation, but it now has nothing to do with the cost to provide service and is an unfair way to fund the operation of our national airspace and the transformation to NextGen.”
GAO’s Gerald Dillingham testified again that the current funding mechanism will not only pay for modernization but ongoing FAA operations, adding increased revenues forecast for the trust fund would even cover increased FAA spending. Related Story
In disputing Dillingham’s testimony, Blakey added that while that may be possible, the existing system is “inflexible and will not enable the implementation of NextGen as quickly or as rationally as a cost-based funding structure,” she said. “For instance, some users have said that they would pay additional fees to achieve the efficiencies of NextGen sooner; under the current tax system, this type of flexibility is not possible…With cost-based financing, the factors that drive our costs — such as how many flights users make and how far they fly — would also drive our revenues.”
Rockefeller Press Secretary Steven Broderick argued that what is needed is a more reliable funding stream but did not comment on the fact that reliability depends on Congressional appropriations. For decades, Congress has shortchanged FAA funding preferring to harbor trust fund revenues against which the government frequently borrowed against to cover its growing debt, leaving millions in IOUs in the trust fund balance. He pointed out 90 percent of GA is exempt from the user fees and noted that if corporate operators could not afford a $25 user fee, compared to the thousands per hour the aircraft costs to operate, they better think about flying commercial. “We have to control who flies in and out of the airspace,” he said.
Broderick would only say that both Rockefeller and Lott were staunch defenders of small community air service, when asked for a response to the fact user fees could cripple regional airlines. He did, however, indicate that Airport Improvement Program grants would prioritize on smaller airports.

Passenger Rights
Both House and Senate reauthorization bills call for some form of passenger rights. The House bill calls on airlines to develop contingency plans for supplying food and water as well as restroom facilities in the event of protracted delays in addition to cabin air circulation and the provision of medical services. In addition, it calls for gate sharing so passengers can deplane. The senate version gives passengers the right to deplane after three hours. Alternatively, airlines can file their own plan for deplaning passengers during protracted delays.
The European Union already has such rights in place under legislation passed in 2005 under which airlines must pay passengers for both overbooking and lost baggage as well as delayed and canceled flights. The cash payment can vary depending on the distance of the flight. The EU also requires airlines to help passengers regardless of what caused the delay.