User Fees Have Potential for Changing Regional Cost Dynamics

If the Government Accountability Office is right, the FAA’s user fee proposal will likely raise regional costs since smaller aircraft are said to exacerbate the mismatch between FAA workload and revenues. Government Accountability Office's Gerald Dillingham testified last year that costs for FAA are largely driven by workload but users are not directly charged for the costs they impose. He indicated that three 48-seat regional jet flights between LAX and San Francisco would generate three times the cost of handling a single, 132-seat, narrow-body aircraft between the two points. "Revenues from the three regional jet flights total only about $37, or three percent, more than the revenue generated by the one narrow-body jet flight," he said. This is compounded by other factors, such as similar commercial flights contributing different amounts of revenue as well as the fairness of distributing the funding burden between commercial and GA operators.
"A 767 flight contributes nearly twice as much as the 737 flight," he said. "A private Learjet flight contributes approximately $40, while the commercial flights of a 767 and a 737 contribute $1,742 and $877, respectively. Commercial aviation representatives favor assigning those costs among all system users in proportion to their use of the system. GA representatives state that the system exists at its present size to serve the needs of the commercial aviation industry, and GA should be assigned only the incremental costs that would not exist apart from the need to serve GA."
Dillingham also pointed out that current funding encourages inefficient use of the airspace. "There is little financial incentive [$37] for the airline to avoid imposing additional costs on FAA by using one flight instead of three flights," he said. "For users to make efficient decisions about their use of the NAS, their price for using the system should accurately reflect the costs their use imposes on the system. Users who pay more in taxes than the costs they impose may use the system less than is optimal, while those who pay less than the costs they impose may use the system more than is optimal."