Industry Blasts Feds on FAA Bill, Congestion Pricing

Industry was shocked as the Senate failed to pass a Federal Aviation Administration reauthorization bill last week, effectively killing chances for a bill this year, despite continuing efforts to bring it to a Senate vote again. Most chalked it up to an astonishing lack of leadership at a time when Congress...

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Industry was shocked as the Senate failed to pass a Federal Aviation Administration reauthorization bill last week, effectively killing chances for a bill this year, despite continuing efforts to bring it to a Senate vote again. Most chalked it up to an astonishing lack of leadership at a time when Congress has spent the last year huffing and puffing about delays while accomplishing absolutely nothing on the modernization that would yield massive fuel and environmental efficiency. The 49-42 vote in the Senate was far below the 60 needed to end debate.
Even so, rising fuel prices are expected to quash demand and lead to a massive reduction in delays owing to the economy. The bill failed as Democrats tried to insert transit and highway funding provisions into the aviation bill, something Republicans would not accept. Instead, industry can expect more inadequate continuing resolutions that do nothing to address what the industry sees as a capacity problem that will remain unresolved without modernization. Republicans also objected to Democratic efforts to prevent Republican amendments not favored by Senate Majority Leader Harry Reid (D-NV).
House legislation, passed last year, has been awaiting reconciliation with a Senate bill. In addition to non-aviation provisions, the bill was likely derailed over provisions to strengthen FAA oversight. Last year it was derailed over a disagreement on user fees, finally resolved just as the oversight scandal erupted.
Regional airlines and general aviation interests were relieved the proposed user fees were dropped. The Senate measure dropped a $25 flight fee that had been originally included by the Senate Committee on Commerce, Science and Transportation. The legislation, however, increased the tax on jet fuel from 21.9 cents per gallon to 36 cents per gallon. There is no tax increase on aviation gasoline. All other existing passenger ticket taxes, segment fees, and cargo waybill taxes would have remained intact.
They have since turned their attention to congestion pricing proposed by the Department of Transportation in its efforts to stem delays, saying it is simply another tax imposed on an already overtaxed user base. Operators have also expressed frustration in the fact that congestion pricing and the slot auctions also proposed by DOT, have no successful model on which to base the imposition of such schemes. Not only do they say that DOT does not have the authority to impose congestion pricing, but such actions mask what is really needed – leadership in Washington and the passage of a reauthorization bill so the FAA can get on with modernization.
The legislation also includes a repeal of the "fuel fraud" provision enacted as part of the 2005 surface transportation reauthorization bill that required aviation fuel retailers to purchase jet fuel from their distributors at the same rate as highway diesel fuel (24.4 cents per gallon), sell it at the aviation jet fuel tax rate (21.9 cents per gallon), and obtain a refund from the Internal Revenue Service (IRS) for the 2.5 cents per gallon difference. the National Air Transportation Association efforts to fight the fuel fraud provision had resulted in the elimination of this controversial tax procedure. The refund process has drawn extensive criticism from the general aviation community since its enactment due to the administrative burden placed on aviation fuel retailers in complying with the regulations.
"Obviously, we are very disappointed that the Senate was not able to approve their FAA reauthorization bill over the last week," Coyne stated. "We are hopeful that as the June 30th expiration looms the Senate will get this bill back on track and passed as quickly as possible."