A report by the Department of Transportation (DOT) Inspector General (IG) on National Airspace System (NAS) usage concluded business jets are not fully paying for their proportional use of air traffic control services and contribute to air traffic congestion at the busiest towers, according to the Air Transport Association. However, the IG report also said that air carriers overwhelmingly dominate tower, en route and terminal area usage with business and general aviation coming in at up to a third of operations.
In addition, it criticized the current methodology of raising revenue through excise and fuel taxes as inefficient, suggesting instead that aircraft of similar operating characteristics, such as commercial and business jets and turboprops would be a better methodology and would recover more costs in line with usage.
“We found that air carriers and non-air carriers, including general aviation and business jet operators, all make sufficient use of the NAS so as to materially contribute to FAA’s costs and congestion in general,” said the IG report. “We also found alternative NAS user groupings that are more homogeneous in terms of their use of FAA services than the groupings reflected in the current aviation excise tax structure. Finally, we found that jet fuel consumption is a better proxy for the use of the NAS than the current aviation excise taxes, but it does not measure whether air traffic control services are used, nor does it distinguish between the types and complexities of services used.”
The report was commissioned by the House Committee on Transportation and Infrastructure to understand who uses the NAS as it considers how to finance the aviation system. Its specific objectives were to determine: how different groups use NAS elements, how that usage contributes to aviation congestion, whether NAS users can be grouped in a meaningful manner based on their usage of the system, and how good a proxy jet fuel is for use of FAA air traffic services. The IG also assessed the relationship between jet fuel consumption and use of FAA’s air traffic control services in several representative markets.
None of the groups examined – jet, turboprop, and piston/rotor air carrier, non-air carrier, and public use – were marginal users of FAA air traffic control services, said the IG, which noted that airlines claim that they are being unfairly required to pay more than their use of the NAS and FAA services would justify. The IG also noted that business aviation interests contend their system usage was marginal compared to airline usage and they do not contribute to aviation congestion because they avoid congested airports and airspace.
“Air carrier representatives argue that it is unfair for their passengers and themselves to subsidize these business jets,” the report said. “However, the National Business Aviation Association contends that only three percent of general aviation aircraft that are used for business purposes actually belong to Fortune 500 companies (i.e. are corporate jets) and business aircraft tend to avoid congested primary airports in favor of reliever or business airports. As a result, these stakeholders contend that the current scheme by which business aircraft are charged for air traffic services is both fair and appropriate. We did find support for the argument by representatives of business jet operators that business jets do not generally use large primary airports. However, business jets’ use of the NAS in total is not insignificant.
“We found that non-air carriers tend to avoid large primary metropolitan airports,” the IG report continued. “Overall, at the 26 large primary airports we examined, air carriers accounted for 93 percent of all operations. Operations by non-air carriers at these airports ranged from as little as one percent to as high as 20 percent. However, we also found that non-air carriers have significant operations at the most active towers in the country. More than half (53 percent) of non-air carrier operations occurred at the top third most active towered airports. Finally, 77 percent of all operations at the two-thirds of towers with the lowest activity were attributable to non-air carriers.
FAA does not track business jets as a separate NAS user group, however, the IG found:
• Business jets used by corporations, individuals, and air taxis and under fractional or shared ownership arrangements accounted for 12 percent of tower and 13 percent of terminal area control services in 2005, the year pegged for the IG survey. In comparative terms, non-air carrier jets use of tower and terminal area control services is about one-third of air carrier jets and turboprops.
• Business jets, while contributing to congestion at the busiest airports, do so to a far lesser degree than do air carrier operations. Air carriers accounted for the majority of activity and congestion at the 26 large primary metropolitan airports, with non-air carriers contributing, but to a far lesser degree. For example, non-air carriers accounted for 20 to 30 percent of the peak level of instrument approach operations at the New York TRACON.
• Air carrier jets were the largest users of terminal area control services in FY 2005, accounting for 38 percent of those services. Their usage was 31 percent greater than the next highest user, non-air carrier piston engine airplanes and rotorcraft, at 29 percent.
• Air carrier jets dominated the use of en route services in FY 2005, accounting for 75 percent of those services. Their usage was almost seven times that of the next largest user, non-air carrier jets, at 11 percent.
• Non-air carriers tend to avoid certain large primary metropolitan airports. Overall, at the 26 large primary airports we examined, air carriers accounted for 93 percent of all operations. Operations by non-air carriers at these airports ranged from as little as one percent to as high as 20 percent. However, it also found that non-air carriers have significant operations at the most active towers in the country (as determined by number of operations), many of which surround large primary airports.
• While 87 percent of air carrier operations were at the top third most active towers (162 airports), more than half (53 percent) of non-air carrier operations also occurred at these airports. Total activity at the top third most active towers was split almost evenly between air carrier and non-air carrier operations.
• Almost 68 percent of the revenue gained from the 10 aviation-related excise taxes, including taxes on airfares, fuel and cargo, came from the 7.5 percent ticket tax and the then $3.30 segment tax in calendar year (CY) 2006.
• Both commercial and general aviation operators contributed to congestion at the heavily used en route centers.
• Turboprop aircraft accounted for 13 percent of tower, 14 percent of terminal, and seven percent of en route services. Jet aircraft were the largest users of FAA services, accounting for 46 percent of tower, 55 percent of terminal, and 89 percent of en route services.

The report said there is a better way of charging for system usage, recommending that grouping users differently – by engine and operator types – might be a better method for determining contributions.
“For example, the current tax structure groups jets used for non-commercial purposes with general aviation, piston-engine airplanes, although they are taxed at different rates,” said the IG. “However, those jets are likely to have more in common (in terms of NAS usage) with commercial jets, which are taxed differently. Certain aircraft and operator types have distinct operating characteristics that could form the basis of more homogeneous groupings. Grouping users by aircraft or operator type would be more indicative of NAS usage than the distinctions inherent in the current excise tax structure.”
It concluded that a tax based on fuel consumption is a better barometer of NAS activity than the current excise taxes because it would recover costs from users more in proportion to their system activity than excise taxes. For example, examination of the Las Vegas to Los Angeles market found that commercial aircraft accounted for 90 percent of all aircraft activity but paid 99 percent of the excise taxes currently collected. This share would decline to 94 percent under a fuel-only tax.
“However, a fuel tax is not a perfect proxy for NAS activity since fuel consumption can vary in proportion to factors unrelated to that activity, such as aircraft weight,” said the report. “In addition, a tax based on fuel consumption neither measures whether ATC services are used nor distinguishes among the types and complexities of the services used. Similarly, the current ticket, segment, and freight waybill taxes do not vary according to the complexity or amount of ATC services consumed.
“Under the current system of aviation excise taxes, the same flight can be charged a significantly different amount depending upon the purpose for which the flight is made,” the report continued. “An aircraft flown by a scheduled air carrier will be charged the 7.5 percent ticket tax and the $3.30 (CY 2006) per-passenger, flight-segment fee. The same aircraft, privately owned, would likely impose similar costs on FAA, but would pay less than the scheduled airlines for those same services through the general aviation fuel tax.