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Almost as predictable as the coming of spring- the Obama Administration’s budget for fiscal year 2015 proposes additional user fees for business jets- observes Jack Olcott.

Jack Olcott   |   1st April 2014
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Jack Olcott Jack Olcott

Possibly the world’s most recognized advocate, if not expert on the value of Business Aviation,...
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Business Aviation’s Ongoing Need for Advocacy.
Almost as predictable as the coming of spring- the Obama Administration’s budget for fiscal year 2015 proposes additional user fees for business jets- observes Jack Olcott.

Directors of companies using- or considering using business aircraft are aware of the benefits that accrue from this form of air transportation: Less time required to reach a passenger’s ultimate destination- greater productivity while traveling- efficient access to more locations- ability to explore new markets. Business aircraft are truly “offices that move”. It is common knowledge among users that Business Aviation facilitates economic growth by bringing the ebb and flow of commerce to all parts of our nation.

What may not be common knowledge is the fee operators of business aircraft are taxed to gain access to the National Airspace System (NAS). All General Aviation aircraft powered by turbine engines (i.e.- jets and turboprops not flown by the Airlines or the Military) pay $0.219 for each gallon of fuel purchased. If the aircraft consumes aviation gasoline- the user fee is $0.194 per gallon. While the amount of fuel-taxes paid has increased since the inception of the Airport/Airways Trust Fund in 1971- General Aviation users have been contributors to the NAS for more than 40 years.

Furthermore- taxes are collected by the fuel-dispensing company at the time of purchase by the aircraft user- thereby eliminating the need for a separate government bureaucracy. In addition to being efficient- user fees based upon fuel consumption are understandable- easy to pay- directly proportional to use- and nearly impossible to avoid.

That simple system of user fees is being challenged once again by the Obama Administration in its proposed funding for the 2015 fiscal year. Similar to taxing schemes introduced in his last four budgets- the President has requested that all turbine-powered business aircraft pay a $100-perflight “surcharge” for access to the NAS. While there appears to be no appetite within Congress for imposing additional user fees on business aircraft- everyone involved with Business Aviation should communicate to friends and opinion leaders why additional user fees is a bad idea.

Marginal User
Business aircraft are marginal users of the National Airspace System- which was created to provide our nation with safe and efficient control of air traffic primarily for the Airlines and the Military and is administrated by the Federal Aviation Administration (FAA). Thus it is appropriate that about 56 percent of funds required to run the FAA are derived from fees imposed on airline passengers in the form of a ticket tax and segment charges.

(Note: Unlike the owners of business aircraft- owners of Scheduled Airlines do not pay ticket taxes and segment fees—their passengers do.) Operating the FAA cost about $15.6 Billion in FY14- of which approximately 80 percent was derived from users of the NAS- and 20 percent came from the nation’s general tax revenues.

Transportation is an enabling technology for economic development and enhanced quality of life. Air transportation- in particular- is a necessity for companies and entrepreneurs in our fast-paced economy. Whether or not they fly in airliners or business aircraft- all citizens benefit from our nation’s aviation infrastructure and the economic activity the NAS facilitates. Thus it is appropriate that some portion of NAS funding should come from general tax revenues- not from direct users of the airspace. (One might argue with justification that participation from the public- rather than airspace users- is inappropriately low.)

If every General Aviation aircraft- including all business aircraft- was grounded or ceased to exist- our nation would still require the NAS. Such is the importance of air transportation. While fewer controllers might be required during peak hours of activity if there were no business aircraft- minimal staffing levels for air traffic personnel would remain - as would most of the nation’s ATC facilities.

Business aircraft bring the ebb and flow of commerce to many areas of the country where the Airlines do not operate. Furthermore- the Airlines do not want to provide scheduled service were traffic loads are low. Business Aviation adds value to the NAS- a required element of our nation’s infrastructure.

Communicate The Facts
Associations representing Business Aviation do an excellent job lobbying Members of Congress on issues involving user fees. Their arguments against access fees such as proposed by the Obama Administration have been convincing- but past performance is no guarantee of future results. Business Aviation is not well understood by the average US citizen. Thus it is essential that those who do understand the value of business aircraft— users such as you- other Directors and the personnel within your companies—actively communicate to associates- opinion leaders and friends just how important Business Aviation is to our nation.

 

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