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A Busy Week for Business Aviation on Capitol Hill

September 17, 2012

NBAA Flight Plan interview with NBAA Member Martha King about user fees

On Capitol Hill last week, NBAA was in two places at once, as President and CEO Ed Bolen testified on NextGen implementation, while NBAA Member Martha King spoke out against the Obama administration’s plan to impose a $100 per-flight user fee.

President and CEO Ed Bolen testifying on NextGen implementationBolen spoke before the U.S. House Transportation and Infrastructure Committee’s Aviation Subcommittee on Sept. 12, while King testified before the House Committee on Small Business.

“What was so important for me to say was that a huge new federal bureaucracy to charge the user fee, build the user fee, collect the user fee and chase anyone who doesn’t pay it on time [would be] very detrimental to small business,” King said, explaining why she flew to the nation’s capital from her company’s headquarters in San Diego, CA, to testify.

King, who, along with her husband, John, founded the King Schools in 1974, employs 50 people. She told members of Congress that her company relies on its Dassault Falcon 10 to maintain and expand their business.

“A $100 per-flight tax on all turbine-powered aircraft would be devastating for thousands of small businesses like mine. I hope this important committee will put an end to this nonsensical proposal once and for all,” she testified.

After the hearing, King said it simply made no sense for the administration to contemplate creating a completely new governmental mechanism to administer an aviation user fee.

“The industry would much rather maintain the existing fuel tax,” she explained. “The economic friction is comparatively very small. The mechanism is already there.”

In contrast, she said, the notion of a user tax would not only create a new federal bureaucracy; the increased administrative burden on her end would increase her cost of doing business. King said that is a cost she would not be readily able to pass on to customers.

“Then we’d have to look around to see what we’d have to cut,” she said.

At the House Transportation Committee’s Aviation Subcommittee hearing, Calvin L. Scovel III, the Department of Transportation inspector general, told members that problems with the software in the En Route Automation Modernization program have put NextGen four years behind schedule and $330 million over budget, raising concerns among stakeholders within the aviation industry.

NBAA President and CEO Ed Bolen, who testified before the subcommittee, agreed with that assessment.

“The progress has been very, very slow to date,” Bolen said after delivering his testimony. “But I think that we are beginning to see some real momentum.”

Bolen attributed that progress to an increased focus by Federal Aviation Administration (FAA) leaders, and a larger voice on the part of the aviation industry itself in the process of NextGen implementation. But the NBAA leader was cognizant of the program’s cost to business aircraft operators.

“NBAA Members have supported NextGen, recognizing that when the system – either the airspace or the airports – gets too congested, we can be pushed out. So we want and need those benefits,” he said. “But, if the federal government is going to ask us to equip [for NextGen], it’s really important that we realize those benefits, that we can see enhanced capacity and better access for those Members.”

That realization cannot come all at once, Bolen warned. Business aircraft owners and operators will need time to absorb the cost of bringing NextGen systems online, something that is difficult to do in the present economic environment.

“Currently, budgetary uncertainties and the lack of a single, comprehensive timeline for achieving important implementation milestones leave users uncertain about what equipment will be needed, ultimately slowing adoption. The FAA has committed to bringing stakeholders together on the development of a future navigation plan, and components of that plan must include a ‘transition strategy’ rather than a light switch approach,” he said.