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NBAA’s Busy Year Advocating for Industry: 2012 in Review

December 10, 2012

As 2012 draws to a close, the Dec. 10 edition of the NBAA Flight Plan podcast looks back on some of the top policy issues that have confronted the business aviation community over the past 12 months, in this first of three year-end installments of the podcast.

Listen to the NBAA Flight Plan podcast review of the industry’s 2012 policy priorities.

Opposing User Fees

It was an issue thought long-dead, yet it turned out to become one of the most hotly debated topics in aviation during 2012: the renewed battle over per-flight user fees.

“It’s frustrating,” said NBAA President and CEO Ed Bolen in early January. “You just want the whole (user-fee issue) to go away, to put a silver stake through its heart. It just won’t die.”

The aviation industry continued to oppose the Obama administration’s proposal for a $100 per-flight user fee during much of 2012. In a display of unity, general aviation (GA) and airline organizations together put the White House on notice that the notion of an aviation user fee just wouldn’t fly.

Each of the 27 members of the Aviation Industry Coalition urged its members to contact members of Congress to oppose the measure. That effort was amplified by lawmakers themselves in February, when four members of the U.S. House of Representatives urged their colleagues to sign a letter of protest to the White House.

“During these challenging economic times, the industry should not be saddled with more than $1 billion in new costs each year,” they wrote to other members of the House. "This fee would have a devastating impact on commercial and general aviation, as well as the aviation manufacturing industry.”

Martha KingThe battle over user fees continued throughout the summer. In September, NBAA invited aviation educator Martha King to testify 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, chase anyone who doesn’t pay it on time  [would be] very detrimental to small business,” King said. King, who, along with her husband, John, founded the King Schools in 1974, employs 50 people. She told members of Congress her company relies on its Dassault Falcon 10 to maintain and expand 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.

At year’s end, the notion of a user fee on large and turbine-driven aircraft remained on the table.

Review Martha King’s hearing testimony.

Mobilizing Against the EU-ETS

As the European Union moved forward with implementation of its Emissions Trading Scheme (EU-ETS) on air travel to, from and within its collective borders, NBAA and other organizations, both in the U.S. and abroad, battled the unilateral taxation of greenhouse gas emissions on a wide range of fronts during 2012.

In the meantime, NBAA Members whose operations take them to Europe were forced to grapple with a series of official forms and trading regulations that taxed not only their bank accounts but their patience and company resources as well.

“Operators are wading into a completely new and foreign process of opening a carbon registry account,” said Adam Hartley, a regulatory services team supervisor at Universal Weather and Aviation, considered an expert on EU-ETS. Speaking in February, he noted the mounting frustration among U.S. operators faced with creating internal processes to deal with creating and maintaining their carbon registry accounts.

John Benjamin, who flies for a major U.S. corporation, said his company was struggling to decide how to operate the program and who would actually administer it internally.

“It’s a turf war that nobody wants to win,” he said. “It took us a month and a half of meetings just to establish who internally will own this account.”

As that struggle continued in flight departments across the country, so did the struggle on Capitol Hill to contain or even stop EU-ETS. At year’s end, an EU-ETS prohibition measure passed both houses of Congress was signed into law by President Obama.

“On a bipartisan, bicameral basis, the United States Congress has sent a strong message to the EU, opposing the imposition of the ETS on civil aircraft,” said NBAA’s Vice President for Legislative Affairs Lisa Piccione in November. “By taxing emissions on flights outside of the European Union, there’s an extra-territorial reach.”

She pointed to that as the reason most lawmakers in the U.S. and in other countries had become insistent that regulation of aviation carbon emissions be governed on a global, rather than regional, basis.

“Members of Congress simply believe this is a job, not for the EU, but for ICAO,” she said. Final passage of the measure now allows the Secretary of Transportation to consider prohibiting U.S. operators from participating in the EU ETS after holding public hearings.

Passage of the Congressional EU-ETS prohibition came at the same time the EU’s Commissioner for Climate Change, Connie Hedegaard announced a freeze on requirements for non-EU flight operators to comply with EU-ETS.

In a memo describing her decision to “stop the clock,” Hedegaard explained it was in large part because the United Nations civil aviation arm, the International Civil Aviation Organization (ICAO), had taken steps to begin addressing the topic of climate change. She specifically cited progress made at ICAO’s Nov. 9 summit, but warned that, if there is no progress from ICAO on creating an international market-based program to reduce greenhouse gas emissions, the EU would resume its own unilateral operations.

Where does that leave NBAA Members?

“It doesn’t say EU-ETS is going away for the next 12 months,” explained Hartley. “All it says is that they will remove the international leg” from the EU-ETS program. In other words, he said, flights from Los Angeles to London would, for the next year, be exempt from EU ETS. However, London-Paris legs would not be exempt.

Review NBAA’s EU-ETS Resources.

Working to Extend Accelerated Depreciation

As the year drew to a close, NBAA went on record urging lawmakers in Washington, DC, to continue stimulating capital expenditures among businesses, big and small, by extending their ability to speed up depreciation schedules for a wide variety of major capital investments. That process, known as accelerated, or “bonus” depreciation, is set to expire at the end of this year.

“While it is too late to impact investments made in 2012,” NBAA and the other organizations wrote in a Dec. 5 letter to leaders in both houses of Congress, “it is imperative that we continue the 50% percent bonus depreciation…for 2013 and beyond. This will provide some certainty to U.S. businesses to allow them to continue to make capital investments, which in turn will create more jobs and help ward off a possible recession in 2013.”

Learn more about NBAA’s support for accelerated aircraft depreciation.