As the debate continues to slowly boil over who will pay for the post of upgrading our nation’s aged aviation infrastructure, the FAA is drawing attention to how corporate jets pay disproportionately lower taxes compared to commercial jets.
This sexy graph, referenced by departing FAA Administrator Marion C. Blakey (her next job is as CEO of an aerospace lobbying group) in her July 12, 2007 testimony before the Senate Committee on Finance, on Financing the Next Generation Air Transportation System, shows how an airline’s b767 pays $3,600 in taxes, while a corporate Gulfrstream pays $300. Both cost the FAA the same amount.
To be fair, though, the B767 has the benefit of being able to levy taxes from all of its passengers, while the Gulfstream only has personal golden caviar spigots at each seat, and pillows stuffed with the hair of 30,000 Vestal Virgins.
Statement of Marion C. Blakey, Administrator [FAA via Washington Post]
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I love the irony of all the commenters saying “make corporate America pay! Make Daddy Warbucks pay!” when in fact this proposal is specifically designed as corporate welfare for the airlines.
What will happen if this proposal goes through is that general aviation in the U.S. will die. If you ever wanted to fly a Cessna somewhere, that opportunity will go away. If you wanted to become a GA pilot, forget it. This proposal will reduce your choice as a consumer, not increase it, and will kill an experience that for many is an important part of their lives.
If you want to do anything other than crowd into your coach seat like a good little sheep, if you want any kind of actual freedom to make choices for yourself rather than have large corporations do it for you, then you should fight this proposal. It’s the worst kind of corporate welfare, and will come at the expense not of Daddy Warbucks (who can afford any fee they throw at him) but at the expense of small plane pilots whose load on the system is miniscule.
STARRIONX,
I would like to expand on your observation about the airlines. If you were to look at the financial performance of Delta, United, AA, NW and SW what you will note is that SW outperformed all of them quarter per quarter.
Some will say SW is just smarter. That might be true but one of the ways that SW is smarter is that they don’t depend on the hub and spoke system like their 4 competitors do. The heck you say? Heck yes say I.
Look the hub and spokers bet on a time-efficiency study back in the 1970′s. They also calculated that they would have fewer facilities to update by doing so. So long as a plane had a seating capacity of 120 and was only at 75% occupancy hub and spoke had a chance. But when the plane now has 250 and is at 99% occupancy the system starts to collapse. The hub and spoke system also has a weak spot — backup. As the airlines started cutting flights and crews and moving to the jumbo planes any single burp in the airlines scheduling cascaded to failure or near failure. That is what we see happening nearly 3 out of 7 days of the week now.
And SW? Not dependent on hub and spoke they hopscotch across the country in 737′s using less occupied airports. They are only hindered when they have to enter into one of the hub cities to disgorge passengers. SW’s ability to have either the number 1,2, or 3 time of arrival rating quarter to quarter is almost wholly based on that fact. That translates into $$ to the bottom line.
/off soapbox
@jamesdenver: Hey, I’m not the one making that statement – I was just relaying the types of ads they’re playing, in an attempt to win public support.
Randalotto I know – sorry I was agreeing with you at the absurdity of it: Crowded stuffy airports running videos blaming blaming the miserable situation on GA pilots.
When I fly my dinky Cessna up to the middle of Wyoming or somewhere to go camping I don’t use Denver Int’l airport. I use a small field in the country, and while I utilize the same ATC controllers en route to keep me clear of other traffic (GA and commercial,) there is NO effect, absolutely NONE, on commercial traffic!
So yeah, saying GA pilots are somehow impeding your seat in 31A and keeping you at the gate or circling in the sky – well it’s just wrong.
Also I don’t fly that frequently on my own as I’ve been taking overseas trips as of late – but I can honestly say the General Aviation environment is F-ing awesome. It’s great to drive up to a small airport, check your plane out, go over weather with some coffee, and just go and see the country from a few thousand feet up. In small airports you can chat with other professional pilots and students – all sharing stories and info – and even the grizzled vets have “been there” and are happy to chat with newbies.
It’s a great feeling of accomplishment and pride, and it keeps your mind sharp and gives you good decision making skills. And I love the fact that ATC treats me with the same respect as a 747 in the same area.
I think it is a personal freedom, and I don’t want the cost to raise to where the average laymen, (like me, who worked part time jobs to GET my certificate) can’t afford it.
james…
@JohnMc: “LESS OCCUPIED AIRPORTS” Not really. Sure, PVD and DAL are small, but what about LAX or PHX or MCO or BWI among many more. But in the long run, what does it really matter because this very post here gives reality to the fact that Southwest is THE American airline.
Some people don’t know that GA is a concept dating back to the days when aviation in this country was supposed to develop into something the ‘anyman’ could do.
There were hundreds of small, GA airports with plenty of space for people to fly their small craft. Then the FAA and local municipalities began shutting them down, one by one. The industry was moving that way until the big airlines came along and actively destroyed the GA infrastructure.
Now we have terrible airlines, everybody is running late or canceling flights, and few people fly on their own anymore. Check out the documentary “One-Six-Right”. It explains it a lot better than I can.
GA planes use fewer resources and tend to avoid major airports altogether.
This is an attack on the ‘rich’, or at least the perceived rich.
@quantum-shaman: “What’s wrong with it?” Didn’t LAX’s entire computer system crash last week?
I’m not saying everybody has to upgrade to the latest and greatest. In fact, I’d rather they didn’t, considering the problems inherent in brand-new technology, but we could at least bring them up to the early 2000s.
@killavanilla: “This is an attack on the ‘rich’, or at least the perceived rich.”
There are way too many attacks on the rich, if you ask me. Unlike this post, most are unwarranted. This is stupidity of the richest sort. If you require $X of services from the government that are not part of every day life (police, fire, military protection, etc), you should have to pay for it. There is no social benefit to having corporate jets in the air and therefore we shouldn’t be subsidizing them (unlike the social benefit of, say, Yellowstone, which I am all for subsidizing).
@quantum-shaman: I don’t think you really know what you’re talking about; the main chokepoint for air traffic is on the ground because of antiquated airports with poor sightlines, lots of gates, and the lack of ground traffic management systems.
The second biggest chokepoint is in the sky, and yes, newer systems can help here, as well. Unfortunately, there is a finite amount of sky, but the airlines have seen fit to operate smaller jets more frequently to increase sales appeal and load factors rather than operating fewer flights on larger jets for more efficiency.
Everybody shares blame here, but the traffic problem is a real one, and newer ATC systems can help alleviate today’s crowded skies.
@notallcompaniesarebad: There are things that are pure joy that we should all have the opportunity to do. Having the chance to fly is one of them.
And not like today’s “sit down, shut up, and don’t even think about getting up to use the bathroom” flying.
Things can be made fairer under the next administration since we know it will be a Democratic adminstration.
@escargot:
Yes, I am saying you should have to pay the same as the 767. While there are some differences (i.e. need more space behind the 767 due to wake turbulance, etc.), basically, the fundamental unit of ATC is the airplane, and the service should be funded that way.
The car / bus analogy fails because there is not a time when you are guided in and have to use a space of road while no one else can use it. The point that many people seem to be missing is that it requires the same amount of effort to land a 767 as it takes to land a small, private jet. Maybe they should not pay the exact same fee to land as the the large plane can spread the costs out a bit more but then again, landing a plane with 6 passengers is a total waste of resources, especially at a busy airport. The goal should be to move people efficiently. As one poster noted about medflights, etc. There would have to be exceptions. I wonder what the stats are at some of the busier airports if you remove flights with less than 20 people? Would this not remove some of the pressure on the system? In all, the solution is not to charge the exact same fee but c’mon, to charge per seat is a complete waste of money from the view of the airtraffic control system.
@Buran:”There are things that are pure joy that we should all have the opportunity to do. Having the chance to fly is one of them.”
I’m not so sure about that. Nevertheless, I don’t think the real problem here is recreational flying (which probably doesn’t occur all that often in highly trafficked areas). The real problem is the increased burden small private aircraft place on our infrastructure in areas with high traffic. Lets model it after “congestion pricing.” If you are forcing the FAA to increase its costs, you should have to compensate them for that. A piper cub in the middle of Iowa likely *is* cheaper for the FAA than yet another G5 landing at Teterboro.
@notallcompaniesarebad:
Unfortunately, I disagree with you.
First of all, it DOES NOT cost the FAA the same to handle small corporate jets. It costs them far less.
Small craft don’t use major airports, where the majority of costs stem from.
But more importantly, you seem to be missing the point.
Large jets carry hundreds of passengers. Each passenger pays a small fee earmarked for FAA fees.
The same is true for corporate jets.
And there IS a social benefit – corporate jets carry executives in smaller, private planes. Because of this, there are seats available that wouldn’t be if the corporations bought big chunks. It would throw another wrench into the whole process. Flying 10 executives across the country and back would mean 10 less seats on your commercial flights. What’s more, the airlines would begin to raise prices as the demand for seats would go up. Less seats become available, airlines start blocking off seats for corporate execs, and prices rise.
Besides, the corporate jets allow execs to move quickly and without delay to where they need to go.
Thus enabling them to do business more efficiently.
Efficient business leads to more profit. More profit leads to more tax revenue and better yield on investments to investors.
So there is a real benefit, though you might choose not to accept it.
It’s like a tollway – large busses full of people pay more than small cars do. Should ALL vehicles pay the same amount for services? Should I pay $300 an oil change like Porsche owners do?
Should I pay the same tax on my $20,000 car as my dad does on his $70,000 car?
The argument is a bit silly and is most definitely aimed exclusively at the ‘perceived’ rich.
They aren’t JUST talking about corporate jets either, they are talking about every airplane. So Bob spends his money and time learning to fly a plane, and scratches together enough money for a loaded bass boat rig or a small, single engine plane. He chooses plane. Why should he have to pay the same to use resources as a plane with 180 people on it?
Consumerist, this is the one post I haven’t liked since reading. Shame on you. This presents only one heavily-biased side of this argument.
As an airline pilot I can tell you that this is a blatant attempt by airlines to gain control of the FAA and offload taxes in an unfair way. The solution to air congestion is not changing to a new tax system – satellites and more concrete will certainly help. But this proposal to create User Fees is pure corporate greed on the part of the airlines.
Yes – you and I as taxpayers, along with the airlines’ ticket tax pay for the FAA and our ATC system. We pay these taxes because it’s in everyone’s best interest for planes to not fall out of the sky, and to keep our ATC system… ie OUR SAFETY *OUT* of corporate control.
ASK ANYONE IN THE BUSINESS – If it is a decision between MONEY or SAFETY – MONEY ALWAYS WINS. So it’s in everyone’s best interest to keep ATC an INHERENTLY GOVERNMENTAL FUNCTION… this is how we’ve maintained the safest ATC system in the world. I personally don’t want my safety auctioned off to the lowest bidder, do you?
For anyone that thinks that this “new tax system” is the way to go – please tell me how you’d feel about paying a yearly fee to use any public roads, and were charged $5 every time you used a stop sign and obeying a speed limit sign.
@killavanilla:
“Should I pay the same tax on my $20,000 car as my dad does on his $70,000 car?”
No, but you’ll pay the same toll when you drive on a toll road, since you’re each contributing the same to congestion.
Even in the “bus vs. car” example you give, your example doesn’t support the argument. Buses do pay more for toll roads, mainly b/c they’re heavy and cause more damage. A bus with 60 people in it doesn’t pay 60x what a car with one person in it does, though. By the same token, a car with one person pays the same as a car with 4 people.
Again, the fundamental unit here is a plane, and the system (particularly landing charges) should be priced like that.
@flywithsteve:
I’d be very happy to pay a yearly fee to use public roads, but it should be appropriately priced. Vehicle license fees should be based on miles travelled, with a modest adjustment for weight of the vehicle (heavier cars cause more roadway damage, albeit have no congestion impact). Gas taxes get you part of the way, but they don’t solve congestion, since a Prius and a Hummer take up the same space on the roadway (or very very close).
ATC fees should be borne by those who use ATC services. Period.
@Justaguy2: Ok, but would you be ok with your road-usage and gas taxes being set arbitrarily by let’s say, trucking companies. That’s essentially what’s happening here to ATC.
And ATC fees are borne by those who use ATC services… we all do. Just like we all pay for highways and their safety. Without travel by roads or air, we wouldn’t have the economy we do.
@flywithsteve:
If those fees were set in a reasonable way, where the truckers pay a modest premium per mile to reflect the road damage they do, then yes, that would be fine.
At the end of the day, while satellites and more concrete will help, we’ll only start resolving some of the air traffic congestion problems we have if we align charges with impact. Why don’t we auction off landing slots at major airports to the highest bidder, and set the # of slots available to match the airport’s capacity. If someone thinks it’s worth outbidding a United 747 for a 7PM Thursday evening takeoff slot from JFK, go ahead.
@bk88: Commercial aircraft rarely use “GPS direct” routing. As stated before, most airliners don’t have GPS onboard, and those that do have much better systems (FMS) for navigation.
Just like the FAA, the ATA is out to remove its source of employees. Airline pilots don’t just pop up; they start out by learning to fly in smaller aircraft, building up to where they fly business jets while waiting for an airline job (or find biz jets to be better paying and don’t bother with the airlines), which the ATA now want to charge more. It already costs large sums of money to build up the flight time to get an ATP rating, without being taxed for learning to fly for the airlines. Of course, the ATA doesn’t quite seem to get this fact, and if their plan goes through, expect more Northwest Airlines-like delays in the future due to lack of pilots.
@N301DP:
FMS systems with dual DME updating and IRUs are being replaced with
FMS’s with GPS’s and IRU’s. The position updates and ability to fly
“direct” are the same on FMS’s with GPS installed or not, its called
Area Navigation.
And to finish the point, most airliners fly the “preferred routing” or
the shortest route between the end of the SID(DP) and the begining of
the STAR.
Due to limited runway space, airliners are put in line hundreds of
miles from their destination for the runway. You should really visit a
center or TRACON and ask to see the Traffic Management Unit. You will
learn a lot there about how they really fly.
–BK
(PS Have fun with your C172N in Nevada)
@bk88
. I’ve moved on quite far since then 
.
The 172 in question was my first solo airplane back in the day
My main point was that while most airlines do use preferred routing, it is almost never GPS direct. When I was in CRJ groundschool we very rarely used the GPS function on the FMS since most airline routings use intersections and SIDs/STARS.
I’ve since moved on to a position in GA where GPS direct is a feasible and desirable option, except on the East Coast.