After several years of policymaking that created uncertainty and harm to airports and aviation, 2015 could turn out to be an historic year for airports and aviation. As we count down the legislative days to the September 30 expiration of the Federal Aviation Administration (FAA) authorization, a growing consensus of policymakers and aviation stakeholders are calling for fundamental reform of the FAA’s funding, governance and policy frameworks.
To those who have not followed recent developments in our nation’s capital, this consensus may be surprising given the budgetary and policy dysfunction of 2011-2013. The effects of the dysfunction were widespread on aviation, including government shutdowns, furloughs of air traffic controllers, closure of the FAA Academy that trains controllers, decisions to forego maintaining navigation aids at many of our nation’s airports, reductions of funds held in trust for airport capital projects, delays in aircraft and part certifications, and many others. This series of events exposed for all to see how uniquely vulnerable our National Airspace System (NAS) is to political failure and disruption of FAA operations. Addressing that vulnerability has become a major priority for aviation stakeholders, including airports.
Background to Reform
The realization that FAA operational performance and capital investments tie directly with budgetary politics has helped to fuel a determination to better sort out the regulatory and quasi-commercial activities the federal government provides to the NAS. Fortunately, in contrast to previous years, policymakers passed a full-year appropriation that runs up to the September 30, 2015 expiration of the current FAA authorization. This gives the industry a window of opportunity to fix the problems. Given how busy the transportation authorizing committees will be this year, some extension of the FAA authorization is likely.
If successful, FAA reform holds the promise of eliminating the frequent operational disruptions of the NAS as well as the “on-again, off-again” capital investments in air traffic control modernization (referred to as NextGen). Reform also could support the industry through the creation of more pro-competitive, business-like, and efficient policies. In recent years, many observers have bemoaned the lack of U.S. leadership on aviation; 2015 presents an opportunity to address that.
The opening salvo for reform occurred early in 2014, when the FAA’s Management Advisory Council (MAC)—a representative group of aviation stakeholders and key government representatives (including three professionals active in the airport industry)—issued its unanimous report to FAA Administrator Michael Huerta. In the report, MAC members reviewed the three previous years’ events and analyzed future trends to make a compelling case that the current aviation funding, governing and policy frameworks were unsustainable and required reform. The MAC offered four principles to help guide consideration of reform (a copy of the full report is available here).
1. CREATE A SUSTAINABLE FINANCIAL FUTURE FOR THE FAA: Provide dedicated and sufficient user-based revenues to pay for existing FAA obligations. MAC members believed that general fund (or taxpayer) support for the aviation industry should be phased out as soon as possible in order to insulate the agency and the provision of
user services from the kind of politics that led to NAS disruptions.
2. SEPARATE A NEW COMMERCIALIZED AIR TRAFFIC ORGANIZATION (ATO) FROM THE FAA: Remove the service-oriented ATO from the FAA and appoint a board consisting of customers (or users) and aviation stakeholders to oversee its work. MAC members strongly believe that air traffic reform needs to be accompanied by overall aviation policy reform due to the tight links between policy and funding decisions.
3. ASSESS AND CODIFY FAA AUTHORITIES AND PROGRAMS: Simplify statutes, regulations and policy by reviewing existing rules and procedures and eliminating redundant regulatory oversight. MAC members believe that this process will result in significant savings to the FAA and will obviate the need for a near-term increase in user fees or taxes after the phase-out of general fund support.
4. REFORM THE TAX STRUCTURE: Eliminate the current mix of Airport and Airway Trust Fund taxes and fees and replace it with transparent schedules of cost-based fees that provide sufficient funding for services such as air traffic control and aircraft certification. MAC members believe that new schedules should be (1) “revenue neutral” and (2) flexible in their administration in order to gain the confidence of stakeholders and facilitate the transition to a new system.
If reform were to track these principles, it would be the most significant since at least 1990 (the passage of the Airport Noise & Capacity Act) and probably since the Airline Deregulation Act of 1978 became law. Encouraging signs for reform have come from two Washington policymakers who would help lead and support the effort and share the desire for a wide-ranging consideration of alternatives by the industry and government.
