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Is FAA Funding On The Verge Of Historic Change?

Since the start of the year, the US House of Representatives and the Senate have been holding hearings analysing the work of the FAA in preparation for drafting the FAA reauthorisation bill – the piece of legislation which sets the regulator’s funding levels and policy priorities for years into the future. The bill must be completed before the current legislation expires on September 30 and speculation is rife over the changes it could bring about and their impact on the commercial aviation sector.

In the second volume of his Airport Policy Report (published last week), Stephen Van Beek – VP of Airport Advisory Services and a member of the FAA’s management advisory council – argued that the potentially dramatic reforms to the FAA’s financing could create substantial benefits for the industry, although on first viewing they may not be popular with airlines. He argues, for example, that a key step should be industry “self-funding” of FAA services, including air traffic management, airports and certification.

Van Beek concludes that the current “hodgepodge of fees and taxes” which pay for the majority of air traffic services in the US are dangerously out of date.

“The policies and funding architectures for aviation are relics of a different era – one created to the recent consolidation of the US airline industry, the terrorist attacks of September 11 and the increasing globalisation of the industry,” he writes.

“Changes in the industry mean these legacy policies now threaten our nation’s global leadership in aviation.”

He goes on to warn that the Airport and Airway Trust Fund (AATF) – which provides the vast majority of funding for airports and FAA programmes – does not provide a “steady and sustainable flow of revenue”.

Severe pressure at federal level is seeing spending on aviation restrained, he says, meanwhile the FAA is left to attempt to deal with growing operations with a capped budget.

If airlines were to pay for the air traffic services they used – rather than imposing taxes on tickets – this would encourage more efficient use of those services, as well as providing funding away from the AATF.

Similarly he argues in favour of OEMs and MROs paying the FAA directly to certify their products and repairs.

This will, according to Van Beek, also provide benefits in terms of “faster approvals and removing vulnerability to budget interruptions, which delay the introduction of valuable new aircraft, products and clearances.”

Food for thought indeed.

With a draft bill some time off, the debate over the best way to fund the FAA moving forward is sure to continue to heat up.

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