Airline Ticket Tax Could Vanish

The Bush administration and the Federal Aviation Administration (FAA) will unveil a plan Wednesday to pay for a new air traffic control system by eliminating the passenger ticket tax while raising other costs for fliers such as a higher tax on fuel.

The announcement is likely to set off a debate among airlines, who support the plan, and private and corporate jet owners who will -- under the proposal -- pay more to fly in national air space.

Although FAA Administrator Marion Blakey hasn't said exactly how much a modernized control system will cost, he did say a new digital system which utilizes satellites should replace a WW II era radio and radar based one.

Blakey also said the 7.5 percent passenger ticket tax currently paying for air traffic control won't raise enough money to replace the aging system because of the growth of low cost airlines and because the average plane has gotten smaller -- it costs just as much to track a small airplane as it does a jumbo jet.

Thus, the FAA is asking congress to charge fees that reflect the actual cost of flying such as raising the passenger facility charges tax (an existing tax which pays for airport improvements) and more than tripling fuel tax for corporate and private aircraft.

The Air Transport Association, an airline lobbyist, says that airlines pay for 93.7 percent of the air traffic control system, but use only 68.1 percent of it while military, corporate and recreational aircraft use the remaining 31.9 percent.

On the other hand, National Business Aviation Association president Ed Bolen says it's the hub-and-spoke system created by large airlines that puts a heavy load on the air traffic control system. He calls the proposal a "toxic mix of higher taxes, new fees and airline control." And added, "It would give them [airlines] a massive tax cut, to be paid for largely by a 'general aviation' industry that serves many of the nation's small and mid-sized businesses and their communities."

"We've got a system in the U.S. that's the largest, safest, most efficient in the world," Bolen said. "It's been funded through user taxes for 40 years, it's worked. We don't need to set up a new bureaucracy."

-Dippold

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