Taxing Situations

Business Jet Traveler » February 2012
Taxing Situations
The general aviation trade associations have statistics suggesting that rate of taxation fits nicely with the demand general aviation places on the system. The airlines tend to disagree, sometimes loudly.
Wednesday, February 1, 2012 - 9:00am

What if there were no airlines? It may sound crazy, but now-retired rogue aeronautical engineer Burt Rutan once speculated that, someday, people might look back and say, "For a short period in history, people traveled en masse in giant airplanes called 'airliners.' They only used a very few crowded runways, and traveling to and from the airports often took longer than the flight itself." In Rutan's version of the future, we would further develop the general aviation infrastructure such that people could fly on light airplanes to and from the thousands of small airports near their homes and destinations.

So what would an air-transportation system look like without big airlines? And could it be more cost effective?

The recent brouhaha over user fees is the latest spat in the ongoing sibling rivalry between airlines and business aviation. Airlines contribute to the FAA coffers through ticket taxes; general aviation chips in through a fuel tax. But every passenger in a business jet has to be viewed by the airlines as one more unsold business-class ticket–and that high-margin "fare-market value" (yes, it's a pun) represents the butter and jam on the bread of the airlines' ledger sheet.

So the airline trade groups lobby to promote the logic that anyone not subject to the ticket tax is not only clogging up the airways but also not paying a fair share. They maintain that each airplane exacts the same "cost" in air-traffic services and that general aviation gets off easy with the fuel tax as opposed to the airlines' per-passenger ticket tax.

Business aviation's tax amounts to about 21 cents per gallon of jet fuel. The general aviation trade associations have statistics suggesting that this rate of taxation fits nicely with the demand general aviation places on the system. The airlines tend to disagree, sometimes loudly.

So who's right? How different would our airport and air-traffic infrastructure be if airlines disappeared? Would it really cost less? And if so, how much less?

Approximately 45,000 to 50,000 flights per day in the U.S. use air-traffic-control services, according to Mark Duell, vice president of operations at flight-tracking company FlightAware.com. Roughly 60 percent of those flights–airliners plus cargo carriers such as UPS and FedEx–operate under Federal Aiation Regulations Part 125. The rest are private and charter flights (not including a smattering of military and municipal operations).

But it's the airliners that generate the vast majority of the FAA's work, because the flow of airline traffic differs greatly from that of general aviation. Airlines fly to the major airports, and their massive amounts of traffic must be sorted and funneled to and from those airports via specific routes. Much of the air-traffic-control computing power goes toward predicting and sorting that traffic flow. If those air-traffic bottlenecks didn't exist–if most flights fanned out to the smaller airports more convenient to the final destination–the air-traffic infrastructure would look a lot different.

There's no way to know just what it costs to funnel most of that airline traffic through the relatively few hub airports, then back out along the spokes of a structure that has evolved since Congress deregulated the airlines in 1978. Conversely, it would be difficult to speculate how much less it would cost if that requirement were to go away.

But practical–and affordable–navigation technology now exists for small aircraft to be able to use small airports in what used to be impossible weather, increasing their utility. Maybe we are a few steps closer to the day when "airliners" will be part of a bygone era, like ocean liners or wagon trains.

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