House Transportation and Infrastructure Committee Hearing on FAA's Reauthorization Proposal
Good morning, Chairman Costello. It’s a pleasure to appear before you, Representative Petri, and the members of this subcommittee. I appreciate your focus on the FAA’s move toward financial reform. In my view, the future of our system and this bill are inextricably linked.
As plainly as I can say it, without the funding provided by the Next Generation Financing Reform Act of 2007, there will be no next generation system in time to prevent gridlock in the skies. Without the program flexibility, financial stability and beneficial budget treatment that this bill brings, our plan for the Next Generation Air Transportation System is likely to limp along, far behind the traffic.
The Act provides for financing through fuel taxes and user fees. Significantly, the user fees will be treated as offsetting collections that ensure that aviation revenues are used for aviation purposes. And, the Act allows for borrowing authority — an important tool in any financial toolbox.
Without a firm foundation of financial stability, the year-to-year uncertainties of budget and revenues will neutralize the impact of a long-term plan. Instead, NextGen will be the solution to a problem that we anticipated and studied, but failed to really address. A legacy of starts and stops, very much too little too late.
It’s my firm belief that our status quo financing structure cannot deliver the NextGen system we need, when and where we need it.
Remember, this is a system that uses the latest satellite-based technology to expand capacity, reduce delays, lower unit costs, provide major environmental benefits, and substantially improve safety.
Satellite technology has revolutionized everything from cars on the highway to GPS-embedded sneakers for toddlers. Isn’t it time aviation enters the future?
Make no mistake, NextGen is not pie-in-the-sky. We have a clear vision and a plan to execute it. Both were developed in partnership with stakeholders from across the spectrum of aviation, from pilots and airlines, to mechanics, to Wall Street and beyond. They agree. We agree. NextGen will get us where aviation needs to go, but we need to act quickly if we hope to avoid our aviation system resembling the L.A. freeway on a hot, Friday afternoon.
A cost-based system such as we advocate will be much more transparent and accountable — for the FAA, the passengers, its users. And, it will give Congress far more insight into our costs, helping you conduct more detailed oversight.
Yes, changing our financing structure is hard, but if we fail to create a direct link between FAA costs and revenues, if we just circle the runway waiting for the weather to clear, aviation users across the spectrum will suffer.
To put it mildly, the system is in trouble. While it’s the safest in the world, it’s grossly inefficient, and everyone who flies it knows it.
It’s built on a series of fixed waypoints from the days of flying the mail in the 20s and 30s. We’ve squeezed every ounce of capacity out of the current air traffic system. Even so, in the future, congestion will rule the day.
The undeniable fact is that we face a billion passengers by 2015, and an ever-increasing number of very light business jets. Traffic levels will double, perhaps in some areas, even triple, in the not-too-distant future.
I’m here today to say that the band-aid solutions of the past will not be enough. We can’t keep trying to scale up an air traffic control system based largely on technology from the 1960s.
We need to take bold action, and with the taxes and user fees expiring in September, we have to get this right the first time. The next six months are pivotal. If we let this once-in-a-lifetime opportunity pass, we’ll begin to watch world leadership in aviation slip through America’s grasp.
The challenges that I just described aren’t limited to our airspace. The problems of crowded skies and airports are worldwide.
Europe is already moving ahead with SESAR, their version of NextGen. And they have the funding to do it. My assessment? The rest of the world already knows how critical this is. They are asking for our help and our leadership, but they aren’t waiting around for the United States. We may have been the birthplace of aviation, but success at Kitty Hawk isn’t enough to keep us out front now.
Someone else’s technologies and standards will pave the way if we don’t.
While the rest of the world has their action plan in high gear, we risk getting bogged down in a debate over who’s going to pick up the tab. Truth be told, right now, the passenger in the middle seat is footing the lion’s share of the bill for operating the system. The folks back home buying airline tickets are paying 95 percent of the cost but imposing only 73 percent of the requirements.
Imagine a restaurant that required you to pick up the tab for the people sitting at the next table. It’s not as farfetched as it sounds. It happens in our skies every day.
A seat on a commercial jetliner is the most heavily taxed spot in all of aviation. General aviation represents 16 percent of the cost to operate the system, yet it currently pays only 3 percent. Everyday passengers shouldn’t have to pick up the tab for a CEO flying across the country in a private jet.
This year presents a rare chance to leave an important legacy for our children. But to successfully develop that NextGen system, we need a revenue stream that’s tied to the actual cost of our operations. We need a revenue stream that’s reliable and equitable, where all users pay their fair share. The hybrid financing system we put on the table last month is balanced, is fair, and it delivers on all these counts.
We can indeed alter the future of aviation by creating a NextGen system that keeps America Number One. If we fail to act on NextGen Financing Reform, we’ll be headed overseas to ask the world leaders in aviation to help us catch up.