Service Companies Meet in Vegas

Aviation Industry Expo in Las Vegas saw a record 5,700 attendees.

LAS VEGAS — This year’s Aviation Industry Expo saw a record 5,700 attendees for the AS3/GSE Expo and the combined conferences of the National Air Transportation Association and the Professional Aviation Maintenance Association. Among the hottest topics for aviation businesses here: future funding of the U.S. aviation system; the soon-to-be-in-service Airbus 380; and, a pre-conference FBO/Airport Symposium.

Heading up the discussions among delegates was the funding of the U.S. aviation system, now under consideration in Washington. On hand as keynote was James May, president of the Air Transport Association, who is leading a call for a new user fee system under which business aviation would pay significantly more than at present.

May told attendees that in light of funding cuts throughout the aviation system, the ATA “supports and prefers” alternative funding systems, specifically a user-fee based system for air traffic control. “The real issue,” says May, “is equity and overall sharing of the tax burden for use of the system.”

According to May, airlines used 70 percent of ATC services in 2004, but paid 94 percent of the cost of the service. General aviation, which May separates from business aviation, used some 4 percent of the ATC services and paid 2 percent of the cost. He says general aviation (piston aircraft) should continue to pay for the system through the fuel tax as general aviation typically doesn’t use the services of ATC. May adds that business aviation’s 15 percent share of the ATC services is equal to that of United Airlines and American Airlines combined, but that business aviation’s share of those costs is “much less.”

NATA president James Coyne countered May’s remarks by calling the ATC an “absolute monopoly,” from which many of its flaws stem. “If we’re going to modernize the ATC, we need to be in a competitive environment,” says Coyne. He adds that it’s not fair for business aviation and general aviation to fund a system that was created for the airlines.

May says the ATA’s perspective on use of the air traffic control system is “a blip is a blip” — each aircraft should pay the same amount for use of the system regardless of the number of passengers. Coyne says that logic is as “ridiculous as airlines saying a butt in a seat is a butt in a seat.”

Ed Bolen, president of the National Business Aviation Association was also on hand. He says, like May, there is a lot the associations agree on, such as growing the general fund and allowing general aviation to pay for use through the fuel tax. However, that’s not where ATA is going to spend its political capital, warns Bolen. ATA’s “political capital is going to be spent on the user fee battle.” Bolen adds, “Is a blip a blip or do you look at the incremental cost on the system? That’s the fight, and it’s a $2 billion fight.”

Airports and FBO's

Prior to the start of Aviation Industry Expo, a one-day FBO/Air-port Symposium was held for managers of airports and airport-based businesses. It was co-hosted by NATA and the American Association of Airport Executives. Among the topics: new money in the FBO business; EPA regulations; the FAA Part 16 complaint process; and, tenant/landlord relationships.

The past decade has seen a dramatic influx of money from private equity firms that have bought, consolidated, and at times rebranded traditional aviation firms. Many questions remain about the long-term impact this trend will have. How will it change the current business at a particular airport? Will new investment come as a result? Is this a different level of lease negotiation? There are others.

Comments NATA president James Coyne, “I think we have just begun to see this play out.” Saying he’s bullish about the trend, Coyne says it brings three things to airports: capital, people, and brand.

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