Business Sector Meets in Vegas

As the aviation services sector prepares to meet in Las Vegas for the annual Aviation Industry Expo and NATA convention, managing editor Jodi Richards looks at major issues facing the industry.

At the end of March, the general aviation community will come together in Las Vegas for Aviation Industry Expo, comprised of the AS3, the National Air Transportation Association (NATA) and Professional Aviation Maintenance Association (PAMA) annual conventions, and GSExpo. James Coyne, NATA president speaks with AIRPORT BUSINESS about the upcoming convention, the issues that the organization’s members are facing, and some of the speakers that will address those issues head on. Plus, an update on what to expect at AIE and a conversation with NATA’s Stephen Beaulieu on the recent fuel tax change.

In early February, the White House released its budget proposals for 2007, which were disappointing to Coyne. “They abolished funding for general aviation airport programs; they dramatically cut back on a lot of the funding for the staff that we need to insure that there’s the manpower at the FAA to do the job that they’ve got to do; and, of course, there’s the adminstration’s expected introduction of a user fee proposal sometime in the next month.”

NATA strongly opposes a user fee-based system. Coyne says the proposal will negatively impact general aviation by a drop in use as much as 20 to 30 percent. “Perhaps even more because they haven’t told us how big the fees are going to be.”

“If you believe Jim May, the president of ATA [Air Transport Association], his view is that it should cost the same for the government to handle, in terms of air traffic control, a one-passenger turboprop as it costs to handle a 500-passenger Airbus 380. And he feels that both planes should be charged the same amount.”

Coyne adds that user fees could very well drive the middle class out of private aviation, leaving only the “very, very wealthiest people — and even they will be discouraged just by the hassle factor of all this extra billing and costs.”

Of equal concern to NATA and Coyne is FAA cutting money to the improvement of the nation’s airports. “You can’t just cut back to zero support for general aviation airports and expect those billions of dollars of infrastructure to be properly up to date,” he says.

The annual convention will allow NATA to present these issues to its members and encourage them to contact their Congressional members to oppose the proposed budget.

Industry Challenges, Not All Bad News

Other top issues, according to Coyne, include ...

  • taxation of fuel use (see sidebar);

  • environmental issues, including the Spill Prevention Control and Countermeasure (SPCC) Rule;

  • safety at all times in aviation;

  • regulations that affect the charter industry — especially the “paperwork nightmare” for operators;

  • the flight training community suffering from TSA regulations, particularly for foreign students; and

  • maintenance challenges, in light of FAA scaling back manpower needed to approve maintenance work and STCs.

Coyne says there is good news, however. “The industry is probably more dyanamic now than I’ve ever seen it,” he says. With the introduction of new capital, new products like very light jets (VLJs) and the announcement of recent mergers and acquisitions, the industry is growing and becoming stronger. He estimates that 2005 was the biggest year ever in terms of new capital coming into the industry.

More and more, says Coyne, the public wants the benefits of personal aviation, and the industry is reacting to this change. “Public demand for what our businesses do has grown to unprecedented levels. And I think the only real worry that we all have is what government might do to us.”

NATA continues to encourage airports to lengthen the terms of leases so that airport tenants can borrow money effectively for capital improvements. Explains Coyne, “The whole thing is driven by the realities of the financial marketplace where, in order for us to borrow money to build something, we need a long-term lease.”

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