House Includes Aviation Spending in Stimulus Package

It is little wonder that aviation groups differed on their take of the

House stimulus package with Air Transport Association expressing disappointment

and the American Association of Airport Executives applauding the bill which was

$500 million short of the $4 billion industry request.

Very simply, the package included $3 billion for airports but not a dime

for NextGen equipage, a critical necessity in quickening the impact of NextGen

rather than waiting for FAA's deadline of 2025. In addition to the $3 billion,

the package included $500 million to install explosive detection systems in

airports.

"We are very disappointed that the House missed a real opportunity to

make the necessary investments in air and ground infrastructure to create jobs

and better serve our passengers," said ATA President and CEO James C. May. "This

critical investment not only would create new jobs, but also would promote clean

energy technology, enhance safety and security capabilities, improve operational

performance and reduce FAA operating costs to help stimulate our ailing economy.

We will continue to encourage Congress to make the investment in the

modernization of our nation's air traffic control system to jump start these

significantly important programs and their benefits."

The coalition cited benefits beyond job creation including reduced

emissions and environmental impacts, enhanced safety and security, reduced FAA

operating costs, an all-weather system for general aviation airports and reduced

flight delays.

Using the FAA methodology for calculating jobs created, it is estimated

that an infusion of $4 billion in funding for NextGen would generate 77,000

jobs, said the coalition. That funding would include:

* ADS-B ($2.2 billion);

* RNP Equipage ($500 million)

* FAA RNAV/RNP Procedure Development ($20 million);

* FAA LPV Procedures Development ($500 million);

* Electronic Display Upgrades (including EFBs), ($458 million)

* GBAS, ($370 million)

AAAE President Chip Barclay applauded efforts in Congress to expedite the

construction of critical airport safety, security, and capacity projects as part

of economic stimulus legislation, noting that federal funding and policy changes

affecting the tax treatment of airport bonds would greatly improve the nation's

air transportation system while creating numerous high-paying construction jobs.

"Airport executives are encouraged that Congress is on track to approve

economic stimulus legislation that provides billions of dollars in additional

funding to airports for key security, safety, and capacity projects," Barclay

said. "Direct federal funding along with the elimination of the negative tax

treatment of airport private activity bonds will ensure that construction begins

quickly on hundreds of thoroughly vetted, highly beneficial airport construction

projects across the country. The end result will be the creation of tens of

thousands of high-paying jobs and an enhanced air transportation system."

AAAE, with ATA, is part of a 12-member coalition of aviation

organizations pushing to include aviation projects in the stimulus package. Tax-

writers also have signaled their intention to include changes to the tax

treatment of airport private activity bonds aimed at freeing additional capital

at airports for construction.

In last month's letter to Congress the coalition joined to urge

additional initiatives beyond infrastructure spending citing the fact that the

industry "(which includes aircraft, engines and parts manufacturers, airlines,

airports, pilots, aircraft owners and the general aviation community) directly

and indirectly generates over 10 million jobs and $1.2 trillion in economic

activity annually." In addition, the group noted that in 2006 industry activity

represented approximately 5.6 percent of the U.S. Gross Domestic Product (GDP),

according to the Federal Aviation Administration. In addition, U.S. employees in

aviation-related fields paid taxes on about $369 billion in payroll. The

National Air Transportation Association estimated last month that $30 billion in

transportation infrastructure spending would create 800,000 jobs. Related Story

www.aviationtoday.com/ran/categories/commercial/28752.html

"Congress recently estimated the cost of air traffic control (ATC) system

delays economy-wide at over $40 billion," said the coalition. "Although $4

billion is only a fraction of the estimated total of $20 billion in required

equipage costs, it will provide a sufficient jump start to significantly

accelerate these programs and their benefits.

In the face of the industry's economic crisis, the industry seems to be

coming together to forget internecine battles about user fees, Regional Airline

Association Roger Cohen told Regional Aviation News.

"Airports across the country are prepared to move forward quickly with

billions of dollars in important airport construction projects if Congress and

the new administration can adopt proposals to free additional capital to

airports through the elimination of the AMT penalty on airport bonds and provide

additional federal funding," Barclay added. "We urge quick action on this

important legislation."

Next stop for the industry? The Senate.