April 1, 2016

I had the opportunity last week to attend the U.S. Chamber’s annual Aviation Summit. “Aviation” in the title is really a misnomer. Despite the fact the Chamber has member companies with corporate flight departments, and even a wide array of other aviation businesses, make no mistake about it — this was an airline conference. The summit’s lack of balance was startling; this was a vehicle for airlines to get their message out and other viewpoints need not apply. Comfortable in what was clearly an enabling setting, airline executives felt empowered to say what they really think.

The leaders of the so-called low cost carriers were in lockstep about the dangers posed by four airlines with 80-percent domestic market share. Through their dialogue, they invited us to peak behind the curtain for a look at the impact of global joint ventures, noting for example three mega-alliances controlling 87 percent of the transatlantic market. They called upon the Department of Transportation to revisit these anti-trust waivers and immunized joint ventures…..and in the next breath they called upon Congress to adopt the Shuster proposal to create an airline dominated air traffic control corporation.

This is a demonstration of the old political adage, “where you are is where you sit.” Market concentration, it appears, is dangerous….unless of course you are part of it. This inability to either see or understand other perspectives is disappointing from people who are seemingly aware of the dangers created by market concentration. Even if we all saw creating an air traffic control corporation as a good idea, which we don’t, why would aviation businesses willingly sign up for a proposal that leaves their future costs to be determined by airlines?

However, the low cost carriers were just the warmup act, next came the airline association and a representative CEO from the big carriers. These speeches were carefully orchestrated and honed to two messages. First, congressional policymakers who offer pro-consumer proposals related to airline seats or pricing of various airline fees are intent on nothing less than re-regulating the airline industry. The airlines’ view of consumer legislation was best summarized by the head of their trade association who told the crowd, “Members of Congress, with all due respect, if you want to run an airline, buy some planes, hire some employees and sell some tickets.” Well, to paraphrase Ricky Bobby, he did say, “with all due respect.”

The wrath of these airline leaders was especially reserved for those who dare oppose their plan to create an air traffic control corporation. Those in opposition to the corporation are nothing more than “entrenched interests fighting to maintain their advantage.” Their response to the bipartisan work of Senate Commerce Committee Chairman John Thune and Ranking Member Bill Nelson that did not include a proposal to corporatize air traffic control, “The Senate took the easy way out.”

Worse are the half-statements that come along with addresses of these sort. For example, we were told airlines believe in a user fee-funded corporation so much they are willing to write their own checks to the corporation for the air traffic services they use. How altruistic. Except of course the real cost will be borne by the customer and the corporation proposal neatly removes accountability for those costs from a consumer’s direct scrutiny — let alone the costs the airlines will attempt to shift to general aviation. Other whoppers rehashed in front of a largely adoring crowd included the suggestion that air traffic controllers are using 1950’s technology, or that 60 countries currently operating corporatized systems are in some way more efficient or safer than ours.

Airlines also tried to dispel the notion they don’t want to run the corporation by noting the composition of the air traffic control board was changed late in the House committee process with the addition of two more seats for general aviation, bringing GA to the same number of seats as the airlines. While no doubt equal in number, it’s arguable those seats are not equal in weight. The corporation CEO, who also holds a board vote, will undoubtedly feel the pressure of the four votes that represent the overwhelming amount of corporation funding. In addition, this is not a proposal that is yet set in stone.   Neatly forgotten by these airline leaders during the conference, their complaint to Congress that the original proposal already lacked a sufficient number of airline stakeholders, particularly given the representation from general aviation — stakeholders that in their view pay next to nothing. We should not expect the airlines to give up on their attempts to “perfect” the board’s composition.

I report all this to remind you that despite some press reports, the airline industry is not giving up. Between now and July 15th (when the current FAA reauthorization again expires) we must be vigilant and engaged with our elected lawmakers if we are to withstand the imposition of the airline worldview on consumers and general aviation.

By Bill Deere, Senior Vice President for Government and External Affairs

NATA 75: An Industry Voice Is More Important Than Ever

December 28, 2015


As we launch into our anniversary year, reading the excellent history of the association written by Paul Seidenman and David J. Spanovich (page 18) underscores just how important it is for aviation businesses to have a voice to represent them in the public policy arena. As the article demonstrates, NATA’s birth was directly linked to the future of civil aviation, when the association’s founders had the vision to join together and intervene at a critical juncture, not letting the military in effect—take over—American aviation. In fact, the article is replete with examples, large and small, of how the association’s intervention made a difference in supporting aviation businesses’ contin­ued growth in this vital, and uniquely American, part of our economy.

It is easy to understand the advantages of membership when viewed from a purely business perspective. Many NATA members, for example, take advantage of the association’s industry leading workers’ compensa­tion insurance program or perhaps its Safety 1st training. However, the need for a public policy presence is not something that is always readily apparent nor easily quantified.

Perhaps because of our history, NATA members see that need. In our recent membership survey, advocacy was rated as one of the most important aspects of membership. It is also borne out by the fact that when the call for help goes out to aviation businesses, NATA members respond.

Looking ahead to 2016 we, like our founders, continue to see challenges and opportunities for aviation busi­nesses. On our immediate horizon is the upcoming FAA reauthorization bill. While events in 2015, the leadership crisis that resulted in a new Speaker of the House, Paul Ryan, and the difficul­ties of financing a multi-year surface transportation bill, slowed down the FAA bill in Congress—make no mis­take about it—the airlines still want the keys to the air traffic control system.

In early December, Airlines for America (the trade group representing the major carriers) and the CEOs of the nation’s six major airlines were in Washington, D.C., talking to lawmak­ers about their desire to create an independent, user-fee funded air traffic control organization. Don’t think they are serious? When the world’s largest airline, Delta, announced it was leav­ing the trade group in a disagreement over this and other policies the airlines are pursuing, the remaining members waived the association’s required de­parture notice allowing Delta to leave immediately.

The idea of privatizing air traffic control has been one pursued by others as well, some frustrated by the pace of modernization, others concerned the congressional budget process has bro­ken down to the point where funding for the agency may no longer be able to keep up with the future needs of the system.

While NATA agrees the FAA could certainly stand the injection of more private sector practices, we view the unknowns associated with corporati­zation as simply too great to risk. Can such a proposal be safely implemented in a system many times larger and far more complex than any other in the world? Will its implementation set back the cause of modernization rather than enhance it? And what happens to general aviation, a uniquely American user not really a large factor elsewhere in the world? Will new costs and fees in effect deny your businesses and cus­tomers access to airports and airways necessary to your operating a viable business?

While a huge concern, I don’t want to leave you with the impression this is the sole issue confronting avia­tion businesses. We are still working to unwind a 2012 IRS opinion that concluded that aircraft management fees are “transportation” and therefore management service providers should be assessing the 7.5 percent commer­cial ticket tax on amounts paid for those services. We are also working as part of a broad national coalition to bring certainty to investment policy by making permanent bonus depreciation and Section 179 expensing. Finally, the NATA regulatory team is working across a myriad of issues, before the FAA, the TSA, and Customs, among others, looking to bring common-sense and your real world perspective to the issues under consideration by the exec­utive branch.

Our issues are not always defen­sive. Our committee members were instrumental in developing a positive agenda for the FAA reauthorization bill. In fact one agenda item, requiring the investigative arm of Congress, the Government Accountability Office, to conduct a study of diversions of non-commercial jet fuel tax revenues to the Highway Trust Fund, was just incorporated into the recently enacted surface transportation bill. We are also particularly proud of the ongoing effort by NATA and AAAE members to identify and address the issues that divide and can unite airports and their tenants.

So as Tom Hendricks says, our future is bright and getting brighter by the day. As we move into what could be a watershed year in aviation, stay involved, and stay engaged. In the end, you are aviation businesses best advocates!

By Bill Deere, Senior Vice President for Government and External Affairs

Speaker Boehner’s Parting Gift

November 2, 2015

No one could have predicted the circumstances under which Congress and the Administration were able to bring about last week’s long-term budget agreements.

The resignation announcement by House Speaker John Boehner immediately cleared the way for a bill funding the government through December 11th.  It also allowed the outgoing Speaker to “clean up the barn” and resolve potentially debilitating issues for incoming Speaker Paul D. Ryan.  In a move worthy of the climactic scene in The Godfather, outgoing Speaker Boehner settled political scores by successfully negotiating a two-year adjustment to federal discretionary spending levels and raising the nation’s debt ceiling through March, 2017.

This is good news for aviation.  As NATA’s President Tom Hendricks observed earlier in the week, the legislation addresses two threats to our industry – the ramifications of defaulting on our nation’s debts and a potential shutdown of the Federal Aviation Administration. Let’s look at the numbers behind the agreement and talk about what happens next.

The Deal

The Bipartisan Budget Act of 2015 amends the discretionary spending caps (the 30% of federal spending directly appropriated by Congress on an annual basis) for fiscal years 2016 and 2017 as seen below:

Discretionary Spending Caps (in billions)
Old Cap FY16 Revised FY16 Old Cap FY17 Revised FY17
Defense $523 $548 $536 $551
Non-defense $493 $518 $503 $518
Total $1,016 $1,066 $1,039 $1,069

One interesting question is whether all parties involved will consider this a two-year spending deal.  After all, the agreement includes virtually no increase in spending between FY2016 and FY2017.  However, veteran appropriators have observed the 2013 Ryan-Murray deal had a similar tight spending level in year two and all parties involved lived within it.As you see, these levels represent increases of $50 billion and $30 billion respectively over the FY16 and FY17 spending levels established in 2011.  Recall that in his February budget request, President Obama proposed a $75 billion discretionary spending increase above the FY2016 caps.

Next Steps

So the chances of a government shutdown have been dramatically reduced but we are not completely out of the woods yet.

Remember, the current continuing resolution (CR) temporarily funds the government by continuing funding levels from the prior year, but it expires on December 11th.  The increases in overall discretionary spending provided in the agreement will allow congressional appropriators the budget ceiling needed to complete work on the FY2016 federal budget –including funding for the FAA.  However one issue still remains, will policy riders, typically in the form of prohibitions against certain types of spending, derail concluding work on the FY2016 budget?

Reports indicate that work on the spending bills has already begun and will likely result in the dreaded “omnibus” appropriation bill where the twelve separate spending bills will be rolled into one mega spending bill.

By Bill Deere, Senior Vice President for Government and External Affairs

A government shutdown? This week is just the warm-up.

September 28, 2015

The new fiscal year begins this Thursday, October 1st, and only the resignation of House Speaker John Boehner effective the end of October may head off a shutdown.  As we again approach the precipice of another government shutdown it’s reasonable to ask, how did we get here?  Readers of my occasional blogs on the budget process know that we were always in for a rough ride this year, as the President’s budget proposal sought $75 billion more in discretionary spending than is allowed under the Budget Control Act (chart below):

Discretionary Spending Caps (in billions)
Enacted FY15 Current Law FY16 President FY 16
Defense $521 $523 $561
Non-defense $492 $493 $530
Total $1,013 $1,016 $1,091

Layered on top of an already difficult situation were press reports about the activities of Planned Parenthood.  These reports have had a galvanizing effect with some elements within Congress prepared to shut down the government rather than see the organization continue to receive federal funding.

This is no small matter for the aviation business community.  The 16-day shutdown in 2013 had huge practical implications for both aviation businesses and general aviation as a whole, including the shuttering of the FAA’s Aircraft Registry, FSDOs and a myriad of other elements of the FAA upon which the industry depends to safely operate.

It’s all about the votes.  Even if the House passes a funding bill that prohibits federal funding for Planned Parenthood, a vote in the Senate last week confirmed there are not enough votes for it in the Senate.  But let’s say it passed the Senate, it would still be vetoed by the President — and there are not enough votes in either chamber to override the President’s veto.  Outgoing Speaker Boehner noted yesterday: “We’ve got groups here in town, mem­bers of the House and Sen­ate here in town who whip people in­to a frenzy think­ing they can ac­com­plish things that they know—they know—can nev­er hap­pen.”

In the short term it appears we will escape a shut-down but it’s potentially just the warm-up for the main event in December.  Last week’s vote in the Senate, that demonstrated there is insufficient support for a prohibition on federal funding of Planned Parenthood, was the first step in a process that could lead to a Continuing Resolution, or CR, as we call it here in political Disneyland, through December 11th.  However, a CR only temporarily funds the government by continuing funding levels from the prior year.

In mid-December we will again have all the challenges outlined above plus a new one.  Just before Labor Day the Congressional Budget Office lobbed another bombshell in Congress’ lap, the nation’s debt ceiling will need to be raised before the end of the year.  As you can imagine, that’s a vote detested by lawmakers, and one that is often the magnet for those seeking dramatic policy prescriptions as the price of their support.

Of course, chaos always draws opportunists and it’s not just on the spending side.  Some will use the current budget situation as justification for the corporatization of air traffic control.  Only in Washington will a failure by our elected officials to perform their basic duties lead some to propose to radically alter the world’s largest, most complex and safest system.  Why stop at the FAA?  If the budget process is unalterably broken, perhaps we should privatize other aspects of government operation.  Rather than asking our elected leaders to do their jobs, let’s also privatize national defense.

For general aviation nothing good comes from privatization, unless you consider rising costs and denial of access to airways and airports good.  Realize though that even if air traffic control were to be separated from the FAA’s safety function, the agency operations upon which general aviation and aviation manufacturers depend will still be at risk during future budget showdowns.

By Bill Deere, Senior Vice President for Government and External Affairs

The Importance of FAA Reauthorizations

May 8, 2015

The 2013 sequester and government shutdown has sparked a discussion in Congress about whether to separate air traffic control from FAA’s safety function and run it as a quasi-government corporation.  This breakdown in the appropriations process was created by an impasse between the Congress and President about the level of overall government spending.  A similar impasse may emerge in the debate about FY2016 spending.  An air traffic control corporation, were it to be created, would most likely be contained in the upcoming FAA reauthorization legislation that is currently under development in both houses of Congress.  Let’s take a look at the difference between authorization and appropriations bills.  Both are important to aviation businesses but each type of bill performs a different function.

Appropriators will proudly tell you that their function is enshrined in the Constitution itself; “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law (Article I, Section 9).”  Authorizations (and by extension reauthorizations) are a creation of House and Senate rules.  In the two-step congressional process for spending money, an agency or program must first be authorized in order to be eligible to receive an appropriation. According to the Congressional Research Service, “Authorization acts establish, continue, or modify agencies or programs.”[1]  Legislative committees are responsible for developing authorization legislation and the House Transportation and Infrastructure and Senate Commerce Committees are responsible for legislation that authorizes the functions and programs of the FAA.

The duration of an authorization can be for a fixed amount of time or open-ended.  Similarly, an authorization can be for a fixed amount of money or provide for “such sums as may be necessary.”  Securing an authorization does not guarantee the agency or program the full amount of the authorization.  The decision about how much money a program or agency will actually receive is within the purview of the House and Senate Appropriations Committee.  As we saw, the process for funding the FAA in FY2016 began last week with approval by the House Transportation Appropriations Subcommittee of the Transportation, Housing and Urban Development and Related Agencies Appropriations bill for FY2016.   A frequently asked question is whether there are unauthorized appropriations.  The answer is yes.  In fact, a January report from the Congressional Budget Office noted that in the current fiscal year about $294 billion was appropriated for programs and activities whose authorizations have expired.[2]

The FAA’s last reauthorization bill, the “FAA Modernization and Reform Act of 2012” (PL 112-95), authorized spending for the FAA’s major accounts and programs including NextGen for FY2012 through the end of FY2015.  Of particular interest to aviation business, the 2012 FAA reauthorization also contained a number of provisions aimed at accelerating the implementation of new technologies by improving the certification process and streamlining regulatory interpretation across the eight FAA regions, 10 aircraft certification offices, and 80 flight standards district offices.

The current authorization of FAA programs expires on September 30, 2015 and theoretically a lapse in authorization renders a program ineligible for appropriations.  Practically, that rarely happens as Congress will typically waive the authorization requirement and continue to fund the agency.  Recall that between 2007 and 2012 there were 23 short-term extensions of the FAA, a period when enacting a long-term reauthorization was seemingly bedeviled by various labor and airport competition issues.  Protracted lapses in authorization reduce congressional oversight and shift the governmental balance away from the legislative branch more firmly toward the executive branch.

This year’s FAA reauthorization bill poses both risk and opportunity for the general aviation community.  As we discussed in the opening, the 2013 government shutdown and sequestration have started a discussion about the future organization structure and funding of the FAA.  On this issue, NATA has told policymakers (link to ATC reform testimony) that while we should all support the injection of more private sector practices into the FAA, it is important how we manage any changes to the agency in order to maintain a stable, safe and efficient system that protects access for all users of our system.  The upcoming reauthorization presents lawmakers with an opportunity to make even clearer that the 24/7 operation of the air traffic control system is – like our defense – a national priority that should not be held hostage to political debates.

As we saw in 2012, the upcoming FAA reauthorization bill also represents an opportunity for NATA to intervene on behalf of our members in other policy matters.  In preparation for such conversations, our regulatory team consulted with members through our policy committees to help us identify aviation business issues to be raised with policy makers.  Because of your help, we are also emphasizing how Congress can utilize the upcoming legislation to assist industry efforts to improve regulatory consistency at the agency, use its existing resources in a manner that benefits aviation businesses, improve safety, and provide a better investment climate.

Hearings on the development of the FAA reauthorization bill are well underway in Congress. By the time you arrive in Washington, D.C. in June for the 2015 Aviation Business Conference, the debate may be entering a critical phase and the opportunity to share your views with key policymakers will be critical to the future of aviation businesses.

[1] “The Congressional Appropriations Process: An Introduction,” Sandy Streeter, CRS. Page 24

[2] “Unauthorized Appropriations and Expiring Authorizations,” Congressional Budget Office. January 15, 2015

By Bill Deere, Senior Vice President for Government and External Affairs

Visit or return to NATA website:

House Subcommittee Approves FAA Funding Bill

April 29, 2015

This morning the House Transportation/HUD Appropriations Subcommittee marked-up the 2016 Transportation, Housing and Urban Development funding bill that contains next year’s FAA funding.  The challenges we identified earlier in the year to funding discretionary spending programs (including the FAA) are beginning to manifest themselves.  First, the FAA numbers:

FY2015 Admin Proposal House
Ops $9.74b $9.915b $9.87b
F&E $2.6b $2.855b $2.5b
RE&D $157m $166m $156.75m
AIP $3.35b $2.9b* $3.35b
Total $15.847 $15.836 $15.876

*Proposal assumes an increase in the Passenger Facility Charge (PFC) from $4.50 to $8.00 and focus of remaining funds on smaller commercial and GA airports.


  • Contract towers $154.4m
  • Continues prohibition against unauthorized user fees

The proposed legislation provides the FAA an additional $40m above the President’s request.  However, the legislation denies the request to increase the PFC, thereby causing other FAA accounts to absorb a cut in order to level fund airport infrastructure funding.

Now remember, what was approved today is an appropriation bill and therefore subject to change if the FAA reauthorization bill, under development by a different committee, the House Transportation and Infrastructure Committee, makes policy changes that impact spending.  In unveiling the legislation today, House Appropriators acknowledged that fact noting that changes contained in an FAA reauthorization bill could change the numbers approved by the subcommittee today.

In January, I outlined (below) how the Budget Control Act (BCA) allows for a less than one percent increase in overall discretionary spending for next year, to approximately $1.017 trillion.  Last week, the Chairman of the House Appropriations Committee, Representative Hal Rogers (R-KY) unveiled a set of allocations for development of the twelve annual appropriations bills that total $1.017 trillion, not the $1.091 trillion proposed by President Obama.

Chairman Rogers’ initial allocations include a $1.5 billion increase over current levels for the Transportation, Housing and Urban Development, and Related Agencies appropriations bill.  While that appears sufficient to addressing the Administration’s proposed increases for FAA operations, F&E and RE&D, the Committee noted that reduced offsets in Federal Housing Administration receipts create an actual increase of only $25 million above the current level. The proposed legislation also includes controversial policy riders related to trucking and travel to Cuba.  The Administration opposes spending at the Budget Control Act levels and President Obama has already indicated he will veto spending bills that increase only defense spending above the BCA caps.

It’s unlikely the budget impasse will lead to a government shutdown though operating under short-term continuing resolutions are possible.  As a result, discussions are beginning about the possibility of increasing the discretionary spending caps, similar to the Ryan-Murray deal struck in 2013 that has produced two years of relative budget peace.

By Bill Deere, Senior Vice President for Government and External Affairs

Visit or return to NATA website:

The FAA Budget Request For FY2016

February 5, 2015

On Monday, the Administration submitted to Congress a $4 trillion budget proposal for FY2016 that includes $15.84 billion for the FAA. In context with the President’s other discretionary spending proposals, the increases in funding for FAA operations, modernization and research will be difficult to sustain through the budget process unless Congress and the President reach a new agreement on overall discretionary spending levels.

FY2016 FAA Budget Request

FY2015        Proposed FY2016 (% change from FY15)

Ops                 $9.74b          $9.915b (+2%)

F&E                $2.6b             $2.855b (+10%)

RE&D             $157m          $166m (+6%)

AIP                  $3.35b          $2.9b (-13%)*

Total               $15.847        $15.836

*Proposal assumes increase in the Passenger Facility Charge (PFC) from $4.50 to $8.00 and focusing remaining funds on smaller commercial and GA airports.


Operations – $9.915b (+2%)

  • 85 additional FTEs requested for additional flight standards safety inspectors and aircraft certification engineers.

Facilities & Equipment – $2.86b (+10%)

  • $845m for NextGen capital investments.

RE&D – $166m (+6%)

  • Maintains $6m in funding for alternative GA fuels.
  • Largest proposed increases are in the Flightdeck/Maintenance/System Integration Human Factors program ($3.9m) and weather program ($3.4m).

Airport Improvement Program – $2.9b (-13%)

  • While an overall reduction, the Administration believes that limiting the use of AIP to smaller commercial service and GA airports would represent an increase in available funds in those categories.
  • The GAO estimates increasing the Passenger Facility Charge from $4.50 to $8.00 will generate approximately $2.4b in additional funding to the larger airports.

User Fees

  • The Administration has finally dropped a proposal to derive part of its budget from a $100 per flight surcharge on general aviation flights.


Trends in FAA spending

Because of the proposed shift in AIP spending, it is not a straightforward exercise to assess the proposed FAA budget increase in the context of other domestic discretionary spending proposals. However, the proposed increases for operations, F&E and RE&D are 3.5% above current levels. This is in contrast to the Administration’s total proposed domestic discretionary funding increase of 7%.

While the additional proposed spending for FY2016 in F&E and RE&D are welcome, it does not appear those increases will be sustained in the long-term. The Administration’s out-year projections of FAA funding average approximately 2% growth through 2025 (see charts below). AIP would be sustained at the $2.9b level until FY2020 when it is projected to rise to $3.35b per year through FY2025. The proposed 10% increase in F&E funding for FY2016 actually increases out-year funding for modernization by $200m annually above the levels the agency reported to Congress just last summer in its capital development proposal.



Budget Outlook

So now we know. Last week in our scene setter we discussed the FAA budget proposal for FY2016 in context of its place within overall discretionary spending. We noted that discretionary spending is an increasingly smaller part of the federal budget and capped in statute by the Budget Control Act to allow for a less than one percent increase in spending next year. We also noted that in response to this situation the President has three choices:

  1. Submit a budget proposal adhering to the caps;
  2. Ignore the caps, propose spending increases and let Congress agree or make cuts to his proposals;
  3. Propose new user fees and taxes to offset any proposed spending increases.

The President’s budget proposal essentially uses elements of choices #2 &#3. His overall discretionary spending numbers are 7% above the caps and the overall proposed budget would still deficit spend by $474 billion.

Discretionary Spending Caps (in billions)
Enacted FY15 Current Law FY16 President FY 16
Defense $521 $523 $561
Non-defense $492 $493 $530
Total $1,013 $1,016 $1,091

The ball is now in Congress’ court. It can live within the discretionary caps, which limit overall funding increases to less than one percent, and develop appropriations bills that are essentially flat. This would be difficult for many agencies to absorb. For example, given increased annual costs in categories such as FAA operations, a flat budget will essentially represent a cut to other parts of the FAA budget.

However, the President’s offer of increased defense discretionary spending may be intriguing to many congressional Republicans and could serve as the basis for a compromise similar to the Ryan-Murray agreement in 2013 when the discretionary caps were adjusted using various budgetary slight-of-hands to offset the increased funding.

By Bill Deere, Senior Vice President for Government and External Affairs

Visit or return to NATA website: