Delta Air Lines CEO Ed Bastian is echoing calls by United CEO Scott Kirby for
Air Traffic Control Needs An Upgrade, But It’s Airlines That Should Pay
Delta used to oppose state subsidies – for Boeing via the Export-Import Bank, when they were only Airbus, for Gulf airlines except the ones they partnered with. They’ve supported subsidies for Delta however.
And with taxpayer pockets wide open to U.S. airlines throughout the pandemic they’ve had even more of a change of heart. Bastian has even called whether they should be open to supporting government subsidies for Middle East carriers “an interesting question” now that they’re so fond of taxpayer cash themselves.
In 2021 Bastian made the argument that Delta was investable because of a Congressional put – that “governments will be there for us if ever needed again.”
But taxpayer subsidies aren’t the right way to handle funding needs of the FAA. It’s not surprising that airline CEOs don’t want user fees, they want more money to provide services for their flights but they do not want to be the ones to pay for it. They’d rather get government subsidies than pay the cost of upgrading air traffic control.
However a consistent and predictable revenue stream is precisely what the FAA needs to make technology upgrades, and there’s no reason why these should be paid by the non-flying public. Indeed, airline passengers skew higher income, why redistribute from the median taxpayer upwards when the benefits of a better air traffic control system are concentrated on those who can easily be asked to pay?
That would be fine if individuals and businesses did not have to pay taxes. That’s the only fair system where individuals and businesses only pay for the goods and services they want and consent to. As it stands now and until the country becomes like above, why should airlines and passengers have to pay for air traffic control when the government sends hundreds of billions to launder in Ukraine, spends 500 billion a year on federal and state funding for illegals and their kids, and has enough money to pay $20 million for gender studies in Pakistan or pay for ads encouraging lgbt in the military? The government already has more than enough to pay for air traffic control upgrades and staffing.
Gary – I assume you know if airlines pay fees they will simply raise fares and fees to pass that along. There is no free lunch. Similar to people that want to raise corporate taxes which get simply priced into products and services.
Not a fan of big government but there are certain things they should be responsible for (courts, prisons, national protection, infrastructure, etc) so to me this should fall on the government with the cost spread across all taxpayers that may utilize the services.
The question of funding source is always provocative and I respectfully disagree with Gary in this case. All heavily-used infrastructure should be funded by the collective, not the users. The non-flying public benefits tremendously from a functioning air transportation system, in the same way that the non-driving public still profits from a good road and highway system. I believe the national government should provide in full the infrastructure for the safe and efficient movement of planes and trains (airports, runways, navigation, tracks, and terminals).
As I mentioned the other day in a reply to the post on NOTAMs, privatizing the system–and once it starts it won’t stop–is a fast way to destroy the General Aviation industry. It will simply become unaffordable as more and more fees are invented and added. From trans-Atlantic to international to domestic instrument to domestic visual flights each phase of aviation shall receive increasing fees and their utility to the public (as well as jobs) are then lost. And all this shall bring in…what? A few days of the already obscene military budget? Granted that particular spending recycles through contractors who make “contributions” to politicians in an utterly corrupt system, but destroying a public good in the name of “fiscal responsibility” is beyond words.
You are so full of crap! The FAA is funded by user fees from the airlines and a gas tax from general aviation. The problem lies with Congress not properly funding the FAA but using these user fees & gas tax for “bridges to nowhere” instead of for what they were intended, upgrading and modernizing the entire FAA system. I recently spoke with a flight attendant with a foreign carrier. He wants to become a commercial pilot. However, the costs of learning to fly in the UK, EU and Canada are prohibitive. Besides the cost of the aircraft rental, flight instructor and “petrol”, he pays ￡20 PER ILS APPROACH, a fee for each landing at an airport, and fees for filing and executing an IFR or VFR flight plan. Privatizing the FAA will lead to the exact same problems one sees in Europe. drrichard is EXACTLY RIGHT….you think flying is expensive now…you ain’t seen nothing if the FAA goes private.
Tax payers should pay for FAA needs
Tax payers should never subsidize airlines that are owned by shareholders or privately owned
Again another example of bloggers who think they know it all because they ride in the back of an airplane. As Win said the FAA is already funded by user fees. Every aircraft pays a large fuel tax specifically for the FAA. Gary please do a little research before you write.
First, Airbus and Boeing are under the same regulations about being able to offer subsidies; the question is the target of the subsidies. Delta targeted the US ExIm bank because it reduced aircraft costs for Middle East airlines.
Second, everyone wants someone else to pay their bill. The higher one gets in the economic food chain, they typically are more able to wield the influence such that they can succeed and that is true for individuals as well as businesses. Greed is core to human nature.
Third, the FAA is treated far too much by Congress on an operating basis financially rather than on the basis of long-term funding which is why major improvements take forever.
Fourth, you, Gary, continue to write 500 word articles about major policy issues and, in the case of the FAA, continue to push a narrative that the FAA is broken. It isn’t. There are always opportunities to improve but it works well w/ what it has and does so more cost-effectively for more users and more reliably than any other governmental aviation organization in the world.
@Rob – You don’t understand what you’re talking about, a user fee is different than tax funding. And that’s not what the airline CEOs are advocating raising.
@Win Whitmire – “The problem lies with Congress not properly funding the FAA but using these user fees & gas tax for “bridges to nowhere” instead ”
This makes my point exactly. There are taxes on aviation activities. And there’s a decision about where to allocate tax revenue by Congress. There should be direct user fees that go to straight to the FAA for each flight and it should be set at a level that fully funds technology needs, and even allows them to borrow against those revenue streams for capital expenditure.
@drrichard – there’s no reason that privatizing the ATO has to ‘destroy general aviation’ though not in this post or that one did I talk about doing so. there are proposals that would destroy general aviation, e.g. putting the airlines in total control of the board of the ATO 🙂 but that’s another matter entirely.
Well said, Gary.