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Trade Group Proposes Modernization Plan

March 9, 2006 By: Susan Young Travel Agent

The Air Transport Association, the business trade group representing most major U.S. airlines, said its members deserve a bigger voice in how the U.S. air traffic system is modernized and financed. The trade organization formally proposed lawmakers scrap the long-held formula of airline ticket and fuel taxes to run the nation's aviation system. Instead, the group wants a system that extracts more money from business jet and other private operators. Airlines are the biggest consumers of air traffic services but carriers have for years complained that their contributions to a federal trust fund that covers much of the Federal Aviation Administration's budget far exceeds what it should be. The trust fund law expires next year, and Congress may look at alternative financing options. However, it's not clear whether Congress is willing to let the airlines off the hook for the $2 billion reduction they seek. The trust fund is also leaner than in previous years; revenues are off because of lower fares and capacity cuts by large airlines. The FAA's 2007 budget as proposed is $13.7 billion, with trust fund receipts expected to fall short by $2 billion. Airlines contribute about $11 billion of that total.

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