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FAA Freeze Will Hurt Travel Industry and Economy

July 27, 2011 By: George Dooley Travel Agent


Travel Agent Contributing Editor George Dooley

Football fans were overjoyed to learn that the NFL has agreed to play ball this year. But the traveling public may not be so lucky with the Federal Aviation Administration’s (FAA) fate in the hands of a divided Congress.

Both the Department of Transportation (DOT) and the FAA urged Congress to approve the FAA’s budget and warned that as many as 4,000 FAA staffers could lose their jobs. Congressional inaction stopped FAA funding on Saturday.

Multi-million dollar DOT/ FAA projects, including improvements in airports and runways and the Air Traffic Control system, will be impacted. While reassuring the traveling public that there will be no compromise on safety, the FAA is left in limbo.

The underlying problem is that the airline and travel industry needs a strong, viable FAA and Air Traffic Control system. The shift to a Next Generation Global Positioning System is long overdue despite support from airlines, the travel industry and delay-weary travelers.

Washington insiders say that – until now  -the FAA authorization has been approved 20 times since its long-term funding authorization ran out in 2007.  Until restored, this would appear to make it all but impossible for the DOT, the FAA or the industry, including airlines and airport operators, to plan for or invest in responsible growth.

Congress has serious questions – over the procedure to force unionization of the airlines, for example, or the costs and need for subsidies for rural airports.  FAA costs appear to be growing and the question of privatization should be explored. One irony: the FAA is celebrating the 75th anniversary of federal air traffic control, easily the best in the world.

Yet without Congressional agreement the FAA is effectively cast adrift, along with the traveling public.  The cost is formidable. The FAA said the government would lose $200 million a week in tax revenue paid mostly by airlines.

"I am making a simple and straightforward request to Congress: pass a clean FAA bill and immediately put thousands of FAA employees, construction workers, planners and engineers across America to work. In these tough economic times, we can ill afford to lay off hard-working Americans whose families depend on them," said Transportation Secretary Ray LaHood.

LaHood, widely regarded as the most consumer-friendly secretary of the DOT in history, made his plea as the FAA said that without congressional authorization the FAA is unable to get roughly $2.5 billion out the door for airport projects in all 50 states. These actions could put thousands of people out of work.

True, this is only a partial shutdown with most of the FAA funded from other sources, and air traffic controllers remain on duty. And some airlines may momentarily benefit from a fare hike equal to the taxes that cannot be collected. But the full long-term, economic impact is still to be determined. For example, what will be the total tax revenue lost from airline ticket sales?

Both the American Society of Travel Agents (ASTA) and the Business Travel Coalition (BTC) have offered a timely advisory on the issues and wisely caution agents on the effects of the FAA shutdown. As has ARTA. But none of the groups can authoritatively estimate when the crisis will end or assess the total economic impact.

The sad reality is that the crisis over FAA funding is being played out against a backdrop of a bitterly divided Congress and justifiable national concern with government spending, defaults and deficits. The FAA budget may be small potatoes to some but it’s a critical part of the airline and travel industry and essential to the economy and job generation.

Let’s wish Secretary LaHood good luck and hope for an early and balanced resolution of the crisis.  If the NFL can do it so can Congress.

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About the Author

George Dooley
George Dooley, Travel Agent’s senior contributing editor covering retail and technology, has a long-standing reputation as one of the top travel industry journalists. He notes...

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By George Dooley | July 27, 2011
The FAA budget may be small potatoes to some, but it's a critical part of the airline and travel industry and essential to the economy and job generation.
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