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… in a move that is being received positively in aviation circles. In Wednesday’s edition of The Wall Street Journal, the paper reports that Randy Babbitt, former head of the Air Line Pilots Association, is expected to be nominated for FAA Administrator “within days.”

He’ll have his challenges, not least of which is dealing with a Congress that has been unable to provide long-term authorization and funding. Then there’s the ongoing feud with the controllers; modernizing air traffic control; and improving the image of an agency that has been seen as too cozy with the industry it regulates following the airline inspection brouhaha last year.

WSJ reports that Babbitt “gained a reputation for being politically astute and media-savvy” during his time at ALPA. The newspaper says that the announcement had been expected to be made in April, but recent aircraft accidents prompted the Obama Administration to accelerate the move.

Comments Greg Principato, president of Airports Council International-North America, “Randy Babbitt is knowledgeable and highly respected; he also knows the airport industry well.  I know that if nominated and confirmed he will be an effective leader for the Federal Aviation Administration. I have worked closely with Randy over the years and look forward to doing so in the future.”

Says James K. Coyne, president of the National Air Transportation Association, "I have known Randy Babbitt for more than 15 years and I think he is an outstanding selection as our next FAA Administrator.  Randy knows full-well how important modernizing our air traffic control system is, so I look forward to working with him to accomplish this critical priority." 

The American Association of Airport Executives declined to comment, with spokesman Sean Broderick saying the organization preferred to wait until an official announcement was made.

Babbitt has been one of the top names in the industry rumor mill for the FAA post, along with former FAA Administrator Jane Garvey. In a conversation at a Denver conference in February, former FAA Associate Administrator for Airports Woodie Woodward related that she believed Babbitt was the leading candidate, and that she thought it would be a very good choice. Woodward, now a consultant, was quite popular among airports in her time heading up the airports division, notably for her candor.

Thanks for reading. jfi

Much of the confusion and disagreement regarding the economic mess occurs because nobody can understand it all. Some say it was caused partially by the sale and purchase of mortgage “derivatives’’. Can you really understand and explain exactly what derivatives are? I can’t.

 

Every time one person explains why Obama’s plans are dead wrong, another person explains why his plans are wonderful and necessary. Most of the time, most of the people can’t pretend to understand what either person is talking about.

 

Ah, but then along came AIG bonuses and all that changed. Everybody can understand those bonuses. The guvmint gave AIG a fortune in bailout money to help straighten out the economy. AIG almost immediately gave a couple of hundred million of those dollars to the very executives who were running the company when the you-know-what hit the fan. The public is screaming that that ain’t right.

 

It’s a mistake for guvmint to do something stupid if the citizens can understand it. We haven’t seen such sign waving and hollering since the 1960s.

 

When the public disagrees so loudly and in such numbers, even presidents and congresspersons listen. Obama was so mad he set out to find a way to get the bonuses back. One idea is to tax the bonuses away.

 

Well, some seem to realize that (1) the bailout as written allowed for such bonuses, and (2) once a guvmint backs down on something that it agreed to, there is a cost involved. For example, right now the guvmint wants private investors to purchase much of the financial world’s “toxic” assets. That might be hard to do, if the guvmint backs down on what they agreed to in the bailout.

 

On the other hand, the stock market went up today, perhaps because of the guvmint saying private investors will be offered a good deal on toxic assets.

 

BTW, everybody says credit is nonexistent, but everywhere I look lenders are touting fast, cheap loans on everything from airplane purchases to quick cash.

 

Me, I’m just as confused as I was last week.

 

So, what’s it have to do with aviation? Everything. People and businesses usually don’t buy airplanes unless they have faith in the future. That kind of.a faith is rare, these days.

 

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…on aviation trust fund monies in a report issued this past week. At the end of the day, it may provide more fuel for the fire that is the debate on Capitol Hill on how the aviation system is funded, and how the associated funds are disseminated.

The Government Accountability Office, in a report entitled “TRANSPORTATION PROGRAMS - Challenges Facing the Department of Transportation and Congress,” notes that the U.S. aviation system and FAA have been operating under a series of funding extensions since 2007. (In fact, the latest extension, which would authorize FAA through September 30, is now in play in Congress.)

According to GAO, “the excise taxes that fund Airport and Airway Trust Fund revenues have been lower than previously forecasted, and forecasts of future revenues have declined because of a decline in airline passenger travel, fares, and fuel consumption. Moreover, the uncommitted balance in the Trust Fund has decreased since fiscal year 2001. For the short run, lower-than-expected excise tax revenues will reduce the Trust Fund balance even further and could affect funding for FAA programs this year and next. In the longer run, continued declines in Trust Fund revenues may require Congress to reduce spending on FAA operations and capital projects, increase revenues for the Trust Fund by introducing new fees or increasing taxes, or increase FAA’s funding provided by the General Fund.”

The impasse on the Hill to get long-term reauthorization passed is indicative of the lack of leadership demonstrated by Congressional leaders in recent years. The Bush Administration didn’t help the reauthorization cause when it proposed new user fees and refused to reenter negotiations with the air traffic controllers. While it is expected that the Obama Administration will settle the controllers issue, the new President has signaled that he likes the new user fee idea.

Reports staffwriter Kathryn A. Wolfe in Congressional Quarterly Today, “Even with a new extension in place, it is unclear whether lawmakers will be able to complete consideration of a larger bill, given uncertainties about what may be contained in the Obama Administration’s version. Aides said the Administration is expected to send its draft FAA reauthorization to Capitol Hill around the same time as it sends its detailed proposal for the entire federal budget, which is expected in April. The broad budget guidelines that President Obama released last month suggested that the Administration may reopen a battle that most thought had been put to rest last year. It proposes to eliminate $7.2 billion in unspecified aviation excise taxes and replace them with “direct user charges.” The proposal set off alarm bells among lawmakers, transportation experts, and industry groups alike. Details on which excise taxes the administration wants to get rid of, and what sort of user fees they would be replaced with, have not yet been detailed.”

The devil will indeed be in the details. And expect that this GAO report will be cited as one justification for changing the way the system is taxed.

Thanks for reading. jfi

NATA’s Jim Coyne expresses concern about Obama’s proposed raid on the aviation trust fund. Coyne is president of the National Air Transportation Association, which is hosting its Education Week in conjunction with the Expo at the convention center here in Vegas.

“It’s a free-for-all with trust funds in D.C.,” comments Coyne. NATA and other aviation groups in Washington are up in arms about the President’s proposal to remove the ‘firewall’ on the aviation trust fund, announced in Obama’s FY2010 Budget Blueprint.

We’ve been here before. In the late ‘90s, Rep. Bud Shuster of Pennsylvania became a hero of sorts to the aviation community when he able to put into legislation the firewall which would keep funds from the Aviation and Airway Trust Fund (AATF) from being handled in the same manner as general revenue in the overall appropriations process. Prior to that, Reagan, Bush, and Clinton all kept the aviation monies at bay, in an attempt to make their overall budgets look better. We’re talking billions being held hostage in the name of appearance. It was Shuster’s leadership that led to the unprecedented levels of funding in this decade for the Airport Improvement Program.

Coyne terms the potential raid on the trust fund as a “tiny ripple in a perfect storm” that is brewing in Washington, in which there is a game going on to look at “anti-populist taxes.” This goes hand-in-hand with the President’s suggestion that new user fees may be on the horizon for aviation.

Coyne’s reaction echoes that of Greg Principato, president of Airports Council International – North America, who last week sent a letter to DOT Secretary Ray LaHood to highlight the issue. “Converting mandatory contract authority into discretionary budget authority threatens the unique structure of the trust fund system, and could undermine the budgetary firewalls which ensure that receipts from aviation excise taxes and user fees are reinvested in infrastructure,” said Principato in the letter. “At a time when the President has identified rebuilding our transportation infrastructure as a national priority, we should not alter this proven system.”

The good news on the issue is that 14 House and Senate members have also publicly stated their displeasure with the idea, including key powerbrokers Oberstar, Mica, and Rockefeller.

Looks like it’s business as usual in Washington. So much for that ‘change’ thing.

Thanks for reading. jfi

Okay, let me see if I got this right…

 

We got in trouble because the banks—not to mention Fannie and Freddie—wanted to lend us money whether we could afford to pay it back or not. So we borrowed it—and guess what?—we couldn’t pay it back.

 

Now we are in the dangdest mess you ever saw.

 

So, how are we going to get out of said mess? Well, first we have to get the banks to lending money again, preferably on easy terms.

 

Did I get that right? If so, then can somebody please explain to me how this is gonna work?

 

Then we gotta refinance all those mortgages that all those people can’t pay. Is there any way in the world we can do that without making credit too easy again?

 

Banks, automakers, and people who can’t—or won’t—pay their mortgage all get bailouts. But Ralph, you explain, they bought houses that are now worth less than they were when they bought them. Well, hell, so did I, but I’m still making the payments.

 

The guvmint’s gonna fix some things by taking them over and running them so well that it will save us all money. Wasn’t it Mike Huckabee who asked the question, “Can you remember the last time the government ran something and made it better?” I surely can’t.

 

My wife reminds me that the guvmint took over a, uh, “house of ill repute” one time, because the owners owed taxes. My wife told me at the time, “I bet they lose money on it.” Don’t laugh—they did.

 

Hillary wants to take over health care and save us all money. Heck, the guvmint already runs part of our health care. They call it Medicare, and they have it so out of control that the costs loom over our heads like a tsunami with proportions that dwarf our Social Security debts.

 

So why in the world would we turn the rest of our health care over to the guvmint?

 

I am sore afraid.

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… yet no one in the general aviation community seems to agree. Last fall, the Transportation Security Administration proposed its Large Aircraft Security Program (LASP). At five public hearings since and in scores of comments to the agency, the GA sector has stood up and shouted a collective “No way.” Will the ‘partner’ listen?

Perhaps the best line from TSA’s website on the announcement of the program is this: “Establishing common sense standards for operators of these larger, and typically highly-capable aircraft, will enhance security for the nation’s general aviation operations.” Actually, “common sense standards” is exactly what the industry is calling for; no one seems to find any in the LASP.

Also from TSA: “The Large Aircraft Security Program (LASP) regulation would require all U.S. operators of aircraft exceeding 12,500 pounds maximum take-off weight to implement security programs that would be subject to compliance audits by TSA. The proposed regulation would also require operators to verify that passengers are not on the No Fly and/or Selectee portions of the federal government’s consolidated terrorist watch list.”

TSA plasters the word “partner” all over their announcement. Apparently, folks from the agency went to a different dance than the GA community.

At the American Association of Airport Executives (AAAE), a General Aviation Security Working Group filed comments that include: “This proposed rule requires additional substantive analysis on impacts and should include revisions that reflect the operational reality of thousands of general aviation facilities across the country. TSA also should create a general aviation rulemaking committee comprised of general aviation associations representing operators, pilots, manufacturers, and above all, airports, in addition to the TSA and relevant DHS divisions.”

As part of its analysis of the proposed rulemaking, AAAE and the working group conducted a survey of GA airports. Among the survey findings:

1. More than 90 percent of respondents reported that they would be charged by their local law enforcement agency for any costs associated with the new regulations, which TSA completely omitted from their own fiscal impact analysis;
2. 88 percent of FAA-designated reliever airports would consider passing on the cost of the LASP to aircraft operators;
3. 60 percent of FAA designated reliever airports estimate the cost of the LASP above $40,000 per year, and several responded that the cost would be well over $200,000 per year; and
4. 71 percent of FAA designated reliever airports do not think the NPRM will improve security.

Ed Bolen, president of the National Business Aviation Association, says “this proposal completely misses the mark. The TSA needs to understand that in preparing the LASP, the agency has attempted to overlay a security regime for the big airlines onto tens of thousands of businesses all across the country. If left unchanged, the plan would overwhelm these small businesses in a time of economic crisis without providing a clear security benefit.”

The National Air Transportation Association (NATA) suggests scrapping the proposal altogether. Comments NATA president Jim Coyne, “Overall, this NPRM demonstrates a troubling lack of knowledge and understanding of the general aviation community by the TSA.”

One of the biggest concerns, says NATA, is the economic impact the proposed rule will have on the general aviation industry with little justification by TSA validating its issuance. “The public should be permitted to review the agency’s justification for this rule. The Administration Procedure Act/Regulatory Flexibility Act requires a federal agency to weigh the costs of a proposed regulation against the anticipated benefits. The public has been unable to validate the TSA’s pronouncement that the benefits of this proposed rule in fact outweigh the costs because of the agency’s unwillingness to share data,” says the association.

“ NATA and other industry members once again ask the TSA to accept their offer of assistance. The only acceptable action for the agency to take is to withdraw the NPRM and assemble an official rulemaking committee, following the FAA’s Aviation Rulemaking Committee (ARC) model or similar.”

If TSA truly wants to regulate in partnership with the industry, it will find a willing industry, as the comments above suggest. Forming a rulemaking committee makes sense, and perhaps the industry participants taking part would be able to further educate TSA on general aviation. Should we ever get to that step, I’d suggest recruiting NetJets president Jim Christiansen to head it up. He was instrumental as chair of the FAA rulemaking committee that helped the agency tread through the waters when fractionals became a player and the subsequent Part 91-Subpart K was achieved.

The time has come for TSA to get a clearer handle on GA. The shadows it sees behind every corner are likely just that – shadows.

Thanks for reading. jfi