Federal Aviation Administration
Cost Allocation Practices and Cost Recovery Proposal Compared with Selected International Practices Gao ID: GAO-07-773R June 8, 2007Anticipating the expiration of the Federal Aviation Administration's (FAA) current authorization at the end of fiscal year 2007, the administration submitted a proposal on February 14, 2007, for reauthorizing FAA and the excise taxes that fund most of its budget. This proposal would introduce cost-based charges for commercial users of air traffic control services, eliminate many current taxes, substantially raise fuel taxes for general aviation users to pay for their use of air traffic control services, and charge commercial and general aviation users a fuel tax to pay primarily for airport capital improvements. In January 2007, FAA released the results of a recently completed cost allocation study in support of the administration's proposal for transitioning to user fees. FAA and the administration used this study to determine the factors that drive the costs of providing air traffic control services, allocate these costs to various users of air traffic control services, and support the development of alternative methods to recover those costs. On March 21, 2007, we testified before the House Subcommittee on Aviation, providing our observations on selected changes to FAA's funding and budget structure contained in the administration's reauthorization proposal. As requested, we are also providing comparative information to further assist Congress in considering FAA's funding proposal. Accordingly, we addressed the following question: How do the proposed practices for allocating and recovering the cost of FAA's air traffic control operations compare to the practices of other countries?
The practices FAA used to allocate air traffic control costs to users and the administration proposed to recover these costs from users differ somewhat from the practices employed by air navigation service providers (ANSP) in other countries. The International Civil Aviation Organization (ICAO) has established guidance for allocating and recovering costs attributed to air traffic-related services, but member states are not legally bound to follow its principles. In its 2007 cost allocation study, FAA allocated its total air traffic control costs to the three air traffic service categories that drive these costs--terminal services, en route services, and oceanic services. FAA then assigned the costs for providing these services to two types of aircraft--high-performance aircraft, which include all fixed wing turbine-engine aircraft, and piston aircraft, which include fixed-wing piston-engine aircraft and helicopters--because different aircraft types affect costs differently. More specifically, turbine- and piston-engine aircraft fly at different altitudes and speeds, and these differences in operating characteristics lead to differences in the costs of providing air traffic control services. The ANSPs with cost-based charges that we reviewed also allocate costs to each of their service categories--although the percentages allocated to each category vary by country--but none of these ANSPs further allocate costs by the type of aircraft used. To recover costs, the administration proposes charging commercial aircraft users for en route services based on distance traveled and for terminal services based on airport size and aircraft weight. This proposed practice for recovering terminal costs generally resembles the practices of the other ANSPs we reviewed, but the proposed practice for recovering en route costs differs because the other ANSPs also consider aircraft weight--a factor that increases the share of costs recovered from larger aircraft that can carry more fare-paying passengers. To recover costs from general aviation users, the administration is proposing a fuel tax of 56.4 cents per gallon for air traffic control services. By contrast, some other ANSPs currently charge users of small general aviation aircraft an annual fee based on such factors as aircraft weight and number of flight operations.
GAO-07-773R, Federal Aviation Administration: Cost Allocation Practices and Cost Recovery Proposal Compared with Selected International Practices
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June 8, 2007:
The Honorable James L. Oberstar:
Chairman:
The Honorable John L. Mica:
Ranking Republican Member:
Committee on Transportation and Infrastructure:
House of Representatives:
The Honorable Jerry F. Costello:
Chairman:
The Honorable Thomas E. Petri:
Ranking Republican Member:
Subcommittee on Aviation:
Committee on Transportation and Infrastructure:
House of Representatives:
Subject: Federal Aviation Administration: Cost Allocation Practices and
Cost Recovery Proposal Compared with Selected International Practices:
Anticipating the expiration of the Federal Aviation Administration's
(FAA) current authorization at the end of fiscal year 2007, the
administration submitted a proposal[Footnote 1] on February 14, 2007,
for reauthorizing FAA and the excise taxes that fund most of its
budget. This proposal would introduce cost-based charges for commercial
users of air traffic control services, eliminate many current taxes,
substantially raise fuel taxes for general aviation users to pay for
their use of air traffic control services, and charge commercial and
general aviation users a fuel tax to pay primarily for airport capital
improvements. In January 2007, FAA released the results of a recently
completed cost allocation study[Footnote 2] in support of the
administration's proposal for transitioning to user fees. FAA and the
administration used this study to determine the factors that drive the
costs of providing air traffic control services, allocate these costs
to various users of air traffic control services, and support the
development of alternative methods to recover those costs. On March 21,
2007, we testified before the House Subcommittee on Aviation,[Footnote
3] providing our observations on selected changes to FAA's funding and
budget structure contained in the administration's reauthorization
proposal. As requested, we are also providing comparative information
to further assist Congress in considering FAA's funding proposal.
Accordingly, we addressed the following question: How do the proposed
practices for allocating and recovering the cost of FAA's air traffic
control operations compare to the practices of other countries?
To address this question, we reviewed FAA's 2007 cost allocation report
and the administration's reauthorization proposal. We interviewed
officials from FAA, selected air navigation service providers (ANSP) in
other countries whose practices we previously reviewed,[Footnote 4]
EUROCONTROL,[Footnote 5] and international aviation industry
associations. We selected the ANSPs in Australia and Canada--
Airservices Australia and NAV CANADA, respectively--and EUROCONTROL as
illustrative of similarities and differences in the way that air
traffic control costs can be allocated and recovered. Both Australia
and Canada have relatively high levels of general aviation activity,
which makes their ANSPs particularly useful for comparison to FAA,
since the United States has the highest level of general aviation
activity in the world. Significant inherent differences between the
U.S. and other countries' ANSPs worldwide cannot be accounted for in
this study. For instance, the administrative management function of
each country's ANSP differs. NAV CANADA is a privately owned ANSP,
while Airservices Australia is a wholly government-owned ANSP. Our
selection of ANSPs is a nonprobability sample, and information
presented about them cannot be used to make inferences about the ANSPs
we did not review. We compared the practices described in FAA's 2007
cost allocation report to the cost allocation practices of the selected
ANSPs. We also compared the cost recovery practices set forth in the
administration's proposed cost recovery legislation to the cost
recovery practices of the selected ANSPs. (See enc. I for additional
information on our methodology.) We conducted our work from April 2007
through June 2007 in accordance with generally accepted government
auditing standards.
Summary:
The practices FAA used to allocate air traffic control costs to users
and the administration proposed to recover these costs from users
differ somewhat from the practices employed by ANSPs in other
countries. The International Civil Aviation Organization
(ICAO)[Footnote 6] has established guidance for allocating and
recovering costs attributed to air traffic-related services, but member
states are not legally bound to follow its principles. In its 2007 cost
allocation study, FAA allocated its total air traffic control costs to
the three air traffic service categories that drive these costs--
terminal services, en route services, and oceanic services.[Footnote 7]
FAA then assigned the costs for providing these services to two types
of aircraft--high-performance aircraft, which include all fixed wing
turbine-engine aircraft, and piston aircraft, which include fixed-wing
piston-engine aircraft and helicopters--because different aircraft
types affect costs differently. More specifically, turbine-and piston-
engine aircraft fly at different altitudes and speeds, and these
differences in operating characteristics lead to differences in the
costs of providing air traffic control services. The ANSPs with cost-
based charges that we reviewed also allocate costs to each of their
service categories--although the percentages allocated to each category
vary by country--but none of these ANSPs further allocate costs by the
type of aircraft used. To recover costs, the administration proposes
charging commercial aircraft users for en route services based on
distance traveled and for terminal services based on airport size and
aircraft weight. This proposed practice for recovering terminal costs
generally resembles the practices of the other ANSPs we
reviewed,[Footnote 8] but the proposed practice for recovering en route
costs differs because the other ANSPs also consider aircraft weight--a
factor that increases the share of costs recovered from larger aircraft
that can carry more fare-paying passengers. To recover costs from
general aviation users, the administration is proposing a fuel tax of
56.4 cents per gallon for air traffic control services.[Footnote 9] By
contrast, some other ANSPs[Footnote 10] currently charge users of small
general aviation aircraft an annual fee based on such factors as
aircraft weight and number of flight operations.
Background:
FAA currently receives the majority of its support (82 percent) from
the Airport and Airway Trust Fund (trust fund), whose revenues come
from a series of excise taxes paid by aircraft operators. These excise
taxes are associated with purchases of airline tickets and aviation
fuel, as well as with cargo shipment. In fiscal year 2006, the ticket
tax was the largest single source of trust fund revenue, followed by
the international departure and arrival tax, the passenger segment
tax,[Footnote 11] and fuel taxes. These trust fund revenues are then
available for use subject to appropriations. In addition to these
revenues, General Fund revenues have been used in most years to fund
FAA. About $2.6 billion was appropriated for fiscal year 2006 from the
General Fund for FAA's operations. This amount represents about 18
percent of FAA's total appropriation.
FAA has expressed concern that under the current funding structure,
revenues depend heavily on factors such as ticket prices that are not
connected to FAA's workload and costs. In addition, FAA maintains that
every cost allocation study the agency has done over the last three
decades has found that general aviation is responsible for at least 11
percent of air traffic costs, yet general aviation users pay roughly 3
percent of the taxes that go into the trust fund.[Footnote 12]
According to FAA, under the current structure, increases in the
agency's workload may not be accompanied by revenue increases because
users are not directly charged for the costs that they impose on FAA
for their use of the national airspace system. Revenues collected from
ticket taxes--which are 7.5 percent of ticket prices--are primarily
dependent on the ticket price and the number of airplane passengers,
while air traffic workload is primarily driven by the number of
flights, the airports that aircraft use, and the distances that
aircraft fly. This disconnect raises three key concerns about the
current funding structure--its long-term revenue adequacy, equity, and
efficiency. The administration has cited these concerns as its reasons
for proposing major changes in FAA's funding, including introducing
user fees to recover the costs of air traffic services.
ICAO has established guidance on ascertaining the full costs of air
navigation services and developing a charging system aimed at
recovering those costs. The policies allow for different methods of
allocating costs attributed to en route, terminal, and oceanic services
and recovering those costs from users. Member states are not legally
bound to follow ICAO policies, but many ANSPs worldwide charge some
type of user fees to recover their air navigation services costs.
However, the schemes for charging and recovering these user fees vary.
The ANSPs we reviewed rely on user charges as their primary source of
revenue, but ANSPs can also choose to recover less than the full costs
of some services in recognition of local, regional, or national
benefits. According to FAA, its methodology for allocating air traffic
control costs and the method contained in the administration's
reauthorization proposal to recover these costs follow ICAO guidance.
Proposed FAA Practices for Allocating Costs Differ from Those of
Selected Providers:
FAA's methodology for allocating air traffic control costs and the
method contained in the administration's reauthorization proposal to
recover these costs from users differ somewhat from practices currently
employed by ANSPs in other countries. In its 2007 cost allocation
study, FAA allocated its total air traffic control costs to the three
air traffic service categories that drive its costs and then assigned
the costs for providing these services to two user groups defined by
aircraft type.[Footnote 13] The ANSPs we reviewed also allocate costs
to each of their service categories but do not further allocate costs
by aircraft type. To recover costs from commercial users, the
administration proposes charging commercial aircraft for (1) en route
services based on distance traveled and (2) terminal services based on
airport size and aircraft weight. The other ANSPs employ an aircraft
weight factor that increases the share of en route costs recovered from
larger aircraft. To recover costs from general aviation users, the
administration proposes a fuel tax; in contrast, the ANSPs we reviewed
charge users of small general aviation aircraft an annual rate based on
such factors as aircraft weight or number of flight operations. In
addition, the administration proposes a congestion fee for all aircraft
landings and takeoffs at congested large-hub airports. While other
ANSPs do not charge a congestion fee, ICAO standards indicate that such
fees are appropriate.
Both FAA and Selected ANSPs Allocate Air Traffic Control Costs by Type
of Service, but FAA Differs in Allocating Costs by Type of Aircraft:
In its January 2007 study, FAA employed a two-stage methodology to
allocate the costs of providing air traffic control services. First,
FAA allocated its total air traffic control costs among the air traffic
service categories that drive its costs--terminal services, en route
services, and oceanic services. Based on an analysis of activities at
service category locations, FAA allocated about 51 percent of its air
traffic control costs to terminal services, about 46 percent to en
route services, and about 3 percent to oceanic services.[Footnote 14]
FAA then assigned air traffic costs to user groups based on aircraft
type.
The two principal user groups are the high-performance group, which
includes all fixed-wing turbine-engine aircraft operations, and the
piston aircraft group, which includes fixed-wing piston-engine aircraft
operations and helicopters. According to FAA, this cost allocation
methodology is based on the assumptions that high-performance users
generally compete for the same air traffic control resources, have more
time-sensitive operations, and require more complex air traffic
equipment and procedures than do piston aircraft operations.
Differences in the speed and cruising altitudes of the two aircraft
types also affect their en route costs.
The other ANSPs we reviewed employ a different methodology for
allocating air traffic control service costs. Like FAA, most foreign
ANSPs we reviewed allocate costs based on their services and
operational activities, according to the Civil Air Navigation Service
Organization (CANSO).[Footnote 15] However, the foreign ANSPs we
reviewed differ from FAA in that they do not allocate costs by specific
user group or by aircraft engine type. Officials from CANSO and NAV
CANADA also told us that FAA would be unique among ANSPs in further
allocating terminal and en route service costs to user groups as
proposed. In addition, the proportion of costs allocated to various
services varies by country. For instance, in fiscal year 2003, NAV
CANADA allocated about 53 percent of its total air traffic control
costs to en route services, 43 percent to terminal services, and the
remaining 4 percent to oceanic services. In Europe, EUROCONTROL member
states' ANSPs allocate on average about 80 percent of their costs to en
route services and about 20 percent to terminal services.[Footnote 16]
EUROCONTROL member states' ANSPs also allocate a portion of their cost
base to the administrative services provided by EUROCONTROL, according
to CANSO.
Both Proposed FAA and Selected ANSP En Route Charges Are Based on
Distance, but ANSPs Factor Weight into Charges and Only FAA Imposes a
Congestion Charge:
Under the administration's proposal for recovering the costs of air
traffic control services, FAA's practices would both resemble and
differ from those of the other ANSPs we reviewed. (See table 1 for a
comparison of these practices). Like these providers, FAA would charge
user fees to commercial aircraft for air traffic control services.
FAA's en route service charge is based on the distance an aircraft
flies in U.S.-controlled airspace.[Footnote 17] Other ANSPs charge fees
for en route services based on the distance traveled but also factor
aircraft weight into their fees. For instance, Airservices Australia
bases its en route charge on both the distance flown in an Australian
flight information region[Footnote 18] and the maximum permissible
takeoff weight of the aircraft. Hence, the charge for a given distance
varies in part with the maximum takeoff weight of the aircraft. For
example, Airservices Australia charges a unit rate of $3 for a Boeing
747-100 weighing 324 metric tons, while it charges a unit rate of $0.68
for a Gates Learjet 35A weighing about 8 metric tons.[Footnote 19]
According to an official from NAV CANADA, which also uses a weight
factor in determining en route charges, aircraft weight is an indicator
of the value of service provided because the ability of an aircraft to
carry passengers or cargo is related to its weight. According to
EUROCONTROL, aircraft weight is included to reflect the relative
contributing capacities, or payload, of different aircraft because
larger and heavier planes carry more passengers and generate more
revenues and can therefore pay relatively more for air navigation
services than smaller and lighter planes flying the same distances.
Including weight as a factor results in a larger share of the costs
being recovered from heavier aircraft than if cost recovery is based on
distance alone. Incorporating weight as a factor in determining charges
is consistent with ICAO guidance.
Table 1: FAA and Selected ANSP Cost Recovery Practices:
United States;
Uses an aircraft weight factor for terminal charges: X;
Uses airport size as a factor for terminal charges: X;
Uses weight factor for en route charges: [Empty];
Uses distance factor for en route charges: X;
Uses congestion pricing: X;
Levies a fuel tax for general and commercial aviation[A]: X;
Charges an annual fee for most general aviation: [Empty];
Charges business jets user fees: [Empty].
Australia;
Uses an aircraft weight factor for terminal charges: X;
Uses airport size as a factor for terminal charges: X;
Uses weight factor for en route charges: X;
Uses distance factor for en route charges: X;
Uses congestion pricing: [Empty];
Levies a fuel tax for general and commercial aviation[A]: [Empty];
Charges an annual fee for most general aviation: X;
Charges business jets user fees: X.
Canada;
Uses an aircraft weight factor for terminal charges: X;
Uses airport size as a factor for terminal charges: [Empty];
Uses weight factor for en route charges: X;
Uses distance factor for en route charges: X;
Uses congestion pricing: [Empty];
Levies a fuel tax for general and commercial aviation[A]: [Empty];
Charges an annual fee for most general aviation: X;
Charges business jets user fees: X.
EUROCONTROL member states;
Uses an aircraft weight factor for terminal charges: X;
Uses airport size as a factor for terminal charges: [Empty];
Uses weight factor for en route charges: X;
Uses distance factor for en route charges: X;
Uses congestion pricing: [Empty];
Levies a fuel tax for general and commercial aviation[A]: [Empty];
Charges an annual fee for most general aviation: [B];
Charges business jets user fees: X.
Sources: FAA, Airservices Australia, NAV CANADA, EUROCONTROL.
[A] European Union member states levy fuel taxes for private pleasure
flying.
[B] Some EUROCONTROL member states charge a flat rate to general
aviation aircraft using visual flight rules.
[End of table]
Under the administration's proposal, FAA would recover its costs for
terminal services much as our selected ANSPs do, basing its charges for
commercial aircraft on airport size and aircraft weight. For example,
the rate for landing at a large U.S. hub airport--one with at least 1
percent of total U.S. passenger enplanements--would be somewhat higher
than the rates at smaller airports that have FAA air traffic control
towers. FAA would vary rates for aircraft weight because larger
aircraft require greater separation, thus imposing greater terminal
airspace costs, according to FAA officials. Similarly, EUROCONTROL
member states and NAV CANADA take the maximum permissible takeoff
weight of the aircraft into account when setting terminal service
charges. Airservices Australia also bases terminal service charges on
the weight of the aircraft but incorporates location-specific charges.
For instance, Airservices Australia currently charges a rate of $4 per
metric ton for an aircraft that weighs more than 5.7 metric tons to
land in Sydney, but $3.50 if the same aircraft lands in
Melbourne.[Footnote 20] Airservices Australia developed location-
specific charges to ensure that funding for air traffic services would
be decentralized and locally driven. NAV CANADA differs somewhat from
some of its ANSP counterparts in that it does not vary its charges for
terminal services by airport size.
The administration's proposal to charge a congestion fee for all
aircraft takeoffs and landings at congested large-hub airports would
also differ from the practices of the other ANSPs we reviewed. These
ANSPs do not currently charge a congestion fee for all aircraft
takeoffs and landings. However, beginning in March 2008, NAV CANADA
will charge $8 a day for aircraft weighing less than 3 metric tons.
Most of these are general aviation aircraft that depart from seven
major international airports, including Vancouver, Toronto Pearson, and
Montreal Trudeau international airports. According to a NAV CANADA
official, this daily charge was created because there was a need for
small general aviation aircraft to contribute more for services at
these airports. The official also noted that NAV CANADA recognized that
this daily charge might encourage some aircraft operators to use
alternative airports, which would promote efficiency by helping
minimize the incidence of larger aircraft having to wait for smaller
aircraft to take off or land.[Footnote 21] Airservices Australia also
charges small general aviation aircraft additional fees for services at
six airports, including Sydney and Melbourne (see the following section
for a description of Airservices Australia's fees for general aviation
users). Neither NAV CANADA nor Airservices Australia refers to the
higher fees charged to general aviation for using specified airports as
congestion charges.
FAA Charges a Fuel Tax for General Aviation Users, while ANSPs Impose
an Annual Fee:
Under the administration's proposal, FAA's practices for recovering
costs from general aviation users would differ from the practices of
the other ANSPs we reviewed. Specifically, all general aviation
operators would be charged a fuel tax of 56.4 cents per gallon for air
traffic control services, an increase of about 35 cents per gallon over
the 21.8 cents fuel tax that general aviation operators currently pay
into the trust fund to fund FAA. By contrast, the ANSPs we reviewed
charge a fee that they collect annually from operators of small general
aviation aircraft.[Footnote 22] For instance, NAV CANADA charges $58
for aircraft weighing up to 2 metric tons and $192 for some aircraft
weighing over 2 but less than 3 metric tons. Thus, for example, small
aircraft--such as a Cessna 172 that weighs about 1 metric ton--pay $58
annually for air navigation services.[Footnote 23] NAV CANADA adopted
this annual fee method primarily because it is administratively simple.
In addition, the modest fee level recognizes that a substantial
percentage of small general aviation aircraft operate at airports with
no air traffic control towers and that many small aircraft have
relatively few flights per year. Airservices Australia charges
operators of general aviation aircraft weighing less than 2.5 metric
tons and flying 200 or fewer flights per year annually from about $44
to more than $928 depending on how many flights an operator makes and
whether the operator also uses Airservices Australia's en route
services.[Footnote 24] This approach is similar to the administration's
proposal in that increased aircraft operation will result in a higher
fee. However, unlike the administration's proposal, the fee level is
not set to recover a specified share of costs. In Canada and Australia,
business jets and other aircraft that weigh more than 3 and 2.5 metric
tons, respectively, are charged flight-specific user fees.[Footnote 25]
Agency Comments:
We provided copies of a draft of this report to the Department of
Transportation for review and comment. The Federal Aviation
Administration responded and generally agreed with the report's
contents, noting that its cost allocation and proposed cost recovery
practices differ somewhat from those of the other ANSPs discussed in
the report. FAA further noted that its cost allocation method is more
detailed than the methods of the other ANSPs. In addition, FAA provided
technical clarifications, which we incorporated into the report as
appropriate.
We are sending copies to the Secretary of Transportation and the
Administrator of the Federal Aviation Administration, and other
interested parties. In addition, the report will be available on the
GAO Web site at http://www.gao.gov.
If you or your staffs have any questions about this report, please
contact me at (202) 512-2834 or dillinghamg@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. Individuals making key contributions
to this report are listed in enclosure II.
Signed by:
Gerald L. Dillingham, Ph.D.
Director, Physical Infrastructure Issues:
Enclosures:
Enclosure I: Scope and Methodology:
To compare the practices set forth in the Federal Aviation
Administration's (FAA) cost allocation system and the administration's
reauthorization proposal with the practices of other countries' air
navigation service providers (ANSP)--Airservices Australia and NAV
CANADA--we reviewed FAA's cost allocation report and the
administration's reauthorization proposal and Airservices Australia's
and NAV CANADA's cost allocation and cost recovery policies and
documents, including their charging schemes, which were publicly
available. We selected the latter to illustrate the similarities and
differences in the way air traffic control costs can be allocated and
recovered. In addition, Australia and Canada have relatively high
levels of general aviation activity, which make Airservices Australia
and NAV CANADA particularly useful for comparison to FAA, since the
United States has the highest level of general aviation activity in the
world. Significant inherent differences between the U.S. and other
countries' ANSPs worldwide cannot be accounted for in this study. We
examined FAA's method of allocating costs in order to compare it with
other ANSPs' methods. Our selection of these ANSPs is a nonprobability
sample, and our observations about them cannot be used to make
inferences about the ANSPs we did not review. We also interviewed
officials from FAA, NAV CANADA, the Civil Air Navigation Service
Organization, EUROCONTROL (the European Organisation for the Safety of
Air Navigation), and the International Air Transport Association.
We converted the local currency of each country into U.S. dollars using
the Organization for Economic Cooperation and Development's purchasing
power parities for gross domestic products. We also examined the
International Civil Aviation Organization's guidance document, Policies
on Charges for Airports and Air Navigation Services, and compared it
with FAA's cost allocation practices and the administration's cost
recovery proposal. In addition, we reviewed prior GAO reports and
testimony and interviewed FAA officials. Finally, we reviewed FAA's
January 2007 cost allocation report and analyzed the administration's
proposed legislation, the Next Generation Air Transportation System
Financing Reform Act of 2007. We conducted our review from April 2007
through June 2007 in accordance with generally accepted government
auditing standards.
Enclosure II: GAO Contact and Staff Acknowledgments:
GAO Contact:
Gerald L. Dillingham, Ph.D., (202) 512-2834 or dillinghamg@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, Ed Laughlin, Jay Cherlow, Bess
Eisenstadt, Jennifer Kim, Maureen Luna-Long, Maren McAvoy, and Jack
Warner made key contributions to this report.
(540149):
FOOTNOTES
[1] Two bills were introduced on request in the House and Senate, H.R.
1356 and S. 1076, respectively, the Next Generation Air Transportation
System Financing Reform Act of 2007.
[2] Federal Aviation Administration, FY 2005 Cost Allocation Report
(Washington, D.C., Jan. 31, 2007).
[3] GAO, Federal Aviation Administration: Observations on Selected
Changes to FAA's Funding and Budget Structure in the Administration's
Reauthorization Proposal, GAO-07-625T (Washington, D.C.: Mar. 21,
2007).
[4] GAO, Air Traffic Control: Characteristics and Performance of
Selected International Air Navigation Service Providers and Lessons
Learned from Their Commercialization, GAO-05-769 (Washington, D.C.:
July 29, 2005).
[5] EUROCONTROL is the European Organisation for the Safety of Air
Navigation, which comprises 37 member states, including the United
Kingdom, Germany, and France. The agency is responsible for developing
a seamless pan-European air traffic management system in coordination
with each country's government/ANSP.
[6] ICAO is an advisory organization affiliated with the United Nations
that aims to promote the establishment of international civil aviation
standards and recommended practices and procedures.
[7] Terminal services are air traffic control services that FAA staff
provide to guide flights from the terminal to the runway and through
takeoff. These services rely primarily on control towers and terminal
radar approach control centers (TRACON). TRACONs then pass flights off
to air route traffic control centers, which provide en route control
until the flights near their destinations; these services are referred
to as en route services. Oceanic services are analogous to en route
services, except that the aircraft is flying over the ocean, where
fewer communication, navigation, and surveillance capabilities are
available than over land. FAA also allocates costs to flight service
stations (FSS), which provide pilot and weather briefings through
automated flight service stations. However, FAA did not further
allocate FSS costs among users because (1) costs are expected to
decline substantially in future years, (2) the cost recovery proposal
funds these costs from the General Fund, and (3) charging user fees for
these services would encourage general aviation pilots to fly "outside
the system," which would negatively affect safety.
[8] NAV CANADA does not vary terminal charges by airport size.
[9] The administration would impose an additional fuel tax of 13.6
cents a gallon to fund the Airport Improvement Program, Essential Air
Services, and Research, Engineering, and Development, bringing the
total fuel tax to 70 cents per gallon.
[10] Some European ANSPs do not charge general aviation users an annual
fee.
[11] The passenger segment tax is levied on each segment of a
passenger's domestic flight. For example, a passenger flying from New
York to Seattle, with a connection in Chicago, travels two segments--
the first from New York to Chicago and the second from Chicago to
Seattle. The segment tax rate was $3.30 in 2006.
[12] The 3 percent of taxes that go into the trust fund does not
include taxes paid by air taxis and fractionally owned aircraft.
Similarly, the amounts FAA attributed to general aviation in its 2007
cost allocation study do not include costs driven by air taxis or
fractionally owned aircraft.
[13] Under the FAA proposal for funding air traffic control services,
some aircraft (such as military aircraft and air ambulances) would be
exempt from charges. The cost allocated to exempt aircraft would be
covered by general revenue funds.
[14] This analysis does not include costs allocated to flight service
stations.
[15] CANSO is an international trade organization that represents the
interests of ANSPs worldwide. FAA--along with NAV CANADA, Airservices
Australia, EUROCONTROL member states' ANSPs, and other ANSPs--is a
member of CANSO.
[16] The composition of air traffic differs among countries and could
account for the variation in the proportion of costs allocated to
various services. For example, the United States has a significantly
larger general aviation segment than other countries.
[17] FAA currently charges overflight fees to operators of aircraft
that fly in U.S.-controlled airspace but neither take off nor land in
the United States. These fees are purely mileage based, with no weight
factor.
[18] An Australian flight information region is the entire airspace
over continental Australia and other airspace allocated by ICAO to
Australia.
[19] All financial amounts have been converted to U.S. dollars from
each country's local currency using the Organization for Economic
Cooperation and Development's purchasing power parities for gross
domestic products. The tonnage is also shown in metric tons.
[20] Airservices Australia's rate for aircraft weighing more than 5.7
metric ton is as of June 2006. The rate will be increasing in Melbourne
beginning on July 1, 2007.
[21] In some European countries, airports may charge higher landing
fees.
[22] Countries may charge a fuel tax for purposes other than air
navigation services. For example, in Canada, the federal government
charges an excise tax on aviation gasoline and jet fuel. The government
considers the revenue from those excise taxes on fuel as general tax
revenue.
[23] Except for private aircraft not used for business purposes--that
is, those used exclusively for recreational purposes--the fee for these
aircraft is composed of a base rate of $58 regardless of the aircraft
weight. This same fee also applies to aircraft between 2 and 3 metric
tons restricted to aerial agricultural spraying.
[24] Airservices Australia's annual charge is as of June 2006. Its
annual charge will increase beginning on July 1, 2007. The annual
charge also does not include flights into six specified airports,
including Sydney and Melbourne.
[25] Some countries in Europe charge general aviation an additional
approach fee if the aircraft is using an instrument landing system,
regardless of aircraft weight.
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