Infrastructure Key to Airline Success

Posted May 1, 2003 at 2:55pm

By Rep. Bill Lipinski This year, Congress is slated to reauthorize the Aviation Investment and Reform Act for the 21st Century. Known as AIR-21, this measure will reauthorize and fund the Federal Aviation Administration and provide important investments for our nation’s airports.

AIR-21 included record funding levels for the Airport Improvement Program, which, along with passenger facility charges collected at the nation’s largest airports, is the main source of funds for airport development. AIP is funded solely by passenger ticket taxes, aviation fuel taxes and other aviation industry taxes. More than 50 percent of AIP funds are spent on runway and taxiway construction and improvements.

The AIR-21 measure mandated that all aviation fees collected into the aviation trust fund were to be spent on aviation. Other important accounts that the aviation trust fund provides for are air traffic control facilities and FAA operations.

Even though the AIR-21 measure was extremely successful in funding aviation and airport needs, this next reauthorization measure must do even more. Airports Council International recently completed a study that concluded that America’s airports have at least $15 billion in annual capital needs. Even though AIP funds $3.4 billion a year for capital projects and PFCs raise more than $2 billion per year collectively, there is still a considerable funding gap between airport needs and funding.

Moreover, security needs resulting from the Sept. 11, 2001, terrorist attacks have used up more than $500 million in fiscal 2002 AIP funding, and it is estimated to eat up the same amount, if not more, AIP funds in 2003. This is a 10-fold jump from the $50 million of AIP funds that were spent on security in 2001.

While there is no question that safety and security are the No. 1 concern of passengers, the airline industry, airport operators and the government, AIP funds were never intended to be spent on security measures. Security is a national concern, and funding should come from general revenues or other sources. For example, airports and the Transportation Security Administration still need more than $4 billion to fund the purchase and implementation of explosive detection equipment that will screen all checked baggage, and airports have incurred more than $500 million in unreimbursed operational security costs such as the increased use of local law-enforcement officers. The need for security funding is great and will drastically drain AIP funds, leaving little funding for needed safety and capacity projects.

Even though the Sept. 11 attacks significantly weakened the airlines, and as the airline industry continues to experience one of the most challenging periods in our nation’s aviation history, airport development projects must be funded and must remain a priority. Despite the recent aviation industry troubles, the FAA expects that airline passenger traffic will increase by an average rate of 4 percent per year and reach 1 billion passengers by 2013 — just a few years later than the agency had predicted before Sept. 11. Given that airfield projects generally take a minimum of 10 years and more to complete, we have no time to lose.

Gerald Dillingham, the director of civil aviation issues for the General Accounting Office, recently testified before the House Transportation and Infrastructure Committee about the need for additional capacity. He said, “Enhancing the capacity and efficiency of the national airspace system through runway development and air traffic modernization is critical to preparing for the projected growth and demand for air travel.”

Ken Mead, the inspector general of the Department of Transportation, said at the same hearing, “building aviation system capacity and more efficient use of airspace” is one of four key issues for the next FAA reauthorization bill. Mead also suggested that it would be shortsighted for the FAA not to be “strategically positioned for when demand returns through a combination of new runways, better air traffic management technology, airspace redesign and greater use of non-hub airports.”

A perfect example of the need to prepare for future capacity needs is in Chicago. The city of Chicago is still moving forward with the O’Hare Modernization Program, which will reconfigure O’Hare International Airport’s outdated intersecting runway configuration to a more modern parallel configuration, similar to those used in Atlanta, Dallas and Denver. This proposed runway configuration would reduce bad weather delays by 95 percent and overall delays by 79 percent. The modernization program also means more efficient operations for the airlines. The more efficient runway layout will mean approximately $370 million in delay savings for the airlines, and that’s why even though the airlines are in financial trouble, they continue to support the modernization of O’Hare and view it as critical to meeting their long-term needs.

History has proven that after every other downturn in the aviation industry demand has rebounded and in robust levels. After the first Persian Gulf War in 1991 the airlines suffered staggering losses, but in the nine years following the war the industry enjoyed its largest growth ever. Airport development projects can take decades to implement, and it is important to fully fund the AIP and other FAA airport development programs so that our national aviation system will be prepared to handle the future increased demand in air travel. Congress and the president must enact an FAA reauthorization bill that significantly increases funding for the AIP account, and funds and reimburses airports for aviation security costs out of general fund revenues. Otherwise, passengers will return to the air only to be grounded by congestion and delays.

Rep. Bill Lipinski (D-Ill.) is the ranking member of the Transportation and Infrastructure subcommittee on highways, transit and pipeline.