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Halogen Guides : Jets

Halogen Guides : Jets

Jet Expert: 300% Tax Increase for Private Jets?


Jet Expert is a column from experts in the field like Craig Bowers. Craig is the President of JetForward Aviation, an aviation portfolio management firm. He has a BS in Mechanical Engineering from Georgia Tech, and an MS Degree in Aviation Systems. A former Marine attack pilot and instructor test pilot, he is a rated ATP with over 3,000 hours in 35 different aircraft and extensive experience in Part 91, 121 and 135 flight operations. You may email him at craig@jetforwardaviation.com. Private jet flyers could be hit with a tax increase of over 300% if the Bush administration has its way with the proposed FAA funding bill currently before Congress.

Two key elements of the Administration’s funding plan are a huge increase in the aviation fuel tax and the introduction of airspace user fees. Proponents of this plan, including the airline trade group Air Transportation Association (ATA), maintain that user fees more evenly spread the cost of controlled airspace between commercial airlines and general aviation users. As ATA CEO James May stated in a recent interview, “I am tired of having our customers subsidize these so-called bigwigs.” Just who the bigwigs are is a bit unclear.

Not surprisingly, the funding proposal is vehemently opposed by several general aviation advocacy groups who see the plan as a thinly-veiled airline effort to shift billions of their costs onto the backs of general aviation. Both the Airline Owners & Pilots Association (AOPA) and the National Business Aviation Association (NBAA) claim the current fuel tax system is efficient and provides sufficient FAA revenue.

This battle is sure to heat up over the next few weeks as the White House, House and Senate have all put proposals on the table – each with its funding mechanism. House Transportation and Infrastructure Committee Chair James Oberstar (D-MN) has vowed that user fees against general aviation pilots will not be part of the House proposal.

So what does this mean to a private jet traveler? That’s difficult to say, with the various bills being bantered about in DC. Rest assured that any increase in the fuel tax will have a dramatic affect on hourly costs. Fuel price is by far the biggest contributor to direct operating costs – in the 60-70% range at the current fuel prices. (For a better understanding of the cost structure in various operating models, see the comparison chart in the Helium Report Decision Guide to Private Jet Travel).

Whether you currently own an airplane or take the occasional charter, this is one legislative battle worth your attention. To learn more about the user fee debate and let your representative know how you feel, visit the NBAA Government Affairs website.

The dog days of summer are quickly approaching our nation’s capital – this battle in the halls of Congress are certain to make the temperature outside look downright balmy.

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