Airlines oppose FAA bill

updated 2:44 p.m. ET Sept. 21, 2007

WASHINGTON - Commercial airlines are counting on a probable White House veto for a Federal Aviation Administration funding bill they oppose because it does not fairly link fees to system use.

The Air Transport Association, whose members include Continental Airlines Inc., Delta Air Lines Inc. AMR Corp.'s American Airlines, UAL Corp.'s United and others, lobbied against the bill, which easily passed the House of Representatives on Thursday.

Congress has until the end of the month to reauthorize the FAA and possibly raise taxes and fees to pay for upgrades to the air traffic control system and other aviation programs.

Commercial airlines are battling corporate jets and small plane operators over what share of the cost they each should shoulder after a summer in which travel delays reached record highs.

The airline trade group contends that corporate aviation does not pay its fair share of fees based on the amount of services it uses. The Senate is working on similar legislation.

The White House on Wednesday issued a statement that said President Bush's senior advisers would recommend a veto of the current version of the bill partly because the administration also favors a closer alignment of FAA revenue with its costs through fees linked to system usage.

The bill would increase the jet fuel tax for noncommercial planes to 30.7 cents per gallon from 21.8 cents, and the aviation gasoline tax to 24.1 cents from 19.3 cents. It would also raise the cap on fees airports can charge passengers for capital improvements to $7 from $4.50.

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Ed Bolen, president and CEO of the National Business Aviation Association, hailed the House bill for dedicating the additional tax revenue exclusively to modernization and for rejecting user fees. The group represents more than 8,000 companies and other operators of private aircraft.

The FAA on Aug. 30 awarded a ITT Corp. a contract worth up to $1.8 billion to build the first portion of a new satellite-based air traffic control system.

Upgrading the system used to manage commercial and general aviation traffic will help reduce air and runway congestion and operating costs, but will take nearly 20 years to complete and cost more than $15 billion.

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