US transportation officials see 1995 as highly significant for aviation. The air traffic control system may be privatised after all, and taxes, airport funding, and reform of the Federal Aviation Admin istration are all issues likely to be in play, with the new Republican majority in Congress trying to dictate the agenda.
The new majority sees things differently from its Democratic predecessor. Anti-government in political tone, anti-tax in fiscal approach, Republicans may force the Clinton administration to privatise ATC and reform the aviation tax system.
The DOT's plan for ATC corporatisation, a high-profile attempt to 'reinvent government' rejected by the Democratic Congress last year, is now considered the least that will happen.
A month after winning control of the powerful House Budget Committee for the 1995 Congress, Ohio Republican John Kasich was drawing up plans to privatise ATC fully. The plan, sources say, will be put forward in the Republican budget proposal that should come out in March. It envisages handing over complete control of the ATC system to its users: primarily airlines and general aviation. 'We are proposing a fully private enterprise,' says a source close to Kasich.
ATC privatisation would be in line with Republican ideology, and, DOT officials confirm, the concept is 'under consideration' as an extension of the corporatisation proposal. But there are plenty of issues that have to be addressed, not least the structure of the private entity and its funding stream.
Under the Kasich plan, the private sector owners of the system would hire administrators and control the board. Safety oversight would remain with the federal government, and the secretary of transportation 'could' have the final say on competitive questions and budgetary issues. The secretary of defense would have a board seat 'to watch out for national security issues.' Financing of the private body sounds simple: 'We will reduce the ticket tax, and in doing so allow the corporation to charge fees in the manner it deems fit.'
Unfortunately for Kasich, nothing of this magnitude will really be that simple. Still, both sides agree that some type of ATC privatisation will occur in 1995.
Furthermore, the new Congress may insist on extending the two-year exemption from the federal fuel tax that went into effect for airlines in October 1993. The 10 per cent passenger ticket tax is up for review, as is the practice of using the aviation trust fund surplus to offset the federal deficit.
Furthermore, the new Congress may insist on extending the two-year exemption from the federal fuel tax that went into effect for airlines in October 1993. The 10 per cent passenger ticket tax is up for review, as is the practice of using the aviation trust fund surplus to offset the federal deficit.
Source: Airline Business
