Members of the US Congress have adjourned for a week without passing an FAA funding extension, which means the agency will need to furlough roughly 4,000 employees.
The Senate failed to approve an extension that passed the US House that entailed capping the subsidy in the Essential Air Service (EAS) programme at $1,000 per passengers. The current funding extension expires at midnight on 22 July.
Members of the Senate pushed for a "clean" bill without any stipulations.
"I'm very disappointed that Congress adjourned today without passing a clean extension of the FAA bill," said US Department of Transportation Secretary Ray LaHood. "Because of their inaction, states and airports won't be able to work on their construction projects, and too many people will have to go without a paycheck.
While the political differences resulted in failure to pass a funding extension, analysts at JP Morgan noted the shutdown would result in the collection forfeiture of numerous airline taxes levied at the time of purchase, including a 7.5% domestic ticket tax.
The FAA has been running on funding extensions passed by Congress since 2007 when the previous multi-year reauthorisation to fund the agency expired. Since that time the US House and Senate have been haggling over passing a new reauthorisation bill.
Previous extensions have allowed FAA to continue collecting ticket and fuel taxes for its continuing operations.
Source: Air Transport Intelligence news
