May 14, 2007

GLOBAL WARMING UPDATE: If we're going to listen to all these rich people on the subject of global warming, surely we should at least end the subsidies for corporate jets. But noooo, they're complaining. . . .

U.S. airlines, which already share the sky with corporate jets, are pushing to share their tax burden too.

President George W. Bush is proposing to cut the amount passenger carriers such as American Airlines and Continental Airlines pay in federal taxes each year by $1.68 billion. Most of that obligation would be shifted to small-jet operators, including General Motors Corp., Exxon Mobil Corp. and NetJets Inc., the business-jet charter company owned by Warren Buffett's Berkshire Hathaway Inc. . . .

Should Bush's proposal become law, the impact on owners and operators of the small jets ``is going to be significant,'' says Ed Bolen, whose Washington-based National Business Aviation Association trade group represents more than 8,000 companies including NetJets, GM and Exxon Mobil.

Given the much greater greenhouse impact of these private jets as compared to flying commercial, that seems appropriate. In fact, I'd say that ending this subsidy is only the beginning. If you're worried about global warming, and want the rich to do their fair share in fighting it, call your Senators and Representative.

And congratulate the Bush Administration on its pro-environment policies!

UPDATE: The Daily Aviator says I'm wrong: "Reynolds is a sharp guy, but he obviously hasn’t spent any time researching the issue, or he would know that this is actually a set up for the takeover of the public’s airways by a private company. I suspect he’s been the recipient of political insider distributions urging his post today."

Nope, unless seeing the link on Drudge counts as an "insider" distribution. And reader Joe Hosteny sends a lengthy rebuttal that's worth your time. Click "read more" to read it. Here's the beginning:

While I applaud the fact that you bring attention to the hypocrisy that frequently surrounds the use of corporate jets, I think you should look a little more into the proposed increase in fees for private aircraft before you advocate them so willingly.

First of all, the airlines are using these fees to fight the onset of air taxi services, and lower cost charters. It really has nothing to do with "sharing" costs as they suggest. They simply want to put stop these nascent businesses from taking hold.

That's a good point. I think that air taxis services and lower cost charters should be treated more favorably than corporate or private luxury jets, as they have economic incentives to keep load factors -- and hence efficiencies -- high. And they offer other benefits, as well, something I explored in this column last year. Maybe we need a special "greenhouse" excise tax on corporate and luxury jets instead!

Joe Hosteny continues:

Secondly, most of the commercial air carriers are simply incapable of running a successful business (with a few notable exceptions, like Southwest). You have frequently cited the poor service you have received when traveling by air. This will not change because of an increase in fees on corporate traffic. Why should the US public take financial advice from the airlines?

Third, the up and coming air taxi services (check out DayJet) are using a new class of light aircraft from manufacturers such as Eclipse and Adam Aircraft. With all of the concern about the loss of American manufacturing jobs, we should be doing everything possible to encourage the success of companies like these. Frankly, the story of Eclipse is an amazing one, and I encourage you to check out a bit of the background on it.

Fourth, the ATC system as it exists is built to serve the needs of the airlines. They *should* pay more, since the system is designed to accommodate *their* needs. The article talks about the fees paid by these different aircraft. Well, that's because the 757 uses a whole lot more fuel than a G-IV. By the way, both AvGas (for propellor driven planes) and Jet-A are heavily taxed, and the fuel currently costs about $4.50 to $5 per gallon. The taxes collected on the consumption of fuel are meant to pay for the system according to use. So, a 757 should pay more.

Fifth, congestion in the skies is not really "in the skies," per se. It is really at the airports themselves. I don't have the exact numbers, but somewhere around 80-85% of all commercial air traffic goes through 25 airports in the US, despite the fact that there are over 10,000 in the US. The congestion is for pavement on the ground.

Frankly, this last point is perhaps the most important. Problems with capacity could be solved by adding *more* small aircraft to the skies, not reducing the number of them by increasing fees. These small aircraft, like the Eclipse, can utilize smaller airports, and allow access to communities that did not have commercial service before.

Once again, thanks for bringing issues of private aircraft use to your blog. However, I'd encourage you to look into it a bit more. The US aviation industry (and specifically, general aviation) is a great success - if you compare it to any other country's in the world, you'll find very little opportunity for the average citizen to learn to fly, let alone use personal aviation as an effective business and travel tool. That is most definitely due to over-regulation and taxation (through user-fees).

I'd be happy to offer you a flight sometime so you can get an alternative viewpoint!