Congress brokers FAA deal, ending shutdown - 555

On Thursday, Aug. 4, Congress came to a bipartisan agreement ending the partial Federal Aviation Administration shutdown threatening jobs and halting airport projects.

The shutdown was a result of disputes over funding the FAA and has continued since July 22. During the shutdown, taxes collected on fares lapsed; 4000 jobs were furloughed; and 70,000 airport contruction jobs were affected. The uncollected taxes added up to $30 million a day that would have contributed to government revunue available for halted projects.

The compromise reached by Congress is only a temporary extension until it returns from recess in September. According to Reuters,

The FAA impasse hinged on cutting more than $16 million in subsidies for rural air service — a demand by the Republican-led House that rankled key Senate Democrats like Reid, Finance Chairman Max Baucus and John Rockefeller, chairman of the Commerce Committee.

Congressional and transportation officials said the linchpin of the compromise gives LaHood authority to waive cuts in service to rural airports targeted in the bill, raising the prospect that some or all of the cuts will not be made.

There are undertones of another partisan showdown, though. Congressional Republicans want to rework the FAA funding such that unions are not easily created at airlines. As Reuters also point out, the extension of FAA funding ends the revenue stream created by the uncollected taxes, which some airlines capitalized on by raising fares equal to the hole left.

Airlines quietly raise fares after tax lapse - 548

When Congress failed to confirm an extension of a bill funding the Federal Aviation Administration (FAA) last Friday, that seemed to be the end of it for federal taxes airlines collected from each ticket. It seemed that, in the short term, the prices of airline tickets would actually help consumers save some money, or at least the equivalent of the taxes on those tickets.

While some airlines (particularly Alaska and Spirit Airlines) decided to offer the lower fares, most airlines actually raised prices to equal what the taxes would’ve been. That’s right: they kept prices relatively equal, in essence pocketing the cost of the taxes. In a release from the Air Transportation Authority of America, spokesman Steve Lott said,

Customers are not impacted and are paying the same ticket prices they were last week.

As Forbes points out, this is the same entity who recently said “hiking aviation taxes would slow economic recovery, further burden customers and cost jobs”.

In light of this cash grab, members of Congress are voicing their displeasure. According to the same Forbes article,

Aviation Operations, Safety and Security Subcommittee Chairwoman Maria Cantwell (D-WA) and Chairman John D. (Jay) Rockefeller IV (D-WV) sent a letter to Mr. Richard Anderson, CEO of Delta Airlines and Chairman of the Air Transport Association, calling for an end to the profiteering, noting:

We are deeply perplexed by the industry’s pocketing of passenger tax revenue even though they expired on July 22, 2011.  Most of ATA members have elected not to pass the savings along to consumers through reduced ticket prices, but rather have decided to increase the base fare of airline tickets…We urge the nation’s airlines to put all of the profits that they are making from the lapse of the aviation taxes into an escrow account so that they can be transferred back into the Airport and Airway Trust Fund when Congress reinstates the taxes.

Whatever happened to the airlines’ familiar refrain of blaming the taxes and fees for depressing consumer interest in air travel, thus hurting the industry? The increases aren’t likely to roll back when new taxes are imposed, so again, consumers will still be hurting.

Transportation Secretary Ray LaHood Addresses Controllers Asleep on the Job - 519

In the last two months, three air traffic controllers have fallen asleep at their posts, forcing the Federal Aviation Administration, the Department of Transportation and Transportation Secretary Ray LaHood to take steps to solve the problem.

On Wednesday night, Secretary LaHood appeared on “ABC World News with Diane Sawyer,” speaking with George Stephanopoulos about the steps and reaction of the FAA to the recent spate of controllers falling asleep. As in the above video, Secretary LaHood said, “I am totally outraged by these incidents. This is absolutely unacceptable. The American public trusts us to run a safe system. Safety is our No.1 priority and I am committed to working 24/7 until these problems are corrected.”

The agencies have already taken steps to prevent future incidents by staffing 27 airports around the country. Also in the ABC report:

[FAA Administrator Randy] Babbitt and Paul Rinaldi, the president of the National Air Traffic Controllers Association, the union that represents FAA’s more than 15,000 controllers, will be visiting airports and radar facilities around the country next week “to reinforce the need for all air traffic personnel to adhere to the highest professional standards,” said the FAA in a statement.

Within this week alone, two incidents of the air traffic controller falling asleep have occurred. On Monday, a controller at Boeing Field-King County International in Seattle—who already faced disciplinary action for sleeping during a shift in January—was suspended by the FAA. On Wednesday, another controller, this time at the Reno-Tahoe International Airport in Nevada, was not in communication around 2 a.m. for 16 minutes, when a plane carrying a sick passenger tried landing. Finally, in March, a contoller with 20 years of experience at the Reagan National Airport fell asleep while working his fourth consecutive overnight shift. Additionally, investigations are underway in the case of a controller in Knoxville and two in at Smith International Airport in Texas for similar cases.