Plan to ax ticket tax won't cut airfares

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Airline passengers no longer will pay a federal ticket tax when flying, under a new aviation-funding plan announced yesterday by the Bush administration.

But don't expect the elimination of the 7.5 percent ticket surcharge to lead to cheaper airfares, as the Federal Aviation Administration proposes to increase other taxes and fees in a major overhaul of its funding structure.

"This is not a consumer-friendly bill -- nor should it be thought of in that way," said airline analyst Darryl Jenkins. "This will not cause airline tickets to go down at all."

The Next Generation Air Transportation System Financing Reform Act, designed in part to help pay for a new air-traffic control system for the nation's airports, would allow airports to increase passenger charges for capital projects from $4.50 to $6.

The plan also calls for collecting "user fees" from aircraft operators, which would impose a fee each time an aircraft flies. The amount of the tax would depend on several variables, including the size and type of the aircraft, and the levy would be imposed on commercial airlines as well as corporate jets and small private planes.

The proposal isn't expected to survive the legislative process without some changes because of its complexity and the Democrat-controlled Congress' reluctance to rubber-stamp a proposal from the Bush administration.

The FAA says its new funding structure would create a more balanced and fair taxing system among commercial, business, cargo and general aviation users.

"Our proposal will allow us to operate more efficiently through a stable, reliable funding stream that enables us to handle the oncoming rush of the second century of aviation," FAA Administrator Marion Blakey said.

Commercial users, more than 90 percent of which are airlines, account for 73 percent of the air-traffic system's use but pay 95 percent of costs, the FAA says. The agency says its new plan would bring aviation costs in line with use.

Under the bill, airlines would pay about $6.75 billion a year, or about $2 billion less than they do now.

User fees long have been sought by the airline industry, which has accused general aviation operators of not paying their fair share.

"When you use the services of the air-traffic controllers, it doesn't matter if you're flying a [private] Gulfstream, a regional jet or a Boeing 767 -- in the eyes of the controller, they're all a blip on the radar screen," said David Castelveter, a spokesman with the Air Transport Association of America, a trade organization of the U.S. airlines.

But many in the general aviation industry say the current funding system works fine and accuse the Bush administration of bowing to pressure from the major airlines.

"By manufacturing a crisis based on flawed financial assumptions about the viability of the current funding system, [the U.S.] government is backing away from the safest and most efficient air-transportation system in the world," said Phil Boyer, president of the Aircraft Owners and Pilots Association.

The Next Generation Air Transportation System, called NextGen, would replace the current radar-based air-traffic control system with a Global Positioning System that uses satellites to track aircraft.

The FAA says the new system would cost as much as $22 billion and wouldn't be fully implemented until about 2025. The agency says the system is vital to help alleviate congestion and reduce flight delays.

and would be safer and help streamline flight operations so as to cut down on jet noise.

The agency says the new system is essential if it's to keep pace with the growing demand for passenger and cargo flights, which it expects to double or even triple by 2025.