Fees fight takes flight.

The aviation industry is readying itself for a dogfight.

On one side is the commercial aircraft industry and on the other the general aviation community which owns and operates smaller planes that fly in and out of Van Nuys and Bob Hope Airports.

At issue is a proposal for private aircraft owners to contribute up to $1.5 billion to $2 billion more a year to fund the Federal Aviation Administration and its air traffic control system.

In the general aviation industry, a change to its contribution to the Airport and Airway Trust Fund is a hot topic of discussion.

"People don't realize the costs we do pay and the fact the airlines are looking for a way to get someone else to carry the burden," said Marc Foulkrod, chairman and chief executive officer of AvJet, an aircraft management and sales firm based at Bob Hope Airport in Burbank

The Congressionally approved structure of the trust fund will expire in September 2007, but already the two sides are marshalling their forces to get their respective messages out.

Trade associations located in Washington, D.C. are doing the heavy lifting--the National Business Aviation Association for the general aviation side, and the Air Transport Association of America for the commercial airlines.

The ATA supports doing away with the current structure of having airlines pay a 7.5 percent tax on ticket price; a $3.20 departure tax; and a 4.3 cents fuel tax and replace it with a user fee they say would be more fair and equitable.

The NBAA, however, would like to maintain the 21.8 cents per gallon fuel tax that general aviation currently pays.

A change to a user fee would shift an estimated $1.5 billion to $2 billion to the private aircraft users. In 2005, more than $10 billion in taxes was collected for the trust fund from all aircraft types.

The NBAA position is that a user fee would create a new administrative burden as invoices would be generated to tell an aircraft user the charges for using the FAA's air traffic control system. If there was a problem with an invoice it would then have to be arbitrated.

"The accounting would be onerous trying to figure out how to charge people for a flight from here to there," said Harold Lee, of Million Air with facilities at both Van Nuys and Bob Hope airports.

"Imagine the expense of administration of a system like that," added Robert Rodine, a Sherman Oaks consultant who has clients in the aviation field. "It's going to be astronomical."

To get its point across, the ATA is tying the user fee to a replacement of the current air traffic control system using radar beacons with one based on satellite technology that will allow for greater efficiency in the airspace.

ATA spokesman David Castelveter said that with the price of airline tickets decreasing, the amount of money going into the trust fund is less and that trend needs to be reversed if the air traffic control system is to be modernized.

It would be unfair to levy more money against the air carriers when the excess demand is being placed on the system by private planes, Castelveter said.

"We don't expect to pay any less, the commercial carriers, all we're saying is everybody who uses the air traffic control system should pay fairly and equally," he added.

Castelveter sums up the association's position by saying that to an air traffic controller tracking planes on a radar screen a blip is a blip is a blip.

Rodine, who serves as co-chairman of the aviation committee of the Valley Industry and Commerce Association, calls that argument utter nonsense.

"If you take away all the general aviation blips, the system does not get smaller or less expensive," Rodine said.

A bulk of the FAA's system is used by commercial flights landing at heavy volume airports such as Los Angeles International or O'Hare International in Chicago and smaller to mid-size airfields such as those in Phoenix, Las Vegas and San Diego, Rodine said.

Many planes operating out of Van Nuys fly under visual flight rules and do not utilize the FAA traffic control system yet they have still paid the tax on the fuel they use, Rodine said.

"You might have a blip out there but it's not a controlled blip," he added. "It could be a Cessna 172 that is in the airspace but FAA controllers are not vectoring it."

The expiration of the current tax structure is still 15 months away but for the players on both sides time is of the essence, especially considering that the debate over the last FAA reauthorization in 1996 lasted nearly two years.

The NBAA is now conducting an education campaign for local and community aviation groups to make them aware of what is at stake, said association President Ed Bolen.

"They are not focused on it day in and day out," Bolen said. "We have to make them aware there is a threat out there and help them understand what the issue is and how they can participate."

NBAA representatives have come to Southern California to meet with its area members, including those from the San Fernando Valley.

Both the NBAA and the ATA have also been lobbying members of Congress on the importance of the issue.

For the ATA, the greatest concern is that if there is no change in the funding structure this time around, the opportunity will not arise again for another decade, Castelveter said.

"This isn't something that changes once a year," Castelveter said. "We have to live with the system as it exists today incapable of handling this growth for another 10 years."

BY MARK R. MADLER

Staff Reporter