Wednesday, January 31, 2007

Fuel tax could be replaced with weight and distance based charges, resulting in dramatic costs rise

FAA is struggling to find a solution to decreasing ticket taxes income and going to redistribute it's burden charging private jet owners more.

The proposal the FAA finally issues will likely be a compromise, said Robert Poole, director of transportation studies at the Reason Foundation, a libertarian think tank.

The straight pay-to-play fees the airlines want would be too extreme, he said. The FAA will probably spare the independent pilots any new expense, Poole said.

Poole advocates a system similar to the one he worked on for Canada in the 1980s, where airlines and business jets pay fees based on a combination of the weight of the plane and the distance traveled.

Poole recently studied how those fees would affect the bottom lines of business jets, based on typical planes and flying habits.

A Lear 60 that pays $22,000 a year in fuel taxes would pay $47,000 in fees under the Canadian model.

The change would whack the bottom lines of corporate jets, but it wouldn't mean much to jets that are in charter or fractional ownership programs.

The same jet that's part of a fractional service already collects $63,000 per year in ticket taxes, Poole said.

The same jet in a charter program pays $98,000 per year.

The business aviation group, which represents everyone from piston-engine to Lear jet fliers, has not exactly embraced Poole and his recommendations.

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