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Airlines, Other Air Services Continue Despite FAA Shutdown

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Even after the stalemate over the national debt ceiling in Washington ended, one other important stalemate remains unresolved by lawmakers. Yesterday, negotiators in the Senate attempted to bring a quick end to the deadlock over providing temporary spending to keep the Federal Aviation Administration (FAA) running. This stalemate has furloughed approximately 4,000 of the FAA’s 32,000 employees and frozen $2.5 billion in airport construction money.

Meanwhile, dozens of airport safety inspectors are being relied upon to continue working without pay, charging their government travel expenses to their personal credit cards to keep U.S. airports operating safely. Randy Babbitt, FAA Administrator, said that his agency was depending on the professionalism of safety inspectors to continue working while their pay awaits authorization by Congress.

However, it is unclear how long these government employees can continue to pay for mounting travel and lodging expenses on their own dime. According to the FAA, each regional inspector must travel to as many as five airports every two weeks. It’s easy to see how those travel expenses and hotel bills could quickly add up for these critical employees, while the government is technically unable to reimburse them.

Tens of thousands of construction workers who have been working on airport-related projects across the United States are now unable to continue working on those projects. The furloughing of so many government employees has also temporarily halted the FAA’s long-term modernization plans such as its satellite-based “NextGen” campaign (which we posted about in Air Ambulance Weekly last year). In addition, many agency services provided to airlines, air taxi, and air ambulance services will necessarily need to be postponed until the funding issue is resolved. Fortunately, vital air medical and air ambulance services that many patients in the U.S. rely upon for transport to healthcare facilities will continue to function throughout the shutdown.

Air Travel Unaffected as Airlines Hike their Fares

Ray LaHood, Transportation Secretary, told reporters that the safety of passengers will not be compromised at any point during the stalemate. “Flying is safe. Air traffic controllers are guiding airplanes. Safety inspectors are on duty and doing their job,” he said, telling Americans that no one needs to worry about safety while the FAA’s operation is temporarily suspended.

Medical Air Ambulance

Airlines and air ambulance services will continue to fly as they would normally until the funding impasse is resolved.

Indeed, air traffic controllers and airplane inspectors are continuing to work through the shutdown, as they are paid with separate accounts. However, workers who oversee research for aviation systems, grants for airports and aviation facilities and operations equipment are among those who have been dismissed.

The White House has asked airlines to reverse the fare hikes they began following the shutdown of the government agency, but they currently seem unlikely to do so. Airline passengers are still paying about the same for flights as they were before tax collection ceased; the airlines are just keeping the extra money to bolster their revenue.

 

According to William Greene, an analyst from Morgan Stanley, the current “tax holiday” could favorably impact the revenue of struggling airlines for months after the deadlock is resolved. At the time of this article, the stocks for Delta, United Continental Holdings, and US Airways are all on the rise.

Bickering Over Unrelated Provisions Extends the FAA Shutdown

The partial FAA shutdown began on the 23rd of July and may continue at least through Labor Day 2011. If the stalemate does continue that long, as many are expecting it to, the U.S. government could lose about a billion dollars in taxes on airline ticket sales.

The last long-term funding authorization for the FAA ended in 2007. Since that time, there have been 20 different stopgap extensions passed to provide the agency with funding. Normally passing such an extension is a routine process, but this time the House has specifically added two provisions to the bill, including one that aims to make it much harder for rail and airline workers to be represented by labor unions.

The House bill would cut government spending by ending subsidies to provide commercial airline service to 13 rural airports. The plan, if passed, could save the government over $16 million in spending. However, the move to cut rural air service subsidizing is coming at the expense of the airline ticket tax, which currently provides the government with approximately $210 million a week in revenue. The government has already lost $360 million in revenue from this tax alone over the course of the 12-day deadlock.

Despite this, President Obama is optimistic that the closedown of the FAA could end by the end of this week if those in Congress reach an agreement. “This is an example of a self-inflicted wound that is unnecessary,” the President said, according to The Washington Times. “This is, as I said, not the kind of situation that is complicated.”

Earlier today, the President urged leaders in Congress to resolve the dispute over funding that has resulted in the shutdown of the FAA. He specifically pointed to the negative effect the shutdown of the agency is having on the economy. White House officials say that President Obama may consider utilizing his executive powers to restart FAA programs if the economy shows signs of weakening further, though they did not go into specifics.

Transportation Secretary LaHood also urged lawmakers to interrupt their vacation to deal with the matter. “End your vacation for a couple days, get off the beach, get out of your mobile homes or whatever you’re traveling in – come back to Washington, pass a bill,” he admonished.

Randy Babbitt reminded those in Congress that the thousands of employees and construction workers who are currently out of work directly because of the Congressional disagreement over funding his agency are real people, with families, who are being wrongly put out of work during a very rough economy.

The FAA shutdown affects not only the 4,000 furloughed FAA workers and their families, but indirectly affects everyone involved in any aspect of aviation in America – from airline pilots to air ambulance operators and crews. Hopefully, this standstill over funding the single agency that all of our national aviation depends upon will be resolved very soon. Our hearts go out to the families of the thousands of FAA employees and construction workers who have been put out of work by this financial dispute.

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