One of the ‘voices’ often heard from the aviation lobby is that of Nicholas Calio. He is President and CEO of A4A, the airline lobby more fully known as ‘Airlines for America’, with the slogan ‘we connect the world’. Wikipedia indicates Mr. Calio is from Ohio, born in 1953, with a law degree from Case Western Reserve University. He served as an advisor to both Presidents Bush,, and in fact was a key person when TSA was formed immediately after the 9/11 attack. Also in his past history is that he formed a law/lobby firm in DC. He came to A4A in January 2011 after serving as the Vice-President for Global Government Affairs at Citigroup.
Mr. Calio’s frequent comments include accurately pointing out last fall that an excessive amount of airline passenger fees are routinely directed to general aviation airports with no direct support of commercial aviation. He consistently advocates for reforming FAA’s administration of the AIP funds, along the lines that funds collected in commercial aviation should be spent on commercial aviation.
Here is the latest A4A release by Mr. Calio, followed by rebuttal comments by aiREFORM…
When Mr. Calio speaks about aviation tax rates, he is speaking first about FAA and second about TSA. There is no disputing that FAA’s budget and expenses have grown considerably, and there is plenty of room for cost-savings. But, in rebuttal to Mr. Calio’s statement, there is a significant difference between the tax burdens on consumption of commercial air miles, and on consumption of alcohol/tobacco products. That is, states are generally not allowed to impose local excise taxes on commercial aviation, while the Federal government seems to deeply respect that local and state taxes on alcohol and tobacco are valid and even encouraged as a means of local revenue generation. Consequently, a commercial airline ticket has nowhere near the total tax cost as do a bottle of gin or a carton of cigarettes. Furthermore, a little online research shows the federal tax on cigarettes is $1.01/pack which, compared with the prices on display at gas stations around here, suggests a steep 25% tax rate. This is much higher than the level of excise taxes paid in aviation, and it would be nice if Mr. Calio would be more careful with his rhetoric. In fact, the jet fuel tax here in Oregon is one-cent per gallon (!), and there is a fight brewing to stop it being raised to three-cents per gallon.
Calio makes an important point at the second highlighted comment: aviation is NOT growing, it is contracting. And it has been contracting for roughly a decade. This alone reasonably suggests room for FAA (and TSA) to make adjustments, as needed when revenues are flat or even declining.
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The one most important point is not yet being discussed, but will be soon. There is no doubt that we cannot and should not continue to encourage people to fly on a whim, to rack up tens of thousands of air miles each year. The environmental costs are becoming too great. Not just the incessant streams of air carriers near major hub airports, but also the air pollution, and most dangerously, the climate change. Change is at our door, and great leaders are needed to help mankind adapt to – and prepare for – these changes…