Archive for March, 2009

Matt Phillips at the Middle Seat Terminal points to a recent GAO study of the FAA Airport and Airway Trust Fund, which pays for aviation infrastructure services like air traffic control. The balance of the trust fund, which is funded by a combination of ticket taxes and fuel taxes, has been declining. Part of the problem? Ticket prices do not necessarily correspond to the number of planes using air traffic control services. As I wrote last fall, “[The Air Traffic Organization] is funded by taxes on jet fuel and airline tickets. Thus, revenue might fall if airlines introduce jets that are more fuel efficient. Aviation is a cyclical industry, so it sells fewer tickets during slowdowns, cutting ticket tax revenue. Moreover, ATO’s revenue has nothing to do with actual use of the air traffic system.”

Good news, then, that President Obama’s budget proposal indicates that his Department of Transportation is thinking outside the box on this issue.

GAO: As Fares Decline, FAA Trust Fund Projected to Shrink More [Middle Seat Terminal]

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