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Statement of Edward J. Driscoll
before the
National Civil Aviation Review Commission
May 28, 1997

Mr. Chairman, Members of the Commission, it is a distinct privilege for me to appear here and to present a brief statement with regard to the task that you have been assigned under the statute which created this Commission and which divided it into the Aviation Funding Task Force and the Aviation Safety Task Force.

I am sure you will agree with us that the U.S. has the finest civil aviation safety record in the world. Notwithstanding some of the statements that have been made by critics of the Federal Aviation Administration, some of which are former government officials, that the system stinks, the record speaks for itself. We all must recognize that the statistics clearly show that we have the finest civil aviation system in the world. Mr. Chairman, we trust that the Commission, in its role of recommending future financing, is going to ensure that this fine system continues through the year 2002 and beyond.

NACA and its member carriers are proud of the role we have played in the safety record of the United States. My group of carriers without question has an enviable record of performance--no fatalities within an extended period of years. I cite this, Mr. Chairman, not to add grist to the mill, but merely to say that we are safe; that we provide essential air transportation services; we provide it at low cost; and we support a national commitment to defense.

Let me just state a few general principles. We represent the smaller carriers which for a long period of time only provided charter service. NACA’s member carriers have since graduated into scheduled service and are now providing a mix of scheduled and charter services throughout the world. In addition, we are the commercial backbone of the U.S. military in peacetime, as well as in contingencies that warrant either voluntary or mandatory commitments under the Civil Reserve Air Fleet. Our record speaks for itself.

Concerning our recommendations to this financial task group, let me assure you, Mr. Chairman, that I do not have all of the answers. The Commission’s task is a daunting one.

I would like to point out that NACA and its member carriers are members of the Alliance for Safe and Efficient Air Transportation, which strongly encourages this Commission to continue excise taxes as the principal means of funding the FAA, with some reasonable contribution from the General Fund.

Several years ago, the FAA produced a long-term budget that estimated that between 1996 and 2002, the FAA needed an additional 12 billion dollars to implement all the improvements we feel must be made.

You have several other very fine studies that have reviewed the FAA budget and which came to the conclusion that basically the FAA estimates are correct. According to most known authorities, the FAA budget produces a shortfall of between 6 and 12 billion dollars depending on who runs the arithmetic. Here I am referring to the Coopers and Lybrand Report and to the GRA, Inc., cost allocation study, both of which have been completed within the past six months.

That 6 to 12 billion dollars, Mr. Chairman, must be made available. However, the functions that the FAA exercises and performs must be scrutinized from the standpoint of safety, an assignment being undertaken by the Commission’s Aviation Safety Task Force.

Mr. Chairman, we must encourage you to look at the entire system that constitutes our current, excellent air transportation system. It is, in one word, "competitive". Competitiveness speaks for itself. One carrier can out-perform another by establishing recognized methods of cost savings, and do so without short-circuiting the system as far as safety is concerned. As a result of such a cost savings, low-cost transportation services are established which broaden the base of air transportation, thus generating additional tax revenues through the existing excise tax. This would not be the case under the system proposed by the seven major carriers which would shift the brunt of the taxation system to the low-fare passengers traveling on low-fare carriers, thus reducing the taxable base of our air transportation system. If we expand our air transportation system, and by all estimates there is little risk that we will not expand through the year 2002, the monies generated by increased traffic should more than satisfy the requirements for the budget and provide for the finest system of air safety in the world. Let's not kid each other, let's recognize there are some--the large and the mighty--who would try to shift the whole responsibility onto the backs of the low-fare traveler and the taxpayers and who, in so doing, would reduce their transportation expenditures if the cost of travel were to increase through the imposition of a user fee.

I ask you to recognize that our air transportation system must be based upon a cost-conscious system of air transport and not on a system that benefits those that can pay the highest fares, such as those who can charge it to corporate accounts. We have a national transportation system which must support the total traveling public, including you, me, families, the elderly, and the low-income retiree, not just those who can pay the highest rates for a first class or some other type of premium service. We ask you to focus on this and produce a financial structure for the FAA that assures that it will continue be an outstanding agency in the future, and low-fare service will be preserved.


Respectfully submitted,


National Air Carrier Association





Edward J. Driscoll

President and

Chief Executive