Joint Letter From The Aviation Industry With Recommendations On The Economic Stimulus Package

Commercial aviation helps drive more than 10M American jobs and 5 cents of every dollar of U.S. GDP
Commercial aviation drives more than $1 trillion per year in economic activity
In 2012, U.S. airlines moved more than 48,000 tons of cargo per day
In 2012, the value of a kilogram of U.S. merchandise exported by air averaged 121 times the value exported by sea
For every 100 airline jobs, some 360 are supported outside of the airline industry
Federal taxes constitute $61 – or 20% – of the price of a typical $300 domestic round-trip ticket
In 2011, U.S. airlines carried 16 percent more passengers and cargo using 10 percent less fuel than in 2000
Domestically, airlines drive 5% of economic activity but account for 2% of man-made GHG emissions
From 2000-2011, airlines reduced GHG emissions by 11% while transporting 16% more passengers and cargo
From 1975-2011, U.S. airlines and their partners reduced significant noise exposure by 99%
Commercial air travel is the safest form of intercity transportation in the United States
In the most recent decade, scheduled air service on U.S. airlines was seven times safer than in the 1970s
From 2000-2012, U.S. airlines improved the on-time arrival rate from 72.6% to 81.9%
From 2000-2012, U.S. airlines reduced the flight cancellation rate sharply from 3.30% to 1.29%
Airfares are a bargain: From 2000-2012, U.S. CPI rose 33% while average domestic fare rose just 14%
Adjusted for inflation, the average round-trip domestic airfare fell 15% from 2000
2007 domestic flight delays cost the United States approximately $31 billion
In 2012, the value of U.S. merchandise exported by air reached an all-time high of $427B
In 2012, U.S. exports of air-travel services reached an all-time high of $39.5B, driving a $5.1B trade surplus
In 2012, U.S. passenger and cargo airlines spent more than $50B on fuel, averaging 36% of operating expenses
In 2012, U.S. airlines posted the lowest annual rate of mishandled baggage ever recorded
FAA projects U.S. air travel demand to top 1 billion passengers in 2027
In 2012, US airlines flew 83.4 million passengers in scheduled international service - a record high
In 2012, the total value of merchandise exported from or imported to the United States by air exceeded $927 billion
In 2012, 7.15 teragrams of merchandise was exported from or imported to the United States by air

	Joint Letter From The Aviation Industry With Recommendations On The Economic Stimulus Package
	PubZone1 December 10, 2008 The Honorable Nancy Pelosi, Speaker Office of the Speaker of the House H-232, U.S. Capitol Washington, DC 20515 The Honorable Harry Reid, Senate Majority Leader Office of the Senate Majority Leader 528 Hart Senate Office Building Washington, DC 20510 The Honorable Mitch McConnell, Senate Minority Leader Office of the Senate Minority Leader S-230 Capital Building Washington, DC 20510 The Honorable John Boehner, House Minority Leader Office of the House Minority Leader H-204 Capital Building Washington, DC 20515 Dear Speaker Pelosi, Leader Reid, Leader McConnell, and Leader Boehner: As Congress crafts legislation to guide our nation through the current economic downturn, the undersigned associations representing the United States civil aviation industry urge Congress to recognize aviation’s unique place in the American economy. Our industry (which includes aircraft, engines and parts manufacturers, airlines, airports, pilots, aircraft owners and the general aviation community) directly and indirectly generates over ten million jobs and $1.2 trillion in economic activity annually. In 2006, according to the Federal Aviation Administration’s recent analysis, that activity represented approximately 5.6 percent of the U.S. Gross Domestic Product (GDP). In addition, U.S. employees in aviation-related fields paid taxes on about $369 billion in payroll. Unfortunately, those numbers are now in decline. The current economic downturn has forced many of our companies to lay off valued employees. Just this year, passenger carriers have shed 22,400 full time jobs. Since the beginning of this year, at least eight airlines have gone out of business. Manufacturers and parts suppliers still have backlogs, but critical delivery dates are being pushed back. And U.S. air carriers continue to draw down capacity as Americans curtail air travel and reduce their reliance on the industry to ship goods throughout the world. General aviation flight hours have declined and there is pessimism among pilots who believe that the current depressed economic conditions will prevail into the next year. In addition, industries that rely on an efficient air transportation system are at risk. In 2007, $394 billion of U.S. exports and $415 billion of U.S. imports were shipped by air. In view of this deteriorating situation, as you consider an economic stimulus package, we believe you should focus on several vital areas of our nation’s aviation infrastructure. Careful investment decisions made today will provide immediate economic relief – while preparing our national air transportation system for future growth. Moreover, many of the investments we make in our aviation infrastructure today will also reap substantial environmental benefits for years to come. Therefore, the industry represented by our associations strongly recommends the following proposals be included in the economic stimulus package: Include at least $1 billion for the Airport Improvement Program (AIP) - As you know, there are over 5,000 public use airports in this country. Approximately 500 have commercial airline service. In addition to commercial airline service to large communities, General Aviation and regional airline service provide an economic lifeline for thousands of communities and an essential economic generator throughout the country. Additional investment in airports of all sizes will undoubtedly provide needed stimulus to both large cities and rural communities in all 50 states. This infrastructure funding would help stimulate the economy by creating approximately 35,000 high-paying jobs. It would also expedite the construction of critical safety, security and capacity projects at airports around the country. Fund $3 billion in NextGen Equipage to Reduce Emissions and Delays - Our aviation infrastructure includes airports, airways, aircraft, and the air traffic management system. In order to support and stimulate the U.S. economy, it is necessary to invest in the entire aviation infrastructure. To enable many of the changes envisioned in NextGen, new aircraft equipment must be purchased and installed to operate in the new system. Incentives or funding to support avionics implementation would accelerate many of the economic and environmental benefits. Key pieces of NextGen include Automated Dependent Surveillance-Broadcast (ADS-B) ($2.5 billion equipage), Required Navigation Performance (RNP/RNAV) ($500 million equipage) and GPS Wide Area Augmentation System – equipment that when deployed on commercial and general aviation aircraft increases safety in all weather conditions, the accuracy of the information used to track airplanes and will help enable reduced spacing between aircraft, will reduce emissions, and improve passenger experience. Approximately 20,000 aircraft can be equipped with this investment – generating high-paying green jobs in the high-tech fields of civil aviation manufacturing, flight operations, maintenance and environment. Eliminate the Alternative Minimum Tax (AMT) penalty on airport private activity bonds - Federal tax law unfairly classifies the vast majority of bonds that airports use as private activity – even though they are used to finance runways, taxiways and other facilities that benefit the public. Since private activity bonds are subject to the AMT, airport bond issuers are charged higher interest rates on their borrowing. Consequently, airports are being forced to either postpone key infrastructure projects or find other sources of short-term financing. Eliminating the AMT penalty would allow airports to find buyers for their bonds so they can fund infrastructure projects that will create jobs and stimulate the economy. Extend the current bonus depreciation provision for aircraft purchases through December 31, 2009 and the placed-in-service date through December 31, 2011 - New general aviation aircraft orders are freezing up. Deliveries of piston engine airplanes have fallen by 11 percent and sales are stagnant. We need to keep aircraft production lines moving and machinists and engineers employed. Bonus depreciation changes the timing of the standard depreciation schedule to give more depreciation in year one but less depreciation in all future years (the total amount of depreciation remains unchanged). Additionally, the in-service placement date should be extended to December 31, 2011 to allow manufacturers to maintain their backlog and production schedules more effectively. By extending bonus depreciation and the in-service placement date, we will be better able to preserve the good jobs our industry offers. Finally, since bonus depreciation relates only to timing and does not change the total amount that can be ultimately depreciated, its cost to the federal government is close to zero. Accelerate Increase in Domestic Manufacturing Deduction - Under present law, in 2010, the Internal Revenue Code, Section 199 deduction for domestic manufacturing activities is scheduled to increase by 50 percent – from six percent of U.S. manufacturing income to nine percent. When enacted in 2004, the purpose of Section 199 was to encourage manufacturing activities and job creation in the U.S., but it was phased in over a six-year period for budgetary reasons. To maximize this incentive for U.S. manufacturing activities, Congress should now accelerate the effective date of the last scheduled increase in the tax deduction to January 1, 2009. Make the R&D tax credit permanent - An increasing amount of research funding is being committed in countries – such as Ireland, Canada and China – because more attractive Research and Development (R&D) tax incentives are available outside the United States. Thus, the U.S. has already fallen out of the top rank of Organization for Economic Cooperation and Development countries offering tax incentives for private sector R&D. The R&D tax credit provides a critical and effective incentive for companies to increase their investment in U.S.-based research and development. The credit is a positive stimulus to U.S. investment, innovation, wage growth, consumption, and exports -- all contributing to a stronger economy and a higher standard of living for American workers. Making the R&D tax credit permanent will help reduce uncertainty for companies making tough R&D investment decisions in the U.S. While the nation’s economy is in trouble and the aviation industry is feeling the pain like everyone else, all forecasts point to robust growth in the civil aviation sector in the coming years. These recommendations, if adopted, will not only achieve short term economic stimulus goals, but will also lead to long term efficiencies and economic growth. Moreover, this growth will come from an industry with a proven track record in improving fuel efficiency and overall environmental stewardship. Very few government investments have the potential to positively influence two policy objectives at the same time. This is an investment we cannot afford to postpone. For questions regarding these proposals, please contact Dan Elwell at (703)358-1080, or dan.elwell@aia-aerospace.org. Sincerely, Aerospace Industries Association Air Transport Association Airport Consultants Council Airports Council International-North America Aircraft Owners and Pilots Association American Association of Airport Executives Cargo Airline Association General Aviation Manufacturers Association National Air Carrier Association National Business Aviation Association National Association of State Aviation Officials Regional Airline Association PubZone2	A4A advocates measures to support aviation safety, security and well-being.