Assuming everyone is still sky-high about aviation after this weekend’s Yellowstone International Air Show, we thought today’s Council Bulletin should focus on our airport and airport issues—from more-power maintenance –Tim “The Toolman” Taylor grunt — to increasing air service.

 Following the Yellowstone International Air Show, Daniel Brooks with the Billings Chamber of Commerce wrote a commentary about the Billings Logan International Field and some of its needs.

He noted that the City Council’s recent consent agenda included a request to purchase snow removal equipment for the airport. He wrote:

A couple buckets of Ace Hardware ice melt, snow shovels, and mittens for City Councilmembers who’ll be moving snow off runways next winter….just kidding, the total request is for almost $3 million for four pieces of major machinery. Two MB2 snow removal vehicles ($1.3 million), an MB3 dedicated front mount broom ($741k), and an MB4 rotary snow blower ($875k) will be purchased from M-B Companies upon approval from City Council. With a performance rating of 7,500 tons per hour (TPH), the MB4 rotary snow blower can clear the equivalent of 150 Megs every hour… beat that, Jason Statham!

According to a recent administrator’s report, the airport has 60+ miles (for reference, that’s Billings to Reed Point) of pavement surface to maintain. That entails a significant amount of work to clear snow over the winter as part of a comprehensive snow and ice removal plan which is required by the Federal Aviation Administration (FAA) for all commercial airports.

 Payment for the new snow removal equipment will come from Passenger Facility Charges (PFCs), a fee built into your ticket price that goes into an airport account and is restricted to authorized airport projects such as airport planning, terminal development, gate construction, and administrative support costs. For Billings, that fee is set at the maximum amount of $4.50 per ticket, or $18 round trip.

 We hear often about airline tickets being extra expensive lately, so it’s worth a little examination of this portion of your ticket price. First, PFCs make up a moderate portion of a commercial airport’s capital development funding. According to an article published by the Cato Institute titled, Do We Need a Passenger Facility Charge?, PFCs make up about 18% of a typical commercial airport’s funding for capital development, while the largest tranche of funding comes from airport-generated revenue (38%) such as landing fees and terminal concessions. The next largest is Federal Airport Improvement Program (AIP) grants (33%), which come from the FAA’s Airport and Airway Trust Fund along with federal tax dollars.

PFCs are well-liked by airports because they represent a stable source of income, tied to traveler enplanements rather than the federal grant cycle. But the Cato Institute article makes the case that PFCs constitute a “hidden tax” on consumers and cautions against increasing the PFC as it may reduce demand for air travel. 

On the other hand, an article published by the Reason Foundation titled, Modernizing the Passenger Facility Charge for Aviation Recovery, argues the PFC is the more beneficial funding tool for airport capital development. The author makes the case that, of the two funding sources (PFC funds and AIP federal grants), PFCs are the better option, pointing to recent research that suggests more reliance on PFC funds versus AIP grants increases airport efficiencies and reduces federal spending on airport development. The author concludes with the suggestion that Congress eliminate the arbitrary $4.50 PFC cap with the qualification that airports choosing to assess above that level forego 100% of AIP grant funding.

Congress is currently debating FAA reauthorization, a process that occurs every five years, giving the FAA authority and funding to provide necessary oversight for safe U.S. air travel. The reauthorization bill would include whether to keep the current PFC limit or raise it as the author above suggests. The House has passed their version of a bill but the Senate has yet to discuss the bill in committee, all of which needs to be completed by the end of September when the FAA’s current authorization expires.

 INCREASING AIR SERVICE

Perhaps more important than the policy question about what to do with the PFC is how to address the airline pilot shortage, a major contributor to the availability—or UNavailability—of flights, especially to smaller airports like Billings. Part of the shortage can be contributed to the 1,500 hour rule, implemented in reaction to a 2009 airline crash, which increases the number of hours required for pilots to earn their Airline Transportation Pilot (ATP) license from 250 hours to 1,500 hours. That’s enough time for our MB4 rotary snow blower to move over 11 million tons of snow!!

 Seriously though, the six-fold increase in required hours disincentivizes would-be pilots from hurdling such an onerous time and financial barrier. According to an article in Forbes (it’s a really good primer on the issue if you’re interested), the estimate for needed pilots is between 12,000 – 15,000, but only 6,000 are expected at the current rate of training. If you’re complaining about air service now, give it time. This is likely to get worse unless Congress acts to ensure overly burdensome regulations aren’t depressing the pipeline of potential pilots.

In the meantime, Billings is working hard to increase air service, providing more connections, and through an increase in competition, help to keep prices down. An application for a Small Community Air Service Development Program (SCASD) grant was submitted to the Department of Transportation earlier this year. If awarded, it would be used to guarantee a certain amount of revenue—in the event that new air service isn’t as prosperous as hoped—to an airline taking a risk on a new connection. Hey, I wonder why all these Avelo billboards are popping up…? 

Part of that revenue guarantee is required to come from the community. Meaning, Billings has to pitch in as well. But not on the backs of residents, though they’re sure to benefit. Our business community has stepped up, with only $90,000 left to raise of a $750,000 commitment.