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AviationRegister E-Xpert Witness Journal
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Amtrak is Essential
to the Transportation System of the USA but Remains Underfunded
"
Every functioning economy requires a passenger rail system. And every passenger rail system requires a public investment. That’s why, Amtrak needs realistic and reasonable Amtrak funding levels."
While Amtrak is a crucial form of transportation in the Northeast of the USA, it is also an important transportation option throughout the United States. Amtrak serves more than 500 stations in 45 states, employing more than 24,000 people and operates more than 22,000 routes. On weekdays, Amtrak operates up to 265 trains per day, excluding commuter trains. An Amtrak train is in operation every minute of the entire year. Throughout Northeast USA, Amtrak intercity passenger rail represents a critical transportation link for many travelers. As Amtrak is currently structured, according to the DOT’s Inspector General, it would have to spend $500 million annually over 15 years to eliminate its backlog of capital projects.
Amtrak has estimated the cost of developing a national high-speed rail network at $50 to $100 billion over 20 years. By way of comparison, total highway spending – federal, state and local – for just one year exceeds $130 billion.
However, investment in the U.S. rail system has traditionally lagged far behind investment in air travel and highways. According to a Congressional Research Service analysis of per capita federal spending on transportation, the U.S. spends $79 per person for highways, while Amtrak received only $27 per person. Federal spending on other modes of transportation literally dwarfs the investment in rail, and has been increasing over the last 20 years, while spending on passenger rail has remained flat or declined. The U.S. ranks among the bottom of all industrialized nations in terms of support for rail travel.
The U.S. Senate Committee on Commerce, Science and Transportation believes that if the U.S. is to confront U.S. transportation challenges – from air traffic delays to highway gridlock – an strong passenger rail network must be part of the solution. And while the $2 billion that Congress provides Amtrak annually should prove adequate to cater for the spike in demand becaus eof high oil prices policy makers risk confusing Amtrak’s short-term survival with the long-term passenger rail enhancements that are key to the U.S.’s transportation future.
The American Rail Equity Act (AREA), which was introduced in 2003 was intened to meet the fundamental challenges facing intercity passenger rail. It was intended to fund Amtrak’s operations for six years at $2 billion per year. The legislation also created a National Passenger Rail Office within the U.S. Department of Transportation, and allowed Amtrak to deal directly with the Surface Transportation Board in scheduling disputes with freight railroads.
Most importantly, by providing $48 billion in tax-credit bonds for rail construction projects, the AREA bill tried to tackle the lack of capital investment in the U.S. rail system, as evidenced by Amtrak’s decrepit infrastructure. The capital funding contained in this legislation was the first step towards giving the U.S. the same kind of rail infrastructure that Western Europe and Japan enjoy. At the same time, it was hoped that the funding for capital improvements would take significant pressure off of Amtrak’s operating budget.
Source: U.S. Senator Olympia J. Snowe.
Tuesday, October 28, 2008
Obama pledged to use infrastructure projects to spur the economy.
Presidential campaigns squared off on transportation issues
By Tom Haines
A panel of aviation experts met on October 22nd,, 2008 for a discussion about the impact on aviation of the current economy, the environment, and the presidential elections. The A follow-up session will tak eplace on Thursday, November 6, two days after the election.
With only days left before the presidential industry analysts attempted to understand how the presidential candidates might structure transportation policies. At a National Journal policy breakfast on transportation, representatives of the Obama and McCain campaigns expanded on their candidates’ transportation policy plans.
Obama would use transportation infrastructure
projects to spur the economy
Mortimer Downey, transportation advisor to Sen. Obama, noted that infrastructure improvements across all transportation sectors need more investment, including “getting an ATC system that works.” He defined a series of short-, mid-, and long-term goals to address transportation and its impact on energy independence, the environment, and the economy. Downey said that short-term, Obama would use transportation infrastructure projects to spur the economy. Mid-term, he would develop an “infrastructure bank” to harness funds for longer-term improvement projects. And, long-term, he would work to pass funding bills for all transportation modes supported by all parties involved in those sectors. While labeled as a “long-term” item, Downey said the passing of an FAA reauthorization bill needs to be “soon” in an effort to move forward with ATC modernization. FAA reauthorization bills have been stalled in Congress since mid-2007. The current legislation expired in September 2007, but has been extended several times.
McCain’s transportation policy
focused on energy independence
Holtz-Eakin , the spokesman for McCain said John McCain was committed to moving away from imported oil and toward energy independence through alternative energy sources. Transportation, a user of as much as 30 percent of all energy, is an important part of that. McCain is an opponent of earmarking funding bills, which means Congress directing federal funding to particular favorite projects of key legislators. Instead, Holtz-Eakin said, McCain favors using independent third parties to evaluate infrastructure projects and determine a reasonable return on investment before funding is released. McCain does not support the infrastructure investment bank, noting that it looked too much like a Fannie Mae or Freddie Mac government solution—referring to the troubled government corporations supporting mortgages. Eakin noted that the federal role in transportation needs to be more defined, and that the burden should be shared with state and local governments and private industry, which benefits from transportation improvements.
Janet Kavinoky, director of transportation infrastructure for the U.S. Chamber of Commerce and another panelist at the breakfast, asked the gathering, “What are we going to do to modernize ATC?” She then stated, “Whether it floats, flies, or rolls, it's important.” Safety problems and congestion across all modes of transportation are a drain on the economy. Investments to fix those problems help the economy. Kavinoky reiterated AOPA’s longstanding position that fuel taxes are the most efficient and easiest way to raise transportation revenues. To those who say there is no support for increasing the gasoline tax, Kavinoky said that all funding options have to be on the table.
Former Transportation Secretary James Burnley said that a meaningful increase in the gasoline tax isn’t going to be supported, particularly if it comes in tandem with a “cap and trade” bill that requires those who contribute to greenhouse emissions to cap the amount of emissions and to pay a fee for not meeting future emission standards. The cap and trade fees amount to another tax on top of the gasoline tax, he said.
December 2009
BAA (British Airports owned by Spain’s) wins its appeal against an order to sell three of its seven UK airports.
Office of Fair Trading asks the UK’s Competition Commission in March 2007 to investigate BAA's ownership of seven UK airports
Office of Fair Trading wanted to determine if BAA’s ownership of airports made the supply of airport services in the UK uncompetitive. March 2009:
Competition Commission in March 2009 orders BAA to sell Stansted and Gatwick to different
buyers and sell either Edinburgh or Glasgow airport to introduce more competition
BAA challenges the ruling in May 2009 on the grounds of apparent bias on the panel, and that the remedies were disproportionate.
Tribunal upholds the appeal in December 2009 on the grounds of apparent conflict of interest
BAA has already sold Gatwick to Global Infrastructure Partners for $2.4B. It is unclear if BAA will have to sell other airports.
Competition Commission ruled in March 2009 that BAA must sell Gatwick, Stansted and either Edinburgh or Glasgow airports within two years.
Competition Appeal Tribunal will now allow more time to hear arguments from BAA and the Commission as to what should happen next.
Euro is credit challenged due to the rising risk of country bails for the likes of Greece, Spain and Portugal. A weaker Euro favors Airbus over Boeing.
Octobeer 2009
Delta Air Lines extended its lease at Hartsfield-Jackson Atlanta airport, its largest hub, until 2017.
Atlanta City Council authorized $800M in bond financing to complete the development of the Maynard Holbrook Jackson, Jr. International Terminal, work that began in 2008.
August 2009
Airport gate leases. About 8% of airports have terminal leases of 10 years or longer, about 82% have terminal lease terms that are 5 years or less, up from 71% with leases of similar duration 5 years ago, says ACI.
Airport gate leases: Under the current Atlanta gate-lease, airlines’ costs amount to less than $5 per passenger, vs. $17 at New York’s JFK & $11 at LaGuardia.
Airport gate lease rates: The new 30-year 142-gate/terminal lease at Hartsfield-Jackson Atlanta International Airport will cost Delta $1.35 Bn.
Hartsfield-Jackson Atlanta International Airport has 182 gates & is adding 12 more. Delta & its regional partners transport 73% of the airport’s passengers.
Airports are factories for airlines, and cost between $5 & $10 per enplanement.
August 2009
Slot swap: Delta & US Air have agreed to trade slots (time-specific landing rights) that will make Delta stronger in New York and US Air stronger in Washington, D.C.
Slot swap: Continental & AirTran propose to swap at LaGuardia, Reagan National & Newark airports.
Summer 2009
Administration had no legal authority
to auction airport slots
The Associated Press reported from Washington (October 2008) that U.S. aviation officials have no legal authority to auction takeoff and landing slots at New York City airports, a scheme the government devised to try to curb crippling traffic jams at major airports, congressional investigators said.
The legal opinion from the Government Accountability Office came amid a legal fight among airlines, airport operators and the Federal Aviation Administration over the U.S. Administration's plan to trim flight delays by auctioning off slots at New York City-area airports.
The opinion was another blow to administration officials who had hoped to get their air traffic experiment off the ground before they leave office in January 2009.
"We conclude that FAA may not auction slots under its property disposition authority, user fee authority, or any other authority, and thus also may not retain or use proceeds of any such auctions," GAO general counsel Gary Kepplinger said in a letter to lawmakers who had sought the legal opinion.
The GAO's top lawyer concluded that for the first time in 40 years, the FAA claimed it may assign airspace as its "property," but the laws covering the FAA were never written to include such a definition of property.
Transportation Department spokesman Brian Turmail said the GAO was unfamiliar with aviation law, and had little time to study it before reaching its conclusion.
"Should Congress give the agency an opportunity to conduct a more thorough review, we are confident that GAO will better understand both the validity and the effectiveness of our approach," Turmail said in a statement.
A number of congressional lawmakers had requested the legal opinion as they tried to stop the FAA's limited tryout of a slot auction in the fall of 2008 at Newark Liberty International Airport.
"This once again shows that the DOT needs to put a stop to this ideological battle that would cause chaos at New York airports. The administration has tried to jam through a half-baked plan that can't even be implemented," said Sen. Charles Schumer (D-N.Y)., one of the agency's biggest critics.
Then Transportation Secretary Mary Peters proposed the auction plan after widespread complaints in 2007 about rampant flight delays across the country. The government claimed two out of three flights delayed 15 minutes or more were due to cascading backups beginning at one of the New York metropolitan area's three airports: Newark, Kennedy and LaGuardia.
Trying to fix the problem, the government imposed new limits on the airports and announced plans to auction off some takeoff and landing slots to control the crushing demand for time and space. By auctioning slots, the government reasoned, market forces will help restrain such demand and make the system operate more efficiently.
Opponents sued.
Airlines and airports contend the auction proposal will add new costs and make a mess of day-to-day airport operations.
The government pressed ahead with a trial effort at Newark to auction off just two slots, but an internal FAA agency told them to wait.
An agency order lifting that stay was issued after the GAO legal finding, meaning the agency could in theory proceed with its trial auction in Newark.
