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<p>[quote user="JT22CW"]I don't see a single reference to support anything you've asserted. Care to provide them? As far as I've heard, plenty of direct subsidy goes into air traffic control, and without it, it would fall apart. (Is the Airline Trade Group an unbiased source?)<br />[/quote]</p><p>Here is some beef for the numbers that I quoted in my post regarding Southwest Airlines and airline subsidies. </p><p>My original estimate used some but not all of NARP's numbers. I eliminated the ones that were not supported, e.g. $700 million to $1 billion of NASA research that NARP claims benefited general aviation. </p><p>Information regarding Southwest Airlines' flights from Dallas to Austin, Houston, San Antonio, etc., can be found in Southwest's on-line schedules. I added up the flights for the second Monday in February. </p><p>For FFY ended 30 September 2007, Amtrak received a federal subsidy of $1,051,500,000 for train related operations. During the year it carried 25,847,531 passengers. Dividing the subsidy by the number of passengers gives an average system subsidy of $40.68. </p><p>The average subsidy for NEC passengers was $2.52, while the average subsidy for state and other corridor train passengers was $16.00. It averaged $129.78 for long distance passengers. I assumed that 80 per cent of the interest and the depreciation was attributable to the NEC, leaving 20 per cent to be split evenly between the other two categories. </p><p>NARP lists 15 Federal Subsidies for Aviation. Four can be quantified. The others cannot be quantified without making assumptions that would be difficult to support, or they relate to investments - airways and airports - that go back as far as WWII, or they don't tell the whole story. </p><p>NARP lists the assumption of the pension plan obligations of several bankrupt airlines by the Pension Benefit Guaranty Corporation (PBGC), as well as a change in the actuarial assumptions for funding legacy airline pensions, as an aviation subsidy. But they failed to mention that the PBGC is an insurance program.</p><p>PBGC is not funded by general tax revenues. It collects insurance premiums from employers that sponsor insured pension plans, earns money from investments and receives funds from pension plans it takes over. The airlines paid actuarially adjusted premiums to the PBGC. Equally important, actuaries frequently change the minimum funding assumptions associated with legacy pension plans. The treatment received by the bankrupt airlines with legacy pension plans was not extraordinary. They collected on an insurance policy. The net benefit would have been the present value of the benefit stream offset by the present value of the premiums paid since the formation of the PBGC.</p><p>NARP fails to differentiate between commercial aviation and general aviation, thereby implying that commercial aviation is the sole beneficiary of a subsidy. General aviation does not compete with Amtrak. People who can afford to fly their own plane or be whisked around the country in the corporate jet are not serious candidates for taking a train. </p><p>Governmental investments in airports and airways facilities are listed as significant subsidies. It is true that the airlines have benefited from a variety of fiscal incentives to build airports and airways facilities. It is equally true that the railroads have enjoyed similar fiscal benefits, i.e. the large land grants for the development of western railroads, local tax incentives to build union stations, etc. Amtrak would not have any tracks out west to run on if it had not been for these subsidies. To cite historical incentives for the development of airports and airways without citing similar support for railway development is disingenuous. Translating these incentives into present dollars would be a daunting challenge. Both are sunk costs and are irrelevant for on-going comparisons. </p><p>NARP claims that 15 per cent of FAA operations are a function of military operations in FAA controlled airspace. It provides no data to substantiate this number. </p><p>NARP claims that FAA operations were slated to receive $2.703 billion of general funds in 2007. It further claims that $1.453 billion was destined for general aviation, implying that half of the subsidy must be for commercial airline operations. I cannot determine how they came up with this number, as per the next paragraph. </p><p>Assuming that the federal subsidy was spread across all FAA operations, the amount that would have been available in 2007 to control general aviation and commercial airline operations would have been $2,297,550,000 (2.703 X .85). According to the <em>FAA Aerospace Forecast Fiscal Years 2006-2017</em>, in 2005 - latest audited figures - commercial airlines flights made up 26.1 per cent of tower operations - ground control, take-off and landing clearance, and approach/departure control hand-offs. They accounted for 35.1 per cent of Enroute controlling. The average of these two numbers is 30.6. Thus, under a conservative scenario, the FAA federal operations subsidy applicable to commercial airline operations using NARP's numbers would be $703,050,300 (2,297,550,000 X .306).</p><p>In 2005, the latest year for audited financial numbers, $2,827,809,000 was transferred from the general fund to support FAA operations. Assuming military flights make-up 15 per cent of FAA's workload, for conservative illustrative purposes, $2,403,637,650 (2,827,809,000 X .85) would have been available for general operations, of which $735,513,121 (2,403,637,650 X .306) could be considered a subsidy to control commercial airline operations.</p><p>These are just some of the disconnects that I found. There are others.</p><p>NARP's verifiable figures add up to $5,852,845,871 before the removal of unsupported items, e.g. NASA research. After the removal of these items, the general fund subsidy totals $4,619,787,047. According to Federal Department of Transportation (DOT), for FFY ended October 30, 2007, approximately 678,000,000 passengers boarded commercial airliners for flights in the United States. Dividing $5,852,845,871 by this number gives an average passenger subsidy of $8.63, while the math after removal of the questionable items shows an average passenger subsidy of $6.81.</p><p>Using the latest audited numbers - 2005 to 2007, the properly allocated - general, commercial, and military aviation operations - verifiable federal subsidy for controlling commercial airline operations was approximately $2,951,485,487. Dividing this number by the same number of passengers shows an average passenger subsidy of $4.35. I only used audited or verifiable numbers for this calculation. Thus, if a 2005 number was the latest audited or verified number, it is the one that I used. It resulted in some mixing and matching of the numbers, but the year to year differences were relatively small. Thus, the bottom line could change a little once the 2007 figures have been audited and verified, but it would be minimal. </p><p>Failure to prorate the subsidies between general aviation and commercial airline operations accounts for most of the variances.</p><p>Digging through government figures is a daunting task. But at the end of the day, no matter how one slices and dices the numbers, the average per passenger federal subsidy for airline passengers is significantly lower than the average per passenger system subsidy for Amtrak. Moreover, the per passenger mile subsidy for the airlines would be even lower because of the greater distances covered. Airline passengers tend to travel many more miles than Amtrak's passengers, 85 per cent of whom travel on short distance trains. </p><p>The information cited can be found at Southwest Airlines, Amtrak, FAA, DOT, and Homeland Security web-sites. </p><p>None of the figures were taken from the Airline Trade Association. It is a trade group that has challenged some of the subsidy figures. Whether its challenges are supported is open to debate.</p><p> </p>
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