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[quote user="blue streak 1"] [quote user="Sam1"] [quote user="henry6"] The airline industry is in fact heavily subsidized by all levels of governent. The obvious is nationwide air traffic control followed by municipally owned and operated airports.  But also the US military's investment in air and space research and development and purchase these products takes the financial burden off private airline companies by them being able to buy an already researched and proven product without financial risk.  Then there are the safety guidlines for operation and employee responsiblity, all spelled out and enforced by the government.  There's probably a lot more.  But you cannot say the airline industry is not subsidized.[/quote] Your claim is long on generalizations and short on facts.  The airline industry is not heavily subsidized, whatever heavy means, NARP's claims to the contrary not with standing.  In fact, although it would take an enormous amount of time to demonstrate it, the Net Present Value (NPV) of the subsidies received by the airlines could pale compared to the NPV of the local, state, and federal subsidies (low cost bonds, land grants, etc.) given to the railroads.  Sam I am going to jump in on this argument in your own back yard so if I state something not correct please correct me. 1st there is a 80 - 100 year difference in starting point for RR subsidies from the 1820s -1880s to the start of Airline subsidies of the orighnal airmail contracts. So to measure actual subsidies may be complicated. With the advances in technology measuring back to original RR subsidities may be moot..   Determining the present value of the subsidies granted to the railroads and those granted to the airlines would be a very difficult task.  It would take a very long time because it would mean unearthing every subsidy in every form.  Having said that, it is possible that the present value of the subsidies granted to the railroads would be much greater than the subsidies granted to the airlines because of the time value of money.  The subsidy gains greater value over time.  And it does so exponentially.  Most airports in the United States were built by the military (turned over to civilian operators) or local government authorities.  They are paid for by landing fees, hangar fees, vendor fees, parking fees, etc.  Most of them are self-supporting. Now Mueler field in Austin was an adequate airport but not outstanding as the commercial field for Austin. The US airforce pulled out of Bergstrom air base. Instead of the US government selling the field to private interests and putting the money back in to treasury (has been done -- Wilmington OH); the city of Austin was allowed to purchase the whole airfield for ($ ? ) a very small sum. Now that is a direct subsidity to the airlines who moved into the new terminal built at Bergstrom since they did not have to pay for the land in their rental payments. Plus any runway and navigational aids are paid for by a 90% match from the FAA and depending on your state setup another  0 -10% from Texas. I was told by the cargo operators on the north end of the airport that those facilities were a bargin but why I do not know why. In 1942 Austin purchased the land for the Bergstrom Army Air Force base with the understanding that it would revert to the city upon closure as a military installation. Upon the departure of the military, the base reverted to the city.  In turn the city had to upgrade the runways and build the current terminals, using tax free bonds to cover most of the cost.  As is the case for all airports in the U.S., the cost of the facility is being recovered through landing fees, hangar fees, vendor fees, and parking fees.  The primary subsidy is the difference between what the city would have paid had it been required to fund the improvements through fully taxable bonds and what it paid thanks to tax free municipal financing.  As I pointed out, the historical spread between fully taxable bonds and municipals has not been that great.    Nation wide the airlines use about 30 to 35 per cent of the U.S. aviation infrastructure.   As an airline employee I find that figure suspect. The upper level ( flight level ) travel is over 90% airline and the Major airports are the same. The figures are taking from the FAA's statistics.  I have no reason to suspect them.  It is true that airlines account for a higher percentage of controlled operations obove flight level 18, but below this flight level the majority of the operations are general aviation.  Texas has three airports where the airlines would account for more than 30 to 35 per cent of the operations (Dallas, Houston, and San Antonio).  But at many other fields, e.g. Abilene, Amarillo, Lubbock, Longview, San Angelo, etc., which are served by a single commuter airline, most operations are general aviation.  Moreover, at several tower controlled fields in Texas, e.g. Georgetown, San Marcos, etc., there are no airline operations. The remainder is used by general aviation and the military operating in civilian airspace.  Not all of the monies transferred from the general fund (approximately $2.2 billion in FY08), which is a federal subsidy, go to the airlines.  They only benefit from a proportional share of it. Most airports in the U.S. were built with tax free municipal bonds.  The difference between the interest paid on these bonds and the interest that would have been paid on fully taxable bonds could be seen as a federal subsidy.  Moreover, they may or may not qualify for a state subsidy, depending on whether the state has an income tax and treats the interest on the tax free bonds the same way that it is treated by the federal government.  Historically, the rate spread between a AAA municipal bond and AAA corporate bond has been less than one per cent.  For example, the spread between a AAA corporate (there are very few corporates with this high of a rating) and U.S. Treasury long bonds, which are a good emulator for municiple rates, was 90 basis points between 2000 and 2008.  By using tax free financing, airports are able to charge slightly lower fees than would be the case if they had to resort to taxable financing.  However, because the airlines, as well as other commercial users, pay slightly lower fees than would otherwise be the case, they have high income, assuming that they have any income at all, which results in higher taxes, which in turn means that a portion of the so-called subsidy is actually paid back to the federal government in higher income taxes.stin  Now in Austin I watched the road subsidity for the Bergstrom airport. The rebuilding of the intersection of I - 35, US 290?, and TX 71?  (what?-- 5 miles from the terminal) was a collosal overbuilding of that intersection to provide a some what faster connection to the airport. The rebuilding of 71 from a 2 lane road to a 6 lane semi controlled access road took about 4 years?. Any idea of costs? my own estimate is 1.5B but I imagine you would have a better figure. All that road building from road funds not airline fees. Since i have not been there for a while I will assume all the road work is complete?. Now isn't that another subsidity though indirect for the airlines? I can come up with many more examples. I fly out of Bergstrom two or three times a month.  I drive there from my home in Georgetown.  At least 90 per cent of the traffic on TX 71, as well as 290 and I-35, is either commuter traffic or through traffic.  If you want to argue that the road enhancements associated with airports are a subsidy for the airlines, then you would have to admit, I think, that the cost of constructing and maintaining the roadways to the nation's major passenger train stations (Penn Station, 30th Street, Washington's Union Station, Los Angeles Union Station, etc.) are a subsidy for passenger rail.  I would not want to go there. But this is irrelevant.  The key question is how to fund passenger rail, if funding it at all is appropriate, and what transport problem is it addressing.  It does not matter how or why the government funds other activities.  Yes the relevant fact is that there should only be one transportation tax pot. Then we would have funds for Passenger rail, transit, roads, airports, waterways, etc. All tax funds should go into that pot and the funds dolled out as seen fit. That might cause projects to be more interactive with different transportation modes. How to fill the tax pot? One way of course is a fuel tax on all transportation. Others I'll leave to other posters. [/quote] Outside of jump start funding, i.e. airways, roadways, railways, etc., the government should not be in the transportation business.  The users (all of them) should be charge the required user fees to cover the operating costs and the infrastructure costs.  Don't worry!  It won't happen.  The politicians would never give up their prerogrative to dole out transportation funds.    Many passenger rail advocates appear to believe that the dismise of the passenger train was a function of nefarious government policies.  Perhaps.  But the real reason lies in the superior technology of the airplane for long distance travel and the economics and convenience of the car for short to intermediate intercity travel, especially for families, and especially in low congestion areas of the U.S., which is most of the country.    [/quote]
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