The Good Life

Via Tapped, a report on private jets from the Institute for Policy Studies:

As Americans prepare to pay extra for checked bags, wait in long lines, and endure increasingly crowded commercial flights, super-wealthy private jet owners are enjoying tax breaks and luxury at the public’s expense. “High Flyers: How Private Jet Travel Is Straining the System, Warming the Planet, and Costing You Money,” a report from the Institute for Policy Studies and Essential Action, exposes the impacts of private aviation on the air traffic system, carbon emissions, and everyday travelers. The report criticizes government inaction to rein in gas-guzzling, sky-crowding private jets, and the super-wealthy High Flyers who dodge security restrictions, carbon costs, and taxes.

It seems that a commercial flight pays $2,014 in taxes to fly from New York to Miami, whereas a private jet only pays $236 even though the impact on air traffic control is the same.

Comments

But..but...Jim Fallows has been going on at length for years and years how private jet travel is the really big next really big thing in transportation.

Did you feel you needed to be on your way out the door, Matt, before you called bullshit on him?

Posted by James Gary | July 22, 2008 10:52 AM

Remember the corporatist mantra: Privatize the benefits, socialize the costs.

Posted by Gregory | July 22, 2008 10:59 AM

Cue Chris Ford to come on and cry about Al Gore again. And Al Gore is fat!

Posted by El Cid | July 22, 2008 11:04 AM

Few have really noticed, but the rich no longer fly first class -- they fly private charter.

Posted by Mark | July 22, 2008 11:15 AM

Why are you hatin on The Rich? Some people just know how to live. Get over it!

Posted by ed | July 22, 2008 11:21 AM

Don't private jets probably carry a lot fewer people and less baggage? The air traffic control cost may be the same but the security cost may be a lot lower. They could ban private planes for all I care, that just struck me as a possible partial explanation of the discrepancy.

Posted by Aleks | July 22, 2008 11:34 AM

Private aviation pays Federal Excise Tax of 7.5%, which I can assure you is more than $236 for a flight from New York to Miami as well as Segment Fees, which are basically the 9/11 fee of $3.30 per person per leg. Not sure where the $236 figure came from but it is way off the mark. A flight from JFK-MIA would cost around $10,000 at a minimum so that's $750 in FET alone.

Posted by Greg | July 22, 2008 11:43 AM

Private aviation pays Federal Excise Tax of 7.5%, which I can assure you is more than $236 for a flight from New York to Miami as well as Segment Fees, which are basically the 9/11 fee of $3.30 per person per leg. Not sure where the $236 figure came from but it is way off the mark. A flight from JFK-MIA would cost around $10,000 at a minimum so that's $750 in FET alone.

Posted by Greg | July 22, 2008 11:45 AM

Don't private jets probably carry a lot fewer people and less baggage? The air traffic control cost may be the same but the security cost may be a lot lower.

Right. The two grand vs. 200 bucks comparison provided by Matt sounds a bit extreme, and perhaps taxes should be raised on private jets. But to the extent that such taxes are added to fares and ticket prices, it may be unrealistic and perhaps counterproductive to expect a jet that typically carries six or seven people to pay the same tax as one that typically carries 180.

Posted by Mutiny | July 22, 2008 11:59 AM

why are we talking about the impact on air traffic control as it relates to fees and taxes? should a guy who takes his little Cessna into JFK pay $2000 just to land there?

Posted by Cody | July 22, 2008 12:04 PM

But to the extent that such taxes are added to fares and ticket prices, it may be unrealistic and perhaps counterproductive to expect a jet that typically carries six or seven people to pay the same tax as one that typically carries 180.

should a guy who takes his little Cessna into JFK pay $2000 just to land there?

FYI: The resources a flight requires from the airport system--runway time and space, air-traffic-control time and labor--are independent of how many people might happen be on that flight.

Posted by James Gary | July 22, 2008 12:14 PM

But to the extent that such taxes are added to fares and ticket prices, it may be unrealistic and perhaps counterproductive to expect a jet that typically carries six or seven people to pay the same tax as one that typically carries 180.

What would possibly be counterproductive about this? Private jets should pay for the costs that they introduce at the airport and in global warming. To the extent that they are primarily used by the extremely privileged, I wouldn't mind if they are even progressive in their taxation. Mostly, they shouldn't be flying into JFK, but into smaller airports that don't handle huge passenger jets.

I don't know anything about the 'true costs' of flying private jets, though. Maybe the taxes are actually much higher, as other commenters have suggested, I have no idea. But they should certainly pay their way, and then some. If fewer people can afford it, that's great. It makes it slightly easier to move normal passenger jets in and out of airports.

Posted by mpowell | July 22, 2008 12:24 PM

mpowell, I agree. This is a pretty easy call. The leisure class uses private aircraft as a prestige item. Often, these flights are paid for by companies - as I recall, Ken Lay's daughter, wanting to move some adorable furniture she'd found in France back to Houston, calmly commandeered Enron's private plane to make the move.

The taxes should be way progressive, as in about twice what a commercial airliner should pay. If the tax on a commercial airliner going from NYC to Miami is $2,000, $4,000 sounds good for the GE company jet. Of course, if that is too expensive, I guess the execs could, uh, take a commercial flight. Poor babies. That would be so unfair!

Speaking of unfair - tax laws should really be changed to reflect the value accruing to people who travel via private jet. And that upper management class should, as well, not be able to escape the tax by having the company pay it - such things should be made illegal. Time to sock the plutocrats.

Posted by roger | July 22, 2008 12:32 PM

Ah, but then do you charge a 4 seat piston engine plane the same fee as a Boeing 777? That would be the end of that. Assuming you believe there will be airliners in the future, how would the airline pilots of the future learn to fly in the first place, with no small planes?

One does not normally take small planes into the biggest and busiest airports. They are too busy! You fly to one of the other nearby airports that doesn't have airliners clogging it. The real scarce commodity is runway space at the airline hub airports.

Posted by Beige | July 22, 2008 12:43 PM

should a guy who takes his little Cessna into JFK pay $2000 just to land there?

Yes, and if he doesn't like it, he can pick another airport that isn't being used primarily by people who need to take a commercial flight somewhere.

Posted by Tyro | July 22, 2008 12:52 PM

"Assuming you believe there will be airliners in the future, how would the airline pilots of the future learn to fly in the first place, with no small planes?"

Probably the same place most commercial pilots learn to fly: The US Air Force.

Posted by freddiemac | July 22, 2008 12:56 PM

What Greg said.

Also, bear in mind that my IFR flight from JFK to MIA in my Cessna will put the exact same utilization burden on the ATC system and pay only a very small amount in taxes (probably less than $50). The issue there is that the ATC system has plenty of excess capacity for general aviation and private jets. It's the terminals -- the runways, the gates, the security infrastructure -- that are overburdened. The private jet or the cessna probably performs a pressure-relief service in that it is more likely to land at Kendall (TMB), an outlying airport, rather than at MIA.

I suspect, but am too lazy to confirm, that the "Institute for Policy Studies" is a think-tank enlisted by the airlines' lobby in their attempt to impose user fees on GA and shift their costs to other players in the aviation industry.

You can read more on this issue, if you care, at:
http://www.aopa.org/faafundingdebate/

Cheers,

SF

Posted by shadowfax | July 22, 2008 1:14 PM

Freddiemac,

Most airline pilots are now and for some time have been non-military trained.

FYI.

Posted by shadowfax | July 22, 2008 1:28 PM

The issue there is that the ATC system has plenty of excess capacity for general aviation and private jets.

That flies in the face of everything I've been reading in Aviation Week for I don't know how many years.

General aviation flies "under the radar" when they stick with general aviation airports, and out of the federal airways. Otherwise, they're just as much an ATC (and runway) resource hog as a 747. When the Superbowl or similar biz jet magnets are in town, you had better hope that you didn't book a flight using that airport.

Joe Blow in his 172 isn't the problem, because he usually isn't sharing airspace with commercial traffic.

Posted by cmholm | July 22, 2008 1:40 PM

The security issue is underplayed here. General aviation has far less security than commercial travel and relies a lot on people knowing each other and eyeballing, which is to say, no formal security at all. This creates all the same security vulnerabilities that made 9/11, other hijackings, airplane bombings, etc., possible in the past. And general aviation has a huge lobby that is fiercely opposed to applying tough security procedures; avoiding the searches is one reason why wealthy people prefer private jet travel.

Posted by Dilan Esper | July 22, 2008 2:17 PM

cmholm,

I don't read Aviation Week, but I read Flying, Plane & Pilot, and AOPA Pilot, and the consensus seems pretty clear on this point.

The skies are big, and controllers are able to track lots of planes. The skies got even bigger with the RVSM standards. There is lots of excess capacity on that side. I'll say it again: the skies are not congested. Airports are -- some airports, that is, mostly the hub airports where there are landings every ninety seconds. If you want to land at ORD or JFK, then yes, you are part of the problem. Most GA traffic avoids these airports, though, and thus do not contribute to the problem of terminal congestion. I don't have the data at my fingertips, but IIRC, at the major airports, air carrier traffic constitutes well over 90% of the landings and takeoffs.

And if you had been paying attention, you would know that for the Super Bowl, most of the bizjets did not use PHX, but used IWA, Phoenix-Mesa Gateway, the regional GA airport.

Posted by shadowfax | July 22, 2008 2:18 PM

Ah, but then do you charge a 4 seat piston engine plane the same fee as a Boeing 777? That would be the end of that. Assuming you believe there will be airliners in the future, how would the airline pilots of the future learn to fly in the first place, with no small planes?

Oops, good point. Thread's over, everyone!

Posted by tps12 | July 22, 2008 2:57 PM

Part of the allure of using private or corporate jets is that they do NOT use crowded airports like JFK, MIA, EWR, ORD.
As noted by other commenters most are flying out of smaller facilities, often in area closer to where the rich executives live. You can go from limo to air in 10 minutes at Essex County or Morristown airports versus 90minutes to infinity at Newark.

Posted by CParis | July 22, 2008 5:32 PM

I recall reading that temperatures went up several degrees after the 9-11 grounding of all flights except the Bin Ladens leaving. The reason being that contrails reflect heat back into space. The "warming the planet" claim might not fly.

Posted by PSP | July 22, 2008 7:08 PM

dilan esper,

This creates all the same security vulnerabilities that made 9/11, other hijackings, airplane bombings, etc., possible in the past.

Huh? So you think hijacking/blowing up a single-engine Cessna with two people on board is comparable to hijacking/blowing up an A320 with 150 people on board or a B777 with 300 people on board?

If you want to crack down on security vulnerabilities in our national transportation system, I suggest you take a look at Amtrak. Exploding a bomb on board a packed passenger train or blowing up a section of track as a train is approaching could kill hundreds or thousands of people.

Posted by Mixner | July 22, 2008 7:28 PM

Citing AOPA as a source for information in the debate about airspace usage is like citing Cato Institute statistics in a debate about taxes. AOPA has a known bias against user fees or any other reform that would make the US airspace system more democratic in its costs.
The problem with congestion and delays, on the east coast at least, is less a problem of airport usage and more a problem of airpace usage. Your average weekend warrior in his piston/prop equipment isn't causing much trouble. He's either VFR and out of the way or he's down low on IFR and not in contact with ARTCC. ARTCC is where the greatest problems are ocurring, namely in the fault lines between Centers and between center controllers. There are only a few points along the borders along each airspace that controllers can send flights through to the next controller during a hand off. This system creates a number of choke points as you can imagine. We have this problem because our current system is based on a system of airways designed around ground based navigation aids. With GPS we could do away with this system and open the skies up, however the money do enact this change, to be raised by user fees, is being blocked by AOPA and its kin.
Right now, even though a private jet and a 777 use airspace in the same exact way and with the same exact seperation requirments, the 777 passengers have to pay a fee on their ticket to fund the airspace system, the private jet does not. The GA folks basically want the benefits of a revamped ATC system but want you to foot the bill for it.
And, by the by, very very few US airline pilots hail from the military anymore. Most airline pilots were flight instructors, charter pilots, or late night freight dogs before their current job.

Posted by MikeB | July 22, 2008 8:17 PM

People have pointed out that due to cherry picking and misrepresenting facts, the study is flawed. (carbon costs? nobody is paying carbon costs yet with any form of trasnportation)

There are two other aspects.

First, 'harmonizing' the tax structure in the name of having 'the rich pay their fair share', will ironically (or not, would have to consult Ms. Morrisette), destroy small businesses and reward big businesses. It will be similar to how the luxury tax or 'yacht tax' of the early 90's wound up not 'soaking the rich' but almost destroyed entire New England shipbuiliding industry and the associated small towns as high paying jobs were eliminated (and as a bonus offshored, so to speak, because yacht buyers just wound up going overseas.)

Second, look at the (tax-avoiding) logic this way. My RX-8 weighes as much as a prius. So for every mile each is driven, it has the same exact wear and tear on the highway system. But obviously, since the RX-8 gets god-awful gas mileage, I am paying anywhere between two to three times as much per mile in gas taxes. Is this fair? You see why IPS logic is silly?

Posted by Kolohe | July 22, 2008 8:36 PM

MY writes: "It seems that a commercial flight pays $2,014 in taxes to fly from New York to Miami, whereas a private jet only pays $236"

Are you sure that isn't a fuel tax? I'll give you 2 guesses to figure out which burns more, a Cessna Citation or a 737?

Even if it's not fuel taxes, I think you're looking at the wrong metric. I think the correct metric is passenger-miles. Divide $2,014 by 150 people and the tab is just over $13 per person. Divide $236 by 4 and you get $59 per person. Who's soaking whom?

mpowell writes "Mostly, they shouldn't be flying into JFK"

Don't worry they're not as shadowfax points out. There are 5400 airports in the U.S. - according to the AOPA - and the major airlines spend 90% of their time going to the top 30.

Posted by MarcInSeattle | July 22, 2008 8:48 PM

MikeB writes: "Your average weekend warrior in his piston/prop equipment isn't causing much trouble."

But he'd have to pay user fees. That's what the AOPA is fighting against them - for a variety of reasons. See: http://www.aopa.org/faafundingdebate/

"With GPS we could do away with this system and open the skies up, however the money do enact this change, to be raised by user fees, is being blocked by AOPA and its kin."

Uh, not exactly. The AOPA is most certainly not against updating the ATC and they are not the reason that the ATC has not modernized. Look at how long it took the ATC to get Dopler radar. Look how long it's going to take the ATC to get ground radar to help avoid runway incursions. The ATC is slow. They simply can't help it.

Updating the ATC with GPS navigation (the system is called ADS-B BTW) is going to happen. There's already a schedule for it's implementation. What's up for discussion is how to pay for it.

ADS-B would benefit commercial airlines the most b/c it would allow them to squeeze more flights into existing airports which means more money for them. And, it would allow them to try continuous descents (don't have room for details here). Savings in fuel on a recent test at SFO: 39%. More money for the airlines.

So, to sum up, the airlines are going to benefit financially (greatly) from this system why shouldn't they pay their fare share?

Posted by MarcInSeattle | July 22, 2008 9:08 PM

"That's what the AOPA is fighting against them"

Ooops... Should read:
That's why the AOPA is fighting against them...

Also just out of curiosity:

"...is being blocked by AOPA and its kin."

So where exactly are you getting your facts on this?

Posted by MarcInSeattle | July 22, 2008 9:18 PM

Huh? So you think hijacking/blowing up a single-engine Cessna with two people on board is comparable to hijacking/blowing up an A320 with 150 people on board or a B777 with 300 people on board?

No, but I do think a prop plane (and not all prop planes are two-seat Cessnas) could pack enough explosives to do serious damage to a building or piece of infrastructure or kill a lot of people. And I also think that a business jet is just as dangerous as a weapon to fly into buildings as a commercial jet is (indeed, the latest trend in business jets is to use same planes as commercial jets).

Posted by Dilan Esper | July 23, 2008 1:24 PM