30.59 million for Operations. The combined total is 159.86 million dollars. We have prepared a tabular summary of our proposals not only for FY '69 but also for the next four years as well. Thus, our recommendation is that the Congress add about one hundred fifty million dollars to the appropriations of the Federal Aviation Administration for the airways and air traffic control system, and continue to support the improvement of the system at about this level for the next four or five years. One only needs to read the newspapers to recognize that our obligation is not wholly discharged by making this recommendation, because the Congress is under heavy pressure now to reduce expenditures and not increase them. I think we must point out the reasons why the program to which we are referring carries with it such a high priority in the national interest that it is entitled to be supported with increased funds. The character of the federal responsibility for the airways and air traffic control system is not a function which the United States government shares with any other governmental unit. In 1926 almost forty-two years ago the United States government undertook the responsibility for developing, operating, and maintaining the airways system for the country. It was determined at that time, and rightly so, that the federal government had to undertake this responsibility-that no one else could do it. The public nature of the system and the need for uniformity in the system components and the procedures relating to them, required that they be operated as a national system. This principle was reaffirmed in the Civil Aeronautics Act of 1938, and again in the Federal Aviation Act of 1958. The responsibility has been, and is, a heavy one, because aviation operations, both military and civil, have grown rapidly, and have constantly pressed the state of the art. Notwithstanding that, having undertaken the responsibility, every effort has had to be made to keep the system up-to-date with the operations which seek to use it. Thus, the burden of developing, operating, and maintaining the airways system is not one which the federal government should pick up or lay down, depending upon prevailing circumstances. In view of the federal government's responsibility for the airways system, it is in a position by action or inaction drastically to affect the operations of its air transport system, the conduct of general aviation operations and, to a degree, its military operations as well. A lagging airway system does not affect military operations so adversely, since the military are always in a position to assert a right to priority use of the airspace--and it does on thousands of occasions each year. But for civil users, a failure of the system to meet the demands upon it can act as a very severe restraint on the respective industries, and in the case of air transportation, a substantial impairment of the air transport system as a whole. Actually, at the present time the inadequacy of the system is resulting in delays which, according to our estimates, cost the air transport system and its users some eighty million dollars annually. Constraints upon these civil industries can bring serious consequences to the total economy of the United States. The air transport, general aviation and aircraft manufacturing industries are playing a very significant role in the nation's economy. Increased capital expenditures by these industries are working their way throughout the entire U.S. economy and are serving to stimulate activity nationwide. In just the past four years alone the airline industry has more than doubled its traffic. There are no present indications that this extraordinary traffic growth will slacken in the years ahead. To help meet and spur this growth, the airlines are engaged in a large scale planning program involving substantial investment in aircraft and ground support equipment. Capital expenditures will amount to more than $10 billion for the four year period 1968-71 compared with the present gross investment in the industry of $8 billion. The great expansion of the airline industry is creating many new jobs. During the past two years over 65,000 new jobs have been created. Last year there were 276,000 airline employees with an annual payroll amounting to $2.5 billion. It is anticipated that by 1971 employees will total nearly 400,000 with a payroll of over $4 billion. Total sales in the aerospace industry have been increasing significantly during recent years reaching a level of $27.3 billion in 1967. Commercial aerospace sales, which includes jet transports, executive and utility fixed-wing aircraft, helicopters, and aircraft engines, amounted to $4.9 billion, up 35% over 1966. The production of general aviation aircraft in 1967 amounted to 14,000 units at a value of $338 million. The aerospace industry had a payroll last year of $13 billion, a labor force of 1.4 million, and capital expenditures of $810 million for expansion, replacement and modernization of plant and equipment. The future expansion of the aviation industry will continue to benefit the U.S. economy. Current and future equipment has become so complex that parts and supplies for new aircraft are found in every region and almost every state. Machine shops in villages in Maine and small, family-owned businesses in such non-industrial states as Wyoming are all part of the civil aviation age. The federal government has long taken the position that it is conferring a substantial benefit upon the users of the airways system, and that they should make a substantial contribution to the cost of it. This is a principle to which the airlines have long agreed. In 1961, when the Congress decided that the then existing ten percent transportation tax was to be repealed, the airlines acceded to the proposal that the federal government retain five percent of that tax on airline tickets, notwithstanding the fact that other common carriers of passengers were being relieved of it. This tax was retained in response to the contention by the government that airways user charges should be paid. This tax on airline passengers this fiscal year will yield approximately $224 million including imputed amounts for exempt travel, according to Federal Aviation Administration estimates. Here are the figures for future years: FY 1969-$249.4 million FY 1970-$273.1 million FY 1971-$296 million (ATA estimate) We have also not objected to imposition of a two percent tax on airfreight waybills, but that tax has not been enacted. The obligation to develop, operate, and maintain the airways system, carries with it a very considerable responsibility for the safety of aviation operations of all sorts. As time has passed, and the speed and performance and number of aircraft using the system have increased, the users have become increasingly dependent upon this government-operated system to continue to expand and thus protect them against collision. Jet aircraft operated by airlines and many general aviation aircraft move through the airspace in routine operations at six hundred miles an hour. Many military aircraft operate at more than twice the speed of sound. Even when visibility is good, these aircraft and their occupants are wholly dependent upon the airways and the air traffic control system to make certain that they do not collide with other aircraft. The hazards resulting from an inadequate air traffic control system can in some instances be compensated for by slowing aircraft down and by keeping them on the ground, but to the extent that this is done, the objectives of the system are not being met. The FAA's imposition of a 250 knot speed limit below 10,000 feet because of ATC inadequacies is an example. The speed of air transportation is a principal consideration of the passenger and shipper. The inefficiency produced by speed limitations penalized the airlines and their customers alike and must be eliminated. Also, if hazards are thought to exist, it should be understood that they cannot be completely avoided even by this process of slowing aircraft down and keeping them on the ground when they should be in the air. The safest aircraft operation is the one which is most efficient. Whenever inefficiency, delay, holding and diversion are introduced, hazards are increased. The objective of the federal government should be to attain the highest degree of safety in aviation operations. In order to attain it, it must obtain the highest degree of efficiency in such operations. For all of these reasons it seems that the Congress must give special consideration to the airways system in determining where best to place limited resources. The airways program is virtually unique. The federal government's obligation is one of long standing. The carrying out of the responsibility is essential to the day-in and day-out efficiency and safety of major industries. A very high percentage of the total funds spent is now being contributed by the users of the system-and before long, all users will be making their proper contributions. 1. Control towers ($160,000 each unit).. 2. Terminal radars and bright tube tower displays ($700,000 each 3. Bright tube tower displays are currently being installed in 86 4. High-density terminal area positive control. 5. Airports where radar sequencing of all arrivals and traffic infor- 6. Airports which now provide radar sequencing of all arrivals, but 2 (20) (11). 9.0. 9.0 9.0 (11). 54.90 Mr. TIPTON. In attacking the various problems that are before the committee this morning, we, of course, will be dealing with the really outstanding problems facing the air transport industry today, and we do appreciate the committee's willingness to take time to study these questions under present circumstances. At the outset, I would like to talk about the airport problem. My statement, then, will include some reference to the need for airways improvement and some specific recommendation for a program, and then deal with the problem of airways financing. We find it necessary to separate the airport problem from the airways problem. Obviously, the airports and airways are a part of a single system for planning purposes and deficiencies in one cause the entire system to be inadequate. For planning purposes it is always necessary to consider them together. For financing purposes, it is likewise always necessary to consider them separately, because the financial problems of the two are wholly different. The Federal Government is wholly responsible for the airways system and is responsible for developing, operating, and maintaining the system. So the financing of that part necessarily relates to Federal expenditures, wholly to Federal expenditures. Airports are the responsibility of the local community and the financing of airports thus is a different financial problem than airways. Consequently, I will take up the airport problem first. We have set forth in detail in our testimony the proposal we have brought forward and which Senator Randolph has introduced with quite a number of amendments in his bill. It is not necessary for us to go into a lot of detail about the need for airport improvement and the need for strong measures to deal with the matter, because that has been dealt with adequately. I think the important thing for me to do would be to describe the essence of the proposal we have discussed and the essence of Senator Randolph's bill. Senator MONRONEY. May I interrupt there? In your statement you make this assertion: "Government forecasts predict U.S. scheduled airlines alone will be enplaning over a million passengers a day in just 10 years from now. That is almost 400 million passengers a year, or nearly triple the number carried in 1967.” Now, this is in agreement with your estimates also? Mr. TIPTON. Yes, it is indeed. That is a good short statement of the problem. You don't need to go much beyond that. Senator MONRONEY. This is twice the population of the United States in 1 year that will be carried in the year 1978? Mr. TIPTON. That is what we expect to have happen. That is the reason for strenuous efforts to expand both the airways and airport facilities, and the reason for the acquisition by the airlines of approximately $13 billion worth of airplanes. It is a problem we have to deal with, and all of us, I think, have to concentrate on these solutions. Now, the essence of the idea that we have brought forward in this: We think that there should be created in the Department of Transportation an airport trust fund, subject to administration by that Department. That trust fund should be fed by funds produced by the passengers |