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The State of the Aviation Industry and the Federal Aviation Administration

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The Inspector General testified before the Senate Transportation-Treasury Appropriations Subcommittee regarding the state of the airline industry and FAA. He advised “great care” be taken regarding any Congressional financial relief package to aid the financially distressed industry. In addition, effective cost control is a primary challenge facing FAA, the IG testified. FAA’s budget has increased more than 70 percent—from $8.2 billion in FY 1996 to $14 billion in FY 2004. This magnitude of continued cost growth cannot be sustained given the financial state of the airline industry, multibillion-dollar declines in projected Aviation Trust Fund receipts, and greater dependence on the General Fund to pay for FAA’s operations. DOT Under Secretary for Policy Jeff Shane and FAA Administrator Marion Blakey also testified.