Airport and Airway Trust Fund: Issues Raised by Proposal To Replace the Airline Ticket Tax

Details

• Corporate Creators:
  United States. Government Accountability Office
• Subject/TRT Terms:
  Airline Tickets Airport And Airway Trust Fund (Trust Fund) Air Transportation Alternatives Analysis Federal Aviation Administration's (FAA) Budget Federal Government Agencies Financing Operating Revenues Ticket Tax User Charges User Fees

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• Publication/ Report Number:
  GAO/RCED-97-23
• DOI:
  https://doi.org/10.21949/1403160
• Resource Type:
  Tech Report
• Geographical Coverage:
  United States
• Corporate Publisher:
  United States. Government Accountability Office
• Abstract:
  The Airport and Airway Trust Fund (Trust Fund) was established by the Airport and Airway Revenue Act of 1970 (P.L. 91-258) to finance the Federal Aviation Administration's (FAA) investments in the airport and airway system. The act further provided that FAA's operating cost could be financed from the Trust Fund. The Trust Fund's primary source of revenue has been a tax on domestic airline tickets. While relatively easy to administer, the ticket tax has been challenged by the nation's largest airlines as unfair in a deregulated environment where other competing airlines often charge much lower fares. In May 1996, a coalition of the seven largest U.S. airlines proposed replacing the tax with user fees, which they believe would more accurately charge each airline for the costs that its operations impose on the airport and airway system. Congress asked the General Accounting Office (GAO) to examine the issues raised by the coalition's proposal, including (1) whether the ticket tax should be replaced by a different fee system, (2) what the potential competitive impacts of the fees proposed by the coalition airlines would be, and (3) what factors need to be considered if a new fee system were to be developed. This is the response to that request. The GAO also updated its April 1996 assessment on the status of the Trust Fund, including the implications on FAA's budget of reinstating or not reinstating the taxes that finance the Trust Fund.
• Format:
  PDF
• Collection(s):
  US Transportation Collection
• Main Document Checksum:
  urn:sha-512:f8be8a70cf3f0ddf9f12b12cddd91abcf18f4da6d700e1ecff1fb8a4dbc6f1eef81bcb6c378895302d2276256a232d03f8d94232d7182e3b55af8e238296031c
• Download URL:
  https://rosap.ntl.bts.gov/view/dot/12625/dot_12625_DS1.pdf
• File Type:
  [PDF - 196.78 KB ]