Cessna Chairman Pelton Proposes Business Approach to Fund FAA

In remarks prepared for the address, Pelton outlined five mythsabout Federal Aviation Administration reauthorization:

-- Myth one: The mechanisms for funding the FAA are not working;

-- Myth two: A funding overhaul is needed to pay for modernization, and to cover revenue shortfalls from the declining commercial ticket tax;

-- Myth three: General aviation does not pay its share for its use of the National Air Transportation System;

-- Myth four: User fees will provide stable and predictable funding for the FAA; and

-- Myth five: Very Light Jets coming to market will place a new burden on the air transportation system.

"These myths have crept into the public discussion about FAAfunding, and they have gained undeserved credibility," Pelton said. "Iam a businessman, not a policymaker, and FAA officials often speak ofthe need to run the FAA more like a business. So, I propose we addresssome basic business questions before we implement more policies orprocedures that could potentially add cost or make the system moreburdensome than it already is. The questions we need answered are:Where does our aviation system stand today? Where is the marketheaded? What are the requirements we will have to meet?"

Pelton said an evaluation of the current funding system showslittle need for new revenue streams - funding for the FAA hasincreased, not decreased, in the last decade. In addition, the FAA hasnot identified how the agency would use an increase in funds.

"The FAA has said extra funding is needed to modernize the system,but with little details on what that means," Pelton said. "How would abusiness evaluate future capital investment needs? We would conductstudies to determine where the market is going, what are themust-haves, what are the nice-to-haves, and so forth, to meet thosechallenges. Once we had finished sizing the needs, only then would weconsider the best ways to provide the funding. Then we would ask whatexpenditures can be reduced and what new revenue sources can we tap ordevelop."

The FAA has not provided answers to these foundational questions,he said.

"I would have a tough time getting funding to develop a newairplane if I could not lay out what we wanted to build, why, what itwould cost, and how long it would take," he added.

Pelton said he is not suggesting business aviation should not helppay for the air transportation system. Business aviation does pay touse the system through a fuel tax, which he said should continuebecause it is a non-bureaucratic way to contribute.

"General aviation represents only about 3 percent of alloperations at our nation's 20 busiest and costliest airports," Peltonsaid. "The air transportation system was built to accommodate airlineoperations - in particular, to accommodate peak traffic at airlinehubs. The principle drivers of the costs of the system are theinfrastructure and support networks to handle those operations at hubairports."

As an example, Pelton said, Ronald Reagan National Airport inWashington was closed to general aviation traffic for four years, yetthe costs of operating the airport did not decrease.

As to the suggestion that the FAA go to a user-fee system, Peltonsaid, the track record of aviation user-fee systems in Europe andCanada "tells us that the mechanism becomes very unstable in economicdownturns. As a result, government bailouts are required, or fees mustbe increased just when the industry is least able to afford the spikein costs."

Finally, he said, the argument that the new, very light jets(VLJs) will take off and overwhelm the nation's air traffic system, iscompletely unrealistic. "This is a topic I know rather well," Peltonsaid of the new VLJ aircraft.

"Even if the most optimistic predictions about VLJs turn out to betrue, we will not see large numbers entering the system over the nextfive years. That means we have time to see how this market trulydevelops," he told the aviation audience.

Pelton proposed continued investment in the National AirTransportation System, with a higher contribution to the FAA from theGeneral Fund; modernization with satellite and other technologies toincrease efficiency; keeping the current revenue structure, includinggeneral aviation fuel taxes; rejecting user fees for general aviation;and ensuring continuing congressional authority.

He concluded by saying, "I'm confident that by working together onthis platform we can help affect policy decisions that are moreenlightened, more realistic, more equitable and more cost effective.And I am confident that these policy decisions will result in a goalwe all want to achieve - a strong, sustainable aviation system for ournation."

Based on unit sales, Cessna Aircraft Company is the world'slargest manufacturer of general aviation airplanes. In 2005, Cessnadelivered 1,157 aircraft and reported revenues of about $3.5 billion.Since the company was originally established in 1927, more than187,000 Cessna airplanes have been delivered to nearly every countryin the world. The global fleet of more than 4,500 Citations is thelargest fleet of business jets in the world. More information aboutCessna Aircraft Company is available at www.cessna.com. Cessna is asubsidiary of Textron Inc. (TXT).

Textron Inc. is a $10 billion multi-industry company with 46,000employees operating in 36 countries. The company leverages its globalnetwork of aircraft, industrial and finance businesses to providecustomers with innovative solutions and services. Textron is knownaround the world for its powerful brands such as Bell Helicopter,Cessna Aircraft, Jacobsen, Kautex, Lycoming, E-Z-GO and Greenlee,among others. More information is available at www.textron.com.

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