On Friday, August 5, after the almost two-week shutdown of Federal Aviation Administration (FAA) programs, the Senate passed H.R. 2553, the “Airport and Airway Extension Act of 2011, Part IV”, clearing the bill for the President.

House and Senate negotiators were finally able to reach a deal on an extension late Thursday, August, 4, restoring the federal government’s authority to collect airline excise taxes and fund airport construction.  The measure will extend FAA programs until September 16 to give the House and Senate additional time to work out their differences in a long-term authorization including a dispute over labor language in the House-passed bill (H.R. 658).  The House passed bill would rescind a 2010 National Mediation Board rule that made it easier for airline and railway employees to unionize.

The shutdown, which began July 23, immediately affected all non-essential federal aviation programs, resulting in the suspension of some 4,000 FAA employees.  In addition to the FAA furloughs, an estimated 70,000 workers (including construction workers and airline/airport support workers such as food vendors) were put out of work and the FAA was forced to issue stop-work orders on approximately $7 billion in contracts.  Essential operations, like air traffic controllers, operated normally.

The Congressional standoff was over a House provision in the extension bill requiring a minimum distance for Essential Air Service (EAS) airports of 90 miles from the nearest medium or large hub airport which will eliminate 10 airports in current EAS communities.  There will also be a $1,000 per passenger cap on EAS subsidies.  Airports requiring a subsidy of more than that will be excluded from the program.  This will cut about $16 million from about $150 million a year in subsidies for commercial flights to remote and rural areas.  The final deal focused on a provision in the extension that would allow the U.S. Secretary of Transportation to issue waivers if petitioned by legislators with airports located within the 90 mile minimum limit that will lose EAS subsidies.   It will not apply to the $1,000 per passenger subsidy cap.

If a deal had not been reached, the shutdown was expected to cost between $25 million to $30 million per day in excise taxes totaling approximately $1.2 billion in lost tax revenue for the federal government by the time Congress returned after Labor Day.  When the chambers return from their August recess, they will have about a week and a half to either further extend programs or reconcile the long term FAA authorization.