New Report: Sequestration Will Ground Air Travelers, Cargo and the U.S. Economy

Aug 13, 2012, 11:54 ET from Aerospace Industries Association

Budget cuts would close air traffic control towers, reduce passenger and cargo capacity and cost 132,000 American jobs

ARLINGTON, Va., Aug. 13, 2012 /PRNewswire-USNewswire/ -- A study released today by the Aerospace Industries Association and Econsult Corporation estimates that budget cuts to Federal Aviation Administration operations as a result of sequestration could cost up to 132,000 aviation jobs, sap $80 billion a year from the nation's gross domestic product and strip almost two billion pounds of freight capacity out of an air cargo system that is already buckling at the seams.

According to the study, annual economic losses could amount to $80 billion annually by 2035, an annual decrease of 37 to 73 million in passenger enplanements and annual reductions of 1 to 2 billion pounds of transported air freight. The forecasted loss in output to the U.S. economy is estimated to reach $9.2 to $18.4 billion, with $2.7 to $5.4 billion lost in wages and salaries.

"If sequestration is not stopped, it will be by far the most devastating budget cut to the FAA in its 54 years," said former Secretary of Transportation and Congressman Norman Mineta. "The FAA is a critical safety organization that regulates our national air transportation system. Putting it at risk is folly beyond comparison." Mineta is currently vice chair of public policies at Hill + Knowlton Strategies.

The study was released at a luncheon meeting of aviation leaders in Washington, who warned against the effects of sequestration. According to a letter from Rep. Norm Dicks (D-Wash.), ranking minority member of the House Appropriations Committee, to the Joint Select Committee on Deficit Reduction  in October 2011, sequestration could result in the closure of 246 airport control towers, and the loss of 1,500 air traffic controllers, 9,000 security screeners and 1,600 customs officers.

"With proper funding the FAA can be both safe and efficient," said AIA President and CEO Marion C. Blakey. "Under sequestration, the air traffic control system will be hobbled for decades, leaving travelers, shippers and our economy in the lurch."

Sequestration – triggered in 141 days unless Congress acts this year to repeal or delay it – would also have a devastating impact on the Next Generation Air Traffic Control System, delaying system implementation by a decade or more. The full implementation of NextGen, now scheduled for 2025, has been forecast to provide more than $281 billion in net benefits, save 27 million hours in flight delays and reduce 216 metric tons of emissions.   

"This study reveals the draconian effect of sequestration on the FAA," said Stephen P. Mullin, vice president and principal of Econsult Corporation and author of the study.  "Sequestration would force the FAA to slash operations, bringing gridlock to the skies today, or defund modernization and infrastructure work.  The closer we study sequestration the more destructive it turns out to be."

The report is one of several released by AIA that demonstrate the impact of sequestration on the nation's economy and the aerospace and defense industry. Most recently, a study by George Mason University's Dr. Stephen Fuller concluded that 2.14 million jobs across the economy are at risk.

The Econsult study, "Economic Impacts of FAA Budget Sequestration on the U.S. Economy," is available at

Others aviation leaders have added their voices to stopping sequestration and its devastating consequences:

Todd Hauptli, Senior Executive Vice President, American Association of Airport Executives: "'Sequestration' is a fancy word for 'abdication'. Congress needs to act to avoid these devastating and indiscriminate cuts. This study confirms that the entire aviation industry should be on high-alert in the weeks and months ahead as this process unfolds."

Deborah C. McElroy, Executive Vice President of Policy and External Affairs, Airports Council International: "We've learned from recent airport economic impact data that runways have replaced Main Street as a key driver of economic growth in our global economy. Sequestration would seriously undermine the ability of airports and air transport facilities to grow and create jobs."

Peter DuMont, President and CEO, Air Traffic Control Association:  "America needs jobs, not policies that handcuff federal agencies and force decisions that undermine safe air travel in this country. Our highly-skilled air traffic controllers keep the system moving 24 hours a day, 7 days a week on behalf of the American people.  As the economy continues to recover, new passengers and cargo are going to flood into the system.  We need to get ready, not give in to cuts that could leave America flying blind." 

Craig Fuller, President and CEO, Aircraft Owners and Pilots Association: "The likely effects of sequestration on general aviation safety and efficiency are truly frightening. The anticipated loss of thousands of FAA employees, including 600 safety and aircraft certification personnel and more than 1,200 air traffic controllers, the closure of more than 200 contract towers, and drastic cuts in the NextGen air traffic modernization initiative would have devastating and lasting impacts on our national air transportation system and everyone who uses it."

Captain Lee Moak, President Air Line Pilots Association, International: "The FAA reauthorization act contains a number of provisions for safety enhancements to our aviation system, many of which have aggressive timelines. If those programs and timelines are not fully supported with critical resources, then the success of our efforts to continue improving the safety, efficiency, and economic viability of the system will be in jeopardy."

Margaret Jenny, President, RTCA:  "After years of developing concepts and plans, the aviation community is beginning to work in partnership with the FAA to implement the first phases of this transformational modernization effort.  If either of the scenarios become a reality, the momentum and trust that has built up will be lost, leading to long-lasting negative impacts to NextGen and to the United States' ability to keep pace with air traffic demand and maintain world leadership." 

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