U.S. Senate Archives - FLYING Magazine https://cms.flyingmag.com/tag/u-s-senate/ The world's most widely read aviation magazine Wed, 18 Sep 2024 13:50:20 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.1 Whitaker to Explain FAA Role in 737 Max Door Plug Mishap https://www.flyingmag.com/aircraft/whitaker-to-explain-faa-role-in-737-max-door-plug-mishap/ Tue, 17 Sep 2024 20:32:06 +0000 https://www.flyingmag.com/?p=217859&preview=1 FAA administrator will discuss oversight at Boeing before an investigative subcommittee on September 25.

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FAA Administrator Mike Whitaker is being called to Washington, D.C., again to explain the FAA’s role in the Boeing 737 Max door plug blowout in January.

Whitaker will appear before an investigative subcommittee of the Senate Transportation and Infrastructure Committee on September 25 to discuss the FAA’s oversight of Boeing after a new Max 9 went through Boeing’s Renton, Washington, assembly plant and was delivered without four bolts that secured the door plug.

On January 5, the door plug detached while the plane was climbing out of Portland, Oregon, on an Alaska Airlines flight to California.

Boeing has already testified in June before lawmakers in trying to explain how that error happened despite its safeguards. Senator Richard Blumenthal (D-Conn.), who chairs the committee, suggested Whitaker is in for a rough ride next week.

“Instead of encouraging workers to report quality and safety concerns, Boeing’s culture pushed workers to conceal problems that required federal inspectors’ attention,” Blumenthal said. “The FAA has to explain what they knew and when they knew it. Boeing’s broken safety culture is in desperate need of repair, and the FAA has an essential role to play.”


Editor’s Note: This article first appeared on AVweb.

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FAA Reauthorization Bill Exempts Boeing 767 From 2028 Production Cutoff https://www.flyingmag.com/faa-reauthorization-bill-exempts-boeing-767-from-2028-production-cutoff/ Wed, 15 May 2024 20:33:34 +0000 https://www.flyingmag.com/?p=202949 Waiver from international fuel efficiency standards preserves FedEx, UPS access to preferred aircraft model.

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The FAA reauthorization bill approved Wednesday by the U.S. House of Representatives includes language allowing Boeing an extra five years to produce 767 freighters for FedEx and UPS beyond the date when international standards mandating cleaner engine types kick in.

The bill gives Boeing (NYSE: BA) a bridge, in case the express carriers need extra capacity, until it can develop a new freighter next decade. Multiple industry sources familiar with the process said FedEx (NYSE: FDX) and UPS (NYSE: UPS) joined Boeing in lobbying Congress for a reprieve from the January 1, 2028, production deadline. The legislation previously passed the Senate and will be sent to President Joe Biden to sign into law.

At face value, a split from international consensus would limit operation of freighters produced between 2028 and 2033 to the domestic U.S. market, but it’s possible some countries could permit access, according to experts. Freighters delivered before the end of 2027 aren’t covered by the enhanced carbon emission rules and won’t face any restrictions. 

Under International Civil Aviation Organization (ICAO) agreements, commercial aircraft manufacturers effectively can’t sell aircraft that don’t meet the 2028 carbon emissions standards. The U.S. Environmental Protection Agency adopted the fuel efficiency standard in 2021 with the FAA following suit in February.

Even if post-2027 freighters end up being limited to domestic flying, it makes sense for FedEx and UPS to buy them, said Tom Crabtree, a Seattle-based industry consultant and former Boeing market analyst, in an email exchange with FreightWaves.

“The 767-300 production and converted freighter provides the lowest trip costs of any widebody freighter in production today while simultaneously allowing service to smaller markets where 50 metric tons of payload, or more, simply isn’t needed,” Crabtree said. “They also have sufficient range to serve international markets to/from Europe and/or northern South America from the U.S.”

Boeing stopped making the 767 as a passenger jet many years ago. It also supplies a tanker variant for militaries. FedEx and UPS are the only customers for the 767-300 freighter. Traditional cargo airlines opt for used 767s that have been converted to a cargo configuration because they don’t have the consistent, daily volumes of integrated express carriers and can’t afford more expensive new models.

UPS was the launch customer for the Boeing 767 freighter in 1995. The parcel logistics giant has 88 B767-300s in its fleet, including 10 converted freighters, and 19 additional factory aircraft on order from Boeing. 

“We expect to receive all outstanding orders before that time,” said UPS spokeswoman Michelle Polk.

FedEx has 137 B767s flying in its network, with 15 more deliveries scheduled through mid-2026, according to the company’s latest statistics.

Aviation publication The Air Current was first to unearth the 767 freighter waiver, tucked away on page 1,038 of the FAA bill. The language doesn’t mention the 767 by name, but the maximum takeoff weight of 180,000 kilograms to 240,000 kilograms squarely fits the 767.

Boeing officials have increasingly signaled that they plan to develop a freighter version of the 787 Dreamliner as a replacement for the 767F, but the first delivery is expected to take at least eight to 10 years.

“The 767F continues to be the most environmentally sound mid-size freighter available. We are working with our customers and are in communication with regulators regarding the requirements for this market segment,” Boeing said in a statement before the vote. “As we look ahead to future medium-widebody freighter options, the 787 is a natural place for us to look. We continue to evaluate our options in this space and are listening to our customers. Any future decisions regarding whether to launch a new program, will be largely driven by customer needs and market demand.”

FedEx operates 137 Boeing 767 freighters (pictured) in its parcel and freight network. [Jim Allen/FreightWaves]

Without the exemption, FedEx and UPS could be limited to Airbus A330 converted cargo jets, a model neither currently operates, if they need more medium-widebody aircraft in four or five years. The feedstock for 767 conversions is drying up because passenger airlines like Delta and United are holding on to aircraft longer than anticipated in response to supply chain, manufacturing and engine-related problems that have delayed delivery of replacement aircraft. The airlines probably won’t be ready to let go of the 767s until “they are well beyond the age of conversion or have too many flight cycles and flight hours accumulated on them to make it worth a while to convert it,” said Crabtree.

The new law will enable Boeing to compete with Israel Aircraft Industries, which installs 767 conversion kits, and an Airbus subsidiary that rebuilds A330s into freighters, and give it time to bring a 787 freighter to market, said the former chief editor of the biennial Boeing World Air Cargo Forecast. And A330 conversion providers would be able to demand higher pricing without that competition.

“Express firms like the certainty of production freighters even though they are more expensive than conversions of the same airplane models,” he said. That certainty takes the form of more consistent delivery schedules and meeting of specifications.

FedEx and UPS put pressure on Congress to keep the 767 option open and keep the playing field level until Boeing brings out the 787 freighter, the sources said.

Many have interpreted the carve-out to the international fuel efficiency standards to mean that noncompliant aircraft will be prohibited from flying outside the United States. But there is no universal enforcement mechanism. ICAO’s carbon emission standard will be implemented by individual countries as new domestic regulations updating their system for certifying aircraft types. Production will essentially be banned starting in 2028 because noncompliant models will not be certified for sale by civil aviation authorities in their area of jurisdiction.

Countries that ban the sale of noncompliant models are likely to ban aircraft with an exemption from entering their airspace on the basis of having an unfair advantage.

But an aviation industry source, who didn’t want to be identified because of the political sensitivity of the topic, said FedEx and UPS access to airspace in foreign countries would depend on what individual governments are willing to accept. Smaller countries that typically follow FAA and European Union regulations rather than certify aircraft themselves might have fewer qualms with allowing exempted 767s to operate.

Boeing also continues to deliver 777 cargo jets to FedEx and other airlines around the world. The FAA reauthorization doesn’t provide a waiver for the 777, probably because it is a transcontinental aircraft that wouldn’t make economic sense to operate only in the domestic market.


Editor’s Note: This article first appeared on FreightWaves.

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Senate Passes Five-Year FAA Reauthorization Bill https://www.flyingmag.com/senate-passes-five-year-faa-reauthorization-bill/ Fri, 10 May 2024 17:14:31 +0000 https://www.flyingmag.com/?p=202631 The $105 billion bipartisan bill was overwhelmingly approved in a vote of 88-4.

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The U.S. Senate approved a five-year reauthorization of the FAA on Thursday, just one day ahead of its expiration date.  

The $105 billion bipartisan bill, dubbed the Securing Growth and Robust Leadership in American Aviation Actwas overwhelmingly passed in an 88-4 vote. Following its passage, the Senate also approved a one-week extension to ensure the House had enough time to vote on the bill before it is sent to the President Joe Biden’s desk for final approval.

According to the Senate, the reauthorization bill “sets national priorities to strengthen aviation safety standards, grow air traffic controller [and] safety inspector workforce, implement safety technology on runways [and] in cockpits” among other initiatives. While the package does not include an amendment to increase the pilot retirement age from 65 to 67, it does contain language to increase the cockpit voice recorder length from two hours to 25 hours.

The legislation was stalled for several days in the Senate this week, primarily over provisions to increase flights into Ronald Reagan Washington National Airport (KDCA) and unrelated measures proposed by some congressional leaders.

FAA reauthorization is considered the last “must-pass” measure for Congress before this fall.


Editor’s Note: This article first appeared on AVweb.

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Boeing Workers Reluctant to Speak Up, FAA Panel Tells Senate https://www.flyingmag.com/boeing-workers-reluctant-to-speak-up-faa-panel-tells-senate/ https://www.flyingmag.com/boeing-workers-reluctant-to-speak-up-faa-panel-tells-senate/#comments Wed, 17 Apr 2024 21:58:25 +0000 https://www.flyingmag.com/?p=200588 There's a disconnect between the aerospace giant's management and what is seen and experienced by technicians and engineers, lawmakers are told in a hearing Wednesday.

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Engineers and technicians responsible for the building of Boeing aircraft are reluctant to speak up about safety concerns, and when they do, they are not being heard, a panel of witnesses told Senate lawmakers Wednesday. 

Three members of an FAA-appointed safety panel created to review Boeing’s safety culture following 737 Max crashes appeared before the U.S. Senate Commerce Committee in Washington, D.C., to review its findings in a February report that were critical of the aerospace giant. 

Also testifying Wednesday in a separate hearing on Capitol Hill was Sam Salehpour, a Boeing engineer and whistleblower, who told the Senate Homeland Security and Governmental Affairs Committee’s investigations subcommittee that more than 1,000 Boeing 787s should be grounded due to safety risks.

“Good engineering wins the day, but you have to listen to them,” said Senator Maria Cantwell (D-Wash.),  who also chairs the Commerce Committee, said during the hearing to determine if there are more steps the federal government can take to ensure Boeing aircraft are safe to fly. 

In 2018, Lion Air Flight 610 crashed, killing all 189 on board. The next year, 157 died when Ethiopian Airlines Flight 302 crashed shortly after takeoff. Following the incidents, investigators determined that both crashes were attributed to the Maneuvering Characteristics Augmentation System, commonly referred to as MCAS, acting on false data from a single angle of attack sensor that put the aircraft into unrecoverable dives shortly after takeoff.

In response, the FAA grounded the jets worldwide for several months while the cause of the crashes were investigated. The investigation pointed to a series of faulty technical assumptions by Boeing’s engineers, a lack of transparency on the part of the company’s management, and what was described as “grossly insufficient oversight” by the FAA. 

The FAA panel reviewing Boeing consisted of 24 members, all considered experts in their field. Among them, Javier de Luis, an aeronautics lecturer at the Massachusetts Institute of Technology, whose sister was killed in the 2019 Ethiopian Airlines crash. De Luis noted the panel spent a year reviewing 4,000 pages of documents provided by Boeing and interviewed 250 company employees at all levels of the organization, across six Boeing locations. The effort resulted in “27 findings and 53 recommendations” for the improvement of safety at the company, he told lawmakers Wednesday.

According to the panel’s findings, Boeing has made changes since the 737 Max crashes, but there is still room for improvement. Although management tells the employees to speak up if they have a safety concern, they are reluctant to do so, fearing retaliation. Others interviewed by the panel noted that their concerns—even when raised— are ignored.

An engineer, for example, warned Boeing about the potential for lithium-ion batteries aboard the Boeing 787 Dreamliners to overheat due to thermal runaway. The Dreamliner entered service in 2011 and was grounded by FAA emergency order in 2013 due to fires from overheated batteries.

“There exists a disconnect between the words that are being said by Boeing management and what is being seen and experienced by the technicians and engineers,” de Luis said.

Following the hearing, Boeing released a statement, saying it took the FAA review panel’s critiques “to heart and will act on their findings and feedback. Since 2020, Boeing has taken important steps to foster a safety culture that empowers and encourages all employees to raise their voice. We know we have more work to do, and we are taking action across our company.” 

According to the company, employee reports through its “Speak Up” portal increased 500 percent since January, which it said indicated “progress toward a robust reporting culture that is not fearful of retaliation.”

The FAA panel released its findings in February just a few days after a Boeing 737 Max 9 experienced explosive decompression when it lost a door plug in its fuselage midflight while en route to California from Portland, Oregon.

The accident resulted in a mass grounding of the aircraft and reopened questions about the manufacturer’s process and attention to safety, including the documentation of repairs made during the production phase. It was determined the bolts that hold the door plug in place had not been reinstalled after corrective maintenance on a line of rivets in the fuselage.

Boeing was given 90 days to issue a plan to address the results and recommendations. That deadline for release of the plan is May 28.

During Wednesday’s hearing, Senator Eric Schmitt (R-Mo.) noted there were no representatives from Boeing in attendance: “We should be hearing directly from Boeing.”

The 737 is not the only aircraft under scrutiny. The 787 Dreamliner is under examination as well. 

Salehpour, who has worked for Boeing for 10 years as a quality engineer, called for a global grounding of the 787 Dreamliners, saying the shortcuts he allegedly witnessed on the factory floor during the building of 787s and 777s that may have led to the misalignment of parts in the jet fuselage. In an interview with NBC, he suggested that employees took shortcuts that may have resulted in parts of the jet being misaligned, which could lead to metal fatigue and weakened fuselage.

Boeing pushed back on those claims.

“Extensive and rigorous testing of the fuselage and heavy maintenance checks of nearly 700 in-service airplanes to date have found zero evidence of airframe fatigue,” Boeing said in a statement Wednesday. “Under FAA oversight, we have painstakingly inspected and reworked airplanes and improved production quality to meet exacting standards that are measured in the one hundredths of an inch. We are fully confident in the safety and durability of the 787 Dreamliner.”

WATCH: Whistleblower Testifies at Senate Hearing on Boeing Safety Culture

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Boeing Whistleblower Wants 787 Fleet Grounded https://www.flyingmag.com/boeing-whistleblower-wants-787-fleet-grounded/ Wed, 17 Apr 2024 16:22:49 +0000 https://www.flyingmag.com/?p=200534 The issues raised by the engineer have been subject to rigorous examination under FAA oversight, according to Boeing.

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A Boeing engineer and whistleblower is calling for the grounding of all the more than 1,000 Boeing 787s for an issue the company says has been addressed and signed off on by the FAA.

In an exclusive interview Tuesday night on NBC Nightly News, Sam Salehpour said he’ll tell a Senate committee on Wednesday he believes the aircraft are in danger of coming apart because of out-of-spec gaps where major assemblies are joined.

“The entire fleet worldwide, as far as I’m concerned right now, needs attention,” he told NBC’s Tom Costello. “And the attention is, you need to check your gaps and make sure that you don’t have potential for premature failure.”

Salehpour was an engineer on the Dreamliner program but has since been assigned to work on the 777. He went public with his warning last week, and Boeing was quick to discount it.

“We are fully confident in the 787 Dreamliner. These claims about the structural integrity of the 787 are inaccurate and do not represent the comprehensive work Boeing has done to ensure the quality and long-term safety of the aircraft,” Boeing said in a statement last week. “The issues raised have been subject to rigorous engineering examination under FAA oversight.”

The improperly shimmed gaps were first found more than five years ago, and the FAA stopped deliveries of the 787 while Boeing came up with a fix. The existing fleet at the time was inspected and repaired, and new aircraft were presumably built to spec.

Salehpour said those repairs were not adequate and there is a danger of fatigue failure. Boeing said the fix has been thoroughly vetted and “these issues do not present any safety concerns” or durability problems. It said it will be on the lookout for problems, noting it encourages employees to “speak up” about any safety concerns.

“Retaliation is strictly prohibited at Boeing,” the statement said. The FAA says it is investigating the allegations.


Editor’s Note: This article first appeared on AVweb.

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Boeing to Face Senate Scrutiny Amid Safety Concerns, Whistleblower Allegations https://www.flyingmag.com/boeing-to-face-senate-scrutiny-amid-safety-concerns-whistleblower-allegations/ https://www.flyingmag.com/boeing-to-face-senate-scrutiny-amid-safety-concerns-whistleblower-allegations/#comments Fri, 12 Apr 2024 18:45:09 +0000 https://www.flyingmag.com/?p=200295 The hearing will feature a panel of experts who released a report critical of Boeing’s safety culture in February.

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The U.S. Senate Commerce Committee will hold a hearing next week featuring a panel of experts who released a February report critical of Boeing’s safety culture.

Since the midair door plug blowout incident on January 5, Boeing’s reputation has taken a hit as the manufacturer has been plagued with whistleblower allegations, management shake-ups, and continual production delays.

Panel members Javier de Luis, an aeronautics expert at the Massachusetts Institute of Technology, Tracy Dillinger, a NASA expert on safety culture, and Najmedin Meshkati, a professor and expert on aviation safety, will testify during the April 17 hearing. The FAA convened the panel in early 2023 with the intention of Boeing to review its report, address the panel’s recommendations, and come up with an action plan within six months.

In addition to Wednesday’s hearing before the Senate Commerce Committee, the Senate Permanent Subcommittee on Investigations will hear testimony from whistleblower Sam Salehpour, a company engineer alleging that Boeing dismissed safety concerns related to its production of 787 and 777 jets.

Salehpour’s concerns made headlines after being featured in a New York Times article earlier this week where he accused the company of cutting corners in the assembly process.

According to USA Today, Boeing has dismissed Salehpour’s claims as “inaccurate,” emphasizing that they do not reflect the comprehensive efforts Boeing has undertaken to ensure the quality and long-term safety of its aircraft.

Boeing CEO David Calhoun was also invited to testify, but it is unclear if he will attend.


Editor’s Note: This article first appeared on AVweb.

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NTSB Chief Testifies That Boeing Is Stonewalling on 737 Door Plug Blowout https://www.flyingmag.com/ntsb-chief-testifies-that-boeing-is-stonewalling-on-737-door-plug-blowout/ https://www.flyingmag.com/ntsb-chief-testifies-that-boeing-is-stonewalling-on-737-door-plug-blowout/#comments Wed, 06 Mar 2024 21:34:18 +0000 https://www.flyingmag.com/?p=197183 Jennifer Homendy tells lawmakers the company has yet to provide names of the installation team and critical documents; Boeing asserts after hearing NTSB has been updated.

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The country’s top transportation safety official stunned Senate lawmakers on Wednesday after testifying that Boeing has yet to provide information crucial to her agency’s investigation into Alaska Airlines’ door plug blowout incident.

Testifying before the U.S. Senate Commerce Committee, National Transportation Safety Board (NTSB) Chair Jennifer Homendy said that despite numerous requests, NTSB has not received the names of 25 people working at the company’s Renton, Washington, facility responsible for opening, closing, and removing the door plug involved in the January 5 event or documentation supporting their work.

“Wow,” responded the committee’s ranking member, Ted Cruz (R-Texas), who asked for the update. “Are you telling us that even two months later you still do not know who actually opened the door plug?”

“That’s correct—and it’s not for lack of trying,” Homendy said, pointing out that it’s not unusual when critical information is not provided immediately after an investigation.

“But for this one, we know for a fact that there is a team that deals with the doors in Renton. The manager has been out on medical leave, so we’ve not been able to interview that individual. We’ve asked for the names of the other 25 people and have not received the names. We’ve asked for the records with respect to what occurred. We asked what shift did it occur on. It’s absurd that two months later we don’t have that.”

When asked by committee chair Maria Cantwell (D-Wash.) whether Boeing has a policy of maintaining documents on work such as installing or removing doors and door plugs, Homendy said the NTSB has not been able to verify that with Boeing.

“And without that information, that raises concerns about quality assurance, quality management, and safety management systems within Boeing,” Homendy said.

Said Cantwell: “It’s beyond disappointing. We have an entire economy that depends on people getting this right, and it seems like this…is stymying your investigation.”

Shortly after the hearing ended, Boeing responded to FLYING’s request for comment with a statement asserting that the company “early in the investigation” provided NTSB with names of employees, including door specialists, that it believed had relevant information.

“We have now provided the full list of individuals on the 737 door team, in response to a recent request. With respect to documentation, if the door plug removal was undocumented there would be no documentation to share. We will continue to cooperate fully and transparently with the NTSB’s investigation.”

Spirit AeroSystems Called Out

Homendy also testified to transparency problems with Spirit AeroSystems, the Wichita, Kansas-based manufacturer of fuselages for the Boeing 737. Spirit has also been part of the investigation.

Referring to individuals that NTSB believed were employed by Spirit, “we were just informed last week that they’re actually not Spirit employees, they’re contractors,” she told the committee. “All three people work for three different entities.”

NTSB was not informed of that by Spirit. “That information was told to us through the individuals being interviewed that contacted us directly. We have engaged our attorney on this matter, just so that you’re aware,” she said.

Spirit representative Joe Buccino told FLYING that, as a party to the NTSB investigation, “we are unable to comment on any matters associated with the investigation. We are coordinating with the NTSB to address the chair’s comments regarding this matter.”

Cruz, who called the lack of response from Boeing “utterly unacceptable,” asked Homendy to inform the committee in writing whether or not the aerospace giant provides the information requested by NTSB by March 13.

“This investigation needs to get to the bottom of what occurred, and what caused the accident,” Cruz said.

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U.S. Senate Committee Moves to Reject Pilot Retirement Age Hike https://www.flyingmag.com/u-s-senate-committee-moves-to-reject-pilot-retirement-age-hike/ Fri, 09 Feb 2024 14:06:14 +0000 https://www.flyingmag.com/?p=195006 The Senate Commerce Committee voted 14-13 to reject a proposal raising the airline pilot retirement age to 67.

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The Senate Commerce Committee voted 14-13 on Thursday to reject a proposal raising the mandatory retirement age for airline pilots from 65 to 67. This move follows heated arguments over the issue with the Air Line Pilots Association (ALPA) voicing its opposition.

“Increasing the pilot retirement age will disrupt airline operations, raise ticket prices, upend collective bargaining agreements, create a cascading and costly training backlog, and put the United States out of compliance with international standards,” said ALPA President Captain Jason Ambrosi in a statement.

“This is a weird union issue,” commented Senator Ted Cruz during the hearing, citing a push from some union members supporting the age hike.

Supporters of the change argued it would address the pilot shortage and allow experienced pilots to continue flying, citing rising life expectancy and advancements in healthcare.

“We strongly encourage preceding that type of change with appropriate research so that the FAA can measure any risk associated with that policy and define appropriate mitigations,” FAA Administrator Mike Whitaker wrote in a letter to Congress earlier this week.

Last year, the U.S. House of Representatives voted 351-69 on an FAA reauthorization bill that included an age hike to 67 for airline pilots. Thursday’s move by the Senate is part of a broader reauthorization bill, which includes an increase in safety inspectors and air traffic controller staffing.


Editor’s Note: This article first appeared on AirlineGeeks.com.

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FAA Reauthorization Bill Passes Senate Committee https://www.flyingmag.com/faa-reauthorization-bill-passes-senate-committee/ Thu, 08 Feb 2024 23:41:57 +0000 https://www.flyingmag.com/?p=194995 The legislation would fund the agency through 2028.

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The U.S. Senate Committee on Commerce, Science and Transportation approved legislation on Thursday that would reauthorize and fund the FAA for the next five years.

Called the FAA Reauthorization Act of 2023, the bill would authorize the agency for fiscal years 2024 through 2028. It covers more than $107 billion in appropriations, including $720 million for the National Transportation Safety Board (NTSB) over the same period.

Broadly, the legislation features provisions aimed at growing the aviation workforce, improving safety, funding airport infrastructure projects, and improving aircraft accessibility for people with disabilities. The bill also looks to continue research and development for aviation technologies, modernize the National Airspace System (NAS), and improve customer protections for airline passengers.

Some specific items covered include expanding air traffic controller training capacity, a requirement for the FAA to hire more manufacturing safety inspectors, engineers, and technical specialists, and increased funding for the Aviation Workforce Development Grants program. The legislation would also establish an Aviation Medical Innovation and Modernization Working Group tasked with addressing pilot mental health. In addition, it would mandate 25-hour cockpit recording devices for aircraft required to carry them, stronger safety requirements for commercial air tours and helicopter operations, and the establishment of a new system and requirements for continuous aircraft tracking including high-altitude balloons.

“With the aviation industry facing serious challenges, this legislation charts a course to address many of them while also modernizing and transforming the FAA’s operations,” said Senator Ted Cruz (R-Texas), ranking committee member. “The legislation will also nurture innovation and nascent technology like air taxis, hypersonic planes, and unmanned aircraft. I want to thank my Republican and Democrat colleagues alike for their hard work on this bill.”

The bill was sponsored by Senate Committee on Commerce, Science and Transportation chair Maria Cantwell (D-Wash.), Cruz, aviation subcommittee chair Tammy Duckworth (D-Ill.), and subcommittee ranking member Jerry Moran (R-Kan). Itl will need to be approved by the full Senate, reconciled with the House’s companion legislation, and signed by the president before becoming law.

The last long-term FAA authorization legislation expired on September 30. Two short-term bills have been passed in the interim, extending authorization and funding for FAA programs and activities first through December 31 and then until March 8. FAA reauthorization legislation was introduced in the U.S. House of Representatives and Senate in June with the House bill passing in July.

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Aviation Benefits Included in New Tax Proposal https://www.flyingmag.com/aviation-benefits-included-in-new-tax-proposal/ Fri, 19 Jan 2024 22:42:43 +0000 https://www.flyingmag.com/?p=193356 The bipartisan, bicameral bill could help lower depreciation and interest costs.

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A three-year tax framework unveiled this week in both chambers of Congress includes lucrative provisions that could help boost profits and lower operational costs for aircraft buyers.

The proposal, the Tax Relief for American Families and Workers Act of 2024, has bipartisan support. In exchange for Democrat-backed language to bolster the Child Tax Credit, it restores tax deductions—supported by Republicans—that were eliminated in the 2017 Tax Cuts and Jobs Act, the signature tax package passed under the Donald Trump administration, to help balance revenue lost as a result of cutting the U.S. corporate tax rate from 35 percent to 21 percent.

Those Republican-backed provisions include restoring accelerated depreciation for capital investments and providing more generous deductions for interest expenses.

Notably for aircraft purchases, the plan extends the allowance of a 100 percent bonus depreciation deduction for property placed in service after December 31, 2022, and before January 1, 2026.

“If you were to purchase a major capital asset, such as an airplane, the bonus would allow you to deduct the full cost in the first year,” tax policy expert James Lucier, founding partner of Washington, D.C.-based Capital Alpha, told FLYING.

“An airplane is quite an expense, so it would be a great benefit to take the full deduction and see that benefit right away.”

Lucier also pointed out that the bonus depreciation provision becomes even more powerful as a protection against inflation.

“If inflation is running at 5 percent a year, and you have to wait seven years to take full deduction of an airplane purchase, that’s a significant impact,” he said. “The decline in the purchase power of money over time means you’ll never get the full deduction if you have to wait seven years.”

The new tax package also temporarily extends the EBITDA limitation under section 163(j) of the tax code to apply to taxable years beginning before January 1, 2026.

“For purposes of the section 163(j) interest deduction limitation, adjusted taxable income is computed without regard to the deduction for depreciation, amortization, or depletion for taxable years beginning before January 1, 2026,” according to a detailed description of the legislation.

Said Lucier: “This means a bigger tax deduction for interest expense, which reduces your borrowing costs. Companies think about operations and finance together, so the better your cash flow from financing operations, the more it will help with operating expenses.”

As in past implementations of bonus depreciation, the move stands to help support the general and business aviation market through the coming year, as softening looms on the horizon post-pandemic.

Fast Track in the House

Congress is attempting to place the tax plan on a fast track. On Friday the U.S. House Ways and Means Committee marked up and passed the bill by a 40-3 vote—a positive indicator for the prospects of the legislation passing the full chamber. The legislation has yet to be taken up by the Senate Finance Committee, which has jurisdiction over the legislation in that chamber.

In addition to strong backing in the House, the bill also has support of business interests, which has sway on both sides of the political aisle.

“This looks to be relatively reasonable, bipartisan legislation that has a good chance of passing the House but probably not enough to get enacted into law,” said Loren Smith, a transportation policy analyst with Skyline Policy Risk Group. “However, it’s very much worth paying attention to even if it fails, because it will likely become the starting point for negotiations in 2025, which will be a very big tax year in Congress. These business provisions will be a major focus.”

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