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The White House released its preliminary federal budget proposal on Thursday. It includes significant cuts to government spending in many areas, and increases in others. Funding to the Environmental Protection Agency, the Department of Housing and Urban Development, and the Department of Agriculture are slashed, while funding for the border wall and a school voucher program are among the additions.
Whether you view the proposed budget as positive or negative is beside the point. It is not my goal in this post is to politicize the budget. Instead, I simply want to discuss a few of the items contained in the budget proposal that are directly related to the travel industry. Here are 4 potential impacts the current Trump administration budget could have on travelers:
Increase to TSA fees
The current budget does not outline an exact increase, but some media outlets are reporting a $1 hike. This would take the current 9/11 passenger security fee from $5.60 to $6.60. Personally, I find this a really modest increase. Back in 2014 the fee more than doubled from $2.50 to $5.60.
If the change proposed in the budget is as modest as is being reported, I don’t find this much to worry about. The TSA passenger security fee is the only one passed on to travelers on award tickets. Thus, U.S. travelers enjoy some of the lowest fees in the industry, especially when compared to obscene rates like the U.K. air passenger duty.
Amtrak funding slashed
Funding for Amtrak’s long distance train routes would be eliminated under the current proposed budget. Long distance train routes incur some of Amtrak’s greatest losses. Between October and March 2015, the Empire Builder service lost $34.8 million. Even with ticket prices that are often cheaper than flying, Amtrak still can’t seem to fill seats. I guess there is this thing about taking 2 days to reach your destination rather than 4 hours…
Amtrak operates at a loss every year. Recently, however, the train service has seen improvements to its operations, breaking ridership records in 2016 and reducing losses to the lowest they have been for decades. That being said, the long-distance routes are still big money losers, and are the primary reason Amtrak is in the red year after year. Revenues from the heavily traveled Northeast Corridor and smaller regional services help offset the losses from the long-distance routes. They still aren’t enough to make Amtrak profitable under current operations, however.
This proposal saddens me because the long-distance routes are some of the most scenic and enjoyable for travelers. My wife and I spent part of our honeymoon taking Amtrak from New York all the way back to California. It was an unforgettable experience. Dan and his family have taken the Empire Builder from Chicago to Seattle as well. It is unfortunate that we may see a loss or reduction to this service under the proposed budget.
Elimination of “Essential Air Service” funding
The current budget eliminates $175 million in funding for Essential Air Service, a program that subsidizes flights to rural airports. Flights that are part of the Essential Air Service program are typically operated at low load factors and high per passenger costs. Without subsidization by the government, many of these routes would not be viable for commercial airlines.
The Essential Air Service program was put into place in 1978 as part of airline deregulation. Roughly 175 communities are subsidized by the program, including about 60 in Alaska. A competitive bidding process keeps the amount of subsidization in check, but it still costs taxpayers money every year to support air service to these communities. Without the EAS program, airlines will likely pull out of these otherwise unprofitable markets.
Privatization of air traffic control
The proposed budget calls for air traffic control to be moved away from the Federal Aviation Administration. Some airlines have previously pushed to privatize air traffic control functions. Their main reasoning for the change includes government inefficiency and behind-the-times technology. The current proposal calls for ATC function to be moved to an “an independent, non-governmental organization.”
Full privatization of air traffic control could be both positive and negative. If the airlines are correct, the move to a privatized system could be cheaper for taxpayers and the flying public. Conversely, moving ATC function away from direct government purview might not bode well from a labor concern. There is a delicate balance between the National Air Traffic Controllers Association (NACTA) and the government because air traffic control is such a vital function. Controllers are essential to safety and commerce, and they are forbidden from striking. Thus, NACTA has had to accept less-than-desired contract terms from the FAA in the past.
If privatized, there will be little executive power to prevent air traffic control strikes from severely disrupting the nation’s air system, unless safeguards are explicitly spelled out as part of creating this new, non-profit corporation. We’ve seen the disruption caused by numerous ATC strikes in Europe. The NACTA itself supports the move to a private, non-profit corporation.
Additionally, air passenger safety has been one of the core transportation safety functions of the federal government. The move to privatize air traffic control will be met with skepticism by many people. This will likely be the most heated transportation-related issue in the budget.
Remember that this is just a preliminary budget proposal and much could change before the actual budget is approved. Again, I don’t want to politicize the budget itself, or hear your rants on the current administration, either for or against. Please keep the comments respectful and related to the potential travel impacts included as part of the budget.
Empire builder photo courtesy of Loco Steve under CC 2.0 license.