FAA sequestration could cost air cargo system $2bil

By Freddie Pierce
Follow @WDMEllaCopeland The Aerospace Industries Association (AIA) have released a report this week detailing the devastating effect of proposed budget...

The Aerospace Industries Association (AIA) have released a report this week detailing the devastating effect of proposed budget cuts to the Federal Aviation Administration (FAA). According to the report, the proposed sequestration could cost up to 132,000 aviation jobs, sap $80 billion a year from US gross domestic product and strip almost two billion dollars of freight capacity out of the air cargo system.


According to the study, which was performed in association with Econsult Corporation, annual economic losses could result in an annual decrease of $37-73 million in passenger enplanements and annual reduction of 1-2 billion dollars of transported air freight. The overall forecasted loss in output to the US economy is estimated to reach $9.2-18.4 billion, with an added $2.7-5.4 billion lost in wages.

Devastating Cuts

 “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 to the AIA. “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.

According to a letter from Rep. Norm Dicks (D-Wash.), ranking minority member of the House Appropriations Committee, 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.

Delays to NextGen control system

The proposed sequestration of the FAA is triggered in 141 days unless congress acts soon to repeal or delay it. According to the AIA, these budget cuts would also delay implementation of the Next Generation Air Traffic Control System by a decade or more. Currently scheduled for 2025, the proposed full implementation of NextGen was expected to provide more that $281 billion in net benefits, save 27 million hours of flight delays and reduce emissions by 216 metric tonnes.

“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.” said Stephen P. Mullin, vice president and principal of Econsult Corporation and author of the study.


Featured Articles

Global land, sea and air logistics news round-up

Global logistics IoT spend ‘will top $32bn by 2032’; UN $10mn grant for explosion-hit Port of Beirut; Costa Rica ransomware attack causes ports chaos

Comfort zones the enemy of sustainability - CIPS economist

Cranfield economist John Glen tells procurement & supply managers that comfortable routines and relationships are unlikely to deliver sustainability goals

Women in supply fare better in large firms - Gartner report

Annual Gartner report on women in supply chain workforce shows there are more women in C-level positions, nut that females in VP supply roles has fallen

What can be done to avert food catastrophe foreseen by UN?


UST's Colehower shares supply risk insights in webinar today

Supply Chain Risk Management

Why today 3PL providers are 'perfect supply partners'