Mike Cote's Business Editor's Notebook : FAA furloughs clip wings of business
The flight delays and cancellations caused by the furloughs of air traffic controllers last week inconvenienced air travelers, with reports of people missing their connections and sitting on the tarmac for an hour as they waited for departure.
The Federal Aviation Administration attributed as many as 1,200 delays a day to staffing reductions - about twice as many as usual - brought on by automatic federal spending cuts. While Congress approved a plan by the end of the week to allow the FAA to use about $250 million in unspent funds so it could bring workers back, the wasted time costs businesses money.
"I think we can all agree that the air travel system in the United states is good but far from perfect. The last thing we need is to create twice as many delays or incur the cost of twice as many delays," said Greg Raiff, CEO of Private Jet Services, a Seabrook company that shuttles corporate executives, professional athletes, rock bands and other high-profile customers around the country.
"As it relates to private jet services, it made our job tougher," said Raiff, whose 23-employee company operates up to 10 flights a day. His clients have the expectation the flight will be ready when they get to the airport. "What they're paying for is timely operation."
Raiff, who founded the company in 2003, says private aviation is more than just a bunch of high rollers drinking champagne at 40,000 feet. Private Jet Services, which books anywhere from 12 to 64 people on a typical flight, frequently helps companies transport people to where they are needed. And when those people don't arrive at their destinations on time, that's money on the table, especially when it involves highly-paid executives.
"If you have 50 executives on a flight who were delayed an hour, that's 100-man hours round trip that are wasted," Raiff said. And assume those executives have a $200-an-hour billable rate, you're talking about $20,000, he said,
"How many times does that happen a day across the country? Those costs apply to the commercial flights as well," Raiff said.
The majority of private aviation flights involve moving people for business purposes and mission-critical needs, including relief workers, repair crews, energy services and cargo flights for just-in-time inventories, Raiff said.
"When those flights are delayed there is a huge added cost to the price we pay for gas at the pump or propane for the backyard grill," he said.
Private Jet Services coped with the delays and cancellations with its clients by suggesting alternate airports, that they allow for additional time or that they fly during off hours when air traffic is lighter.
"We fly some professional sports teams around. There are not a whole lot of delays at midnight when the teams come home," he said. "But it's not enough for us to say, 'hey, there's a delay.' That's not what they are paying us for."
While the FAA may be saving taxpayer money by furloughing some workers, we'll end up paying for it anyway, Raiff said.
"The airline isn't going to eat the costs of theses delays. They will pass it on to consumers," he said. "To claim that they're somehow saving money by cutting the FAA budget is ridiculous on its face."
Raiff pondered whether a $2 tickets tax to make up for the FAA's budget woes would be worth the ease in air traffic delays - though he voiced reluctance about going on the record advocating another tax as soon as the words were out of his mouth.
"If I had a choice between a $2 tickets tax and unintended consequences of these flight delays, I suppose I'd rather pay the tax," he said.
Mike Cote is business editor at the Union Leader. Contact him at 668-4321, ext. 324 or email@example.com.