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Wednesday, 16 January, 2019

Government Shutdown Status & Effects on Industry

MEMBER ALERT 

Status:
More than a dozen major departments and agencies, including the Department of Transportation (DOT) and Federal Aviation Administration (FAA) have been shuttered since December 22, 2018 as President Trump and Democratic lawmakers feud over funding for a border wall. This shutdown, the longest funding gap in United States history, is resulting in essential government workers, including Air Traffic Controllers and TSA agents, being required to work without pay. 

Discussions have centered around whether the White House will declare a national emergency to build the border wall, a move strongly opposed by Congress, but one that could pave the way for an end to the government shutdown.

If President Trump uses the emergency declaration, Congress will move immediately to open government -- and will be able to do so quickly. President Trump has also indicated that he will sign any government funding deal passed through Congress, so long as the President has funding for border security, whether through the national emergency or in the Department of Homeland Security (DHS) appropriations bill.

The House recently passed appropriations bills that would reopen shuttered agencies, including the departments of Homeland Security and Transportation, but President Trump's veto threats and Majority Leader Mitch McConnell’s (R-KY) vow to not bring funding bills to the floor without Presidential support will keep the legislation from going any further, further stalling any progress. Negotiations between the President and Congressional leaders is ongoing. 

Effects on aviation industry:
As Politico reported, the aviation industry is one of the hardest hit, and because of the necessities of security and safety in the air, tens of thousands of workers between the FAA and TSA - which is dealing with its own crises - are still on the job but facing financial hardship. The shutdown has halted work on new aircraft certification, interactions between FAA and other nations, some aircraft registrations, commercial drone flight authorizations, aircraft mechanic licenses, introduction of new air traffic technology and airport construction approvals.

  • The effects of the shutdown became very real for air traffic controllers, who found out two weeks into the shutdown that they would be missing a paycheck.

  • The delivery of Airbus and Embraer-made airplanes has been disrupted because the federal employees who must give their seal of approval to move forward aren’t working.

  • One NATA member company has two aircraft stranded in Canada as a result of the shutdown. The newly purchased planes were being painted and need a special FAA approval before they can be flown back to the US.

    • The member company and numerous operators have encountered issues obtaining ferry permits and/or special flight permits, affecting both domestic and international-bound flights. NATA is working to clarify whether Designated Airworthiness Representatives (DAR) could facilitate permissions for certain things, such as ferrying permits, without FAA approval. But the furlough has affected the agency’s DAR oversight, making it unclear whether they can take these steps. 

  • NetJets hasn’t been able to add new aircraft into its operations.

  • The halting of FAA knowledge testing and check rides is creating scheduling issues and delays for certain organizations. 

  • Companies are unable to obtain decals from Customs and Border Protection (CBP), but the agency is accepting receipts that show a decal has been ordered.

  • Regarding flight training, training center evaluators’ qualifications are expiring and there is a backlog of qualifications for flight simulators. This is making it impossible for organizations to conduct critical training activities resulting in severe economic impacts because the organizations cannot schedule training activities. As a temporary solution to this problem, we request that the FAA allow qualified examiners, instructors, courses, and simulators that were current as of Friday, December 19, 2018 (the day before the shutdown) to retain their qualification status until the government reopens.

    • NATA has also received questions about flight school interviews and whether they are able to happen during the shutdown. NATA informed National Air College that the student will have to wait to do the interview once the shutdown ends. 

  • Flight Safety International is reporting the inability to conduct training and they have had multiple requests/ delays/ cancellations associated with: cancelled TCE Training classes, cancelled TCE observations, delayed course approvals, no approval of remote site training requests, updates to simulator MQTGs (T011) are not being signed by the TCPM/TPAA, course enrollment waivers are not being approved, course prerequisite waivers are not being approved, client Temporary Airman Certificates are expiring, revisions to Training Specifications are not being signed/approved and letters of Verification for foreign Pilots are not being processed

    • Companies that provide training for pilots require regular authorizations by the FAA to issue certificates; these training providers need certain qualifications which they may lose due to the shutdown and this could halt pilot training and may prevent aircraft from having the necessary crews to operate.

  • While the Registry has remained open during the shutdown, thanks to the passage of the FAA reauthorization bill, the furlough of other FAA resources has restricted the Registry from operating to its fullest potential. The Registry is only one part of an integrated system. For example, owners can register aircraft, but can’t fly them. Also, attorneys have been deemed non-essential, so non-routine registrations aren’t being processed. Aviation safety inspectors are furloughed, so new aircraft can’t be added to OpSpecs. 

    • In December, days before the shutdown, a member company (along with a medical client) took delivery of two new CJ3+ aircraft. While the companies worked to race conformity documentation to their inspections so that the client can transport surgeons and organs, the shutdown prevented them from going into the right hands, resulting in two new aircraft that are sitting in hangars, unable to fly because they are not able to obtain the OpSpecs signed approving them to operate. According to the member company, the aircraft, once flying, will save at least one life almost every time they fly. The shutdown is preventing these aircraft from entering service and saving lives.

Effects at the agencies:
According to the Congressional Research Service, when federal agencies and programs lack funding after the expiration of full-year or interim appropriations, the agencies and programs experience a funding gap. If funding does not resume in time to continue government operations, then, under the Antideficiency Act, an agency must cease operations, except in certain situations when law authorizes continued activity (essential operations). Agencies, like the FAA, are required under law to cease non-essential operations and cannot act while there is a lapse in funding. When funding does resume, and the shutdown ends, all non-essential operations will restart, creating a backlog of work that will take months to catch up. 

Nearly 18,000 FAA workers involved in a range of activities from airmen certificate issuance to NextGen development are on furlough, with others facing the prospect of working without compensation until the government reopens. 

  • TSA agents have begun to call in sick more often, meaning longer lines at airport security checkpoints and perhaps less security.

  • Customs and Border Protection has the same problems with personnel pay at passport and immigration control locations at airports and other border crossings. There are already plenty of problems with illegal immigrants; now the problems are spreading to those with legitimate work and visas who have followed the rules.

  • The FAA has begun to recall a handful of its 3,000 safety inspectors; they are required to sign off on thousands of transactions, from pilot licenses to layers of approvals as necessary. 

    • In some cases, employees of airlines or manufacturers have been granted legal authority by the FAA to give such approvals, but many such tasks still require a government official. 

  • Currently all Border Overflight Exemption (BOE) requests are also not being processed. We have not been receiving any approvals since December 21, 2018. Unfortunately, unlike the decals that won’t affect an operation, a BOE does. For example, we had one operator that had a flight on Monday January 14th that will have to stop at the border because their BOE is expired and will not be renewed on time.

  • State DOTs note they are beginning to delay new projects, constrained by the absence of a FY19 appropriations bill.

    • Multiyear projects approved in previous years by DOT are still moving forward, however

  • One hundred percent of Federal Highway Administration employees are working, exempt from the furlough because their positions are funded by the Highway Trust Fund. This shows it is more important than ever that we push to return the billions of dollars of aviation taxes currently being funneled into the Highway Trust Fund (click here for more information on the “fuel fraud” issue, a top NATA legislative priority in 2019) and return them to the important work of modernizing our nation’s aviation infrastructure, and pay the workers who make that happen during future government shutdowns. 

For more information on DOT, FAA and DHS essential and ceased operations, click here

NATA action on the shutdown:

  • On January 10th, NATA and 34 aviation groups sent a joint letter to President Trump and Congressional leaders urging them to end the government shutdown. 

  • NATA News articles discuss the shutdown and its effects on the industry – click here and here.

  • At the start of 2019, NATA issued a Member Alert helping members affected by the shutdown. 

  • At midnight on December 22, 2018, NATA President Gary Dempsey issued a memo to the membership noting the beginning of the shutdown and provided resources on DOT, FAA and DHS shutdown plans.

  • NATA also reports on the shutdown in real-time via its social media channels.  

NATA legislative and regulatory staff are on hand to answer any questions during the shutdown - please call (800) 808-6282 or email Rebecca Mulholland, Director of Legislative Affairs, at rmulholland@nata.aero or Megan Eisenstein, Senior Manager of Regulatory Affairs, at meisenstein@nata.aero.  

For general press inquiries, contact Shannon Chambers at 703-298-1347 or schambers@nata.aero

The National Air Transportation Association (NATA) has been the voice of aviation business for over 75 years. Representing nearly 2,300 aviation businesses, NATA’s member companies provide a broad range of services to general aviation, the airlines and the military and NATA serves as the public policy group representing the interests of aviation businesses before Congress and the federal agencies.