Going over America's fiscal cliff rattles US aviation industry

THE US looming budget cuts, call the "fiscal cliff" will not lead to immediate layoffs in aviation, said the Department of Transportation deputy secretary John Porcari in an email to employees, reports Bloomberg.

Without a deal cut to prevent overall automatic spending cuts and tax increases of almost US$600 billion, the Federal Aviation Administration and relevant departments will need to adjust budget of $15.9 billion by US$1.04 billion until the end of the fiscal year on September 30.

Mr Porcari's email outlined the US budget cuts and tax increases were not the same as the failure of Congress in 2011 to reauthorise funding for the FAA which led to layoffs of 4,000 for 16 days and a pay freeze on airport construction.

Yet while immediate staffing cuts were ruled out, Mr Porcari said there were no long-term guarantees: "Should we have to operate under reduced funding levels for an extended period of time, we may have to consider furloughs or other actions in the future."

With budget cuts, comes a reduction in services that will impact operations, slow up technology upgrades and affect certification of new aircraft, said FAA Administrator Michael Huerta in a speech made in September.

Airline and cargo flight reductions of 10 per cent, or cuts to air-traffic technology projects, will lead to job losses of 132,000 and economic loss of $40 billion by 2021, according to a study by Virginia-based Aerospace Industries Association. Flight delays are likely to extend for decades to come.

Day-to-day operations for the aviation industry will remain largely unchanged on January 2, but the long-term disruptions on airports and passengers is worrying without advise from the FAA on areas ripe for cuts, said Debbie McElroy executive vice president of Washington-based trade group Airports Council International-North America.