DOT 96-08
Contact: Sarah Echols, Tel: 202-366-4570
Thursday, July 10, 2008

U.S. Transportation Secretary Peters Announces New Near and Longer Term Measures to Help Aviation Industry Struggling with High Fuel Costs

As the U.S. aviation industry continues to struggle with high fuel prices, U.S. Transportation Secretary Mary E. Peters today announced a new tool to help airports and airlines alleviate delays and fuel-wasting congestion, and helped kickoff a new X Prize competition to stimulate private sector innovation in developing an alternative to jet fuel.

“For more than a century, creativity and innovation have been the hallmark of American aviation,” Secretary Peters said. “I’m confident that with the right incentives, this dynamic industry can retool and refuel to cope with high energy costs.”

The Department’s final rates and charges policy announced today gives managers at busy airports the ability to use market incentives to help spread flights throughout the day, Secretary Peters said. Effective immediately, overcrowded airports will be able to move away from the decades-old practice of charging aircraft landing fees based simply on the weight of the plane, instead having the flexibility to vary charges based on time of day, she said.

The Secretary said the new policy also will allow airport operators to include the cost of projects designed to expand capacity in the new landing fees, which will help airports lower construction project costs by avoiding hefty finance fees. Currently, airports can only include those costs after the projects have been completed, she said.

“This is part of our continued effort to give airports and airlines the tools to help them manage congestion, operate at peak efficiency and decrease fuel burn,” Secretary Peters said.

Also today, Secretary Peters announced that the FAA and the X Prize Foundation, which awarded $10 million in 2004 to the first private team to launch a manned spacecraft into suborbital space, will lead a competition to develop a renewable alternative to jet fuel. The terms of the competition and the amount of the prize will be determined in the coming months.

“The race to refuel American aviation is on and our hope is that the X Prize will jump-start investment and spur innovation,” Secretary Peters said. “It will be a competition that everyone wins, because a breakthrough in alternative jet fuels is a potential game-changer that could bring lower airline fuel costs, greater U.S. energy independence, and cleaner air.”

Secretary Peters also announced the government will continue to provide the airlines with War Risk Insurance through the end of this year, a measure that will avoid burdening the carriers with higher insurance costs on top of increasing fuel prices. She reiterated the Administration’s long-term goal of permitting a gradual re-entry of commercial insurance companies into the war risk market.

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Click HERE for the Remarks.