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I think we should call a halt to the passenger tax idea right where it is now - the source of funds to pay the airlines' share of the cost of the federal airways system. I think we must regard the passenger tax as a agencies get out of our passengers is revenue which is not available to the airlines. Thus, when the government agency or an airport levies on a passenger a tax for aviation facilities, they are taking our money, and these levies should be so regarded. When approached in this way the issue before us tends to change, and in my opinion becomes more easily answerable. The issue really becomes whether the airlines wish to five some of their money to the federal government or to an individual airport authority for the expenditure, or whether it is better for the airlines to collect the money themselves and preside over its expenditure. The answer to that seems clear. Over the long term our industry would be better off to pay whatever it takes to get the airport facilities we want, rather than transfer some of our money to the government for distribution as it sees fit. Under the latter solution part of the money will inevitably go for projects the airlines neither want nor need, and from our standpoint would be wasted. In this period our obligations are too heavy to permit anyone to waste a dime of our resources. The course of action I suggest will inevitably require airlines to raise their prices, but I suggest that those price increases will not nearly aggregate the price increases caused by a proliferation of passenger taxes.

Consequently, I would hope that in dealing with the problem of airport financing the industry would be prepared to go back to the position which was taken earlier - that we should advocate legislation which would provide for long-term and flexible loans and loan guarantees to help get the airport authorities and ourselves over the tremendous capital bulge with which we are now faced. While the Airport Operators Council has opposed this solution, I am quite confident that the airport operators would find this solution quite useful if it were ever made clear to them that there is not going to be any federal fund into which they can dip beyond the present Federal Airport Act Fund. The present federal fund can be continued. It should be devoted to the financing of airport improvements in the smaller places which could not even support a long-term loan.