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Should commercial space companies contribute to the FAA the way airlines do?


Commercial space companies are sending up more rockets than ever before. Our colleagues over at The Indicator From Planet Money, Wailin Wong and Adrian Ma, explain why the industry may soon need to start paying into a federal fund to support that effort.

WAILIN WONG, BYLINE: In 1969, Michael Huerta was one of the tens of millions of Americans watching the Apollo 11 moon landing on TV. He was a teenager then, and he was transfixed.



CHARLIE DUKE: We copy you down, Eagle.

ADRIAN MA, BYLINE: Almost 50 years later, Michael was at Cape Canaveral for another historic moment. The company SpaceX launched a rocket and successfully landed the booster on a barge off the coast of Florida.

MICHAEL HUERTA: It was one of the most exciting things I've ever seen.

MA: Michael wasn't just a curious bystander for the SpaceX launch. At the time, he was the head of the Federal Aviation Administration, and he saw new companies like SpaceX grow into big players that consumed an increasing share of FAA resources.

WONG: One of the main jobs of the Federal Aviation Administration is to manage the country's national airspace system.

MA: Every day, big players like commercial airlines all the way down to recreational pilots make use of this system.

WONG: But rocket launches by commercial space companies like SpaceX have become much more frequent.

MA: That increased activity means more work for the FAA. The agency has to close off airspace and ensure safe conditions for every commercial space launch.

WONG: Over half of the FAA's annual budget comes from something called the Airport and Airway Trust Fund, and commercial airlines contribute to this trust fund.

MA: And the money pays for things like upkeep of airports, technology upgrades of the air traffic control system and safety inspections.

WONG: None of the money comes from commercial space companies like Blue Origin and SpaceX. They do not have to pay into this trust fund, but Michael Huerta thinks they should start.

HUERTA: Today, you have a structure that is founded largely on airline ticket taxes. You have this group of new users that are paying nothing into the system that are an increasing share of the operations, and I truly believe the current structure isn't sustainable.

MA: And the Biden administration agrees, at least in principle. The President's recent budget proposal calls for updating the trust fund's sources to account for who's actually using the system. Now, the proposal doesn't lay out specific numbers or give a timeline, but it signals that it wants the current funding structure to change.

WONG: Michael says he doesn't have a problem with some users paying more than others.

HUERTA: But I do feel that everyone should pay something.

MA: The government has not required commercial space companies to pay into the trust fund because the industry, for a while, was seen as nascent. Michael says the thinking was that a light regulatory touch would help this sector grow.

WONG: Now, the question is whether the industry has grown up enough that it can start chipping in.

MA: We reached out to the Commercial Spaceflight Federation, which is this group whose members include SpaceX and Blue Origin. And the president of the Federation said in a statement that, look, aviation and space - these industries are fundamentally different in terms of their operations, their scale and also how they use national airspace.

WONG: For example, there were just over 100 commercial space missions last year versus 16 million traditional flights. Because of this disparity, the Federation said that it would not be appropriate to have commercial space companies pay into the trust fund right now.

MA: Economist Matthew Winzerl notes a lot of these companies aren't making a profit yet. That's another argument in favor of holding off taxing the industry, especially an industry that's deemed vital to scientific research, defense and other national priorities.

MATTHEW WINZERL: There's a belief among many in the sector that there are real commercial opportunities to really solve some of the biggest problems we have here on Earth - whether it's climate change or other things - through the use of space technologies. And so the last thing people will then say that we should be doing is discouraging growth by taxing and therefore raising the costs of launch.

WONG: That said, Matt thinks it's reasonable to have the commercial space companies chip into the FAA trust fund. He says the government could also perhaps increase subsidies and support for the industry in other ways to make sure that the increased taxes don't put a damper on growth.

MA: Adrian Ma.

WONG: Wailin Wong, NPR News.

(SOUNDBITE OF MASEGO SONG, "YOU NEVER VISIT ME") Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Wailin Wong
Wailin Wong is a long-time business and economics journalist who's reported from a Chilean mountaintop, an embalming fluid factory and lots of places in between. She is a host of The Indicator from Planet Money. Previously, she launched and co-hosted two branded podcasts for a software company and covered tech and startups for the Chicago Tribune. Wailin started her career as a correspondent for Dow Jones Newswires in Buenos Aires. In her spare time, she plays violin in one of the oldest community orchestras in the U.S.