Mojave Airport lands foreign trade zone

Valley Press ^ | February 11, 2004 | ALLISON GATLIN

[BenLurkin]

MOJAVE - Mojave Airport businesses are preparing to take advantage of the airport's newly approved foreign trade zone designation. The U.S. Department of Commerce last week approved including the airport in the foreign trade zone, said Stuart Witt, East Kern Airport District general manager.

Including the airport extends the zone, which is managed by Palmdale.

"It places us in some very nice company across the country," he said.

To get the processes in place to utilize the zone's benefits will take approximately 60 days, he added.

Foreign trade zone status allows carriers to transport goods from the airport to foreign trade zones in the United States or overseas. Foreign trade zones can be beneficial to companies because no duties are paid on merchandise re-exported from a foreign trade zone, and if the merchandise is sold domestically, no duty is paid until it leaves the zone, according to the Foreign Trade Zone Corp.

Although most sites apply for foreign trade zones in order to attract new businesses, Mojave Airport primarily is looking to assist existing businesses.

The zone is expected to strengthen these by giving them the ability to offer discounts and tax breaks, allowing them to compete with such facilities as the Southern California Logistics Airport in Victorville.

A significant benefit will be in fuel sales to customers.

For example, to save as much as 30 cents per gallon in taxes, airline companies previously would send 747 jetliners and other planes maintained at Mojave elsewhere to fill up.

Other firms could benefit from tax and duty savings on goods and parts imported or exported for use in commercial and military aircraft modifications and improvements.

With so much of the work at Mojave Airport involving foreign customers, many businesses stand to benefit, including AVTEL, Flight Test Associates, the National Test Pilot School and Scaled Composites.

In the long run, the foreign trade zone is also likely to help attract new businesses to the airport, which is in a position to be the next economic driver for Mojave.

"I'm sure it will (help), I just don't know to what end yet," Witt said.

The foreign trade zone designation comes at the end of a yearlong application process, accomplished with Palmdale's aid.

The Palmdale City Council unanimously approved expanding its trade zone boundaries to include the airport in January 2003.

"I'm really proud of the crew and the work they've done," Witt said.

[Willie Green]

I always thought that the airline fuel tax was earmarked to pay for operation and maintenance of airports and the air traffic control system.
Where are they going to get these operating funds now?
Out of our Social Security retirement Trust Fund?

[BenLurkin]

I really don't know. Perhaps it is along the lines of "tax cuts increase tax revenues".