Today that loan sits waiting for its first applicant.

Palin approved the Alaska Capstone Avionics Loan Program during the Alaska Airmen's Association trade show in early May. The loan program offers $5 million in state funds to be used toward the purchase of aviation safety equipment, called Automatic Dependent Surveillance-Broadcast also known as Capstone.

But so far, there have been no takers.

“It is really too early to say why, except that everyone is out flying right now,” said Geoff Whistler, lending manager at the Alaska Department of Investments.

Those in the aviation industry, however, point immediately to the rising costs of fuel, which cuts into extra funds to buy new equipment.

Others, such as the president of the Alaska Airmen's Association, point to the Federal Aviation Administration as the reason. Joe Pearson, president of the AAA, said the FAA has not fully agreed on a standard for the equipment.

Last year the FAA opened up a public comment period to help the agency develop the rules, but the effort drew fire from industry and aviation groups nationwide.

The Aircraft Owners and Pilot's Association said it is opposed to the national ADS-B plan, and officials there argued that the plan was limited in its scope and is expensive.

The argument is over the FAA's proposal to use the multi-faceted equipment developed and tested in Western and Southeast Alaska. The equipment effectively replaces radar with a real-time digital tracking of aircraft.

At issue over the ADS-B standard is whether to certify the equipment that allows only an “out” signal, much like the current transponder method.

“Alaskans know what this equipment is capable of doing, and we don't want to invest in a package that is less than what it is capable of technically providing,” said Dee Hanson executive director of the Alaska Airmen's Association.

ADS-B equipment is a cockpit situational awareness technology that displays on a cockpit screen other aircraft, as well as the terrain in the area. It offers a moving map display, weather and terrain avoidance features, as well as in-flight messaging capability.

ADS-B is touted as the replacement for radar in less congested areas of the U.S. and for use in rural and Third World locations.

ADS-B will be used nationwide by 2020 to monitor aircraft traffic in the country's airspace.

Current Alaska cost estimates range from $14,000 to $18,500 per aircraft for installation and the hardware.

The state loan package finances 80 percent of the installation and equipment, requires a seven-page application, a $50 application fee, and a title search fee. The loan can be financed at a maximum of 10 years at 4 percent interest, and creates a lien against the title of the aircraft until the loan is repaid.

While there are no applicants as yet, Peninsula Airways said it planned to submit an application soon.

“We have five aircraft that we would like to equip with ADS-B, and intend to submit an application,” said Danny Seybert, Peninsula Airways CEO. “We were taking our time to do this, holding back to learn a bit more about how this is going to work.”

The state loan program does not preclude private aircraft owners from using the program.

Ground-based transmitters are scheduled for installation and service for Nome and Kotzebue flight routes this year.

Also at issue is the Capstone Statewide Plan signed by the Alaska Airmen's Association and the Alaska Air Carriers Association and others that agreed to equip 5,609 aircraft in five years.

The agreement was signed by the FAA and a group of aviation industry officials in August 2007 and requires equipage to the allotted aircraft by 2012.

To date, no aircraft has the new technology, other than the roughly 400 commercial planes that already had the equipment.

This may be an issue that brings users and the FAA back to the table to negotiate a new timeframe, according to Alaska officials. The Alaska Airmen's Association believes that the document can be changed, Pearson said.

“This is absolutely a fluid document, and if the feds have not committed to a standard then we will have to renegotiate,” said Pearson. “Our members and myself are not going to go out and commit to a loan for equipment that will have to be replaced two or three years from now because the FAA has come up with a new standard or wants to transition to something different.”