Last month, President Trump endorsed an airline-backed proposal to privatize management of the U.S. air traffic control (ATC) network. While supporters said such a move would speed implementation of the NextGen satellite-based ATC system, the proposal has generated stiff opposition from consumer groups and the general aviation community, among others. Senior editor Robert Silk asked privatization supporter Bob Poole, director of transportation policy at the libertarian Reason Foundation think tank, to explain why he hopes Congress will pass a privatization bill this year.
Q: You are a strong backer of removing ATC management from the FAA and turning it over to a private, nonprofit company. Why?
Bob Poole
A: A tax-funded bureaucracy is a poor fit for operating a 24/7, high-tech service business, which is what ATC actually is. What I favor is separating the Air Traffic Organization from the FAA and converting it into a federally chartered nonprofit corporation, paid directly by its aviation customers, like a utility, and governed by a board representing all principal aviation stakeholders. Since 1987, over 60 countries have separated their ATC operation from their transportation department and set it up as a user-funded corporation.
Q: Aside from not having to live with political squabbling over funding, how would a nonprofit have an advantage over the FAA?
A: It would be free of micromanagement by the FAA administrator, the DOT secretary, the Office of Management and Budget, the DOT inspector general, the Government Accountability Office and 535 members of Congress. All three former heads of the Air Traffic Organization support corporatization, on the grounds that you cannot run the Air Traffic Organization as a business when all these different bodies continually give you directives. A stakeholder board has a 20-year history of success at Nav Canada [Canada's ATC], enabling it to become the most cost-effective ATC provider in all developed countries.
It would also be regulated for safety -- at arm's length -- by the FAA, as has been the International Civil Aviation Organization policy since 2002. Self-regulation as it exists with the [Air Traffic Organization] as part of the FAA does not optimize air safety.
Q: How can we be assured a nonprofit would be accountable to the interests of the traveling public?
A: The stakeholder board should have one or two members representing the traveling public. The plan voted on last year by the House Transportation and Infrastructure Committee included two board seats appointed by the Secretary of Transportation, to represent the public interest.
Q: Many opponents fear the privatization push is a power play by the airlines. As proposed in the House bill last year, major airlines would hold four out of 13 seats on the board. Is that too many?
A: In addition to two public-interest seats appointed by the DOT secretary, I recommend there should be a seat representing the airport community, a very important part of the ATC system and of real concern to small airports and rural states. Since airlines will be paying the large majority of the user fees, I think four out of 13 seats is appropriate, but they should not all be appointed by the major airlines in [Airlines for America]. Two from [Airlines for America], one from the Regional Airline Association and one from the Cargo Airline Association would be a far more representative set.
Q: Some skeptics also said that supporters haven't spelled out what, if any, operational or cost improvements would come from privatization. Is there reason to believe costs would be held down?
A: Nav Canada's costs have come down over its 20-year history; and the fees it charges today are 30% lower in real, inflation-adjusted terms than when they began charging. In the latest international productivity comparison, FAA's average cost per controlled flight hour was $453; Nav Canada's was $335. That's an impressive achievement, because a larger ATC provider can spread fixed costs over far more users. As the world's largest provider, the FAA ought to have the lowest unit cost, but is far from that.