In the Hot Seat
In the Hot Seat

Bob Poole, director of transportation policy at the libertarian Reason Foundation think tank, explained why he hopes Congress this year will pass a privatization bill for air traffic control. Read More

President Donald Trump's endorsement last month of a plan to privatize the U.S. air traffic control (ATC) network has given the proposal's chief backers on the House Transportation Committee and in the U.S. airline industry a vital ally.

"I think it will make a big difference," said Bob Poole, director of transportation policy at the Reason Foundation, a libertarian think tank, and a backer of privatization. "A number of Republicans who have been on the fence about this idea will have to take it more seriously."

Still, it remains unclear whether the president's support will be enough to overcome bipartisan opposition within the Senate and within appropriation committees in both chambers.

Rui Neiva, aviation policy analyst at the Washington-based Eno Center for Transportation think tank, explained the reluctance of lawmakers by saying, "It's $11 billion that they won't get the chance to give out."

In its March 16 budget blueprint, the Trump administration called for a multiyear transition from the status quo, replacing a system that has the FAA running the U.S. ATC network to a model in which ATC would be overseen by an independent, nongovernmental organization.

Trump's endorsement was cheered by the trade group Airlines for America (A4A) and House transportation committee chairman Bill Shuster (R-Pa.), who has been the leading congressional champion of privatization.

With input from A4A, Shuster last year sponsored a bill to have ATC overseen by a nonprofit organization managed by a board of aviation stakeholders.

Commercial airlines were to have the most seats on that 13-member board, with four, but they were still to have been a minority. Other stakeholders, including the general aviation community, airline pilots, the National Air Traffic Controllers Association and the federal government would nominate people for the board.

The organization's framework was modeled after Nav Canada, the nonprofit that runs the Canadian ATC.

Last year, Shuster had little difficulty shepherding the proposal out of the House Transportation Committee as Congress was working on its most recent FAA reauthorization. But privatization was never featured in the FAA bill passed by the Senate Transportation Committee and then on the Senate floor.

Opposition from the House Appropriations Committee helped prevent the measure from getting a vote last year on the House floor.

The dynamic seemed little changed this year, at least in the Senate, ahead of Trump's formal decision to support ATC privatization. In late February, ranking members from both parties on the Senate Appropriations Committee and the Senate Transportation Subcommittee signed a letter opposing a move to the Nav Canada model.

Proponents of the move, including the air traffic controllers union, said it would speed implementation of the satellite-based ATC system NextGen, which is to replace radar technology while removing ATC from contentious appropriation debates in Congress.

But opponents, notably including Delta, said the complicated process of privatizing will itself delay NextGen implementation. Meanwhile, consumer groups said privatization would make the ATC system less responsive to the general public. General aviation groups also oppose the proposal, saying that it would disadvantage small communities and give too much power to airlines.

Privatization critic Bob Mann of airline industry analysts R.W. Mann & Co. said that supporters have offered no metrics relating to operational performance, logistics or costs that would justify privatizing the ATC network.

"There's not even a suggestion in these proposals that says what they're going to do better," he said.

For its part, Nav Canada has had a good record on fees, especially after a bumpy few years following its establishment in 1996. The company's fees now are lower, even without adjusting for inflation, than they were in 1999.

A direct comparison between what U.S. air travelers pay to support ATC and what Canadian flyers pay isn't possible. That's because U.S. flyers support ATC through ticket taxes and fees that go into the general treasury, from where they are redistributed to air traffic control and other programs. Nav Canada, meanwhile, bills airlines for fees directly and the carriers then pass those costs onto consumers.

Nevertheless, a February Eno Center analysis, which the authors acknowledged was merely a "crude comparison," found that U.S. flyers would pay approximately double in ATC-supporting passenger fees for the typical flight as Canadian flyers. In a series of case studies, the Eno Center, which backs privatization, also reported that Nav Canada's fees bested fees charged in the private ATC models of Germany, the U.K. and Australia but were costlier than those of New Zealand.

The Office of the Inspector General also took a look at the Canadian, German, French and British ATC systems in a September 2015 report.

In the four countries, the report said, safety in the skies was not compromised when air traffic control was either privatized or, in the case of France, separated as its own governmental entity. However, each of those organizations oversees an ATC system that is far smaller than the U.S. system, and none have undertaken a major modernization effort comparable to NextGen.

Mann questions whether such a modernization is even necessary.

"NextGen is an empty shell," he said.

Delta, Mann said, has succeeded in more efficiently utilizing the air space around major hubs such as Atlanta and Detroit by investing in a software solution called Attila.

He said the competitive advantage Delta has gained from that investment is one reason it stands opposed to privatization. (Delta declined to comment on Attila for this story.)

Poole, despite his support for privatization, said he is surprised other U.S. carriers haven't adapted Attila. Still, he said, the board of the ATC company could review NextGen to determine what will and won't work.

"I would be astonished if there weren't significant changes" put in place by a private ATC operation, Poole said.

He added that structurally, a private company could more easily spur innovation than the FAA. Plus, Poole said, from a safety standpoint, it's important to separate the management of ATC from its safety oversight, both of which are currently the responsibility of the FAA.


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