Why not privatize the sky?

President Trump says he likes the idea of privatizing the nation’s air traffic control system, a topic that most people won’t understand or consider with the big pictures, and understandably so. For most people, aviation is an aluminum tube you get into after passing through security.

That’s probably why the one caution Trump indicated is that he didn’t want privatization to affect the cost of an airline ticket.

There are bigger and more important considerations as I’ve indicated in this space a number of times.

Safety. The nation’s air traffic control system is one of those government programs that actually works.

The following post originally ran on April 21, 2015.


This week, the Federal Aviation Administration took another step down Privatization Road when it stopped printing the navigation charts used by aviators. They’ll now be printed — for those people who depend on paper — by a private company, instead.

It’s not the first time the FAA turned over part of its functions to a corporation. A few years ago, all the “flight service stations” — there’s one in Princeton, Minn. — which provide weather and other services to pilots, were sold off to the Lockheed Corp. with mixed results.

Today, NPR broaches the next step in privatization: turning the entire air traffic control system over to a private company to run.

In so doing, it undersells a key component of such a plan — user fees — that roils the water between the big airlines and general aviation.

The FAA has a solution to augment radar. It’s called NextGen, and very simply put, it would replace the current air traffic control system with one based on GPS satellites, which would be more precise and allow more flights, closer together.

Problem is, the FAA has been working on NextGen for over a decade now, and still has a long ways to go. At a recent congressional hearing, Transportation and Infrastructure Committee Chairman Bill Shuster, R-Penn., argued that “in the same amount of time that we’ve pursued NextGen, Verizon has updated its wireless system not once, not twice, not three times, but four times in the last 10 years.”

So Shuster and others in Congress, along with the airline industry, think it’s time for someone other than the FAA to operate the air traffic control system. Sharon Pinkerton, vice president of industry trade group Airlines for America, says air traffic control is “very technology focused and we need to have a very nimble organization and one that’s not subject to politics or an annual appropriations process, that’s going to enable it to get NextGen done quickly.”

Some put the blame on the FAA, for the snails’ pace roll out of NextGen. Robert Poole, a transportation analyst with the Reason Foundation, a libertarian think tank, calls the air traffic control function of the FAA “a 24-hour, seven days a week, high-tech service business trapped inside a government bureaucracy.”

By contrast, Poole says an air traffic system operated outside the FAA “wouldn’t have civil service culture, they wouldn’t be as risk averse and status quo oriented as they are, they’d be able to hire and keep really top notch engineers and software writers and program managers and hold them accountable for results.”

And it’s not just industry and the GOP that support extracting the air traffic control organization from the FAA. The union that represents air traffic controllers is on board too.

Canada’s air traffic control system is run by a nonprofit private company with pilots assessed user fees for services rendered.

But organizations representing U.S. pilots say that if that happens here, many pilots will simply stop using services that are designed to keep them from colliding.

In earlier budgets, President Obama took a step toward user fees and possible privatization by proposing a $100 flat fee for certain general aviation aircraft.

It was pulled after business groups and general aviation industry lobbying organizations proposed raising the tax on jet fuel instead.

And there’s the problem, they say. Congress won’t properly fund a pretty important element of the U.S. transportation system — keeping airplanes from bending metal.

But the idea may have picked up some steam this week when the union for air traffic controllers — who’ve been victimized by the gridlock in Washington — signaled it might support turning the whole operation over to private interests, The Hill reported.

National Air Traffic Controllers Association President Paul Rinaldi said Monday that Congress should focus first on extending the FAA’s funding, but he said he would be willing to talk about efforts to reform the agency after the aviation money is firmly put in place.

“We understand that addressing the funding makes a lot of people look toward the structure of the FAA. But we must agree that finding a secure, stable funding system is the first thing that needs to be agreed to,” Rinaldi said in a speech to the Aero Club of Washington.

“Any structural changes that we want to examine has to be carefully examined and cannot be done with any haste or exuberance that will lead to unintended consequences,” he continued. “Safety has to always be our priority. None of us can afford to get this wrong.”

The comments came a week after Rep. John Mica (R-Fla.) introduced legislation in the House that calls for the creation of a new private corporation that would oversee air traffic control functions that are currently handled by the FAA. The new private organization would be known as the Employee Stock Ownership Corporation and would “allow stakeholders, including current air traffic controllers, airlines and users, to operate a new air traffic control system,” according to Mica.

Some of the delay in advancing the ATC system technology involves equipment that needs to be installed in airplanes to accomplish it.

By 2020, all current aircraft will have to be retrofitted to provide more data to air traffic control and make weather and traffic data available to pilots. It’s an improvement, but for general aviation aircraft owners, it also means spending 20 percent of a current airplane’s value for new equipment, in some cases.

Still, the odds for privatization seem to be improving. The Aircraft Owners and Pilots Association, vehement opponents of privatization a dozen yeaars ago, now says it’s interested in anything that will improve efficiency.



Related:
Why Travelers Should Care That Trump Is Inclined To Privatize Air Traffic Control (Forbes)

  • MrE85

    “The nation’s air traffic control system is one of those government programs that actually works.”

    Indeed. As I am flying to DC in a few days, I appreciate that. We all should appreciate government programs that work.

    • Heb Ienek

      We all should appreciate government programs that work.

      I can’t find a single thing to argue against that statement. Especially since there are so few to appreciate.

    • JamieHX

      Most U.S. government programs work well — VERY well if looked at in comparison to how many governments around the world don’t work. Because people hear about a few here that don’t work in one way or another, they think most government programs are screwed up.

  • John

    1) Did NextGen ever get implemented?

    2) Safety is far more important than cost savings, in this case. I wish people would look at bigger picture, but we have a cheaper is automatically better attitude in this country. It’s kind of awful.

    • NextGen is getting implemented but it’s slow going. The ADS-B requirement is part of that. But the FAA has had to give airplane owners — in the case of general aviation — time, which is why the deadline is 2020 to complete installation of equipment.

      For commercial aircraft, of course, there’s also the pushback from neighbors about noise from new routes.

      The other aspect of this is the commercial v. general/business elements. Airline execs are anxious to push the costs — or at least a lot of the costs — of the ATC system onto other elements of the system.

      • John

        Of course they are. No one wants to pay for anything that they can make someone else pay for.

        We all pay for airbags, seat belts, bumpers, etc. in our cars. Why would we expect to not have to pay for safety equipment in the planes we’re riding in?

  • dave

    means spending 20 percent of a current airplane’s value for new equipment, in some cases. = = = COULD that equipment be sold when the plane is scrapped??

    I do not know, but if the equipment has a value in the next plane, that is easier to swallow than “use & toss” approach to second-hand safety equipment.

    • Planes tend not to be scrapped. They’re not like cars.

  • Rob

    I’m wondering which of the global players would end up owning and running the skies – Google? Apple? Virgin?

    • No, defense contractors. Lockheed Martin primarily, although I think it just changed its name.

      • Will

        Leidos, they just branched off from Lockheed, I had an interview with them last year. They seemed to keep reiterating that they were no longer going to be associated with Lockheed in the interview.

      • Rob

        Yow.

  • Mike Worcester

    //Canada’s air traffic control system is run by a nonprofit private company with pilots assessed user fees for services rendered.

    Would using a non–profit even be considered here? Or is the idea to allow some entity to make a profit on managing the skies?

    • No. There’s no infrastructure for a non-profit to run anything and then supporters note that corporations have the capital to invest in equipment necessary.

      Of course, unmentioned in all of this is what Congress did to the FAA budget over the years that helped bring us to this point.

      • Mike Worcester

        //Of course, unmentioned in all of this is what Congress did to the FAA budget over the years that helped bring us to this point.

        Ah yes, the Grover Norquist approach to government. Is this the first on the list to be drowned in the bathtub?

        • Unless I missed a story — and I probably did — I’m pretty sure it’s been years since the FAA was funded with anything but a continuing resolution.

          • jon

            If I’m recalling correctly (I might not be) the suquestation impacted air traffic control and was one of the first to have an exception granted…

      • rover27

        That would be Republicans in Congress. They’ve done the same to numerous federal agencies over the years. Cut the funding and then complain the agencies are doing a poor job. And their answer: eliminate the agency.

        I’ve been convinced for many years, the biggest threat to democracy and to this country in general is internal. It’s called the Republican party.

  • Jim in RF

    I did a little research (googling) and came up with the FAA budgeting about $12.9 billion for operations, facilities & equipment in 2016; and US+foreign airlines carrying 896 million PAX in 2015. The money comes from airlines and appropriations. (The FAA spends an additional $3 bill on airport grants, R&D, etc.) The FAA cost per passenger works out to $14.40 per airline passenger (assumes 100% of FAA spending goes to servicing airlines and not GA). I know that $14.40 per ticket adds up; but to me, if it was $20 and I knew the extra $5 was getting me there faster I wouldn’t mind. Put another way, I would never vote for allocating $5 less and getting there slower or less safe.

    • Fuel taxes. You left out fuel taxes. The Airlines like to convey that the only people paying for FAA services are airline passengers. They’re not.

  • Will

    Trump wants to spend on infrastructure, here’s a sector that needs it, upgrade it all ASAP.

    • RBHolb

      And this is how the infrastructure upgrade is going to go: sell it off to private contractors. What could possibly go wrong with that? Let’s ask how Chicago’s privatization of its parking meters is going.

      • Heb Ienek

        Yeah well, let’s not use Chicago as a measure for anything.

  • Heb Ienek

    What objection, aside from fees, do pilots have to Air Traffic being a state-owned enterprise (SOE) like railroads?

    • That it won’t work. And that the services available will be segregated and provided to the segment that’s the biggest profit center.

      And that eventually Comcast will own it . :*)

      • Heb Ienek

        I’m not trying to initiate an annoying circular argument, but why does it work for railroads, but won’t work for air traffic? I see where profit centers (major airlines) might intrude on a single private pilot, but general aviation as a group is a pretty big chunk of what’s flying around up there, no?

        And bringing up Comcast, or anything which leaves me without the possibility of a logical retort is just unfair!

        • Joe

          Well someone built the rail lines, so if they have priority access, that seems reasonable to most people. No one built the sky. So many more people can claim access to it.

        • I guess i would liken it to an Empire Builder that consistently ran 7-8 hours late because oil trains had the priority. It worked great for the oil trains. Not so much for people on Amtrak.

          And it’s OK in aviation too if the smaller planes can’t get access to the ATC services. Unless they end up sharing the same airspace.

          Unlike most people, I tend to favor user fees for aviation where everyone pays for what they use. I’m fully aware that many pilots will simply increase risk to them and others to save money, but that’s the way it goes.

          The Obama administration had proposed a $100 fee PER FLIGHT for general aviation, which is utterly insane.

        • Jack Ungerleider

          As someone who travels via Amtrak, when I travel, the answer is it doesn’t really work for the railroads. The exception is the Northeast Corridor (NEC) as it has the necessary population density and Amtrak actually owns the track. The issue that Bob raises about priority is a descending spiral as once you are behind your priority goes down and you get further behind.

          With regard to delays and track ownership, I’ll just say that some host railroads (ex. CP Rail, BNSF, or Norfolk Southern) are better than others.

  • Al

    Oh, come now. There are a LOT of government programs that work well.

    • I wish people could have gone along with me for one of my flights back east and felt what it was like to be in “the system” with the air traffic controllers.

      They do an amazing job incredibly efficiently. I was always impressed by them all.

      https://www.youtube.com/watch?v=XlUMzLhQaIs

      • Al

        What in particular makes the process go well, in your opinion as a customer?