Aviation Experts Present Options for Major ATC Reform
March 30, 2015
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  • During a House Subcommittee on Aviation hearing last week, lawmakers heard testimony from experts across different segments of the aviation industry deciphering the possibility of removing the Air Traffic Organization (ATO) from within the FAA. The committee heard testimony from leadership at American Airlines, the National Air Traffic Controllers Association (NATCA), and the FAA Management Advisory Council (MAC), among others, on the positive and negative aspects of creating a more privatized Air Traffic Control (ATC) system.

    The hearing was organized because the FAA’s governance and financing structure is broken beyond repair, according to House Transportation and Infrastructure Committee Chairman Bill Shuster. According to Shuster, while the FAA has spent $6 billion to date implementing NextGen, ATC delays are up at 13 of the 20 largest U.S. airports. In the same amount of time the FAA has been working on NextGen, “Verizon has upgraded its wireless network four times,” he said.

    “The underlying problem is that air traffic control is a high-tech service. The customers are companies and individuals who pay good money to a service provider that is not a business, but a vast government bureaucracy,” said Shuster. “As a government agency, the FAA is simply not set up to determine risks, pursue the most cost-efficient investments, manage people to produce results, reward excellence, or punish incompetence like a normal business.”

    To fix that problem, the expert witnesses at the hearing presented their perspectives on what the future FAA management structure might look like. The witnesses believe the current FAA operational structure could be greatly improved with the consideration of separating the ATO — which is responsible for providing air navigation services in the National Airspace System (NAS) — from complete government control and running it more like a private business.

    Craig Fuller, vice chairman of the FAA Management Advisory Council (MAC), told lawmakers that over the past year the council identified three main areas where the FAA needs to improve. Firstly, the MAC identified a need for less interruptions in the FAA’s funding stream and a need to fund capital projects necessary to modernize ATC facilities. Secondly, the FAA’s current certification and regulatory functions are not structured toward accommodating the speed at which technological innovation is occurring within the industry. After discussing these issues with 30 different aviation organizations, Fuller said the council found agreement that creating a stand-alone ATO could provide greater accountability and a more business-like approach to modernization.

    “The concept is the creation of a federal corporation that would incorporate the full set of functions contained within today’s FAA,” said Fuller. “As a federal corporation, this new FAA would operate with it’s own governing board.”

    Fuller detailed how this governing board would work, explaining that it would operate like one would on the private sector, would not be advisory, would retain and oversee the work of a CEO/administrator, determine decisions about sources of revenue and approve detailed operational metrics along with the annual budget. “This would include a capital spending program for facility modernization,” he added.

    American Airlines CEO Doug Parker also gave testimony on behalf of his role as the vice chairman of Airlines for America (A4A), which conducted research on the ATO models currently featured in the U.S., Canada and Europe. This analysis lead to the conclusion that the U.S. needs to establish a “fair self-funding model based on the cost of ATC services and free from budget constraints and short-term, declining appropriations,” Parker said.

    “Our work to date leads us to believe that a commercialized, non-profit type governance structure would deliver the greatest benefits for a reformed ATC entity because such a structure would continue to put safety first, while driving value for all stakeholders,” said Parker. “Let us be clear that under any and all scenarios, first and foremost, the FAA must retain the role as a safety regulator.”

    NATCA President Paul Rinaldi presented in-depth analysis regarding ATC reform based on Air Navigation Service Provider (ANSP) models in other countries as well. NavCanada, for instance, is a privately owned non-profit company established in 1996 that controls the Canadian ATC system funded by user fees, said Rinaldi. The advantages of this model are the prioritization of efficiency, while the disadvantage is a difficult and lengthy transition period. This model would also be difficult to implement in the U.S., which controls 132 million flights annually compared to 12 million in Canada; along with 315 ATC towers in the U.S. compared to 42 in Canada, Rinaldi said.

    “NATCA absolutely opposes any model that derives profit from air traffic control services,” said Rinaldi. “A profit-driven private system, like a not-for-profit private system, might cut services to rural communities because of the lack of returns for shareholders. A profit-driven system might also be an impediment to our General Aviation (GA) sector, which is very sensitive to changes in services or increased costs.”

    Ultimately, the lawmakers on the House Subcommittee on Aviation are considering the experts’ opinions about how to best reform the FAA and the U.S. ATC system ahead of the upcoming consideration for the FAA’s reauthorization this fall. Robert Poole, director of transportation policy at the Reason Foundation, gave one of the most insightful reasons for establishing major ATC reform that would eliminate the excessive bureaucratic oversight that currently plagues all FAA operations.

    “The ATO must respond to oversight by the FAA administrator, the DOT secretary, the DOT inspector general, the Office of Management & Budget, the Government Accountability Office, and up to 535 members of Congress. Responding to all these overseers takes up a large amount of senior management time,” said Poole. “Because the ATO gets its funding from Congress, it ends up — de-facto — acting as if its customer is Congress, rather than the aviation customers it is set up to serve.”