Alan Levin, Derek Wallbank BLOOMBERG
Air-Traffic Control Spinoff Sought by Key U.S. Lawmaker
June 15, 2015
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  • A key lawmaker will propose spinning off the government-run U.S. air-traffic-control system into a nonprofit corporation, in what would be the most far-reaching change since the current structure was created in the 1950s.

    The shift is needed to insulate the Federal Aviation Administration from political interference and budget uncertainty, House Transportation and Infrastructure Committee Chairman Bill Shuster said in an interview.

    “It’s one of our leading industries in this country and if we don’t do something transformational, we’ll start to lose that leadership in the world,” Shuster said. “We need to do something different.”

    Shuster, a Pennsylvania Republican, plans to unveil the idea today in a speech in Washington.

    The more than $10 billion operation within the FAA that oversees flight routes and purchases computers, radars and other technology would become part of a federally chartered, independent, nonprofit corporation, according to a summary of the legislation.

    The corporation would be governed by a board representing users of the aviation system including airlines, private-plane owners and unions, according to the committee. The FAA would continue to set standards and oversee safety of the system.

    The plan calls for funding air-traffic control with user fees instead of the current patchwork of taxes, fees and general tax revenue. The structure would insulate the new corporation from the federal budget process.

    The legislation would promise to protect current FAA employees who would no longer be working for the government.

    NextGen Uncertainty

    If successful — and the concept is opposed by some powerful aviation interests — it could create uncertainty for companies such as Harris Corp., Lockheed Martin Corp. and Raytheon Co. that are building portions of the $42 billion air-traffic upgrade known as NextGen.

    The plan reflects what most industrialized nations have done with their air-traffic agencies in recent decades. One advantage to that structure is it separates air-traffic control from the safety regulator, Shuster said.

    A similar proposal by President Bill Clinton was derailed in 1995 by fierce objections from FAA unions and others. The current political and budgetary climate may give enough cover to advance legislation, Shuster said.

    Shuster says he will include the plan in a bill to renew the FAA’s authorization, which expires at the end of September. Lawmakers haven’t finished writing the bill, which Shuster said he wants filed by the end of the month. House leaders plan to consider it on the floor in July, he said, before Congress leaves for its monthlong August recess.

    Government Shutdown

    After recent years of fights over spending, including a partial FAA shutdown in 2011 and more furloughs in 2013, Shuster said some previous opponents have been willing to revisit the idea in exchange for promises of stability and certainty.

    The National Air Traffic Controllers Association union, which had previously opposed any move to take air-traffic outside of the FAA, is now open to the idea if it guarantees steady funding, President Paul Rinaldi has said in recent public forums.

    The National Business Aviation Association, which represents corporate aviation operators, opposes any plan that adds new fees for flying and takes away congressional oversight, President Ed Bolen has said.

    New Corporation

    Nations such as Canada, Germany, England and Australia have created various private and semi-private operators to oversee their air-traffic systems, according to a report this year by the non-partisan Congressional Research Service.

    The private systems have generally improved their efficiency and operators say it has been easier to install new equipment, according to the CRS report.

    There have been no indications that the new non-governmental operators have been less safe, according to CRS.

    Shuster’s bill will also include provisions to streamline the way aircraft are certified, a reaction to industry concerns that it takes the FAA too long.

    Shuster said the time is ripe to alter the FAA because of the success of those other countries and fights over the federal budget.

    “I feel pretty good, but you know I’ve been around this place for a lot of years,” Shuster said. “You take nothing for granted.”