Conservative Group Calls ATC Privatization ‘Cronyism’
July 13, 2017
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  • The 21st Century AIRR Act (H.R. 2997) would remove air traffic control from the FAA and place it in the hands of the airlines, a move that the conservative Institute for Liberty calls “cronyism.”

    Are You Covered When  You Rent and Fly? Learn More! Andrew Langer, president of the Institute for Liberty, wrote that it supports true privatization, which is not the case here. ATC privatization would create an entity that is a “hybrid of governmental and private, which generally contains the worst practices of both worlds (few, if any, incentives to innovate or compete, no oversight in how the public actually benefits or how the entity is governed).” The letter goes on to say, “One need only look at examples like Amtrak, the US Postal Service, or FannieMae and FreddieMac to see just how disastrous these hybrids can be over the long term.”

    Under H.R. 2997, a board composed of 13 members would give general aviation two seats; scheduled airlines and their employees make up four. Hub airports and the air traffic controllers union, who have shared interests with the airlines, also scored seats allowing the board to dictate aviation policy at the expense of GA and rural communities.

    Rep. Mario Diaz-Balart (R-Fla.), senior member of the House Committee on Appropriations and chair of the Subcommittee on Transportation, Housing and Urban Development, shares Langer’s concerns about the makeup of the board: “It will be a monopoly run by private interests with zero oversight. There’s still no competition.”

    Break out those piggybanks, a privatized ATC will be costly. The Congressional Budget Office on July 12 estimated that the move to privatization would increase the federal budget deficit by nearly $21 billion over the next decade.

    Privatization in Canada wasn’t all that it seemed. “Proponents point to Canada as the model for how ATC privatization ought to be accomplished, but general aviation in Canada continues to pay not only aviation taxes but user fees as well, the industry has not received the fair treatment originally promised from privatization,” said Sen. Jerry Moran (R-Kan.).

    The 21st Century AIRR Act has a bipartisan group of opponents concerned that ATC privatization also would leave taxpayers on the hook for bailouts.

    Rep. Peter DeFazio (D-Ore.), ranking member of the House Committee on Transportation and Infrastructure, said, “The bill gives the FAA’s air traffic control assets, worth tens of billions of dollars and paid for by taxpayers, to the private ATC Corp. for free. Over the last 20 years alone, taxpayers have invested more than $53 billion into air traffic control facilities and equipment. Many of those assets are handed over to ATC Corp. if the AIRR Act is passed. Taxpayers also have no protections if ATC Corp. runs into financial trouble and can’t afford to manage air traffic control operations—meaning taxpayers would be on the hook to bail it out.”