Inside Politics: Fly That Proposal by Us Again, Please
October 12, 2017
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  • Americans constantly debate privatizing government safety oversight, services and infrastructure. Fox-guarding-chicken-coup, civil service, labor, monopoly and conflict of interest considerations always enter the discussion.

    Privatizing air traffic control is currently in the spotlight. Idaho’s aviation industry has much at stake, as do the safety, comfort, convenience and pocket books of all airline passengers. Furthermore, airline, cargo, business, private- and general-aviation interests don’t always coincide.

    The U.S. ATC system continues to keep American aviation the safest in the world. However, the government and aviation interests across the board have long recognized the need to upgrade from our primarily ground-radar-based system to a satellite-linked GPS/ATC-communication system.

    Presidents Clinton’s and Bush’s efforts were thwarted by distrust, turf protection and post 9-11 fears. The Obama administration successfully initiated conversion to the Next Generation Air Transportation System (NextGen). Disruptions resulting from quixotic congressional budgeting, however, have severely hampered completion of transition to the new technology.

    A new effort has been launched by Republican Congressman Bill Schuster, Chairman of the House Transportation and Infrastructure Committee. President Trump and current and past Transportation Secretaries, Elaine Chao, Elizabeth Dole, and Mary Peters back Schuster’s bill, as do most major airlines, the National Air Traffic Controllers Association, and a number of Democrats.

    Nonetheless, the bill’s passage is uncertain given significant resistance from private and corporate aircraft owners, general aviation enterprises, passenger advocacy groups and Congressmen and Senators of a number of (mostly) rural states.

    Business aircraft account for about ten percent of current system use, but pay just over a half percent of system operational fees. Airline passengers pay a disproportionate share of system operational costs.

    The proposed ATC system would operate through an ostensibly non-profit corporation committed to sweeping infrastructure modernization, with a less cumbersome procurement process that proponents claim would reduce inefficiencies and hasten modernization. That rationale is based on its direct collection of user fees, and internal corporate fund management and expenditure disbursements.

    Critics wary of the transformation cite perceived faults in the proposed legislation.

    The bill is without language limiting compensation of board members, managers and other personnel. As with some utilities, enormous salaries and bonuses could be shielded from direct government oversight. Due to the essentiality of its function, the new entity could come knocking on the government’s door for bailout money in the event of poor management or other exigencies (which has happened in other nations who have switched to similar systems).

    Many opponents strongly object to the uncompensated turnover of $54 billion in infrastructure purchased by taxpayers since the mid-1990s. The Congressional Budget Office estimated that Schuster’s bill would raise the federal deficit $20 billion by 2027 and increase air travel cost. Others simply note that the bill’s chief proponents, American Airlines, Delta, Northwest, United, US Airways have all gone bankrupt since 2000. So did President Trump’s “Trump Shuttle.” That track record does not instill confidence in their financial projections or institutional management recommendations.

    Schuster’s proposed non-profit would be governed by thirteen board members: a CEO, a representative each for passenger, cargo, and regional airlines, one for general aviation, one for business aircraft, one for controllers, one for airports, one for commercial pilots, two Secretary of Transpiration appointees, and two board-selected “at large” representatives. Absent are passenger advocates for any, let alone each classification of passenger carrier, or other citizen entities affected by aviation operations. Consumer advocate Ralph Nader stated corporatized ATC “would put commercial airlines in a dominant position over other users of the runways and make the collusive profit motives of an already highly concentrated airline industry a determinant over safety and fairness.”

    Others note that even if privatized ATC lowers operational costs, there is no guarantee savings would be passed on to consumers. Indeed there is fear that the fee levying authority of corporate ATC could amount to uncontrolled de facto taxation of pilots, passengers etc.

    Paul Hudson, president of “Flyers Rights,” on FAA’s Aviation Rulemaking Advisory Committee, criticized the entire privatization rationale. Hudson notes that NextGen is projected to be complete by 2020, which will remedy most of the current system problems. He further cited bipartisan criticism of the concept by the Senate Finance Committee and the House Ways and Means Committee. Hudson also suggested that if corporatization were instituted, most board members should be the “people that paid for it (the system) and use the system (i.e. passengers/customers), not the people with fingers in the pie (i.e. airlines etc.).”

    Proponents cite successes of corporatized ATC in other countries, especially “Nav Canada.” However the Canadian system is proportionally more expensive than the current US system. Furthermore, the US system oversees the world’s largest air traffic volume, about 8 times Canada’s. European national analogues are even smaller. The FAA notes the US controls sixty percent more flights than all 40 European control centers combined.

    Rural states distrust the proposal because system oversight will be dominated by large carriers with conflicts of interest. Namely, they prefer to reduce competition from startups and regional carriers that serve low population towns. Major carriers would prefer to limit such service because of greater per passenger mile fuel costs by smaller aircraft. Additionally, new fees for small aircraft, various communication and tower services etc. have impacted private and general aviation in other privatized systems. They would have their greatest negative effects for U.S. rural flight operations.

    While there may be a case for seriously considering ATC privatization in America, it has not yet been convincingly made or developed via the robust input from all affected parties that one would expect for such a critical and drastic change to American aviation. Idaho’s representatives should demand open hearings with input from all concerned parties before agreeing to a radical transformation. They should mandate strict compensation limits for public-corporation personnel, ample board representation for all affected parties, and guarantees that rural aviation operations and passenger air services will not be adversely affected.