Supporters of reform want to “privatize” air traffic control, implying that the new entity would be a profit-making enterprise.
We support a federally chartered, non-profit organization, and not privatization as it is typically construed to mean a for-profit enterprise.
- We evaluated and rejected a private, for-profit air traffic control structure because we believe it provides the wrong incentives and is inappropriate for a monopoly function such as air traffic control.
- Under our proposal, fees would be set based on the costs to operate, maintain and improve the air traffic control system. Any revenues exceeding costs would stay within the air traffic control system.
The current FAA structure is optimal for safety oversight of air traffic control; separating air traffic control from the safety function will make air traffic control less safe.
Separating air traffic control service provision from air traffic control safety oversight is an international best practice and will enhance safety by providing truly independent oversight.
- The FAA’s Aviation Safety (AVS) organization is responsible for oversight of the FAA’s Air Traffic Organization (ATO). This structure has the FAA essentially oversee itself, an inherent conflict of interest.
- By combining the operation with the oversight function, the status quo confuses responsibility for the different safety functions and impairs accountability. It is also inconsistent with international best practice.
- ICAO’s Safety Oversight Manual (Doc 9734, paragraph 2.4.9) calls for the separation of air traffic control safety oversight from air traffic control service provision:
- “In those States where the State is both the regulatory authority and an air traffic service provider, aerodrome operator, air operator, manufacturer or maintenance organization, the requirements of the Convention will be met, and public interest be best served, by clear separation of authority and responsibility between the State operating agency and the State regulatory authority. The approval, certification, and continued surveillance procedures should be followed as though the operating agency were a non-governmental entity.”
- A recent MITRE report reviewed the experiences of six countries which have separated their air traffic control safety oversight from air traffic control service provision. The report found that one of the significant benefits of separation was that both the oversight body (civil aviation authority, or CAA) and the air navigation service provider (ANSP) demonstrated an increased focus on safety.
- Specifically, MITRE found that “the collective experience after separating the ANSP from the CAA was quite good. The primary responsibility of a CAA is safety regulation. Despite the many approaches to organizing the CAA and the ANSP, in each case the safety record of the ANSP was equal to, or better than the record prior to the separation and regulatory costs are largely, or completely, supported by aviation users.”
Canada’s successful experience in restructuring its air traffic control system is irrelevant to the United States because our system is so much larger and more complex.
Canada’s system does have less traffic in aggregate than the U.S., but new technology is inherently scalable and thus the efficiencies of scale should be greater in the U.S.
- U.S. airspace is not different from other busy, complex airspace in the U.K. and around the world—most of which is handled by restructured air traffic control providers.
- The fact that more than 50 other countries have taken action to modernize their air traffic control systems gives us a blueprint of best practices and learnings to apply toward a world class U.S. system that customers deserve when they fly.
Recreational general aviation flyers will pay more under air traffic control reform.
We support allowing recreational general aviation users the ability to continue to pay the same amount they’re paying today through the fuel tax.
- Chairman Shuster’s reform bill from 2016 exempted both recreational and corporate jet users from paying any user fees. Under this bill general aviation users would continue paying into the system through the fuel tax.
There will be a funding shortfall if the air traffic control operation is removed from the federal government.
There is sufficient funding for all current FAA functions (air traffic control, safety oversight, and airport grants), assuming a General Fund contribution in line with historical levels.
- Air traffic control would transition from its current mix of user tax and General Fund funding to 100% user fee funding.
- FAA’s safety oversight and airport grant functions can be funded through a mix of user funding and General Fund appropriations.
- Over the last 15 years, the General Fund contribution to FAA funding has averaged $3.25 billion. Combined with the airlines’ current payments and slightly higher contributions from corporate jets, a General Fund contribution at this level would be sufficient to fund the current FAA budget (based on FY 2013 data).
- Initial funding requirements for the new air traffic control organization may also be lower than current requirements due to the new air traffic control entity’s ability to borrow in capital markets rather than having to fund capital investments with current revenues under government budgeting rules.
The new air traffic control organization would have power to “tax.”
The new air traffic control organization would collect user fees for the services it provides; a non-government entity cannot levy a tax. Fees are distinct from taxes in several ways:
Tax payments must be remitted to the government, and tax levels can only be set or changed by Congressional action.
We envision a system in which users pay a fee for air traffic control services, not a tax.
The payment for service model is used in air traffic control systems all over the world, including U.S. overflight fees (as well as other industries in the U.S., such as utilities) and has been demonstrated to work well without burdening users, including general aviation.
Under Chairman Shuster’s proposal general aviation will continue to pay for their use of the air traffic control system through the fuel tax, collected by the government.
The current funding and governance system works well.
The current outdated funding and governance system is costing America $25 billion per year, not to mention air traffic congestion and longer flight times for passengers. It subjects the economically-critical, technology-intensive air traffic control operation, and its modernization, to government-wide budget reductions and shutdowns, as well as undue political influence on operational decisions.
- In July 2011, the lapse in FAA’s authorization caused the FAA to stop work on numerous projects funded through the Facilities and Equipment account, including NextGen modernization projects.
- In April 2013, the government-wide sequester caused the FAA to furlough air traffic controllers (among other employees), resulting in massive delays throughout the air traffic control system. The sequester also interrupted funding for NextGen programs – and imposed significant re-start expenses when funding was resumed.
- In October 2013, the government shutdown resulted in many FAA employee furloughs. While air traffic controllers were generally not furloughed, NextGen programs were again negatively affected.
- Workforce readiness has declined dramatically as training programs have been suspended and decades-old training systems become more stretched in the face of a generational retirement wave. Ground delay programs are now occurring as a result of insufficient staffing.
- Air traffic control operations and capital investment depend on the annual appropriations process, which is simply not conducive to long-term planning.
- Air traffic control needs to compete with the rest of the government for funding, even when there is sufficient money in the Airport and Airway Trust Fund (AATF).
- Decisions that could result in more efficient operations are often stopped due to political factors.
- Congress can’t “fix” NextGen through the FAA Reauthorization bill and better oversight. Over the past few decades, Congress has passed many FAA Reauthorization bills and annual appropriations bills, held scores of hearings; and directed GAO and the DOT IG to investigate the FAA’s troubles implementing NextGen. Unfortunately, there is very little progress to show for it, despite billions of dollars of stakeholder and taxpayer investments. What is needed is a new governance model in which a team of aviation industry experts – representing all segments of aviation operators and employees – are empowered and have a fiduciary duty to oversee the operation of a 21st century ANSP.
The board will be dominated by the airlines.
As other countries that have reformed air traffic control systems have demonstrated, a governance structure can include multiple stakeholders in ways that will prevent any one stakeholder from having supermajority control.
- The proposed board of stakeholders would include representatives from the federal government, airline pilots, aerospace manufacturers, air traffic controllers, corporate jets, general aviation, an air traffic control CEO, and commercial carriers. No one interest will control decision making.