Will US Air Traffic Control Privatization Work?
There has long been a widespread belief that the current Air Traffic Control (ATC) system in the US is not in line with the superpower nation behind it and privatization has often been mooted as a solution. Scholars at Embry-Riddle Aeronautical University explored the feasibility of Air Traffic Control privatization back in 2005 in a paper titled The Effects of Air Traffic Control Privatization on Operating Cost and Flight Safety. The study cited the Government’s National Commission to Ensure a Strong Competitive Airline Industry which found that “the present U. S. ATC system was outmoded and was costing consumers billions of dollars each year in delays, and needed to be modernized”, and went into more depth about the figures:
“The FAA employs about 38,000 people to operate and support the ATC system that requires nearly 80% of the agency’s $9-billion budget to function properly and safely (Phillips, 1994). Bureaucratic personnel and equipment procurement policy has prevented the FAA from procuring and using cutting-edge technology that would have improved economic efficiency.”
The study concluded in no uncertain terms that “ATC privatization would reduce operating cost and increase ATC safety”. So if privatization can lower costs and increase safety, why is there such a strong resistance to the proposals currently being put forward by House Transportation and Infrastructure Committee chairman Bill Shuster? Perhaps some of the answers can be found in Furchtgott-Ruth’s recent articles.
Perceived Shortcomings in the Bill
Journalist Diana Furchtgott-Roth has not held back in exposing the perceived shortcomings in the bill. In a scathing attack of multiple facets of the move, the Director of Economics21 labelled it a “union giveaway bill, disguised as privatization” and claimed that financial gain was a large factor behind the actions of Shuster “rushing” the process:
“To see the answer, follow the money. In the 2016 election cycle, according to the Center for Responsive Politics, Bill Shuster so far has received $118,000 from unions, including NATCA ($10,000), the Carpenters and Joiners Union ($10,000), the Laborers Union ($10,000), the Painters and Allied Trades Union ($10,000), and the Air Line Pilots Association ($10,000). He received $170,000 from unions in the 2014 cycle.
“Privatizing the air-traffic-control system would be an excellent move, but the proposed new ATC Corporation is a Trojan horse, an expansion of union power cleverly disguised as privatization. The resulting entity would limit reorganization and cost savings, benefiting neither consumers nor employees.”
Such was the impact of Furchtgott-Roth’s words that they prompted a direct rebuttal from Shuster, but this only proved to invoke further angst from the journalist who continued to pile on the pressure. In a second piece she labeled the proposal “a congressionally sanctioned monopoly with an unfettered ability to raise user fees on those who travel” and highlighted the personal relationships between several key decision-makers and an influential lobbying group Airlines for America (A4A), alluding to more sinister underlying intentions.
Furchtgott-Ruth’s argument is not against privatization as a concept, but instead, the particular arrangements – or lack thereof – of this proposal, with the possibility of unstoppable union strikes throwing the industry into disarray proving one of the main sticking points.
Private Aviation’s Take on the Issue
Wider organizations also appear to share many concerns about the prospect of privatization in general. Both the National Business Aviation Association and Experimental Aircraft Association have expressed strong opinions against ATC privatization for some time, and have made clear their stance on the latest round of suggestions.
“Our nation’s air traffic control system is a monopoly, and will always remain a monopoly,” NBAA President Ed Bolen said at a recent House Transportation hearing. “So, the question on the table is, who will control that monopoly – the public’s elected representatives, or a board dominated by big airlines? H.R. 4441 is proposing to give away our monopoly ATC system, free of charge, to the nation’s big airlines. That is a fundamentally flawed idea.”
Full Opening Statement by NBAA’s Ed Bolen Before Senate Commerce Committee
EAA Head Jack Pelton appeared to echo these sentiments as he took to the floor:
“ATC privatization is simply a bad idea on many levels. It will not solve the FAA’s funding dilemma and will create a substantial number of new problems and challenges that would cripple general aviation. Although the bill contains some items that would be beneficial to grassroots aviators, those benefits are overwhelmed by the ominous consequences of a corporatized ATC system without direct federal authority and oversight.”
Why ATC Privatization Could be Good and the Challenges That it Presents
However, some believe that reaction to the bill has been overblown and it could yet prove to be a viable solution. Chris Edwards, editor of Downsizing Government at the Cato Institute, called the protests “knee-jerk negative reactions” and cited a successful privatization project in Canada as proof that it could work, whilst rejecting the notion that the current bill will simply lead to another Amtrak:
“One of the many advantages of this reform is that it would remove the current ‘conflict of interest’ whereby FAA both operates and oversees America’s ATC system. The new ATC non-profit company would be regulated by FAA at arm’s length, as the government regulates other private businesses.”
It is true that privatization of ATC has worked successfully in other countries. Canada has been a frequently cited example, handling 50% more traffic yet with a 30% reduction in staff when compared to figures before it was privatized. The UK is another area in which part-privatized ATC has proven effective being owned primarily by the Government and the Airline Group (comprised of seven airlines including British Airways and Virgin).
But doubters have pointed to the gulf between flight numbers in such countries and the US. Data from the World Bank showed just how big the gap is between the world-leading US and second-placed China, with the former sanctioning almost three times as many flights per year. Factor in the fact that Canada operates close to a third of the flights of China and it’s easy to see why experts are skeptical about the scalability of such a project.
Privatization of ATC can certainly help a country’s aviation industry run more effectively and efficiently, and this has been proven in areas such as Canada and the UK. The two pressing issues here are whether this can be achieved in a country as large as the US, and whether these precise proposals have the country’s best interests at heart. If industry experts are right, the bill could prove to be a monumental gamble.