Recent events on ATC privatization stimulate practical questions in an open letter to Secretary Chao

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An Open Letter to Secretary Chao

Recent Events on ATC Privatization

“I am cognizant of those who are in favor of it. I am cognizant of those who have safety concerns,” Chao said at the Senate Commerce, Science, and Transportation Committee hearing on her nomination, according to the Washington Examiner.

Dear Secretary Chao:

You may or may not remember me, but when you were Deputy Secretary, we met several times to review several complex air traffic management issues.

Here are some thoughts to consider, not conclusions, on privatization. Frankly, I’m agnostic on the subject; continuing with the current structure has problems and changes, as always, pose risks.

The task of discerning the right path for the future of the Air Traffic Control system involves issues of immensely long term consequences; if the wrong path is selected, it may not be possible to reestablish the correct approach to guide our nation’s air navigation. There is considerable momentum towards moving quickly; my primary advice is to be cautious.

Most of the advocates on either side of the issue speak from theoretical bases. Operation of the FAA ATC is a very large endeavor which is filled with many technical, operational and human issues which are essential to the movement of airplanes on a daily basis. Here are some practical questions which you, as Secretary, should hear the answers BEFORE you make judgments on the future management of the U S Air Traffic Control System:

  • The existing FAA ATO staff is the human asset which makes the system work. The moment that privatization is enacted, some or maybe all of those knowledgeable executives and managers will consider retirement. Many of them are eligible for federal retirement benefits. Others, particularly those who are most knowledgeable about the system, will leave for private jobs. The thunder around the Privatization proponents has made it clear that the new leadership will manage better; thus, the incumbents are likely to assume that once “privatized”, they will be fired. Early exit is a real possibility and the immediate consequences could be catastrophic. How will this vital human capital be retained?

  • Assume that retention can be dealt with on a temporary basis. New senior management arrives and begins to remove the oft-criticized “dead weight”. Replacements from the private sector will likely be paid more than the civil servants whom they replace. Will there be economies of scale or will the end result be increased costs? If the latter, are the users aware that a privatized ATC may have higher personnel costs?
  • The transition from a land-based to space satellite ATC is an enormous technology challenge. The interconnections and the future systems are not intuitive. The new outside management will require considerable time. The NextGen acquisition and implementation have been delayed but progress is evident; will the users be aware that transitioning the air traffic controller workforce and equipment acquisition process to a new organization will probably involve a greater immediate delay? Has anyone explained how this initial interruption can be compensated by the private management’s greater speed?
  • AIRR did not explicitly provide for the acquisition powers of the privatized ATO. Will the new entity be exempt from all federal statutes and regulations normally applicable to federal purchases?
  • One of the benefits of the historic ATC hardware/software purchases is that the seller of the equipment can be “indemnified” if there is a subsequent failure. The US government has sovereign immunity and that status was conveyed under special statutes for ATO acquisitions. Will that indemnification be conveyed to the privatized entity and under what protections of the US Treasury from such claims? If not, does the user community know that the cost of unindemnified contracts will be substantially higher?
  • Basic stuff: the existing ATO occupies buildings in Washington, in regions, towers and centers. Will those properties be transferred to the new entity without charge? Can the privatized entity close those offices without any federal/Congressional approval process? Could the new privatized entity consolidate these ATC facilities without federal/Congressional approval process?
  • To achieve the benefits of NextGen, the FAA ATO has to redesign flight patterns, particularly near airports. A number of these proposed changes have created local controversies and NEPA challenges plus many Members of Congress are insisting on added involvement. Will NEPA apply to the NextGen implementation by the new entity? If the new entity will not be shackled by NEPA, are the complaining Senators and Representatives aware of this loss of control?
  • An objective analysis of the FAA’s implementation of NextGen would include the inability to establish long term financing among the problems. Congress chose not to address that issue. The purpose of creating a new entity is to facilitate financing. Does Congress know that it is surrendering that control?
  • The FAA has officially registered over 616,000 owners and individual drones. Many more to come. Integrating unmanned vehicles into the National Airspace System to safely support a myriad of commercial applications is a daunting task requiring a close relationship between the airspace management and safety organizations within the current FAA structure. Will separation of the ATC function from the safety function speed up or slow down the expansion of the drone market? 

These are but a few questions which must have definitive answers before you decide which solution is best for the country. If answers to the above questions and others support the separation of air traffic management and system acquisition from the FAA safety regulation function, the final question needs to be one of timing. Is this the right time to risk immediate disruption of NextGen and also slow down the growth of the Drone market?

NOTE: none of these inquiries touch on the politically sensitive issues of governance, user fees or cost determination; those are questions best addressed by the experts on those policy issues.

 


Elaine Chao Says She's 'Open to All Ideas' on Privatization of Air Control
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3 Comments on "Recent events on ATC privatization stimulate practical questions in an open letter to Secretary Chao"

  1. Further to your point of losing experienced senior managers, I once took AAT-1 (Bill Pollard) to meet the new management team in Germany shortly after that organization went private. I counted the Germans across the table from us. There were ten senior officials. Of the ten one was a holdover from the former government entity, and he had the underwhelming title of Planning.
    Cheers
    Jim

  2. I thought the letter had a lot of well thought out recommendations, however I am still not convinced that privatization is not the best way to go. It may be rocky at first, but should smooth out in short order. It certainly has the possibility of getting a high level ATC workforce without a bunch of government issues to wade through. It’s worth a try. Former controller/ARTCC/Tower/Approach/DSS/Washington HQ/Tech Center/Region/Management

  3. Joe,
    Indemnification is the high hurdle. Congress is almost as high. ATC and Safety are so closely intertwined that they cannot be separated.
    Bob

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