PRIVATIZATION OF THE ATC SYSTEM IS A TIMELY ISSUE; THE AVIATION INDUSTRY MUST REACH A CONSENSUS BEFORE THE HILL DEBATE BEGINS

Share this article: Facebooktwittergoogle_pluslinkedinFacebooktwittergoogle_pluslinkedin

ARTICLE: Fixing U.S. Air Traffic Dysfunction Seen in Example

121712a

It can be said that the US Air Traffic Control System is a business. Unlike 95% of the American federal civil government, the ATC produces a vital service 24 hours 365 days in every state. It can also be said that the ATC has a CEO, who holds the office at most 5 years and is owned by a holding company, the Department of Transportation, which has a political agenda [The Secretary is a member of the President’s Cabinet.]

Continuing the analogy, the ATC’s Board of Directors is the US Senate and the House of Representatives. One of these bodies must grant Advice and Consent to the appointment of the Administrator. They jointly review and approve the annual budget (a task which has confounded them for years) and establish major policy decisions, like NextGen. Even a casual observer would notice that the Board (Senate/House) – FAA relationship involves oversight which occasionally goes overboard on seemingly insignificant personnel, acquisition decisions and safety actions; that intervention is a natural consequence of the Members’ representation of their constituents.

If the battle over Sequestration a/k/a the Fiscal Cliff has not raised doubts about this governance structure, then you need not read further.

As the attached Business Week article makes clear, the ATC system of Canada has benefitted from transferring this governmental “function” to a non-profit entity. The naysayers argue that Canada’s much smaller traffic levels somehow differentiates the Northern country’s experience. If volumes were the big ATC issues, that would be an apt argument. The ATC challenges of tomorrow are about technology, transitioning the workforce to the NextGen different job tasks and like problems which do not involve consideration of volumes.

The divisive issue is GOVERNANCE. Every group knows the devils they know and fear the devil that they do not know. The supposition is that each interest—airlines, government unions, general/business aviation, etc.—believes that they will be able to reach decisions closer to their view point with the Congress as the reviewing body. An objective review of recent history suggests that the “Board” is not meeting that expectation.

The federal employee unions are terrified that a politically insulated Board of Directors might make decisions with which they disagree. They should also remember the outcome of the NATCA battle with Administrator Blakey in 2006; the “Board” then did not meet their expectation.

Oddly, in 1984, the FAA sponsored an informal think tank, involving diagonal slices of management and workers (pilots/controllers) drawn from airlines and the ATC. The symposium was charged with developing tactics to improve communications between the controllers and the pilots/airlines. While the goal of the group was more tactical, one of the break out groups, heavily populated with controllers, came back with the startling suggestion of privatizing the ATC.

Probably the #1 priority for the users of the system has, since 1981, been modernization of the ATC system. While the FAA has made progress, there is little doubt that the FAA’s “Board” has contributed to substantial delays throughout this effort and will add to the problems of future major decisions like consolidation of ATC facilities.

In the very early commercial flights, the airlines owned and operated the ATC system. It makes sense since the capacity of the air traffic defines the collective volume which the carriers can fly. Today, in current budget Armageddon, the Hill is likely to favor less rather than more. There are increasingly higher risks that the FAA’s Board will limit NextGen and thus constrain aviation growth.

A relevant body, not mentioned yet, is that of 535 legislators. Their oversight of the FAA guarantees that the people who elect Senators and Representatives will notice. They are institutionally not predisposed to remove anything from their jurisdiction. For example, the devolution of power over Washington’s two airports to Washington Metropolitan Airport Authority was slow and painful. The temptation to hold on to the FAA ATC system is immensely greater.

A few final thoughts are worth mentioning on a single issue – the revenue for any ATC organization that may be separated from the federal government must be permanently and irrevocably defined. If Congress CAN change the sources and rates of funding, that THREAT alone will create Congressional leverage which has been so detrimental (see above).

A second revenue comment: some permanent formula must be defined to fund the civil control of military traffic. The defense flights impact the civil aviation; so those costs should be paid directly from general revenue (not the defense budget).

The third revenue note is that the split between the airlines and the general/business aviation segments over user fees needs to be resolved by those groups. If the battle which has raged for five years over user fees is unresolved when this debate starts, the Congress will be incapable of addressing privatization.

An objective, thoughtful group of economists needs to create a fair formula to allocate costs. A key question to be determined is what actions cause the ATC system to be sized to its current diameter? The airlines line up surges of scheduled departures/arrivals at major airports due to the demands of their consumers. GA operates primarily from small airfields and not necessarily at peak times.

The proof of business aviation’s willingness/ability to avoid the periods of increased demand, which push the diameter of the ATC capacity, is that that segment is the only group with full time staff at the FAA National Flow Control. Whenever weather creates constraints on the system, only these aircraft can/will move their arrivals/departure to reduce the projected delays.

FAA’s structure and relationship to the government is a timely issue to be considered. A second term President might consider the reexamination of the FAA, its structure, governance and funding, if successfully redefined, would help establish Mr. Obama’s stature in history. Industry, which has been fractured on the underlying governance/revenue issues, would be well advised to try to develop some consensus on this issue before the Executive and Legislative Branches decide to enter the fray.

Share this article: Facebooktwittergoogle_pluslinkedinFacebooktwittergoogle_pluslinkedin

Leave a comment

Your email address will not be published.