Can a privatized Air Traffic Organization and the FAA work as well together as the past relationships between the regulator and the operator?

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As proposed by Rep. Mica (see below), the splitting of the Air Traffic Control Organization (ATO) from the functions and staff, may create a problem. Heretofore, these two have worked together well, as peers. The second article, linked below, reflects that the FAA Administrator is concerned that separating an Employee Stock Ownership Corporation (the previous ATO) from the FAA will cause friction between the two. His prepared text was of lesser significance than this remark.

The former Chair of the House Transportation & Infrastructure Committee, Rep. Mica (R-FL), has announced that he will introduce legislation which will privatize the ATO (research of the legislative services found no Mica Bill). An Employee Stock Ownership Corporation ESOC) would be authorized. The stock aspect would “allow stakeholders, including current air traffic controllers, airlines and users, to operate a new air traffic control system.”

Presumably the Mica legislation will propose keeping all of the other FAA functions within the federal government. There are many issues (permanent funding [the Military and other governmental uses of airspace cannot be for free], equitable governance, job protection through the transfer, union right to strike, etc.) which will be discussed when the proposed language is released. Given the Administrator’s testimony before the Senate Commerce Committee underlying the potential organizational dysfunction, some discussion of the validity of that prediction may be warranted.

The Honorable Mr. Huerta is reported as saying something like:

He maintained that the FAA is making progress in modernization and is delivering benefits through a combination of technologies and operational procedures. Any changes in governing structure must focus on the ability to deliver the technology, Huerta said and at the same time ensure stable funding, a high level of safety and a ‘tight linkage’ between the operational and regulatory side. ‘I would be fearful of any structure that puts a wall in those relationships,’ he said. ‘Can alternative government structures get us there? Possibly. But we need to recognize that there may be unintended consequences that we have to fully understand.’”[Emphasis added]

His line-of-thinking may be imputed as follows:

· the two staffs have worked together effectively for many years;

· their current relationships have been developed; their communications are trusted;

· if/when the Employee Stock Ownership Corporation is created, there will be an abrupt separation; some of those links may suffer;

· it is quite possible that the private corporation will receive pay and benefits consistent with that sector’s wage scale and benefits;

· that pay differential may become a source of irritation;

· one obvious source of tension: the Air Traffic Safety Oversight Service, now a coordinate organization with ATO, will become a “regulator” of the Employee Stock Ownership Corporation and could issue civil penalties against the civilian organization for violations;

· NavCanada, the most often cited example of a well working ANSP, had some initial conflicts with the Minister of  Transport; there a civil penalty assessed by the MoT against NavCanada was the subject of years of litigation.

· Intergovernmental communications are usually subject to exemptions under the Freedom of Information Act. Those emails and papers between the ATO and the ESOC will be more at risk for public disclosure. The frank commentary, which usually is typical of policy deliberations, may not be as robust as the past.

· While the MoT and NavCanada are working well to implement SMS, that will be a challenge for the future FAA-ESOC development of the same program.

Governing is a difficult process; there must be balancing of interests. When all of the people are from the same organization, they have the same mission, same goals and same ultimate leader. Those mechanisms for reconciliation will not be as strong with two independent bodies. The FAA will continue to be solely focused on safety; while the ESOC will continue the safety mandate, but will also have to be more aware of the economic impacts of decisions.

There will be many points of debate about privatization. The list of issues, which must be resolved before/if privatization is enacted, should include the unintended creation of walls between the two organizations, as noted by the Administrator.

ARTICLE: GOP files bill to privatize air traffic control

ARTICLE: Huerta: Administration Open to Alternative ATC Models

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