Privatization is an Old Issue for which New Answers to a Long List of Critical Issues must be Found by the Aviation Stakeholders

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ARTICLE: Talks on Private U.S. Air-Traffic Control Said to Turn Serious


For a moment consider arguendo that the federal government owned and operated all of the plants that defined the capacity of the automobile manufacturing industry. The notion that the joint ability of GM, Ford and Chrysler to produce cars would be subject to the whims of the Congressional appropriations vagaries would be deemed as idiotic. Add to this theater of the absurd, the long term funding of critical long term technology which would massively enhance the safety and efficiency of the manufacturing of these autos is not defined ten years into the “modernization” of the automotive factories.

This hypothetical statement is a structurally accurate definition of the reality faced by the aviation industry. It does not require the review by a Harvard Business School professor or a BCG consultant to verify that this is a formula for failure. How, therefore, is it possible that the FAA Air Traffic Organization and its future, NextGen, is mired in such financial/economic insanity?

Bloomberg reports that there is some glimmer of hope that discussion among industry leaders (according to the reporter, NATCA and AOPA are included in such a dialogue) has begun. The mere initiation of such a discussion is impressive and important. It seems that the catalyst for such consideration of this contentious issue is the ultimate in legislative asininity – sequestration.

The industry needs to develop a full list of points of agreement before they venture to Capitol Hill to initiate a legislative process for privatization. Such a conversation will involve an enormous list of stakeholders – the GA pilots, the unions (pilot/flight attendants/mechanics/controller/other federal employee), the airlines (large/small/regional/foreign), business aviation, manufacturers of aircraft, OEMs of the ATC equipment and consumers.

The list of topics is even more daunting in terms of substantive issues for which consensus must be achieved:

  • The FMV for the ATC system to be bought by the privatizer (the Congress will be attracted by the idea of getting a check for an asset, but the system. users[including the consumers] will want it for free)?
  • The price of the NextGen system (what is needed, what can be realistically be developed, when, where [consolidation of the ATC facilities is a necessary benefit, but a political bomb.], what the users will equip on their aircraft and paid for by ??)?
  • How to pay for the NextGen price tag (any legislation which leaves the federal payment to a privatized ATO as an undefined element will be a disaster; clearly there is some military use of the ATO, but is there more?)?, and
  • How to govern the Privatized ATO? (perhaps the most problematic issue!)

Bob Poole of the Reason Foundation has written extensively on the subject, but even though his thoughtful ruminations make sense on an intellectual basis, the industry as a whole has not endorsed all of his suggested solution.

Those involved in such a dialogue must have the Wisdom of Solomon. In the past the participants have played this political battle as a zero sum game; each segment drives for 100% protection of its primary goals. There has been great distrust between the players, particularly as to governance. Leadership will be needed to break those historical impediments. The agenda is complex, ranging from detailed, technical questions to broad, permanent policy determinations.

We wish them good luck; the solution lies within the talents of the leaders of the stakeholders.

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