Getting Washington out of the air traffic control business
June 5, 2017
Weather causes some flight delays and disruptions. Others have a bureaucratic origin. The nation's air traffic control system, while safe, is gummed up by antiquated technology. American Airlines CEO Doug Parker said in a recent interview that a flight from Dallas to Philadelphia takes about 30 minutes longer than in 1979 because the system is "broken."
There is a fix, endorsed Monday by President Donald Trump: Reshape the Federal Aviation Administration by shifting air traffic control operations to a separate, nonprofit corporation. This new entity would fund itself by charging fees instead of having to beg Congress for money. With a more predictable revenue stream, it could do a much better job investing in new technology. The FAA, meanwhile, would continue to enforce safety regulations and provide grant money to airports. Trump hopes to put momentum behind legislation circling in Congress.
The best argument for this change is the new organization would — finally — be able to provide proper funding for NextGen, the long-awaited, $40 billion air traffic system upgrade. NextGen involves switching from cumbersome radar and static-prone radios to satellite-based GPS tracking of aircraft and digital communications. This is a smarter way to fly because planes could be routed along more precise flight paths. Planes could fly safely while spaced closer together, too. The result: Passengers get to their destinations more quickly.
Speaking of delays, the FAA has been talking about modernization for 30 years. The problem is that Congress, despite its reputation for profligacy, actually doesn't like to spend money, or at least is bad at it. Funding the FAA doesn't give lawmakers anything to brag about. So the agency's requests wait too long for approval and are vulnerable to cutbacks. The government isn't much better at buying new gear, either. Believe it or not, U.S. air traffic controllers still keep track of planes by passing little strips of paper around.
If run as an independent nonprofit, the air traffic control system would charge fees to airlines and other users to cover costs instead of spending tax dollars. With that steady income stream, it could go to the bond market to borrow money to help pay for the new technology. The overall benefits would add up faster than a frequent flyer racks up mileage: fewer delays for passengers, jet fuel savings for airlines and much smarter, quicker decision-making by managers freed from bureaucratic molasses.
This would not be "privatizing" the skies, since the organization would be run akin to a regulated utility rather than a for-profit corporation. It's not a radical idea: Many developed countries already have made the switch. "Air traffic control is a 24/7, high-tech service business," Robert Poole, director of transportation policy at the Reason Foundation, tells us. "That makes it a very poor fit for a large government bureaucracy that's funded by annual appropriations of tax money." Also, if you think about it, having one agency such as the FAA operate air traffic control and regulate safety is a conflict of interest because it involves one agency overseeing itself.
The model to follow is Canada's air navigation operation, called Nav Canada, which spun off from the government in 1996. Nav Canada is respected for its safe operations and functions more efficiently with better technology, so its flight costs on a per-hour basis are 30 percent cheaper than the FAA's. Poole said that with its larger scale, the U.S. air traffic control system could achieve even greater efficiencies. He figures that swapping out current funding sources for an all-fee approach would provide necessary revenue at no greater cost to passengers because the fees would replace aviation taxes.
The Trump administration is studying Nav Canada. Changing the U.S. system to something comparable is a sensible idea. Congress, get on board.