ICYMI: America's Unfriendly Skies
Well known writer and economic policy analyst Stephen Moore recently wrote an editorial for Investor's Business Daily detailing the need for FAA reform, especially where our old and antiquated air traffic control system is concerned. Here, Moore focuses on why the opponents of reform, namely special interest groups for private jets, are on the wrong side of the issue.
By Stephen Moore
September 19, 2017
Liberals love to portray Republicans as the party of the rich and powerful. The GOP has tried, valiantly, to shed that criticism — but then why are so many in the party defending the special interests of private- and corporate-jet owners over the interests of the rest of us? Do Warren Buffett and LeBron James really need taxpayer subsidies to jet across the country?
At issue here is the proposed modernization of the operations and pricing of America's air traffic control system. President Trump has proposed an air traffic control upgrade that would take the system out of the direct control of the government and convert it into a self-funded nonprofit group. The air traffic control system would become directly accountable to the industry and passengers — not politicians, congressional committees and bureaucracy. Bill Clinton's administration proposed something like this 20 years ago.
This would upgrade an air traffic control system that still operates as it did when "The Brady Bunch" was a No. 1 show. The Federal Aviation Administration continues to spend billions of dollars to try to bring the infrastructure and management into the 21st century — with little to show for it. Many air traffic controllers still don't have the capacity to see the air space beyond their radar screens. It's like they are working with Atari computers.
This inefficiency makes air travel more expensive.
Transportation expert Bob Poole of the Reason Foundation finds that the "cost per controlled flight hour in domestic airspace is $335 in Canada, but $453 in the United States, a 35% difference." Canada has gone private, as have many other nations, including the U.K. and Germany.
Meanwhile, we burn through an estimated $30 billion a year in lost man hours, lost productivity and wasted fuel due to flight delays. While weather accounts for many instances, thousands of delays and cancellations are due not to acts of God but to manmade disasters: The air traffic control system is just too antiquated, bureaucratic and expensive to cope with the current volume of flights.
The best solution would be to move to a for-profit air traffic control system, in which operators have a financial incentive to make things run smoothly. This is seen as too radical, so the compromise is a nonprofit entity with a board of directors made up of all the stakeholders in the system — including the airlines, airports and passenger groups. That is the plan that the White House and House Transportation Committee Chairman Bill Shuster are pushing.
But many in Congress are showing signs of motion sickness, caving under pressure from a deep-pocketed group called the National Business Aviation Association, which is spending millions to defeat modernization. NBAA is a lobbying group that represents corporate- and private-jet owners.
I don't have anything against private jets. I wish that I could afford one. But private-jet owners have a sweet deal thanks to Washington. A new analysis by Bloomberg found that a "private jet could generate as little as 2% of the taxes and fees paid by airline passengers on an identical route." All told, private jets use about $1 billion of air traffic control resources but contribute only about one-tenth that amount to cover those costs.
Private jets are exempt from the ticket tax and the $4.10-per-passenger tax paid by those of us who aren't multimillionaires and have to squeeze onto a Southwest flight. But the expense of the air traffic control system is the same whether a plane carries 300 people or three corporate executives. These tax breaks mean that the poor subsidize the rich to the tune of hundreds of millions of dollars a year.
Fix this and the cost of flying goes down for the rest of us. A modernized air traffic control system would eliminate many, if not all, airline ticket taxes. It would move toward a genuine user-fee structure for use of the air space — something that will probably never happen as long as lobbyists are setting the pricing structure.
In the days ahead, Congress will vote on whether or not to instate a more private, more efficient air traffic control system that would decrease operating costs along with delays. Unfortunately, many liberal Republicans and Democrats may vote with the corporate interests and keep Congress in control of the industry. This gives more clout to politicians and retains tax preferences for the millionaires. Keep that in mind the next time a liberal professes to care about the "little guy."For more information on the 21st Century AIRR Act, please visit our website, here.