Yes: U.S. air travelers deserve better
More than 3.4 million Americans are expected to take to the skies this Fourth of July holiday, and turbulence is a given.
With such a surge in traffic, congestion and delays that leave passengers holed up in crowded, outdated airports are inevitable. But this could be fixed, at least in part, by overhauling the nation’s outmoded air traffic control system, which directs thousands of planes every day as they land, take off and fly across the country.
In an age in which nearly every car and smartphone uses accurate GPS navigation, our air traffic control system still operates with 20th century radar technology and strips of paper. Modernizing the system and fulfilling numerous other basic business functions has been a struggle because the Federal Aviation Administration, or FAA, a cumbersome government agency, provides the service.
Primarily a risk-averse safety regulator, the agency is not well-suited to overseeing a modern, round-the-clock operation. Furthermore, it regulates itself, creating ample conflicts of interest when it comes to safety reporting. And that’s not to mention how it’s hampered by congressional micromanagement and political wrangling over the federal budget.
These structural flaws have hindered reform.
Indeed, the Department of Transportation’s inspector general recently told Congress the myriad proposals to rejigger air traffic control “have not achieved the expected cost and productivity outcomes.” The inspector noted that “systemic issues impact FAA’s ability to meet its overall cost, schedule and implementation goals.”
To improve, the nation’s air traffic control system has to be freed from governmental morass and reorganized as a private nonprofit governed by aviation users, which would allow better operations while ensuring user concerns are heard.
To see how this could work, we can look to Canada, which privatized its setup 20 years ago. Since then, Canada has become a world leader in developing air traffic control technology and has reduced costs to fliers by 40 percent.
Fortunately for Americans, the concept is gaining political traction in the U.S.
This week, the House Transportation and Infrastructure Committee, led by Rep. Bill Shuster, R-Pa., approved a piece of legislation he introduced that would free air traffic control from government oversight and establish it in a private nonprofit provider governed by a 13-member board representing various users of the system.
Although a similar bill from Shuster fizzled last year, the Trump administration, which has weighed in on the air traffic control issue, has given the proposal more political viability.
The bill is imperfect but presents a path forward far better than the outmoded status quo.
Running air traffic control like a business — not a government agency — would result in a faster, safer and more-cost effective aviation system.
Michael Sargent is a transportation policy analyst with The Heritage Foundation’s Thomas A. Roe Institute for Economic Policy Studies. Readers may write to him at Heritage, 214 Massachusetts Ave. NE, Washington, D.C., 20002-4999.
No: Privatization not all it seems
In June, President Donald Trump announced a plan to reform the nation’s air traffic control system.
As usual, the president’s claims were grandiose and his details were lacking.
What we actually got was an endorsement of legislation that was passed this week by the House Transportation and Infrastructure Committee, which is led by Rep. Bill Shuster, R-Pa. The legislation’s ultimate fate is uncertain, but much is at stake.
The pitch is that the nation’s air traffic control system, currently under the aegis of the Federal Aviation Administration, or FAA, should be privatized. In this case, however, the promise of privatization isn’t all that it seems.
Generally, it’s argued that public services moved to the private sector improve under the pressure of marketplace competition, leading to efficiencies and reduced costs.
The problem here is that the private air traffic control nonprofit being proposed looks a lot like a new, monopolistic government agency. The principal advantages of privatization simply would not apply.
This new bureaucracy would be disciplined by neither competition nor the pursuit of profit, and there would be no public shareholders driving managers to better performance. Giving it a board of directors and a CEO doesn’t change those basic facts.
What would the proposal actually do?
Air traffic control would be separated from the FAA and put under a new organization governed by industry stakeholders, including the big airlines, regional carriers, airports, air traffic controllers and others. The organization would borrow directly from the private sector, and interest and principal on the loans would be financed by charges to — guess who? The flying public.
Other countries have implemented a variety of reforms to the organization of air traffic control, but comparisons in this vein are dubious. The workload of the U.S. system is an elephant compared to the fleas of other nations.
Of prime interest, as in all things, is where the money comes from to finance both operations and investment.
Presently, there is an array of taxes and fees paid by passengers and other users of the system.
Under the Shuster plan, the new entity would determine all these fees, subject to the approval of the secretary of transportation. In effect, the reform shifts control of revenues from Congress to the Department of Transportation and ultimately, the White House.
So the vaunted independence of the new organization is not all that, especially in light of the reality that he who controls the money has inordinate influence on everything else.
These are just a few of the concerns about a wholesale reorganization of the agency that prevents planes from crashing into each other. If you like excitement and turbulence, this could be the reform for you.
Max B. Sawicky is an internationally known economist specializing in public finance and privatization. Readers may write him at the Center for Economic Policy Research at CEPR, 1611 Connecticut Ave. NW, suite 400, Washington, D.C., 20009.