Will Privatized Air Traffic Control Put You in Danger?

Trump reignites a long-simmering debate. We take a look at how other countries have done it.

Trump Proposes to Take U.S. Air Travel ‘Into the Future’

In pressing to privatize air traffic control, the White House has revived one of the U.S. airline industry’s top policy priorities: stripping the Federal Aviation Administration of air traffic oversight and giving the function to a not-for-profit organization.

That model is used in other countries, including Canada. U.S. carriers frequently cite Nav Canada, the Ottawa-based nonprofit that’s overseen air traffic there since 1996, as something America should emulate. Under such a model, the FAA would retain oversight of safety much as Transport Canada, its counterpart north of the border, does. The new U.S. air traffic group would be funded by user fees.

Representative Bill Shuster after U.S. President Donald Trump announced the Air Traffic Control Reform Initiative on June 5, 2017.
Photographer: Eric Thayer/Bloomberg

U.S. Representative Bill Shuster, a Pennsylvania Republican, introduced a bill last year that would have mirrored the Canadian model, but it didn’​​​​​t​ reach a vote amid tepid support in both parties. Shuster joined a White House ceremony Monday at which President Donald Trump announced the revived proposal.

Nicholas Calio, president and chief executive officer of Airlines for America, the industry’s trade group, has in the past decried a “a consistent record of failure” by the FAA to manage major technology projects associated with NextGen, the long-delayed revamp of U.S. air traffic control. Those delays—coupled with heavy technology spending by airlines on equipment they complain they often can’t use—have been aggravated by inconsistent FAA funding.

Supporters of privatization believe that removing the FAA from direct control would speed the system’s evolution.

For passengers, though, the paramount question is obvious: Would a private system be any less safe? A look at five countries where private groups handle air traffic shows that there need not be increased safety risks. But that still leaves a number of open questions as U.S. airlines, pilots, regulators, unions and travelers watch to see whether Congress takes up a sweeping overhaul of air traffic control.

Would a private agency save money?

That’s a huge bone of contention. The current FAA-run system costs $2.07 per mile, 8 cents cheaper than Nav Canada charges, according to a 2015 study by Bob Mann, an industry consultant in Long Island, New York. Currency fluctuations can affect the comparison, and Nav Canada also faces persistent squabbles over how to set fees for different parts of its customer base. Canadian airlines also pass along navigation costs to customers through ticket prices—another potential source of friction in the pending Congressional debate. So the answer is: maybe not.

Would taxpayers have to fund the agencys shortfall when travel declines? 

Possibly. Sorting out the financial base for a new ATC agency would be tricky, especially given the difficulties in setting user fees and forecasting lean periods. Adding to the complexity is the fierce fight between commercial airlines and private jet operators about funding the current system. Carriers have argued for years that corporate jet users aren’t paying their fair share.

Is the U.S. just too big, with too many planes, to privatize?

There were 9.6 million airline departures from the U.S. in 2014, almost three times the number in second-place China, according to data from the World Bank. Canada and its private air traffic system ranked third, with 1.3 million departures. So is the U.S. just too big? Reasonable people differ. In its response (PDF) to a Department of Transportation Inspector General report on different models, the FAA noted in 2015 that it “controls 60 percent more [instrument] flights than all 40” of the European airspace control centers combined. But officials on the other side of the argument say every airspace is identical, save for volume, and that systems such as the one in Canada can scale without problems.

Would an air traffic cooperative satisfy the demands of pilots and controllers? 

Key players in air traffic—pilots—have devised a strict test for any reform legislation, Tim Canoll, president of the Air Line Pilots Association, the largest pilots’ union in the U.S. and Canada, has said. To gain pilot support, any new system must be as safe as the current one, structured as a not-for-profit, financed by “fair and equitable” fees across all airspace users and offer collective bargaining rights to employees, he said. 

Air traffic controllers monitor airport traffic in the NAV CANADA tower at Ottawa International Airport.
Photographer: Patrick Doyle/Bloomberg

The National Air Traffic Controllers Association, which represents 20,000 U.S. air traffic controllers and related employees, has been agitating for more predictable FAA funding for years. The union says any ATC change must protect employee rights and benefits; keep safety and efficiency as top priorities; provide a stable funding stream; and maintain service to all aviation segments. The union supported the 2016 bill. “We look forward to reviewing the specifics of the air traffic control (ATC) reform legislation so we can evaluate whether it satisfies our union’s principles, including protecting the rights and benefits of the ATC workforce,” union President Paul Rinaldi said Monday in a statement.

So who doesn’t want to privatize?

Delta Air Lines Inc. has argued  that a transition would be too disruptive, given all the previous work done to implement NextGen. “We don’t think the system’s broken,” Steve Dickson, Delta’s senior vice president for flight operations and an Airbus A320 captain, has said. That pits Delta against the rest of the industry. On Monday, the airline said it looks forward to working with Congress and the administration to modernize air traffic control. Delta didn’t specifically endorse the Trump plan nor did it clarify whether its past position on privatization has changed. “We remain committed to working together to identify ways to reduce delays, improve efficiency, and enhance airline performance while maximizing safety and minimizing costs,” Delta said in an emailed statement.

The National Business Aviation Association, which represents corporate business jet operators, has opposed privatization for years, arguing that its members will see higher costs and reduced access to fly when they want. On Monday, the group said it was “deeply concerned” by Trump’s push. “No one should confuse ATC modernization with ATC privatization—the two are very different concepts,” NBAA President and CEO Ed Bolen said in a statement. The association and 15 other aviation groups also wrote Trump (PDF) Monday to reiterate their concerns about the proposal’s fee structure.

Several members of Congress have gone on the record opposing the idea as well. “The industry responsible for massive IT meltdowns, sky-high airline fees, and shrinking seats should not be in control of managing the most complex airspace in the world,” Massachusetts Senator Ed Markey, a Democrat, said Monday in a statement.

Which nations have gone private?

Several dozen. New Zealand was the first to end a government role in air traffic control, in the late 1980s, followed by Germany, Australia and the U.K. France migrated ATC to a government agency funded by user fees a decade ago; that agency retained safety oversight. Germany established a government-run corporation. The U.K. uses a unique public-private partnership for NATS, which oversees air traffic control. U.S. airlines say the Canadian model has worked best.

“ATC is a natural monopoly. It has very clear and identifiable customers,” Nav Canada’s former president and CEO, John Crichton, said in a 2015 interview. “So the optimum solution is really something in the form of a customer cooperative.” Nav Canada is managed so it will break even each year, he said. Last month, the company announced a rate reduction and C$60 million (US$44.5 million) refund, citing stronger traffic from trans-Atlantic low-cost carriers.

“Governments are not good at running big IT projects,” Crichton said. As aviation interests wrangle over whether to replace the FAA in managing U.S. airspace, one other question looms large over the debate: Would a private enterprise perform any better?

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE