The
Federal Aviation Administration (FAA) operates the nation's air traffic control
(ATC) system, regulates aviation safety, and provides grants to airports. The
agency's $16 billion budget is mainly funded by taxes on aviation. The FAA
has 45,000 employees.
The
FAA has struggled to modernize the ATC system. It still relies on 20th century
technologies, such as radar and voice radio, despite the development of newer
technologies, such as satellite-based navigation and text communications. Air
traffic control is a high-technology industry, yet we are still running it as
an old-fashioned bureaucracy from Washington, D.C.
One
of the problems with America's ATC is stifling bureaucracy. In a detailed
analysis of the FAA's performance, economist Robert Poole found that the agency
was risk averse and slow to make decisions. It loses high-skilled workers
to private industry because of a lack of federal pay flexibility and
frustration with the government work environment. Poole found that the FAA
"is slow to embrace promising innovations" and "is particularly
resistant to high-potential innovations that would disrupt its own
institutional status quo." That is the opposite of what is needed in
the dynamic, technology-dependent aviation industry.
Dorothy
Robyn, a policy expert who worked in the Clinton and Obama administrations,
examined ATC reforms in a Brookings Institution study. She concluded, "As
a traditional government agency constrained by federal budget rules and
micromanaged by Congress, the FAA is poorly suited to run what amounts to a
capital-intensive, high-tech service business." She noted that as
late as the 1990s the FAA was the nation's largest purchaser of vacuum tubes.
Another
problem with our ATC system is Congress. Politicians, Robyn says, have
"long blocked large-scale consolidation of the FAA's aging and inefficient
facilities," and Congress "micromanages FAA spending on investment
and maintenance." The FAA's so-called zombie air traffic control
towers, which receive little traffic, are another example of politically
induced waste. Both Robyn and Poole propose that the ATC system be separated
from direct federal control, as many other nations have done.
One
concern of both Robyn and Poole is that the FAA both operates the ATC system
and oversees aviation safety. That is a conflict of interest. A basic principle
of good governance is that regulators should be independent of the entities
they regulate. The International Civil Aviation Organization recommends just
such a separation for the ATC. Separating the aviation regulator from the ATC
operator would increase transparency because hidden decisions made internally
within the FAA today would instead be made public.
A
high-performing ATC system is important for the U.S. economy, yet the rising
demand for air travel is expected to severely strain the FAA. Airspace is
getting crowded and our antiquated ATC is causing delays, wasting fuel, and
generating pollution. Transitioning to new technologies, such as
satellite-based navigation, would increase safety while also raising airspace
capacity, reducing delays, and saving fuel by allowing aircraft to fly more
direct routes. New technologies would also save costs by reducing the number of
ATC facilities needed across the country.
The
FAA has long struggled to upgrade its technology. A 2005 Department of
Transportation study looked at 16 major ATC projects and found that the
combined costs had risen from $8.9 billion to $14.5 billion. A 2005 GAO
analysis concluded, "For more than two decades, ATC system acquisitions
under the National Airspace System modernization program have experienced
significant cost growth, schedule delays, and performance problems."
A
2012 GAO report found that half of FAA's major acquisition programs were behind
schedule. And a 2016 auditor's report found that several critical programs
"remain over budget and behind schedule due to overambitious plans,
unresolved requirements, software development problems, ineffective contract
management, and unreliable cost and schedule estimates."
The
FAA has made some advances, but the 2016 auditor's report found that its
"total budget, operations budget, and compensation costs have doubled
while operational productivity has decreased substantially." Another
recent report found shortcomings in the FAA's workforce management, including
too few qualified controllers at numerous major airports.
A
report from the U.S. Travel Association warned that our "air traffic
control system uses technology from the World War II era that causes systematic
delays and cancellations," and that upgrades remain "mired by
setbacks, cost overruns and delays as a result of FAA mismanagement" and
budget cuts. A report from the Eno Center for Transportation found
that "many stakeholders are losing confidence in FAA's ability to move
forward" with technology upgrades.
Our
ATC system needs to be restructured. Other nations have made their systems
partly or fully independent of their governments. Canada privatized its ATC in
1996, creating a self-funded nonprofit corporation called Nav Canada. That
reform was the model for legislation introduced by House Transportation and
Infrastructure Committee chairman Bill Shuster (R-PA) in 2016, which would
transfer our system to an "independent, not-for-profit corporation"
that would have a "self-sustaining, cost-based user fee structure.The legislation was passed out of committee but will likely
not pass Congress this year.
Since
privatization, Nav Canada has won three International Air Transport Association
Eagle Awards as the world's best ATC provider. The association reports that Nav Canada is a
"global leader in delivering top-class performance"; and its
"strong track record of working closely with its customers to improve
performance through regular and meaningful consultations, combined with
technical and operational investments supported by extensive cost-benefit
analysis, place it at the forefront of the industry's air navigation service
providers."
In
Canada, funding was changed from a government ticket tax to direct charges on
aircraft operators for services provided. Nav Canada's revenues come from
charges for en route and terminal services. Airlines are charged for flying
through Canadian airspace and for landing at Canadian airports. Those
cost-based charges are a more efficient way to price ATC services than the U.S.
system, which is based on ticket fees and general federal revenues. Dorothy
Robyn notes, for example, that the U.S. system biases airlines in favor of
multiple small jets for routes, when a single larger jet would be more
efficient from an ATC perspective.
Nav
Canada is a private monopoly, which might raise concerns that its user charges
would rise excessively. But that has not happened. Indeed, Nav Canada's real
customer charges have fallen by one-third over the past decade, as efficiency
has increased. The system is handling 50 percent more traffic now than
before privatization, but with 30 percent fewer employees. One reason for
the good performance is that airlines and other aviation stakeholders are
represented on Nav Canada's corporate board, and those stakeholders have a
strong interest in increasing safety and efficiency while reducing costs.
People
may also be concerned that an important institution such as ATC be open and
transparent. That is what privatization can achieve. Nav Canada publishes
regular reports detailing its financial and operating metrics. For example, it
publishes an in-depth annual safety plan and is proud to be among the top ATC
systems worldwide for safety. One key metric known as losses of separation has
been cut in half since privatization, as safety has improved. Another
advantage of privatization is innovation. Nav Canada has become a leader in its
field and is praised for its sound finances, solid management, and investment
in new technologies. According to the company's former chairman, Nav Canada has
"sold and installed our home-grown technology around the world from
Australia to Hong Kong to Dubai, and all over the U.K. and Europe."
In
Senate hearings in 2015, the head of the U.S. National Air Traffic Controllers
Association described some of Canada's advantages: They have the air traffic
controller, the engineer, and the manufacturer working together from conceptual
stage all the way through to training, implementation, and deployment within
their facilities. And what that does is it saves time and money. And they
actually are developing probably the best equipment out there, and they are
selling it around the world. And they are doing it in a 30-month to three-year
time frame, when we have to look much longer down the road because of our
procurement process in this country.
In
2016 the air traffic controllers association backed the Shuster legislation to
move ATC to a nonprofit corporation. It may seem odd for a labor union to
support such reforms, but the controllers are concerned that our ATC system is
not receiving the steady funding and advanced technology that it needs. A
self-funded system would create more financial stability than the current
system, which is buffeted by chaotic federal budget battles.
A
2009 report by Glen McDougall and Alasdair Roberts compared the FAA to 10
partly or fully "commercialized" (or privatized) ATC systems in other
countries. They looked at performance and safety data and conducted
hundreds of interviews with managers, workers, and users of the different
systems. They found that, generally, service quality improved, safety improved,
and costs were reduced with commercialization.
A
2005 GAO study looked at the performance of commercial ATC systems in
Australia, Canada, Germany, New Zealand, and the United Kingdom. It concluded
that those systems had cut costs, invested in new technologies, and either
maintained or increased safety. The United Kingdom privatized its ATC in 2001
as a for-profit business, called NATS, with ownership shares split between
private investors, NATS workers, and the government. The British government has
announced that it will sell its remaining stake in NATS.
In
the United States, various studies and commissions since the 1970s have
recommended ATC restructuring or privatization. In the 1990s, the Clinton
administration proposed separating ATC from the FAA and setting it up as a
self-funded government corporation. In 1997, the National Civil Aviation Review
Commission, chaired by Norman Mineta, also proposed a self-funded ATC system.
Today,
the dominant reform model is the Canadian system, which inspired the 2016 House
legislation of chairman Shuster. Privatization would give ATC leaders the
flexibility, incentives, and funding they need to improve efficiency and
innovate. New technologies are the key to reducing flight times, cutting fuel
costs, and minimizing the environmental impact of aviation. Privatization would
also encourage America's ATC organization to develop technologies that it could
sell globally.
In
a recent interview, the head of Nav Canada, John Crichton, was blunt:
"This business of ours has evolved long past the time when government
should be in it. . . . Governments are not suited to run
dynamic, high-tech, 24-hour businesses."
Norb
Leahy, Dunwoody GA Tea Party Leader
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