January 28, 2016

Legislators and stakeholder groups supporting and opposing a fundamental restructuring of U.S. air traffic control provision have begun positioning themselves in the last several weeks in anticipation of the release of draft legislation by House Transportation and Infrastructure Committee chairman Bill Shuster (R-PA) that breaks up the Federal Aviation Administration (FAA) and turns air traffic control over to a private, non-profit corporation. Shuster is expected to release the anxiously-awaited text of the legislation on or about Wednesday February 3, in anticipation of a committee markup of the draft bill eight days later.

Most recently, on January 26, a coalition of organizations accompanied Rep. Eleanor Holmes Norton (D-DC) and Rep. Elijah Cummings (D-MD) on a press call to urge Congress to “not privatize our air traffic control system.” The group currently has a petition with over 100,000 signatures addressed to the House Transportation and Infrastructure Committee (T&I). Norton and Cummings are very senior members of the Transportation and Infrastructure Committee. However, it is important to note that the head Democrat on the full T&I panel, Peter DeFazio (D-OR) and its aviation subcommittee, Rick Larsen (D-WA), were not on the call and appear to be keeping their powder dry until they see the specifics of Shuster’s proposal.

Susan Harley from Public Citizen opened the call, introducing Rep. Norton. Norton noted that there is currently not enough information available regarding Shuster’s bill, and highlighted her concern that the U.S. already has the safest air traffic and that there is a lot of work to be done within the current system. She also commented that as a practitioner of Constitutional law she’s not convinced that Congress has the authority to delegate responsibilities to a private entity.

(Ed. Note: In April of last year, ranking member Peter DeFazio (D-OR) had a similar question on the constitutionality of spinning-off ATC function into a private entity. The Congressional Research Service responded with this report, which said “a proposal intending to authorize a private entity… to provide air traffic control services would likely need to strike a careful balance: it must provide enough government involvement in policy or regulatory decisions to comply with constitutional requirements… but not authorize so much government involvement that… [it is viewed] as part of the government.” Which basically means that it would need to be carefully constructed.)

Rep. Cummings reiterated Norton’s point on safety and went further to say that “we don’t need to give airlines more power over the ATC, [and] this is what they would get under current GOP proposals.” He also noted that, “evidence from other countries that have privatized their ATC systems [have had] job losses and government bailout.” Cummings contended that this is an ideological driven proposal and that ATC would have sufficient funding if the “GOP ceased their senseless pursuit of budget cuts.”

(Ed. Note: The United Kingdom’s ATC system, NATS, was bailed out shortly after being transformed into a public-private partnership. That bailout was a result of the downturn in traffic resulting from 9/11, and was one of the many bailouts the aviation industry – including the airlines in the U.S. – received during that period.)

Following statements by the two members of Congress, a number of supporting organizations made statements, but they seemed to be groups opposed to any kind of privatization of government services, not to air traffic control reform in particular.

Harley made the final statement noting that, “other countries have privatized systems… [making] them weaker.” She contended that in the “UK jobs were cut and new fees increased markedly.” She similarly assured listeners that Canada’s system resulted in lost jobs and increased fees for costumers.

(Ed. Note: While ETW does not have the exact figures on lost jobs, we understand that labor supported the reforms in Canada; their salaries had been frozen for the five prior years before reform. To be clear, fees in Canada were not increased. ATC fees in Canada are significantly lower, in real terms, in comparison to the taxes they replaced when ATC was operated by the government – and, similar to the FAA, the former Canadian ATC system received money from the general fund in addition to fees to operate. From 1999 to 2014 user fees in Canada increased 5 percent, 33 percentage points lower than inflation. Just as a comparison, from 1996 through 2012, the operations account at the FAA (which pays for air traffic controller’s salaries, a major expense in ATC provision) increased 52 percent in real terms, while the agency’s total budget increased 41 percent, also in real terms.)

A caller pushed the coalition on why they chose to launch without support from any aviation groups, noting that labor groups including the National Air Traffic Controllers Association (NATCA) do not agree with the aim of the petition. Harley replied that, “we’re standing up for consumers.”

Both Norton and Cummings expressed an interest in learning more about both Shuster and DeFazio’s proposals, and that they would reserve judgment until after they are aware of the details of the proposals.

The anti-privatization conference call with Norton and Cummings was just the latest in a series of positioning exercises in anticipation of Shuster’s bill. On January 7, POLITICO published an op-ed by Rep. Mike Pompeo (R-KS) opposing ATC privatization on the grounds that real user fees “would disproportionately hurt general aviation.”

Then, on January 18, Reps. Sam Graves (R-MO) and Todd Rokita (R-IN), both of whom are members of T&I (unlike Pompeo), wrote an op-ed in The Hill endorsing the concept of ATC privatization and stating that “we would not even entertain this transition discussion if we found out it would harm the general aviation community.” (Ed. Note: The position of Rep. Graves is particularly noteworthy – not only is he personally very close to Shuster, he is also regarded as the heir apparent to the T&I chairmanship once Shuster is term-limited or steps down – so opponents of privatization know that they can’t simply wait Shuster out and hope the issue goes away.)

The day after that, a number of general aviation groups both major (AOPA, GAMA, NBAA) and minor (Commemorative Air Force, Recreational Aviation Foundation) released a letter to the T&I leadership that was carefully drafted not to declare opposition to the as-yet-unreleased bill but instead to say that the groups have concerns about how privatization has been handled in other countries and to ask Shuster “provide ample opportunity for all stakeholders and citizens to carefully review, analyze and debate any proposed legislation changing the governance and funding for air traffic control.”

Then, on January 21, the Aerospace Industries Association sent a letter to the T&I leaders – again, the letter was not expressly in opposition to the Shuster bill, but it questioned the near-term effects that fundamental ATC restructuring would have on the ongoing NextGen procurement. The letter said “AIA believes that significant structural reform will pose both complex challenges and a prolonged transition period with a potential to negatively impact complex NextGen programs just as they are starting to deliver real results.”