February 15, 2017|ENO CENTER FOR TRANSPORTATION
Between 2013 and 2015, the Eno Center for Transportation brought together key stakeholders to understand how best to hasten modernization of the nation’s air traffic control (ATC) system. The Next Generation Air Transportation System (NextGen) Working Group (now the Aviation Working Group) quickly concluded that only governance and funding reform of the existing federal structures could accelerate the implementation timeline.
Since the 1980s, there have been several attempts to modernize the ATC. However, the Federal Aviation Administration (FAA) has proved unable to expediently implement these plans or update the numerous systems that comprise ATC. This has catalyzed calls for the internal reorganization of FAA and prompted many proposals to reform ATC governance and funding. The most substantial was the introduction of a performance-based ATC organization, the Air Traffic Organization (ATO), which was created as an arm of FAA in 2000. However, while governance was reformed, funding for the system remained unchanged and continues to rely on a mix of taxes on aviation, augmented by the General Fund.
The budget sequester and government shutdown in 2013 revived the discussion. This interest culminated in 2016 with the introduction of a bill in the House of Representatives to spin off ATC provision into a new independent non-profit entity. Though that legislation was not enacted, stakeholders continue to push for ATC reform and it is expected that in 2017 new efforts will be put forward.
While in the United States the ATC system is operated by the federal government and funded through direct and indirect taxation, many other developed countries have already departed from this model. For example, Australia, Germany, and New Zealand created government corporations to provide ATC services. An independent non-profit user co-operative functions in Canada, a reformed government agency in France, and a public-private partnership in the United Kingdom. None of these countries rely on taxation for their operations; instead fees charged to airspace users fund them.
There are concerns within the United States that non-governmental ATC provision could lead to increased costs to the airspace users, poor service, or unsafe operations. Yet the international experience demonstrates that commercialized providers can keep costs in check, upgrade their systems, and improve safety. Some key factors that are essential to the success of these systems include reliable, independent sources of revenue, independent, but accountable, management, and stakeholder involvement.
There are several options for ATC reform in the United States. The federal government could, for example, only change only how the system is funded. They could also overhaul governance by establishing a new government corporation or an independent non-profit. A more radical change would be to allow a fully private for-profit company.
Based on a thorough review of previous efforts for reform, the Eno Working Group determined that neither maintaining the status quo governance structure with funding reform nor the complete privatization of ATC are likely to be successful. On the other hand, a government corporation and an independent non-profit organization both have the potential to offer strong benefits. Therefore, Eno proposes that the United States adopt a new governance and funding model for ATC provision that is either a government corporation or a non-profit independent entity.
The proposed organization would be free from both federal procurement and personnel rules. This would facilitate modernization. Providing airspace stakeholders an opportunity to be represented on its governing board would ensure that the system would be run based on the interest of its users. This would create a more efficient ATC system with the potential to continue the growth of the national aviation system, promote economic growth and increased mobility, while maintaining the high standards of safety that the system enjoys today. The current funding system would be replaced with direct payments to the ATC provider.
The rest of the FAA would be able to focus on its core mission as the aviation safety overseer. FAA would regulate the system and administer grants in a manner similar to the other USDOT administrations. Congress and the federal government would continue to play a substantial role in promoting the growth of the aviation system and assuring that strong safety oversight remains intact.
This arrangement would promote faster modernization of the ATC system, leading to more fuel saved and less congestion. Implementation of NextGen would also increase the reliability of the system, leading to faster and more efficient travel for passengers and cargo. It would also allow the aviation system to grow to meet the demands of the global economy.
After 30 years of attempted reforms, there is now an opportunity to move forward and reform ATC into a system more ready to tackle the challenges of the future.
A bright idea for modernization in Mr. Trump’s ‘skinny budget’ Washington Post, April 10, 2017
Plan to privatize 30,000 FAA workers gains momentum, but is it enough? Washington Post, March 21, 2017
Major Trump to Ground Control Wall Street Journal, March 23, 2017
Air Traffic, Under Control U.S. News and World Report, March 17, 2017