What is Privatization of ATC about?

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You’ve likely seen it on the news, on June 5th, 2017, President Trump has announced that he plans to privatize the Federal Aviation Administration (FAA) Air Traffic Control (ATC). What does that mean and why does it matter? Let me provide my limited perspective from what I know and I welcome debate and corrections for mutual understanding and potential problem-solving ideas.

Well, first off, we need to understand there are essentially three ‘types’ of aviation. First is the Airlines, and second is the military, both of which most people are familiar. Thirdly is General Aviation. This is defined by the General Aviation Manufacturer’s Association (GAMA) as ‘all aviation except for the military and the airlines.’ This covers a broad spectrum from a small privately owned airplanes that have between 1 and 4 seats, sometimes as many as six seats and corporate jets which  can range from the new Very Light Jets (VLJ) such as the Cirrus Jet up to the very large Gulfstream G550 which can transport up to 19 people over 6750 nautical miles.

History

WWI ended in 1918, and aviation was still in its infancy, and a dangerous business. Navigation relied on crude maps, fires and light towers along routes, airstrips were mostly grass fields, and airplanes were being designed and developed largely by trial and error. As air travel increased and people demanded safer skies, Federal Regulations of the Airlines began with the Air Mail Act of 1925, then the Air Commerce Act of 1926 and the Civil Aeronautics Act of 1938, which created the Civil Aeronautics Authority (CAA), creating the Civil Aeronautics Board which had the power to regulate airline routes, investigate accidents, certify aircraft and pilots, and created the rules for Air Traffic Control. From their inception these organizations were all fraught with scandal and corruption that favored the airlines. William P. MacCracken, Jr. an attorney and WWI flight instructor, helped craft the bills and became the first Assistant Secretary of Commerce for Aeronautics, reporting directly to the Secretary of Commerce, Herbert Hoover, who later became U.S. President. Mr. Mac, as he came to be known, established aviation medical directors, policies for the certification of aircraft and pilots and regulations that govern maintenance, aeronautics, and air traffic control. He resigned in 1929 but became involved with postmaster Walter F. Brown and was later deemed a lobbyist and held in contempt for refusing to testify in congress on the charges of favoritism in the selective assignment of lucrative air mail routes. In 1958, the CAA became the Federal Aviation Administration (FAA).

Regulations grew and continued to favor certain airlines. In 1978, the Airlines Deregulation Act, starting with President Jimmy Carter. The airlines adopted new strategies, such as the hub and spoke system and low cost carriers flew point to point. Prices dropped and many argue that deregulation provided benefits to most air travelers. As changes and conflicts increased, the Air Traffic Controllers had formed a union and on Aug 5th, 1981, went on strike. President Reagan fired them, breaking the PATCO union and the commercial air system slowed to a crawl, with 7000 cancelled flights in peak summer travel season. The FAA met the contingency with 3000 supervisors, 2000 non-striking controllers and about 900 military controllers and were able to resume about 80% of scheduled flights. Air freight was hardly affected.The big business of the airlines struggled in the competitive environments and there were many subsequent bankruptcies. The Airlines have unions, the FAA has unions and the controllers have also re-established a union as the National Air Traffic Controllers Association. During the 9/11 terrorist attacks the airlines took a major blow and in the 2008 economic collapse, General Aviation took a major hit. The FAA continued to grow.

The FAA

The FAA has over 80,000 employees and many of them make $80K to over $100k in salaries with good benefits. The FAA has become a complex organization that besides air traffic control, has departments that oversee, build and maintain airports, departments that provide airworthiness certifications and inspections, departments that provide licensure and registrations, departments for medical requirements, departments that provide the technical implementation, maintenance and inspection of equipment, and departments that provide safety and training. Due to the sheer size and complexity of the FAA and the subsequent expense, it has become a bureaucratic force to be reckoned with. Because of the sizable volume of air traffic, and the importance of public safety, privatization stands to be a disruption of mega-proportions that must be approached delicately. It is inevitable that its budget is un-sustainable and some form of streamlining will take place.

ATC

The Air Traffic Control (ATC) National Airspace System (NAS) is about 10.4 Million square miles of airspace including over water, and consists of approximately 14,500 air traffic controllers, in 600 air traffic control facilities, 4,500 aviation safety inspectors, and 5,800 technicians operate and maintain services for the NAS. It has more than 19,000 airports. In all, there are 41,000 NAS operational facilities. Over half of the aircraft operations in the world operate in the United States. On average, about 50,000 flights use NAS services each day. ATC is also faced with insurmountable challenges. The annual budget has more than doubled from about $8 Billion in 1996 to over $16 Billion in 2016, while still mostly operating the same system and facilities. The 1960’s and 70’s computer and telecom equipment that powers the ATC is out-dated and has been in a long and complex upgrade called NextGen. There are over 71,000 pieces of equipment, from radar systems to ground-based radios and relay stations. And the FAA has back-up and contingency plans to handle large-scale catastrophes, such as nuclear war, natural disasters, etc. The theory is that eventually, with the 2020 mandate of all aircraft to have ADS-B (flight tracking) capabilities, that GPS navigation and self-monitoring of air traffic from inside the flight deck will provide the necessary traffic controls and that air traffic controllers and radar traffic systems will, in theory, be a back-up. The technology exists to do things in a better way, but the challenge is doing it seamlessly without impacting flight operations or increasing costs to pilots.

Other Privatization

With that said, many of the Flight Services, such as weather, Notices to Airmen (NOTAMS) pilot reports and flight planning were privatized to Lockheed Martin more than a decade ago in 2005, and after a bit of a rough transition has reduced the cost of Flight Service from about $500M to about $190M per year and the services today are, in my opinion, the same quality they were prior to the privatization. So, it stands to reason that if there is a way to streamline the current FAA infrastructure to reduce cost without a significant impact to service, then it is worth looking into. However, with the decrease in the number of pilots and General Aviation Aircraft operating, it is a concern to us pilots who are already operating in tight margins to incur the potentially devastating extra costs of user fees. It should be a concern of the public that safety could be compromised in order to reduce costs and maintain profitability of General Aviation.

The Airlines

The airlines have long been in a battle with airports over who should get more of your money for improvements. The airlines pay landing fees in exchange for their use of slots at major airports. Airlines lobby and compete for these lucrative slots at airports for major air routes, and thus virtually guaranteed business. The airlines are also the largest user of ATC services. The airlines have traditionally charged a ticket tax to pay for ATC services. The Airlines and their unions also have a powerful lobby and their input into the privatization of ATC seems like a power grab, especially since GA Advocacy groups didn’t seem to get much input. President Trump said that privatization will reduce the cost to passengers of airline travel. I think the intention is to reduce the cost of ATC, which will, in theory, reduce the ticket tax paid by passengers.  This brings up concerns to general aviation.

General Aviation

General Aviation is funded by an excise tax on aviation fuel, which is supposed to go into an aviation fund. This has been considered the most fair way to spread the costs evenly among users. My understanding is that this fund has become intertwined with the general fund and has created funding issues for the FAA and aviation infrastructure that are periodically debated in legislature. If the intent is to reduce the overall cost of ATC, then it stands to reason that many busy GA airports might reduce or eliminate ATC services, which poses a risk to safety of the corporate jets and private airplanes that use smaller controller airports. If the services are not eliminated for safety reasons, then it stands to reason that it will increase costs to General Aviation. Also keep in mind many GA aircraft do not have radios or use ATC. For the small private airplane pilots, user fees, would be a significant shift in financial burden to those that do use ATC, and would significantly impact the industry. The already numerous litigations, insurance prices, fuel costs and expense of maintaining aircraft and pilot currency requirements make private aviation less affordable. The industry is already down to 600,000 pilots from a peak in the 1970’s of over 800,000 pilots. And keep in mind, GA is the primary method of training for airline pilots, so increased costs will widen the pilot shortage.

Smaller, non-airline, airports

Some Fixed Base Operators in conjunction with local governments also run quasi-coersive-monopoly-like businesses that are sure to further impede the industry. Privatization is sure to open a can of worms that will pit pilots and businesses against one another with more user fees such as ramp fees. Also the issue of airport ownership and land-use could lead to the closure of a number of airports or lead to less-safe development practices. This valuable infrastructure is already starting to erode and there is a real concern that privatization will exacerbate this problem.

The impact to jobs

Airports, Aircraft manufacturers, and Aircraft Operators create jobs. Perhaps more importantly, they also create gateways to communities that support other businesses, that, with less regulations, could spur innovations. Less General Aviation due to increased costs will reduce available jobs. More people need to be aware of aviation to preserve this American Freedom. Aviation has, perhaps inadvertently, become insular and there has become a gap between most airports and the communities they serve. More people need to become involved to close the gap and to recognize the numerous opportunities in aviation. Everyone needs to read my new book ‘Open Air – How People Like Yourself and Changing the Aviation Industry’. Share with your friends and learn how aviation can help communities. To learn more go to www.OpenAirForEveryone.com

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