Discerning Fact from Fiction in the ATC Reform Debate

There are so many misconceptions about air traffic control reform being spread that it’s hard to tell fact from fiction. A recent Dear Colleague letter purports to be looking out for taxpayers but the important thing to know is that the Aviation Innovation Reform and Reauthorization Act (AIRR Act) protects the public interest. Allegations that the legislation “gives away billions of dollars of taxpayer-owned property and equipment and sticks taxpayers and the traveling public with the bill” are simply unfounded.

Throughout the decades the American public has been flying, they have paid federal taxes on airline tickets. In 2015, aviation taxes—from passengers, shippers, airlines, and private pilots—brought in over $14 billion to the Airport and Airway Trust Fund (AATF). Since the creation of the AATF in 1970, aviation users have paid over $250 billion in taxes into the AATF—which is the funding source for the vast majority of equipment, facilities and real property that house the air traffic control (ATC) system.  In other words, aviation users—not general taxpayers—have already paid for almost all of the assets in question. Since aviation users would also be funding 100% of the costs of the new, non-profit ATC entity proposed in the AIRR Act, requiring this entity to pay for these assets again would be inappropriate and would truly stick the traveling public with the bill (twice).

It is also worth noting that the current book value of the FAA’s assets is significantly less than the “more than $50 billion” cited in the Dear Colleague letter, and in some cases, those assets also come with significant environmental liabilities. The AIRR Act transfers the ATC infrastructure on an “as is, where is” basis to the new, federally chartered entity.

The need to modernize our nation’s ATC facilities and technology is widely recognized. The DOT Office of Inspector General recently noted that the FAA has not produced comprehensive business cases to support facility consolidation, and that, despite previous reform efforts, the agency still experiences significant challenges in introducing new technologies. One of the goals of the AIRR Act is to expedite the modernization effort by freeing ATC from the restrictions of the federal budget process. In keeping with this goal and the new entity’s non-profit status, the Act requires that any proceeds from property sales be used for the acquisition or improvement of air navigation facilities or other capital assets to benefit the flying public.

Contrary to the implication in the Dear Colleague letter that the ATC Corporation could simply close facilities without input from labor or other stakeholders, the AIRR Act requires the non-profit entity to develop a process for the realignment and consolidation of services at least 180 days prior to assuming responsibility for operation of the ATC system. This process is to be developed in consultation with labor unions representing operations and maintenance employees and no facility consolidation or realignment can occur until the process is established. And of course, under the AIRR Act, the air traffic controllers’ union (among a broad cross-section of stakeholders) would also be responsible for appointing one of the members of the new company’s Board of Directors.

The FAA will continue to manage ATC functions until the new non-profit company is up to speed and ready to take over, similar to how relay runners pace together before handing off the baton for a seamless transition. As the new user-funded entity moves forward with transforming the ATC system, all aviation users will see better service because of the modernized air navigation operations.

What Do the Transcontinental Railroad and “I Love Lucy” Have to Do With Air Traffic Control? More Than You Realize

There’s an interesting piece in Wall Street Journal from a guy who has lobbied every side of air traffic reform. Roger Cohen, a former executive at the Regional Airline Association, the Aircraft Owners and Pilots Association, and Airlines for America, knows the issue inside and out, and gives a great summation of why we’re still stuck with the status quo. Here’s how Cohen begins:

“FAA funding was set to expire March 31, and Congress bumped that deadline until July 15. Although the measure prevented a traveler’s nightmare over Easter break, it hasn’t resolved the larger points of contention: how to revamp a flight map based on the Transcontinental Railroad, a regulatory scheme rooted in the New Deal, and traffic-control technology pre-dating ‘I Love Lucy.’”

Over the years that reform proposals to separate ATC operations from safety oversight have been debated, Cohen notes that the various sides of the debate have circled around each other, dancing and jabbing but no one really gaining any altitude on the issue. The allies this time, though, have changed. The National Air Traffic Controllers Association is siding with the vast majority of major airlines in support of the plan to create a not-for-profit company to manage ATC. Here’s Cohen’s answer to why that happened:

“The unions are afraid of future congressional budget battles, and they know they’ll get a reliable stream of funding from industry. Controllers are sick of waiting for technology and tower upgrades. And they talk to their counterparts in other countries and hear what a good deal it is. Canada and several other Western democracies have already successfully transferred their government air-traffic systems to industry control.”

What’s really interesting about Cohen’s piece, though, is how he describes the opposition, which ostensibly is led by general aviation. Cohen gets to the heart of it with this: “Since corporate jets have few political friends, they rely on the muscle of the Aircraft Owner and Pilots Association … 400,000 passionate, mostly recreational private pilots.” As anyone who’s actually read the legislation proposed in the U.S. House knows, non-commercial flights (“recreational private pilots”) are exempt from the fee structure, making their argument moot. But AOPA and its backers don’t want their members to know that so they continue their misinformed crusade to keep the status quo.

The FAA is a regulatory agency; it’s not designed to manage the kind of transformational reforms necessary to modernize air navigation systems and operations. ATC reform is a billion-dollar, high-tech program. A federal agency that has this problem, from Cohen’s piece, isn’t in a position to manage the billion-dollar, high-tech program ATC reform needs to become reality:

“The FAA’s Kafkaesque bureaucracy is so constricting that a former administrator once privately complained that he lacked the authority to hire a secretary. Not a deputy secretary or an assistant secretary: a regular secretary to answer the phones.”

Go here to read Cohen’s full piece.

The Cost of Not Reforming Air Traffic Control

Here’s some of what happened inside the FAA during the last government shutdown:

  • Federal contractors weren’t able to perform any work so they didn’t get paid;
  • Critical skills were lost because some contractors found other work, leaving the FAA with a skills gap; and
  • Re-activating contracts that were suspended due to the stoppage cost more money in the long run.

The federal budget sequester with its mandated spending reductions was worse, said Jim Williams, former Director of Engineering Services for the FAA’s NextGen program. His comments published in a lengthy examination of the proposed reform to separate air traffic control operations from the FAA in InsideGNSS magazine. The article is well worth the time it takes to get all the way through. Williams spoke at length about the issues within the FAA because of its rigid agency structure and how that makes it more difficult to fund necessary modernization programs.

Over one five-year period, Williams said he saw the agency’s capital budget fluctuate from $2.4 billion to $3.3 billion. From the article:

“A private-sector operator would be able to sell bonds to smooth out the highs and lows, privatization supporters insist. Williams suggested that business-focused managers also might be better positioned to raise money for critical gaps that government has had difficulty funding — such as addressing cybersecurity issues.”

According to the Transportation Department’s Inspector General, full implementation of NextGen is estimated at triple its original $40B price tag and the agency, if it remains as-is, will need a decade longer than originally planned to get it in place. That means the U.S. won’t be fully rid of a ground-based radar and paper-slips system until 2035 or later.

According to Nancy Graham, a former FAA official who was also the director of the Air Navigation Bureau of the International Civil Aviation Organization, our inability to modernize is already costing us well beyond economic impact of flight delays. From the article:

“U.S. innovation is severely hampered by its current ATC system …

“‘When companies doing research and development look at the implementation opportunities, they don’t go to the U.S. anymore; it’s just too complicated,’ she added. ‘It’s too difficult to work with them under the regulatory scheme that they have. They go elsewhere to look at opportunities for prototyping new technologies. That’s a shame.’”

Despite the caterwauling from those opposing the ATC reforms, Graham says the companies that are operating systems similar to the model proposed in the U.S. House “have a proven track record for safety and better service.” The article continues quoting her saying, “Costs have gone down, cooperation has gone up, transparency has gone up, and the ability for these organizations to manage themselves in a businesslike manner has provided them untold benefits.”

The current FAA authorization has been extended through mid-July. The previous one underwent 23 short-term extensions and took seven years to pass … wait for it … a three-year bill. It took more than twice as long as the authorization lasted to pass it!  While the bill that came out of the House Transportation Committee did include the ATC reforms, the Senate Commerce Committee bill did not. The Senate, though, did “mandate a stack of new reports on NextGen progress,” said the InsideGNSS piece.

The U.S. has already lost its innovation edge over this issue. What’s next? We’ll leave the final word here from the article:

“What’s the alternative?” said Graham. “It has to happen if we are going to continue to have the [economic contribution] that we expect aviation to produce over time.”

Go here to read the full piece.