Report: Congress Could Pursue Privatizing ATC

This smells like another Boeing boondoggle similar their push to lease air
tankers to the Air Force that resulted in the CEO being fired and the member of
the Pentagon who colluded with Boeing being jailed a few years ago.
Satellite-based ATC reduces air safety by reliance on feeble satellite radio
signals subject to the vagaries of the Sun and ionosphere.

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http://www.avweb.com/avwebflash/news/Report-Congress-Could-Pursue-Privatizing-ATC-224079-1.html
Report: Congress Could Pursue Privatizing ATC

By Elaine Kauh

Privatizing the National Airspace System, which drew criticism from FAA
employees when discussed
http://www.avweb.com/avwebflash/news/FAA-Unions-Reject-Privatization-Suggestion-223982-1.html
with members of Congress in March, could become a real proposal this year when
the FAA’s reauthorization comes before Congress. The Wall Street Journal
http://www.wcarn.com/news/44/44099.html reported this week that Rep. Bill
Shuster, chairman of the House Transportation and Infrastructure Committee, is
tinkering with legislation to move ATC and its employees from the FAA to
private, non-profit control. With the FAA’s current reauthorization expiring in
five months, both House and Senate staffers are looking at remodeling the
entire system, which includes 230 ATC sites and 15,000 controllers, the
newspaper reported. The ideas are based on other countries that have privatized
their ATC networks while keeping safety and regulations under government
control.

Most major U.S. airlines have said they support moving ahead with such a
restructuring, and the National Air Traffic Controllers Association is at least
willing to discuss reforms, The Wall Street Journal reported. The newspaper
quoted comments made by Paul Rinaldi, president of the controllers union: “We
cannot continue these starts and stops in planning and lack of funding. Our
aging equipment and buildings are unacceptable,” he said. Meanwhile, American
Airlines CEO Doug Parker has said he supports looking at other models for the
NAS. A study of international systems “has shown that an independent,
commercialized, nonprofit structure would deliver the greatest benefits to
airlines and customers,” he told employees in a memo quoted in The Wall Street
Journal report.
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https://secure.marke****ch.com/story/support-builds-to-redo-us-air-traffic-system-2015-05-12
A push to radically reshape the outmoded U.S. air-traffic control system is
gaining support, as airlines and some labor unions join to back change and a
top lawmaker drafts legislation that could effectively privatize services.

Rep. Bill Shuster, a Pennsylvania Republican and the chairman of the House
Transportation and Infrastructure Committee, and his staff are drafting
legislation to strip the nation’s 15,000 civilian controllers and more than 230
air-traffic facilities from the Federal Aviation Administration, possibly
putting them under the control of a nonprofit corporation, people familiar with
the plan say.

The senior Democrat on the committee, Rep. Peter DeFazio of Oregon, on Monday
said he favors putting the entire FAA into a stand-alone government
corporation, partly because he believes privatization poses significant legal
and procedural challenges. “We see common problems,” he said, but “we differ a
bit on the way forward.”

The legislative push from both sides of the aisle reflects broad concern that
sticking with decades-old management approaches and technology means the U.S.
air-traffic system— while still very safe—isn’t cost effective and is
contributing to flight delays that will only get worse as traffic increases.
Advocates for retooling the system say that the politics, funding challenges
and bureaucracy of direct government control of the FAA are inhibiting
progress. The issue is coming to a head in part because of a looming deadline
to reauthorize the FAA later this year. But partisan disagreements could still
prolong or even stymie reform.

The proponents of change include most of the larger U.S. airlines, pilot
groups, representatives of private aviators, and the controllers union, the
National Air Traffic Controllers Association, though not all of those groups
are persuaded that privatization is the best approach.
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http://www.wcarn.com/news/44/44099.html
Support Builds to Redo U.S. Air-Traffic System

By Andy Pasztor, Susan Carey, The Wall Street Journal | May 11, 2015

A push to radically reshape the outmoded U.S. air-traffic control system is
gaining support, as airlines and some labor unions join to back change and a
top lawmaker drafts legislation that could effectively privatize services.

Rep. Bill Shuster, a Pennsylvania Republican and the chairman of the House
Transportation and Infrastructure Committee, and his staff are drafting
legislation to strip the nation's 15,000 civilian controllers and more than 230
air-traffic facilities from the Federal Aviation Administration, possibly
putting them under the control of a nonprofit corporation, people familiar with
the plan say.

The senior Democrat on the committee, Rep. Peter DeFazio of Oregon, on Monday
said he favors putting the entire FAA into a stand-alone government
corporation, partly because he believes privatization poses significant legal
and procedural challenges. "We see common problems," he said, but "we differ a
bit on the way forward."

The legislative push from both sides of the aisle reflects broad concern that
sticking with decades-old management approaches and technology means the U.S.
air-traffic system -- while still very safe -- isn't cost effective and is
contributing to flight delays that will only get worse as traffic increases.
Advocates for retooling the system say that the politics, funding challenges
and bureaucracy of direct government control of the FAA are inhibiting
progress. The issue is coming to a head in part because of a looming deadline
to reauthorize the FAA later this year. But partisan disagreements could still
prolong or even stymie reform.

The proponents of change include most of the larger U.S. airlines, pilot
groups, representatives of private aviators, and the controllers union, the
National Air Traffic Controllers Association, though not all of those groups
are persuaded that privatization is the best approach.

The most aggressive say that a new structure could assure more reliable
funding, via fees that airspace users would pay, than the current mix of
congressional appropriations and a hodgepodge of taxes. That could help advance
the FAA's troubled NextGen air-traffic modernization drive, a US$40 billion
program widely criticized by government watchdogs and air-space users for
delays and for being over budget and ineffective.

Details of Mr. Shuster's legislation are still in flux, and opposition on
Capitol Hill or elsewhere could alter or derail it. The AFL-CIO's Transport
Trades Department, a coalition of unions whose members work in aviation, has
said it's willing to consider changes but strongly opposes any privatization
plans that involve a for-profit corporation or shifting FAA employees to a
private entity.

For his part, Rep. DeFazio says the FAA's financial stability could be assured
by a strong and diverse group of directors running a newly-formed government --
rather than private -- corporation. "If we can fix the problems" that way, he
said, it would avoid a host of complex and controversial issues that threaten
to expand into ideological disputes.

Still, the increasing momentum has persuaded even some veteran Washington
players that major change could be near. "The atmosphere is very different,"
said James Burnley, who served as deputy secretary and then secretary of the
Transportation Department in the 1980s. Mr. Burnley, a proponent of recasting
the FAA's role for three decades, believes Rep. Shuster's gambit is a viable
option. "This is the first time I am cautiously optimistic systemic reform can
occur," he said.

Senior FAA officials acknowledge the shift, but they remain skeptical and stand
to lose authority over roughly 60% of their budget and more than 70% of their
employees. "Some of the stakeholders have changed positions," Michael Whitaker,
the FAA's deputy administrator, said on the sidelines of a conference last
month. "It seems like the conversation is more serious," he added, and the FAA
is "open to the conversation." But critics worry remaining FAA functions could
suffer and lack funding.

Opponents also contend that restructuring the system could lead to controller
layoffs and potentially erode the safety of a network handling about 75,000
flights daily. Business-jet operators are expected to object to the prospect of
paying a substantially larger share of the system's operating costs. And Delta
Air Lines Inc., breaking with its trade group, said in a statement that
spinning off the air-traffic control organization "could result in higher costs
for airlines and travelers, reduced efficiency and disruption to the
organization."

The Center for American Progress, a think tank affiliated with liberal
Democrats, argued in a recent report that privatization would provide undue
economic benefits for airlines and could raise more questions than it resolves.
Kevin DeGood, who wrote the study, said Monday that "every frustration people
have with the FAA, they hang on privatization as a solution." But"simply
reorganizing the boxes is not a guarantee of improved efficiency," he noted,
adding that industry control over aviation-related taxes to finance
traffic-control improvements could strand the FAA's traditional safety programs
as stepchildren entirely dependent on support from the general fund.

Some House Democrats have urged caution, too. Rep. Rick Larsen, the ranking
minority member of the Transportation Committee's aviation subcommittee whose
suburban Seattle district includes many Boeing Co. jet-making facilities, has
warned that FAA reauthorization "must not be a science experiment." If Congress
reorganizes air-traffic services, he said late last year, "we must do so
methodically - with a clear statement of the problem we are trying to solve and
a clear understanding of how to solve it without compromising safety in any
way."

More than four dozen other nations, from Australia to the UK, have already
adopted some type of privatization for their previously government-run
navigation services. Advocates of changing the U.S. system say a downsized FAA
would retain authority over safety and regulation as national authorities have
done in those other countries.

Canada's government spun off its system, which funds services through user
fees, in 1996. While that system, called Nav Canada, handles far fewer flights
than the U.S., some in the industry see it as a model. Nav Canada receives no
federal funding but can sell bonds against its revenue stream and has been able
to significantly upgrade its systems and even sell its own technology solutions
to other air-navigation providers.

The idea of separating air-traffic control from the rest of the FAA began to
bubble up last summer for the first time in a decade. Today, five months before
the FAA's 2012 authorization is set to expire, there is new urgency to use the
reauthorization bill to enact long-term changes. Senate staffers are pursuing
their own package to complement anticipated House legislation, though proposals
could face more daunting roadblocks there. Final legislative action could
ultimately take years.

Rep. Shuster has said he is impatient with putting "half measures" in any
reauthorization bill. "I won't do that," he told an aviation summit in
mid-March. A week later, he opened a House hearing by saying: "The only answer
is transformational reform that will ensure that our [air-traffic-control]
service provider operates like a business, with no degradation in safety
levels."

Rep. Shuster's spokesman said this month that the goal is "serious reform" and
the committee "has looked extensively at other air-traffic models around the
world."

A number of influential organizations are joining the chorus for change. Paul
Rinaldi, president of the controllers union, hasn't signed onto the idea of
privatization but has become less resistant to the general concept. He has
complained about the unpredictability of congressional appropriations by saying
"we are going to lose our competitive edge if we don't knock it off."

Referring to possibly implementing a system like Canada's, Mr. Rinaldi said in
a speech last month, "I don't know if it's scalable...I'm willing to roll up my
sleeves and look at it and see if it's scalable."

"We have reached the breaking point" with the current system, said the union
chief. "We cannot continue these starts and stops in planning and lack of
funding. Our aging equipment and buildings are unacceptable."

Doug Parker, CEO of American Airlines Group Inc., the largest airline by
traffic, recently testified in favor of Rep. Shuster's concept. Speaking on
behalf of most members of the Airlines for America trade group, Mr. Parker said
a review of governance, finances and operational performance of selected
overseas air-traffic models "has shown that an independent, commercialized,
nonprofit structure would deliver the greatest benefits to airlines and
customers," he summarized in an employee memo afterward.

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