Air traffic control commercialization can change the incentives in the ATC system, Eugene Hoeven (pictured at right) said during a panel discussion last Wednesday, leading to dramatic improvements in the industry. Hoeven, the director for ICAO affairs of the Civil Air Navigation Services Organisation (CANSO), the trade association for air naviation service providers (ANSP), spoke at an American Enterprise Institute panel on February 20. (Here are event information and media, and here’s the speech.)
Hoeven said that today’s airline troubles are a result of bad policies, including the failure of lawmakers to recognize ATC as an integral part of the air traffic system. He said that satellite-based technologies would be the long-term operational answer. But “all this costs an awful lot of money.” Hoeven looked at the debates over FAA funding that have consumed the aviation community for the past several years, and he concluded that “the FAA, just like the airlines, is a victim of bad government policy, constant political meddling and bipartisan politics.”
So, he asked, is commercialization the answer? He flatly rejected “privatization,” the selling off of the ATC system — echoing moderator Ron Utt’s statement that privatization would be a no-go — but he said that by focusing on how to fund the FAA, we are only responding to symptoms. Commercialization might have a role in “creating the right institutional environment that will make the U.S. air traffic system more responsive to the needs of the nation.”
He pointed out that the United States is one of only a few major industrialized countries that have not commercialized their ATC systems. In Germany, Australia, and New Zealand, there are autonomous government corporations to handle ATC. In the UK, the ANSP runs ATC through a public-private partnership. NavCanada is a fully privatized, nonprofit corporation. “Where governments have ‘let go’ of ANS provision,” he said, “and granted greater autonomy for the ANSP, there has resulted a greater responsiveness to the needs of the aviation community.”
These commercialized entities rely on user fees for the services they provide, not taxpayer dollars. A user fee structure allows the users to hold the ANSP accountable for the services they provide. Hoeven said that countries with commercialized ATC enjoy greater responsiveness to airlines’ needs. The process by which this occurs begins with separating the service function from the regulatory function — allowing the FAA to focus on safety and oversight, not on service provision. The ANSP then begins to see its users as customers and gains a service-oriented focus. Efficiency gains follow, Hoeven said, after which comes regional and international integration. “The United States air traffic control service, as a government service provider, is still stuck squarely in Stage 1 of ANS development!”
Commercialization of ATC, Hoeven said, is about clarifying “the public interest in air navigation, which has long been associated with public safety, national security, system availability and efficiency, traveler convenience and environmental responsibility” — all of which commercialization can allow an ANSP to focus on. Commercialization also clarifies who the customers/users are: air traffic system users and, by extension, the flying public — not Congress or the air traffic controllers the FAA employs (Ed.: Isn’t this a problem with any public-sector union?)
Hoeven concluded: “Has ATC commercialization been successful? The answer is an unequivocal and resounding ‘Yes, Yes, Yes!'” By changing incentives so that the ANSP focuses on customer service, commercialization can generate expanded capacity, cost savings, improved efficiency, better technology, and improved safety. He called on U.S. policymakers to set aside politics to focus on steps that will fundamentally improve U.S. ATC. He also pointed to CANSO studies of commercialization for details.
Joshua Schank, a transportation scholar at the Bipartisan Policy Center and former transportation adviser to Senator Hillary Clinton (D-N.Y.), commented that much of the president’s aviation agenda has been held up because of reflexive opposition to anything the president might propose. The real barriers to ATC funding reform, he said, are general aviation interests (which stand to pay more under a user fee system) and the National Air Traffic Controllers Association (NATCA), the controllers’ union. Even the most reform-minded Democratic legislator won’t buck NATCA, Schank said.
Photo courtesy of CANSO.