In 1974, an air traffic controllers' union advocated an independent corporation to manage air traffic control (ATC).
In the 43 years that followed, similar proposals surfaced occasionally, but none led to broad ATC overhaul.
Perhaps until now.
Aviation observers and policy experts say the current push to corporatise ATC may actually have the broad support needed to pass into law.
"It's different this time," says Robert Poole, director of transportation policy at the Reason Foundation, a policy research group. "We have a White House and a [Department of Transportation] that seem more committed… They really want to see this get done."
Poole expects that congressman Bill Shuster could introduce a bill to corporatise ATC by next month, if not sooner.
Observers predict Congress will tie corporatisation to the Federal Aviation Administration's next spending authorisation – expected before the FAA's current authorisation expires at end-September.
”So many of the traditional stakeholders have aligned," says Alex Stillman, director in the travel and transportation practice at consultancy PwC. "President Trump… has now followed through [in] bringing the idea to the public fore."
TRUMP JUMPS IN
ATC overhaul efforts accelerated 5 June when President Donald Trump proposed removing ATC from the FAA and placing it into a "self-financing, non-profit organisation" – the type of structure advocated by most US airlines.
"The President’s leadership means that we can look forward to legislation that gets government out of the way, so we can modernise for the future," trade group Airlines for America said in a 5 June media release.
In the following days, transportation secretary Elaine Chao, who observers describe as a respected administrator with vast experience, promoted Trump's plan to lawmakers in both houses of Congress.
In a clear effort to head-off criticism, she stressed the corporation would recognise existing FAA labour agreements and protect small communities' airspace access. "No one stakeholder group" would rule the organisation's board of directors, Chao added.
The DoT has made ATC reform a priority, Poole says. DoT senior advisor to the secretary for air traffic modernisation, Michael Britt, has said "his number one job was to make corporatisation happen", according to Poole.
On 9 June, Trump also announced plans to appoint Daniel Elwell, a former pilot and former FAA staffer who has supported removing ATC from the FAA, as deputy FAA administrator.
Although current FAA administrator Michael Huerta has not supported ATC corporatisation, his term expires in January 2018.
"The DoT and some new senior people at FAA are really committed, as I judge things, and want to see this happen," Poole says.
ATC overhaul also enjoys backing from Republicans in the US Congress, and, for the first time, a Congressional sponsor in Shuster, chair of the House Transportation and Infrastructure Committee.
"It never had a champion before," Poole says of earlier ATC overhaul efforts.
TRUMP'S PLAN
"We are still stuck with an ancient, broken, antiquated, horrible system that doesn't work," Trump said during an event at the White House on 5 June.
"At its core, our new plan will dramatically improve America's air traffic control system by turning it over to a self-financing, non-profit organisation," he said.
Trump cited Canada, which operates Nav Canada, as an example.
His plan would transfer FAA ATC assets, free of charge, to the new entity, which would assume ATC operations within a three-year transition period, according to White House documents.
User fees established along IATA guidelines would fund the new entity, allowing the government to reduce ticket taxes and other fees that currently pay for ATC, documents say.
"All users should pay their fair share," documents say.
The ATC entity would be managed by a 13-member board composed of two airline representatives, one general aviation representative, one airport representative, two DoT representatives and two representatives of unionised pilots and FAA workers, documents say.
The board would also include a chief executive and four independent members, says the White House.
"The new entity should represent all users impartially, and no group should have even the appearance of influence over the board," documents say.
The FAA would retain safety oversight under Trump's plan.
A 40-YEAR EFFORT
Proposals to strip ATC from the FAA have floated around Washington for more 40 years, though none resulted in broad changes.
Following the 1974 controller union's proposal, Poole's Reason Foundation wrote a report for the Heritage Foundation in 1982 proposing a corporate model, according to report published in May by the Congressional Research Service.
The Air Transport Association of America (which became Airlines for America) advanced the concept in 1985 by supporting a study that recommended an independent government-owned ATC corporation.
In the late 1980s, a commission under President Ronald Reagan recommended some ATC privatisation, the report says.
Then in 1994, the administration of President Bill Clinton proposed a government ATC corporation, though his plan failed amid opposition from lawmakers and the general aviation community, the report says.
The current push came after the FAA in 2013 furloughed controllers and deferred some ATC upgrades in response to funding cuts stemming from budget sequestration, Poole notes.
"That was the lightning that struck. A4A turned around and said, 'We can't have anything like this happen again,'" he says.
In 2014, an FAA advisory group floated the concept of an independent ATC, and the issue became a top policy objective of Airlines for America.
Shuster, working with the group, advanced the effort further in 2016 when he introduced a corporatisation bill.
Though the bill stalled in Congress, it had broad support among US airlines, with the exception of Delta Air Lines. Even the National Air Traffic Controllers Association (NATCA) approved the legislation, though the group has withheld an endorsement of Trump's plan until it reviews specifics.
THE REASONS
FAA critics say the agency has struggled with management problems and has been hamstrung by bureaucratic barriers and funding uncertainty.
Those factors, they say, have kept the FAA from effectively implementing the ATC update effort known as NextGen.
That project, which the FAA estimates could cost $36 billion by 2030, aims to transition ATC from a radar- to satellite-based system.
Indeed, a report presented to Congress in May by the DoT inspector general said several FAA organisation reforms have failed to achieve predicted cost and productivity results.
"Our work continues to find that several systemic issues underlie FAA’s problems in delivering new technologies on time and within budget," said the report. "These include overambitious plans, unreliable cost and schedule estimates, unstable requirements, software development problems, poorly defined benefits, and ineffective contract and programme management."
Critics point to the FAA's funding structure as chief among problems.
The majority of FAA funding comes from the Airport and Airways Trust Fund (AATF), which receives money from a 7.5% passenger ticket tax, flight segment fees, taxes on jet fuel and cargo waybills and other costs paid by users, according to government documents.
The US Treasury's general fund provides the balance of the FAA's money, though in recent years the general fund has provided only 0% to 30% of the FAA's total budget, according to Poole.
Congress must authorise collections and disbursements in the Trust Fund – meaning the FAA cannot spend money if its authorisation expires without extension, the agency notes on its website.
The FAA's authorisation did, indeed, lapse in 2011, causing some work stoppages.
Even FAA administrator Huerta has conceded the funding structure creates uncertainty and makes long-term planning difficult.
In addition, the FAA cannot raise money for large projects by issuing revenue bonds, Poole notes.
"They cannot do long-term planning for capital spending, and have to do it on an annual basis out of what Congress gives them," he says.
Corporatisation advocates say an independent ATC could solve many of those issues. It would better manage NextGen, and charge lower fees to users, they say.
Poole notes, for instance, that Canada's ATC costs fell 40% since that country established the independent Nav Canada ATC organisation in 1996.
OPPOSING FORCES
Delta Air Lines had in recent years strongly opposed corporatisation, citing the issue in 2015 when it withdrew from A4A.
The carrier argued a corporation could increase ATC costs, and it urged the industry to work with, rather than against, the FAA.
Although Delta's new chief executive Ed Bastian, who took over in May 2016, has followed the anti-corporatisation line, the carrier has been less vocal recently, Poole notes.
"They seem to have backed off. There has not been a peep out of them in the last six months," Poole says. "I wouldn't be surprised to see Delta rejoin A4A."
In a statement to FlightGlobal, Delta did not criticise Trump's proposal, but says it remains "committed to working together" to improve airspace efficiency and reduce costs.
"Delta looks forward to working with the administration and Congress on our shared goal of modernising US airspace," the carrier says.
Other corporatisation opponents include Democratic lawmakers, chief among them Peter DeFazio, a ranking Democrat on the Transportation Committee.
On 7 June, DeFazio released a bill aimed at easing the FAA's funding restrictions by making the Trust Fund not subject to Congressional appropriations or sequestration.
DeFazio, whose bill would leave ATC under the FAA, called Trump's plan "another giveaway to special interests" that would "jeopardise aviation access to small communities", according to an 8 June media release.
The FAA has already made significant NextGen progress, building an ADS-B ground network and creating thousands of new navigation procedures and satellite-based approaches, DeFazio added.
Other opposition comes from the National Business Aviation Association and the Aircraft Owners and Pilots Association (AOPA), which have expressed concern about user fees and undue influence by airlines.
"We will not support policies that impose user fees on general aviation,” said AOPA president Mark Baker in a 5 June media release.
Currently, general aviation and executive jet users pay for ATC through fuel taxes.
Some observers think the opposition will be overcome.
"I'm optimistic that the concerns I've heard and read about can be readily addressed. They are not on point," Southwest Airlines chief executive Gary Kelly said during a speech in Washington DC on 8 June.
Poole thinks Congress can draft legislation palatable to the non-airline aviation community.
He notes that Canada charges general aviation users an annual fee, not per-transaction charges. Those annual fees are as low as C$68 ($51), he notes.
Poole also describes concern about excessive airline influence as inflated.
"There is no intent whatsoever to do that," Poole says.
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Source: Cirium Dashboard
