Across the Aisle from Delta’s SVP of Operations on Why Privatizing Air Traffic Control Would Be Bad

If you haven’t heard, it’s time for Congress to once again try to reauthorize the FAA. I say “try” because in general, Congress is really bad at this. Usually it just passes temporary extensions which keeps the lights on but does nothing to push the FAA forward. On occasion, it can’t even do that, and the FAA shuts down (excluding essential functions). In light of this governmental dysfunction, there is talk about trying to privatize the air traffic control organization. While Airlines for America (A4A) and its members support the idea, Delta has notably opposed it.

Delta is really starting to push on this and approached me about doing an Across the Aisle interview with Steve Dickson, the SVP of Flight Operations. A4A has asked about the possibility of interviewing someone at an airline on the other side of the coin. That’s going to happen after Thanksgiving. For now, here’s a nice long interview you can read while you digest your turkey later this week.

Planeline

Cranky: Thanks for taking the time to talk, Captain. Let’s start by explaining why you’re talking about privatizing air traffic control now. Modernization has been a topic for many years.

Steve: Sure, as you noted, the modernization of the air traffic control system has been decades in the making and it continues to proceed. It really is an evolution and Delta’s been involved in a significant way for a number of years. Most recently we saw a pretty significant improvement in the way weAcross the Aisle from Delta engaged with the FAA in 2009 in the NextGen implementation task force. There’s been quite a bit of activity, a number of initiatives that have rolled out that have seen improvements in the operation of the system. The disagreement at this point is whether it makes sense to split out the air traffic organization from the FAA. Our position is that would be a distraction and would actually delay what we’re doing in our current collaboration with the government.

Cranky: Let’s get into that. If you can, please explain why you believe the way you do, that this shouldn’t be broken out?

Steve: Sure. I think it really comes down to four basic points. The first one being that we don’t see at this point in time how privatizing the air traffic organization would improve efficiency or the performance of the ATC system. I can get into that in more detail. We also see the potential that we could see some cost increases that our customers may ultimately end up having to bear. Third, we think privatization will create new barriers that will set back some of the implementation initiatives we already have quite a bit of momentum on. Finally, we think that separating the safety organization from the operations organization doesn’t make much sense. That stove pipe that’s created there would be counter productive.

Planeline

Cranky: Alright, then let’s start with the efficiency piece and get into more detail since you brought that up. Is it that you don’t think this will improve it or you think it will be harmful?

Steve: I think it’s both. We actually think that it would create a distraction. It would take quite some period of time. It would be a distraction from those who are working on the implementation of new operational capabilities. During the time period it would take to run its course, whether 18 months, 3 years, 5 years depending on the model you look at, there will be some unintended consequences in terms of disrupting and interrupting work that’s already underway. That’s one of our biggest concerns and that’s why if you look back 20 or 25 year ago, you might come to a different conclusion at least with respect to that point.

Cranky: Let’s say they do go down the privatization path and there is disruption. Do you not think once it’s completed that it would be more efficient at that point?

Steve: No not really, because first of all the system in the US is unlike any other system in the world. It’s considerably more complex than what we see even in Europe. And we have fewer air traffic control delays than in most other industrialized countries. If you look at Delta’s operation for example, on a good weather day we’re running 92 to 94 percent on time and we’re setting records. We’ve had 133 days without a cancellation. That kind of performance, if the system were broken, we wouldn’t be able to achieve. We’re the largest operator up and down the East Coast.

Planeline

Cranky: Of course the Northeast is where the concern is. Nobody is worried about congestion in Salt Lake or Minneapolis. So if we talk about the Northeast, you don’t see a need for improvements around New York? You have a couple of hubs there. Are you saying it’s fine the way it is or the current path will solve those problems?

Steve: You’ve actually set me up for the next point I was gonna make. With respect to the Northeast, there absolutely need to be improvements made and we think the path that we’re on will provide those improvements. But privatization will not address the structural issues in the Northeast. There aren’t new airports being built. The US is often compared to Canada, Nav Canada in particular, but the New York airspace every day handles the same amount of traffic as all of Canada. You’re dealing with very close proximity of airports, a lot of demand. There aren’t new airports being built, there aren’t new runways being builtin the northeast. Without those physical infrastructure improvements, privatization isn’t going to help. The implementation of the improved capabilities that are already in the pipeline, that’s what’s going to make the difference.

Planeline

Cranky: One of the things that sticks with me as being a primary reason to consider is the interruption in funding that occurs every 5 minutes when Congress decides to use the FAA as a bargaining chip. Is the current method not something that concerns you or is it just not enough of a problem?

Steve: I’d say the latter. Unstable funding is an issue but I also think Congressional accountability is important as well. We believe the funding issue could be addressed through changes in the FAA budgeting process without privatizing the organization. You don’t see the same kind of difficulties in other agencies of the federal government. If that’s the problem, let’s address that. You don’t need to privatize.

Cranky: The issue is they just never seem to properly fund it for any period of time.

Steve: Sure it creates some challenges, but remember this is an evolutionary process. That’s one of the difficulties we face. The NextGen project was said to be some sort of revolution or big bang. You introduce all this new technology and the system will have big improvement. But the system we have now is evolving and it has improved. We’ve seen improvements at several large airports. Specifically Atlanta which, by most measures, has been the busiest airport in the world. We’re seeing new efficiencies with new departure procedures that have allowed us to take advantage of new technologies. That’s led to fewer ground delays, better utilization of gates, taxiways, runway, environmental benefits. That’s been going on for really more than a decade. We wouldn’t see the kind of operational performance Delta has been demonstrating without these improvements. And there’s certainly more to do. Were only at the tip of the iceberg of what’s going to be happening over the next decade or so.

Planeline

Cranky: Let’s talk about the second point, costs.

Steve: We’ve looked at systems in other countries and it’s a mixed bag on what’s happened. When we visited Nav Canada, we actually saw some decrease in their air traffic control costs, but we had also seen a decrease in volume and we also saw increases in the cost for their airport system. So if you look at the entire cost of the system, it had actually gone up since before Nav Canada was created. Look at the all-in costs in the US vs other systems around the world, we actually see that the US stacks up very well. I think there’s really just not any data that suggests that the airlines or traveling public would benefit to any degree on cost advantages.

Cranky: If it’s just no benefit of cost advantages, that’s probably less of a concern than severe cost increase. Is the real concern that people say this is going to save money but it won’t or is it worse than that and it’ll just be very costly.

Steve: We feel like it’ll be the latter where there’s a certain loss of control. You would have to have some sort of user fee system and you could have taxes on top of that. It ends up increasing the price of a ticket and increases the overall cost of the system.

Planeline

Cranky: The proposals I’ve seen have suggested creating a not-for-profit federally-chartered corporation. It’s not truly spinning it off to a private company. What is that most similar to in the other systems you’ve seen and does that make a difference?

Steve: I’m not sure it makes a whole lot of difference. Frankly, it depends on what the outcome, what all the twists and turns of the legislative process are. At Nav Canada, I believe they have a 15 member board. The operators are about a third of that board. There are a lot of other stakeholders that get involved. You don’t necessarily have the control over how decisions are made that you’d like to have. There’s a lot of detail involved in what the structure would look like. We haven’t actually seen a specific proposal. It’s just not out there yet.

Cranky: Do you think you have more control today? I mean… it’s the government.

Steve: We feel like we have a forum to work with the government. Richard Anderson our CEO is the current chairman of the NextGen advisory committee. He works with the deputy administrator to make recommendations on what the industry, not just the airlines, thinks the next priorities are that the FAA should be working on in terms of improving performance of the system. Nothing ever happens as fast as you’d like, but we’ve got a pretty good track record of these incremental improvements and that’s given the industry a pretty strong voice in Washington.

Planeline

Cranky: Alright, then on to the third point which was these new barriers?

Steve: Sure, I talked about this before. The process of removing the air traffic organization is going to necessarily result in some period of organization disruption. When you work across the FAA whether it’s the aviation safety and regulatory side or the air traffic organization, they’re able to work across those lines of business fairly effectively at least at the leadership level. When that goes out into a different entity, it formalizes a separation between the two. We believe it’s more difficult to get things done in Washington. A lot of the improvements to the system are not technology. They’re training, standards separation criteria that the standards side has to push forward… when there’s a separation it remains to be seen if that would allow us to proceed more efficiently or provide another barrier to process.

Planeline

Cranky: This is your fourth point, I believe, that separating the FAA would be problematic. There are a lot of people who want to do that, see a problem with the FAA being both the promoter of the industry and the regulator. But your concern is specifically about air traffic control and the ops side?

Steve: Yes, splitting off the air traffic control organization from the safety, airports, flight standards side of the FAA… all those areas have a significant stake and have something to say as we implement new air traffic control procedures. When you separate out the air traffic organization, then they have to go hat in hand to get things done.

Planeline

Cranky: Give people some hope here. You say there’s been progress, but the general feeling in the public is it’s never going to change. It’s never going to get better. Obviously you see this differently, so give people some hope about where things are going and when we’ll see that.

Steve: I would just come back. We’re seeing all the network carriers, I know at Delta we’re setting operational records. We see the performance of other carriers improving as well. At Atlanta within the last 2 years, we’ve seen a minute and a half reduction in our departure queue delays and that has been worth quite a bit of savings here. On the order of $15 to $20 million a year. We’re seeing similar benefits in other locations.

Cranky: What do you attribute that to in Atlanta?

Steve: It’s two things, the implementation of new departure procedures that allow us to do 3 departure routes off of 2 runways. This takes advantage of the more precise GPS systems on the aircraft. What’s happened is over a period of years, the controllers are now able to clear aircraft for takeoff more rapidly during big departure banks. You have tighter degrees of separation on departure if for example, you have one airplane heading to the northeast and the other to the southeast. You can space them closer together instead of having them in a nose to tail string.

Another change in the rules has allowed us to operate on parallel runways more independently. This is a change in the wake turbulence separation criteria. A lot of modeling and a lot of work with NASA and the FAA and other stakeholders. We’ve got the ability to fly airplanes closer together. All of these things have led to getting more capacity out of the infrastructure that’s already out there. For example in Atlanta we have 5 runways. One of the reasons our taxi times have gone down is we can get better utilization of the runways closer to the terminal and we don’t have to resort to that far away runway as often. It’s not only in Atlanta. It’s other places around the country.

Planeline

Cranky: Why are you standing alone on this side of the coin in terms of privatization? Why are A4A and its member airlines standing on the other side?

Steve: That’s a good question, you’d have to ask them why they think privatization would be a silver bullet. Frankly when we look at the data and we look at the roadmap and the way forward, we think that collaborating with the FAA is more effective way forward than going through this privatization exercise. We see more risk with privatization than we do benefit. That just comes from years of rolling up our sleeves and really looking at the data and seeing what we can do to improve the performance for our customers.

Planeline

And ask them I will. Stay tuned for an interview with someone on the other side after Thanksgiving.

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35 Comments on "Across the Aisle from Delta’s SVP of Operations on Why Privatizing Air Traffic Control Would Be Bad"

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Sean S.
Guest
I have to agree here. Not to necessarily inject another form of politics in here, but in many ways privitization is akin to charter schools. The form the school or the agency takes matters less than the internal structure, staffing, and competency of the people in it. There is no clear expectation, unless the privitization scheme radically alters the structure of air traffic control, that you will necessarily see any change in how business is done. It would just change the funding mechanism, and maybe the larger stakeholder system, and also throw in a monkey wrench of introducing another seperation… Read more »
Nick Barnard
Member

The big argument I’ve heard is it frees the air control operations organization from the the government procurement process. Right now everything has to be bid on, and is bid out to the lowest qualifying bidder.

Bob
Guest

Congress can do whatever they want. If they want to carve out an exception for the procurement process, they can do it.

If congress were so inclined, they could give the FAA more money, and the FAA can do the work inhouse without having to farm it out the lowest bidder.

Don Roberto
Member

Nick

You are quite wrong. The FAA has not been bound by the Federal Acquisition Regulations (the FAR) for many years.

Also, nothing in either the FAR or FAA regulations requires award to the low bidder, rather tradeoffs analysis is required between cost, technical merit and documented past performance.

Nick Barnard
Member

Don, I sit corrected then.

danwriter1
Member

Hey, kids! Count the wrong things in this graphic:

[image: Inline image 1]

JoEllen
Guest

Would privatization then lower the salaries of air traffic controllers ? It would then become another
“dumbing down” of the quality of life that is hired at lower salaries, less benefits, etc. while the private entity that runs it becomes just another monopoly and the only game in town. Leave it alone.

Nick Barnard
Member

Air traffic controllers are unionized. I’d expect that the only way they’d agree to work for a new organization is if their current contract was picked up by the new organization, or they negotiated and agreed to a new contract.

Bob
Guest

Don’t forget that Reagan busted the union in 1980. Union contracts aren’t even safe. 2005 was another bad year in terms of ATC contracts, and that lead to a lot of attrition. They had to renegotiate them a couple years later to get people to stay on the job.

So maybe I’m arguing with myself here. On the one hand, the feds can bust the union if they want, the proved their ability to do that in the past. On the other, if contract terms suck too bad, people quit.

Andy
Member

You underestimate a person’s desire to remain employed.

Nick Barnard
Member

Which is really to the detriment of people as a whole. If they’d be a little more risk tolerant employers couldn’t push them around as much.

Bob
Guest

Let’s be honest, in the US there is effectively one employer for air traffic controllers. Privatizing the system wouldn’t change it.

Sean S.
Guest

You underestimate people’s desire to hit early retirement. Or the fact that if salaries are not commensurate with training, that people simply won’t go into the field. You can only get so much blood from a stone.

grichard
Guest

Yeah: injecting a profit motive into air traffic control seems on its face like a Bad Idea. Perhaps they could give the contract to Comcast?

Nick Barnard
Member
I should pull out one of my old Popular Sciences from 1989 or so when they were promising “next gen” air traffic control by 2000, with things like point to point routing, data messaging, RNP, and quite a bit more. The FAA has promised these things for a long time, and hasn’t gotten there universally. To top it off the FAA air traffic control operations team doesn’t follow their own safety and staffing requirements from the safety side of the house. The FAA has had 20 years to get this together and they haven’t. As much as people malign the… Read more »
Bob
Guest
The USPS is also insolvent, and congress requires a bunch of crap that the USPS can’t afford. You’re talking two different things here — strategic and tactical. On the tactical side, the USPS runs fine, and DL is arguing that the NAS runs reasonably well as well. They’ve certainly got the operational performance to back it up, and they’re proud of it. But from a strategic standpoint? The USPS is in the tank just as bad as the FAA is. And they’re both where they’re at because congress likes to play games with funding. I don’t consider a Post Office-like… Read more »
Nick Barnard
Member
The USPS is insolvent mostly because they have to fund retirement in a way that no organization in the US private or public has to. If you strip those costs out, the USPS is profitable. I’d argue that USPS has strategically worked its straight jacket pretty well, they’ve grown the package business both on the point to point side, as well as providing last mile delivery. They’ve modernized their IT systems pretty smoothly. The USPS can withstand location shutdowns and carry on. (Seriously they do it all the time, there usually is a Post Office or thirty closed for security,… Read more »
hsano
Member

Just before I left Hughes Aircraft in 1985, I was working in a group that was submitting a NextGen FAA proposal. It sounded like NextGen was coming soon. That was 30 years ago.

Bob
Guest
I make my living working for organizations that do R&D work for the FAA. I happen to agree with Delta’s position here — and don’t under estimate the difficulties in transitioning the system from the feds to a private organization. Look at what happens when two airlines try to merge, United and Continental still have IT issues years afterward. The NAS is a complex system, I wouldn’t expect a transition to be painless. I’m also not so sure that congress would leave a private system alone. Airlines are non-government owned entities, and while they were “deregulated” in 1978, are still… Read more »
Nick Barnard
Member

Pulling out United and Continental is a straw man. I could pull out the opposite and argue that the transition could go as smoothly as Northwest and Delta or as smoothly as US Airways and American seem to be going.

I agree the proponents of this idea do need to document a funding plan.

Bob
Guest

Why is it a straw man? Because it doesn’t suit your political agenda? The reality is that large IT projects do fail (look at healthcare.gov) and some succeed (look at all the stuff the NSA does that we never hear about).

What really holds the system back is politics. For this system to really shine, you need to get politics out of the way. You raised your own straw man argument above — the USPS — and the reality is, there’s plenty of politics in the way, no matter what the governance of that organization.

Nick Barnard
Member

Its a straw man because you replaced a one thing (privatized NAS) with another United/Continental’s merger.

But yes, I will agree with you that large IT projects do often have problems.

One of the ways to minimize politics could be to make this organization less beholden to the federal government by spinning it out into another organization that is still regulated by the federal government, but not operated by it. (Like the airlines.)

George
Member

What I got from the conversation is equivalent of the answer “Location” x 3. It was Delta. Delta, Delta and ATL, ATL, ATL. The current situation best suits the DL operation and competitive position in the areas served. I look forward to the opposing viewpoint.

Nick Barnard
Member

I’d like to see that article as well.

Although, as a counterweight AA could also say DFW, CLT, PHX all run fine! But then they’ve got PHL which is a little more hemmed in.

I doubt CF could arrange it, but perhaps it’d be fun to have a conversation with both of them at the same time so they can pick apart each other’s arguments.

LT_DT
Guest

Just because an organization is private, it doesn’t mean that it’s immune from government shutdowns if its funding comes from Congressional appropriations. In some cases, it might be better to have controllers be feds: you can make a federal employee work during a government shutdown, but I doubt you can make a contractor do so if they’re not getting paid (possible Antideficiency Act violation).

Don Roberto
Member

I’m now a Government contractor, and I can tell you from experience that if the Government is shut down, I don’t work.

Nick Barnard
Member

Ideally if the organization is private the only funds that it receives from the Feds are for providing services to US Government owned planes. A private organization could still operate during a government shutdown even if it is a government chartered organization. (AFAIK, the USPS keeps running during government shutdowns.)

1js7371
Member
Perhaps Delta favors privatization so that they can then take an equity stake in the new provider of ATC services. As it stands presently, the controllers treat all carriers alike. But if one owned (at least part) of the “new” ATC, that carrier would get priority handling from its (essentially) own employees. God knows what they would charge the other carriers for these same services…………You’re thinking: That sounds ridiculous. But consider Delta bought a refinery to control its fuel, is investing in worldwide joint ventures to control its access, and clearly wants independence from the other domestic carriers via its… Read more »
Nick Barnard
Member

Delta is against privatization, not for it.

George
Member

But Delta is opposed to privatization!

1js7371
Member

Yes, I read the interview (and thought Mr. Cranky did a great job), but I take a contrarian view on Delta. They SAY a lot of things (eg. “We value our relationship with Alaska Airlines in Seattle.”). Let’s see how this plays out over time.

William Robbins
Guest

Arubaman, you spent a lot of energy and time “accidentally” making Delta’s point as to why privatization is bad and could cause disruptions or even preferential treatment for certain airlines depending on how the privatization may occur.

Will Robbins
Guest
I think Delta is the adult in the room here realizing that present state of affairs are probably the best they can possibly be without building new airports, infrastructure, and maintenance so to “rock the boat” in any way would and arguably COULD even do is cause more problems and disruptions. The funding problems are the result of Congress not being competent enough to set up a system to provide an adequate funding stream so as to why it would be a halfway reasonable idea to let that exact same Congress restructure the entire system is beyond me. Unfortunately the… Read more »
Will Robbins
Guest

“…THE present state of affairs…” ***

(Can’t find the edit option)

Will Robbins
Guest
(Final edit:) think Delta is the adult in the room here realizing that the FAA’s current efficiency and operations status is probably the best it can possibly be without REAL solutions like building new airports, infrastructure, and properly maintaining it all, so the best result of “rocking the boat” and making changes in any way would (and arguably COULD) even do is cause more problems and disruptions. The funding problems are the result of Congress not being competent enough to set up a system to provide an adequate funding stream. As to why it would be a halfway reasonable idea… Read more »
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