It’s been a long time coming, but the sponsors of the House of Representatives bill to split air traffic control into its own non-profit entity have finally put it out there for all to see. The plan is a lot like what I expected to see, but it’s missing a key component: what it’ll actually cost.
This has been a hot topic of debate for a long time, and there are differing opinions pointing in all different directions. The main question at hand is… should air traffic control remain as is where it falls into the federal budgeting process every year or should it be split out into an independent organization? I did two opposing interviews on the subject last year with Delta explaining why it likes things just the way they are and American explaining why it’s time for a change. Who’s right? Well my hope was that once the bill came out, we’d be able to make an actual judgment call. But we can’t just yet.
The so-called Aviation Innovation, Reform, and Reauthorization (AIRR) Act (read all 273 mind-numbing pages or stick with the summary instead) is actually an FAA reauthorization that includes a lot of pieces. There’s a bit in there about requiring airlines to refund bag fees if bags aren’t delivered within 24 hours of arrival. There’s another part that unfortunately extends the ban on mobile phones on an airplane. Essential Air Service gets more money. Oh, and there’s a complete and total failure to deal with the problem of lithium battery transport in any meaningful way (a lot of lip service in there). But those are all sideshows compared to the big question at hand regarding air traffic control.
The plan looks a lot like what Will Ris laid out back in December. Air traffic control wouldn’t be privatized in the traditional sense of the word. It would just be spun off into a federally chartered, not-for-profit corporation which the bill so creatively calls ATC Corporation.
ATC Corporation (ATCC) would be run by an 11-member board. The CEO of ATCC would be one of the board members. Reading the text of the bill, it’s not clear exactly who would end being CEO, but it would be someone who is a US citizen who has a relevant professional background. In addition to the CEO, there will be 10 members broken down as follows.
- 2 directors will be appointed by the Secretary of Transportation
- 4 directors will come from mainline airlines
- 2 directors will come from general aviation
- 1 director will come from the air traffic controllers union
- 1 director will come from the largest pilot union (ALPA)
The directors can’t have any conflicts of interest, can’t be federal employees or elected reps, etc. So, no one group will have majority control, but you can see how alliances could be formed to help further one group’s goals vs those of another.
There’s also an advisory board made up of commercial airports, aircraft owners, aerospace companies, drone companies, labor, the Department of Defense, and small communities. So pretty much everyone will have their fingers in this one way or another.
But what really matters in all of this is… how much will it cost? And despite all the other concerns, it’s cost that’s getting different entities to line up one way or another.
This will be funded through user fees, but there are limits on how that will work. The fees will not be paid by traditional general aviation. Anyone who flies for fun or for their own purposes won’t pay a dime. Neither, unsurprisingly, will the armed forces. This will fall largely on the backs of the airlines and business aviation, anyone who does transport for hire. At the same time, taxes on domestic tickets and on fuel should be reduced since they will no longer be needed to fund air traffic control. But we don’t know any of these details yet.
What we do know about the user fees is that they’ll be implemented per the rules set out by the International Civil Aviation Organization’s Policies on Charges for Air Navigation Services, Ninth Edition, 2012. (The ninth edition has always been my favorite, beats the crap out of that garbage eighth edition.) In short, this means the fees must be cost-based and can’t be discriminatory against foreign airlines, etc. But there are plenty of carve-outs, so I consider this more of a guideline than anything else. We won’t know what the fees will be for some time.
On the taxation side, there is nothing in this bill about lowering taxes, so I asked for clarification. Airlines For America (A4A, the industry’s lobbying group) tells me “the House Transportation Committee will vote on the bill Chairman Shuster introduced next week, as planned. Second, following that vote, the House Ways and Means Committee, which has jurisdiction over tax policy, will then move forward with the specifics of the tax structure that is in line with the criteria outlined in the Shuster bill. That typically happens in a separate bill – but the tax policy will ultimately be joined with the larger FAA reauthorization bill when it comes to the House floor for a vote.”
Get that? In other words, it’s all coming. We just don’t have it yet. And only then can we really evaluate this. Of course, not having all the details hasn’t stopped a variety of folks from weighing in.
- The Air Line Pilots Association loves the idea, but is pissed off that not all users are required to pay their share. They want less burden on airlines and more on general aviation.
- Most US airlines love this as well, and they just want it passed, naturally with a few changes if they can. A4
A is speaking on their behalf.
- Delta hates this plan. As we know Delta pulled out of A4A and this was a big reason. It says costs will skyrocket.
- General aviation doesn’t like this, at least at an organized level. The Aircraft Owners and Pilots Association (AOPA) is always against user fees. Today they pay for air traffic control via the fuel tax, so it’s interesting to me that much of general aviation could see fees drop depending upon what happens with taxes. But business aviation will end up paying more and they will be angry.
- If AOPA doesn’t like this, then the National Business Aviation Association (NBAA) downright hates it. Yes, it’s against user fees for its members, but it also says this will swing the system to favor airlines and hurt business aviation.
I’d love to say I know what’s right here, but I don’t. Without knowing what the fees will look like and how taxes will decrease, it’s hard for me to really say either way. But it sounds like we should at least get some more clarity before it comes to the floor of the House and the Senate. I don’t dislike the idea, but let’s see the numbers.
[Original air traffic controller photo via Shutterstock]