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]
I am somewhat saddened to see that one stakeholder seems not to be represented – the traveling public. Unless the secretary of transportation uses their assignments to specifically get an advocate for safety and reasonable cost control (lets use TSA as an example of a new entity doing something that already was done).
Safety regulation would remain the purvue of the FAA.
This should enhance safety, since currently the FAA polices itself when it comes to ATC safety, and they have a history of not following their own recommendations.
The NTSB is who provides the majority of analysis and investigation when it comes to aviation accidents. The fact that their recommendations aren’t universally adopted by either Congress or the FAA is not going to be helped by spinning off ATC. There would still be a board whose interests are at times divided (the major 4 having a seat at the table will likely fight anything that impinges on scheduling).
I am surprised a bit that NATCA is for this, but there mus tbe a feeling that it does not interfere with their collective bargaining rights and their status as far as Federal retirement etc.
True the NTSB investigates accidents and makes suggestions to the FAA.
The FAA writes the rules that airlines and aircraft manufactures must follow. It also writes the rules that the ATC organization should follow, but doesn’t.
I’d expect that we’d see the new ATC organization evolve a relationship with the FAA similar to the airlines. There would be an office to oversee the organization, it would write rules and monitor compliance with those rules. The new ATC organization could also ask for changes to those rules as well.
Money. The union wants to have an uninterrupted tap of money from a self-funded company so its members do not have their pay interrupted during a budget show down.
Are you suggesting Kate Hanni be appointed to the board?
I will move to Atlantis if that happens.
This is a terrible idea. Allowing mainline airlines to have 40% of the seats on the board paves the way for them to push the new organization in ways that only benefit them–especially when a fifth seat belongs to the largest union. 50% of the directors directly benefit from the airlines making more money.
Furthermore, there’s no outline of what it will actually cost and if it will really be benifical to the national airspace system, or the general public. It’s sad to see that there is legislation that might be voted on without a true understanding of the costs involved.
I also wouldn’t consider that ALPA news release a ringing endorsement that they love the idea.
The current mechanism of using fuel taxes works just fine. With fuel being cheap, this would be a wonderful time to raise them if you wanted to properly fund the FAA. Congress needs to pass a clean, long term funding bill for the FAA, there are too many unknowns with this legislation, or with another short term extension.
Well, 5 out of 11 is just under 50%, but still …
I see ten seats represented, not 11. Even if the airlines + union make up 50% of the votes (and assume they always vote together) there’s only one swing vote required for a majority. Not sure I like that.
As mentioned in the post, there are 11 seats. The CEO has a seat.
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How much will this cost? If the flying public are being forced to pay a good portion of this, the answer unfortunately is who cares.
Brett, if you want a fully informed view of “corporatization” (not privatization), read many of Bob Poole’s Reason Foundation newsletters on the subject. He probably is the most knowledgeable person on the subject. I got to know Bob when I was a consultant to American, Boeing and others looking into improving ATC management worldwide. We did some of the first cost benchmarking and investigated how other countries were moving to more efficient ATC services – Services Australia, Airways New Zealand, Nav Canada, Eurocontrol and others.
Well if the airlines will have to pay part of the costs, then they will just pass that on to passengers so for the traveling public which will cost less, being taxed on tickets by the Feds or taken advantage of by the airlines? Unless there is a cap on how much the airlines can charge the public, then it may not be a good thing.
You know… I hear talk about “costs being passed on to customers” but IMHO, airfare is strictly demand based. Airlines charge what they can get away with. We see it all the time with “fuel” surcharges. When fuel drops, it’s not like the fees disappear.
Like Amtrak and USPS and Federal Reserve and the housing agencies and more. Quasi-government entities.
IMHO this is a half-baked Nav Canada template that is tainted with political and special interest platitudes. It’s a feeble first draft….back to the drawing board folks.
I’m not sure I’d believe whatever tax is going away unless I saw stronger language in the bill. I think about toll roads, where the tolls were supposed to go away after the road was paid for. That never happens.
Dan – As noted, that information will be included before the bill comes to a vote. We just don’t know details yet.
As a private pilot, I do have a to say that I support the small guys not paying for ATC services. As that sort of pilot, many ATC services are optional. But, safety is improved when we have more people participating in the system instead of avoiding it. If ATC fees were charged on a per-flight/per-use basis, it’s too easy to see people avoiding service because it would cost “extra” money.
Sure, you’re likely not going to see VFR guys land without a clearance, but VFR flight following is certainly optional, and useful, especially in marginal conditions.
My guess is that your commenters know far more about what this bill is about than any of our 435 members who might vote on it. Think aviation and then throw in everything but, or rather to include the kitchen sink and there you have 273 pages of hilarious reading.
I got to page 12 (section 122) on “Mothers’ Rooms at Airports” but the section on the sense of Congress on “One Engine Inoperative Procedures,” begged that I read on. “Technical Corrections” are always a must-read!
That EAS program, of which GAO will have to complete a study in 6 months, “Air Shows,” a “Tower Pilot Program for Rural and Small Communities,” and something here, something about “Consumer Rights” sort of added to my questions of privatizing air traffic control, or whatever this bill is trying to authorize.
Just me, I suppose, but couldn’t Congress consider a nice, clean authorizing bill explaining how I, a taxpayer, who is going to ultimately pay for all of this, could understand how much I’m paying now and much better (or worse) I” be after privatization is put into place?
I know this is so much better than having the appropriate aviation agencies simply write the regulations approving a the change, if they think this is a good idea, or have the President issue a 1-page Executive Order to mandate this or that. Then Congress could stay home Tuesday, Wednesday, and Thursday, too. Having to work 3 days a week is hard, and it’s going to snow in DC tomorrow so, these bloggers really need to be watched more closely so that this stuff is better kept under wraps.
I’ve never quite understood the obsession with “clean” bills and having a simple explanation when it comes to what often is extremely technical and dense area’s law. Should legislators have a clear explanation for what the bill does? Yes. Does the bill itself ever contain, or rather should be simplified to ensure that the general public can understand it? No. Technical area’s are always going to be stuffed full of complexity, be it banking, insurance, or any other regulatory area. Nature of the beast.
The thought with clean bills is each bill should address one topic.
This might be one broad large topic such as transitioning the ATC system to a non-profit corporation. A bill like this might include things such as the timeline for the transition, the handling of current FAA ATC employee benefits, the handling of the FAA’s safety role.
But “Mothers’ Rooms at Airports”, “Recycling Plans for Airports”, “Air transportation of lithium cells and batteries”, “Remote Tower Pilot Program for Rural or Small Communities.”
These things should stand on their own, or at the very least if its determined that they’re non-controvercial just put into one “Aviation Legal Update of 2016.”
How things are now, if Senator Jim Smith votes against this bill because they don’t like the ATC transition to a private company, their competitor can come out against them and say, “Senator Jim Smith voted to have lethal flammable lithium batteries on airplanes.” when in reality Senator Smith might’ve been for that provision, but voted against it for other reasons.
I don’t think the current fuel tax is going away for GA under the current bill. GA pilots are actually will be paying for the service.
AOPA also want Class 3 medical reform, which was not addressed in the bill.
Ted is right. The tax primarily is for the airport trust fund, so that will not go away. I am a general aviation pilot for clarity and this is a dumb idea cooked up by the pimps (lobbyists) for the hookers to execute (politicians). General aviation uses so little of the ATC environment and this is obvious by how few of the communications are for such aircraft. Because the chunk of airspace I use is never inhabited by airliners (they are all above me), i am almost always routed direct from my small, general aviation airport to my destination, a small general aviation airport. While small aircraft purchasers do spend large sums on our planes, we hate being nickled and dimed. This will drive people out of the market and put all the people who build these planes (in the USA) out of jobs.
Oh yeah. And I agree with another poster who said it wasnt a good idea to let the airlines have so much say. Remember what happened when we let the airlines pay for and choose airport security, don’t we?
There is a place for government and this is it. Air Traffic Controllers care about their jobs and like what they do. Putting them to work for a company will just create labor issues and an unhappy work force.
The argument about security is a straw man.
September 11th was an exploitation of a paradigm from the 1960s and 1970s where hijackers wanted money or attention. Flight crews were taught to act just bank tellers do in a robbery: Save life by complying with the hijackers.
Its also strange that General Aviation Pilots are complaining about this. They’re expected to pay the same amount they currently play: nothing.
Also, the safety argument seems iffy at best. Pilots are also responsible for safety and most of them are unionized employees that work for a for profit company. Why would having unionized air traffic controllers that work for a non-profit company be any different?
I’m not sure you know what a straw man is, but this isn’t it. A straw man is an intermediary, oh never mind.
General aviation pilots will have to pay a whole new set of fees in top of the gas taxes we pay even though we rarely use atc services and when we do, it’s not at a class b airport. In fact, it most likely is an rnav approach which we do by ourselves without radar or atc oversight. We are not unionized either. If I am, it’s a union of 1.
Generally, the fuel tax averages around $.25 per gallon. I take on 120-140 gallons at a pop. Then there is th sales tax, annual registration, etc etc.
In every country that has privatized air traffic control, fees continue to rise because there is no accounting for a government corporation. I have seen this in Canada. General aviation employs thousands in this country and generates tons of tax revenue. It is also one of the last bastions of purely American jobs that are not shipped abroad.
Shortsightedness is the hallmark of foolish policies such as this that appeal to the grasshoppers, but not the ant. This is h government cannibalizing its own people and starving itself of future revenue for a quick payoff today.
Did you miss the point in the article that in the proposed law general aviation will pay nothing more than what they currently pay?
That sounds like a good deal to me.
I’ll leave the cereal human discussion untouched.