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Old 10th Feb 2016, 22:18   #1 (permalink)
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US privatization of ATC

Republicans introduce a bill to separate ATC from FAA and privatize.

(Apologies if this has been posted elsewhere, could not find it in N America...)

There is an article on Thehill dot com, sorry cannot post a link.

Seems a frightening idea given US' record on privatizing these types of industries....
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Old 10th Feb 2016, 22:48   #2 (permalink)
 
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Link:

Conservatives rally behind independent air traffic control plan | TheHill

@Smott999

Privatization is different than deregulation. I think you may be mixing up the two.

Right now the FAA has a conflict of interest. They run the ATC system and also regulate it. It's like one hand policing the other hand.

Here in Canada we privatized our ATC almost 20 years ago. And ATCs in Australia, Germany, New Zealand, and Switzerland are also private / non-government. (Plus the UK NATS is partially private if I'm not mistaken).

Privatizing the US ATC would be quite a complex process, undoubtedly. But it may be the right thing to do in the long run.

By the way, privatization was seriously proposed back in 1994, by Bill Clinton.
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Old 10th Feb 2016, 22:55   #3 (permalink)
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Thanks for the info

I guess it's fair to say that as a long time US resident I am suspicious of privatization in areas where public safety is concerned, as there always seems to be a profit motive entering the equation. And certainly here profit over safety is the rule.
But indeed I am cynical!....
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Old 10th Feb 2016, 22:58   #4 (permalink)
 
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I guess it's fair to say that as a long time US resident I am suspicious of privatization in areas where public safety is concerned, as there always seems to be a profit motive entering the equation. And certainly here profit over safety is the rule.
But indeed I am cynical!....
And quite rightly so!
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Old 11th Feb 2016, 00:12   #5 (permalink)
 
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I don't see that the OP has mixed up anything at all.
The question is what benefits would accrue from a privatization of an ATC system that handles far more traffic terminating and originating at far busier airports than Canada and all of the other countries with privatized ATC have combined.
We do have a terminal problem in some US markets, but that's a matter of too many flights trying to use too little pavement. This works pretty well until weather intervenes and no amount of ATC improvement can help with that.
In short, ATC privatization seems like a solution in search of a problem, or maybe someone's wet dream about the profits to be reaped, if only in outsized management salaries in some non-profit scheme.
Thanks, but no.
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Old 11th Feb 2016, 00:12   #6 (permalink)
 
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I'm cynical as well, and it usually turns out I underestimate the consequences.
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Old 11th Feb 2016, 01:17   #7 (permalink)
 
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I always knew Americans secretly love big government. Profit == evil!!

I think all of the privatized ATCs are non-profits and even management salaries are subject to board caps.

In these types of companies, a large percentage of the board members (often a super-majority) are elected by the Government and by stakeholders (e.g, Airlines, GA groups, Unions, etc.)

E.g., for NAV CANADA, the Government of Canada has 3 board seats, the Airlines collectively have 3 board seats, the Unions have 2 board seats, a GA group has 1 board seat. Plus there are a couple independent seats from non-aviation industry.

Airlines and other stakeholders pay $$$ in "user fees" to fund NAV CANADA. There is zero chance they will let NAV CANADA and/or its management reap huge profits while compromising service or safety.
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Old 11th Feb 2016, 01:47   #8 (permalink)
 
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The Flight Service Stations in the US were privatized 20(?) years ago. it took around 10 years for the contractor to come up to the promised level of service, even as the standards of service were reduced (e.g., fewer in-person and radio briefs; reliance on Internet briefs).
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Old 11th Feb 2016, 03:45   #9 (permalink)
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a GA group has 1 board seat
.....aaaaand that'll be the final nail in GA's coffin.

Europe here we come.
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Old 11th Feb 2016, 11:37   #10 (permalink)
 
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Originally Posted by fdcg27 View Post
I don't see that the OP has mixed up anything at all.
The question is what benefits would accrue from a privatization of an ATC system that handles far more traffic terminating and originating at far busier airports than Canada and all of the other countries with privatized ATC have combined.
We do have a terminal problem in some US markets, but that's a matter of too many flights trying to use too little pavement. This works pretty well until weather intervenes and no amount of ATC improvement can help with that.
In short, ATC privatization seems like a solution in search of a problem, or maybe someone's wet dream about the profits to be reaped, if only in outsized management salaries in some non-profit scheme.
Thanks, but no.
The real benefit is in funding. Currently, all the budgets of government departments are political footballs. So FAA will suddenly be told as from the end of the month your budget is zero until the politicians get their beans in a row on something completely unrelated to running an ATC system. Staff are then furloughed at almost no notice with no income until the politicians agree (they normally get their missing funds repaid after a month delay but have had to live till then). Or the Agency is told that next year due to a clever political ploy their budget will be 5% less than it was last year despite all the increased spending that had been previously approved by the same politicians for NextGen. Etc etc. So being able to get away from political budget interference would lead to far more stability in funding and multiyear development programs would not be hazarded - as they have been in the past.

The regulatory part of the FAA would remain a federal agency and would be completely independent of the operations by the newly privatized company - as it should be but isn't at the moment.
If NATS and NAV Canada experience is anything to go by, the commercial ATC company would be far more responsive to their users needs and concerns than a bureaucratic government agency.
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Old 11th Feb 2016, 13:20   #11 (permalink)
 
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And ATCs in Australia, Germany, New Zealand, and Switzerland are also private
In Australia, Airservices Australia is a "GBE", a Government Business Enterprise, allegedly run by a Government appointed board. It is also the monopoly provider of ARFFS. Known elsewhere as a QANGO ( QUANGO if you prefer).

The result is the worst of both worlds, with the benefit on neither.

Tootle pip!!
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Old 11th Feb 2016, 14:07   #12 (permalink)
 
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In some countries they just split ATC and CAA into two companies, CAA stays gonvermental, whereas the ATC part can be gonverment owned, private or a combination.

It works pretty well, if you see past the tendency of it's not experienced controllers, or other with past experience, sitting in the CAA anymore.... Now every almost jobopening require an university degree....
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Old 11th Feb 2016, 17:14   #13 (permalink)
 
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My view of the UK experience:

ATC privatised away from CAA. CEO is now paid tenfold what they were previously. Dividends paid to shareholders. Staff numbers and conditions squeezed. Overheads and empires expand to unsustainable levels so that contracts lost, but same staff provide the same great service at the coalface for less reward. CAA does safety and economic regulation - a conflict of interests where $ seems to win.

I see no evidence of privatisation improving customer service, costs, safety, conditions and if there was a real nasty event then the government would still need to pick up the pieces so still holds the risk. Another example of privatise the profit, but nationalise the risk.

Last edited by Dan Dare; 11th Feb 2016 at 17:36.
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Old 11th Feb 2016, 17:37   #14 (permalink)
 
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In a sense this is going back to the 1930s when the U.S. airlines ran the ATC system.

Today, though, general aviation is very large in the U.S. A lot of the light airplane folks who occasionally fly IFR, often for just a departure or an approach. There will be a measure of temptation to do such without filing.
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Old 11th Feb 2016, 17:55   #15 (permalink)
 
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Different horses for different courses. In UK all kinds of govt owned entities, telecoms, Gas, Electric , etc were privatised just so there were some potentially profitable companies for the City to play with as Britain doesn't have many real private businesses of a large scale for anyone to invest in.

Some improvements in service in some cases and some superficial improvement sin others.

Created to establish a 'shareholder democracy' the shares were alloted across a wide spectrum but rapidly ended up in City hands and then sold to European, mostly, companies in the same field (the City doesn't like anything involving capital investment-long term views , stra tegic infrastructure. etc)

At the end of the day as has been said everything is sacrificed for money in the name of shareholder value and the exec team earn 5 times what their predecessors did and the rest of the staff earn 80% of previous salaries after about a third are made redundant.

Seldom a happy ending but in the US case the often bizarre balance of equally hating the government and big business (admittedly with good reason) might keep things on an even keel and away from the bizarre US practice of shutting the federal government down every so often.

PB
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Old 11th Feb 2016, 18:58   #16 (permalink)
 
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The UK partial privatization is only one model.

Here NAV CANADA was formed as a private, non-share capital corporation -- there are no shareholders! People who opposed its formation on the basis of "shareholder value" compromising safety had no clue what they were talking about.

As a whole, controllers were probably one of the largest beneficiaries of the privatization. That's because prior to privatization, budget was a political football and as a result controller salaries were effectively frozen for years.

And if you look at FAA struggling with modernization issues, NextGen, etc., due to the government bureaucracy -- the experience with NAV CANADA has been completely the opposite. As a private company, rapid adoption of new technologies have been possible.

E.g., the collaboration between NAV CANADA and Iridium for space-based ADS-B technology would have been completely unthinkable had the ANS remained under government bureaucracy.

Of course there were bumps in the road, but looking back, ATC privatization has been very successful here, and I expect for many other countries in the future.
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Old 11th Feb 2016, 19:34   #17 (permalink)
 
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Nav Canada still doesn't sell electronic versions of their charts, do they?
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Old 11th Feb 2016, 19:45   #18 (permalink)
 
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The Canadian experience

From my view in Canada, as a professional pilot and a private aircraft owner, our privatized ATC system is a huge improvement from the days when it was government owned and run. Nav Canada has had the stable budget needed to make investments to improve the system.

The big fears when privatized ATC was first discussed in Canada were potential significant cost increases for private owners, and a potential incentive for private pilots to avoid flying IFR or getting weather briefings, if they were charged for those services.

These concerns were fully addressed when the system was set up. As a private aircraft owner, I pay about $CAD 77/year, tax included, or about $US 55. There are no extra charges for IFR, weather briefings, ATC services, etc, as long as I avoid less than 10 of the busiest airports in the country. Considering the amount I pay annually to fly, $US 55/year is a drop in the bucket.
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Old 12th Feb 2016, 03:00   #19 (permalink)
 
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No doubt the companies running the ATC system will be exempted from liability suits.
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Old 12th Feb 2016, 05:10   #20 (permalink)
 
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It's the other way around. Governments & government employees have various forms of legal immunity. FAA employees are immune from most lawsuits (including claims of negligence) arising within the scope of their employment.

Privatized ATCs are more exposed to liability. In fact one of the reasons to privatize is to make ANSPs more accountable. When AF358 overshot the runway at Pearson airport and ended up in a ditch, Air France promptly sued NAV CANADA.

@MarcK

Electronic charts have been available for several years now through NAV CANADA's partnership with ForeFlight (and possibly others).
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