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....

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.

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!....

And quite rightly so!

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.

I'm cynical as well, and it usually turns out I underestimate the consequences.

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.

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).

.....aaaaand that'll be the final nail in GA's coffin.

Europe here we come.

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.

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!!

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....

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.

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.

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

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.

Nav Canada still doesn't sell electronic versions of their charts, do they?

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.

No doubt the companies running the ATC system will be exempted from liability suits.

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).

yes the UK is only one model and for ATC its not been that bad looking from the outside but then compared to most privatisations its still fairly early days compared say to railways.

I wasn't suggesting it doesnt work per se but the UK privatisation model in general is not a good one ; once the gloss wears off the focus on customers disappears in favour of shareholder value.

There are a number of Canadian models for state realted enterprises that you seem to get to work quite well compared to other areas of the world so I am not surprised ATC seems to work well

PB

Is there any information on what is FAA's current Airnav revenue?

I have a feeling it is more to do with losing that revenue stream than having ATC under their umbrella.

ATC with 15,000 employees will do very well on its own with Airnav revenue.

Rest of the 25,000 employees will totally dependent on federal budget.

What happens to NextGen with its $40-$50 Billion? I doubt either can implement without federal support.

NextGen is one of the big drivers for privatization. It is feared that under the existing federal bureaucracy, NextGen costs could balloon to well over $100 billion.

(The FAA is forecasting $29 billion, which doesn't seem realistic considering they've already spent $6 billion with little to show for).

NY Times editorial against privatization of ATC
 

http://www.nytimes.com/2016/02/15/op...c-control.html

They claim only the UK and Canada have privatized ATC (among major countries), and that their costs have risen faster than in those the US since privatization.

The Times calls it "a solution in search of a problem" -- if it ain't broke, don't fix it.

Such is politics.

Back in 1994, it was Bill Clinton and the Democratic administration which pushed for privatization, as part of Al Gore's "re-inventing the government" plan. The Republicans in Congress vehemently opposed privatization, led by Bob Dole. The fight back then wasn't about safety. Bob Dole -- being from Kansas -- was the champion of GA aircraft manufacturers, and their big concern was user fees.

Now that the Republicans in Congress is proposing privatization, naturally the Democratic admin is in opposition. The fight now isn't about safety either. It's an election year and union support takes precedence.

The ANSP in New Zealand was "commercialised". Airways NZ is totally government owned, but as a SOE (State Owned Enterprise). It does not come under the Ministry of Transport, and receives no public money - rather it is required to return the government a yearly dividend. It seems to work OK.

Every time politicians want to shutdown federal government, ATC furloughs delay/cancel their EAS funded flights. Now they have to compromise and fund again to get flights back in the air to spend quality time with their families.

By privatizing ATC their flights won't get delayed/cancelled even if government is shutdown.

the bill passed!

"The Transportation and Infrastructure Committee has approved legislation that establishes an independent, not-for-profit corporation outside of the federal government to modernize America’s air traffic control (ATC) system and provide air traffic services. H.R. 4441, the Aviation Innovation, Reform, and Reauthorization (AIRR) Act, introduced by Transportation Committee Chairman Bill Shuster (R-PA) and Aviation Subcommittee Chairman Frank LoBiondo (R-NJ), reauthorizes the Federal Aviation Administration (FAA), provides a number of reforms to our aviation system, and upholds the FAA’s role as the Nation’s aviation safety regulator. The bill was approved by a vote of 32 to 26."

Well, HR 4441 (FAA Reauthorization Act) passed the House committee stage, with privatization being just one of many items in the bill, all of which are still subject to further negotiations.

There's a long road ahead still from the committee stage to passing the full House and Senate votes intact. And for Obama to actually sign it into law.

My guess is the privatization portion will pass the House intact but will face stiff opposition in the Senate, since even many Senate Republicans are against the bill.

Having spent $6B with little to show for it has quite a bit to do with it...

FAA is seriously broken and change is needed
 

FAA is seriously broken and changes is needed, both to fix a dysfunctional regulatory mess at FAA, as well as to redirect an already obsolete ATS system with a seriously flawed overly expensive and ill-conceived NextGen (it ought to be called PastGen), pointing it in a more useful, capable, and economic direction, with sane regulatory and equipage criteria, and sensible targeted benefits.

FAA's massive failures abound, ...from examples of seriously policy faulty cylinder ADs, to fouled up medical standards, to completely illogical and decades late drone rules, to incomprehensible pilot qual rules, to a hopelessly screwed up NextGen,... that is not only heading toward a $40B failure right now, but now is being projected to cost up to $125B by 2035 and STILL BE A FAILURE.

While repairing FAA internally is still a theoretical possibility, nothing has worked in trying that approach now for decades. That possibility appears to be virtually hopeless. So the only realistic answer now appears to be the approach we took back in the days of the Curtiss Committee (Eisenhower era) and later the Ben Alexander Committee (ATCAC - birth of the "Upgraded 3rd Gen ATC System"),... to now bust up FAA completely, and start over, to fully reorganize the regulatory part, then to get competent aviation and technically experienced executives, ...while splitting out the ATS part as a separate NON-PROFIT ANSP (e.g., the Schuster Bill).

The key aspect to make it all work, will be not letting FAA drive the solution, while picking the right aviation and technically experienced oversight board for the endeavor, and accomplishing a competent redesign of flailing and failing NextGen, before it further fouls up the entire global aviation system.

It's official, Trump administration announces privatization of US ATC:

https://www.washingtonpost.com/polit...4cb_story.html

(Video) https://www.whitehouse.gov/live/pres...orm-initiative

*grinds teeth*


ATC is IMO an inherently public good (like sewage, roads, traffic lights) and this is, as the NYT noted, a solution in search of a problem.

Whats the word on user fees for GA under trumps privatization?

Question for pilots (including General & Business Aviation pilots) flying in the US and abroad: where do you find the best ATC services?

Food for thought...

Nail. Hit. Head.

You and me both, brother!

It's very common to jump to conclusions at the outset of a major policy statement. I fly in the US, and the Caribbean some times, and the US ATC is very good as it is.

Here's a few takeaways that I can offer. I'm not sure there are enough electrons to cover all the issues by all the stakeholders involved. Literally thousands of direct stakeholders, and of course multi-millions of minor stakeholders.

First, the big picture that is trying to be accomplished is to have a safe system at lower cost. That's the major goal of the announcement. There are of course, many challenges involved. It's a major step in the quest for a balanced budget in the US, and I have to say - everyone who uses some service thinks that service should be immune from cuts(or fees). The nation can't continue to borrow, print and spend money from the treasury.

All I know at this point is the basis for the original funding proposal contained language that GA planes would be excepted from user fees. The was to bow to the desires of AOPA and gain their endorsement. Whether it will pass the legislative edits and make it through to a vote, and then make it through the senate is very questionable.

Since it has been endorsed by the major airlines(to greater or lesser degree), there's a sense that it will support the majors to the detriment of business/cargo/GA. I am going to take a wait and see attitude, understanding that the major goal is to provide safe traffic control for less money.

One of the concerns is that GA planes which in some cases have the option to avoid ATC involvement will choose to compromise safety over cost. Flying actual IMC without a clearance, scud running, even using a different call sign(without ADS-B of course) while flying. I can see an incentive to cut safety corners if each time one calls for an IFR flight plan, the meter starts running on costs. Of course, that will be just one of the concerns from the GA side. The other part of the equation is if a privatization will actually save money over what is being done now. I have to opine that it would be hard, very hard, to be as inefficient as the FAA has been for the past 30 years. Since the strike of 1980, pretty much the entire ATC budget has gone to hell and not kept up with the times. I can find hundreds of places to save money without losing any safety right away. For dozens if not more than a hundred controlled towers, they could easily go back to uncontrolled, with no loss of safety. Big swaths of the midwest from Nov to March are virtually dead, but manned towers still operate from 0600-2000 each day, and they may handle 3 ops or 5. From a cost per op basis, there's no reason to have a controller sitting there watching Angry Birds on his phone, just waiting for a Piper or Cessna to show up.

AOPA discouraged over Trump's air traffic control proposal

Mark Baker, AOPA president and CEO, spoke out against President Donald Trump's comment Monday that the US air traffic control system is "an ancient, broken, horrible system that doesn't work." Baker argued that while privatization may be an option, other solutions should be evaluated, adding, "As the air traffic debate continues, we are also concerned about the impact of these proposed reforms on general aviation based on what we have seen in other countries."

NBAA Strongly Challenges Latest White House ATC Privatization Plan

NBAA President and CEO Ed Bolen said upgrading the nation’s ATC system, not privatization, should be the goal, in response to the Trump administration’s continuing call for privatizing the ATC system, which was included today in a set of transportation-infrastructure spending “principles” advanced by the president. “Unfortunately, the recent discussion about privatization is really about the airlines’ push to gain more control over our air traffic control system, so that they can run it for their own benefit, and is a sideshow to a serious and constructive discussion about building on the progress currently underway on NextGen,” Bolen said.

I really wanted to give Trump the benefit of doubt regarding his promises of improving government functions. However, just the same as with Obama, their rhetoric is miles apart from their action.

The ATC proposal is a great example of this. For all this talk about improving the quality of ATC, what this proposal is really about is giving the large airline operators what they have been lobbying heavily for. It's the same old user fee system in a new wrapper, that gives the airlines greater control at the inevitable expense of general aviation. Those that will benefit from this change will be airline stakeholders and those in a position to profit from this business opportunity. Unfortunately, this will also be at the expense of many more GA operators, privateers, and part 91 fliers. No doubt rural areas will be the first to see major reductions in service since "the business case" won't support the service.