This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.
TPG Insider “Vic Vector” is an air traffic controller at a major ATC facility in the United States. Here, he shares some behind-the-scenes facts about how being an ATC really works and what travelers need to know about privatization.
On Monday, June 5th, President Trump announced a plan to privatize air traffic control in the United States as a part of his broader infrastructure improvement vision. It’s important to clarify that despite all the theatrics, his statement was only one of intended policy change. At the time of this writing, there is no legislation that has been introduced by Congress concerning the privatization of ATC services, therefore there is no way to form an educated opinion on this year’s effort yet. The presumption is that this year’s bill will be very similar to last year’s Aviation Innovation, Reform, and Reauthorization (AIRR) Act, though it’s important to note that this is a new bill being introduced to a new congress and under a new presidential administration, so that’s not necessarily a safe supposition. In any case, here are nine things we know so far.
1. The Only Information We Can Go on So Far Is What the Previous Bill Said
Last year’s AIRR Act would have, by 2021, removed ATC services from the federal government and transferred them to a government chartered, non-profit organization. Proponents of the bill, including the National Air Traffic Controllers Association (NATCA), argued that it was necessary to remove ATC from under the umbrella of government appropriations in order to achieve a stable and consistent funding stream.
2. It’s Impossible to Know Which Labor Organizations or Aviation Companies Will Support This Year’s Iteration
Many were surprised when NATCA came out in favor of the AIRR Act, but members did feel that the bill had very favorable language protecting the wages, benefits and collective bargaining rights of air traffic controllers. If this year’s proposal doesn’t have the same protections, it’s a good bet that NATCA will pull its support.
3. Not Having Consistent Funding Can Actually End up Costing the Agency More Money
I’ve seen first hand the inexplicable waste of resources that can occur when an organization such as the FAA has no ability to plan a budget beyond a few months. The costs of the numerous modernization projects associated with the oft mentioned NextGen have a tendency to spiral out of control when the programs get stopped and restarted repeatedly due to budgetary uncertainties. It’s kind of like buying something from a rent-to-own company — when all is said and done, you’ll spend a lot more money than you would have by just buying the thing with cash outright.
4. Passengers Won’t Necessarily See an Increase in Ticket Prices
The source of funding for this proposed non-profit air traffic organization would be the Airport and Airway Trust Fund (AATF). Also known as the Aviation Trust Fund, the AATF helps finance FAA operations, including airport improvements, ATC and safety inspections. Opponents of the AIRR Act argued that privatizing would create a massive increase in fees to the flying public in order to fund this organization, but the truth is the money is already there and you’re already paying it. The AATF is funded through excise taxes, namely on airline tickets and gasoline for small aircraft, and in fiscal year 2016, it was worth approximately $16 billion. The FAA’s annual operation budget is approximately $10 billion. Though there’s no way to know exactly how the proposed organization would run, the math seems fairly simple. Isolating the AATF as a dedicated fund for solely the new non-profit air traffic organization would leave a $6 billion surplus to spend on things like airport and air traffic facility improvements as well as the continuance of NextGen modernization.
5. Privatization Might Actually Decrease Costs Eventually
Nav Canada is the privately run, non-profit organization that provides ATC services for our neighbors to the north, and while I hate using them as a comparison simply because our ATC systems differ in many ways, it’s a great example of how a non-profit organization can trim some unnecessary fat without sacrificing safety or employee benefits. In 1996, prior to privatization, there were around 6,000 employees, 2,000 of which were controllers. 20 years later, there are closer to 4,000 employees, 2,000 of which are controllers. 2,000 employees weren’t laid off — the company simply stopped replacing nonessential middle management team members when they retired and as such, got leaner via attrition. Nav Canada also recently ratified a rather impressive contract, including some benefits that would be unheard of in this country, including six months of paid maternity/paternity leave and 225% pay for overtime.
6. Airlines Held the Most Seats on the Board in Last Year’s Bill
The AIRR Act proposed a board consisting of representatives from airline pilot unions, general aviation, the air traffic control union, aerospace manufacturers and those representing the public interest. However, of the 13 proposed seats, a plurality of four were delegated to representatives from major airlines. Many took exception to this since although the airlines are the largest user of the ATC system, they could move to make detrimental changes to the system, like increasing previously mentioned fees or eliminating service to some markets. Airlines have also had their fair share of technological growing pains, leading many to question if they’re the right choice to lead this board.
7. No Matter What Happens, Safety Will Not Be Compromised
The United States has the busiest and most complex ATC system in the world, staffed by more than 10,000 well-qualified and dedicated professional air traffic controllers, as well as several thousand more support staff. Even if ATC services were to be transferred to a non-profit corporation, the FAA would still have safety oversight as it does with other private companies like airlines.
8. Privatization Will Not End Flight Delays
No matter what you’ve been reading or seeing on TV, ATC privatization is not a magic wand. I take exception with the assertion that the ATC system in America is “broken.” It’s not. It works every single day, though it does have certain unalienable limitations that not even privatization will fix. Passengers want to fly at times convenient to them, meaning everyone wants to take off and land at the same times of the day. Sometimes, there are busy pushes with more airplanes traveling inbound than an airport can handle, and no amount of technology will change the physical limitations of how many planes can take off from and land on one piece of pavement. Privatization will not end thunderstorms, poor visibility and other weather that reduces the amount of traffic an airport can handle and causes delays.
9. This Isn’t a Quick Fix
Ultimately, whatever happens — or doesn’t happen — the coming bill will have to pass through a lengthy legislative process and many are speculating that there’s no more support for a privatization push this year than there was last year. Passengers won’t see any immediate changes and even if the bill were to pass, it would take several years to implement. So, brace yourself because even if this bill once again fails, the push to privatize ATC will likely not end anytime soon.
What do you think about air traffic control privatization? Sound off, below.
With great travel benefits, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game. Here are the top 5 reasons it should be in your wallet, or read our definitive review for more details.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- Chase Sapphire Preferred® named a 'Best Travel Credit Card' by MONEY® Magazine, 2016-2017
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for travel through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel.
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards