Washington, D.C. — Approximately 30,000 federal employees could be moved off the taxpayer payrolls over to a private, non-profit within three years. The proposal has been floating around Washington for years; however, yesterday, June 5, 2017, President Donald Trump is now pushing the issue forward. The non-profit would be funded exclusively from user fees, airport fees and aviation fuel fees.
Privatization would be a large improvement and could help advance technology which has gotten bogged down by politics. Currently, those user fees paid are funneled through Congress which how that money is spent gets highly political, rather than efficient. Under the new non-profit, we should see significant advancements in air traffic control. The new entity would be run by airlines, unions, general aviation and airports among others.
The challenge will come in with a likely battle between general aviation and airlines. They generally do not see eye-to-eye, especially when it comes to user fees. The new non-profit entity will have to make these two industries equal votes at the table.
Additionally, Robert Poole of the Reason Foundation testified last month to the U.S. House of Representatives, noting the following concerns under the current Congress-led model:
- Funding: uncertain, unstable, and poorly suited to paying for large-scale capital
modernization of not just technology but also of antiquated facilities.
- Governance: a system in which far too many legislative and executive branch
agencies oversee the ATO, which leads it to focus more on its overseers than on
its aviation customers.
- Culture: an organizational culture that is risk-averse and status-quo-focused and
therefore lags considerably behind its counterparts that have been corporatized
over the past three decades.
Poole’s support for a non-profit entity to handle air traffic control (ATC) of America’s skies continued stating, “My focus today is limited to the second of these: governance. Although technology may someday allow for competition, air traffic control is basically a utility monopoly. We know of only three ways to deal with the monopoly problem of such entities.
- If the utility is a for-profit, investor-owned company, the usual solution is
economic regulation by an external public utility regulatory body. That is the
situation of NATS in the United Kingdom, one of the few for-profit ATC
corporations (though partially government-owned).
- A second approach is a government corporation, such as the Tennessee Valley
Authority, one of the nation’s largest electric utilities. Because such utilities are
owned by the government, they are presumed to be operating in the public interest
and are not externally regulated (though that presumption is not always correct).
Most of the world’s 60 ATC corporations are government corporations, often with
only one or two government ministers as the sole shareholders.
- The third alternative is a non-profit corporation in which the customers are the
owners. We have thousands of rural electricity and telecommunications user coops
in this country. They operate as businesses, but any profits they make are used
either to reduce the extent of bond issuance or to make it possible to reduce
customer charges. This is essentially the Nav Canada model.