Titus Statement on Trump’s Air Traffic Control Privatization Scheme

Jun 5, 2017
Press Release

June 5, 2017

Washington, D.C. – Today Rep. Dina Titus of Nevada’s First Congressional District issued the following statement after President Donald Trump announced his plan to dismantle the Federal Aviation Administration and privatize the nation’s Air Traffic Control system.

“President Trump’s plan is an ill-conceived scheme to hand over our air traffic control system to a corporate board without any congressional oversight. Privatizing our skies is a dangerous proposal that will negatively affect our national security, the traveling public, Nevada’s economy, and the world’s safest and most complex airspace. Nearly half of Las Vegas’s 43 million visitors arrive by air; we have the eighth busiest airport in the country and one of the largest general aviation markets in the nation. With this bad deal, the public will get nothing in return for forking over billions of dollars’ worth of federal equipment and control of our skies to special interests.”

 

Background:

During the past three decades, the airlines and other special interests have unsuccessfully attempted to privatize the nation’s Air Traffic Control system. Trump’s new plan will transfer Federal responsibility for the air traffic control system by handing it over to a private, not-for-profit board of industry interests and businesses.

A similar Republican privatization proposal from the 114th Congress would have increased the deficit by $20 billion over the next ten years, and billions more in subsequent decades, according to the Congressional Budget Office.

The Government Accountability Office recently reported that privatization could increase costs, create new funding challenges, and jeopardize safety.  

 

  • Equal access to the aviation system. “[S]mall and rural communities could be negatively affected by a restructured ATC. . . . [R]ules need to be in place for the ATC entity to not restrict access so that only high value customers, such as commercial airlines[,] are served; access should be maintained for small communities and other services, which are important but don’t make a lot of money.”
  • User fee fairness. Charging user fees for air traffic services, which significantly improve safety and prevent midair collisions, could discourage pilots from operating under air traffic control to save money. Moreover, “it is possible that general and business aviation might see their contribution to the cost of ATC services rise and that this increase could reduce the use of the airspace by these users.”
  • Fairly distributing costs. “Because no single user can be said to ‘cause’ . . . fixed costs,” such as administrative overhead costs, including the $640 million in the FAA ATO’s administrative services, “there is not a truly cost-based means to assign these costs to users . . . .”
  • Too big to fail. “Another key issue . . . is how a new entity would mitigate risk of unforeseen events or economic downturns that could affect traffic and revenue,” in view of the extraordinary measures taken by NATS UK and Nav Canada during the post-9/11 slump (NATS UK was bailed out, and Nav Canada hiked user fees and tried to impose cost-cutting measures on its workforce).
  • Liability.  “[A]nother transition issue is ascertaining whether the ATC entity would be fully insurable in the private market. The extent of insurance coverage needed might be substantial, and as such, a consideration would be whether the federal government should play a role in insuring certain risks that may not be privately insurable.”
  • Splitting up the FAA. “[I]t is not clear how activities such as the development of flight standards and procedures and approvals of new procedures, which spans FAA’s operations and safety organizations, would be easily separated between the safety regulator and ATC entity,” nor is “coordination between the safety regulator and an ATC entity” assured.
  • Leaving safety subject to shutdowns. “[A] restructuring could result in the safety regulator being more vulnerable to funding challenges because the safety regulator would no longer have the ability to shift resources among programs as FAA has some ability to do. Additionally, one expert stated that [the safety regulator] . . . may face challenges hiring skilled staff because it would be competing with the ATC entity for skilled labor. For example, Transport Canada . . . lost many skilled staff that went to [Nav Canada] . . . [and has] continued to face challenges filling technical positions within the organization.”
  • Maintaining safety. A challenge would be “ensuring that the safety regulator has access to safety data and other information to continue to maintain oversight and safety.”