Has The Time Come to Privatize Air Traffic Control?

On Wednesday, July 18, 2012, the Honorable Calvin L. Scovel III, the Inspector General for the U.S. Department of Transportation presented his Update on the Safety and Cost Aspects of the Federal Aviation Administration’s Contract Tower Program to the U.S. House’s Committee on Transportation and Infrastructure Subcommittee on Aviation.  In his testimony before the Subcommittee, Inspector General Scovel stated that OIG “found little difference in the safety or quality of services provided by similar FAA and contract towers.  We also found that the contract towers provided air traffic services to low-activity airports at lower costs than the Agency could otherwise provide.”  Inspector General Scovel’s remarks were echoed by FAA Air Traffic Organization Chief Operating Officer David Grizzle who testified that the FAA  is “always investigating ways to operate more cost-effectively by reviewing and adjusting, as necessary, staffing levels, operating hours, and deployment of system enhancements. . . . We agree with Congress about the importance of the cost share program and are committed to working in an effective fashion with stakeholders to optimize how this program can contribute to our optimal management of the [national aerospace system].”  This testimony has inevitably raised the drumbeat by the Republicans on the Subcommittee to expand the Contract Tower program and, eventually, privatize the entire air traffic system.

One of the biggest selling points for more contract towers and/or a privatized air traffic system is that contracted facilities will be cheaper to run than FAA facilities.  Many supporters of air traffic privatization point to our neighbors to the north.  Canada has had NAV Canada, a privately run, not-for-profit corporation, running its civil air navigation system since 1996.  NAV Canada operates independently of any government funding and therefore has been able to upgrade its systems more quickly than the U.S. using commercial financing rather than government funds.  NAV Canada has been successful at keeping costs low by negotiating with controllers to keep flexible schedules.  As a result, fewer controllers need to be hired and labor costs are kept low.  However, this flexibility comes at a cost: since NAV Canada took over operations they have an aircraft incident rate twice that as the U.S. with a system 7% the size of the U.S.  Moreover, NAV Canada has suffered by inefficiencies, inadequate staffing and huge financial losses.  These losses led NAV Canada to increase fees that airlines (and ultimately passengers) by 7% to cover its debt.  And Canada is not the only country with a privatized air traffic system.  In Great Britain, near-misses increased by 50% and delays have grown enormously since privatization. Likewise, in Australia, cost saving work rules have led to a strikes by controllers that shut down air traffic movement for hours.

The other argument in favor of privatization grew out of the frustration many experienced with the inability of Congress to reauthorize the FAA, which led to the FAA not being able to roll out its heralded “NextGen” improvements to the air traffic system, including a switch to a more satellite based technology rather relying on than old-fashioned ground radar.  While not having to deal with Congressional funding for technological improvements would be a boon, the Canadian, Australian and British cases show that speedy implementation of new technology is not necessarily an outgrowth of privatization.  Canada simply imports its technology from U.S., after it has been developed for use by the U.S. air traffic system.  Implementation of new technology has led to technological failures in both Australia and Great Britain.  Many news reports from Great Britain and Australia claim that major inefficiency and safety hazards have resulted from the implementation of new technology by privatized air traffic control systems.

In the end, the ultimate goal of any air traffic control system is safety.  Safety for the aircraft in sky.  Safety for the crew and passengers on those aircraft.  Safety for those on the ground potentially affected by those in the sky.  As National Air Traffic Controllers Association Vice President Trish Gilbert told the Subcommittee, “[t]here is a fundamental difference between an FAA tower and a contract tower. . . The FAA model was built on the premise of redundancy to prioritize safety above all, whereas a contract tower has incentive to prioritize the bottom line.”  While some airports may benefit from contract towers because of the operational conditions of the airport, as shown by the Inspector General’s testimony, privatization is not a panacea that will cure all of the ills of the air traffic control system like some believe.

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6 Responses to Has The Time Come to Privatize Air Traffic Control?

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