Don't Let Air-Traffic Control Become Another Amtrak

Government-sheltered monopolies have been a steady drain on taxpayers for decades, says Diana Furchtgott-Roth

The summer travel season is in full swing — and about 16 legislative days are left until funding for the Federal Aviation Administration expires on July 15.

The House and Senate are trying to compromise on a bill to reauthorize spending for the agency. The outcome could determine whether the nation’s air-traffic-control system is a thriving, vibrant part of U.S. aviation or becomes as infamous as the post office, Amtrak and those painfully long airport security lines in terms of consumer service and as, in at least those first two, a sinkhole for taxpayer money.

Awaiting floor action is a House bill supported by the federal National Air Traffic Controllers Association union. It would spin off the air-traffic-control part of the FAA into a federally chartered nonprofit corporation. A FAA reauthorization bill recently passed by the Senate doesn’t include the spinoff provision.

Congress should go with the Senate version. Here’s why.

In a February memo to its members, NATCA listed 14 advantages of the House bill. These include keeping the union “as the exclusive representative of those represented today;” “collective bargaining agreements, orders, rules, practices remain in effect until renegotiated;” “labor seats on the governance board;” and the carry-over of all benefits and contracts.

True privatization would be a step forward. But with NATCA’s provisions in the bill, the new Air Traffic Control entity wouldn't have the flexibility to reduce costs in the same way as other private entities can. It also would be a monopoly, so it would be protected from competition. Government-sheltered monopolies such as Amtrak and the U.S. Postal Service have been a steady drain on taxpayers for decades. In 2015, Amtrak lost $307 million, and the U.S. Postal Service lost $5.1 billion.

Amtrak and the post office have unionized workforces that make it difficult for them to implement cost- and labor-saving technology. Transportation Security Administration red tape means it can’t quickly address those long lines that cause travelers to miss their flights. The new ATC Corp. would have union representation on its board of directors and on its advisory board.

After President Reagan fired more than 10,000 members of the Professional Air Traffic Controllers Organization when they refused to return to work during a 1981 strike that threatened to cripple the U.S. economy, air-traffic controllers organized again under the National Air Traffic Controllers Association in 1987. NATCA has powerful friends in Congress, including Rep. Bill Shuster (R-PA), chairman of House Transportation and Infrastructure Committee and Rep. Frank Lobiondo (R-NJ), chairman of the House Aviation Subcommittee, who want to help the union cause.

Paul Rinaldi, the president of NATCA, testified before the House Transportation Committee on Feb. 10 that his union supports the proposed ATC Corp. because it keeps workers’ compensation packages, including pay, pensions, health insurance and “negotiated agreements for their work rules.” He threatened to withhold support for the legislation if these principles are violated.

NATCA lobbied extensively to make sure that its workers face no change under the new bill, including any change to their collective-bargaining rights. Air-traffic controllers can make a top salary of $185,000, plus federal benefits such as health insurance and pensions, work-life benefits such as elder care, and legal and concierge services, and tuition reimbursement.

Under current law, ATC workers, along with other federal workers, have to take an oath not to strike, and workers who do strike can be fired. Under the House bill, striking would be treated as merely an unfair labor practice, for which the penalty is not firing, but a hearing before the Federal Labor Relations Authority—which has to wait at least five days before holding the hearing. Imagine five days of grounded flights.

The House bill codifies in law that NATCA would be the “exclusive representatives of FAA employees” in the new ATC Corp. But with the same union, the same contract, no permitted competition from other firms, and no serious penalty for striking, there would be no advantage to moving air-traffic controllers to a separate ATC Corp. The union provisions in the House bill were crafted to attract support from Democrats, but not one voted for the bill.

A better approach would be to give air-traffic controllers the same right as other Americans to choose their own union—or no union at all.

Instead of creating a new federal entity, Congress should free each airport to choose the air-traffic-control service it prefers. There could be one agreed-upon set of communications protocols, and each service provider would have to abide by those protocols. There are tens of thousands of public safety systems in the U.S., and they all can connect with each other.

Privatizing an inefficient government bureaucracy would be true progress. But real privatization means competition and getting the government out of regulating business practices, including compensation. In drafting their Senate bill, Sens. John Thune and Bill Nelson, the chairman and ranking member of the Senate Committee on Commerce, Science and Transportation, were clever enough not to repeat the post office and Amtrak mistakes with FAA reauthorization. It is time the House wised up as well.

This piece originally appeared on WSJ's MarketWatch

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Diana Furchtgott-Roth is a senior fellow and director of Economics21 at the Manhattan Institute. Follow him on Twitter here.

This piece originally appeared in WSJ's MarketWatch