Sick of Plane Delays? Let's Privatize Air Traffic Control

Independence Day weekend approaches, and many of us will travel by plane to visit family or escape somewhere with cooler weather. But thanks to an outdated public air traffic control (ATC) system, congested skies will lead to plenty of flight delays. These delays are more than just an inconvenience—a report sponsored by the Federal Aviation Administration (FAA) estimates they cost our economy $31 billion per year in operating expenses and lost time.

Rep. Bill Shuster (R-PA), Chairman of the Committee on Transportation and Infrastructure, has a plan to fix this. In a speech last Monday to the Aero Club of Washington, Shuster proposed creating a “federally chartered, fully independent, not-for-profit corporation” to take over our nation’s air traffic control system. In short, separate ATC from the FAA and privatize it.

Privatization could correct the many inefficiencies that beleaguer our current ATC system. Economist Dorothy Robyn, in testimony before Shuster’s Transportation Committee, illuminates the financing problems of the publicly run ATC. Operating expenses for ATC are financed using excise taxes levied per passenger, while the costs aircraft impose on the ATC system are mostly independent of size—in Robyn’s words, “a blip is a blip.” This creates a bias towards smaller, regional planes, which pay less than their fair share of ATC expenses. With so many passengers needing to fly, smaller planes mean more planes, contributing to aerial “traffic jams.”

Another financing problem is that technology upgrades and other major capital expenses are funded through annual congressional appropriations. This has the dual effect of creating uncertainty regarding funding for multi-year projects and making the ATC system accountable to Congress rather than to the airlines and passengers it serves. The result has been a system that is slow to adapt to the changing face of aviation. The Office of the Inspector General last year released a report showing that the FAA’s implementation of the $40 billion, 20-year NextGen project has fallen short of expectations.

Implementing major upgrades like NextGen requires significant coordination with the airline industry, and so keeping air traffic control under the purview of the FAA turns the federal government into an unnecessary middleman. Air traffic control should work for airlines and consumers, not politicians in Washington. Rep. Shuster’s proposal would do just that, creating an independent board that would govern the private corporation rather than the FAA. Funding would come from fees assessed on the airline industry directly, meaning Congress wouldn’t appropriate a cent.

Privatizing ATC would also take politics out of air traffic control. Manhattan Institute Senior Fellow Jason Riley recently wrote that the Obama administration forced the FAA to “promote diversity” among its air traffic controllers at the expense of merit-based hiring practices. While this may satisfy the political class, such affirmative action makes the skies more dangerous. An independent ATC would be further removed from political pressures of this kind.

The United States is starting to look like a global anomaly when it comes to ATC, as over 50 countries have privatized, or at least made independent, their ATC systems. One of the most successful is the system of our northern neighbor, called Nav Canada. The system in Canada is financially self-sustaining, while the U.S. system received $7.3 billion of taxpayer money in 2014. The U.S. system is incredibly safe, but Canada’s is even safer, having a quarter of the flight movements of the United States but only one-sixth the fatalities.

Safety is the first priority of any air traffic control system, which is why all serious proposals to privatize America’s ATC retain a role for the FAA as the safety regulator. In fact, separating ATC operations from its regulator would allow the FAA to focus more directly on safety concerns. 

Robert Poole of the Reason Foundation argues that privatization will allow ATC more flexibility to implement innovations such as remote control towers, where ATC staff from multiple airports can work from one central location. This lowers the risk of ATC staff at small airports falling asleep on the job because there is no one else around.

With the airspaces of Canada, Mexico, and most of the E.U. now operating with independent ATC systems, it is time for the United States to catch up. Not only will it save taxpayers money and boost the economy, but it will also get you to Grandma’s house safely in time to watch some Fourth of July fireworks.

Preston Cooper is a Policy Analyst at Economics21. You can follow him on Twitter here.

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