Trump Sets Path for Air Traffic Control Reform

Published July 24, 2017

President Donald Trump announced his intention to explore separating the Federal Aviation Administration’s (FAA) traffic control responsibilities from its role as a regulatory agency.

Trump proposes spinning off FAA’s Air Traffic Organization into an independent nonprofit corporation overseen by a board of directors representing airlines, private plane owners, and organized labor groups.

The resulting nongovernmental organization would be responsible for the air-traffic control (ATC) functions FAA currently performs. It would be funded with user fees instead of tax dollars.

The president’s proposal, announced on June 5, is largely based on a 2016 bill sponsored by U.S. Rep. Bill Shuster (R-PA), chairman of the House Transportation and Infrastructure Committee.

Slow Out of the Gate

Robert Poole, director of transportation policy for the Reason Foundation, says other countries’ nongovernmental ATC systems are more advanced than the U.S. version.

“Has government outlasted its role in ATC?” Poole said. “Definitely. Since Airways New Zealand was spun off from the New Zealand transport ministry in 1987, about 60 countries have spun off ATC corporations, self-supported from fees charged for their services, like other utilities, and separated at arm’s length from their government safety regulator.”

Keeping ATC under the authority of FAA, paid for with taxpayer money, is a backward policy, Poole says.

“The U.S. is now the last major developed country that does not charge users of ATC services directly for those services rather than using taxes that are then allocated to ATC by a political body,” Poole said. “It’s also the only remaining developed county to not separate the provision of ATC service from its safety regulator. This kind of self-regulation is recognized widely—including by the International Civil Aviation Organization—as a conflict of interest.”

Independence, Not Privatization

Marc Scribner, a senior fellow at the Competitive Enterprise Institute, says Trump’s idea isn’t really privatization but a matter of separating and spinning off some FAA functions.

“Really, what you are doing is taking out of the aviation safety regulator the air traffic control office—in the case of the FAA, it is called the Air Traffic Organization—and spinning that off into an independent, nongovernmental, user-backed co-op,” Scribner said.

“This is modeled on very successful reforms that took place in Canada more than twenty years ago,” Scribner said. “And now, Canada’s air traffic service provider, known as NAVCanada, is regarded as one of the most technologically advanced and efficient air navigation service providers in the world.”