How would privatization affect nextgen implementation

Reference no: EM133697380

The United States has the largest and safest aviation system in the world. On any given day, the Federal Aviation Administration, or FAA, must successfully handle 65,000 flights. Each year, commercial airlines carry approximately 740 million passengers-more than 2 million people per day. The backbone of this system is the 14,800 air traffic controllers who, along with 5,000 supervisors and managers, ensure a safe national airspace 24 hours per day. The vast majority of controllers are federal employees, while a small percentage are contract workers paid through the FAA budget.

The United States is the last major country that has not separated its air traffic control system from the government transport agency, taken it out of the government budget, and installed the government as the safety regulator at arm's length from air traffic service delivery. The U.S. is also the only developed country that still funds air traffic control via annually appropriated taxes, rather than via customer charges.

Perhaps the largest and most complicated question before Congress is whether to privatize air traffic control operations, system maintenance, and procurement responsibilities for the air traffic control modernization program known as NextGen.

The current system of air traffic control relies on ground-based radar. When radar technology first came to the civilian aviation sector in the 1950s, it was cutting edge. Today, the limitations of radar hamper the FAA's ability to manage heavy air travel demand-especially in the Northeast and other major metropolitan regions-and to efficiently reroute planes in response to severe weather. NextGen is an effort to transition to a more efficient satellite-based system.

The term privatization is politically fraught, for good reason: Privatization often means turning over government assets that serve as nonmarket-based public goods to a private entity with a profit motive. Fights over privatization are especially contentious when the private sector takes over infrastructure that functions as a public utility, with all the monopolistic advantages that can entail.

In this case, however, Congress is not contemplating turning over air traffic operations to a for-profit company seeking to earn a return on investment. Instead, privatization likely would take the form of a congressionally chartered, not-for-profit government corporation that would operate independently of the FAA.

Yet, this sensible air traffic reform plan has the support of the union involved - the National Air Traffic Controllers Association (NATCA) - because they've seen technology, performance, and working conditions improve at air traffic control corporations in other countries. Another possibility is the formation of a hybrid public-private partnership. The goal for aviation stakeholders, to the extent that there is any unanimity, is to create an Air Navigation Service Provider, or ANSP, that is governed with substantial input from industry, is budgetarily self-sufficient, and operates independently of Congress.

The prospect of privatizing air traffic operations-and possibly, the procurement responsibilities for NextGen air traffic control modernization-raises many questions. Below are four of the most pressing.

Questions:

If the current system of air traffic control governance works well, why privatize it?
How would privatization affect NextGen implementation?
How would privatization affect aviation policy?

Reference no: EM133697380

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