Federal Privatization And Air Traffic Control

Traveling by air this holiday season? Then you are likely to encounter off-duty air traffic controllers leafleting about the proposed federal competitive sourcing initiative, under which federal agencies will be responsible for putting some of their functions and jobs up to competitive bid. Problem is, the ATC workers and the FAA have their facts wrong about how this initiative will affect ATC, as well as misunderstanding how outsourcing and privatization are likely to be applied to air traffic control. This commentary by Reason founder Bob Poole describes the flaws in their position and the typical ways that air traffic has been privatized in countries around the world. An excerpt:

In any case, outsourcing is not the form of privatization being used in other countries that have accomplished major ATC reform. Australia, Germany, New Zealand, South Africa and more than a dozen other countries have transformed their ATC agencies into government-owned ATC corporations. Instead of being embedded in transportation bureaucracies, these corporations are independent, paid directly by airlines to provide cost-effective ATC services. And they are regulated at arm’s length by the government’s air-safety regulator. These ATC corporations have modernized more quickly than the FAA and have come to resemble commercial enterprises.

Canada and the U.K. have gone one step further. They have created quasi-private ATC corporations—Nav Canada and NATS. The former is a non-profit, with a board composed of aviation stakeholders, including controllers. The latter is part-private, part-government. Since both depend heavily on North Atlantic traffic, both took serious hits from the big declines in that market after 9/11. To survive, year-old NATS is getting an additional capital injection from both government and private owners. By contrast, since Nav Canada had already built up financial reserves over its six-year history, it’s come through the post-9/11 in pretty good shape.

These two dozen ATC corporations are what the leafleting controllers point to when they claim that “privatization has not worked in Great Britain, Canada, and Australia, and it won’t work here.” On the contrary, privatization via outsourcing of small control towers is working here. And quasi-privatization via creation of government-regulated ATC corporations has worked quite well overseas. It’s too bad the FAA is so tongue-tied when it comes to explaining these things to air travelers.

Don’t let them tell you otherwise.