Will Trump’s Plan to Privatize the FAA Really Improve Air Travel?
Policy + Politics

Will Trump’s Plan to Privatize the FAA Really Improve Air Travel?

REUTERS/Louis Nastro

President Trump is reviving a controversial measure to transform the Federal Aviation Administration and its 30,000 air traffic controllers, technicians and managers into a private, non-profit corporation.

Trump announced his legislative proposal late Monday morning during a ceremony in the East Room of the White House. It was part of the administration’s planned week-long focus on the nation’s infrastructure shortcomings and the president’s call for $1 trillion of new spending in the coming decade on highways, bridges, waterways and airports.

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Here’s a rundown on the basics of the plan and what’s at stake:

What Is Trump calling for?

Gary Cohn, director of the National Economic Council, told reporters late last week that government procurement rules and uncertainties over the annual congressional appropriations process have impeded the FAA’s ability to implement a $35.8 billion modernization program called NextGen.

Trump and his GOP allies on Capitol Hill believe that a privately operated FAA could step up the effort to bring the air traffic control system into the 21st century.

The idea is to run the FAA more like a business than a government agency to achieve greater efficiencies and to avoid restrictions on acquisitions or hiring consultants. By operating independently, the FAA would also be spared the adverse impact of a budget crisis or a partial government shutdown that could lead to the furloughs of some employees.

Does the air traffic control system really need to be fixed?

The NextGen program to update air traffic control was launched over a decade ago by the FAA as a complex interconnected array of new technologies. The intention was to reduce flight delays and lower fuel consumption and carbon emissions that contribute to global warming. But the FAA has been sharply criticized for years by the Government Accountability Office and the Transportation Department’s Inspector General for repeatedly missing deadlines and running over budget with NextGen.

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“At a time when every passenger has GPS technology in their pockets, our air traffic control system still runs on radar and ground-based radio systems that they don’t even make any more, they can’t even fix anymore,” Trump said Monday. “And many controllers must use slips of papers to track our thousands and thousands of planes that are up in the air.”

How would the new system work?

The administration wants a newly constituted non-profit corporation to lead the way in converting the air traffic control system from an outmoded land-based radar tracking system to a digital satellite based, GPS-style tracking system. 

Under an approach designed by Rep. Bill Shuster (R-PA), chair of the House Transportation Committee, a new corporate board representing the users of the system and the public would govern the air traffic control system, much like the system used in Canada and dozens of other countries.

One big change would be the way the air traffic control system is financed. Currently, federal excise taxes on jet fuel and airline tickets generate an estimated $14.7 billion annually for use in operating the FAA. Under Shuster’s proposal, the FAA would be funded by fees paid by aircraft operators. Those fees would be paid based largely on actual use of the traffic control system – something that the airline industry has favored for years.

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The FAA would continue to operate as an oversight agency for the airline industry, responsible for regulatory changes and safety issues including aircraft certification. Moreover, Trump and other administration officials said that airports operating in rural areas would not get short-shrift in FAA coverage and services in favor of larger hubs, though that worries some critics.

Shuster’s plan ran into opposition in the Senate last year.  Some opponents raised concerns about problems inherent in a long transition period as well as legal obstacles to transferring the FAA’s assets to a new corporation. There was also controversy over the makeup of the board that would oversee the new FAA corporation.

Who’s for it and against It?

Airlines for America, which represents most of the largest carriers, and the National Air Traffic Controllers Association, support the privatization. 

House Republicans including Shuster and former Rep. John Mica (R-FL) previously have explored the idea of privatizing the FAA roughly along the lines of the U.S. Postal Service and Amtrak, but repeatedly ran into resistance from influential GOP Senate members who opposed the notion of shifting government activities and responsibilities to a private corporation.

Last year, Sen. John Thune (R-S.D.), the commerce and science committee chair, blocked Shuster’s bill in favor of his own FAA legislation that didn’t include a privatization plan. 

Some critics worry that the privatization of the FAA might result in more abuses, reduced safety levels and even higher ticket prices. 

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But the privatization idea has gained momentum more recently, with several aviation industry groups offering tentative support. And with the Trump administration now pushing the latest iteration of the proposal, it is likely to get a warmer reception on Capitol Hill among Senate GOP leaders.

The plan has drawn support from many of the 14,000 air traffic controllers, in part because of their concern about the antiquated technology they must use. However, they also favor it because Shuster’s plan would still allow them to be part of a union, which was an important consideration in getting behind the legislation. Shuster’s approach has also won support from all the former FAA commissioners and three past transportation secretaries, according to Trump.

Does privatization make sense?

Overall, proponents say it is something that would dramatically improve efficiency and safety, cut through government red tape and procurement regulations that can result in the purchase of new equipment that is no longer the latest technology, and insulate the operation from political interference or budgetary crises.

On the downside, some critics fear that a new, private corporate board would be less responsive to public complaints about airline performance and seating comfort, that there is a danger in giving up congressional oversight, and the fear by smaller air craft manufacturers, regional airlines and pilots that the major airlines would dominate the board and call the shots.

Will it result in 'cheaper, faster and safer travel,' as Trump claimed?

By speeding up the transition from ground based radar systems to satellite GPS tracking under a new FAA board unencumbered by federal procurement regulations, planes eventually will be able to take off and land more quickly and with fewer delays.

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And it’s possible that passenger travel would be cheaper if consumers didn’t have to pay a ticket tax, although there would be nothing to prevent the airlines from passing along their operational fees to their customers. Some critics say prices could rise.

How soon will changed be made?

Shuster’s approach has won support from all the former FAA commissioners and three past transportation secretaries, according to Trump, but there’s no telling when – or if – Congress will go along with the privatization proposal. It will likely be considered as part of an FAA reauthorization bill this year.