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Reason Foundation

Air Traffic Control Reform Newsletter #35

Topics include: ATC overload likely result of growth in very light jets; "base closing commission needed for ATC; speeding up RNP routes; the ATC funding crunch; and NATCA's losing contract battle.

Robert Poole
June 1, 2006

In this issue:

Very Light Jets Will Increase ATC Overload

The recent announcement by Florida-based DayJet of its initial locations for air-taxi service using Eclipse 500 jets has kindled speculation about the likely growth of flight activity by such very light jets (VLJs). In its 2006 Aviation Forecast, the FAA projected the number of turbojet-powered planes in general aviation and air taxi service to grow by 10.2% annually through 2017 (thanks in part to the advent of VLJs). That means the number of jets in this category would grow from 8,628 today to 17,270 by 2017; that's faster growth than any other category of plane in the forecast. A recent Eurocontrol study of business aviation in Europe forecast 6.5% annual growth in business jet numbers there over the next decade.

How much impact will business jet and VLJ growth have on the ATC system? That depends in part on what fraction of the VLJ fleet is used for air taxi service. Most business jets fly only about 4-500 hours per year. But a viable air taxi operation probably needs to average 6 to 8 flight hours per day. That's 2-3,000 flight hours per year, much closer to airliner utilization. NASA's Langley Research Center has a project under way to model the impact of VLJs on the ATC system. Aviation Week quotes NASA's Jeff Viken as saying that they assume VLJ air taxis will fly mostly at 25,000 feet on 250-mile trips; that's well below most airline flight activity. But VLJs owned by corporations or individuals will cruise at or above airline flight levels, at slower speeds than airliners, and generally on longer trips. In congested terminal airspace, even when a VLJ uses a reliever airport rather than an air carrier airport, it will in many cases still be controlled by the same TRACON, adding to the complexity of traffic in that terminal airspace.

The growth of business jets (including VLJs) makes a mockery of claims by groups like the National Business Aviation Association that business aviation is only a "marginal" user of a system designed for airlines. That may well have been true at one time, but aviation policy today must be made for the future, not the past. The FAA Forecast projects flight hours and ATC activities, by type, through 2017. From the tables in that document (at www.faa.gov/data_statistics/aviation/), we find that annual flight hours by turbojet aircraft in the "general aviation and air taxi" category will triple from 3 million in 2005 to 9.6 million in 2017. Since nearly all of those hours fall into the IFR (instrument flight rules) category, those 9.6 million business jet hours constitute will 29.6% of total domestic IFR flight hours in 2017. Not exactly marginal use.

But it gets more dramatic when we look at the tables projecting IFR aircraft handled by the ATC system. The air taxi and general aviation categories total 40.4% of such traffic at en-route centers by 2017 (vs. 53.6% for airlines). And when you look at IFR operations at airports with control towers, air taxi and general aviation adds up to 65.4% of the total (vs. 30% for airlines). Hardly marginal use. (Air taxi alone constitutes 22.4% of en-route center activity by 2017 and 28% of tower activity.)

The coming year will see a huge debate over the planned shift of ATC funding from aviation taxes to direct fees for service. Keep these numbers in mind when NBAA and its allies try to pretend that business aviation is still a marginal user of the ATC system.


A "Base Closing Commission" for the ATC System?

Monday of this week (June 26) marked the launch of the FAA Air Traffic Organization's consolidation of administrative, service, and support operations from nine regional offices to three: one each in Atlanta, Ft. Worth, and Seattle. The ATO projects savings of $460 million over 10 years from this consolidation. Needless to say, at a hearing of the House Aviation Subcommittee, Rep. Maxine Waters (D, CA) objected to the required transfer of 86 employees from Los Angeles to Seattle. So far, no legislation has been introduced to stop this consolidation, but the House voted 261 to 166 a few weeks ago to prohibit the FAA from spending any funds to "eliminate, consolidate, co-locate, or plan for the consolidation or co-location" of any TRACON.

This is madness. The next-generation system being planned by the Joint Planning & Development Office (JPDO) depends critically on being able to consolidate facilities and retire obsolete ground-based systems (like ILSs and various radars). This is absolutely crucial to being able to triple the capacity of the ATC system at a cost that users can afford. As Mike Lewis of Boeing recently told Business & Commercial Aviation, "We can't just scale up today's system and its costs�45,000 controllers just doesn't work! It's just too expensive."

But Congress members apparently cannot restrain themselves from trying to preserve the status quo of facilities and jobs in their districts. And this is not a new phenomenon. As long-time aviation expert Frank Frisbie (now with Apptis) points out in a forthcoming article in the Journal of Air Traffic Control, this problem has been with us for decades. He notes that the 2005 Federal Radio Navigation Plan "is [again] full of wishy washy statements" about phasing out and consolidating ATC infrastructure, "giving evidence that there is still no plan in the Plan."

Frisbie notes the striking similarities with the problem historically faced by the Defense Department in closing and consolidating obsolete and surplus military bases. During the 1980s, Rep. Dick Armey (R, TX) came up with the brilliant idea of a Base Realignment and Closure (BRAC) process. Instead of proposing the closure of individual bases, to be attacked one by one by members protecting their districts, the idea was to have an expert body develop an overall proposal for bases to be closed and consolidated. The entire package would be subject to an up-or-down vote, without amendments. Obviously, some members (and their districts) would still lose, but others would clearly win. And by agreeing to bind themselves to this process in advance, the losers can go back to their constituents with a solid defense: "I did my best, but those are the rules."

So Frisbie argues that a BRAC process will be needed in order to implement the next-generation system. I think he's right. So does House Aviation Subcommittee chairman John Mica (R, FL), who announced his support for the idea last week (Aviation Daily, June 26).

This inability to put the public interest ahead of parochial interests is one more reason why Congress is not the right entity to serve as the de-facto "board of directors" for the ATC system.


Speeding Up Implementation of RNP

The Wall Street Journal's Susan Carey (May 12, 2006) did an exceptionally clear job explaining how RNP (Required Navigation Performance) can increase the effective capacity of airports located in difficult places or subject to frequent bad weather. As I wrote in Issue No. 31 early this year, RNP is a functional specification for very precise flight paths. It makes use of the flight management system (FMS) computer on board many airliners (and advanced business jets) to fly a precise track on landings and take-offs. For RNP to be used, two conditions must obtain: (1) the plane must be equipped to maintain a flight track to the required degree of accuracy, and (2) a specific RNP approach or departure path must have been designed, and approved by the FAA.

What Carey's article did not present was the struggle experienced by airlines in getting such paths approved. Alaska Airlines pioneered RNP approaches in their home state in the early 1990s, and has been the lead airline for new ones recently approved for San Francisco, Palm Springs, Portland, and Washington Reagan. But one of my sources in an aviation company writes of the "nearly infinite impedance that Alaska Airlines had, getting their new procedures approved" at these airports, despite "a decade of flying many thousands of approved and highly successful FAR 121 RNP operations with paying passengers in Alaska." Continental, he writes, "had the same painful experience getting RNP in Houston," not yet finally approved. Apparently, despite FAA Administrator Marion Blakey's strong support for RNP as a transformational technology, the troops in the field drag their feet, insist on mountains of paperwork, and cause "unnecessary pain and extended delay" in getting these things approved.

By contrast, Australia, New Zealand, and Canada have authorized private companies to develop RNP routes in a can-do fashion. For example, Qantas Airways in February learned that the ILS for Runway 16R at Sydney would be shut down for extended maintenance within two weeks. Working with RNP specialist Naverus, it developed a new RNP approach in just 14 days, and got it approved by CASA (the counterpart of our FAA) in just eight days more. Naverus has developed several dozen RNP approaches at Canadian airports for WestJet, and for Qantas and Air New Zealand in new Zealand.

It's high time the FAA adopted this model of designation and delegation. A handful of new RNP approaches every year may sound like progress, but not when hundreds could be developed and made good use of.


Why the "No Funding Crunch" Claim is Wrong

Opponents of the shift from aviation taxes to ATC user fees continue to claim that there is no ATC funding crunch. Last year this was the mantra of controllers' union NATCA. Today the same song is being sung by the Aircraft Owners & Pilots Association. In forum after forum, Phil Boyer and Andy Cebula keep repeating that airline yields are rising, the Aviation Trust Fund will have a growing surplus, and the status quo is just fine, thank you. What are they leaving out?

First, on the question of airline yields, they are seizing on a short-term trend that is very unlikely to be sustained. Since bottoming out at an all-time low in 2005, yields have been increasing for the past year. But they are still 16% below the level of early 2001. More important, the overwhelming long-term trend, over many decades, is of ever-declining yields. That trend was already evident prior to the Airline Deregulation Act of 1978, but the resulting creation of low-cost carriers reinforced it, by making the industry far more competitive. My colleague Vaughn Cordle, of Airline Forecasts Inc., expects yields to fall in 2007, resuming their long-term downward trend. He points out that airlines have gone through a massive restructuring that has significantly reduced their costs, but those savings have not yet been passed along due to high fuel costs. Moreover, airlines right now are operating at historically high load factors, which are not likely to be sustained once more capacity enters the market, probably by next year.

But the larger point is one that I made last month, when the JPDO's Research, Engineering and Development Advisory Committee released its cost estimate for implementing the next-generation system. Their best estimate is that it will cost $25 billion over 20 years, over and above what FAA can realistically project their current funding sources to provide. Don't forget, they have to operate and maintain the existing legacy ATC system while developing, testing, and implementing the new one. When AOPA and others talk about Trust Fund surpluses, that is before the cost of NGATS!

The most businesslike way to come up with $25 billion is to issue revenue bonds, to be repaid by a reliable stream of user-fee revenues over the lifetime of the new system. That is why, contra AOPA, user fees are essential to bringing about the next-generation system.


Post-Mortem on Controller Contract Battle

As I imagine you know by now, controllers union NATCA lost its battle to have Congress overrule existing law regarding an impasse in contract negotiations between the union and the FAA. Therefore, the new contract was put into effect earlier this month by Administrator Marion Blakey.

Now we should all observe carefully, to see if the mass exodus of disgusted controllers that was predicted by the union leadership actually materializes. My advice: don't hold your breath. One of my controller friends tells me that controllers in the age group 50-56 (the window between "can go" and "must go") will very likely stay on several more years�after all, for existing controllers, their current generous pay and most perks continue, and the more years of service, the better their pension. And the FAA's Gerald Lavey notes that of the controllers who will reach age 56 by the end of this year, already "nine percent have requested a waiver so they can continue beyond their mandatory separation age. We continue to receive requests for waivers and expect more."

One further thought. This is the third all-out battle NATCA president John Carr has chosen to wage in the halls of Congress and the court of public opinion. The first was over whether ATC is "inherently governmental" and hence exempt from any aspect of it being contracted out. The second was over the FAA's outsourcing of Flight Service Stations. And the third was over the new contract. In all three cases, the Bush Administration made credible veto threats. And in all three cases, NATCA lost when the final votes were counted. Most of the controllers I've met over the years are not Carr-type militants. Do they really want to continue this kind of union leadership, at a time of impending structural transformation of air traffic control?


News Notes

ANSP Cooperation. Two of the largest commercialized air navigation service provicders will jointly pursue business opportunities in the Persian Gulf, India, and China. Airservices Australia and soon-to-be-privatized Deutsche Flugsicherung (DFS) will share market data and develop strategies to market air traffic control, tower, and airside services and products, according to Aviation Week (June 19, 2006).

Lessons from Canada and the UK. An important new report on ATC restructuring has just been made available online. "Reforming the Federal Aviation Administration: Lessons from Canada and the United Kingdom," was researched and written by Clint Oster, one of America's leading academic experts on aviation. You can download the report from www.businessofgovernment.org/pdfs/OsterReport.pdf.


Quotable Quote

"The real problem has been�and likely remains�the inability of the FAA to use its available resources wisely (or effectively) enough to keep up with changes in demand and technology. Providing a new source of funding won't solve the FAA's institutional problems . . . . What's needed is an ATC organization that is truly independent with its own sources of funding, answerable to all its users, and overseen by the FAA. Government bureaucracies are simply not well suited to running production operations like ATC. We don't expect (or allow) the federal government to manufacture pharmaceuticals. Rather, Congress created the FDA to oversee the drug development and manufacturing processes. Notwithstanding NATCA's strong preference to keep its Congressional allies in a position to mau-mau the FAA, why can't we follow that sensible approach with ATC?" -- Dan Kasper, LECG



Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy


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