America's air-traffic-control (ATC) system lags far behind the state of the art, with technologies and procedures still based largely on what was modern 50 years ago (radar, ground-based navigation aids, voice radio, etc.). The aviation community strongly supports sweeping modernization as promised by the Federal Aviation Administration's NextGen program. But that program, as well as FAA's ongoing ATC operations, is now under serious threat.
The first warning shots were fired several months ago, when the congressionally imposed sequester hit FAA hard. Furloughs (one unpaid day off every ten days) were imposed on air-traffic controllers and most other staff, and nearly 150 small control towers were nearly shut down through the end of the fiscal year -- it took massive protests for Congress to shift enough funds from airport grants to air-traffic control to undo the cutbacks.
But the fact that budget cuts could wreak such havoc was a wake-up call to the aviation community -- especially as it looked forward to nine more years of funding reductions. The FAA's Management Advisory Council sent a letter to Congress's senior aviation officials in March, telling them that the current funding system is broken and must be replaced. The president of the powerful Aircraft Owners & Pilots Association posted an interview on the organization's website musing that it might be time to consider outside-the-box alternatives -- perhaps something along the lines of the self-supporting, nonprofit air-traffic corporation in Canada. And at a NextGen conference late in June, the heads of controllers union NATCA and pilots union ALPA both said the current funding system needs to be replaced, so that air-traffic control can no longer be held hostage to politics.
An across-the-board solution would include three key elements. First, de-politicize the funding of the ATC system by taking it out of the federal budget. That's not possible as long as the funding consists of various user taxes, since tax money can be spent only if it's authorized by congressional committees and appropriated by other committees. Instead, the system needs to be paid for directly, just as people pay their utility bills directly to the utility provider, whether that provider is government or private. In most of the world, aircraft operators pay the ATC provider directly, not via the government budget process.
The second element is to stop trying to pay for major modernizations (like NextGen) out of annual cash flow, and instead finance these capital expenditures (just as airports, toll roads, and electric utilities do). That requires a bondable revenue stream, which direct user payments for ATC services would provide. ATC providers in Canada, Germany, the UK, and elsewhere have investment-grade bond ratings, giving them ready access to the capital markets.
The third key change would be to focus the reformed ATC provider on meeting the needs of its aviation customers, rather than responding to congressional mandates, OMB directives, and endless critiques by the GAO and the DOT inspector general. Ideally, that would lead to a governing board representing aviation customers, as well as other stakeholders such as air-traffic controllers and airports.
Those three changes are not something I just made up. They are features of Nav Canada, NATS (UK), DFS (Germany), AirServices Australia, and about 50 other reformed ATC providers worldwide. A sequester-like disaster could not affect air-traffic control in any of those countries.
This is also not a new idea for the United States. It was first proposed by the airlines in 1985, but Congress was not interested. It was rediscovered by Vice President Gore's reinventing-government shop in 1994, which led to the DOT's proposal for a self-supporting US Air Traffic Services Corporation. That was also dead on arrival in Congress. Several years later, a blue-ribbon commission headed by former congressman (and later DOT secretary) Norm Mineta recommended something similar. Also D.O.A.
A key reason these reform proposals failed was that the aviation community never rallied around them. Private pilot groups opposed them, for fear that ATC user fees would be ruinously expensive, and at one point the controllers' union was opposed. And no serious champion ever took up the issue in Congress.
Today, however, nearly all the key aviation groups agree that the current funding system is broken and must be replaced with one that is immune to budgetary politics. There is not yet consensus on what form this should take, but in my view the best model out there is Nav Canada. It is governed by a stakeholder board, including private pilots, and it charges small planes less than $100 per year.
If the aviation community rallies around such a proposal and gets the business community on board, the U.S. air-traffic-control system can be de-politicized, made self-supporting, and can finance the NextGen modernization we urgently need.
Robert Poole is the Searle Freedom Trust Transportation Fellow and Director of Transportation Policy at Reason Foundation. This article first appeared at RealClearPolicy.com.