Why There's Turbulence Around Privatizing Air Traffic Control

SMITH BRAIN TRUST – It's an idea that has, at various points, had support from both major political parties. And it's already been done in many major industrialized countries. So what's so difficult about privatizing air traffic control here in the United States?

Nearly everything, says Michael Ball, senior associate dean for faculty and Dean's Chair in Management Science for the University of Maryland's Robert H. Smith School of Business.

Air traffic control (ATC) has long been government-run for several reasons. There's the fact that it involves the use of a public good, the national airspace. And there's the overriding public concern for safety. Plus there are the potential anticompetitive issues stemming from the fact that air traffic control services most naturally would be provided by a single entity.

But there are also potential advantages from taking air traffic control out of the direct control of the government, says Ball, who also is co-director of NEXTOR, the National Center of Excellence for Aviation Operations Research, and has a joint UMD appointment within the Institute for Systems Research (ISR) in the Clark School of Engineering. For starters, it's a labor-intensive function that could benefit "substantially" from capital investment and innovation, Ball says.

"Particularly compared to the pace of change in computing and communications technology across the broader economy, the [Federal Aviation Administration] has been notoriously slow in adapting new technologies," he says of the agency that oversees all aspects of civil aviation in the U.S.

That slowness is partly because of the "very high safety standards" imposed in the aviation industry. But it's also because, "the FAA suffers from poor project management, uncertainty in funding streams and micro-management by Congress," he says.

"There are 20 air route traffic control centers scattered across the country," he says. "With today's technology, these could be consolidated to a much smaller number but members of Congress are loath to let such facilities, and jobs, move away from their districts."

Worries about safety, monopolies

The government, Ball says, should play a less hands-on role. He recommends maintaining a purely regulatory agency that insures system safety.

"International experience shows that the separation of the safety regulator and the air traffic control service provider can not only maintain a high level of safety but may even improve safety," he says.

The government should also maintain oversight over the use of the national airspace. "The issue of how this public good should be shared is a natural government concern but, more obvious to the general public, is the environmental impact of that use, most noticeably the noise exposure to communities around airports," he says.

At least initially, the non-governmental air traffic control agency would be a monopoly, and would need to be structured in a way to curb predatory practices, Ball says. The proposal under consideration has the privatized entity controlled by a board that includes representation of airspace users, such as airlines and private jet operators. Those are the people who would be most harmed by predatory prices.

Can it pass this time?

Similar proposals have failed on Capitol Hill, and this one isn't expected to be easy.

"Not only will many in Congress be reluctant to give up control over how and where the FAA's resources are used," Ball says. Plus, there isn't a quick gain for politicians who vote in favor.

Sure, the plan is expected to reduce air transportation delays, increase throughput and shrink air traffic control costs. But those benefits are likely to accrue "very slowly," Ball says, and might not even be noticeable in the next decade.

"A vote yes is fraught with political risk," says Ball. "What if there is a major accident shortly after the transfer? What if delays increase in the short term? What if ATC costs increase in the short term? What if an ATC facility is shut down in the district of a congressperson who voted yes? What if changes in flight patterns increase noise exposure to certain communities?"

Although privatization has worked well for Europe and Canada, potential political pitfalls could keep the Trump proposal from getting off the ground. The issue, Ball says, is complex.

"The new entity will have to be nurtured over time and it is even possible that multiple legislative steps will be required," he says. "These are not things Washington is known to be good at."