President Trump has proposed a plan to privatize the US's air-traffic-control system.
- President Trump has proposed a plan to privatize the US's air-traffic-control system.
- Proponents of privatization tout costs savings.
- Opponents argue privatization would increase costs and jeopardize access to services for smaller communities.
- Experts say modernizing air-traffic control (ATC) won't completely solve delays and congestion.
On Monday, President Trump announced his plan to modernize America's air-traffic-control system.
"We're proposing reduced wait times, increased route efficiency, and far fewer delays," the president said. "Our plan will get you where you need to go quickly, more reliably, more affordably, and, yes, for the first time in a long time, on time."
In fact, the president went as far as calling it an "air-travel revolution."
The White House plan will use the Aviation Innovation, Reform, and Reauthorization Act (AIRR) introduced in 2016 by the Republication Congressman Bill Schuster as its foundation.
The centerpiece of the AIRR calls for control of the country's air-traffic network to be transferred from the Federal Aviation Administration to one or more not-for-profit private entities.
The pros of going private
The privatization of America's air-traffic-control network has long been a hot-button issue. The White House argues that its plan would allow the FAA to focus on aviation safety while freeing the ATC-upgrade process from the burden of bureaucracy.
Privatization is expected to be achieved through the use of public-private partnerships (P3s), a contract-based business arrangement in which the public and private sectors cooperate to deliver a service or infrastructure project.
The advantages of a P3 are twofold. First, proponents say they can reduce the cost of a project by streamlining bureaucracy. Second, P3s are more effective in that they contract specialists whose expertise is focused on a particular subject area.
REUTERS/Jonathan Ernst
In addition, the cost of the modernization project is expected to be shouldered by fees generated from the parties that use the ATC system.Privatization's biggest proponents are the country's major airlines represented by the trade organization Airlines For America (A4A). In a statement, the group called Trump's announcement "bold leadership in prioritizing the modernization of our nation's air traffic control (ATC) infrastructure."
"This is a really important issue for the entire country," Hawaiian Airlines Chief Commercial Officer Peter Ingram told Business Insider.
"If you look at service between the Eastern US and the West Coast, flight times today are much longer than they were 20 or 30 years ago, and it's not because the airplanes are moving slower - it's because we confine ourselves to a fraction of the available airspace because we simply don't have the ATC infrastructure to be able to support taking full advantage of that."
In addition, Hawaiian, a member of A4A, and other carriers are limited to a handful of lanes across the Pacific, which often results in less efficient routing that causes more pollution and higher costs, Ingram said.
According to A4A - which includes American, United, JetBlue, Alaska, and Southwest Airlines - antiquated air-traffic technology has contributed to delays that cost the economy as much as $25 billion last year. As a result, the airlines are standing behind the president's promises to expedite the modernization of the country's ATC systems by updating satellite-based technology through privatization.
AP
A Hawaiian Airlines Airbus A330.
"It's not for lack of technology or lack of will to get [modernization] done," Ingram said. "We, fundamentally, as an industry believe that in the confines of the annual government budgetary system, we are not going to be able to make the necessary investment to fix the system even if there is the will to spend the money."
The cons
Opponents of the plan believe the privatization of the country's ATC systems is fraught with risk and negative side effects.
The Alliance for Aviation Across America argues that privatization would hurt the nation's smaller communities. In fact, the organization - which represents private operators, small business, and small airports - called Trump's plan a "power grab" by the nation's big airlines.
"We have 5,000 airports around the country of which 3,000 are public-use airports, but the majority of the commercial traffic, about 70%, goes through roughly 30 airports," Selena Shilad, the alliance's executive director, told Business Insider.
"So there are a lot of communities who are served by smaller airports or by municipal airports where the airlines will have no incentive to concentrate their resources."
According to Shilad, the airlines have long sought control of the ATC network to funnel resources to the markets that they care about the most. The alliance believes that the user-fee-based system supported by A4A would be detrimental to the smaller operators that dot the American landscape.
"Our infrastructure that connects large and small communities alike are crucial parts of the economy and access for communities of all sizes is an important part of keeping that economic engine going," Shilad said.
At least one major airline agrees with Shilad.
In a 2016 report, Delta, the second-largest airline in the world and a former A4A member, lends credence to the alliance's concerns.
"The current FAA system helps support equal service at both large urban airports and smaller rural ones, but privatization could cause smaller airports to limit service or shut down," the Delta report said. "As a result, rural residents could be forced to drive to urban areas to access the same airline service they currently enjoy close to home."
In addition, Delta questions whether it is prudent to privatize ATC when the FAA-managed system has evolved into the world's largest networks - and one of its safest.
A Delta Boeing 777 at LAX.
The Atlanta-based airline also questions whether privatization would lead to lower costs. According to the report, ATC fees in Canada and the UK increased 59% and 30% after the countries privatized their respective ATC systems.
During that same period, ATC fees in the US increased just 6%. The Delta report concludes that operational costs in the US will increase by 20% to 29% during the first 10 years of a privatized ATC network.
As for the Trump administration's plan, the airline wrote in a statement to Business Insider:
"Delta looks forward to working with the Administration and Congress on our shared goal of modernizing U.S. airspace. We remain committed to working together to identify ways to reduce delays, improve efficiency, and enhance airline performance while maximizing safety and minimizing costs."
But wait - there's more
As the debate over ATC privatization rages on, it should be noted that a modernized ATC system is not the silver bullet some make it out to be. It will not cure all that ails America's aviation network.
"Even the most sophisticated ATC system is not going to solve the chronic delay problem that plagues much of the country," author, commercial airline pilot, and industry commentator Patrick Smith wrote in a blog post. "The problem won't be solved until two things happen: First, airlines need to be better rationalize their schedules and, second, we need more runways and larger, better-designed airports."
Hawaiian's Ingram agrees.
"I think [ATC and airport infrastructure] are both big issues," he said. "There are airports throughout the US where the infrastructure is no longer adequate or we could use more capacity because things are very constrained."
Regardless of what happens, the fact that there is an open acknowledgment that America's air-traffic-control system and aviation infrastructure are in dire need of improvement is a step in the right direction.