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Air Traffic Control Reform Newsletter #17

Topics include: union loses privatization battle, ATO's promising debut, the slot credit system, and reconsidering LAAS.

Robert Poole
December 1, 2003

In this issue:

Reauthorization Passes - Without Anti-Privatization Provisions

In a victory for common sense and good government, the Senate last month passed (by a voice vote) the FAA reauthorization bill, after much gnashing of teeth over the issue of further outsourcing of ATC activities. In the end, the Senate agreed to the House-passed bill, which was shorn of the anti-privatization amendments that had been added to earlier House and Senate versions over the summer. The face-saving compromise was a letter from FAA Administrator Marion Blakey promising that the agency would not add any more contract towers during FY 2004, and that no decision on possible outsourcing of flight service stations would be made next year, either — though the ongoing A-76 study of that possibility will continue.

That letter is the sum total of what controllers' union NATCA managed to achieve after a $7 million, 11-month campaign that began with leafleting at airports last Christmas, released an anti-privatization white paper in February, ran ads on television, and included news conferences, editorial briefings, op-ed articles, and heavy-handed legislative tactics. The campaign alienated virtually every other aviation interest group, all of which banded together to urge passage of the reauthorization bill without the troubling anti-privatization amendments.

NATCA's real target was to undo President Bush's executive order from June 2002 that undid the "inherently governmental" language that NATCA persuaded Bill Clinton to slip into his December 2000 executive order implementing a performance-based organization for air traffic control. With its years of litigation against the contract tower program failing to bear fruit, NATCA tried an end-run around the courts by undercutting the legal basis for towers to be operated by anyone other than the federal government. But the Bush administration noticed, and fixed the problem, catching NATCA by surprise. It also played hardball right back, by threatening to veto any bill constraining the FAA's ability to make use of competitive sourcing, one of the pillars of the President's Management Agenda.

Ironically, not a single control tower has been outsourced during the three years of President Bush's administration. That compares with 116 FAA towers that were added to the program during the eight Clinton years. Where were Sen. Lautenberg and Rep. Oberstar during all those years? Apparently safety was not at risk when their president was contracting out control towers.


ATO Makes Promising Debut

It's been a long time coming. Six years after the Mineta Commission recommended it, and three years after Congress gave FAA permission, the FAA announced last week the initial organizational structure of its new, performance-based Air Traffic Organization (ATO). The Commission said that ATC should be run like a business, with its own organizational structure, accounting system, revenue stream, chief operating officer, and board of directors (albeit still safely within the FAA itself, unlike real ATC corporations created by governments in more than 30 other countries). Congress balked at creating a user-fee revenue stream, but gave permission for the rest of the package.

The big hold-up for most of the last three years was finding anyone willing and able to take on the task of being the new COO. Two headhunter firms failed to turn up anyone, until the quasi-board (dubbed the Air Traffic Services Subcommittee) clarified the job description this year and streamlined the reporting relationships. Those changes led to the hiring of Russell Chew, a former senior pilot at American Airlines. As both a corporate executive and an FAA customer, Chew is in a good position to know what a high-tech, 24/7 service business ought to be and do. The big question is: will he be able to make meaningful changes in what Aviation Week has called "one of the federal government's most hidebound bureaucracies?"

Despite my long-standing skepticism about the prospects for internal reform, I have to say that the first few signs are positive. Chew's Nov. 25 speech to the Aero Club of Washington acknowledged the magnitude of the challenge he faces. "All of the symptoms of an organization that has lost its focus are here — budget problems, cost overruns, delayed decisions, and so on." But he also spoke strongly about ATC being a service business that should be judged by the value it delivers to its customers. And, very significantly, he promised that the new ATO would be regulated at arm's length by "a new, independent air traffic safety office" in FAA, as called for several times by this newsletter.

The new organization chart looks like a step in the right direction, especially with the dismantling of FAA's centralized acquisition organization, the source of the agency's miserable track record for cost overruns, schedule delays, and systems that often don't really meet customer (or employee) needs. In future, acquisition programs will be managed by the line organizations that deliver the services to customers.

There's a lot of well-deserved skepticism about how much change even a very talented outsider like Russ Chew can bring about within this major portion of FAA. For now, we're happy to give him the benefit of the doubt and wish him well in taking on this enormous task.


Slot Credit System Saves Time for Airlines

Due to 2003's lower levels of air traffic (compared to the boom times of 1999 and 2000), delays have not yet returned to the crisis levels we saw then. The past summer was relatively mild-except during periods of bad weather. Like me, you've probably been stuck at a connecting hub airport when the system falls apart, due to the cascading effect of delays and cancellations. But starting this summer, airlines have had a new way to cope with such situations: the slot credit system (SCS).

Basically, SCS creates a form of slot trading. When an airline cancels a flight and gives up a takeoff slot, they now have an incentive to quickly notify the FAA command center in Herndon, VA, because the center will give the airline a credit if it can use the returned slot for another airline's delayed flight. This helps get the hub airport back up to speed in an orderly fashion. With the credit, the airline can make sure one of its high-priority flight gets away sooner.

Airline response to SCS was pretty rapid, as carriers began to see benefits in time saving. Early adopter Northwest told Aviation Daily that it saved about 100 hours of flight delays in September (worth about $150,000), thanks to SCS. Others estimate that when fully used by airlines, the system could save some 200,000 hours of delay per year.

SCS is made possible by the government/industry program known as Collaborative Decision Making (CDM), one of the core technologies of the Free Flight program. One of SCS's designers, Metron's Michael Wambsganss, told ATM Global that SCS is "the first step toward a more dynamic and complex trading mechanism that will be a basic element in the CDM system." I might add that there are no technical obstacles to shifting from a trading system to a pricing system, should we eventually get to the point of paying for ATC via fees for services, like other countries do.


Will LAAS Be Obsolete Before It's Operational?

The Global Positioning System (GPS) is a marvel that is revolutionizing civilian as well as military navigation. And it's certainly a cornerstone of future high-tech air traffic control. But because GPS signals are not accurate or reliable enough for precise control of air traffic, the FAA has two augmentation programs under way. The first one, Wide Area Augmentation System (WAAS) went live for the first time this summer, though it's hugely over budget (nearly $3 billion compared with an estimated $900 million) and five years behind schedule. Further behind is the Local Area Augmentation System (LAAS), aimed at improving the signal accuracy enough to permit bad-weather landings, even under stringent Category II and III conditions (though initially aimed only at the less-demanding Category I conditions).

The Inspector General estimates that LAAS is now four years behind schedule — but in this case, that might be a blessing in disguise. The reason, as suggested by John Sheridan in the October issue of Aviation International News, is that Europe's forthcoming Galileo system may make LAAS superfluous. Reporting the views of some of those participating at a recent U.S. Institute of Navigation conference, Sheridan suggests that the combined signals from Galileo and WAAS "could provide Cat. I precision approach guidance to virtually every runway in the northern hemisphere" 10 years before LAAS becomes fully available.

To be sure, Galileo does not yet exist, though it's a high-priority European Union project that appears to be moving forward rapidly. And there is a definite political issue over whether the United States (i.e., the FAA) would approve a foreign satellite system for Cat. I approaches in this country (even though the rest of the world now uses our GPS for navigation). But at a time when ATC is becoming increasingly global and satellite-based, and when FAA's capital investment budget is under great stress, canceling LAAS could free up resources for much more critical modernization projects. The trade-offs are certainly worth looking into.


ATC Corporations Collaborate in Europe

Speaking of ATC becoming global, we're seeing more and more collaborative efforts among the ATC corporations of Europe and other countries. Among the leaders of this trend is the UK's NATS. For example, NATS and Ireland's IAA last month signed a letter of intent to extend, starting in 2005, radar-controlled ATC services from Shannon into a new Northern Oceanic Transition Area northwest of Ireland. NATS and Spain's AENA last month moved into a new stage of joint development work on how to adapt AENA's SACTA system for use in the UK. If the 14-month study finds the system to be a good fit, it will be launched at NATS's new $200 million ATC center at Prestwick, due to become operational in 2009.

Meanwhile, Denmark's ATC corporation, Naviair, is lending a number of controllers to ATNS South Africa for 17 months. The latter is experiencing an acute shortage of controllers, while the former has a modest surplus due to the current downturn in European flight activity. The deal came about in part because ATNS is now introducing a new ATC system similar to that which Naviair will introduce in 2006. Thus, the loaned controllers will have a head start on the new Danish system when they return to Denmark.

And four Nordic countries have begun collaborating in anticipation of the Single European Sky, creating the NUAC Company to provide upper-level ATC services. Thus far, only Denmark and Sweden have agreed to have NUAC take over operations at upper levels, in late 2005/early 2006. But the Finnish and Norwegian providers continue to participate in the project and consider themselves "potential co-owners" of the forthcoming NUAC Company, according to the latest issue of CANSO News. (www.canso.org)


News Notes

Nigeria Is Newest CANSO Member. ATC corporations exist on every continent, including Africa. The latest one to qualify for full membership in the Civil Air Navigation Services Organization is Nigerian Airspace Management Agency (NAMA). It's the fourth such corporation on that continent, the others being ATNS (South Africa), CAA (Uganda), and Roberts Flight Information Region (Sierra Leone, Liberia, Guinea). NAMA's membership brings the world total of full-fledged ATC corporations to 31.

Nav Canada Rate Increase Upheld. The 6.9 percent increase in ATC fees put into effect by Nav Canada earlier this year has been upheld by the Canadian Transportation Agency, which on Nov. 19th dismissed an appeal filed by Air Canada. The regulatory agency ruled that the ATC company had followed the law and proper procedures and set its charges "based on reasonable and prudent projections [that] would not generate revenues exceeding its current and future financial requirements in relation to the provision of civil air navigation services." For fiscal 2003, Nav Canada operated on a breakeven basis.


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


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