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Reason Foundation

Air Traffic Control Reform Newsletter #8

Topics include: new administrator open to ATC privatization; AOPA warming to flight service outsourcing; the long-term need for more ATC capacity; and FAA's release of guidance for implementing RNP (required navigation performance).

Robert Poole
November 1, 2002

In this issue:

Blakey Keeps an Open Mind on Privatization

In a speech to the U.S. Chamber of Commerce on October 8th, new FAA Administrator Marion Blakey endorsed public-private partnerships as a general principle. In a follow-up interview with Inside FAA, Blakey told the newsletter that she would not rule out privatizing the ATC system during her five-year term�in marked contrast to predecessor Jane Garvey's outright opposition. "I want to see how air traffic control is working before a decision is made," she said. "It's still premature to determine if we should take such a big step in the direction of privatization."

John Carr, president of controllers' union NATCA, was quick to respond that he would begin educating Blakey about the realities of ATC, including the fact that the union is all-out opposed to the idea. This contrasts sharply to its position prior to Carr's tenure, when NATCA was on-board with the Clinton Administration's proposal for a self-supporting government ATC corporation to be called USATS. In those days, there was even friendly dialogue between Reason Foundation and NATCA officials over our idea for a nonprofit ATC corporation on which employees would have one or more board seats (very similar to what became Nav Canada). We referred to the Reason proposal as "USATS plus a board seat."

In the interest of equal time with Carr's educational efforts, I'm pleased to attach a statement on ATC reform signed last year by four former FAA Administrators, of both parties, along with another eight retired senior FAA officials. All 12 of them agree that ATC is a 24/7 high-tech service business that should be operated by a corporate entity, paid directly by its customers and accountable to them. Read it on our website at www.rppi.org/atcletter.html. Or see the attachment to this newsletter.


AOPA Seems Open to Outsourcing Flight Service Stations

Despite having been a staunch ally of ATC unions when it comes to privatizing the ATC system as a whole, the nation's largest general aviation organization has taken a moderate stance toward the possible outsourcing of the FAA's flight service stations (FSSs). The Aircraft Owners & Pilots Association has issued a background paper on the process now under way to assess the feasibility of outsourcing these functions—see www.aopa.org/whatsnew/air_traffic/a76_process.html. It's quite even-handed, noting the $500 million annual cost of the current FSS program (which equates to over $2,500 per GA plane), and noting that "the current FSS system is in a state of decline and disrepair," relying on 1970s computer technology and outmoded products and processes.

The AOPA report goes on to describe the federal-government-wide A-76 outsourcing program, which is being expanded as part of the President's Management Agenda. In the case of FSSs, the FAA first had Grant Thornton LLP do a feasibility study, which found that a substantial portion of FSS functions are commercial in nature and that there are firms available to provide these services (such as the firm providing the DUAT weather-briefing services to pilots, under contract to FAA). Those findings were sufficient to enable the launch of a formal A-76 process, which could lead either to these functions being outsourced or to their being reformed internally for more efficient delivery. The FAA has already achieved a major outsourcing success with its Contract Tower Program, under which more than 200 small-airport control towers are operated by private contractors, at savings of about two-thirds compared with FAA-operated towers.

Sources tell us that AOPA president Phil Boyer will meet next week with Wally Pike, president of the union representing FSS employees, NAATS. Pike had hoped to enlist AOPA to oppose the A-76 study as the slippery slope toward full ATC privatization. But the release of AOPA's position paper a week before the meeting seems to be sending Pike a message. Good job, Phil!


More ATC Capacity Still Needed, Despite Today's Slowdown

Back in the days of record congestion and delays, those opposed to ATC corporatization kept insisting that the problem could be solved with "50 miles of runway." Those days (the summers of 1999 and 2000) seem far away, but a recent study by DRI-WEFA expects "normal" air travel growth to resume, and with it new record levels of congestion. Indeed, with just the expected capacity additions provided by committed runway projects and ATC enhancements under way in FAA's Operational Evolution Plan (OEP), the study projects the full economic cost of delays in 2012 to be $15.2 billion, up from $9.4 billion in the record year of 2000.

That projection had led Boeing to repeat its call for going well beyond the OEP, to fundamentally redesign airspace and air traffic control. We certainly second that motion, but repeat our assessment that the likelihood of such dramatic change would be much greater if ATC were restructured into a self-supporting, de-politicized corporate entity, with a can-do mandate from its stakeholders to get the job done. Instead, we're more likely to get a continuation of status-quo thinking, as evidenced by a recent ATC Market Report headline, "Secondary Hubs Could Cause Airspace Congestion—FAA." The article noted the likely evolution of a "shadow" network of secondary airports served by America's rapidly growing low-fare airlines. Charlie Keegan, director of FAA's OEP, views this possibility as a yet another burden for the ATC system—as indeed it is, without the kind of major structural and technological changes that Boeing and other visionaries are talking about.


Kudos to FAA on RNP Launch

This newsletter has often been critical of FAA's performance. But our hats are off in support of the agency's release, last month, of an advisory circular providing detailed guidance for implementing a technique called RNP (required navigation performance). As the name suggests, it's a performance standard that takes advantage of modern onboard computerized flight management systems to make use of an array of inputs�both GPS and ground-based�to provide precision guidance to landings even at airports without precision landing systems. RNP was pioneered by Alaska Airlines for the perilous approach to Juneau in its often-inclement weather. Airline sources estimate that some 40 percent of the airline fleet is already equipped to fly RNP approaches, once they have been specified for individual airports.

That process is now under way at SFO, whose parallel runways are far too close for parallel landings in poor weather with existing landing aids, leading to a 50 percent cut in capacity (and huge delays) under those conditions. Administrator Blakey announced early in October that an RNP procedure for SFO will be approved "within a month." Another welcome location would be Reagan National, where RNP would permit safer (and quieter) approaches down the Potomac River. A Washington Post article by Don Phillips quotes Tony Broderick crediting Nick Sabatini, associate administrator for regulation and certification, as being the driving force behind the RNP circular. The new technique is a major step in the shift of ATC from ground-based centers to aircraft cockpits.


Running ATC as a Business

Never shy about speaking out on ATC corporations, NATCA's Ruth Marlin just had to weigh in on the pending one-day strike by controllers against Airservices Australia late in August. Marlin told ATC Market Report she was not surprised the controllers wanted to strike, given that Airservices operates as a business. "Advocates of air traffic control privatization hold Australia up as a model which the U.S. should follow. However, the reality of this situation makes it clear that profits should never come before the safety of the traveling public."

How's that again, Ruth? Airservices Australia is a government corporation, not a private, for-profit business. Its charter is to run efficiently in the interest of its users, covering its costs from fees and charges and making its own decisions about operating, expanding, and modernizing its business. That means its decision-making is not subject to constant second-guessing by politicians, as is FAA's unfortunate lot. For example, despite AIR-21 supposedly having solved FAA's financial problems, Congress has been micromanaging its FY 2003 budget, telling it to spend less on its safer skies initiative, national airspace redesign, AMASS, Free Flight Phase One, STARS, and control center consolidations, among others.

Being able to run as a business means hiring skilled executives and managers and holding them accountable for delivering the services customers want--not constantly looking over their shoulders and altering their decisions. It has nothing to do with alleged conflicts between imaginary "profits" and safety. Of course Ruth knows that. But she's counting on reporters and editorial writers not having a clue.


Notable and Quotable

User Satisfaction with Nav Canada. "Nav Canada's gotten things done on a much more cost-efficient basis than the FAA, frankly, could ever dream of in terms of cost-and-time-to-implementation. I definitely believe in a move towards privatization."

—Robert Milton, CEO of Air Canada, Airports International, August 2002.

"The industry is pleased the way that Nav Canada has evolved. It has been responsible on costs and tried to keep fees down. After the initial fees were set, there was a reduction and it was only recently, after September 11, that we saw an increase. We were pleased that they did everything they could to mitigate the negative effects, with the professional way that they communicated this to their customers."

--Cliff Mackay, president, Air Transport Association of Canada, WINGS Magazine, Issue 2, 2002.

Procurement Reform. I can't tell you how many times I've been told by congressional staff and others that Congress has "already fixed" FAA's labyrinthine procurement process. But that's not what knowledgeable observers say. For example:

"The FAA has, amazingly, failed to take a lesson in management reform from another agency that has also had its share of criticism—the Defense Department. The lesson: The breadth of skills required of a good program manager are too varied and complex to be learned on the job—they need to be learned in school. It is surprising that the agency attempting to modernize the nation's air traffic control system—with arguably "THE" most diverse interaction of computers, software, and people—has the least progressive approach to buying the parts."

—Bruce D. Nordwall, Aviation Week editorial, April 8, 2002


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


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