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Reason Foundation

FAA's Efforts Fall Short

Market prices for air traffic would help modernize system

Robert Poole
April 1, 2004

The Federal Aviation Administration's plan to spread the pain of air-traffic delays probably will get us through this summer. But as air traffic continues to grow this decade, such stopgaps will be sorely inadequate.

More effective reform must address both the demand for air traffic control and its supply. A powerful tool for dealing with both is pricing. By charging planes to use the most congested airports and airways, the system would give its customers economic incentives to reschedule flight times or choose less-congested airports without such charges. That easing of demand would provide breathing room to address the looming shortfalls in air-traffic-control capacity.

All sorts of new technology can increase this capacity, both cross-country and on the approaches to airport runways. "Synthetic vision" systems can permit pilots to land at socked-in airports at nearly the same rate as in clear weather. So the air-traffic system need not break down just because Chicago has a bad-weather day. Other advanced technologies can reduce the size of the protective bubble needed around planes en route to keep them safely separated.

Unfortunately, the FAA has two big problems in applying such technologies. First, it has a terrible track record of designing and redesigning such systems, ballooning their costs and getting them in service many years late. And every time the federal deficit becomes a problem (such as now), the FAA's budget is cut, reducing modernization funds. The agency's new Air Traffic Organization (ATO) is supposed to run like a business. And it is off to a good start, headed by a well-respected former airline executive. But as long as it is hostage to the federal budget, this organization won't be able to modernize as a real business does.

But here's where pricing air-traffic-control services comes in. If the ATO charged customers for its services, the revenue stream would be its own, not subject to cutbacks by the White House or Congress. That means it could issue revenue bonds -- billions of dollars worth -- to fund a much more aggressive modernization program.

The answer to demand and supply is to charge market prices for air-traffic-control services and use the revenues to modernize the system. That's the only sustainable way to prevent endless summers of delays.

Robert W. Poole, Jr. is Director of Transportation Studies at Reason Foundation. A version of his air traffic control corporation concept was implemented in Canada in 1996. He has advised the Office of the Secretary of Transportation the White House Office of Policy Development, the National Performance Review, the National Economic Council, and the National Civil Aviation Review Commission on air traffic control.


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


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