Policy Study

Reinventing Air Traffic Control

A New Blueprint for a Better System

Executive Summary

Recent and pending congressional efforts to reform the Federal Aviation Administration (FAA) will fail to solve the underlying structural problems of air traffic control (ATC). Procurement and personnel reforms, while useful, are not likely to change the FAA’s bureaucratic corporate culture. And they do not address the inherent problems of the ATC system being part of the federal budget process, subject to external micromanagement, and subject to a conflict of interest between safety regulation and ATC operations.

Canada has now joined 15 other countries in fundamentally restructuring its ATC system, by 1) divesting it to a newly created corporation, 2) funding it entirely by user fees, and 3) subjecting it to arms-length safety regulation. Data from other restructured ATC systems reveal major gains in efficiency, reduced flight delays, reductions in operating costs, and significant progress in technological upgrades.

Canada is selling its ATC system to a not-for-profit corporation (Nav Canada) set up and controlled by the major aviation stakeholders: airlines, business aircraft owners, pilots, air traffic controllers, and the government (which is also a user of the system). This was a consensus approach developed by the aviation community itself, as the best way to resolve the same set of structural problems that beset the U.S. ATC system. Their guiding principle has been “user pay means user say.”

A U.S. adaptation of the Nav Canada model offers several advantages over current House and Senate FAA reform proposals, as well as moving beyond the Clinton Administration’s failed government-corporation proposal. As an independent nonprofit corporation, it would give meaningful control of the system to its users, all of whom would be represented on its board of directors. Independent of government, it would develop a commercial corporate culture, like those of overseas ATC corporations. ATC funding would keep pace with the growth of aviation, no longer held hostage to the federal budget process. User fees would be reasonable, tempering cost-allocation with ability-to-pay. For example, a typical Learjet in business use would pay only a bit more or a bit less in annual user fees than it used to pay in fuel taxes, which would be abolished. Air safety would be improved, thanks to both arms-length regulation by the FAA and the rapid modernization made possible by a revenue-bond funded modernization program. This approach would permit the abolition of the passenger ticket tax, with the remaining FAA functions funded by general federal revenues.

The United States should follow the example of Britain, Germany, Switzerland-and now Canada-in fundamentally restructuring air traffic control. A not-for-profit user-controlled, user-funded corporation is the best way to address the ATC system’s fundamental problems.