Policy Study

Why an Air Traffic Control Corporation Makes Sense

Executive Summary

The National Air Traffic Controllers Association (NATCA) recently issued a White Paper arguing against the “privatization” of air traffic control (ATC) services. This policy study responds to NATCA’s paper.

Overall, the White Paper is off-target, in that much of its argument is directed against a form of privatization-outsourcing-which no one has seriously proposed for the national ATC system. The White Paper does acknowledge several examples of ATC reform overseas that do follow the models proposed for this nation: conversion of the FAA’s existing ATC organization into a user-fee-supported business entity. But instead of dealing seriously with this model, the White Paper simply takes potshots at three of the overseas ATC corporations. In doing so, the paper provides no quantitative data or analysis. Its case is presented only in the form of anecdotes and assertions.

The White Paper also misleads by omission. It fails to explain the global trend toward converting ATC departments of government into user-fee-supported ATC corporations. That trend now extends to 29 nations (including much of Europe, Canada, and both Australia and New Zealand). Corporatized ATC providers now control over 40 percent of the world’s air traffic.

When it comes to specifics, the White Paper is factually incorrect on a host of major issues in which it uses selective or incorrect information about the corporatized ATC providers of Australia, Canada, and the United Kingdom. For example:

Safety-Contrary to the White Paper’s claims, air safety has improved in Canada and the United Kingdom since corporatization. Moreover, safety is greater at the U.S. control towers run by private contractors than at comparable towers run by the FAA.

Security-Converting to a corporate form of organization would not compromise national security, or 29 nations would not have done so. Nav Canada cooperated smoothly with NORAD and the FAA in bringing down all planes on Sept. 11, 2001.

Cost Savings-Contrary to the White Paper’s assertions, significant cost savings have been achieved by ATC corporations overseas, which have led to reductions in user fees.

Staffing-The White Paper distorts actual staffing changes in Canada, where Nav Canada is increasing the size of the controller workforce to adequate levels. But it also discounts the possibility of future cost savings thanks to facility consolidation and advanced technology, savings that have been achieved since Australia’s corporatization in 1995.

Cross-subsidy-Contrary to NATCA’s statements, the globally accepted method of charging aircraft for ATC services includes significant cross-subsidies (which NATCA claims would be a casualty of “privatization”). And special protections have been legislated for remote areas in Canada, a provision that could be adapted for rural areas in this nation.

Modernization and Funding-The White Paper dismisses the argument that a shift to user-fee funding will facilitate modernization. But the overseas experience demonstrates not only that this does occur, but illuminates how and why it does.

Contract Towers-Long the target of NATCA litigation, the more than 200 small-airport U.S. control towers are subjected to much innuendo in the White Paper, ignoring their superior safety record in addition to major cost savings.

In short, the NATCA White Paper is the furthest thing from an objective analysis of the issues involved in reforming air traffic control. Rather, it is best understood as a plea to maintain the status quo: a highly laborintensive system run for the benefit of its employees rather than its users (the customers). The global track record of ATC corporatization is powerful and positive, and offers valuable guidance for reforming the U.S. ATC system.