Policy Study

The Case for Air Traffic Control Facility Consolidation

A paradigm shift in air traffic control that will make it possible to manage air traffic from anywhere to anywhere

Air traffic control-in the United States, Europe and other advanced countries-is on the verge of a paradigm shift that promises to at least double the capacity of the skies without expanding the workforce, i.e. doubling productivity. The NextGen program in the United States is implementing key technology and procedural building blocks for this transition, but the program is at risk of becoming merely an upgrade of hardware and software, rather than redesigning the airspace and consolidating its far-flung, labor-intensive facilities. Without these additional changes, the end result will be a far more costly, albeit higher-tech, system.

Three key enablers of the paradigm shift are performance-based navigation, far more precise surveillance of aircraft positions, and digital communications instead of voice. Together, these will make it possible to manage air traffic from anywhere to anywhere. A controller located in Miami will be able to manage traffic in Seattle, for example. Thanks to these changes, the entire airspace can be reconfigured, expanding its capacity to handle two or three times as many aircraft safely.

This reconfigured airspace, in turn, should drive the reconfiguration of staffed facilities. ATC facilities will no longer need to be located directly beneath the airspace they manage. And that means most of the 187 Centers and TRACONs, many of which are aging and in need of major refurbishment if kept in service, can and should be shut down. They can be replaced by a much smaller number of facilities, many of which can be designed from the outset to function in the from-anywhere-to-anywhere paradigm.

This study presents an original plan for consolidation of airspace and ATC facilities in the continental United States. Under this plan, the current 20 en-route Centers and 167 TRACONs would be consolidated into five high-altitude Centers, eight Integrated Control Facilities, and 38 consolidated TRACONs.

ATC facilities, such as Centers and TRACONS, have significant economies of scale, as demonstrated by the much higher productivity of the larger existing facilities. Current productivity data are used in this study to estimate the operating cost savings that would be obtained via the proposed consolidation. In the U.S., annual savings simply from economies of scale would be $314 million. Combined with further productivity gains from NextGen technology and procedure changes, total operating cost savings from the reconfigured system range from $540 million to $680 million per year. There would also be annual savings in equipment and facility maintenance estimated at $109 million per year. Total operating cost savings will thus be in the vicinity of a billion dollars a year.

While it was beyond the scope of this study to estimate the cost of the consolidated facilities, the study did estimate the savings from closing and disposing of obsolete Centers and TRACONs. This one-time saving, at $1.7 billion, should be applied toward the cost of developing the new, consolidated facilities (which would require a legislative change). At this point, the FAA has not developed cost estimates for an integrated plan for consolidation. Any new facility costs are speculative without a detailed, time-sequenced consolidation plan.

To summarize, the overall saving from consolidating facilities (as well as ATC ground equipment that is no longer needed as NextGen is implemented) is estimated in this study to be the following:

One-Time Consolidation Savings

  • Centers and TRACONs closed $689 million
  • ATC equipment and structures retired $654 million
  • Salvaged equipment value $294 million
  • Avoided facility refurbishment costs $98 million
  • Total one-time savings: $1,735 million

Annual Consolidation Savings

  • Productivity gains from economies of scale $314 million
  • Next-Gen productivity increases $540-680 million
  • Facility and equipment maintenance savings $109 million
  • Total annual savings: $963-$1,103 million

??The FAA’s current approach to facility consolidation is problematic. Its original 2010 concept, the Future Facilities Program, called for large-scale consolidation including the creation of Integrated Control Facilities. However, since then the agency has failed to produce a detailed plan outlining a schedule for closing obsolete facilities and opening new ones, despite being called upon by Congress to do so. Instead, it is focusing all its attention on developing an initial ICF in the most

technically and politically difficult portion of the airspace: the New York/New Jersey area. And like several previous proposals for large-scale facility consolidation, the proposed Liberty ICF has already encountered significant congressional intervention.

This study calls for rethinking the current approach to NextGen and the consolidation of airspace and facilities. The FAA’s Air Traffic Organization should develop a nationwide airspace reconfiguration plan and develop a facility consolidation plan consistent with that. The latter would identify the facilities to be closed, the new and consolidated facilities to replace them, and an overall schedule for what happens when. Labor agreements must be worked out in advance of consolidation, to ensure that the productivity gains inherent in consolidation will actually be realized.

Congress should develop a process to permit large-scale consolidation to proceed without micro- management, as it has done for needed but difficult military base closing and consolidation. It needs to allow the Air Traffic Organization to make use of new funding options, such as issuing revenue bonds, to finance the facility consolidation program. And it needs to permit the ATO to retain the proceeds from selling the land and buildings associated with facilities that will be closed, to help fund the development of the new facilities.

If Congress cannot accomplish those admittedly difficult tasks in the near future, the alternative is to delegate these responsibilities to a revamped ATO that would be insulated from both congressional micro-management and federal budget constraints. This would involve separating the ATO from the FAA, enabling it to charge aircraft operators for its services (like airports and other utilities) and use the revenue stream to back ATO revenue bonds. The FAA would regulate the reformed ATO for safety, at arm’s length. This model has been used successfully overseas, including in Australia, Canada, Germany and the U.K., each of whose self-supporting air navigation service providers has successfully consolidated its equivalent of Centers and TRACONs along the lines proposed in this study.

Without consolidating airspace and ATC facilities, NextGen is at risk of becoming merely a very costly upgrade of hardware and software, without the large productivity gains that should constitute a major portion of the business case for this transition. And without a timely commitment to large-scale facility consolidation, the Air Traffic Organization will be forced to spend billions in coming decades refurbishing and rehabilitating aging and unneeded facilities. Consequently, the time for action on these issues is now.

Attachments

Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation. Poole, an MIT-trained engineer, has advised the Ronald Reagan, the George H.W. Bush, the Clinton, and the George W. Bush administrations.

Surface Transportation

In the field of surface transportation, Poole has advised the Federal Highway Administration, the Federal Transit Administration, the White House Office of Policy Development, National Economic Council, Government Accountability Office, and state DOTs in numerous states.

Poole's 1988 policy paper proposing privately financed toll lanes to relieve congestion directly inspired California's landmark private tollway law (AB 680), which authorized four pilot toll projects including the successful 91 Express Lanes in Orange County. More than 20 other states and the federal government have since enacted similar public-private partnership legislation. In 1993, Poole oversaw a study that coined the term HOT (high-occupancy toll) Lanes, a term which has become widely accepted since.

California Gov. Pete Wilson appointed Poole to the California's Commission on Transportation Investment and he also served on the Caltrans Privatization Advisory Steering Committee, where he helped oversee the implementation of AB 680.

From 2003 to 2005, he was a member of the Transportation Research Board's special committee on the long-term viability of the fuel tax for highway finance. In 2008 he served as a member of the Texas Study Committee on Private Participation in Toll Roads, appointed by Gov. Rick Perry. In 2009, he was a member of an Expert Review Panel for Washington State DOT, advising on a $1.5 billion toll mega-project. In 2010, he was a member of the transportation transition team for Florida's Governor-elect Rick Scott. He is a member of two TRB standing committees: Congestion Pricing and Managed Lanes.

Aviation

Poole is a member of the Government Accountability Office's National Aviation Studies Advisory Panel and he has testified before the House and Senate's aviation subcommittees on numerous occasions. Following the terrorist attacks of Sept. 11, 2001, Poole consulted the White House Domestic Policy Council and the leadership of the House Transportation & Infrastructure Committee.

He has also advised the Federal Aviation Administration, Office of the Secretary of Transportation, White House Office of Policy Development, National Performance Review, National Economic Council, and the National Civil Aviation Review Commission on aviation issues. Poole is a member of the Critical Infrastructure Council of the Los Angeles Economic Development Corporation and of the Air Traffic Control Association.

Poole was among the first to propose the commercialization of the U.S. air traffic control system, and his work in this field has helped shape proposals for a U.S. air traffic control corporation. A version of his corporation concept was implemented in Canada in 1996 and was more recently endorsed by several former top FAA administrators.

Poole's studies also launched a national debate on airport privatization in the United States. He advised both the FAA and local officials during the 1989-90 controversy over the proposed privatization of Albany (NY) Airport. His policy research on this issue helped inspire Congress' 1996 enactment of the Airport Privatization Pilot Program and the privatization of Indianapolis' airport management under Mayor Steve Goldsmith.

General Background

Robert Poole co-founded the Reason Foundation with Manny Klausner and Tibor Machan in 1978, and served as its president and CEO from then until the end of 2000. He was a member of the Bush-Cheney transition team in 2000. Over the years, he has advised the Reagan, George H.W. Bush, Clinton, and George W. Bush administrations on privatization and transportation policy.

Poole is credited as the first person to use the term "privatization" to refer to the contracting-out of public services and is the author of the first-ever book on privatization, Cutting Back City Hall, published by Universe Books in 1980. He is also editor of the books Instead of Regulation: Alternatives to Federal Regulatory Agencies (Lexington Books, 1981), Defending a Free Society (Lexington Books, 1984), and Unnatural Monopolies (Lexington Books, 1985). He also co-edited the book Free Minds & Free Markets: 25 Years of Reason (Pacific Research Institute, 1993).

Poole has written hundreds of articles, papers, and policy studies on privatization and transportation issues. His popular writings have appeared in national newspapers, including The New York Times, The Wall Street Journal, USA Today, Forbes, and numerous other publications. He has also been a guest on network television programs such as Good Morning America, NBC's Nightly News, ABC's World News Tonight, and the CBS Evening News. Poole writes a monthly column on transportation issues for Public Works Financing.

Poole earned his B.S. and M.S. in mechanical engineering at Massachusetts Institute of Technology (MIT) and did graduate work in operations research at New York University.