On Course: Privatize ATC? No Way!

Why handing over the nation’s $50 billion ATC system to a nonprofit corporation is a terrible idea.

ATC Privatization
On Monday, President Trump unveiled his plans to turn the nation's ATC system over to a nonprofit entity. This is not a good idea.NATCA photos

The White House's proposal to privatize our nation's air traffic control system is nothing new. The original en route air traffic control system developed in the late 1920s, in fact, was owned and operated by the airlines. But by the late 1930s, after a number of high-profile airline crashes, the federal government and airlines jointly decided that a central authority should be in charge. The obvious answer was for the government to run the ATC system, which it has ably done for the past 80 years with a safety record unmatched anywhere in the world.

In the mid-1990s, the Clinton administration pushed for ATC privatization with a plan to create an autonomous corporation called the United States Air Traffic Control System, which would remain part of the Department of Transportation. Then as now, the major proponents of the plan were the airlines. This time around, calls for ATC privatization are being led on Capitol Hill by Rep. Bill Shuster, the Republican chairman of the airline-friendly Transportation Committee, who wants to remove ATC from the purview of the FAA and put it under the direction of a privatized entity called ATC Corp.

I can list any number of reasons why privatization is a bad idea. To start with, ATC Corp.’s board of directors would be heavily influenced by the airlines, to the detriment of general aviation. Privatization also means user fees. The National Air Traffic Controllers Association says it supported last year's House measure because, theoretically, it would stabilize the funding stream for ATC rather than leaving it up to the impulses of a gridlocked Congress. That means ATC functions would be paid for through fees charged to airline passengers, not tax dollars. Eventually general aviation could be forced to pay ATC user fees too, requiring an entirely new layer of bureaucracy to collect the cash.

I would never argue that moving ATC to the private sector couldn’t work, but that’s not what’s being proposed. Instead, Shuster is calling for a massive new nonprofit organization to run ATC. That’s a recipe for mediocrity. Nonprofits have very little incentive to excel at the kind of project execution, from idea creation through delivery, that makes for great companies. Ask yourself, if you were launching a startup with the aim of modernizing the world’s largest air traffic control system, who would you want running it? A corporate board consisting of members with vastly different agendas, chosen by groups that don’t really like or trust each other? Not likely. You’d want a smart, tenacious, passionate entrepreneur — somebody in the mold of Elon Musk, Steve Jobs or those guys from Google — who understands the problem, knows how to fix it and never wavers for an instant from that goal until the job is done right.

If we really want to overhaul America’s ATC system we should forget “corporatization” and instead start by reforming the FAA’s draconian personnel and equipment-procurement policies, which prevent the agency from implementing the best technologies quickly and at a reasonable cost. As dreamed up by Shuster and supported by the Trump administration, the current privatization proposal won’t come close to achieving this aim. But Congress has the power to make changes within the FAA that can dramatically increase the chances that the next big ATC modernization project is delivered on time and on budget.