With President Trump’s promise to pass a massive new infrastructure package, there’s been a lot of renewed talk about a proposal to scrap the current Air Traffic Control system in favor of a new quasi-government entity. Proponents of the plan characterize it as a privatization, but as usual, the devil is in the details.
First, it’s important to be honest about what is actually being proposed here under the guise of “privatization.” The proposal, which is being pushed almost exclusively by the big commercial airline lobby, would actually create a new quasi-governmental, public-private entity similar to a government sponsored enterprise (think Fannie Mae or Amtrak). The history of such GSEs is hardly private. From their codified monopolies to their government-appointed leadership and powerful unions, GSEs usually represent the worst of both worlds: none of the profit motivation of the free market, but none of the oversight or political accountability of a federal agency. And when they fail, taxpayers are on the hook.
The new “non-profit organization” is also a gift to organized labor. It would be overseen by a board with heavy union representation, and would preserve existing labor benefits and contracts. It would also prohibit personnel changes or layoffs without sign-off from the union, and even prevent the consolidation of facilities without union approval.
Sound like a far cry from a free market solution? It actually gets worse. This proposal was “scored” by the Congressional Budget Office last year and CBO found that this proposal would actually raise mandatory spending by $89.0 billion and increase the deficit by $19.8 billion over the next 10 years. Some privatization!
Setting aside the false privatization and big labor giveaways, maybe it’s a matter of efficiency. You might think that countries with ATC systems similar to this proposal are operating more efficiently now that they have “privatized”. Think again. The only two truly comparable systems are in the U.K and Canada. Our system is ten times the size of the Canadian system, and is still cheaper to run.
All that expense will have to be paid for somehow. While the new system would be funded by user fees, the 13 person private-public board running the new ATC would have the ability to raise taxes with no accountability to Congress or the taxpayers. Sooner or later air passengers will bear the burden of this expensive new entity in the form of more expensive air fare.
The only justification left for such a proposal is that the ATC system is in need of modernization, but the Government Accountability Office has already cautioned that any type of restructuring could actually delay the deployment of new technologies.
If the concerns about spending, accountability and technology weren’t enough, there’s also the issue of national security. The Department of Defense recently raised “serious concerns” about the ATC proposal, due to shared infrastructure issues such as interoperable communications and military special use airspace.
Simply slapping the word privatization on something does not make it so. Before we end up uprooting our current system, let’s figure out whether that proposal would actually save costs, increase efficiency and enhance competition, rather than creating yet another Fannie Mae, Amtrak, or United States Postal Service.
Andrew Langer is President of the Institute for Liberty