Linda Chiem LAW 360
Airline PR Woes Spotlight Air Traffic Control Reform Fight
May 4, 2017
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  • Discussions on Capitol Hill to overhaul the nation’s air traffic control functions may face new hurdles this year as some lawmakers seek to leverage recent high-profile customer service breakdowns by U.S. airlines to stymie efforts to split off air traffic control from the government, experts say.

    Critics of so-called air traffic control reform or modernization efforts are already trying to build momentum from the drubbing that executives from United Airlines, American Airlines and others received in the House Transportation and Infrastructure Committee and the Senate Committee on Commerce, Science and Transportation this week following the infamous incident involving United forcibly removing a passenger from a flight in April.

    United and the U.S. airline industry as a whole have weathered a hailstorm of bad publicity for what consumer advocates and politicians have described as their increasing focus on boosting airline profits at the expense of customer service. And experts say it’s a sure bet that passengers’ rights and consumer issues will come into play when Congress ramps up negotiations in the coming months to reauthorize the Federal Aviation Administration, and potentially disrupt long-brewing discussions to split off management of the nation’s air traffic control system from the FAA to an independent nonprofit entity.

    But experts say that lawmakers and other groups pandering to an American public outraged by the recent string of airline customer service lapses are playing a weak hand if they’re trying to leverage those incidents to rail against air traffic control reform. Attorneys told Law360 that there is no correlation between Congress’ renewed focus on airline consumer issues — related to overbooking, baggage fees, flight delays and airline seat sizes — and the provision of air traffic control services.

    “The debate about transferring air traffic control to a nonprofit corporation has absolutely no overlap with the debate with how passengers are treated on an airplane — it’s a totally separate issue,” Venable LLP partner Jim Burnley, the secretary of transportation from 1987 to 1989, told Law360.

    It’s been a decadeslong battle for reform advocates to convince Congress to seriously consider handing over the reins of air traffic control management from a federal government handcuffed by the appropriations process to an independent standalone entity, which in theory could more quickly invest and implement badly needed upgrades to the nation’s mostly radar-based system of directing air traffic. And attorneys say it would be “ridiculous” for lawmakers to base their opposition to air traffic control reform on consumer issues.

    “The evolution of separating out the [air traffic control] function to a provider that is not subject to things like the president saying, ‘Well, maybe it’d be good if we shut down the government’ — there should be no linkage,” Steptoe & Johnson LLP partner Roy Goldberg told Law360.

    “Consumer issues arise out of the evolution of the domestic airline industry following deregulation,” Goldberg added. “Market forces do not always work in a linear fashion. Ultimately, if consumers demand a certain level of service (rather than the lowest possible fare) the service will increase. But this has no relationship to the ‘back-office’ provision of ATC services.”

    And because large U.S. airlines have been among the most visible proponents of air traffic control reform, the recent media coverage depicting airlines to have abused passengers’ trust in pursuit of profits could not have come at a worse time, according to Tod Northman, an attorney with Tucker Ellis LLP.

    “There are good examples from around the globe of countries that have moved from government to private control of the air traffic control system,” Northman said. “However, given the size and complexity of the United States flight system, privatization here would be daunting without unequivocal support from industry and consumers. The recent incidents will make it impossible for privatization advocates to make their message heard over the cacophony of outrage.”

    Ultimately, arguments for privatization are strong but theoretical, Northman said, adding that accepting the arguments requires trust, “which is in precious supply for airlines given the recent incidents.”

    But other attorneys say the political winds have been shifting in favor of air traffic control reform.

    Goldberg said the current political climate bodes well for legislative action to create a not-for-profit organization — something like Canada’s NavCanada — to provide air traffic control services in the U.S. in a manner that is just as safe and more efficient and cost-effective than the current model, by which FAA and its ATC functions are subject to congressional whims and budgetary impasses.

    Lawmakers for years have kicked around proposals tackling air traffic control, and the furthest the debate ever got was when House Transportation and Infrastructure Committee Chairman Bill Shuster, R-Pa., in early 2016 unveiled an ambitious air traffic control system overhaul in the House’s version of an FAA reauthorization bill.

    But that bill languished after clearing the House Transportation and Infrastructure Committee in February 2016 in a mostly party-line vote, putting off the air traffic control issue for yet another day as Congress ultimately went on to approve a compromise measure to keep the FAA running until the end of this September. Shuster has indicated he’ll be reviving his push for an air traffic control overhaul this year as Congress gears up to negotiate another reauthorization of FAA programs in the coming months.

    And President Donald Trump also stirred up political momentum for further debate on this issue when he described the current  system as “out of whack” during a meeting with airline executives earlier this year.

    “The most positive development since the first of the year is that the Trump administration has enthusiastically embraced reform,” Burnley said. “The Obama [administration] had been totally silent on the issue. So that’s a major change in the political equation on what might happen. If the administration follows through and plays a proactive leadership role during the debate, then reform will occur.”

    But Rep. Peter DeFazio, D-Ore., the committee’s ranking member, will be a foe. He said Tuesday that public trust in airlines is slipping, especially after the April 9 incident in which David Dao, a 69-year-old Elizabethtown, Kentucky, physician, was captured on video being forcibly removed from a United flight after he refused to give up his seat for airline employees. And a separate incident on April 21 involving a video showing an American Airlines passenger crying after a flight attendant apparently forcefully yanked away her stroller, and then that flight attendant getting into a heated confrontation with another passenger, didn’t help matters.

    Under Shuster’s earlier 2016 air traffic control reform proposal, some of the largest U.S. airlines would hold several seats on a governing board that would oversee any such independent, not-for-profit corporation. It’s a provision that hasn’t sat well with opponents who have argued that it would give commercial airlines — which already operate like regional monopolies after years of industry consolidation — too much influence over the aviation system.

    “Now we’re being pressured by the airlines to privatize the air traffic control system and put them in effective control of the governing board,” DeFazio said at Tuesday’s oversight hearing. “The airline industry needs to focus on getting its own house in order instead of extending its reach to control our skies. The airlines’ lack of focus on the traveling public and the repeated failures to invest in IT infrastructure only add to the many reasons I will continue to oppose privatization of air traffic control.”

    Leaders of the Senate Appropriations Committee in February told transportation committee leaders that they’re also worried about proposals aiming to split off air traffic control functions from the FAA, saying such a split would disrupt the agency’s ongoing air traffic control modernization efforts and could remove the system from proper government oversight.

    Lawmakers this week warned the airlines to improve their customer service policies or face potential new regulation, but some experts cautioned that uninformed calls for more government regulation of airline practices hurts consumers more than it helps.

    “This argument is probably among the weakest the opponents have but I completely expect them to exploit bad media attention to any of the stakeholders [to further their opposition],” Marc Scribner, a transportation policy research fellow with the Competitive Enterprise Institute, told Law360.

    “When they talk about airlines running the proposed nonprofit, what they fail to mention is that under the status quo, you have the FAA charged with regulating itself,” he added. “It is a single entity regulating a single entity. If that’s their concern, they should be far more concerned with the status quo than with the successful modernization of air traffic control.”

    –Editing by Pamela Wilkinson and Catherine Sum.