Max Sawicky MarketWatch
Opinion: Let’s Stop the Senseless Talk of Privatizing Air Traffic Control
March 5, 2019
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  • The most recent Federal government shutdown might be the most prominent from a public relations perspective in the case of air travel. Inadequate staffing due to employees working without pay gave rise to wait times for passengers, although not nearly as much as was overdramatized by the media and other interested parties. 

    All of this has once again provoked interest in “privatization” of air traffic control (ATC), something that the big airlines have been promoting for decades. It’s worth noting this is really privatization in name only. There would be no market competition under this structure.​

    U.S. air travel by unanimous agreement is very safe. The Federal Aviation Administration (FAA) has reported that NextGen, the program to modernize our air traffic control system with satellite-based navigation and digital communication, is delivering tangible benefits, already having resulted in $2.72 billion in savings. ​This leaves privatization advocates with a weaker case. They are obliged to promise hypothetical improvements in efficiency if air traffic control is run by a nonprofit entity, rather than the FAA. This is not easy in light of the fact that privatization of air traffic control in other countries provides ambiguous evidence for improved efficiency, at best. ​

    The whole point of ATC is coordination and efficiency, yet reports of flight delays and cancellations in Europe, where some nations have privatized operations, have increased sharply. Delays in Europe increased to 19.1 million total minutes in 2018, more than double the previous year, according to Eurocontrol. ​​

    Staff shortages and lack of capacity are among the causes cited, responsible for 60% of the delays in Europe last year. Another is labor-management conflict, accounting for 14% of the delays. Costs of the latter in this decade have been estimated to exceed $10 billion. In 2018, strikes of controllers have caused the cancellation of 5,000 flights in Europe alone.​​

    In the U.K., the privatized ATC system, NATS, has struggled to keep up with passenger traffic resulting in widespread delays, and relies on outdated technology that limits capacity. According to a recent report by the U.K.’s Department of Transport, the system “has not undergone significant change since the 1950s, and this outdated infrastructure is struggling to keep pace with the growing demand for aviation, which can lead to delays.”​

    Nav Canada, the privatized ATC provider most commonly cited, is experiencing its own staffing crisis and will need 2,000 new air traffic controllers by 2025. At the beginning of this year, more than 27% of flights at Canada’s nine busiest airports were delayed. ​

    In theoretical models of privatization, the separation of functions are supposed to generate economic efficiency. When this notion was applied to the rail transportation system of Great Britain, a debacle resulted. The promised increases in efficiency and resulting cost reductions were never seen. ​

    The basic objective for air traffic control and related regulatory functions of the FAA is to avoid the problem of too many cooks. This means maintaining U.S. system within the FAA and providing it with the political stability that ensures adequate funding, productive labor-management relations, and investment in new technology. Good government requires congenial politics. What we have now is sorely lacking.​

    In 1981, President Ronald Reagan dealt with a strike of air traffic controllers by firing the lot of them. While the impact of recent 35-day shutdown wasn’t as damaging as some have made it out to be, it has become clear that the stability of the aviation system is of the utmost importance. The president can’t fire the entire federal government. It’s not like “The Apprentice.”​Splitting air traffic control away from FAA, among other shortcomings, wouldn’t isolate it from politics, no more than separation does the U.S. Postal Service or the Federal Reserve Bank. What makes the notion even more dubious is that the same folks held to be at the root of the problem — politicians — are the ones who would be given the job of organizing how the separation would happen, and what remaining strings would tie air traffic control to politics. It’s like asking the fox how to rebuild the chicken coop.​

    There is no way the flying public is safer with understaffed airport security and overstressed controllers. Instead of divorcing air traffic control from the FAA, we should focus on the more immediate issue of funding the system through a shutdown by giving the FAA access to the revenue it collects in the Airport and Airways Trust Fund.

    Max Sawicky is an economist and writer in Virginia, specializing in public finance and privatization.