Wednesday, June 7, 2017

The Trump Idea Liberals Should Like

Privatizing air traffic control has worked well for countries like Canada.


By Adam Minter
The Bloomberg View
June 7, 2017

On Monday, Donald Trump kicked off his infrastructure drive with a proposal to privatize the sprawling U.S. air traffic control system. It's a free-market big idea that U.S. Republicans have long embraced and Democrats have generally resisted, fearing that all but the biggest airports will suffer in quality and coverage.

They shouldn't be so worried. In fact, Trump is following in the footsteps of an unlikely and, indeed, quite liberal model: Canada, which privatized its air traffic control system in 1996 and hasn't looked back since. Two decades on, Canada's system is unquestionably more advanced, efficient and cost-effective than the one operated by the U.S. government.

Even the U.S. system's champions would hardly deny that it has major flaws. The chaotic federal budget process has dragged out expensive technological upgrades. A bloated workforce and complicated government procurement rules further impede change. And political interference can undermine the independence of regulators.

The FAA's troubles don't differ significantly from those Canada faced before 1996, except perhaps in terms of scale. Nav Canada, the user-financed, non-profit corporation that purchased Canada's air traffic control system for $1.1 billion, has solved most of those problems by introducing private-sector efficiency and incentives where none had existed before.

Freed of burdensome government contracting rules, Nav Canada is able to hire quickly and pay competitively, and set strict deadlines for tasks to be accomplished. The company has also been able to take advantage of new navigation technologies more quickly than the U.S. government has.

For example, Canadian controllers now use satellite-based GPS to track aircraft that are outside radar coverage, whereas their American counterparts still often rely on paper-and-pencil. Canadian controllers can space in-flight planes more closely and thus develop more efficient routes. This allows airlines to schedule flights more flexibly and improve on-time performance -- not to mention reduce fuel use, improve margins and shrink carbon emissions.

Given the glacial pace at which the U.S. has adopted such technologies, U.S airlines and passengers will wait more than a decade to experience similar improvements. In 2004, the U.S. Department of Transportation announced NextGen -- a series of multibillion-dollar upgrades that included a shift from ground-based radars to satellite-based navigation. According to recent testimony from the department's inspector general, the Federal Aviation Administration still hasn't revealed the total costs or completion schedules for any component of the system.

Deploying new technologies can dramatically bring down costs. Simply removing air traffic control from the federal budget will save billions, of course. On top of that, Canadian controllers have proven more efficient than their American counterparts, managing 1,760 flight hours annually on average, compared to 1,725 for the FAA. In 2014, Nav Canada spent $340 per flight hour, while the FAA spent $450.

Most importantly, privatization should make the skies safer. For years, in order to keep air traffic control free from political influence, the International Civil Aviation Organization has recommended that countries separate aviation regulators from air traffic providers. That arms-length relationship ensures that politicians can't as easily interfere with investigations or decisions on where to locate air traffic control facilities. A 2014 study commissioned by the FAA found no evidence that separation had degraded safety in any of the dozens of countries that had tried it.

Privatization won't make everyone happy. In its early years, Nav Canada dramatically downsized its work force -- a trend that will likely continue as technology takes over more tasks in the control tower. But the long-term benefits to U.S. passengers and airlines should outweigh any disadvantages -- regardless of who's proposing the idea.


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