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U.S. is open to privatizing air traffic control

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Transportation Secretary Anthony Foxx said the U.S. could consider privatizing the nation's air traffic control system. "My feeling is that we should engage with all of the stakeholders and keep our ears and minds open to new and different ways of doing things," Foxx said. AIN Online (2/25) (www.ainonline.com) Mehr...

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tedtimmons
tedtimmons 12
We have the safest air system in the world, which pays for itself by way of the aviation fuel tax, so of course, let's change it.
Privatizing ATC would only provide some really rich people with another way to get even richer :-(
The push to privatize ATC has absolutely nothing to do with making ATC better.
The push to privatize ATC is purely motivated by a few very influential people that see a way to increase their fortunes. It's always about money.
SpaceRanger
If the airways belong to the public, they should be manged by a public, not-for-profit entity. We already have such an entity. Why change it?
bbabis
bbabis -2
Remember, the airwaves belong to the public also. ATT, Verizon, and many others do an excellent job of managing that and competition drives pricing.
Bernie20910
Bernie20910 3
No, the FCC manages that. AT&T et.al. just lease them.
preacher1
preacher1 2
I guess they do but it has evolved into a semi-monopoly. I remember all the "Baby Bells" and LD that was around, and now there are basically 2. Really makes for competition. Just had to jab at that my friend. Don't flame me too much. LOL
bbabis
bbabis 1
No flaming here preach. I'm really just playing devil's advocate. I haven't made my mind up either way and I'm enjoying the excellent points brought up by both camps.
preacher1
preacher1 1
Bernie20910
Bernie20910 14
Yeah, I can see it now... You call ATC to declare an emergency and get:
"Thank you for calling XYZ ATC. Your call is very important to us. Please hold and the next available controller will be with you shortly."

Followed by (after 5 minutes on hold): "Hello, I am being named Patel and I will be handling your emergency today. First, have you made sure that it is plugged in? Please go and check and I will wait."
Av8nut
Michael Fuquay 1
HAHAHA! So true.
PhotoFinish
PhotoFinish 1
Of course folks used to cushy federal jobs with cushy federal pay and federal benefits and federal pensions will balk at private companies doing the same job with more productive productive workers that often are paid more. But they're worth it. They work harder. So in the end it's a win-win.

Except the lazy non-workers who hide behind a civil service shield.

I've seen professionals, as well as management and workers at union shops leave their high-paying jobs to choose to join private firms that are taking over government work. There's often so much waste, that a private firm can usually do the same job with many fewer people, pay them more and still save the taxpayers money.

That's a win-win across the board in my book.
LGM118
LGM118 2
I would argue that any large company will, if pushed to a certain size, begin to mimic government inefficiencies. We hear the "private sector employees are more motivated than public sector employees" argument frequently. It's an argument that effectively goes back to Adam Smith (arguably earlier), but was very much popularized by the Chicago School.

I find that the reasoning that public employees are detached from costs and there's no incentive to make them efficient equally or nearly equally applies to larger corporations (to an extent). I guarantee you that a McDonald's employee and a USPS employee are motivated by basically the same things.

The primary reason for the bureaucracy costing so much is inter- and intra-agency communication. Remember, the FAA isn't just in charge of ATC, it's also got a whole boatload of other functions. Each of those departments has to work with each of the others in an integrated manner. If individual companies took over ATC, they'd be taking over a fraction - albeit a rather large one - of what the FAA does. Yes, you save on labor, but it's not a zero-sum game because the FAA doesn't end up getting rid of everyone who's actually involved in ATC. They still would end up needing to keep a bunch of people, maybe even add people, to work with the ATC service providers.

In addition, the FAA and other federal agencies are often legally required to provide additional services beyond what's required. ATCSCC is a prime example - one of their responsibilities (just one of many) is to manage and coordinate reroutes during severe weather and other events (http://www.fly.faa.gov/PLAYBOOK/pbindex.html). You can't really privatize it since it's impossible to have competition in an industry that definitionally would have one and exactly one player. Right now, it's fairly easy to coordinate facilities because it's almost all under the larger FAA structure. If you spread it out into the private sector, suddenly ATCSCC has to communicate to a number of other organizations. The cost of ATC provision itself may decrease, but those cost savings may very well end up being matched by increases elsewhere.

In terms of those people going from the public sector over into those private firms, usually those people are being hired because they can get the inside track on contracts. Formerly public employees come into the private sector with a public sector network of contacts, and that's valuable for companies that often work with the government. The reason for the pay raise is pretty similar - I'd rather my company have all those formerly public workers rather than someone else, so it creates a bit of a bidding war.

The big problem with that is that ultimately it reflects that the "free market" is really just creating an incentive for companies to skew the game in their own favor, rather than working to offer a better and/or cheaper product or service. I'd say that the current way in which government contracting works combines the worst elements of the private sector with the worst elements of the public sector.
MultiComm
MultiComm 4
I say we just privatize Congress and let the raise support to stay in office. If their constituents liked their progress they can stay otherwise someone else can take their place. Of course I am being facetious but still....

Privatization of ATC is not a good move.
davysims
David Sims 4
For some reason this brings to mind the credit card commercial where the guy answers the phone, "Hello this is Peggy".
Flyaay
Bryan McKee 2
They should look at privatizing TSA as well. I'm traveling later today and I cant wait to get there and watch as they get on their power trips!
preacher1
preacher1 2
Well, the biggest problem I see here and one that would need to be addressed before any of this took place is the money. Will the tax $ still go to pay for a bloated bureaucracy or will they be set aside to pay for private controllers as should be being done now and isn't
bbabis
bbabis 3
Private enterprise can do anything more efficiently and effectively than government can. The drawback is that they will want to make a profit as well they should. To the user it sounds like going from a free system to a pay system. Well the current system isn't free. Far from it. The costs are hidden in taxes and gross mismanagement. If a private company were to take over ATC, every cent of fuel tax, ticket tax, tax tax etc. should then go to that company instead of the government. With better efficiency the user should see no increase in the cost of doing business and possibly a decrease. This would only happen with a complete separation from the government. If the government would still want to suck up all the taxes and only slide a company in to do the expensive work, then this will never work. I guess we will have to wait and hear what the government considers "New and different ways of doing things." So far, with this administration, I don't like it at all.
LGM118
LGM118 1
I used to be a libertarian like Bill. The thing that changed my mind is that when people quote off how the free market is more efficient, they almost never grasp why exactly that is and what mechanics are at work in making a market more efficient.

The overall problem is that we're not in the 1700's buying bread, we're in the 2010's and the product is the national airspace system. The mere logistics of creating an ATC "market" are astoundingly complex and even if there was "privatization" there'd still be massive government regulation to ensure safety was maintained. Even then, I doubt that the market would actually be competitive in a real way because of the specifics of the ATC "industry"

In essence, free markets work best when it's easy for competing companies to vie for customers or where you can start up a new company easily. Think about things like raw/basic goods and parts manufacturing. ATC is nothing like that. It would not be possible for actual competition to occur - the idea of two separate "service providers" for a single airport is unimaginably unsafe no matter how well regulated. Competition could occur in terms of bidding - Airport A hires the company that can give the best deal. But in that case, you end up with the incumbent always having an extremely strong advantage because they have existing infrastructure and expertise. It helps to also advertise that you know existing SOPs and other rules. The result would be an industry dominated by a few large companies that are each just slightly better than what the government might offer.

Considering the technological and other barriers, you're "disappointed" that the current administration hasn't just handed ATC over to the private sector willy-nilly? First off, that's not even how government works. The existing laws of the land specifically charge said administration with maintaining the National Airspace System. When Congress passes legislation saying it can go into the private sector, it can go into the private sector (note: this would actually also require modification to standing international treaties, which would need to be signed by the president and ratified by Congress). The fact that it hasn't been done yet is because there's not some brilliant, compelling and obvious reason and mechanism for quickly handing off Air Traffic Control to the private sector in a way that goes beyond, say, the existing FCT Program.

But back to the free market, yes, there are some instances where the private markets work better. Quoting off Milton Friedman and/or Adam Smith is not an actual justification fro privatization given a specific context any more than quoting off Karl Marx serves as sufficient justification for Communism. I'm not saying that you shouldn't respect pro-capitalists. People cite Milton Friedman and Adam Smith because they had brilliant ideas. But there's a whole boatload of stuff that comes with it. [i]Adam Smith himself specifically believed one of government's primary duties was the maintenance and construction of roads.[/i] Adam Smith himself said that one of a good government's three primary duties was: "erecting and maintaining certain public works and certain public institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit would never repay the expense to any individual or small number of individuals, though it may frequently do much more than repay it to a great society." (<a href="http://books.google.com/books?id=rBiqT86BGQEC&pg=PA407&lpg=PA407&dq=erecting+and+maintaining+certain+public+works+and+certain+public+institutions,+which+it+can+never+be+for+the+interest+of+any+individual,+or+small+number+of+individuals,+to+erect+and+maintain;+because+the+profit+would+never+repay+the+expense+to+any+individual+or+small+number+of+individuals,+though+it+may+frequently+do+much+more+than+repay+it+to+a+great+society.&source=bl&ots=Zy88VdWLQ-&sig=dpeblWa_12mOu3k20OtCvt5BSrk&hl=en&sa=X&ei=QIMPU_n4IoXP2AXhsIHoBQ&ved=0CC8Q6AEwAQ#v=onepage&q=erecting%20and%20maintaining%20certain%20public%20works%20and%20certain%20public%20institutions%2C%20which%20it%20can%20never%20be%20for%20the%20interest%20of%20any%20individual%2C%20or%20small%20number%20of%20individuals%2C%20to%20erect%20and%20maintain%3B%20because%20the%20profit%20would%20never%20repay%20the%20expense%20to%20any%20individual%20or%20small%20number%20of%20individuals%2C%20though%20it%20may%20frequently%20do%20much%20more%20than%20repay%20it%20to%20a%20great%20society.&f=false">Source</a>). The great free market thinkers never believed that things like transportation infrastructure made sense in the private sector.

The thing is, you need to establish why exactly privatization would work better for the specific service being provided, not just the blanket "markets work better" in order for me or anyone else with half a brain to listen to you. You can't just ignore historical context, specific market realities, or facts about the specific service you're talking about and spout off claims made by dead people in place of real, rational discussion. That's not how it works (or at least, not how it should work). Just saying that the free market always works and you're disappointed that the current administration isn't upholding its will is a statement of religion, not one of rationality. The way you're talking, it makes the free market sound like a deity.

I'm sorry if I sound angry, but these things do have consequences. We've got people in the US House of Representatives who do this, and not just on the Right (though right now, the Tea Party definitely has had a lot of influence through its market worship). If anyone here wants to argue that the free market should take over Air Traffic Control and point out how and why it would be specifically better than the existing system, please do so. I think there are many inadequacies to the way Air Traffic Control is handled in the status quo. Unfortunately, blindly arguing that "the free market is better" is not sufficient.
PhotoFinish
PhotoFinish 1
Any smaller company performs the same functions as large companies and large government bureaucracies for much less.

In my experience, I've seem private firms do the job better, for half the cost (contracts are competitively bid), without any higher communication cost and returning half the previous budget back to the tax payer. All this while paying the workers more, getting better customer evaluations and not insignificantly doing it for HALF THE COST.

If there is any reason to do so would be to isolate the cost and operation of the vital ATC function from the rest of the FAA bureaucracy.

1. If there are any sequesters, gov't shutdowns and any other disruption due to fights over the need to control the out of control gov't spending, ATC operation will not be interrupted.

2. By isolating the ATC operation from the remainder of the FAA monster, the FAA bureaucracy which is out of control, power-grabbing and inefficiently (even if mostly effectively) exercising its' regulatory functions. FAA would not be able to hide its' out of control predisposition toward greater budget, greater power behind the essential ATC operation.

3. The savings are not necessarily insignificant.

I'm not persuaded that it can't be done. I was willing to concede that ATC was one of those crucial governmental infrastructure functions. Except that some countries have successfully privatized their ATC without the world falling apart.

So whatever can be done by the private sector should be. The best government is limited to the most essential functions. I used to to think that privatizing ATC wasn't possible. Other countries' successful privatizations of sand tell us otherwise.
LGM118
LGM118 3
Going through your points in order:

Okay, so we're getting more detail. The system you'd prefer would be largely competitive. A number of small companies which I'm assuming would basically compete for contracts to provide ATC services for specific facilities through an open and competitive bidding process. Not unlike the FCT program, only expanded to pretty much all facilities that don't handle mostly military traffic (for national security reasons).

The reason for communication costs is again that you need facilities to be synchronized. The ATCTs need to be able to quickly talk to TRACON and enroute controllers, sometimes ATCSCC. That overhead will still exist no matter what. We could move it around, but the actual provision of ATC services actually really is only a part of ATC. Splitting out the ATC operations alone is basically just an example of the existing FCT Program, which hasn't grown because it has been, by all accounts, a failure. FCTs have generally seen cuts to operating hours, overworked controllers, etc.. While that might be acceptable elsewhere, there are too many lives at stake to take that risk with even Class C facilities.

Moreover, the way in which government contracting works means there would likely be few competitors for ATC service. I can think of maybe four companies that would be at all interested in doing this, and they're all big aerospace companies that are pretty much on par with the FAA when it comes to efficiency. I mean, just look at the development history of the KC-46 if you want to see how well the "competitive bidding" system works. For most high-profile contracts, the best lobbyists win out. There's a reason Lockheed Martin, Boeing, and Rockwell Collins buy up advertising space at the Pentagon Metro station, and it isn't just patriotism. Releasing ATC out to the oligarchy wouldn't save that much money, but it would lead to a lot of corners being cut.

Even if the industry didn't boil down to a couple of large companies basically competing for the best lobbying, where would the savings actually come from? People think of government as being bloated because they oversimplify things - "what, they need this much money for providing ATC?!" But government is just like any organization, it needs Human Resources, Legal Compliance, Public Relations, etc.. People think that federal employees should walk around in sack cloth and self flagellate (that's when you literally whip yourself, in case anyone doesn't know). The FAA runs very much like a business in many respects. Those "cost savings" are almost entirely due to changes in accounting; a bunch of in-house expenses get replaced with a couple contracts that were signed. That and the federal agency ends up laying off a number of support personnel while the private company just absorbs the new people into some subdivision and use existing personnel to manage them.

Going to your numbered points:
1. ATC provision is already shielded from budget issues because it uses revenue from passenger taxes, the avgas tax, and the jet fuel tax. Higher level FAA functions are affected, but your own claim is that you want the operations to be separated so that even in a shutdown, ATC would still be provided. Luckily, it is already, so this a non-issue.

2. I don't know where this "FAA monster" claim is coming from. I know a few people get annoyed every time the FAA adds a regulation in the wake of any incident, but wouldn't private companies just do the same thing for PR reasons? And anyways, most of the regulatory functions are limited by existing legislation. Legislation that would also apply to private ATC providers. Moreover, since we wouldn't be getting rid of the FAA, just the ATC operations, the problem would probably get worse since FAA bureaucrats would probably fee some level of insecurity about not being able to directly browbeat the ATC providers directly. Putting that in short: FAA bureaucrats who you claim are power-hungry would just find ways to hamstring the private ATC providers until the FAA gets ATC provision back.

3. For what reason would costs savings be "not necessarily insignificant"? Where are the savings coming from outside of the general assertion that you make that "free markets are more efficient." I agree that in many cases market incentives do help unlock efficiencies, but why is ATC a case where that is true?

Regarding international examples, which ones? Nav Canada is a non-profit and 3 out of the 15 members of their Board of Directors are from the Canadian Federal government at any given time with another two from unions. It's heavily regulated and there is no competition. The biggest downside to Nav Canada is actually that it had overexposed itself to risks during the recession and is only now back to where it was prior to 2009 in terms of financial stability. That's not exactly a good thing for the privatization argument, is it?
preacher1
preacher1 1
I take issue with one of your points about "ATC provision is already shielded from budget issues". Remember the tower closure threat during the sequester? You are right on with the rest of it.
LGM118
LGM118 1
True. That's due to differences between tax and fee revenues and actual costs. Just like the Highway Trust Fund, the FAA relies on "user fees" (taxes). I made the assumption that all else equal, the FAA and private sector can closely match tax/price rates to costs. Mismatches are not unique to either (my point about Nav Canada's over-reliance on Commercial Paper) so in the end it's awash.
preacher1
preacher1 1
yep, but it's all in the budget, regardless where it comes from. LOL
PhotoFinish
PhotoFinish 1
Normally I'd be ok with government managing essential shared transportation infrastructure. But I'm not convinced that ATC wouldn't be much better - greater safety and greater efficiency - if iy instead existed as an independent entity with ONLY ATC as its' main priority. This could be a government agency similar in fashion to how NTSB handles transportation investigations. This can be as a non-profit as NavCanada. And it can be done as a private entity. I don't really care which.

Anything is better than keeping ATC as part of the FAA bureaucracy. There are too many examples of ATC as part of FAA compromising airspace safety.

1. There is the example of the current administration cutting ATC during the sequester, instead of bureaucrats fir political gain at the cost of safety. That's obnoxious. Imperiling the safety of the flying public for political reasons is exactly the evidence that shows ATC should not be subject to government and political winds. ATC should be made independent as soon as possible. Safety demands it.

2. There are also ample stories about both the FAA and contract ATC not providing the highest level of service and safety possible. There are myriad reasons from insane workplace rules to depending on self-reporting of adverse incidents. It shouldn't be surprising that the FAA would mismanage the contract ATC providers, possibly seeing them as enemies who might take their jobs, if they did a better job than the fed ATCs. Again more reasons for an independent ATC operation.

3. The FAA is moving in the right direction by measuring safety objectively and having all incursions recorded and automatically measured digitally. ATC should not only be independent but should also be measured.

4. Objective safety determined by objectively measuring actual performance is the only way to insure effectiveness and increase safety. That measuring of performance should be standard operating procedure for any provider of ATC services whether gov't, non-profit or private.

5. If safety is the measuring stick, private firms can usually get that best result with the least interference and inefficiencies that being part of a government bureaucracy creates unnecessarily. So I clearly show that private vs. government isn't a question of safety. ATC services can be made safe as government, non-profit or private services. The only difference is that safety can be increased faster as a private entity than as part of a gov't bureaucracy. Government has more inertial forces than a private entity and is less responsive and less quick to implement changes that improve safety.

I would prefer an independent ATC entity that had no other priorities other than providing ATC services. Most likely a private entity would be the best structure, though I am not tied to that as the only solution. But in accepting an of the other alternatives, we are compromising ATC for reasons unrelated to provision of ATC services.
Lunarstorm777
(v)e Same 1
Bernie20910
Bernie20910 1
Could you please use shorter URLs to make your points?
LGM118
LGM118 1
I know, and normally I would just put in filler like "I can provide a cite if needed". I was trying to throw in an html code for it. I thought you could put html in posts here, but I guess I must be wrong.
MultiComm
MultiComm 1
Here is a shorter link (al be it without the highlighting). Although the damage to this thread has already been done forcing the left-right scrolling...

http://books.google.com/books?id=rBiqT86BGQEC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q=405&f=false
LGM118
LGM118 2
Again, sorry about that.
samsterflight
samsterflight 1
Private enterprise and greed time and time again have ruined things that government can do well and efficient.
PhotoFinish
PhotoFinish -1
I know of private firm(s) that have to bid for work, which replaces functions formerly provided by government.

Not only are they saving the government entity in each case about 50% on average . Real dollars that go back into real taxpayers pockets. But also the services have greatly improved. Customer satisfaction and job performance are off the charts better. All employees are also very productive, and are being well paid. They leave very good jobs to join the operation. Not only are they getting paid well, but are socking away substantial amounts in their personal retirement accounts.

No one loses in the cases that I'm personally familiar. I'm sure the same bloat and unproductive layers must exist in other areas of government also.

The more streamlining of goverement services, the better. Realigning the costs and resources to actuallly providing valuable services to actual customers is a good thing. Helps to decrease the burden of the cost of government on real workers and real businesses, those doing non-governmental work, like flying planes or keeping them working.
NBGTowerGuy
Matthew Donica 2
The idea of privatization of the ATC system as a whole sounds good on paper, but in reality will never work. What will work is a further expansion of the FCT program to include some of FAA towers where the traffic has dropped significantly to where, in some cases, are doing fewer operations than their FCT counterparts
Vectorer
Vectorer 1
What is the one key issue that differentiates FAA ATC service from that provided by private contractors?

The right to strike.

Since 1972, all new FAA ATC hires have sworn/affirmed the no-strike oath.

The issue is a potential Pandora's box that could be reopened with the advent or adoption of a privatized ATC system in America. Advocates had better begin to understand it. The option of non-governmental employees withholding their services is real if privatization comes to pass.

ATC strikes routinely happen all over the planet. Do a simple search for "air traffic controllers on strike". Lots to read.

Please, don't evoke The PATCO Strike as so many of those folk (not all) were pre-1972 hires not bound to the no-strike oath. But, DO recall what U.S. ATC service was like on 8/3/81, and the next day, and the next day, and the next day for some years to come. Does anyone remember The GAR Program or the draconian metering?

How can controllers working for a company be compelled/incentivized not to walk, especially once they are inevitably organized? Where is the big stick? The possibility of slow-downs, sick-outs, and strikes within any private firm cannot disappear with the stroke of a pen.

The American flying public have enjoyed a seamless continuity of ATC service for decades, perhaps,to the point of taking it for granted. However, they may have forgotten precisely what an ATC job action tastes like.















OBomb
Mike O'Connor 0
No.....No, no, no, no. No. And no. Public safety should NEVER be outsourced to an organization needing to meet a bottom line and earn a profit. This was one of the worst ideas I've ever heard in my life.
Lunarstorm777
(v)e Same 0
Forgive me for adding my 2 cents, but.... Wasn't that basically what we did with all the regional carriers?
bennettgaryw
Gary Bennett 0
I see the dolts are on the loose again...
grinch59
Gene Nowak 0
Al-Qaeda has attacked civilian and military targets in various countries, including the September 11 attacks, 1998 U.S. embassy bombings and the 2002 Bali bombings. You now want to hand over our Air Traffic Control System to potential members????
bbabis
bbabis 1
grinch59
Gene Nowak 0
Yes! Let private industry take over and they will be hiring every Tom, Dick and Harry who will work for 'peanuts" so they can increase profits and bonuses. This lessens the security and control of our airspace. You want that???
PhotoFinish
PhotoFinish 1
That's jusy scare mongering. Airlines don't want their planes falling out of the sky. They have every incentive to want to prevent crashes.

The only way to increase ATC safety is by measuring safety, no matter who performs the ATC function.
grinch59
Gene Nowak 1
Then you are being naive! Edward Snowden penetrated NSA via a private contractor. Why can't some one of his mentality or terrorist leanings penetrate a privatized ATC and someday just say, I don't like that EL AL or Delta flight flying in my vicinity. Let's see if we can direct them into each other.

I just don't trust private contractors hiring into secure government positions. Maybe this is due to my 27 years in the Air Force.
PhotoFinish
PhotoFinish 1
Again. Scare mongering. We all get up and put our pants on one leg at a time. Any good ol' American will want to keep the planes flying safely.

People need to start believing in what they can do. Not what they can't do.
Lunarstorm777
(v)e Same 0
"Listen, our contract is up for bid again in 2 weeks and management is riding my arse to get these birds in the air and on the ground like clockwork. I don't care what it takes, get it done or don't bother clocking in tomorrow!"....... Said right as a possible micro burst is forming off the end of the runway.....

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