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ATC Privatization Considered, NASAO Concerns Mount

On Tuesday, May 23rd, the President released the administration’s full FY2018 budget. NASAO participated in a call with Administrator Huerta this afternoon to hear more about the specifics as relates to aviation and the FAA’s budget specifically.

Under this plan, Airport Improvement Program (AIP) funding would remain flat at 3.35 billion. As anticipated, Essential Air Services (EAS) program funding would be cut in half — eliminating all supplemental appropriations and leaving only overflight fees to support the program (approx: $150 million). Most notably, the budget proposes removing Air Traffic Control (ATC) from the Federal Aviation Administration to create a new corporate entity starting in 2021.

NASAO continues to strongly advocate for increases to AIP in a long-term FAA reauthorization bill and firmly opposes any cuts to EAS. But we have growing concern about the Administration’s backing of efforts to corporatize ATC and the proposed reform in its entirety.

Last week the House Transportation and Infrastructure Committee convened to hold a hearing titled, “The Need to Reform FAA and Air Traffic Control to Build a 21st Century Aviation System for America.”

The Committee heard testimony from  Calvin Scovel, Inspector General, U.S. Department of Transportation (Testimony here), Joseph Brown, President, Hartzell Propeller, Inc. ( Testimony here), Robert Poole, Director of Transportation Policy, Reason Foundation (Testimony here), Paul Rinaldi, President, National Air Traffic Controllers Association ( Testimony here), and Dorothy Robyn, Independent Policy Analyst ( Testimony here).

Chairman Shuster’s ATC reform proposal stalled in the previous session of Congress, but he has reiterated his commitment to reform as a top priority again this year. This was the first hearing this session solely focused on ATC reform, and is expected to be followed by a subsequent hearing in the coming weeks prior to a bill introduction. The Chairman has sought to leverage the Administration’s support of privatization to breathe new life into the effort, but much remains the same with respect to opposition and the expected content of the proposal itself. Democrats, tax-writers and appropriators from both parties were the main source of opposition in Congress and will likely continue to be.

During the hearing, Chairman Shuster noted that his proposal from the previous Congress will serve as the “framework” this year, but that he was “open to changes”. Perhaps the most noteworthy development from the hearing was Chairman Shuster’s announcement that Department of Defense (DOD) Secretary Jim Mattis said the Pentagon is “supportive of a possible privatization of ATC services and recognizes the potential risks.” This endorsement is significant because the DOD Policy Board on Federal Aviation (PBFA) stated as recent as late as January, that creating a separate ATC organization “raises serious concerns,” and that any such proposal by Congress must address “shared infrastructure” with the military.

Paul Rinaldi of NATCA stated in his testimony that the union would support privatization if the legislation guaranteed current pay rates, and health and retirement benefits for his members. However, the Trump Budget included a footnote that proposes to “reduce Federal agency costs through changes to current civilian employee retirement plans.” This appears to run contrary to Chairman Shuster’s assurances but it’s unclear whether the budget is proposing changes to retirement plans for workers that remain after the transition, or if the controller workforce would be included.

It is also important to note that seven FAA employee organizations (the American Federation of Government Employees; American Federation of State, County & Municipal Employees; FAA Managers Association; National Association of Government Employees; National Federation of Federal Employees; Professional Association of Aeronautical Center Employees; and Professional Aviation Safety Specialists) have since united to express to the House Transportation and Infrastructure Committee that they oppose privatization of any of the functions or services within the FAA.

NASAO has been voicing concerns to Congress on the proposed reform since it was initially introduced and will be submitting a statement to committee outlining principal concerns.

Kimberling

“After careful consideration of differing perspectives on this issue and meticulous review of the applicability of the sixty foreign models that have privatized in some form, it seems clear that a transition of our ATC to a private entity, at this time, would hinder more than it would help NexGen implementation and the continued development of the national aviation system,” said NASAO President Mark Kimberling.

NASAO’s analysis of even the most successful foreign case-studies alluded to by proponents for reform, notably in Canada, experienced undeniable multi-year growing pains with operational cost and user fee increases along with other logistical setbacks. Not one of the 60 countries that undertook reform was in the midst of a technological overhaul comparable to NextGen implementation. And, as Delta Airlines aptly noted in a letter to Committee, “It’s time to drive NextGen, not take a multi-year pit stop.” Transferring control to a corporatized entity would have an immediate negative impact on the real progress currently being made on NexGen.

“There are considerable other risks in dismantling an FAA controlled system that already bests many of its international peers on key performance and capacity metrics, while – most importantly – maintaining an unmatched level of safety. But, we believe these transitional uncertainties alone could outweigh the speculative benefits of the overreaching reform under consideration. ” stated Kimberling.

NASAO will continue to monitor these issues and keep members informed of major developments. For any questions or comments on this and other legislative issues, please contact John Shea at jshea@nasao.org or (703) 610-0272.

Categories: News
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