In Business Week aka Bloomberg, Peter Orszag presents his vision of the most effective approach to improving the nation’s air traffic control system. In general, when we read a person’s opinion, we wonder — Who is this? What is their expertise? Who profits?
Orszag’s text follows; emphasis added, comments in superscript.
Sept. 21 (Bloomberg) — Without a doubtwarning!, GPS, the satellite-based navigation system that has revolutionized travel by car and truck, even by foot, could do the same for commercial air traffic.GPS is already in use in today’s system
President Barack Obama has proposed stepping up government investment in NextGen, a GPS-based ATC technology that will allow planes to fly closer to one another than they can with human and radar help alone and to follow more direct flight paths. The system is expected to reduce delaysrunways reduce delays and decrease flight times by more than a thirdwild exaggeration, saving billions of dollarsunwarranted for airline companies and for the traveling publicdoubtful. This would mean consuming less jet fuel, so carbon emissions would be lowertrue, too. The change would even improve safety by making us less dependent on sleep-deprived controllersad-hominen slur.
So it’s a step in the right directionassumption. Unfortunately, though, the NextGen system is being rolled out in stagesseems prudent, and it isn’t expected to be fully operational in U.S. airports and aircraft until 2020. Even that slow timetable assumes that the Federal Aviation Administration, the agency overseeing the project, receives the necessary funding from Congress and can meet all its deadlines.
We shouldn’t have to wait so long. There is a way to move faster, one that would probably also help the NextGen system work more smoothly once it’s in placebaseless: Take responsibility for implementing the new GPS system, and for air-traffic control altogether, away from the FAA and assign it to a private, nonprofit organizationreveal of intent. (Disclosure: Aerospace clients I work with at Citigroup Inc. would benefit from faster implementation of NextGen.)$urprise
Almoststretch word two dozen other countriessmaller than NYC metro have already assigned ATC to either government-owned corporations, nonprofits or other organizations outside of government, and the results have generallyweasel word been encouragingvague euphemism. As the U.S. GAO concluded in a 2005 review, these operators have maintained or even improved air safety, while they have lowered costsfalse and boosted efficiency by investing in new technology.disingenuous
NAV Canada, for example, is a nonprofit corporation that provides air-traffic control, along with weather reports, flight information and other services. Its revenue comes from fees charged to airlines for this work. Its safety record is excellent. And, compared with the FAAno comparison presented, it tendsweasel word to be more responsivevague to innovation and better able to make improvements in technology, investing in the needs of its user airlines.
For example, NAV Canada has developed a touch-screen flight data and display system, called NAVCANstrips, which automates controllers’ work flow and reduces their need to communicate with one another verbally. It integrates tower flight data with information about departures, arrivals and planes en route, as well as radar, weather and the status of runways. This system was developed by controllers themselves, and NAV Canada has sold it to the U.K., Denmark and other countries. (It’s also being used at Sheppard Air Force Base in Texas.)
The public air-traffic-control system we have in the U.S. began as part of the federal government’s role in air mail, starting in the early 20th century, through the U.S. Postal Service (an agency that should also be moved out of the government, but that’s a different topic)secondary agenda. By the 1920s, the government was licensing pilots and issuing certificates of airworthiness for planes.
In the late 1930s, Congress explicitly assigned the Civil Aeronautics Authority (the predecessor of the FAA) the job of managing air-traffic control. That was more than 70 years ago, even before the use of radar in civil aviationan FAA initiative. Today, air traffic increasingly relies on rapidly evolving technology, and the FAA has, for decades, struggled to keep up.
As late as the 1970s, U.S. air-traffic control was still using light beacons to guide planes at nightout of context. As a 2006 review of the agency, by Clinton Oster of Indiana Universitywho?, concluded, “Concerns about being able to upgrade and expand the air traffic control system to accommodate anticipated growth in air traffic have been almost continual since the early 1960s.”
In 2004, an expert panel convened by the National Academy of Sciences likewise concluded that the FAA lacks the technical expertise needed to build and manage complex air-traffic systems.
An important reason the FAA has had trouble keeping up with technology is that its funding has been unstable and uncertain. Its money comes from two sources, an annual appropriation from Congress, and revenue from the passenger tax. The amount that comes from Congress is always at risk of being reducedbogeyman, especially when money is tight. And the passenger tax, for its part, is misaligned with the costs of air-traffic control.
The tax is assessed on airlines’ total receipts from ticket sales, but what determines the amount of funding needed is not the number of passengers or the price paid per passenger (which combined determine ticket revenue), but rather the number of flights coming in and out of airports. And that is not directly reflected in the passenger count because it varies depending on size of aircraft and how full the flights are.fails to explore options: congestion pricing?
A betterassumption approach would be for users to pay the whole bill, and for the fees to be imposed based on the number of takeoffs and landings. This would ensure that those who use the air- traffic-control system pay for it, and it would keep funding outside the political processand no accountability.
To be sure, there are downsides to a user-based revenue model. For example, NAV Canada experienced financial difficulties after the Sept. 11 attacks, when travel declined, diminishing its revenue base. In response, the agency raised user rates, froze employee wages and took other steps to improve its financial health. By 2005, NAV Canada’s finances had stabilized.Back in the red in 2008
Perhaps the biggest objection to shifting air-traffic responsibilities to a nonprofit comes from the National Air Traffic Controllers Associationthe experts. It asserts that private management would create tension between safety and profitsNATCA didn’t say that — even though the Canadian agency has an outstanding safety record. Other union concerns could be at least partially mitigated by including protections for controllers in the legislation that would move air-traffic control out of the FAArestatement of key agenda. For example, in NAV Canada, the unions nominate two members of the board of directors. The Canadian agency also extended pre-existing job security provisions and reached a new collective- bargaining agreement with employees.NATCA would probably say the primary objection is moving an inherently governmental safety and transport function into a cost-sensitive, non-accountable business model. But Orszag didn’t ask NATCA, he just put words into their mouth
This isn’t to say all government functions would be best turned over to private operators. There are some jobs that, over the past two decades, the U.S. has unwisely moved out of government control.attempted ethos In the 1990s, for example, despite some strong objections within the Clinton administration, the government turned over to private operators the U.S. Enrichment Corp., which has the job of enriching nuclear fuel.straw man
The regulation of airline safety and operationcall for re-regulation? should remain the business of the government, as it would pose too many conflicts of interest to have the airlines regulate themselves. But as other countries have shown, air-traffic control can be split off into a nongovernmental entity even while the government retains regulatory oversight of air travel. NAV Canada, especially, provides a model the U.S. would be smart to follow.
(Peter Orszag is vice chairman of global banking at Citigroup Inc. and a former director of the Office of Management and Budget in the Obama administration. The opinions expressed are his own.)
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Having led the Obama Administration down the rabbit hole on health care reform, and leaving in place a set of onerous trigger mechanisms to ensure implementation of his program, Peter Orszag has now moved into the financial industry and presents opinions on behalf of his clients in a field in which he is not qualified to evaluate the various issues. But, hey, he’s Peter Orszag!
We are surprised that Orszag is once again pitching a Canadian model.
We would point out that after its establishment in 1996, NavCanada was in dire financial trouble from 2001-2005, and again from 2008 through 2011. In fact, their financial model does not ensure safety or continuous operations during economic downturns.
Do you want government air traffic controllers watching your family, or do you prefer Citibank, Lockheed Martin and their media whores?
It must be significant when even Democrats behave this way.
related links: NATCA
, The Hill