Updated with statement by Airlines for America

Republican leaders of the U.S. House Transportation Committee unveiled legislation on February 3 that proposes to relieve the Federal Aviation Administration of its role in managing the nation’s ATC system, assigning that task to a separate, not-for-profit corporation. The long-anticipated move was endorsed by unionized controllers but encountered immediate resistance from Democrats, airline pilots and other unionized FAA employees.

The creation of a federally chartered “ATC Corporation” is contained within the so-called Aviation Innovation, Reform and Reauthorization (AIRR) Act, legislation that would reauthorize, or reestablish, funded programs within the FAA for six years after its current authorization expires on March 31. Governing the corporation would be an 11-member board of directors consisting of a CEO; two directors appointed by the secretary of Transportation; four directors appointed by the “principal organization” representing mainline airlines; two directors representing general aviation owners and operators; one director representing controllers and one director representing airline pilots. Though federally chartered, the new entity would not be “a department, agency or instrumentality of the United States government,” according to the bill language.

Rep. Bill Shuster (R-Pa.), chairman of the House Transportation and Infrastructure Committee, and three other Republican lawmakers unveiled the legislation at a Capitol Hill press conference. Shifting FAA management of the ATC system to a separate corporation will involve a three-year transition, predicted Shuster, who said an independent entity that charges airspace users for its services represents the best model for achieving ATC modernization.

“I believe by separating air traffic control into an independent not-for-profit corporation and leaving behind the regulatory, the safety aspect, in government, is something we need to do,” said Schuster. “There are 46,000 people at the FAA; I do not believe they are suited (to be) a high-tech service provider for the airlines and the traveling public.”

Asked what a corporation can do that the FAA cannot do, Shuster responded: “They can go to the markets and borrow dollars and issue bonds to get the dollars necessary, based on their cash flow, not based on an appropriations cycle, to go forward and make the investments (necessary) for the long term. Operating outside of the government, they’re going to be outside of this political pressure; if they want to change, modify, reform, consolidate different aspects of this organization, they will be able to do it.”

Acknowledging “genuine policy differences” with other lawmakers, Shuster said members of the Transportation Committee will be afforded an opportunity to discuss the legislation at a hearing next week, and to offer amendments during the “mark-up” process before the bill is sent to the full House.

But the prospects of the legislation passing both the House and the Senate before March 31 appeared dim. Hosting reporters in his office after the Republicans’ press conference, Rep. Peter DeFazio (D-Ore.), the committee’s ranking minority member, said Democrats oppose any spin-off of the FAA’s management of ATC, and will instead offer “targeted fixes to what we know are enduring problems with the FAA.” Those fixes, expressed as amendments, call for mandating the level of FAA funding and reforming its personnel and procurement processes. The reforms will help the FAA be self-funded, said DeFazio, adding that a 10-year projection indicates the agency is “3 percent shy of being 100-percent funded by user fees that currently exist.”

DeFazio, who was joined by Rep. Rick Larsen (D-Wash.), said transferring ATC oversight to another entity will undermine the FAA’s progress toward achieving the $40 billion-plus NextGen system modernization. “At this critical point in acquiring NextGen technology, it would be a huge disruption and a setback for that progress,” he said.

Lining up behind the legislation as proposed was the National Air Traffic Controllers Association (Natca), which represents most FAA controllers. “After extremely careful review, consideration and deliberation, we have reached a decision: Natca supports this bill,” the union said. The proposed transformational change to the ATC system marked a “historic day,” declared Airlines for America (A4A), the trade group representing most major U.S. airlines. “We applaud the hard and diligent work the committee has done to produce a bill that could accomplish for the national airspace system what others have only talked about for years, putting it at the forefront of aviation technology and innovation,” stated president and CEO Nicholas Calio, who has said that an inefficient system costs airlines and their customers $30 billion annually in delays.

Opposing the legislation was the Air Line Pilots Association (Alpa), which argued that commercial air carriers would shoulder the financial responsibility of supporting an ATC system run by a separate organization. Alpa said the legislation also does not provide a means to strictly regulate the carriage of lithium batteries. Also opposed were the American Federation of Government Employees, the American Federation of State, County and Municipal Employees and the Professional Aviation Safety Specialists, which also represent FAA employees. “Privatizing the FAA will only add uncertainty and potentially reverse major advancements that have been made over the past several years toward modernization,” the unions stated.

In the past week, the Republican and Democrat leaders of both the House and Senate appropriations committees have issued letters expressing their opposition to creating a separate ATC corporation. In response, Shuster said concerns that Congress would have less influence over an independent entity is “not an adequate argument.” He also assured that the federal government would maintain control of the national airspace system—not the ATC Corporation—if a crisis were to occur. “That is not going to happen. The president will assume control of the airspace,” he said. “The American people still own the airspace. I don’t think those (concerns) are something that we can’t overcome."