House lawmakers are expected to introduce a bill shortly that could reshape the FAA, moving either some or all ATC functions to a new organization. Lawmakers face a September 30 deadline to adopt new FAA reauthorization legislation. Debate on that bill in recent months has increasingly turned to the future of ATC and whether it should be privatized or turned into a government corporation. 

Rep. Bill Shuster (R-Pa.), the chairman of the House Transportation and Infrastructure Committee (T&I), has been at the center of the reform effort, making it clear that he believes ATC reform is not only possible but imperative. Shuster has consistently reiterated his vision of “transformative” change for the FAA, upholding private nonprofit and/or separate government air traffic management systems run by other countries as examples. Speaking before the U.S. Chamber of Commerce’s 14th annual Aviation Summit earlier this year, he said, “We don’t need an FAA reauthorization that does half measures. I won’t do that.”

This view is shared by groups such as Airlines for America, which asked lawmakers to look at a new ATC structure that would involve an independent, multi-stakeholder governing board and a “fair” self-funding model based on costs of services. American Airlines chairman and CEO and A4A vice chairman Doug Parker testified before a March 24 House aviation subcommittee on ATC reform that a successful organization must be able to manage assets and capital that facilitates modernization at a far greater speed. An air traffic organization also must have effective management teams that can be nimble “without the constraints imposed on government agencies.” Funding should be free from budget constraints and either short-term or declining appropriations, and governance should involve multiple stakeholders, he said.

Parker underscored the need for change, given the significant cost overruns and constraints of existing structure. The organization has been studying models of other countries to see if the U.S. could adopt structures or practices of those organizations. “Many other countries have taken it on, and we have the benefit of learning from their combined experience,” Parker said.

Controller Buy-in Needed

Key to winning support for such a transformation is securing backing from the nation’s air traffic controllers. Paul Rinaldi, president of the National Air Traffic Controllers Association (Natca), gave a speech in April calling on Washington leaders to transform the country’s ATC system, but he stopped short of endorsing a model similar to those adopted by other countries and declined to back a specific funding mechanism. In fact, he was cautious about adopting wholesale a system such as Nav Canada’s without fully understanding whether it is scalable. Canada has one of the busiest 10 airports in the world; the U.S. has eight of the top 10 and 16 of the top 30, Rinaldi said. “It’s easy for them to modernize when they have one major airport they need to worry about,” he said. Nav Canada manages 12 million operations a year, while the U.S. manages 140 million. “I don’t know if it’s scalable,” he said. “I’m willing to roll up my sleeves and look at it and see if it’s scalable.”

Despite this concern, Rinaldi more recently has appeared to back the concept of a government corporation, leading some lobbyists to believe that House lawmakers are nearing agreement on a new ATC structure.

Backing some of this debate for reform is a report released by the National Research Council (NRC) that traces the delays and cost overruns of NextGen, and recommends that the FAA, Congress and airspace stakeholders “reset expectations.” The report notes NextGen has moved away from the initial sweeping transformational goal to a “much more concrete set of phased incremental changes” that closely replicate existing capabilities, such as satellite navigation replacing radar functionality “rather than the reinvention of flight.”

While momentum has clearly grown for a separate ATC function–so much so that House appropriators acknowledged the effort in the Fiscal Year 2016 transportation appropriations bill–the shape of such a proposal remains elusive. Few details have surfaced on structure or funding of such an entity. 

Also unclear is whether Shuster can ensure a sign-off from the Administration, other lawmakers in the House and his counterparts in the Senate. FAA Administrator Michael Huerta told the Senate Commerce Committee that the Obama Administration is open to discussing alternative models, but warned of possible unintended consequences.

 “We need to ask the question of what exactly the problem is that we are trying to solve,” Huerta said, maintaining that the FAA is making progress in modernization and is delivering benefits through a combination of technologies and operational procedures. Any changes in governing structure must ensure stable funding, a high level of safety and a “tight linkage” between the operational and regulatory side, he said. “I would be fearful of any structure that puts a wall in those relationships,” he said. “Can alternative government structures get us there? Possibly. But we need to recognize that there may be unintended consequences.”

Other members on Shuster’s own committee have expressed skepticism. Rep. Rick Larsen (D-Wash.), the ranking member of the House aviation subcommittee, has asked dozens of questions about such a structure. Rep. Pete DeFazio (D-Ore.), the ranking member of the T&I committee, also raised constitutionality questions about delegating functions outside the FAA. But DeFazio also has appeared willing to contemplate such a concept.

Meanwhile, House appropriators, who control FAA funding, have made it clear they expect Congress to retain control of any new ATC structure, an expectation that many corporatize/privatization advocates are hoping to change. The House Appropriations Committee included language in the Fiscal Year 2016 transportation appropriations bill saying, “The Committee believes that congressional oversight of agency resources is necessary to ensure accountability for program performance and a sustained focus on aviation safety.”

As for the Senate, Commerce Committee Chairman John Thune (R-S.D.) has expressed openness for dialog, saying, “I applaud Chairman Shuster…on his consideration of new approaches that may yield better results and deliver the promised benefits of NextGen.”

FAA workers are divided on this issue. While Natca may offer support, other unions have stated clear opposition to a separate ATC organization. The leaders of seven different FAA unions appealed to House lawmakers to reject efforts to privatize the agency’s ATC functions, saying, “We do not agree that a massive change to the FAA’s structure is the solution to the funding problem.”

Consequences for Business Aviation

Business aviation advocates have been closely monitoring these activities, concerned that an effort to corporatize or privatize could result in a governing structure that could harm access or lead to an entire new user fee structure. NBAA president and CEO Ed Bolen has cautioned that the U.S. has the most complex and diverse system in the world, and other systems have led to access concerns. Business aviation either gets lower priority or is squeezed out of certain locations. These systems are typically paid through user fees, which require a costly bureaucracy to collect, Bolen noted. Any new system must be equitable, transparent and preserve general aviation access, he said. 

NATA president and CEO Tom Hendricks also cautioned against getting swept into the “separate ATC” push, saying the aviation community is “unfortunately suffering from a bad case of ‘group think’ that pillories both the institution of the FAA and its thousands of highly skilled and dedicated employees.”

Hendricks noted that “no one in the aviation community suggests accepting the status quo,” adding, “Good changes…are under way and we need to keep the pressure on for more and faster changes.” But he also warned, “Before we leap too far down the proposed path of some pundits, to remove the ATC system from its governmental role to a network run by users, let’s avoid basing any decisions upon outdated, unrealistic expectations.”

Getting a comprehensive agreement on a new structure may prove difficult. Not only does he have to get enough of the various interests in line, Shuster himself has had to deal with several news articles questioning whether his reported relationship with A4A vice president of global government affairs Shelley Rubino has posed a conflict of interest. This attention was followed by another article from the Washington insider publication Politico about unrelated fundraising activities in the Virgin Islands. Washington observers do not believe this media attention will interfere with Shuster’s duties as chairman, as long as the glare does not grow more intense.

Time may serve as the single largest obstacle to resolving the issue. With the upcoming Fourth of July and August/Labor Day breaks, Congress has limited legislative days before the September30 deadline to pass a reauthorization bill. Neither industry nor lawmakers have much appetite for another round of short-term extensions, similar to those that occurred in the last FAA reauthorization cycle. Larsen has warned: “I find it difficult to foresee an on-time FAA reauthorization bill if we are to tackle this topic.” He added that stakeholders must produce a proposal or risk “the chaotic path of multiple short-term FAA bills.”