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The Trump administration released its first federal budget proposal on March 16, for the first time revealing its support for calls to restructure the FAA by creating a separate entity to manage air traffic control. The U.S. Fiscal Year 2018 budget would also eliminate funding for the Essential Air Service (EAS) program that subsidizes airline flights to rural airports, a longstanding goal of congressional Republicans.
President Donald Trump’s $1.15 trillion “America First: A Budget Blueprint to Make America Great Again,” proposes substantial cuts to discretionary spending by various federal agencies; the Department of Transportation (DOT), the FAA’s parent organization, would see its discretionary spending reduced by 13 percent, from $18.6 billion to $16.2 billion. Discretionary spending represents about 19 percent of the DOT’s $98 billion overall budget.
A summary the White House Office of Management and Budget released states that the blueprint initiates a reauthorization process in Congress to shift the FAA’s responsibility for the nation’s ATC system “to an independent, non-governmental organization,” language that approximates what the House Transportation Committee under chairman Bill Shuster (R-Pa.) proposed but failed to advance through reauthorization legislation in the last year of the Obama administration. The spin-off would render the system “more efficient and innovative while maintaining safety,” the Trump proposal states. “This would benefit the flying public and taxpayers overall.”
Offering a prelude to the coming battle in Congress, Shuster issued a statement hailing the proposed ATC spin-off, which counts among its major proponents the influential airline industry trade group Airlines for America (A4A). “For too long, the federal government has been the impediment in updating our ATC operation to a world-class, state-of-the-art system,” Shuster declared. “Like [they do for] any transformative change in Washington, entrenched interest groups will do and say anything to protect their parochial interests. But the facts are not on their side. The President’s budget rejects adherence to the status quo, and I applaud his leadership to disrupt the old way of thinking.”
The House Transportation Committee’s ranking Democrat, Rep. Peter DeFazio (D-Ore.), decried the Trump administration’s “Skinny Budget,” on several counts, starting with what critics of the ATC spin-off describe as a “privatization” of the system that favors the airlines. “For the last two years, opponents of this short-sighted plan have raised serious concerns about whether ATC privatization would guarantee safety, protect national security, expedite new technology, and keep our aviation system solvent,” DeFazio said. “Proponents have failed to answer any of the serious questions we have raised. Air traffic control privatization will not benefit the flying public, and it definitely will not benefit taxpayers who will be on the hook for bailing out the private ATC corporation if it fails.”
The budget blueprint contains a declaration of Trump administration goals for transportation that had been heretofore missing. At her Senate confirmation hearing on January 11, then Transportation Secretary-nominee Elaine Chao was noncommittal when asked for her opinion about ATC restructuring, saying only that a “national discussion” was needed to decide the best way forward for system modernization. On February 9, Trump hosted a White House meeting with airline and airport executives, who came away encouraged that the President appeared to support their priorities.
Business aviation groups remain strongly opposed to the proposal. “NATA is disappointed the budget blueprint contains language to explore corporatizing air traffic control. We believe Transportation Secretary Chao’s call during her confirmation hearing for national dialogue and consensus is a more appropriate way to approach this issue,” said NATA president Martin Hiller.
Hiller added the proposal to separate ATC from the FAA “simply poses too many leaps of faith,” and said, “NATA will continue to work with the new administration and Congress toward a more efficient FAA, with a priority on educating them about the risks posed by handing over our nation’s air traffic control system to special interests.”
NBAA president and CEO Ed Bolen reiterated his opposition and warnings that general aviation operators “could have their access to airports and airspace threatened.”
Business and general aviation groups are girding for a tougher battle over the future of U.S. air traffic control after the White House’s budget embraced the airline-backed proposal to separate the ATC organization from the FAA.
Details were sparse, but on March 16 the Trump Administration released its $1.15 trillion “America First: A Budget Blueprint to Make America Great Again,” calling for Congress to shift the FAA’s responsibility for the ATC system “to an independent, non-governmental organization.” This language approximates what House Transportation and Infrastructure Committee chairman Bill Shuster (R-Pa.) proposed but failed to advance through reauthorization legislation in the last year of the Obama Administration.
The spinoff would render the system “more efficient and innovative while maintaining safety,” the Trump proposal asserts. “This would benefit the flying public and taxpayers overall.”
The budget blueprint contains a declaration of Trump Administration goals for transportation that previously was missing. At her Senate confirmation hearing on January 11, then Transportation Secretary-nominee Elaine Chao was noncommittal when asked for her opinion about ATC restructuring, saying only that a “national discussion” was needed to identify the best way forward for system modernization. But she also said that she believed the President would examine the issue.
Airline Support
On February 9, Trump hosted a White House meeting with airline and airport executives, who came away encouraged that he appeared to support their priorities.
Several airline executives reiterated their position on the issue during a Chamber of Commerce Aviation Summit on March 2. Among those expressing support for such change were Alaska Airlines chairman and CEO Brad Tilden, American Airlines chairman and CEO Doug Parker and Airlines for America president and CEO Nicholas Calio. Parker stated his belief that the change would open ATC to better financing options and said, “We have an ATC system that pales [in comparison] to others around the world.”
Tilden warned, “We run a real risk and likelihood that demand is going to grow at a faster rate than technological advancement,” while Calio promised that reforming ATC can make air travel more affordable and efficient.
But perhaps the most impassioned call for reform came from former American Airlines chief Bob Crandall, who charged that general aviation should “set aside paranoia and support a change that would have major favorable impact on this country.” He stressed that the change has been successful everywhere else in the world, but he also acknowledged that corporate aircraft operators may have to pay a fee at high altitudes “instead of the free use they enjoy today.”
Universal Industry Opposition
NBAA president and CEO Ed Bolen was a lone voice to speak in opposition during the event, stressing that business aviation supports and is actively involved in forwarding NextGen, but that “We don’t want to be sidetracked by a lot of ideas that have been around for a long time.” Bolen added, “the fundamental question is who is going to control the system and whose benefit does it serve. We don’t think the public airspace ought to be managed by a board of special interests.”
After the White House released its proposal, Bolen reiterated business aviation's opposition and his warnings on the effect it would have on the small towns and the general aviation industry. “Simply put, privatization of the ATC system would benefit airlines at the expense of the citizens, companies and communities that rely on general aviation,” he said.
The large airlines have pushed the notion of privatizing ATC for decades, he said. “Under such a proposal, the ATC system—which is a natural monopoly that currently serves the public’s interest, and is overseen by the public’s elected representatives—would be turned over to a non-governmental entity effectively controlled by the airlines.
“Under such a scenario, the small and midsize towns that rely on access to general aviation for everything from civil services, to emergency support, to business access and more, could have their access to airports and airspace threatened.”
The General Aviation Manufacturers Association (GAMA) agreed with that contention, saying in a statement: “The FAA air traffic control system is the safest, most efficient, largest and most complex in the world. To a degree not found in other countries, the economic health and vitality of numerous businesses and communities, small and large, depend on the U.S. aviation system. We must not weaken this strong foundation.”
The opposition was universally shared by the major business and general aviation groups. NATA president and CEO Martin Hiller expressed disappointment in the administration's stance and said, “We believe Transportation Secretary Chao’s call during her confirmation hearing for national dialogue and consensus is a more appropriate way to approach this issue.”
The proposal to separate ATC from the FAA “simply poses too many leaps of faith,” he added.
AOPA president Mark Baker, meanwhile, stressed that the association will continue to oppose proposals that involve user fees. Business and general aviation advocates have noted that such a proposal has an uphill climb on Capitol Hill, where most Democrats, some of the more conservative Republicans and appropriations leaders have stated opposition. GAMA president and CEO Pete Bunce last fall said the “wild card” is whether the White House would endorse such a concept. That would change the battle, or at least create a new front to tackle, he said then.
Nearly all administrations over the past two decades have at some point backed some version of user fees or ATC privatization/corporatization/independence. Some of those proposals had been designed squarely to extract more money from business aviation, with backers calling for corporate jet operators to pay their “fair share.” (The use of “corporate jet” was deliberate for these backers, because studies showed the words elicit a degree of negativity and a sense of luxury.)
But those proposals always faltered because they would remove a certain degree of congressional oversight, something that many lawmakers have continued to oppose firmly.
The Appropriations Committee leaders restated their opposition in February, with both the top committee Republicans and Democrats writing a letter to their colleagues—before the Trump proposal was released—stating that, “The public would not be well served by exempting any part of the FAA from annual oversight” and expressing concern that progress on NextGen “would be lost” should ATC be separated from the FAA. “It does not appear to make sense to break apart the FAA, an essential part of our success in aviation,” they had said.
The battle lines, which have long been drawn on Capitol Hill, appear only to have dug in deeper after the Trump Administration revealed its stance.
Shuster issued a statement hailing the proposed ATC spinoff. “For too long, the federal government has been the impediment in updating our ATC operation to a world-class, state-of-the-art system,” Shuster declared. “Like [they do for] any transformative change in Washington, entrenched interest groups will do and say anything to protect their parochial interests. But the facts are not on their side. The President’s budget rejects adherence to the status quo, and I applaud his leadership to disrupt the old way of thinking.”
The House Transportation and Infrastructure Committee’s ranking Democrat, Rep. Peter DeFazio (D-Ore.), decried the Trump Administration’s “Skinny Budget” on several counts, starting with what critics of the ATC spinoff describe as a privatization. “For the last two years, opponents of this short-sighted plan have raised serious concerns about whether ATC privatization would guarantee safety, protect national security, expedite new technology and keep our aviation system solvent,” DeFazio said. “Proponents have failed to answer any of the serious questions we have raised. ATC privatization will not benefit the flying public, and it definitely will not benefit taxpayers, who will be on the hook for bailing out the private ATC corporation if it fails.”
In the Senate, Commerce Committee chairman John Thune (R-S.D.) has remained open to the concept of ATC reform, but has been unwilling to fight for a proposal he feels has little chance of succeeding on the Senate floor. The committee’s ranking Democrat, Bill Nelson (Fla.), remains steadfastly opposed and said the proposal would go nowhere in the Senate.
As for the business and general aviation organizations, they said this would be an education process.
“NATA will continue to work with the new administration and Congress toward a more efficient FAA, with a priority on educating them about the risks posed by handing over our nation’s air traffic control system to special interests,” Hiller said.
“We continue to welcome the renewed focus in Washington on infrastructure investment, including for aviation,” Bolen added. “We will keep working with Congress, not on a distracting debate over ATC privatization, but on truly modernizing the aviation system, with policies that offer targeted solutions to identified challenges. That’s the best way to ensure that all Americans have access to our nation’s critical aviation infrastructure, five, 10 and 25 years from now.”