Trump Provides Detailed Look at User-funded ATC System

A push to carve the U.S. air traffic control organization out of the FAA remained the single most controversial aviation issue confronting the House and Senate as lawmakers began work on comprehensive FAA reauthorization bills late last month.

On Capitol Hill, most legislators have reaffirmed their previous stances on the issue. Similar to last year, Senate lawmakers were expected to unveil a bill late last month that addresses numerous aviation issues, but omits any independent ATC proposal. Also similar to last year, House lawmakers were expected to offer a reauthorization bill that calls for an independent ATC organization. Also similar to last year, most aviation groups have dug into their positions either for or against it.

What’s changed is the White House.

The Obama administration was largely silent on the concept of an independent ATC, remaining neutral on the topic last year. The Trump administration, however, has not only embraced the proposal but also used the concept to kick off its infrastructure campaign. On June 5, President Trump held an event in the White House to roll out his own independent ATC proposal, painting a bleak picture of the state of the ATC system.

“The FAA has been trying to upgrade our nation’s ATC system for a long period of years. But after billions and billions of tax dollars spent, and the many years of delays, we’re still stuck with an ancient, broken, antiquated, horrible system that doesn’t work,” Trump told an audience assembled in the East Room of the White House. “The previous administration spent $7 billion trying to upgrade the system and totally failed. Honestly, they didn’t know what the hell they were doing—a total waste of money.”

Trump offered broad descriptions of what that entity might look like. It would be a “self-financing, nonprofit organization” that would not require taxpayer funding. Proposed FAA reauthorization legislation would also maintain support for rural communities and small airports.

“For too many years our country has tolerated unacceptable delays at the airport, long wait times on the tarmac and a slowing of commerce and travel that costs us billions and billions of dollars in lost hours and sales,” said Trump. “We will launch this air travel revolution by modernizing the outdated system of ATC. It’s about time… Under this new plan the FAA will focus firmly on what it does best: safety.”

Plan Principles

House Transportation & Infrastructure Committee chairman Bill Shuster (R-Pennsylvania), the chief architect of the independent ATC proposal that stalled in the House last year, joined Trump during last month’s announcement. The White House credited Shuster’s proposal as providing “a good foundation” for the concept and released a set of “Principles for Modernizing the U.S. Air Traffic Control System” that the administration says improves upon the concept.

The principles outline protections aimed at addressing general aviation, rural community, Department of Defense and security concerns. “All users, including the general aviation industry and emerging new entrants, must have open access to our nation's airspace…the new entity must maintain access and services to rural community and general aviation users.” As for military access, the principles also discussed continued military access and ability to enforce temporary airspace restrictions.

At the same time the principles outlined a pay-for-access system, saying, “The new ATC entity would grant FAA-certified users access to the NAS, subject to their participation in the system's user fees, their being equipped as necessary to fly in controlled airspace and their compliance with other applicable rules and regulations.”

The organization “must be fully and financially self-sufficient through the collection of user fees that cover both its costs of operations and recapitalization,” according to the principles. “Users should have input in the fees and their structure…All users should pay their fair share.” However, it does not specify whether certain segments of general aviation would be exempt as called for in past proposals.

Under the White House proposal, the fees could not be reviewed or approved by Congress. The only recourse would be review by the Secretary of Transportation and the determination of the secretary would be “final and not subject to judicial review.”

The White House budget released last month would eliminate the airline ticket tax, but keep other excise taxes in place (at a rate to be determined), including fuel taxes and cargo fees, to fund the Airport Improvement Program and the rest of the FAA. The White House expects the general fund would cover the shortfall between those taxes and the costs. However, some estimates are that the proposal could result in a deficit of as much as $45 billion from Fiscal Year 2021 through Fiscal 2027.

The FAA could make safety reviews of route changes, but the principles add that such changes “would be subject to National Environmental Policy Act (NEPA) review only if the change exceeds the FAA-established noise threshold.”

The proposal would seek to honor existing labor agreements and maintain the ban on controller strikes.

Plans call for a three-year transition period overseen by the DOT secretary. All the assets owned by the FAA would be transferred at no charge. Under the White House vision, the organization would be managed by a professional board of directors that have a “a fiduciary responsibility solely to the new ATC entity.” The organization should represent all users and “no group should have even the appearance of influence over the board of directors.” The Transportation Secretary would select members from candidates supplied by “nominating groups” representing a spectrum of stakeholders.

Along with Shuster, joining Trump in making the announcement were Vice President Mike Pence, Transportation Secretary Elaine Chao and three former Republican transportation secretaries—Elizabeth Dole, James Burnley and Mary Peters. Among lawmakers in the audience were Shuster, House majority leader Kevin McCarthy (R-Calif.) and Sen. Ted Cruz (R-Texas).

Chao said the proposed reforms will accelerate the deployment of new technology and usher in a new era of enhanced safety and ATC system performance. But she made a point of complimenting the FAA’s controller workforce, most of which is unionized.

Chao, who subsequently testified in consecutive days on Capitol Hill before the House Transportation and Infrastructure (T&I) Committee and Senate Commerce Committee, recognized fears surrounding general aviation and rural community access. She said she has worked with business and general aviation groups and added she wants to “partner with them to address some of the issues.”

She further dismissed concerns that the system would be run by the airlines, saying it would be run by an independent board with only a couple of seats appointed by the airlines. “The board will not be dominated by airlines,” she emphasized.

She addressed concerns surrounding protections for rural airports and contract towers, noting that they are vulnerable under the current funding systems. “Contract towers are always the first to be cut back when there are budget pressures,” she said, adding there would be more protections in the future. When further questioned about protections for rural communities, she added, “It can’t be any worse than it is now,” given the vulnerabilities to cuts.

However, Chao also acknowledged that “in broad terms,” a private air traffic board would have an incentive to prioritize operations of larger airports, but said “we are open to working with Congress” on the details to preserve access. “Rural America overall is an important aspect. We are open to discussion about that.”

Long-term Authorization Needed

In the House T&I Committee, the Trump proposal received a mixed reception, with many of the Republicans referring to a need for change and emphasizing “the status quo is unacceptable,” while Democrats questioned the capitalization of the new organization, long-term labor outlook and prospects for environmental reviews for future changes.

Rep. Rick Larsen (D-Washington), noting that comprehensive reauthorization encompasses a spectrum of issues, expressed concern that the controversy surrounding the ATC reform could lead Congress to another short-term bill rather than a long-term bill. He asked if Chao would support moving forward with reauthorization without addressing the ATC reform issues.

Chao responded that the administration’s preference is that “liberation” of the ATC organization would be considered and passed. But she added, “We want to work with the committee and the Congress. Let’s work on the issues and see how far we can get.”

“There is consensus about the need for a long-term FAA bill that reforms the FAA's certification processes, integrates unmanned aircraft and improves safety,” Larsen said. “That's the bill we should be talking about today. That's the bill we must enact with no further delay. Absolutely no science experiments, just bipartisan provisions that have broad stakeholder support and should have already been enacted.”

Larsen has teamed with Rep. Pete DeFazio (R-Oregon), the ranking Democrat on the T&I Committee, to offer an alternative proposal that would instead call for a series of personnel and procurement reforms and the removal of the Airport and Airway Trust Fund from the constraints of the congressional appropriation process. The lawmakers said they have the co-sponsorship of every Democrat on the panel and would be reaching out to other Democrats and Republicans.

Shuster said that the Democrats' proposal is an acknowledgement that the current system is broken. “However, we disagree on how to fix the problem,” Shuster said. “[The Democrats' alternative] rehashes years and years of ineffective congressional reforms aimed at allowing the FAA to act like a business and modernize the ATC system. If government is clearly the problem, and if exempting ATC service from virtually every government system, process and procedure is the offered solution, why keep it in the government at all?”

In addition to the House Democrat opposition, Chao faced a skeptical Senate Commerce Committee, where she heard further concerns about rural community and contract tower protections from several members of the committee on both sides of the aisle, among them chairman John Thune (R-South Dakota).

 Sen. Bill Nelson (D-Florida) also reiterated, “I am opposed to ATC privatization, no matter what form it might take. We currently have the safest ATC system in the world. Why risk that by handing the whole thing over to an untested, unproven entity?” Thune stressed the committee would work on a bipartisan basis to craft an FAA reauthorization bill

While protections were outlined to preserve general aviation access, GA groups were unswayed in their opposition. The groups sent a joint letter to the Trump Administration expressing their concerns.

“It’s difficult to see how one ‘Makes America Great Again’ by emulating foreign ATC systems that are smaller and demonstrably less safe than our own,” said National Air Transportation Association president Martin Hiller. “The Trump proposal introduces significant uncertainty to the world’s largest, most complex and safest ATC system, offering a radical solution to issues easily addressed within the FAA’s current framework. Surprisingly, the proposal also makes little business sense; it does nothing to address the need for additional airport infrastructure investment but adds significantly to annual budget deficits and increases the costs to be borne by the non-flying public.”

NBAA president and CEO Ed Bolen remained wary of the underlying objectives of ATC reform and long-term ramifications. “Unfortunately, the recent discussion about privatization is really about the airlines’ push to gain more control over our ATC system, so that they can run it for their own benefit, and is a sideshow to a serious and constructive discussion about building on the progress currently under way on NextGen,” Bolen said. “We are concerned that those left behind under ATC privatization would be the citizens, companies and communities that rely on general aviation for all manner of services.''

Meanwhile, the Aircraft Owners and Pilots Association took aim at the prospect of user fees. “While AOPA is open to proposals aimed at making the ATC system more efficient and delivering technology in a timely and cost-effective manner, we have consistently said we will not support policies that impose user fees on general aviation,” noted AOPA president and CEO Mark Baker. “As the air traffic debate continues, we are also concerned about the impact of these proposed reforms on general aviation based on what we have seen in other countries.”

The Trump Administration unveiled the proposal ostensibly with critical support from Defense Secretary James Mattis, who wrote that the Department of Defense is “supportive of possible privatization.” But it remains to be seen if the proposal retains the backing of another critical organization: the controllers union.

While the National Air Traffic Controllers Association (Natca) had backed the independent ATC concept as unveiled last year, the association was more measured in its response to the Trump proposal. “Natca shares the Administration’s commitments to infrastructure modernization and providing the National Airspace System with a stable, predictable funding stream,” said Natca president Paul Rinaldi. “We look forward to reviewing the specifics of the ATC reform legislation so we can evaluate whether it satisfies our union’s principles, including protecting the rights and benefits of the ATC workforce.”