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Controversial Bill Aimed at Privatizing US Air-traffic Control Has Been Thrown Out

Written by: Roland Pinto Nissim, Chairman and CEO, Meiya Group Global
April 6, 2016

For now, the United States Federal Aviation Administration (FAA) will maintain control over air traffic control, keeping the system in the hands of government and out of risky private enterprise. Historically, the air traffic control system in the United States started out as a private endeavor prior to being funded and converted over to public domain.

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In 1935, Eugene Vidal, the director of the then operational Bureau of Air Commerce, adivision under the US Federal Department of Commerce, held a pioneering conference to discuss the needs of developing a system and hiring personnel to control air traffic in the skies of America. People flying in the US's developing airline industry grew from around 462,000 passengers in 1934 to 1,900,000 passengers in 1939. That was exponential growth of a new industry and people wanted to take to the skies to get around.

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Airlines were introducing new airplanes that were offering more comfort, speed, and cabin services such as sleepers and first class amenities. People were falling in love with the dream of flight and therefore; more airplanes were flying around the country's airspace. On the 1st of December, 1935, a consortium of airline companies finally came forward to create and open the first airway traffic control station in Newark, New Jersey. This action was done on the promise from the Bureay of Air Commerce that it would take up funding the control centers within 120 days. Under that promise, this new airline consortium continued to open several new airway traffic control stations with the second one being in Chicago in April of 1936, and Cleveland, Ohio in June of 1936.

Shortly thereafter, the Bureau of Air Commerce took over the airway traffic control stations in the three locations removing private control and ownership from the airlines and placing the future of air traffic control in the hands of the government, under the direction of the Bureau of Air Commerce. Since that time in the history of the USA's aviation development, air traffic control services were consistently provided by government agencies and paid for by government funding, monies collected from taxes and airport and passenger fees.

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Jump ahead eighty years, air traffic control (ATC) has been passed to several other agencies before being given to the FAA for control. In 2013, there was a horrific budget fight in the US government. This problem caused the government to shut down temporarily and many air traffic controllers to be furloughed. Due to the fear of this happening again and several other reasons, Representative Bill Shuster, a Republican from Pennsylvania, and also the chairman of the House Transportation Committee, proposed a new privatization bill aimed at getting the control of America's skies out of the hands of government and into the hands of the private sector.

Shuster says the air traffic control system under the FAA is safe but "incredibly inefficient." Rep Shuster continued by saying: "The problems will only get worse as passenger levels grow and as the FAA falls further behind in modernizing the system."

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The National Air Traffic Controllers Association backed this proposal all too quickly. A trade group called the Airlines for America, who represents most of the scheduled carriers in the United States, also stated that a private company governed by representatives of the aviation industry could and would move quicker than the current FAA to create more efficient flight routes, and upgrade equipment. Opposing viewpoints were immediate to rebuff the proposal stating that an air traffic control system operated by the very users of this system would reduce the public's ability to control and regulate safety and security, as well as remove oversight and accountability from the government. House Appropriations Chairman Hal Rogers, a Republican from Kentucky, and Nita Lowey, a Democrat of New York both wrote letters saying the same thing and sharing the same main concern; a move to private control of the nation's air traffic control system would "give the public less leverage to influence how the system operates."

Peter DeFazio, a Democrat from Oregon and also the most powerful democrat on the Transportation Committee did not agree with Shuster and his proposal. DeFazio said that this plan would give the airlines way too much power and control. He continued by saying: "The same people who today determine your baggage costs would determine what you would pay to use the air-traffic control system. I don't think that would give consumers a lot of confidence. "

Delta Airlines is one of the only airlines in the US to speak loudly against this measure. CEO Richard Anderson stated that the proposal was unnecessary and unwise in a letter addressed to Shuster. Delta's senior vice president (SVP) for flight operations, Captain Steve Dickson also stated that privatizing the air traffic control system would not

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reduce heavy congestion and traffic in the US and could distract the current progress of easing congestion in the Northeast part of the country.

Nonetheless, the bill, sponsored by Shuster's House Transportation Committee was scrapped and the Republican leadership of the House of Representatives stopped the bill to reauthorize the FAA before the end of March 2016. This requires the FAA to temporarily operate under an interim extension of unknown time to keep the FAA operations running past the March 31 deadline. The new stopgap bill will not include privatization of air traffic control as the government has removed that from the table of discussion. So, after all this controversy, H.R. 4441, the Aviation Innovation, Reform and Reauthorization (AIRR) Act has been put on hold while a new long-term bill is hashed out.

Parties opposing the bill said that the plan was dangerous, a gamble, and a risk that could disrupt the world's largest and most complex air traffic system for many years to come.

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There are several countries that have implemented a private air traffic control system. Namely Canada and the United Kingdom are the only two countries that have entirely transferred control of all ATC assets to private corporations. Coincidentally, both of these corporations had to be bailed out and saved after the September 11, 2001 terrorist attacks in the United States. This resulted in a major slowdown in air travel killing these two company's revenue streams. They were not able to continue operations in the short term and their governments had to fund their rescue.

Moving the US ATC system over to private hands would have been the largest transfer of US government assets to private sector in the history of the US. Going forward, the government will continue to pay for, support, and operate the world's largest, most powerful, and safest air traffic control system and will receive additional funding to help speed up the continuation of the efforts to modernize the air traffic system and its equipment and systems, and to speed forward with the continued roll-out of NextGen, the FAA's future of ATC.

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