Time to Privatize ATC?

Many pilots and aircraft owners are very upset about the FAA’s new policy to charge EAA for controller expenses at Oshkosh. Virtually everyone who has emailed or posted a comment notes that we already pay specific aviation taxes as well as income tax that goes into the federal government general fund and that should cover the cost of controllers at Oshkosh.

It’s also true that nearly everyone who has commented negatively about the FAA policy of charging for ATC services also adds remarks about overall government waste and bloated budgets. It’s clear that many in aviation have lost faith in government, if they ever had faith to begin with.

So, I ask, is it time to privatize air traffic control? Several other countries already have. It would be the ultimate user fee because a private ATC system would need to operate at a profit to stay in business and each airplane owner would have to pay to keep the system up and running even if we don’t use all or most of the services.

About 15 years ago Canada changed from a tax-funded air traffic system to Nav Canada, a private sector corporation financed through publicly traded debt. Nav Canada operates the ATC centers, provides weather briefings, aeronautical information, and installs and maintains electronic navaids.

Nav Canada charges light piston airplane owners flat annual fees. Larger airplanes and jets pay more, and transport airplanes pay based on a formula of weight, distance in Canadian airspace and so on.

For the Canadian owner of a private airplane the annual Nav Canada charges are modest, no more than a few hundred dollars a year for a propeller airplane weighing less than 6,613 pounds max takeoff. That’s 3 metric tons in case you wonder about the odd number. The fee is less than one hundred bucks for piston airplanes less than 2 metric tons. There are extra daily charges for private piston airplanes to use Canada’s busiest airline airports but the fee is only about ten bucks. Many busy GA airports here, particularly in the northeast, already charge landing fees that are similar.

Under Nav Canada all Canadian GA piston airplane owners pay the annual fee if their airplane flies at all during the year and weighs more than 1,360 pounds. The fee is not higher or lower for VFR or IFR flying. The system of navaids, controller radar, weather briefing and so on is there so every aircraft owner except for LSA or lighter types pays to support it. Charges are more complicated, and higher, for jets of any weight.

When the Canadians were going through ATC privatization many of us in the U.S. were worried. I was afraid the system would turn out to be some fiendishly complex schedule of charges that would be expensive and overly complicated. Or that airliners and jets would get preference. But I turned out to be wrong.

When I fly to Canada I get a bill in the mail from Nav Canada for a flat fee that is good for the entire quarter of the year. I don’t remember the cost, but it was somewhere around $60. And that covered normal IFR flying in the system to as many airports in Canada as I wanted to go, except for the handful of busy airline airports.

Often I’m transiting Canadian airspace en route on east-west trips and am in Toronto air space for part of the trip but don’t land in Canada. In that case there is no charge from Nav Canada. And when flying in Nav Canada’s system I really can’t tell any difference from being in the FAA system.

Nav Canada brags that it has been able to hold its fees far below the overall inflation level, and hasn’t had a rate hike in years. Its fees for all users are significantly below comparable costs in other nations, and as far as I know Canadian aircraft operators of all types are reasonably happy with Nav Canada compared to the previous tax-based system.

What would you think of a Nav Canada style system here? We would pay, but we pay taxes now. There would also need to be a special fee for an event such as AirVenture Oshkosh because of the extra manpower required, but it could be a flat daily fee just like Nav Canada charges for a private airplane to use a big airline airport.

Nav Canada has earned a reputation for being nimble in terms of new technology, and responsive to people who use their system. That’s not what anybody would say about the FAA ATC system where every new program drags on for years, is over budget, and often is never completed.

I have reflexively been in favor of a taxpayer-funded ATC system because all citizens benefit from an air transportation system whether they fly or not. But now that the FAA is making charges for specific ATC services should we consider a system that charges for every service but doesn’t swallow up tax dollars? A concept that at least deserves some thought.

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49 Responses to Time to Privatize ATC?

  1. Wayne says:

    Hey Mac,

    I thought being a controller at Oskosh was an elite assignment. Am I to believe that our President has ruined that honor also?

  2. Roger Halstead says:

    I have always opposed privatizing the FAA and avoided any airport that charged landing fees on top of gas purchases., at least until recently.

    IF and I emphasize the “IF” the governments (state and federal) would eliminate all taxes on aviation, then I believe Privatization could present the potential for an improvement. In other words, completely remove government from the process so there is no money for them to get their hands on.

    As log as the government has their fingers in the pie I do not believe that they will allow privatization to approach its true potential.

  3. The problem with trying to have a system like NavCanada in the US is that the administration would want to add it to what we have now rather than use it to replace what we have now.

    I think a privatized system would be hugely more efficient than any government run system and would probably be much more responsive to its users. The transition would be interesting at least and painful at worst, but I think it would probably be worth it as long as it is a full replacement and not just another agency to deal with.

  4. Stu Baxter says:

    Yes yes yes yes. If we could truly do that, it would be a huge cost savings and get rid of one of the most wasteful parts of oor government. Well maybe it’s hard to pick out the most wasteful but the savings could be enormous.

  5. Kayak Jack says:

    The government holding Oshkosh hostage has nothing to do with budget, and everything to do with politics. Presenting an argument – even the most cogent and logical one – against it will be immediately disregarded. Save your time.

    Also, if a wand were magically waved and ATC were privatized tomorrow morning, and aviators paid for it on some formula, the government would not remove the tax burden. Taxes would remain, private fees would remain, and Obamma would find other ways to deter private citizens enjoying their Constitutional rights.

    I hope I’m completely wrong. Don’t you bet on it.

  6. David Magda says:

    For the record, Nav Canada is incorporated as a not-for-profit corporation. So it needs to legally aim for breaking even each year (and it needs to have certain reserves for contingencies).

    Of course this can be fudged by adding expenses (like upgrading navaids) to add to what it needs to bring in, but I haven’t heard of complaints that it’s wasting money. It’s kept “honest” because it’s board is made of stake holders: airlines, government, GA/business, and unions. Basically the entire industry gets a say.

    It should also be noted that Nav Canada charges for charts as well, whereas the FAA gives them away. It’s not terribly expensive, but it should be noted for completeness.

    • Roger Halstead says:

      Don’t think that would change much for me as I’ve always purchase mine, be they VFR, IFR, or approach.

    • Thomas Boyle says:

      Don’t mistake “not-for-profit” and “not-for-gain”. The problem with the proposed “stakeholder board” is that there is no such thing as an “entire industry”: the board will be controlled by incumbent airlines and their unions, and they have much bigger interests than whether ATC generates a profit.

      GA and new-entrant (and non-union) airlines compete with incumbent (unionized) airlines, and are going to find the deck gradually stacked against them – GA by being outnumbered, and new-entrant airlines because you’re not on the board until you’re a big incumbent. GA (business jets, in particular) will be gradually priced out. New-entrant airlines will be faced with “capacity constraints”.

      Privatization, by itself, does not offer better costs or better service. Competition is what does that. The one thing guaranteed to be worse than the government, is a government-mandated private monopoly. Privatization without competition is a disaster.

      • Bill Tomlinson says:

        “Privatization without competition is a disaster.” Totally agree. Anyone who thinks otherwise should take a look at what has happened to Britain’s utilities since they were privatised.

  7. William McIntosh says:

    We have the best ATC system in the world, and the FAA is a government success story that has, like all other aspects of government these days, fallen victim to the wretched god of party politics. There is nothing wrong with the FAA that could not be addressed by a modernization of the FARs, and , above all, making the FAA an insependent agency, divorced from the stifling onus of being subservient to the DOT. It would help if somehow, the best career employees could hope to some day be named Administrator, rather than the party hacks that have to learn on the job.

    Politics rears its ugly head in the contollers-for-Oshkosh situation this year, as another writer has pointed out. The FAA could certainly accomodate the EAA, as it has in the past, but the Administration wants you to “share the pain” of sequestration. Those of you flying those “million dollar jets with tax loopholes for the corporations” should also now confess your sins and repent by begging to be taxed. Never mind that such a tax would cost a lot of ordinary workers their jobs.

    Improvement, not privatization, is the answer in this country, and Canada is not the United States. I am in favor of Federal primacy over local-yokel real estate developers and airport grabbers. I still love it that you can opt out of the system altogether, or that it’s still possible to land your 172 at Boston Logan, and be treated the same as Mr. 73….

  8. atpfirefly says:

    These are all good thoughts, however, it is important for us to not react spontaneously to these types of irritations and inconveniences….like the government with their knee jerk reaction to individual events in order to eliminate all future like events…never works and never will.
    If we are against USER FEES, and PIECEMEAL individual billings, then definitely, we should Privatize. In my opinion, and I do in fact “fly the world”, we have the best system due to the way in which our ATC is run. Privatizing will make us sitting ducks for people sitting around a conference table deciding “what the market will bear” in terms of their billings, USER FEES, and all other “ATC activities”. Privatization is a very bad idea and will almost always be a bad idea.

  9. Scott says:

    I guess I just don’t understand how a once a year fee is any different than taxing gas by the gallon. How exactly would it stop the Oshkosh scenario? Govt would still say it wasn’t going to pay to have air controllers there…

    At least with per gallon taxation, users who fly less get charged less. I don’t see any problem with that.

    • Jim says:

      Taxing 100LL can be avoided by those who don’t put 100LL in their aircraft – yet in some measure they will use the system.

      Somebody has to pay for the system, whether from general tax revenue, user fees, or some other source. I don’t expect others to pay for my flying, and I sure as hell don’t want to pay for somebody else’s hobby.

      A fee-based system can easily be designed so those who fly less will pay less – it’s been done. In reality, the overwhelming majority of the users are the commercial air carriers (including organizations like FedEx and UPS), and they pay the overwhelming share of the fees. The users at the bottom end are not worth the administrative effort to collect the fee, so give them a pass.

  10. Ed Hase says:

    I just went to Nav Canada and looked up there fees and was pleasantly surprised.
    The most common weights EAA members would fly and there fees.
    1360Lb -4406Lb Annual fee of$ 65.62.
    4409Lb-6613Lb Annual fee of $222.33.
    Single charts $5.87 Ea.
    All prices Converted today 6/19/13
    LSA and Ultralight aircraft have no fees, as they fall under the 1360 Lb. minimum charge!!

  11. James Butler says:

    I agree with some of the earlier posters. If we privatize, we need to completely and forever eliminate the taxes and fees that have been imposed to pay for our existing system.

    You only have to be old enough and have been paying attention to remember the numerous times we have all agreed to a new tax to fix the potholes in the roads, only to have that money siphoned off for other government waste. Then, 15 or so years later, along comes a new tax to fix the potholes. Rinse and repeat.

  12. Jim says:

    I live in Ottawa, Canada, and have flown into the United States in addition to all of the flying I do here in Canada. Philosophically, I believe that the government shouldn’t do anything that can be more capably done by the private sector.

    The transition of Nav Canada to not-for-profit has been a terrific success. They are much more nimble, the employees I talk to locally love not working for the government and the turtle-like decision making – they can get things done in weeks instead of years. Financially, they do not rely on random budget allocations each year, held hostage to the the many conflicting priorities that a cash-strapped government would need to choose between. Fees have been negligible, especially when compared to the overall cost of flying. And fees cannot be avoided, everybody pays their share (a tax on 100LL will be avoided by somebody who can put mogas in their aircraft).

    If implemented, the US government is not going to reduce taxes to parallel the new fees. But their governmental nose will be out of the system, their hand will be off the funding throttle, they won’t be able to jack around fees from GA/aviation because someone in Homeland Security needs a new truck, and decisions will be made based on objective criteria for delivering a system, rather than by votes traded by Congressman who get a bridge built in their District. What’s not to love about this proposal?

    • Roger Halstead says:

      At least here in Michigan, they might avoid the aviation tax, but I believe there is more tax on mo gas than av gas, plus almost all mo gas is too low an octane rating and for old aircraft, has alcohol in it which is hard on the engine and fuel system.

      Fuel for old aircraft is a real problem as they require lead and a low octane. So 100LL is too high an octane rating and mo gas has alcohol and no lead. 80 av gas is quite rare and most airports around here do not offer it. I don’t know if it’s even blended any more.

    • Thomas Boyle says:

      NavCanada has a 10-member Board. Incumbent airlines get 4 seats. GA gets 1 seat. New-entrant airlines get 0 seats.

      What assures you that NavCanada will
      a) care, at all, about GA in the long run?
      b) not try to gradually squeeze out GA?
      c) provide enough capacity to support new-entrant airlines?

      I realize that the rules of NavCanada’s charter state that charges must “not be unreasonable or undue for recreational aircraft”, but that’s a pretty weak protection for recreation (for example, instructional flights are commercial and could be crippled, similar to what Santa Monica airport is trying to do, and other GA is unprotected). Is there some other protection in place against abuse of what is now a government-mandated private monopoly?

      • Bram says:

        One additional item is that under the Nav Canada legislation there is a 19 member Advisory committee who regularly meets with managements on all issues put on the agenda by the committee. The committee has real input to management and reports directly to the Board Of directors who then take the committee’s advise if there are issues that can’t be resolved by management which can then be directed to management by the Board. The committee is made up of Provincial aviation councils, National airports groups, pilots and controller unions, helicopter association, Airlines of America, IATA, ATAC, CBAA, Northern Air transport assn, etc. This is a wide industry group who keep tabs on the system. I represent a provincial assn on the committee. The committee members alternately changes every three years. I am a private aircraft owner who flies IFR/VFR all over North America. I am a retired Approach controller and Tower chief who worked under both system and no one would want to go back the the govt system. My fees for my Piper Dakota are $68.00 annually and haven not changed in 12 years. The committee also reviews the financial aspects.
        Nav Canada also runs the FSS system. While the Canadian system is not perfect it was arrived by consensus of all the stakeholders since the govt decreed it wanted it privatized and therefore this is the model that was agreed on by the stakeholders without govt interference and we are totally out of the politics. Nav Canada is highly creative technically and exports its equipment and technology all over the world as an example its Tower Terminal systems are installed in London Heathrow and many other European Airports. If the USA could get the politicians out of the equation I think you could have a better system and be in control of the system, however I doubt that your congress would ever allow that.

        • Thomas Boyle says:

          Thanks, that’s helpful (and detailed). I’d still be happier with a less political way to limit misbehavior, but I take your word for it that the system has been working well and you’re happy with it. I’m probably just too much of a skeptic, but I’ve watched similar privatized monopolies in other countries (in other areas, e.g., licensing of radio broadcasting) go “off the rails” – but the governments claim to be powerless to intervene because the regulatory body is now “independent of political influence”…

          Long may your system remain free of such problems! (And it’s not as if it ours doesn’t have issues of its own!)

  13. Pingback: Touching a Raw Nerve: EAA agrees to pay $447K to FAA for AirVenture | Aviation Impact Reform

  14. Josh says:

    Forgetting all the possible ramifications of ‘govt’ getting a foot in the door with user fees, I don’t think I’d find $10 objectionable for ATC at OSH but based on the 15k airplanes number I’ve heard and the feds $500k ‘user fee’ they imposed this year, we’d be looking at more like $35 for the ‘user fee’ – that seems like a bit much to me.

  15. Greg Pinnell says:

    I always get nervous when I see a “flat” fee for a service. Has anyone got an explanation or breakdown of the $500K fee or did they just pull that number out of a hat? Time to bid it out to the private ATC companies.

  16. Jim Densmore says:

    No easy answer. We’ve already paid for this year’s Airventure ATC services. The fuel taxes taken in approximately match or exceed the cost of the FAA including ATC. A privatized ATC? Well, the problem there is putting a private entity in place with no competition available to motivate them to maintain quality – not that there is any such device now, but quality will degrade, that’s what happened to FSSs. I know what would happen re the $$: whatever mechanism is put in place to pay for a privatized system should replace the fuel taxes we pay now or at least a large portion of them. But that won’t happen; instead we’ll pay both.

  17. melvin Freedman says:

    We all forgot wallsteet,not for profit, no easy answers. The short and the long of all this is that the faa has blown trillions in my lifetime, and the pvt pilot seems to always wind-up the fall guy, just like the controllers

  18. Tom Martin says:

    The fuel and passenger tax (ADAP) was only for airport development and was never supposed to fund FAA operations. Trust the government, privatize and they won’t tax you too…

  19. Tim Kramer says:

    Clearly most of the commenters have realized this is about politics and not about operating economics. The ATO has already been separated out from the compliance-based enforcement part of the FAA so air traffic could be a performance-based organization operating with the efficiencies of a managed business and not be a government beauracracy. So Mac’s suggestion to start the privatization discussion could be a step in the right direction away from politics towards optimized and continuously improving performance. The hard issue will be stopping the existing taxation and substituting any new funding scheme. The politicians are very reluctant to stop taxes once they they have accustomed the citizens to pay them.

  20. Dale Amon says:

    The events with the FAA have shown that they are as willing to hold up those who rely on them as any set of bureaucrats who wish to protect turf. The goal is to inflict pain to make us think we need them. Mac’s proposal could turn this into an opportunity, but as other posters note, it should be a replacement, not an add on. Privatize it and move all of the air system management out of FAA… *and* delete the funds and taxes which went to support those activities. Both must happen simultaneously else the second will never occur at all.

  21. Philip says:

    Note, that Canada is not the only country that has privatised or corporatised their ATC eg UK, New Zealand, Australia, etc. Many other countries have done it also and each has used a slightly different model to implement the devolution of ATC out of government. In fact, many have done it to enact a clear separation of operation and regulation of aviation as required by ICAO. I don’t see how the FAA can honestly say they are not influenced by politics as they are required to be…but that is a different issue.

    It is also worth noting that not all ATC services need be fully public, private or corporate. Some countries have privatised all tower operations but retained the rest of ATC as a separate group (sometimes public but also sometimes private) eg U.A.E or privatised most tower services but retain major centres eg Ireland, UK. I wouldn’t say that any one of these is necessarily the example that the FAA should follow, simply that there are many ways to solve a problem and NavCanada is only one possible solution. One that seems to be working well for Canada. Perhaps one day, the US will develop a solution that works well for the US because the current approach isn’t.

  22. Bob says:

    Why not privatize police departments, too? ..because the profit motive and the public safety motive are fundamentally incompatible in the REAL world of short-term gains.

    • Philip says:

      Not necessarily so. Take for example the Corporatised approach done with Airways New Zealand. Airways is company but 100% of the shares are owned by the government. It is fiscally responsible for its costs, development, expansion, etc. It is required to ensure safe skies and the NZCAA force them to be safe. The system works. Now, if they make a profit, it is used for improvements to the ATC system or it is returned as a dividend to the shareholder ie the government. Now, take the NavCanada example, it is a private not-for-profit organisation. Profits are used to offset charges or are used for expansion and upgrading. Safety is ensured by having a tough regulator such as Transport Canada making sure that NavCanada keeps safety as a priority. How about UK NATS? They are private and for profit but 49% of NATS is owned by the UK Government but the UK CAA is a very tough regulator that doesn’t let UK NATS strive for profits without ensuring safety first. Privatisation/Corporatization and Safety can be compatible in the REAL world. Privatisation/Corporatization can and does work in the REAL world right now.

    • Jim says:

      This is known as a “Washington Monument Argument”, or the camel’s nose in the tent. Divert the discussion to a draconian (and independent) example.

      Nobody proposed anything to do with police departments.

  23. Josh says:

    Privatization makes me a bit nervous, although I’d say I have no complaints with the Lockheed Martin Flight Service program. Granted, there were a few issues during the transition but I seldom have to wait more than about 20 seconds to talk to a briefer.

  24. Pete says:

    I recall that when Nav Canada was introduced, the fuel taxes would go away or be significantly reduced. Surprise, it didn’t happen. Double taxation?

    I would fly to Canada once a year to lower Ontario, spitting distance from NY. To fly 5 miles into Canada and 5 miles back to the U.S., I would get charged $50 or more. All I did was contact ATC to cross the border and tell them I had the airport in sight and cancel. One radio call inbound and one radio call outbound for $50. Haven’t been back since.

  25. Frank says:

    Overlooked here is the new FAA Tower at OSH. It was demanded to replace the existing tower for use one week of the year, projected cost was some $3 million but, like most things FAA does it actually cost a bit more: $9 to 11million depending upon the source you choose to believe. And this was citizen dollars for FAA to occupy and use for one week of the year!!!!

    Not to worry about sleeping controllers, night flights at OSH are prohibited so the use in day only.

    Seems FAA has an almost unlimited number of ways to display their contempt for the citizen pilot. Doubt it- just visit your local FSDO and request a “service” like Field Approval, registration assistance, C of A inspection, check ride, etc.

  26. Allan says:

    Mac brings up the seemingly benign example of privatization of ATC in Canada. Simply look to NZ and their recent jacking up of fees ( http://bit.ly/17YYOlV ) and the situations in pretty much every European country to see how it usually turns out. Pricing GA as we know it out of existence.

    As much as I no longer trust the current administration to govern with the best interest if its citizens in mind, infrastructure should be a core competency of the Federal government. That means them running ATC, and not using it as a political football in an attempt to keep the us vs. them political theater going.

    • Jim says:

      Regarding political theater and the bi-polar split in politics: That ship has already sailed, that blood sport is the new reality.

      This reality is that everyone will be out to gore each other’s ox, while the government bleeds red ink regardless of who sits in which chair. Pretty much everything they touch is contaminated.

      The less they touch, the better.

  27. Brian says:

    Comparing any other nation’s ATC system to the U.S. is an apples-to-oranges comparison. An analogy would be comparing an independently-owned general store to the WalMart corporation.

    The U.S. ATC system remains the gold standard for safety, service, and efficiency.

    If you’re a proponent of GA, the last thing you’ll ever want in the U.S. is privatized ATC. The airlines would absolutely own it.

  28. Ken says:

    Somethings like ATC are inherently noncompetitive and best done by a single organization. Which would you rather have do these functions, a public or a private monopoly?

  29. Bill Tomlinson says:

    Perhaps we should consider a British-style approach. Airspace is segregated into IFR and non-IFR blocks. If you want to go into an IFR block you have to be on an instrument flight plan, even if the weather is CAVU. Anywhere else – do what you like.

    Let those who want ATC fly in IFR airspace – and pay for it – but leave the rest of us alone, to stumble along somehow just seeing-and-avoiding.

  30. Michael Sheridan says:

    Childish, parochial response, not unlike a childish, self-important fit, by Mac and others to paying your way to what is an airplane adult-jamboree that uses at lot of ATC in a time when the controllers were themselves being furloughed. Given the way EAA has its hand out for every time you turn around at the show and on the site, the stance is laughable.

    The net is we have a great, supremely safe, system with by and large very dedicated controllers, who have a lot more pressure than you do, complaining of oh so tough flights in your Baron.

    • Roger Halstead says:

      If you take the fuel taxes general aviation pays compared to the airlines we already pay well more than our fair share as GA pays a much higher tax.

      • Ken says:

        But GA burns much less total fuel than the airlines. According to GAO reports. The airlines pay 93% of the system costs and use 78% of the services.

  31. Steve Phoenix says:

    I think before we rush off and copy Canada’s example, perhaps a little more thought is in order. Canada’s system may work well because they have a lot of space but relatively little infrastructure to support. The U.S. has a lot less space and a lot more infrastructure (like a lot of expensive towers and so on) to support (or get rid of).

    It might be ok if the users somehow got a say in how much infrastructure they were willing to support. And it would have to be better than having reps from the alphbet groups do the talking (I think the AOPA and EAA are a little out of touch much of the time). Maybe like being able to specify how your yearly fee was to be split and applied into general categories (small airport improvement, FSS, ADS-B, enroute facilities, etc).

  32. John Mininger says:

    Good start Mac; thanks for bringing the subject up. I have to think that the budget squeezing we’re now feeling will only get worse. So with that in mind, I would hope that with 13 months to plan, the EAA will have some time to put out an RFP for ATC services for Airventure 2014.
    Wouldn’t it be interesting if Nav Canada got the bid?

  33. John Mininger says:

    From the studies I’ve seen and the personal experiences that I’ve had with NavCanada, I for one would be in favor of the U.S. moving to that system. But as others here have pointed out, it would have to be a complete clean sheet change. The last thing we need is some blended system with user fees added to the current FAA government funded, owned and controlled ATC system we have now.
    I’m not very optimistic though. We can’t seem to even be able to consolidate some parochial radar facilities, because of local pride, or local jobs, or something like that. As soon as the suggestion is made, local congressional reps step in to block it; the U.S. taxpayer at large be damned.
    But who knows? The budget unpleasantries we’re experiencing now are only going to get worse as more and more Medicare and Social Security entitlements start flowing out and Obama Care starts to kick in.
    So to repeat an already overused phrase: “A crisis is a terrible thing to waste”.

  34. Hod says:

    Follow the money. A huge portion of the FAA’s current budget is currently going to defense contractors, including LockMart, Raytheon, and others. Most of the projects these contractors are working on are late and over-budget. What would change if the FAA was privatized? Unlike NavCanada, corporations would insist on a for-profit business model through their bought and paid for U.S. Senators and Congressmen. We could anticipate new “tiers of service” based on what you can pay (similar to AirVenture giving prime spots on the flight-line to corporate sponsors), and an overall degradation of the entire system (to maintain profits, and corporate compensation to presidents and CEO’s).
    No thanks.

    • John Mininger says:

      I don’t know, Hod. When I glance at the FAA budget, I see half of it going for ATC services alone. The concern I have is not how much the CEO of a prospective private vendor might make; it’s how much more cost effectively a private company could provide the same service.
      There was a recent report put out by the Civil Air Navigation Services Organization (CANSO) for 2011.
      http://www.canso.org/cms/streambin.aspx?requestid=92AF6FDB-1EDB-4A96-931D-4C48AF1B8C82
      Part of that report compared what it cost individual Air Navigation Service Providers (ANSP) from 15 developed countries to provide one hour of IFR ATC service. The four most cost effective ANSPs were: EANS of Estonia at $251 per hour; Nav Canada at $327; Airways New Zealand at $396; and the FAAs Air Traffic Organization at $433. (Incidentally, the UK’s NATS was $774 per hour.)
      The CANSO report also showed the changes in the providers costs for service annualized over the past 5 years. Estonia had an average annual increase in costs of 5.9%; New Zealand 5.3%, and the FAA 6.6%. What I found really interesting was the cost to Nav Canada to provide those IFR ATC services actually went DOWN 1.3% annually over the last 5 years.
      I’m 60 years old. I don’t have any problems with the service provided by the status quo FAA-ATO, and it may very well be able to hang on until my flying years are over. (Or I’m relegated to ultra-lights.) But I don’t think the status quo is sustainable. We’re already starting to see that with ATC service fees being charged for events. And I think these sledge hammer style cuts being implemented under the guise of sequester are only the beginning. As I said before, I think the worst scenario we could get would be keeping the current system and adding user fees to try and fund it. We need to start moving towards a more sustainable system now, and the Nav Canada model doesn’t look bad to me.
      I thank Mac for bringing the subject up. And I’m actually surprised that the idea didn’t get blasted here more than it has.

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