Commercializing U.S. ATC

Commercializing U.S. ATC

Think-tank reviews alternatives to a government-operated system

By Robert W. Poole, Jr., & Viggo Butler, Reason Public Policy Institute

April 2001

In February, the Reason Public Policy Institute released its latest study, "How to Commercialize Air Traffic Control." Specifically, the group looked at alternatives the U.S. might consider as it seeks to modernize its current system. Following is an edited transcript of the think-tank’s executive summary, and lessons to be learned from the Canadian experience.

Over the past 15 years, nearly two dozen countries have corporatized their air traffic control systems, including Australia, Canada, Ger-many, Ireland, New Zealand, South Africa, Switzerland, Thailand, and the United Kingdom. All of these ATC corporations operate on commercial principles, to a far greater extent than do typical U.S. government corporations (such as Amtrak, U.S. Postal Service, the Tennessee Valley Author-ity). At a minimum, these commercial principles include the following:
• Keeping their books in accordance with generally accepted accounting principles;
• Being governed by a corporate-type board of directors;
• Borrowing from the private capital market;
• Supporting themselves via fees charged to users.
The International Civil Aviation Organization (ICAO) has long supported ATC corporatization, which it terms the creation of autonomous authorities (with) greater freedom from the government in conducting its financial affairs. Importantly, it should still be regulated by the government.

A Stretched System
The record levels of air traffic delays in the summers of 1999 and 2000 have revealed an air traffic control (ATC) system stretched beyond its limits. And not only are delays at record levels; so, too are runway incursions and operational errors by controllers.
Over the past decade a growing consensus has emerged that air traffic control is essentially a commercial service, a 24-hour-a-day, seven-day-a-week, high-tech service business. A number of federal task forces and commissions have, accordingly, recommended that ATC be separated from the Federal Aviation Adminis-tration (FAA) and set up as some kind of corporate entity, funded directly by payments from users.