President Trump Endorses ATC Spin-Off in Budget Blueprint

 - March 16, 2017, 12:59 PM
An FAA air traffic controller scans surface from the tower at Dulles International Airport outside of Washington, D.C. (Photo: Bill Carey)

Updated with further reaction.

The Trump administration released its first federal budget proposal on March 16, for the first time revealing its support of calls to restructure the Federal Aviation Administration by creating a separate entity to manage air traffic control. The 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 Transporation (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 Transporation 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 major proponents the influencial 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 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.”

A4A said the Trump administration has shown “visionary leadership” by recognizing the need to restructure the ATC system to accomplish modernization. “This is a bold step that will lead to the governance and funding reforms needed to move our air traffic control infrastructure into the 21st century,” stated Nicholas Calio, A4A president and CEO. “We need to stop accepting pockets of progress and put in place a modernized system that better serves the traveling and shipping public.”

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 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.”

Americans Against Air Traffic Privatization, a coalition of liberal organizations, said the ATC spin-off would do more harm than good to travelers and taxpayers. “A Republican-led Congress has already rejected this proposal because of vast opposition from a bipartisan coalition including legislators on both sides of the aisle from appropriators to tax writers, rural and consumer advocates along with several aviation unions who all agree that the risk and the cost far outweigh the reward,” the group said. “Today, the same plan remains on the table—a plan that would separate ATC from the FAA and hand over control of our airspace to an unaccountable organization controlled by the airlines for free.”

Under Shuster’s original plan that failed to move through Congress last year, “the principal organization representing mainline air carriers,” most likely A4A, would have appointed four of the 11 directors of a not-for-profit ATC corporation, with another director appointed by the main union representing airline pilots. (Membership was later amended to 13 directors by adding representatives of business aviation and aerospace manufacturers.)

The Regional Airline Association (RAA) said it is neutral on the issue of ATC restructuring, but argued that regional carriers operate 44 percent of U.S. departures and should have representation on any ATC corporation board.

The National Air Traffic Controllers Association, which supported Shuster’s previous plan and would have appointed one director to the ATC board, said any new proposal would have to meet its “core principles” of protecting the employment rights and benefits of controllers, ensuring that system safety and efficiency remain the top priorities, making available a stable and predictable funding stream and ensuring continued service to all aviation segments.

The Alliance for Aviation Across America, a coalition representing businesses, agricultural groups, small airports and fixed-base operators, remained steadfast in opposition to the proposed ATC spin-off.

It is unfortunate that the President’s budget includes a proposal, pushed by the big commercial airline lobby, to privatize and give control over the ATC system to the big airlines, at the expense of the farms, businesses, and other important interests located in small towns and rural areas across America,” the alliance said. “This proposal would allow certain private interests to make critical system decisions ranging from infrastructure funding, to taxes and fees, according to their own best interest rather than that of the public. We urge Congress to retain oversight of the national air traffic control system to ensure that it operates in the best interest of the public.”

Eliminating the EAS, created in 1978 to ensure that rural communities maintained a minimal level of scheduled air service after airline industry deregulation, would save $175 million from the current annualized spending level, according to the Trump budget blueprint. “EAS flights are not full and have high subsidy costs per passenger,” the document states. “Several EAS-eligible communities are relatively close to major airports, and communities that have EAS could be served by other existing modes of transportation.” The service generally subsidizes two round trips a day by 30- to 50-seat aircraft, or additional frequencies by aircraft with nine or fewer seats, to large or medium hub airports, according to the DOT.

During his campaign for the presidency, Trump “promised to rebuild our ‘third world airports,’ but this budget would eliminate air service to 173 rural communities and sever critical access to the aviation system,” DeFazio charged.

The RAA expressed its support of the EAS program, which is funded in part by fees that foreign carriers pay to the FAA to overfly the U.S., and in part by discretionary funding, the association said. “At a time when rural America is struggling for economic parity, commercial airline service is a lifeline that helps communities attract and support businesses and retain professionals,” said RAA president Faye Malarkey Black.

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 noncommital 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.

Reacting to the release of the budget blueprint, Airports Council International-North America (ACI-NA), the trade association representing commercial airports, said it was dissatisfied.

While President Trump has been a vocal proponent of improving our airport infrastructure and enhancing security across the country, today’s budget proposal misses the mark when addressing these key airport challenges,” ACI-NA said.  “To provide the safest and most secure passenger experience possible, we must ensure that airports have the resources they need to improve their infrastructure and that the Transportation Security Administration and U.S. Customs and Border Protection have the staffing resources they need to protect the American public in a complex world while providing an efficient screening process.”