Study: U.S. Airports, ATC System Should Be Self Supporting

 - January 21, 2013, 12:35 PM
A Reason Foundation study proposes that the FAA spin off its air traffic organization as a separate, user-funded entity analogous to air navigation service providers in other countries.

A new Reason Foundation study argues that U.S. passenger airports could support themselves and fund capacity improvements with user fees and long-term financing, eliminating the need for government grants from the Airport Improvement Program (AIP). The study by the libertarian research organization also proposes spinning off the FAA’s Air Traffic Organization (ATO) into a separate federal entity that charges users for ATC services.

The study, titled “Funding Important Transportation Infrastructure in a Fiscally Constrained Environment,” aims to promote solutions that would distance the U.S. transportation system from ongoing budget and debt-limit crises in Congress, according to the foundation. “If you look at our outdated air traffic control system or our aging Interstate highways, you’ll see Congress has long struggled to provide reliable funding streams for infrastructure projects,” study author Robert Poole said in a release. “Fortunately, there are numerous practical changes we can implement to rebuild and reinvigorate our infrastructure within the current economic climate.”

A 2011 survey by Airports Council International-North America estimated that annual capital investment needs at U.S. airports total $16 billion for runways, taxiways, terminals and other projects through 2015. AIP grants, generated by passenger ticket taxes, fuel taxes and other fees, account for just 22 percent of airports’ capital funding sources, the Reason study notes. Revenue bonds backed by airport operating revenues, including local passenger facility charges (PFCs), now federally capped at $4.50 per enplaned passenger, provide more than half of capital funding.

The AIP also “cross subsidizes” airports, according to the Reason study. Larger, hub airports that host 70 percent of passengers receive just 17 percent of AIP grants; the balance gets distributed among smaller hubs, non-hubs and general aviation airports. “Rather than battling with general aviation interests over how to split up the AIP pie, a better solution would be to liberate passenger airports from AIP altogether, allowing them to self-fund via PFCs and all their other user-derived revenue sources without a federal limit,” states the study.

The idea of recasting the ATC system as a self-supporting operation dates back to at least 1985, the study notes. It recommends separating the ATO from the FAA and making it a user-funded entity, analogous to the air navigation service providers of Canada, Australia, the UK and other countries. The new entity could issue long-term revenue bonds to finance the technology and facility improvements needed for the NextGen ATC modernization effort, expected to cost the government and airspace users $50 billion.

 

 

 

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Comments

Jerry S's picture

It has never made sense to any rational human being (which necessarily excludes NATCA representatives) to have the same organization operating ATC that regulates it. Organizations such as NATS and NAVCanada have demonstrated that it is not necessary to have ATC operations run as a strictly governmental organization, and the 'old chestnut' that the the US ATC system somehow holds a unique position in the world simply no longer holds true. Expect NATCA to fight this tooth and nail, as they will want to continue their present system so as to insure over-inflated salaries, over-staffed facilities and protected incompetent controllers.

Mike's picture

^^^You have no idea what you are talking about. The vast majority of control facilities around the country are woefully understaffed, many to the point of being categorized as being at a "Critical staffing level"; the lack of budget allotted the FAA means less new controllers are being brought in to replace those that are retiring or are lost during the training process due to attrition.

And as for your "over-inflated" salary comment, I think controllers make fairly decent money for working such a safety-critical position...or should we include budget cutbacks for controllers and pilots, too, so you can play a guessing-game as to which barely-high-school-graduate will be flying you to LAX today?

Mike's picture

User fees are a great idea! Let's also import the idea of user fees into our highway system, so that only the people who use the roads have to pay for them.

We'll start by including tolls at every highway and road at the state line, so we can be sure each state is getting its fair share. Let's take it a step further, we wouldn't want those counties to lose money, now would we? We can set up tolls at the entrances to every municipality in the country to ensure that only the people who use those roads have to pay for them!

User fees are so great!

pilot's picture

First off, there has never been a dedicated fund system that has been used as intended. User fees would not be placed where they are supposed to go anyway. The government would collect a tax from the airport system intended for runway projects and then the money would go to fund some subsidized housing project or get transferred and thrown into the general fund of some city or county budget. If each airport kept the money collected what happens when the airport has been improved. Do they then lower the fees to an airport maintenance level or do we keep the fees coming in for projects that are then pointless such as huge, grand, cathedral ceilings, in well oversized buildings that are at 10 percent capacity. Look at the highway system, we already have user fees, it is called road tax on fuel. Where does this tax go? I bet 50% of the tax does not make it back to the highway system. The US average fuel tax is 49 cents per gallon. Our roads should be in great shape.

If we want airports to keep their own fees collected then there needs to be a controlling system that only allows the funds to be spent on improving the airport. I am fine having the people who use the system pay for the system. However, it has to be assured that the system will be managed correctly.

matt's picture

Canada does not have the General Aviation that is in the US. Neither does anywhere else in the world. The US does have a fuel tax that does not require a new or separate entity to collect and distribute user fees and works just fine. If user fees were implemented, what is still left of GA would go away. Keep in mind where the rest of the world gets its airline pilots trained. That is because GA elsewhere is taxed nearly out of existance. The ATC system that is now in place in the US was set up for the airlines. GA in the US gets whatever is leftover for IFR flights, and in most GA flights ATC is not even needed. In one airport there are no GA flights at all except for government flights (DCA), and there are still departure and arrival delays. If funding were reduced to GA airports then those flights would have to go to the major airports that most GA operators prefer to avoid, increasing the already overloaded airline schedule at the larger airports (LGA, JFK, ORD). User fees are just a bad idea, period. Anyone who thinks taking ATC away from the FAA is such a great idea need to remember how well the transition went for Flight Service Stations. That is why Duats and other computer flight service providers are so popular. Most professional pilots avoid the privatized FSS like the plague due to the issues involved in dealing with them.

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