The potential train wreck of privatized air traffic control
“Don’t Privatize Air Traffic Control” is a New York Times editorial from February 15, 2016. The Times argues that the FAA is actually efficient but has been starved for funds: “Congress itself is to blame for some of NextGen’s problems because it has not provided stable funding to the F.A.A. in recent years.” The Times‘s portrait of the FAA as a model of efficiency is hard to square with experience, but a system run by a government crony could surely be far worse (see Amtrak, for example). And in fact the stuff that the FAA currently farms out to contractors seems to be frozen in time (see my NBAA report for how multi-billion-dollar ADS-B weather can’t catch up to 15-year-old XM weather).
Americans are so bad at running bureaucracies that it seems almost certain that any new system for collecting fees will have administrative costs vastly higher than the current system, which at least we know how to run (taxes on airline tickets; taxes on fuel purchased by private aircraft operators).
If Congress wants to change something, I would suggest privatizing aircraft certification so that multiple competing organizations could verify manufacturers’ compliance with regulations. This works well for consumer products. See UL and TUV Rheinland. This can boost the GDP by allowing U.S. aircraft manufacturers to get new and upgraded products to market faster.
If Congress truly can’t resist monkeying with air traffic control, the idea of giving it all to one big unaccountable bureaucracy is the height of madness. The U.S. is already split up into about 20 “centers” (list). Why not split things up so that running the radar in each center (and airports within those centers’ airspace) is contracted out every five years? Separation services (the people on the radio talking to pilots, issuing routes, etc.) would also be contracted out to the lowest qualified bidder every five years within each center. (One issue with privatization is that currently the federal government engages in age-based employment discrimination that would be illegal for a private employer. A controller cannot be hired if over age 30 and must generally retire at age 56.)
I think that we have ample evidence that when there is competition Americans can run things reasonably cost-effectively. If the government takes something over we’ll pay 2-4X the competitive market price (see healthcare, for example!). If the government gives a single private company the exclusive right to do something, there is no limit on how badly taxpayers and consumers can be abused.
Related:
- The CATO Institute buys into this idea, mostly due to the fact that the Canadian monopoly hasn’t ripped off citizens up there

