ATM Modernization, Business & GA, Commercial, Military

Editor’s Note: How Far Will ATC Privatization Go?

By David Jensen | February 1, 2001
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It appears the United Kingdom will carry through with the partial privatization of its National Air Traffic Services (NATS) organization. Will the United States do the same with the Federal Aviation Administration’s (FAA’s) air traffic services?

Hmm. Don’t bet on it–though the first step in that direction has been taken.

In the UK, despite continuing opposition by various interests (including the air traffic controllers union), the government seems determined to proceed with the partial privatization of NATS. Here’s how it now stands: Late last year, the UK Minister of Transport, Lord Macdonald, announced that the three consortia contending for interest in NATS are to proceed with the bidding process. The goal is to have the NATS Public Private Partnership (PPP) in place by this spring.

The three consortia are:

  • NIMBUS, whose equity participants are SERCO and PPM Ventures, with technical assistance provided by ARINC Inc. and Cranfield University;

  • NOVARES, whose participants are Lockheed Martin ATM, Apax Partners and Airways International Ltd., with technical assistance from AEA Technology and DERA; and

  • The Airline Group, comprising British Airways, British Midland, Virgin Atlantic, Airtours, Britannia, JMC, Monarch and Easy Jet airlines, plus the technical support of BT and several European ATS providers.

In addition, Boeing–which plans to develop a global, satellite-based air navigation system–and Alenia Marconi Systems have both indicated keen interest in joining one of the contending consortia.

Meanwhile, across the Atlantic, former President Clinton issued an executive order Dec. 7 to establish a performance-based air traffic control (ATC) entity called the Air Navigation Services Organization (ANSO). He also suggested that the newly-elected Congress consider concepts such as charging airlines higher landing fees during peak travel periods and eventually having fees, rather than taxes, support all ATS in the United States. Then Transportation Secretary Rodney Slater subsequently announced the members of ANSO’s board of directors: John Snow, chairman of CSX Corp.; John Cullinane, chairman of the Cullinane Group; former Senator Nancy Kassebaum Baker; Leon Lynch, international vice president for United Steel Workers of America; and Sharon Patrick, president of Martha Stewart Living Omnimedia Inc. As this is written, the FAA is conducting a search for a chief operating officer.

If ANSO gains footing and proceeds down the road towards privatization, the U.S. would join its closest allies, the UK and Canada, in forming a kind of non-public, North Atlantic ATS triad. But it will be an arduous road for an initiative launched by a president who, at the time, had one foot out the White House door.

First, Congress shows no appetite for implementing extra fees, nor for allowing the proceeds from aviation fees to be beyond government reach. Second, the initiative has so far gained no support from the aviation community. The Aircraft Owners and Pilots Association (AOPA) claims the initiative is "full of holes," and AOPA vice president Bill Deere, says the user fees "will cost more to collect…and give the air traffic control monopoly the power to impose taxes on the traveling public without the benefit of congressional representation or oversight." Likewise, the National Air Transportation Association (NATA) "decried" the presidential order, and NATA President Jim Coyne has stated that "the Clinton Administration continues to say [ATC modernization] is a funding problem when it really is a management issue."

Some in the U.S. aviation community hold a cynical view of how the executive order would be executed. They recall the good intentions several years back of personnel reform in the FAA; the result was that agency personnel joined 48 different unions. Some also wonder if the already-slow certification process associated with ATC would become even slower by an agency (the fully governmental part of the FAA) that has fewer ties with ATC operations. And what, some ask, would happen to assets like the Technical Center?

In many ways, the FAA is not like NATS or like Transport Canada before the Nav Canada spinoff. It is a distinct agency within a unique political environment. So, we should not anticipate (or fear) the existence of a non-public North Atlantic ATS triad in the near future.

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