The Privatization of Air Traffic Control Vigorously Opposed by General Aviation Groups

In an unusual divergence of opinion between aviation related organizations concerning progress in the operation and development of the national air traffic system, the Airline Owners and Pilots Association (“AOPA”), the nationwide organization of private aircraft owners, opposes the plan set forth in the 21st Century Aviation Innovation, Reform, and Reauthorization Act, H.R. 2997 (“AIRR Act”).  That plan calls for the air traffic control (“ATC”) system currently managed by the Federal Aviation Administration (“FAA”) to be removed from federal government control, and turned over to a 13 member, largely private, board, the dominant members of which are the nation’s commercial airlines.  See § 90305.  

The apparent rationale behind the shift, heavily supported by the commercial airline industry, is the consistent delays and resulting costs in fuel and efficiency that have been endemic to the ground based radar air traffic control system in effect since World War II.  The airline industry maintains that insufficient progress has been made in expediting operations to accommodate the increasing number of operations in the United States airspace.  The commercial airlines’ position is supported by the legislative purpose which is “to provide for more efficient operations and improvement of air traffic services.”  See § 201.  
AOPA, on the other hand, relies on examples of the disputed improvements in system management which it maintains undercut the airline industry rationale for pursuing privatization.  
For example, AOPA defends FAA’s current accomplishments in the implementation of the “multiple runway” program at the nation’s busiest airports, whereby FAA supports development and use of new, more widely separated runways that allow reduced separation between aircraft because of approved wake turbulence impacts and, thus, increased operations in a shorter period of time.  
Similarly, AOPA points to the implementation of the performance based, or satellite based, navigation (“RNAV” and “RNP”) systems as ahead of schedule in several locations including Northern California (of course AOPA declines to mention the plethora of lawsuits challenging the implementation of the Northern California and other programs, some of which threaten to stay that implementation).  
Finally, AOPA supports its position by reference to the implementation of the System Wide Information Management (“SWIM”) Surface Visualization Tool ahead of schedule, purportedly allowing terminal radar (TRACON) controllers to better monitor congestion and more quickly react to requirements for changes of use on airport runways and taxiways, especially in less than favorable weather.  
Interestingly, and in an effort to quiet AOPA’s vocal concerns, the legislation contains various provisions aimed at ensuring the equitable treatment of private aircraft owners.  For example, while the corporation will be financed by user fees, § 90313(d)(7), the legislation prohibits the charging of fees for air traffic control services to “aircraft operations conducted pursuant to Part 91, 133, 135, 136 or 137 of Title 14 Code of Federal Regulations,” notably including general aviation which will continue to support the system through fuel taxes.  
H.R. 2997 has not yet been passed, so the entire debate may turn out to be academic.  It does, however, highlight the ongoing rift between two of the most influential segments of the aviation community (airport operators being the other) concerning the future management of the air traffic control system so vital to the entire aviation industry.


Congress' Attempt to Transfer Air Traffic Control to a Private Corporation Leaves a Great Deal to the Imagination

Up against a September 30th deadline for the passage of legislation before its recess, Congressman Bud Shuster introduced the 21st Century Aviation Innovation, Reform, and Reauthorization Act (“21st Century AIRR Act” or “Act”), H.R. 2997.  Although somewhat obscured by its name and size (in excess of 200 pages), one of the central points of the Bill is the transfer of air traffic control responsibility from the Federal Aviation Administration (“FAA”) to a private sector corporation (“Corporation), i.e., privatization of the air traffic control system.  The Bill betrays the speed of its development through its lack of specificity on a number of critical issues.

First, the Bill requires the Secretary of Transportation to transfer operational control to the Corporation in a systematic and orderly manner that ensures continuity of safe air traffic services, § 90302(a).  Although the air traffic control system in the United States is notably complex, the Bill lacks any hint of what constitutes “systematic” or “orderly,” including timelines or a transition team.  In addition, § 90302(c)(3) allows the Corporation to subcontract to unspecified “entities” for the provision of air traffic services, further complicating the transition by adding another apparent layer of administration.  
The process for choosing the Directors of the Corporation is equally nonspecific.  While the legislation specifies various industry groups that compose the “nomination panels,” with responsibility for choosing the Directors of the Corporation, the only qualification to be a member of such a “nomination panel” is that the designee be a citizen of the United States.  No specific knowledge of business administration or air traffic control is required for appointment to a nomination panel to choose the Directors that will be controlling the air traffic system, § 90305(e).
This is important because the Board ultimately chosen by the nomination panels is then tasked with the job of choosing a Chief Executive Officer to manage the corporation.  The qualifications of the CEO are, however, as nonspecific as those required for membership on a panel to nominate him/her.  See § 90311(a)(1)(B) [“(B) QUALIFICATIONS.—The CEO shall be an individual who— (i) is a citizen of the United States; (ii) satisfies the qualifications to serve as a Director under section 90307; and (iii) by reason of professional background and experience, is especially qualified to manage the Corporation.”].  The so-called “qualifications” specified in § 90307 are, however, more in the nature of “prohibitions,” or limitations on the persons who may serve, and not “qualifications” in the sense of affirmative accomplishments related to the task for which the CEO is being appointed.  See § 90307(b)(2).  
Finally, while the Secretary of Transportation is tasked with “prescrib[ing] performance-based regulations and minimum safety standards for the operation of air traffic services by the Corporation,” § 90501(a)(1), FAA’s formal oversight of the Corporation’s implementation of those standards will last only two years after the date of transfer of responsibility, § 90501(b), eventually thereafter divesting the federal government of the plenary power it now possesses under the Federal Aviation Act as currently drafted.  See 49 U.S.C. § 40103(a).  
These inconsistencies and deficiencies have not escaped notice by a wide swath of the aviation community, including the Airline Owners and Pilots Association (“AOPA”) which perceives the legislation as a power grab by the airlines.  See § 90306(b) for the various groups included in the Corporation’s Board, three from various types and sizes of commercial airlines, and one from the universe of commercial pilots, while only two seats are awarded to general and business aviation.
What is certain is that the Corporation, if eventually approved by Congress, will become a political football, both in its establishment and, eventually, in its operation, hopefully, not at the expense of the safety of our nation’s skies.  

Congressional Stalemate Persists over Air Traffic Control Privatization as FAA Reauthorization Deadline Approaches

The integration of cutting-edge aviation technology such as commercial drones and the modernization of our national airspace system are just a couple of the pressing aviation issues hanging in the balance this summer as Congress seeks common ground on FAA Reauthorization legislation.  

With the July 15, 2016 expiration of the current Federal Aviation Administration (FAA) authorization legislation rapidly approaching, congressional disagreement over a plan to privatize Air Traffic Control is preventing bicameral endorsement of a path forward.  
On April 19, 2016, the Senate passed its Federal Aviation Administration (FAA) Reauthorization legislation by an overwhelming margin of 95-3 (initially introduced as S. 2658 and later merged into H.R. 636). The Senate’s FAA legislation would reauthorize FAA programs through September 2017, and would focus billions of dollars and government resources on some of the most pressing aviation issues including the promotion of widespread commercial drone operations, bolstering airport security, and adding new safety systems in private aircraft. However, the Senate’s FAA Reauthorization legislation is arguably more notable for what it would not do than for what it would do. 

Namely, it would not privatize Air Traffic Control.  In the House of Representatives, the pending Aviation Innovation, Reform, and Reauthorization Act of 2016 would completely overhaul domestic Air Traffic Control operations by moving the operations out of the FAA to a non-profit corporation. If successful, the House bill would place approximately 38,000 Air Traffic Control employees, and the management of the safest national airspace system in the world, in the hands of a private corporation.  

Though the Senate and House bills share many commonalities, each passing day without congressional consensus brings mounting fears that the current efforts to modernize American aviation will devolve into an endless string of short-term extensions. The July 15 deadline has industry insiders calling for the House to adopt the Senate’s more measured approach to reauthorization and to table the Air Traffic Control overhaul until 2017.  

Privatization of the United States Air Traffic Control System Hits Roadblock in the U.S. Senate

Less than a month ago, it seemed clear that privatization was the wave of the future for the United States Air Traffic Control System (“ATC System”).  On February 19, 2016, the United States House of Representatives Transportation and Infrastructure Committee approved the Aviation Innovation, Reform and Reauthorization Act (“H.R. 4441” or “FAA Reauthorization Act”), the centerpiece of which was the establishment of an independent, nonprofit, private corporation to modernize the U.S. ATC System and provide ongoing ATC services.  The benefits of such “privatization” were seen to include less expense, less backlog in the implementation of air traffic control revisions, in essence, greater efficiency in the development, implementation, and long-term operation of the ATC System.  Central questions still remain, however, concerning the synergy of a private corporation’s management of the ATC System with the overarching statutory regime by which it is currently governed.  

H.R. 4441 does not directly address the issues of: (1) whether the Federal Aviation Administration (“FAA”) still have the final determination as to whether a change in the ATC System recommended by the corporation is “safe,” or will that determination also be left in private hands; (2) will the National Environmental Policy Act, 42 U.S.C. § 4321, et seq. (“NEPA”), applicable to the analysis of the environmental impacts of projects sponsored by a federal agency, still apply to changes in the ATC System effectuated by a private corporation; and (3) will federal preemption of local airport noise and access restrictions, conclusively established in the Airport Noise and Capacity Act of 1990, 49 U.S.C. § 47521, et seq. (“ANCA”), apply to determinations by a private corporation?  While many questions are left to be clarified, H.R. 4441 does explicitly answer at least one – it provides that federal preemption of local regulation of airline “prices, routes, and service,” originally established in the Airline Deregulation Act of 1978, 49 U.S.C. 41713(b), will remain in place.  Finally, judicial review under the Act is applied differentially, depending on whether a challenge is to FAA’s grant of a proposal, or its denial.  FAA’s approval of a proposal made by the corporation would be subject to the “abuse of discretion” standard, and the deference normally accorded to a governmental entity charged with the administration of a program established by Congress, which is difficult to overcome.  FAA’s denial of such a proposal, however, likely to be challenged only by the corporation, would not be subject to such deference, making the path to a reversal and ultimate approval of the corporation’s recommendations smoother.  

Apparently, the Senate Commerce Committee recognized H.R. 4441’s many unanswered questions, as did the full House of Representatives which has held up approval and caused the House to enact an extension of the FAA’s funding reauthorization to July 15, 2016.  The Senate reacted by passing its version of H.R. 4441 without the privatization provision.  This means that passage of the FAA Reauthorization must wait first until the issue is resolved internally in the House of Representatives.  Even if H.R. 4441 should emerge from the full House including the privatization provision, unless the full Senate should see fit to agree, a Conference Committee will be required and funding for the FAA could be delayed well past the current July 15, 2016 deadline.  

Recent Development in FAA Airport Privatization Program

The Federal Aviation Administration (FAA) has accepted the preliminary application by Gwinnett County Airport Briscoe Field (Airport) to participate in the FAA Airport Privatization Program. The airport sponsor, Gwinnett County, may now negotiate an agreement with a private company to operate the Airport. Gwinnett County may then submit a final application to the FAA for approval. If the final application is approved, the Airport would qualify as the one general aviation airport required by the Pilot Program, and be eligible to receive exemptions from certain Federal statutory and regulatory requirements.


The FAA published notice of the preliminary application in the July 7, 2010, Federal Register. The FAA will be required to publish notice of receipt of the final application in the Federal Register and allow a 60-day period for public review and comment.

An update on the Airport Privatization Program was posted by Chevalier, Allen & Lichman, LLP on this Aviation & Airport Development Law Blog on July 6, 2010.

Update on the Federal Aviation Administration Airport Privatization Pilot Program

Many in the aviation community have been monitoring the progress of Chicago's efforts to privatize Midway International Airport (MDW) under the Federal Aviation Administration’s (FAA) Airport Privatization Pilot Program. The City faces a July 31, 2010 deadline to either select a private operator for MDW or seek an extension of the City’s slot in the Program from the FAA. Chicago is the only approved applicant for the Program’s only large-hub slot. If the application is approved, MDW would be the first privatized large-hub airport in the U.S. 


The Airport Privatization Pilot Program was established in 1996 by Section 149 of the Federal Aviation Administration Authorization Act, which added a new Section 47134 to Title 49 of the U.S. Code. Section 47134 authorizes the Secretary of Transportation and, through delegation, the FAA Administrator, to exempt a sponsor of a public use airport that has received Federal assistance from certain Federal requirements in connection with the privatization of the airport by sale or lease to a private party.

The Administrator may exempt the sponsor from some or all of the requirements to: (1) use airport revenues only for airport related purposes; (2) pay back a portion of Federal grants upon the sale of the airport; (3) return airport property deeded by the Federal Government upon transfer of the airport. The Administrator is also authorized to exempt the private purchaser or lessee from the requirement to use all airport revenue for airport related purposes, to the extent necessary to permit the purchaser or lessee to realize a profit from operation of the airport.

In establishing the Pilot Program, Congress also placed limitations on the number and types of airports eligible to participate. Section 47134(d)(1) provides that if the applications of five airports are approved, at least one must be a general aviation airport. Section 47134(d)(2) provides that no more than one of the airports approved may be a large-hub airport (an airport with more than one percent of revenue passenger boardings in the U. S. in the prior calendar year on an aircraft in service in air commerce, as defined in 49 U.S.C. section 47102(10)).

FAA final approval of a privatization application is based on a number of conditions, including the private operator’s ability to ensure continued access to the airport on reasonable terms, continued safe operations, ensure continued maintenance and improvements, adequate security, mitigation of noise and environmental impacts, and to provide for the continued operation of the airport in case of the private operator’s bankruptcy or other default. Privatization must be approved by at least 65% of the air carriers serving the airport and air carriers whose aircraft landing at the airport during the preceding calendar year had a total landed weight of at least 65% of the total landed weight of all aircraft landing at the airport during that year.

Since the Pilot Program was implemented, nine airports have applied for privatization. Five have withdrawn or terminated their application. The four active applicants are: MDW; Gwinnett County Briscoe Field (Lawrenceville, GA); Louis Armstrong New Orleans International Airport (LA); and Louis Munoz Marin International Airport (San Juan, PR). With the approval of Chicago’s preliminary application, all applications from other large-hub airports will be placed on a standby list. One slot remains available for a non-large-hub or general aviation airport.