NCPA - National Center for Policy Analysis

Blueprint For Air Traffic Control Privatization

February 22, 2001

Political observers say momentum has been building in Congress and the Bush administration for privatization of the air traffic control system, as public frustration over air traffic delays has mounted. In addition, a number of large airlines have come out in favor of privatization recently.

Today, the Reason Public Policy Institute will release a study that examines how air traffic privatization has worked in two dozen nations and provides a blueprint for U.S. privatization. It recommends that the U.S. look to Canada's successful privatization for clues on how to accomplish it here.

  • The institute recommends replacing the Federal Aviation Administration with a nonprofit corporation to run air traffic control.
  • A 15-member board of directors representing airlines, airports, air traffic control workers and private pilots would direct control operations -- but the government would still maintain oversight of safety and fund safety-related expenses.
  • The current passenger ticket tax would be replaced by user fees collected from airlines and other jet operators to fund air-traffic services.
  • Private planes would pay an annual fee for air-traffic services instead of the current fuel tax.

An air-traffic corporation could borrow money and more quickly install modern technology, thus reducing delays and improving safety. Several nations, including Canada, Australia and New Zealand, have increased the capacity of their air-travel systems by deploying satellite-based technologies far more advanced than the radar system currently used in the U.S.

A privatization bill is likely to be introduced in Congress for the first time, advocates say, though its chances for passage this year are considered slim. Two politically powerful organizations, the National Air Traffic Controllers Association and the Aircraft Owners and Pilots Association, are dead set against privatization.

Source: Scott McCartney, "Air-Traffic System Report Calls for Privatization," Wall Street Journal, February 22, 2001.

For WSJ text (requires subscription)


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