Should a Portion of the FAA Be Privatized?

The House Transportation Committee recently held a hearing to debate the possibility of privatizing a portion of the nation’s air traffic control system.

The House Committee on Transportation and Infrastructure met this week to discuss the need for fundamental reform of the nation’s air traffic control (ATC) system.

According to a summary of the hearing:

Bottlenecks, failures, and inefficiencies in the ATC system cascade throughout the rest of the aviation system and broader economy. The cost is growing larger and more apparent each year. The mismatch between bureaucratic decision-making of a government agency and the business decision-making required to ensure the long-term success of ATC in the United States cannot be reconciled through further legislative reforms of the FAA. The proven and demonstrably successful approach of separation from government is the only approach to ensuring America’s long-term leadership in aviation.

Congressman Bill Shuster (R-PA) is continuing his efforts to reform the Federal Aviation Administration.

In prepared remarks, Shuster said, “The FAA bureaucracy has been trying to undertake a high-tech modernization of the air traffic control system for over 3 decades. It’s not working, and it’s never going to work.”

At issue is NextGen system which employs about 30,000 FAA employees. Shuster has proposed privatizing this portion of the agency to allow the FAA to run more like a business, advocating the following principles:

  • Create an independent, not-for-profit corporation to provide air traffic services;
  • Fund the new service provider by fees assessed for air traffic services;
  • Free the new service provider from government dysfunction, political interference, and uncertainty of the Federal budget process;
  • Create a governance structure that is right-sized and balanced, and a board with sole fiduciary responsibility to the organization;
  • Ensure connectivity, access to the airspace, and continuity of air services for General Aviation, small and rural communities, and the airports that serve them;
  • Ensure full access to the air space and air services to support our Armed Forces and their National security mission;
  • Free the air traffic control business from the FAA’s bureaucratic procurement processes and the appropriations cycle;
  • End the federal government’s decades-long pattern of costly, delayed, and failed management of modernization;
  • Give the new service provider the ability to access financial markets and leverage private funding for multi-year, capital projects needed to modernize the system;
  • Allow the FAA to focus on its safety mission; and
  • Ensure continued oversight of air traffic services by the FAA, DOT and Congress.

In response to the hearing, a number of federal employee groups sent a letter to Shuster and other lawmakers expressing their opposition to the plan of privatizing any portion of FAA.

“Overhauling the entire aviation system by removing air traffic control from federal oversight and funding will be a serious setback for its development and growth. Our air traffic control system is a national public asset and we strongly believe it should remain in the public trust,” wrote the groups in their letter. “Privatization is unlikely to make the system more efficient or less costly, but would introduce a significant level of uncertainty into the global aviation economy.”

Shuster introduced legislation last year that would have removed 30,000 federal employees from the government’s payroll while simultaneously turning much of the nation’s air traffic control system over to an independently operated, non-profit corporation along the lines of what he proposed in the Committee hearing. It ultimately failed to advance.

New legislation has not yet been introduced to make any of the reforms that have been proposed.

About the Author

Ian Smith is one of the co-founders of He has over 20 years of combined experience in media and government services, having worked at two government contracting firms and an online news and web development company prior to his current role at FedSmith.