The Corner

Another Washington Monument Syndrome: The FAA’s Furloughs

Recently newspapers have been running stories about the impact that sequestration will have on the Federal Aviation Administration (FAA) and the air-traffic-control system in particular. The furloughs of air-traffic controllers are supposed to start today. The Wall Street Journal reports that the FAA has told airlines the furloughs could delay as many as 6,700 flights per day at 13 airports, and USA Today notes that Michael Huerta, administator of the FAA, said that in order to prevent planes from “stacking up during busy times” at key hubs, the FAA will “ground planes at their originating airports or order them to take circuitous routes.”

The agency claims it has no choice but to furlough people. Huerta and Transportation Secretary LaHood “said they have no choice but to cut controller staffing by 10 percent, which will reduce how many planes airports can handle.” But this may not actually be true — the FAA actually has a lot of flexibility but may simply not want to exercise it. Check out this press release from Senator John Thune (R., S.D.) on flexibility from a recent hearing:

In addition, after weeks of claims by Secretary LaHood and Administrator Huerta that the Administration has no flexibility in the implementation of the spending reductions, Administrator Huerta walked back claims under direct questioning on the issue by Ranking Member Thune at the hearing. Administrator Huerta admitted that the FAA has the flexibility under current law to transfer up to two percent of funding from one activity to another without Congressional action. Also, under direct questioning, Administrator Huerta admitted the FAA has the authority to request reprogramming of funds which could lessen the safety impact of certain sequestration cuts that the FAA is currently working to implement.

That’s the case made by Airlines for America, an industry trade group, which says that “the furloughs are unnecessary and they are considering legal action.” There are several reasons to believe that the FAA’s claims of necssary furloughs and the pain that travelers will experience as a result are nothing more than political scare tactics and should be mostly ignored.

First, even after the cuts, the FAA’s operations, facilities, and equipment budget is going to be higher than it was in 2008. Planes were flying just fine back then, and no one was talking about closing large number of air-traffic-control towers. Moreover, as Mercatus Center’s Gary Leff reminds us:

Of course the FAA budget goes up year-over-year (in nominal terms) even under the sequester, and air traffic control is handling 27% fewer departures than prior to 9/11 with a budget that’s 41% higher (again, nominal $). And that’s aside from actually probably being able to make some cuts without noticeable service effects, even before having to put off capital investment in future air-traffic-control improvements.

Leff goes on to quote the Reason Foundation’s Bob Poole:

The Administration’s marching orders to all government agencies covered by the sequester law (including FAA’s parent, the Department of Transportation) seem designed to inflict maximum pain on the traveling public, in hopes of mobilizing aviation stakeholders, the media, and the traveling public to demand that Congress change the law. I have tried to figure out how a mandated cut of $600 million — under 5% — in the FAA’s $12.75 billion budget (excluding the exempted airport grants program) could possibly require all-hands furloughs reducing 47,000 daily personnel by 10% and the shut-down of 100 low-activity (mostly contract) towers and ending midnight shifts at 60 or more low-activity towers (which should have been done in any case). This appears to be a classic example of the “Washington Monument” strategy of trying to prevent budget cuts by proposing the worst possible method of coping — rather than finding 5% of the budget that could be eliminated or deferred with the least harm.

Second, the FAA’s ATC budget is loaded with what Cato Institute’s Tad DeHaven rightly calls “plane pork,” and it should be cut dramatically (it should be privatized, really). Just as the “bridge to nowhere” exposed how the federal government was spending money to build expensive bridges that serve no one, a look at where some of the FAA money is going reveals how much of taxpayers’ dollars is spent on small airports with no passengers:

This is Lake Murray State Park Airport, one of the least busy of the nation’s 3,300-plus public airfields. In an entire week here, there might be one landing and one takeoff — often so pilots can use the bathroom. Or none at all. Visiting pilots are warned to watch out for deer on the runway.

According to the Washington Post’s David Fahrenthold:

Every year, Oklahoma is allotted $150,000 in federal funding because of this place, the result of a grant program established 13 years ago, in Congress’s golden age of pork. The same amount goes to hundreds of other tiny airfields across the country — including more than 80 like this one, with no paying customers and no planes based at the field.

Third, there is already some evidence that if and when the federal government stops paying for some of the bills, state and local governments as well as the private sector could step in, as they should, if the service is considered necessary and worth paying for. The Economist this week has an interesting story that looks at what could happen after sequestration for the tiny airport of Victoria in Texas:

Victoria secured a tower only in 2008, after an FAA cost-benefit and safety analysis found that traffic levels justified one. Pilots can land without a tower using radios and their eyes, concedes Jason Milewski, the airport manager. Today’s limited Houston service could survive the loss of a tower. For Victoria, the tower is really about growth, both future and past: having one has allowed the airport to attract much more traffic, including fast corporate and military jets — and thus to sell an additional million dollars’ worth of fuel each year.

After a spate of legal challenges, the FAA is delaying contract-tower closures until June. About 50 airports have already signalled that they may try to go it alone after that. Victoria hopes to join them. Local officials and businesses are considering whether they could cover the roughly $500,000 a year to keep Victoria’s tower, once 90 days of interim funding from the state of Texas runs out. In short, supporters will have to prove that the airport really is valuable.

Mr Milewski can see some positives from such debates. There are overstaffed towers across America, he says, and more use should be made of contract towers, which cost far less than FAA-staffed equivalents. Currently the FAA keeps Victoria’s tower open at weekends when it is “very quiet”. If locals ran the tower, its hours would be cut back. For all the clumsiness of the sequester, it is imposing new rigours. Too many airports have been run as municipal amenities, or, worse, sinks for federal pork. In straitened times, perhaps more will be run as businesses.

Fourth, as the Cato Institute’s Chris Edwards and Reason Foundation’s Bob Poole explained in this piece, it is time for the U.S. to privatize its airports and commercialize its air-traffic-control system. It’s been done in many other countries very successfully.

During the past two decades, nearly 50 governments have commercialized their air traffic control systems. That means they have separated their ATC activities from their transport ministries, removed them from the civil service, and made them self-supporting from fees charged to aircraft operators. These new air navigation service providers (ANSPs) are usually regulated at arm’s length by their government’s aviation safety agency.

Britain’s ATC system has been commercialized by means of a “public-private partnership.” National Air Traffic Services is a jointly owned company, with British airlines owning 42 percent, airport company BAA owning 4 percent, employees owning 5 percent, and the government owning the remaining minority stake. NATS is operated on a not-for-profit basis.

Canada’s ATC system has been fully commercialized. In 1996, Canada set up a private, nonprofit ATC corporation, Nav Canada, which is self-supporting from charges on aviation users. The Canadian system has been widely praised for its sound finances, solid management, and its investment in new technologies. The Canadian system is a very good reform model for the United States to consider.

Nav Canada’s corporate board is composed largely of aviation stakeholders. It has 4 seats for the airlines, 3 for the government, 2 for employees, and 1 for the non-commercial aviation industry. Those 10 stakeholders select 4 directors from outside aviation, and then those 14 select the company president, who becomes the 15th board member. To further strengthen governance, neither elected officials nor anyone connected with suppliers to Nav Canada can serve on the board. Nav Canada also has a 20-member outside Advisory Committee.

A number of studies have found that ATC commercialization has generally resulted in improvements to service quality, better management, and reduced costs. At the same time, air safety has remained the same or improved in the countries that have pursued reforms to set up independent ANSP organizations.

They have much more on the issue here.

While this is another case of Washington Monument syndrome that may backfire in the face of whoever is promoting these threats, I am hoping that some lawmakers will use the opportunity to push for serious reforms, and maybe even a privatization of the whole agency.

Veronique de Rugy — Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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