Aviation Debate Heats Up as Carriers Pan ‘Dysfunctional' FAA

(Bloomberg) -- The simmering debate over whether to put U.S. air-traffic control under a nonprofit corporation burst into the open as an airline trade group accused the government of being “hopelessly dysfunctional” in a letter to a senior senator.

Airlines for America accused the Federal Aviation Administration of overstating its progress in modernizing the current flight-monitoring system and said the agency had repeatedly bungled technology programs. The lobbying organization represents carriers such as American Airlines Group Inc. and United Continental Holdings Inc., though not Delta Air Lines Inc.

The system “is broken beyond repair within the constraints of government,” said the Airlines for America’s letter to Senator John Thune, a South Dakota Republican who is chairman of the Commerce, Science and Transportation Committee. The letter was obtained by Bloomberg News ahead of a congressional hearing Wednesday on the future of air-traffic control.

The trade group’s missive represented a significant escalation in the rhetoric over a controversial proposal endorsed by President Donald Trump to spin off the FAA’s air-traffic operations into a nonprofit.

At the Wednesday hearing before the House Transportation and Infrastructure Committee, Representative Bill Shuster, the Republican chairman, said the FAA has wasted a “shocking amount of taxpayer dollars” over the past three decades as it has tried to improve its technology and operations.

‘Broken’ Structure

“No other single infrastructure reform has as much potential to improve travel for the average American flier,” said Shuster, who has vowed to push legislation to separate air traffic from the FAA this year. “Although our aviation system is safe, the FAA structure and how air traffic is managed has been broken for decades.”

Air transportation was the top donating industry to Shuster in the 2015-16 election cycle, according to the Center for Responsive Politics. The industry and its employees gave his campaign $284,399 during the period.

A coalition of most large airlines, former FAA air-traffic officials and conservative think tanks argues that moving the agency’s nearly 15,000 controllers into a federally chartered nonprofit corporation would free it from budget uncertainties and allow it to adopt new technology more swiftly. Dozens of other nations, including Canada and the U.K., have made similar moves in the past 20 years.

After years of opposition, the National Air Traffic Controllers Association union has expressed openness to a spinoff -- assuming employment and other certain conditions are met -- because it could provide a more steady source of funding.

‘At Risk’

Paul Rinaldi, president of the controllers union, told committee members that the current system in the U.S. is the “gold standard,” but “that status is at risk” if a more stable funding source isn’t found.

Representative Peter DeFazio, the highest ranking Democrat on the committee, defended the current system and said the proposed changes would hurt safety and result in airlines ignoring air-traffic control for small, rural airports. “They don’t use them, they don’t care,” he said.

FAA Administrator Michael Huerta, who didn’t testify at the hearing, wrote to Thune on Dec. 15 and said the agency had made significant progress in the modernization program known as NextGen. Huerta estimated the agency had already saved airlines, passengers and private pilots $2.7 billion in reduced delays, improved safety and fuel savings.

“Today, using the measurements upon which we and the aviation community agreed, NextGen is delivering real benefits,” Huerta said.

The agency projects that benefits will total $161 billion by 2030, Huerta said. He acknowledged that some air-traffic technology programs had stumbled, but said the agency had in recent years done a much better job of fielding new systems, such as text-messaging between controllers and pilots.

In its letter, the airline trade group said Huerta used overly optimistic estimates of benefits and understated actual costs.

Trump’s Budget

Trump, who called the current air-traffic system “obsolete” shortly after taking office, endorsed the proposal in his budget plan earlier this year. White House officials have portrayed it as an element of the president’s plan to channel $1 trillion toward rebuilding U.S. infrastructure.

Groups including private-plane operators, Democratic lawmakers and some labor groups have opposed the measure. They argue that a nonprofit corporation wouldn’t be responsive to smaller users of the system, such as rural airports, and say the current system functions well.

A coalition of seven other FAA unions and employee groups issued a press release denouncing the proposal to split air-traffic operations from the agency.

“FAA employees have decades of specialized experience maintaining the National Airspace System that cannot be replaced without great costs to American taxpayers and great risks to the flying public,” said Ron Consalvo, president of American Federation of Government Employees Local 200. The union represents employees at an FAA center for technical research in Atlantic City, New Jersey.

Shuster last year pushed legislation to split off the air-traffic system from the FAA. It failed after some powerful Republican lawmakers and most Democrats balked. He’s planning to reintroduce the measure this year as part of legislation to set broad policy guidelines for the FAA, whose authorizing language expires in September.

Under Shuster’s plan, a board made up of airline and other aviation stakeholders would oversee a new air-traffic corporation. Instead of the current taxes on fuel and airline tickets, it would be funded by fees paid by aircraft operators. The FAA would continue to oversee safety and set aviation regulations.

To contact the reporters on this story: Alan Levin in Washington at alevin24@bloomberg.net, John McCormick in Chicago at jmccormick16@bloomberg.net.

To contact the editors responsible for this story: Joshua Gallu at jgallu@bloomberg.net, John Voskuhl