For Safer Skies, Privatize

All of a sudden, airline safety is front-page news. The New York Times, the Los Angeles Times, Business Week, and other major media have all featured stories on the subject recently. The message of these articles—implicit or explicit—is that airline deregulation has led to serious safety problems.

This claim is spurious, as airline pilot John Doherty points out in his review of Blind Trust in this issue (page 48). Statistically, flying is safer now than before deregulation, especially on commuter lines. And yet, there are clouds on the horizon.

Air traffic has increased dramatically since deregulation in 1978 opened the doors to new entrants and price competition. The number of commercial aircraft in service, the number of airlines, revenue passenger miles—all are way up. At fast-growing hubs, air traffic has grown by 25–50 percent.

And the government-run Air Traffic Control (ATC) system is not keeping pace. The number of air traffic controllers has decreased by 14 percent in the past four years. Controllers rated as "full-performance level" have declined from 80 percent of the workforce to only 62 percent. And the number of maintenance personnel—the people who keep the radar screens and instrument landing systems working—has fallen to half its pre-deregulation level.

The results have not shown up in increased crashes—yet. But the signs are ominous. A recent General Accounting Office survey of controllers found that one-third are so overworked that they sometimes decline to advise pilots of nearby traffic when asked. And one-fourth decline requests for weather advisories. Near-collisions in midair jumped from 589 in 1984 to 777 in 1985.

Now you'd think, given this situation, that the ATC organization would be going all out to upgrade its capabilities—installing new equipment, seeking out experienced controllers and technicians, shifting people to where they're most needed—and raising prices to its users to cover the costs. Unfortunately, air traffic control is run by a government bureaucracy—the Federal Aviation Administration. So the ATC system isn't doing any of those things.

In fact, right now the FAA is desperately fighting just to preserve its workforce and budget against Gramm-Rudman cuts. Its capital spending to install next-generation computers and equipment is about $1 billion behind schedule—because Congress won't hand over funds that have long since been collected from earmarked taxes on fuel and tickets. And because the FAA is governed by civil service rules, it cannot offer the kind of incentive pay that a private employer would to entice more experienced controllers to overstressed facilities. Finally, the FAA has no control over its "prices"—the aviation user taxes set by Congress.

In short, today's ATC system is not doing the job because it cannot do what is needed. It can't do so because it is a government bureaucracy, not a service business responding to its customers' needs in the marketplace. The longer the status quo remains, the greater the likelihood that air travellers will pay the price in crashes.

Fortunately, aviation users are beginning to see why a bureaucratic, politically controlled ATC system can't hack it. The Air Transport Association, the principal airline trade group, has been circulating a proposal for divesting ATC from the FAA and setting it up as an independent corporation. The new corporation would be funded by direct charges (as in Europe) rather than so-called aviation user taxes.

Thus far, the ATA plan has drawn cautious support from Aviation Week, several former FAA administrators, and the National Academy of Public Administration. Yet in its present form, the plan does not go far enough. The ATA proposes that the new organization be a federal corporation, similar to—believe it or not—the US Postal Service! That would mean (1) Congress would still attempt to micromanage it, and (2) its employees would be forbidden from striking. These features could defeat the purpose of transforming ATC into a service business.

The fear of another controllers' strike is very powerful in aviation circles. Rather than banning strikes and paying the price of governmental status, however, the probability of a crippling strike could be minimized by decentralizing. Operation of the system's 23 air route control centers and hundreds of control towers could be contracted out to dozens of different firms, with contracts expiring at different times. That way, employees would be free to unionize, but no one strike could shut down the entire ATC system. Union officials are already on record as favoring privatization of ATC if the right to strike is restored.

The benefits of making ATC independent of government would be significant. A truly private ATC corporation would be free to raise the revenue needed to modernize and automate the system. As a user-pays service business, it would receive direct feedback from its customers, not indirect political feedback. It could attract and motivate topflight managers and recruit from among the thousands of experienced air controllers now banned from federal employment as former strikers.

The alternative to some form of privatization is either draconian cutbacks in air traffic or an era of airline disasters. The prescription seems clear. It's time to privatize air traffic control.