Flight Chaos Demonstrates Need for Systemic Changes in Air Traffic Control Policy

By Colin Grabow.

"Air travel in the United States was thrown into chaos earlier this week when a key system used by the Federal Aviation Administration (FAA) went down, forcing over 10,000 flights to be delayed and at least 1,300 canceled. While a damaged database file may have been the proximate cause of this upheaval, the episode appears yet another indication of systemic flaws in U.S. air traffic control policy.

Technological deficiencies in U.S. air traffic control operations are long-standing. Indeed, Congress mandated twenty years ago that the FAA establish a plan for implementing the modernized Next Generation Air Transportation System (NextGen) by 2025 in order to improve matters. The FAA’s technological woes, however, are unlikely to go away anytime soon. A 2021 Department of Transportation Office of Inspector General report noted that the agency has “struggled to integrate key NextGen technologies and capabilities”—a finding consistent with other reports on the topic—and the particular system that failed this week apparently won’t be updated for another six years.

Updated air traffic control technologies, meanwhile, are available in other countries right now. A key reason why: private management. As I wrote in the transportation chapter of the Cato Institute’s new book Empowering the New American Worker:

Regarding airline travel, Congress should improve efficiency and quality by transferring air traffic control duties to privately managed entities, as is done in numerous countries. A 2005 Government Accountability Office study, for example, concluded that commercialized air traffic control systems in Australia, Canada, Germany, New Zealand, and the United Kingdom had cut costs, boosted investment in new technologies, and either maintained or increased safety after being reformed.

My colleague Chris Edwards went into greater detail about the advantages of private management, citing Canada’s example in the 2022 edition of the Cato Handbook for Policymakers:

Dozens of nations have restructured their air traffic control systems to separate them from government budgets and political micromanagement. Canada privatized its system in 1996 in the form of a self‐​funded nonprofit corporation, Nav Canada. The Canadian reform has been very successful. Nav Canada has won three International Air Transport Association (IATA) Eagle Awards as the world’s best ATC provider. The IATA has said that Nav Canada is a “global leader in delivering top‐​class performance” and that its “strong track record of working closely with its customers to improve performance through regular and meaningful consultations, combined with technical and operational investments supported by extensive cost‐​benefit analysis, place it at the forefront of the industry’s air navigation service providers.”

In Canada, funding was changed from a government ticket tax to direct charges on aircraft operators for services provided. Nav Canada charges for terminal services, flying through Canadian airspace, and oceanic services. Those cost‐​based charges are a more efficient way to price ATC services than the U.S. system, which is mainly based on ticket taxes.

Nav Canada is a private monopoly, so there might be concerns that its user charges would rise excessively. But that has not happened. Indeed, Nav Canada’s real customer charges have fallen as efficiency has increased. The system is handling more traffic than before privatization, but with fewer employees. One reason for the good performance is that airlines and other aviation stakeholders appoint members of Nav Canada’s corporate board, and those stakeholders have a strong interest in increasing both efficiency and safety.

Another advantage of privatization is innovation. Nav Canada is praised for its development of new technologies. Robert Poole noted, “The technical expertise at Nav Canada has led to a thriving business marketing innovative ATC hardware and software and advising other air navigation service providers.” In a 2013 address, Nav Canada’s chair Nicholas Geer said that the company has “sold and installed our home‐​grown technology around the world from Australia to Hong Kong to Dubai, and all over the UK and Europe.”

Privatization, Edwards adds, would would provide the “flexibility, incentives, and funding needed for [air traffic control] managers to increase efficiency and pursue innovation” with attendant improvements in flight times, airspace capacity, and fuel costs.

The FAA’s ongoing struggles to incorporate advanced air traffic technologies aren’t a strange aberration but part of an established record unlikely to change absent systemic changes. Some in Congress have recognized the need to move towards a private model, but unfortunately have been stymied in their attempts to advance reform. Let’s hope that recent developments provide renewed impetus for such efforts."