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Air Traffic Control in Urgent Need of Reform... If Only Critics Could See That

CEI has for years called for air traffic control reforms now being considered in the House. It is critical for the future health of the aviation sector that these reforms are enacted as soon as possible. And given that most aviation stakeholder groups are in favor of these reforms, the AIRR Act presents a unique and historic opportunity to get this done.

If we succeed in reforming air traffic control, it will be the most transformative shift in U.S. aviation policy in a generation. But some conservatives have been balking at the House AIRR Act for comparatively minor reasons. 

The intellectual architect of this plan is the libertarian Reason Foundation’s cofounder Bob Poole, who first sketched out the reforms in a 1982 Heritage Foundation study at the request of the Reagan White House following the illegal 1981 air traffic controller strike.

For over a decade, the FAA has been attempting to implement an air traffic modernization program called NextGen. Unfortunately, this has been a total failure. It is already billions of dollars over budget, years delayed, and the FAA estimates controllers will be forced to continue using paper flight strips until 2025. Yes, in our high-tech 2016 world, a critical component of the U.S. air traffic control system is strips of paper that are physically passed among controllers in order to track flights throughout the airspace.

Moreover, it is an ongoing dangerous conflict of interest for an aviation safety regulator to also be providing air navigation services, which is why the International Civil Aviation Organization since 2001 has required member countries at the very least to separate aviation safety from air traffic control. The United States remains the last major developed country not to have undertaken this basic step.

Modernizing air traffic control by spinning off the FAA’s Air Traffic Organization into an independent utility-style nonprofit will save the country time, money, and fuel by harnessing new technologies and practices unattainable under the FAA’s 1960s air traffic control system. This proposal is widely supported by aviation experts, free market transportation and privatization researchers, and fiscal conservatives.

On Tuesday, I published a critique of the errors made by Manhattan Institute’s Diana Furchtgott-Roth after she and three others sent a letter to members of Congress making a variety of false and misleading claims.

Furchtgott-Roth last night responded with an attempted rebuttal. Her response contains errors that I address point-by-point below. Her quotes are bolded and are followed by my corrections.

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Scribner flatters me, but I am just one of a growing number of people and organizations concerned about the flawed policy provisions.

Actually, the number of people and organizations involved in this group dwindled. Furchtgott-Roth got three others to back her claims in their letter to members of Congress. A group that previously published Furchtgott-Roth’s false claims, the conservative Capital Research Center, has since published two rebuttals and did not sign the letter.

In contrast, the House’s air traffic control reforms have been supported by transportation and privatization researchers at the Reason Foundation, Cato Institute, National Taxpayers Union, American Enterprise Institute, Citizens Against Government Waste, and numerous others.

Scribner, along with Chairman Bill Shuster, writing in National Review, asserts that employees would not be able to strike. Everyone is "able" to strike-the question is: is there a significant penalty (including being fired and large fines) to act as a deterrent?

Fact: new employees would not be government workers, so they would not have to take an oath not to strike, as they do now, and so they would not risk being fired if they decided to do so.

Yes, the Federal Service Labor-Management Relations Statute applies and states that striking is an unfair labor practice. But there's no financial penalty for an unfair labor practice, such as being fired or fined.

If there were a strike, the General Counsel of the Federal Labor Relations Authority would investigate the unfair labor practice charge and then could serve a complaint on the union. "The Authority then conducts a hearing on the complaint not earlier than 5 days after the date on which the complaint is served," (italics added) according to the U.S. Code (5 U.S. Code § 7118).

That means that travelers would have to wait for at least 5 days while the air traffic controllers are on strike before even getting a hearing-and the hearing can take days to resolve. Americans cannot manage that long with air traffic controllers on strike.

If the controllers union were to illegally strike following these reforms, they would be put out of business by a court-ordered decertification, which is precisely the deterrent Furchtgott-Roth says she needs in order to be convinced on the strike issue. It goes like this:

Section 90703 in the AIRR Act (p. 97) extends 5 U.S.C. Chapter 71 to cover the ATC Corporation’s controllers. This includes 5 U.S.C. § 7116(b)(7), which makes it an unfair labor practice for a union covered by the statute “to call, or participate in, a strike, work stoppage, or slowdown, or picketing of an agency in a labor-management dispute if such picketing interferes with an agency’s operations, or . . . to condone any activity . . . by failing to take action to prevent or stop such activity.”

Striking or failing to prevent a strike would constitute an unfair labor practice enforceable by the Federal Labor Relations Authority. In response, management can obtain an order from the Authority stopping the strike under 5 U.S.C. § 7118(a)(7), which can then be enforced in the federal district courts under 5 U.S.C. § 7123(d).

So far, so good, as Furchtgott-Roth concedes the existence of Section 7118. Yet, curiously, she stops short of getting to the actual strike deterrent she claims she is searching for. That is found in 5 U.S.C. § 7120(f), which provides that in the event of a strike, work stoppage, slowdown, or failure to prevent a strike, the “exclusive recognition status of the labor organization [] shall then immediately cease to be legally entitled and obligated to represent employees in the unit.”

In other words, if the union strikes and loses in court, which is the most likely outcome, the union will be put out of business.

The air traffic controllers’ union, the National Air Traffic Controllers Association (NATCA), has not once in these negotiations expressed interest in gaining a legal right to strike. Is Furchtgott-Roth suggesting that NATCA has become suicidal? Such a claim requires evidence, not just fear.

At the risk of repeating what I have written elsewhere, the existing union contract would hold for the new ATC Corp, including wasteful "official time" provisions. "Official time" is time spent working for the union instead of the taxpayer. In 2012, the latest data available, 19 air traffic controllers, 18 of whom earned six-figures salaries, were on full-time official time. Removing this perk would save over $3 million annually-but it could not be done in the near future under the existing bill.

Furchtgott-Roth is right that official time is a waste of money and a sop to unions. My CEI colleagues have written about it dozens and dozens of times over the years. But let’s put this in context. Now, $3 million sounds like a lot of money, but the FAA’s Air Traffic Organization spends around $7.5 billion per year on air traffic control operations. So, eliminating controller official time would cut operations spending by approximately 0.04 percent annually, little more than a rounding error.

In contrast, air traffic control corporatization can result in dramatic savings for customers. Since Canada undertook a similar reorganization 20 years ago, the user fees paid by aircraft operators are more than 30 percent lower than the user taxes they replaced.

This, I think, gets at the heart of the myopia of this handful of anti-union advocates opposing air traffic control reform. They appear willing to derail a plan that would take $10 billion-with-a-B off the federal budget, in addition to all the traveler and economic benefits of reform, in order to attack a “union giveaway” worth a measly $3 million-with-an-M.

The union would negotiate with the ATC Corp on all compensation and conditions of employment, and it would have to approve which services and personnel were transferred from the FAA to the new ATC Corp, and vice versa.

True privatization allows the entity to cut costs and adopt new technology. The NextGen technology for air traffic control systems requires less manpower than does today's technology. Under the proposed bill, unions would be able to prevent the technology from being implemented-or require workers to be kept on, even though they might not be needed.

Negotiation does not mean determination. The controllers union would have a seat at the table—one seat on the ATC Corporation’s 13-seat board of directors—but would not be able to dictate which technologies, labor practices, or anything else undertaken by the ATC Corporation, as former FAA Chief Operating Office and Chief Counsel David Grizzle noted in his own critique of Furchtgott-Roth’s false claims.

Amtrak and the Post Office are federally chartered unionized entities, similar to the proposed ATC Corp. Amtrak lost over $300 million last year, and the Post Office lost over $5 billion. Scribner's coworker, CEI's Vice President for Strategy Iain Murray, wrote in 2010, "[Amtrak's] failures are not due to a lack of funds, but to chronic mismanagement, which is inevitable under Amtrak's current organizational framework...Dishing out money to a single company-such as the Post Office-that faces no competition is a recipe for waste and mismanagement."

This is apples and oranges. Under the proposed legislation, Section 90304(d) explicitly states that “[a]ny debt assumed by the Corporation shall not have an implied or explicit Federal guarantee.” If revenue fails to meet operating expenses, the ATC Corporation will simply raise user fees to close the gap. In fact, a major purpose of these reforms is to prevent Congress’s recent multi-billion dollar general fund bailouts of the FAA’s Airport and Airway Trust Fund from continuing indefinitely into the future.

As the Reason Foundation’s Bob Poole noted in response to similar claims, the ATC Corporation “would be a federally chartered private nonprofit corporation, analogous to the American Red Cross or federal credit unions. It would receive zero government funding, and its bonds would not be backed by taxpayers, only by the revenues that it generates from providing ATC services (just like private or public toll roads—or like utility companies).”

The Competitive Enterprise Institute cannot recommend that the union provisions be dropped from the bill because it is not a disinterested player. It is partnering with a lobbying organization, AirportsUnited, set up in 2014 by the Airports Council International-North America (ACI-NA) and the American Association of Airport Executives (AAAE), to shepherd FAA reauthorization through Congress.

In December 2014 ACI-NA CEO Kevin Burke told Airways News, "This time, we're working not only with airports, but outside groups and communities...Our goal is to get 218 [House of Representatives] members to clear it and the majority of the Senate. If we do that, we've done our job."

CEI has allied with airports on a different issue, passenger facility charge modernization—calling for an increase in, or ideally elimination of, the federal cap on local airport user fees that is strongly opposed by the airline industry. Furchtgott-Roth is conflating two very different aviation policy issues.

As a matter of principle, CEI strongly supports transportation user fees over taxation, whether at airports, for air traffic control, or highway tolling. It is also worth noting that, unfortunately, neither the Senate-passed bill nor the current House bill contain the PFC modernization provisions we support.

Reason Director of Transportation Policy Robert W. Poole, Jr., wrote in 2013, "The ATC corporation, by removing its employees from the constraints of the civil service system, could seek and attract highly skilled engineers and program managers, compensating them at market rates-and holding them accountable for delivering results." The House bill as structured would not free government workers from these civil service constraints so these benefits are less likely to occur.

As Poole himself wrote in direct response to Furchtgott-Roth’s “flatly wrong” claims,

On pay scales, the bill very sensibly would keep in force any existing union contracts until they expire, at which point the union and management would negotiate a new contract. The Corporation would have opportunities to modernize pay, benefits, work rules, etc.…

Any realistic transition of a large workforce from a government agency to a new kind of organizational structure must preserve existing pay and benefits during the transition period. In a stakeholder-governed co-op structure that seeks to emulate the Nav Canada model, gaining the trust and cooperation of employees on whom service delivery depends makes very good sense. And of course politically, it is also the smart and sensible thing to do.

Conservatives should rejoice that an important labor union agrees that the FAA status quo is unsustainable and that this high-tech, 24/7 service business is more appropriate to a self-funded corporation business model. And that said union is willing to stand up and be counted in favor of this kind of far-reaching reform.

The situation at FAA has become so dire due to its inability to modernize its 1960s air traffic control system that it has trouble attracting qualified non-union managers. One goal of these reforms is to attract these highly skilled non-union workers from other private-sector entities, something that is impossible as long as air traffic control remains under the FAA.

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I am still deeply confused by Furchtgott-Roth’s arguments. They reflect a lack of understanding of the basic issues under discussion, as well as a sense of proportion.

As I noted in 2012, while there are some problems with the FAA’s unions, most of the FAA’s problems are structural and will not be fixed by simply blaming the workforce. As I discussed last year after a series of damning government reports, air traffic control is too important to be left to the FAA. Poole’s groundbreaking 2013 study for the Hudson Institute, “Organization and Innovation in Air Traffic Control,” goes into great detail on the real issues facing air traffic control modernization in the U.S.—and they have nothing to do with the controllers’ union.

Is the AIRR Act a union-busting bill? Of course not. No one ever said it was. Does the union and its members stand to benefit from these reforms? Of course, which is why NATCA has endorsed the bill. But let’s not miss the forest for the trees—or let one’s antipathy toward unions take priority over advancing freedom.