Currently, air navigation services are provided by the Federal Aviation Administration’s (FAA) Air Traffic Organization (ATO). The U.S. is the last developed country in the world to still have its air traffic control system operated by the national aviation safety regulator. In essence, the FAA is charged with regulating itself, something the International Civil Aviation Organization has recognized as a dangerous conflict of interest since 2001.
Due to agency and congressional mismanagement, the ongoing attempt at modernizing U.S. air traffic control has been plagued by billions of dollars in cost overruns, years of delays, and uncertainty as to whether many of the promised improvements will ever materialize at all. These failures have resulted in reams of scathing government audit reports, but to date nothing has been done to address these systemic problems.
The 21st Century AIRR Act would spin off the FAA’s ATO into a congressionally chartered, nonprofit user co-op called the American Air Navigation Services Corporation. The nonprofit would be governed by a diverse board of stakeholders and impose cost-based user fees to aircraft operator customers. Given that approximately two-thirds of the FAA’s annual budget is dedicated to air traffic operations and modernization, tax writers and appropriators in Congress would then have the opportunity to reduce federal aviation taxes and spending by more than $10 billion annually.
The proposal from Chairman Shuster is modeled on the very successful Nav Canada reforms from two decades ago. Today, Canadian airspace users enjoy the most efficient and technologically advanced air navigation service provider in the world. Nav Canada has not raised user fees in 13 years and recently announced another permanent rate cut. As a result, the inflation-adjusted user fees charged by Nav Canada will soon be 45 percent lower than the aviation taxes they replaced. American airspace users deserve to enjoy the same benefits of modern air traffic control as our neighbors to the north and developed countries in Western Europe and the Pacific.
To aid in the public understanding of this important but complex reform proposal, CEI has released two policy briefs on the 21st Century AIRR Act. The first is a FAQ that explains what is wrong with the status quo, how the American Air Navigation Services Corporation would operate, and why a small number of special interests are opposed. The second busts six labor-management relations myths that have been circulated by opponents led by the corporate jet lobby.