Fate of Existing Air Traffic Assets ‘Tricky': Chao

Daily Report for Executives provides in-depth coverage of unfolding legislative, regulatory, and judicial news from the nation’s capital, the states, and around the world. This daily news service...

By Shaun Courtney

Transferring FAA-owned assets to a nongovernmental entity under the White House’s proposal to privatize air traffic control management is a “tricky issue,” Transportation Secretary Elaine Chao told a House panel June 8.

A statement of principles from the White House calls for all air traffic control assets owned by the Federal Aviation Administration to be “transferred, at no charge,” to a new nongovernmental entity. The new air traffic control management would be governed by a 13-member board, initially including representatives from the airlines, unions, airports, general aviation, and government.

Chao told the House Transportation and Infrastructure Committee the Trump administration is open to discuss addressing congressional concerns with the proposal, including how to handle the assets and the balance of the Aviation Trust Fund.

“Let’s work on the issues and see how far we get,” Chao said.

Assets and Liabilities

Chao echoed the administration’s position that since users have already paid for the existing assets through fees, it would be unfair to charge them again upon transfer.

But Del. Eleanor Holmes-Norton (D-D.C.) said both the U.K. and Canada received payment for their systems’ assets when they were transferred to a nongovernmental body. “Why shouldn’t the government of the United States be compensated for these assets?” Holmes-Norton said.

Several Republicans on the committee noted that the current equipment is several decades old in some instances and comes with environmental liabilities as well.

The White House principles document says “sufficient funds to account for those liabilities should also be transferred to the entity.” That’s where the trust fund money, which Chao estimated at $5 billion, comes into play.

“We knew this was going to be a tricky issue,” she said.

Fears ‘Unfounded’

Chao also sought to assuage concerns raised during a Senate hearing on the same issue June 7. Senators on both sides of the aisle said they worry the proposal would hurt small airports and general aviation.

Chao said the fears are “unfounded” and that House T&I Chairman Bill Shuster (R-Pa.), whose 2016 bill is the model for the White House plan, is working with committee members representing general aviation to address their concerns.

Chao’s message that the changes to air traffic control would benefit small communities was echoed by Southwest CEO Gary Kelly during a gathering of aerospace and aviation leaders at the Aero Club of Washington.

Kelly said the bipartisan concerns among legislators that a private air traffic control operation would hurt small airports are “not on point.”

Small communities are the first to be harmed by rationing under the current scheme, said Kelly, who added he has had to cut service in smaller areas because of limited access to air space.

“What flights get canceled? The flights with the fewest number of people affected,” he said.

Shuster, who represents a rural area of Pennsylvania, said he is convinced service would be enhanced under the proposal, but acknowledged there are “good questions” that need to be answered.

“I believe we have to do something transformational,” Shuster said. “This is the beginning of the process.”

The current FAA authorization expires Sept. 30. As the House and Senate work on legislation to reauthorize the agency, the House is likely to take the lead on extracting air traffic control as part of its proposal.

To contact the reporter on this story: Shaun Courtney in Washington at scourtney@bna.com

To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Try Daily Report for Executives