This issue of Aviation Policy News is also available online here.
In this issue:
- The coming eVTOL shakeout
- Airlines and FAA ignored rules after runway incursions
- Unintended consequences of banning fees for family seating
- Airline ancillary fees make sense for airlines and passengers
- Superior landing system in operation in Germany
- Alaska and United diverge on electrification
- News Notes
- Quotable Quotes
This year may see the first stages of winnowing out electric vertical take-off and landing (eVTOL) startup companies. Thoughtful aviation and financial experts are taking a harder look at the large array of would-be advanced aerial mobility (AAM) developers and operators.
For example, the outgoing chief executive officer of Wisk expressed serious concerns to Aviation Daily’s Ben Goldstein (Jan. 31, 2023). “There are going to be a lot of failures this year,” Wisk CEO Gary Gysin told Goldstein. “I’ve already had companies approaching me asking to be bought out because they are running out of money.” And Gysin added that he expects “a more significant batch of failures” in 2024. He noted that with interest rates sharply higher than a year ago, future earnings look a lot less rosy, with stock market valuations having been “pummeled” already.
An aviation acquaintance last November shared with me his comparison of six eVTOL startups with traded shares, contrasting their initial public offering (IPO) price with their then-current price. I have replaced his November 2022 prices with mid-February 2023 prices, as follows:
|Name||IPO Price||Mid-February Price|
I can’t offer an explanation for EHang’s increase, but it’s not very relevant to the U.S. market since it is only seeking certification in China.
Aviation Week did a detailed assessment of eVTOL startups, “Reality Check” by Graham Warwick, in its Jan. 30-Feb. 12 issue. Drawing in part on assessments by Sergio Cecutta of SMG Consulting, it included an updated table of leading startups, with each one’s 2023 rank compared with its 2022 assessment. Here are the magazine’s revised rankings.
|Company||2023 Rank||2022 Rank||Seats|
Many factors are discussed in Warwick’s lengthy article. I have added the number of seats for each eVTOL. From a value proposition perspective, I see little potential in carrying only one or two passengers. Lilium stands out with six, plus a longer range than most, focusing more on inter-city than air-taxi markets. And Beta may have commercial prospects by hauling only cargo. Wisk remains only 10th on the list, in part because its concept is fully autonomous, which is likely to take years longer to certify than piloted eVTOLs.
Another concern is second-ranked Archer’s plan to outsource its air vehicle production to global auto company Stellantis (parent of Jeep and RAM, among other vehicles). Goldstein quoted Savanthi Syth of Raymond James as considering this a “competitive advantage” for Archer. I disagree. There is a huge difference between auto production and aircraft construction, as pointed out by Bill Johnson of Single Seat Consulting.
“[T]he auto industry certainly has the understanding of scale, but they do not understand the safety and specifications that you need for aviation. The difference between them is the amount of tolerance that you have for safety. A car’s engine or systems can fail, and it’s not necessarily an emergency, but in a plane that’s not the case. Basically, the culture and mentality of the mass production of automobiles does not inculcate this idea of very precise and safety consciousness that the aviation industry requires,” Johnson told Aviation Daily.
If I were a market trader, I’d bet on Joby and Beta to do better than most, and also Lilium if it can achieve its inter-city range goals. EHang is irrelevant, and Volocopter and Wisk might be candidates to sell short. These are just my opinions and definitely not intended as recommendations for any actual investors.
In two recent runway incursion incidents, pilots of the involved aircraft failed to comply with Federal Aviation Administration (FAA) rules put in place after an Air Canada A320 on approach to San Francisco International in 2017 nearly landed on a line of aircraft waiting on the adjacent taxiway. The rule calls for planes involved in such incidents not to complete their planned flights immediately to facilitate finding out what cockpit crews and controllers said and did in the minutes leading up to a near-collision. The reason for this rule is that cockpit voice recorders have only two hours of capacity. After that, the device records over the previous information. By going ahead with the flight, the cockpit crew destroys the evidence needed to assess what happened, with the goal of improving aviation safety.
Last month, on Jan. 13, an American 777 taxied in front of a Delta 737 that had begun its take-off roll at John F. Kennedy International Airport. After a safety warning from the airport’s ASDE-X system, the 737’s crew was able to abort its take-off, averting a collision. But soon thereafter, it took off on its planned flight, with its voice recorder proceeding to record over the incident. The same thing happened with the 777, which also went ahead with its planned take-off.
A similar incident happened on Feb. 4, when a Southwest 737 was cleared onto the runway at Austin-Bergstrom while a FedEx 767 was on final approach to that runway in low-visibility conditions (where the runway end was not visible from the control tower). Air traffic control transcripts showed that a controller asked the 737 if they were actually moving, getting the reply, “rolling now.” Fortunately, the FedEx crew realized they might land atop the 737 and made a quick decision to go around. The 737 taxied back to its starting point and made a normal takeoff. Neither plane was required to stand down at Austin-Bergstrom so that the content of their voice recorders could be saved.
“I’m very proud of the FedEx flight crew and that pilot,” Jennifer Homendy, chairwoman of the National Transportation Safety Board, told CNN. “They saved, in my view, 128 people from a potential catastrophe.” Homendy added, “It was very close, and we believe less than 100 feet.”
Aviation Daily (Feb. 7, 2023) reports that overall runway incursions have continued to increase since 2011. FAA defines four categories, of which the most serious is a near-collision such as these two, deemed Category A. While less-severe Category B incursions have increased every year since 2017, Category A incursions fluctuated between three and five per year since 2016, except for zero in 2022. Unfortunately, 2023 has now begun with two such near-disasters.
The National Transportation Safety Board (NTSB) is investigating both incidents and will record its interviews with the cockpit crews. Unfortunately, there will be no data available to judge the accuracy and completeness of what they tell NTSB. I hope its report will fault FAA for not enforcing its own stand-down rule so that cockpit voice recorder data will be saved—at least for near-collisions of airliners—in the future.
Note: For more on this topic, see the Quotable Quote below from Gary Leff.
In his State of the Union address to Congress on Feb. 7, President Joe Biden called for prohibiting or otherwise restricting “junk fees,” naming hotel resort fees, event ticket service fees, and cellular carrier transfer fees as specific targets of his ire. He also mentioned airline ancillary fees on seat selection, saying, “And we’ll prohibit airlines from charging up to $50 roundtrip for families just to sit together. Baggage fees are bad enough—they can’t just treat your child like a piece of luggage.”
This call to prohibit certain ancillary fees on airline seat selection earned widespread applause. After all, who could oppose young children sitting with their parents on a plane? While this may have been a an effective use of populist political rhetoric, it raises numerous questions on how such a rule would be implemented in practice and the potential outcomes on the traveling public. As is often the case, this may prove to be better politics than policy.
President Biden called on Congress to ban charges on family seating by passing legislation he calls the Junk Fee Prevention Act. One problem is this bill does not exist beyond the title. No legislative text has been introduced for members of Congress, let alone the public, to review. Perhaps in recognition that President Biden’s hypothetical bill won’t be ready for consideration in the near future, the White House also released a fact sheet on President Biden’s competition agenda. Included was a call for unilateral regulatory action to “[b]an airline fees for family members to sit with young children” by having the U.S. Department of Transportation (DOT) “launch a rulemaking to ban the practice.”
In order to satisfy President Biden’s request, the transportation department would presumably exercise its Section 41712 aviation consumer protection authority to prohibit “unfair” practices and methods of competition granted to it by Congress. Section 41712 powers to police against unfair airline conduct have largely remained the same since Congress first authorized them in 1938, apart from a 1958 amendment that extended the unfair conduct prohibition to include ticket sellers as well as air carriers.
The Department of Transportation’s Section 41712 authority was modeled on language included in 1938 amendments to the Federal Trade Commission Act. However, while DOT’s authority has largely remained the same since then, Congress modernized the Federal Trade Commission’s (FTC) similar Section 45 authority in 1994 to add new standards of proof. Under these standards, for conduct to qualify as legally unfair, it must be (1) “likely to cause substantial injury to consumers,” (2) not “reasonably avoidable by consumers themselves,” and (3) “not outweighed by countervailing benefits to consumers or to competition.”
The FTC’s balancing test for unfair practices reflects case law and internal agency practice developed over several decades. By codifying them, Congress aimed to ensure regulatory quality and consistency in enforcement by explicitly requiring the FTC to carefully consider the business practices alleged to be unfair and weigh them against market factors. When Congress created the Consumer Financial Protection Bureau in the Dodd-Frank Act of 2010, it also included an identical unfairness balancing test (12 U.S.C. § 5531(c)). DOT’s Section 41712 authority is both anomalous and nebulous, and the Office of the Secretary of Transportation in recent years has wielded it to re-regulate airline and ticket agent business practices best left to market competition.
Although current Section 41712 unfairness determinations aren’t subject to FTC-style standards of proof, there are many important questions that ought to be answered before DOT proceeds with a family seating ancillary fee ban.
If DOT required airlines to guarantee family seating in all circumstances, how would this mandate be integrated into airline reservation systems? What would happen if a parent attempted to purchase a ticket shortly before a flight that is already mostly full of fee-paying customers and there aren’t enough seats grouped together? Would the flight be shown as full and no sale be permitted? Could parents consent to not sit next to their minor children in this case in order to take the flight? If not, would parents flying with minor children have access to fewer flights because of this policy? Would customers who have already paid fees to select their particular seats be forcibly moved to seats they did not purchase and refunded those fees?
Ultra-low-cost carriers (ULCCs) with the most-aggressive airfare unbundling business models would bear a disproportionate share of the costs of a mandatory family seating rule. Through their aggressive pricing, ULCCs also exert most of the downward price pressure on average airfares—competitive business practices that allow all air travelers to benefit from lower fares even if they aren’t flying on a ULCC. Would this crackdown on ancillary fees cause average base airfares to rise? If so, by how much?
Perhaps the benefits of guaranteed family seating are worth the costs of higher airfares and fewer flight options for parents traveling with young children. But detailed analysis should be conducted and presented in a transparent manner for all to see. Rather than mandating a questionable policy, if Congress wishes to promote regulatory quality that maximizes consumer welfare, it should amend DOT’s Section 41712 authority to incorporate an FTC-style unfairness balancing test.
President Biden attacked airline ancillary fees in his State of the Union speech on Feb. 7, calling them “junk fees.” He demanded that airlines show the full price of a ticket, including ancillary fees—even if some of the optional extras get signed up for at the check-in counter, long after the ticket was purchased.
Ancillary fees are optional for air travelers, as is obvious when they apply to checked versus carry-on baggage, alcoholic beverages, and premium seats, if available. They have become a significant part of airline revenue, whether majors, hybrids, low-cost or ultra-low-cost carriers. According to the Department of Transportation’s Bureau of Transportation Statistics, in 1990, 88.5% of U.S. airline revenue was derived from airfares. By 2022, that number had decreased to 72.6%. The growth of ancillary fees has made it possible for airlines to advertise basic fares, expecting that many travelers will opt for some of the optional services.
Ancillary fees have been used most extensively by ULCCs, both here and in Europe. As Aviation Week’s Helen Massy-Beresford noted in an article last fall on ancillary fees in Europe, “Customers, it seems, are willing to pay to make their journeys smoother, with paid-for cabin bags, extra legroom, or assigned seats.”
The article provides examples from European LCCs EasyJet, Ryanair, and Wizz Air. For example, Wizz Air reported ancillary revenue per passenger for a recent period averaged €34.20; EasyJet’s latest was £22.07. (A personal note: I wish U.S. carriers charged for cabin bags, which would likely shift some of them from overhead bins to cargo holds so that those of us who travel light would be assured of overhead bin space.)
FAA may well be concerned because when airlines enable reduced airfares by relying more on ancillary fees, this leads to reduced ticket tax revenue since that tax applies only to the airfare itself. This is a problem that no other country faces. About 80% of FAA’s budget is devoted to the capital and operating costs of the air traffic control (ATC) system, so basically, that tax pays for air traffic control (and the general fund covers safety regulation and a portion of airport grants). In virtually every other country worldwide, the ATC system is paid for by ATC fees, paid by air carriers and business jets according to charging principles promulgated by the International Civil Aviation Organization. So any FAA or congressional gripes about short-changing the Aviation Trust Fund because of ancillary fees is only a problem because the United States is out of step with the rest of the world on how to pay for air traffic control.
I have often written about the superior performance and economics of Ground-Based Augmentation System (GBAS) landing systems over traditional Instrument Landing System (ILS). The former uses augmented GPS signals to provide precision landing approaches at far lower cost (for multi-runway airports) than ILS. One GBAS installation can handle all the runway ends at a large airport. Think what this would mean for multi-runway airports such as DFW and O’Hare.
The latest news is that the German air navigation service provider (ANSP) DFS, last summer, got the GBAS at Frankfurt Airport certified for higher-precision Category II approaches. This is a big deal because it is the first (and so far only) airport that is now doing Cat. II GBAS approaches. The Frankfurt system allows two different glide slopes, 3 degrees and 3.2 degrees. A flight doing a Cat. II approach at Frankfurt can begin at 10,000 feet altitude. 35 nautical miles from the runway end, performing a continuous descent approach at idle thrust. And the higher slope angle further reduces noise exposure on the ground.
And it gets even better. As discussed in a detailed article in Air Traffic Technology International 2023, (“Realizing the Potential for More Capacity” by Olaf Weber, Oliver Reitenbach, Winfried Dunkeo, and Jascha Runow), during low-visibility conditions when Cat. II approaches are often used, testing and simulation by DFS has shown that runway occupancy time for a Cat. II-landed aircraft is less than for an ILS Cat. II landing due to poor signal transmission in what are called instrument landing system protection zones. Since GBAS is in communication without interruption, the equipped plane can exit the runway sooner. DFS fast-time simulations found that if even 10 to 30% of arriving aircraft are GBAS-capable, there is some runway throughput increase; with 60% of arrivals GBAS equipped, the throughput increases are very significant.
Over 100 airports worldwide have installed GBAS, generally as a supplement to their existing ILS, since the majority of airliners and other aircraft are not fully equipped for GBAS landings. Besides Frankfurt, other equipped European airports include Bremen, Malaga, and Zurich. Notable examples elsewhere include Sydney, Australia and Chennai, India. In the United States, early adopters include Charleston, Houston’s George Bush Intercontinental Airport, Newark Liberty International, and Moses Lake (WA), to be joined soon by San Francisco International, which was approved by FAA last March but is not yet operational.
There is a kind of chicken-and-egg problem inhibiting wider airport GBAS usage. Most airliners are not currently able to interface with GBAS. Although most Airbus and Boeing aircraft being produced today are GPS-capable, unless the airline operating them uses GBAS-equipped airports, the onboard equipment is not enabled. To deal with this problem, a European GBAS Alliance has been organized, with representatives from airlines, airports, ANSPs, IATA, and others to “bridge the gap between on-board and ground systems.” One of its objectives is to get Single European Sky funding to certify GBAS ground systems for even more-precise Cat. III operations.
No such effort is under way in this country, in large part due to FAA indifference. Despite the superior performance and economics of GBAS, FAA does not fund either research or airport equipage with GBAS. The few U.S. airports with functioning GBAS installations have had to pay for it themselves, with United Airlines helping to pay for it at hubs, including Newark, San Francisco and George Bush Intercontinental.
GBAS should have been an integral part of modernizing air traffic management under FAA’s struggling NextGen program. I’ve never seen a coherent FAA answer to the question, “Why not?”
Both Alaska and United plan to electrify their short-haul routes via new and re-powered aircraft, but United also plans eVTOL air taxi services to its larger hub airports.
Alaska is partnering with ZeroAvia in order to retrofit the latter’s liquid-hydrogen fuel cell to power De Havilland Dash 8-400 turboprops. This would be the airline’s first extensive use of electric propulsion. The airline has announced no plans for replacing or re-powering its Embraer E-175 regional jets.
United is investing in the Heart Aerospace 30-passenger hybrid-electric ES-30, with an initial order for 200 and deliveries starting in 2028. They will likely be flown by its regional affiliate, Mesa Air Group. United leadership is also betting heavily on eVTOL air taxis to convey passengers from central cities to their major airport(s). Edward Espiritu, of United’s Ventures and Corporate Development operation, told Aviation Week, “We’re not in it to get cool science projects. We want to invest in commercially viable products and that includes scaling it to an operational level where we can create value and ultimately profitability.”
But with the four-passenger eVTOLs it plans to acquire from Archer and Eve, it’s not clear how large that market will be. It has committed to up to 300 Archer Midnight eVTOLs and up to 400 Eve eVTOLs. Mike Leskinen, head of United Airlines Ventures, envisions competing with UberX for trips between Newark and Manhattan by offering time savings for most of the hour that the trip can take by highway. Leskinen told Aviation Week’s Ben Goldstein, “Tickets may be a bit more expensive at first—we’re thinking business travelers mainly—but we expect it to come down to a price similar to UberX before long.” How an Uber-like fare from between one and four passengers could cover the direct operating costs, landing fees, and annualized acquisition cost is hard to imagine, but it’s not my money.
Electrifying regional turboprops and possibly jets strikes me as far more likely to be commercially viable. As I’ve pointed out before, the huge amount of energy needed for vertical take-off and landing will severely limit most eVTOLs’ range, and their very limited seat capacity will limit their passenger miles per trip. But we’ll see when the best-positioned eVTOLs gain certification and begin carrying paying passengers.
Athens Airport Up for Sale
The Greek government’s asset management fund (HRADF) currently owns 30% of the shares in Athens International Airport. In keeping with the government’s privatization/asset-recycling policy, it has asked HRADF to sell those shares via either an initial public offering or competitive bidding by commercial entities. AviAlliance, owned by PSP Investments, already owns 40% and would have the option to buy another 10% plus one share. Other pre-qualified bidders from an aborted 2019 sale process include Ardian, ADP Group, Ferrovial, Macquarie, and Vinci Airports. The airport served 22.7 million passengers in 2022.
Pacific ANSPs Conduct Trial of Trajectory-Based Operations
The air navigation service providers of Canada, Japan, Singapore, Thailand, and the United States carried out the first multi-region trial of a procedure that coordinates traffic in a performance-based manner, called trajectory-based operations (TBO). Each ANSP developed its own way of implementing TBO and these were modeled in five scenarios involving 10 airports and nine flights traversing selected Flight Information Regions. Aviation Daily reports (Jan. 25, 2023) that the next planned step will be on live flights, for which the time frame is not yet clear.
Newark’s New Terminal A Opens Up Competition
Terminal A, which opened on Jan. 12, is not only larger and better-equipped than the “downtrodden” terminal it replaced, but it also will reduce United Airlines’ dominance of flight activity at Newark Liberty International Airport, Pre-pandemic figure published in Aviation Daily showed United with 51.% of EWR passengers, with American at 6.9%, JetBlue at 6.43%, Spirit at 4.43%, and Delta at 4.21%. The good news is that on opening day Terminal A had 21 common-use gates which Air Canada, American, and JetBlue will use; Delta will be able to expand when the next 12 gates open.
Panama Plans P3 Concessions for Three Regional Airports
Currently, all five of Panama’s commercial airports are run by the Tocumen International Airport Administration (AITSA). Early this month, it announced that it will seek long-term public-private partnerships for three of the airports. The original P3 plan called for concessions for all four of the smaller airports, but after thinking through the use of Panama Pacifico International Airport as an alternative to Tocumen International under certain weather conditions (and its use by low-cost carriers), AITSA will retain control of that airport.
Drone Advisory Group Opposes Drone Toll Lanes
AUVSI, a nonprofit organization focused on autonomous systems, last fall issued a release opposing what it terms a “dangerous trend.” State legislators in Louisiana, Mississippi, Texas, and West Virginia have introduced bills to restrict and tax flights by uncrewed air vehicles. AUVSI calls state bills to allow drone companies to acquire avigation easements from land owners as “the creation of toll lanes in the sky for drones.” This raises an important unresolved question of whether federal or state governments will define and manage low-altitude airspace—and how UAV operators will pay for their use of that airspace.
AENA Invites Financial Partners for Its Brazilian Airports
Last summer, Spanish airport company AENA won an auction for a long-term (30-year) P3 lease to operate, manage, and improve 11 Brazilian airports, paying €736 million as the winning bidder. Inframation reported (on Feb. 6, 2023) that AENA is open to investments by infrastructure funds, pension funds, and sovereign wealth funds in the concession, which is known as the Eleven Airports Block of Brazil (BOAB).
Another Japanese Airport Privatization Candidate
Medium-size Komatsu Airport appears to be close to deciding on following a number of other Japanese airport by opting for a long-term P3 concession. Komatsu handled 1.8 million passengers a year prior to the pandemic, about 14% of them international. The airport has only one runway, which it must share with the Japan Air Self-Defense Force; also, its terminal buildings are 40 years old and “in urgent need of upgrading.” A report on a potential second runway is to be discussed in March, and following that will be a discussion of the airport’s future status.
U.S. Airport Traffic Reached 95% of 2019 Levels in 3Q22
Last month, Fitch Ratings reported its findings on traffic recovery at U.S. airports and toll roads whose bonds it rates. By the third quarter of 2022, the average across all the airport Fitch rates was 95% of the third quarter of 2019. International travel lagged domestic travel recovery, putting hubs such as Los Angeles International, San Francisco International, Dulles International, O’Hare International Airport, and Seattle-Tacoma International all below 90% of 2019 levels. Above average figures were attained by domestic-oriented airports such as Chicago Midway International, LaGuardia, Dallas Love Field, Dallas-Fort Worth, DFW, and Reagan National.
Honduras Gets ADS-B and Multilateration for Newest Airport
For its new international airport serving Honduras’s capital city of Tegucigalpa, the ANSP for six Central American countries—COCESNA—implemented a Frequentis system called Quadrant. It combines ADS-B (via COCESNA’s subscription to Aireon) with wide-angle multilateration (WAM), an alternative to radar. Wide-angle multilateration uses a geographical array of ground stations with minimal maintenance needs. Space-based ADS-B provides quicker updates than radar, but operates only with ADS-B-equipped aircraft. WAM tracks non-cooperative targets as well (akin to primary radar).
Philippines Shifts to Only Partial Privatization at Manila
The long-planned privatization of Ninoy Aquino Airport has been downgraded to just an operations and maintenance contract rather than a long-term P3 concession. A $2.2 billion proposal to modernize the airport, submitted by GMR Infrastructure and Megawide Construction, was rejected by the Philippines government. Terms of reference for the operations and maintenance contract are being prepared.
Boom Breaks Ground on SST Factory
Startup supersonic transport developer Boom Supersonic broke ground for its initial production facility at Piedmont Triangle International Airport in Greensboro, N.C. This development comes prior to Boom’s completion of a flyable prototype or the development of the jet engines the production Mach 1.7 Overture airliner will use.
Delta Brings (Some) Competition to Dallas Love Field
Although it has only one gate at Southwest-dominated DAL, Delta plans to use it more extensively this year than in the past. Starting June 5, it will add twice-daily service to both LGA and LAX. It will also increase the frequency of its daily flights to ATL from DAL. The flights will be operated on Airbus A 310 aircraft with 12 first-class seats, 18 Comfort+ seats, and 102 standard economy seats. Delta is leasing its gate from Alaska Airlines.
Some Well-Informed Perspectives on Autonomous Flight
In a Feb. 3 guest op-ed for the Eno Center for Transportation, NASA-Ames expert Parimal Kopardekar outlines a number of reasons why various aviation automation concepts are being researched and follows this with the challenges each poses to airspace management. This is an excellent primer on the subject and should be read by anyone proposing innovations in this field.
Good Viewing Opportunities
- A brief and very well-done video on the FAA’s NOTAMs debacle was produced by my colleagues in Reason’s journalism division.
- A much longer video is of a recent Commerce Committee hearing about Southwest’s winter problems. The best testimony is from Cliff Winston of Brookings Institution. You can watch it at https://www.commerce.senate.gov/2023/2/executive-session.
Corrections to Last Month’s Issue
- In the article on fledgling U.S. remote tower projects, consultant Bill Payne pointed out that the remote tower project at Leesburg, VA, has received from FAA an “operational viability decision” that allows the remote tower to control traffic without a backup mobile tower (but the RT has still not been officially certified by FAA). The RT project at Loveland, CO, has not yet gotten that far.
- In the article on airline deregulation, the Europoean Union’s 1997 authorization of cabotage rights applied only to EU member states.
“Aviation watchdog JonNYC notes that there were procedural changes after the  Air Canada near-miss [at SFO], but those changes do not seem to be followed in these two recent incidents. In all cases, the American, Delta, Southwest, and FedEx planes continued to operate. As a result, their cockpit voice recorders—which only capture the most-recent two hours of data—were overwritten. But FAA shouldn’t be allowing this. . . . The FAA’s Air Traffic Organization needs work to avoid situations like these and the FAA—supervising itself—isn’t getting that done. The FAA should not be regulating itself. We need better funding of technology, culture change, and separation of oversight. That doesn’t have to mean ‘privatization.’ The Canadian model is a separate non-profit, but we don’t even have to do that. Just put the Air Traffic Organization into a new separate agency, build the culture [from the] ground up, and do longer-term funding for IT. Have the FAA serve as regulator.”
—Gary Leff, “The FAA’s System for Responding to Air Traffic Control Near-Disasters Is Broken,” View from the Wing, Feb. 7, 2023
“The December travails of Southwest Airlines would be an everyday occurrence if its capital allocation process were as starved and unpredictable as the FAA’s. When Congress appropriates less funding for FAA than is needed to run a full-staffed, safe and efficient operation, FAA has some tools at its disposal, but they can sometimes make the situation even worse. Given a choice between safety and efficiency, FAA will always choose safety, which means they will maximize the funds available for operations. Because FAA cannot, on its own initiative, move funds between its operations budget and the Facilities & Equipment budget, it keeps new systems running out of the F&E budget long after they are fully operational, in order to preserve more funds in the safety-critical operations budget. While definitely the right choice for the airspace system, this practice reduces funds in the F&E budget that Congress and the Office of Management & Budget had really thought would be available for new systems development—like a new NOTAM system.”
—David Grizzle, “The Problems at the FAA Begin Way Outside the FAA,” Aviation Daily, Jan. 25, 2023
“[A] better question than why NOTAM failed might be why the Department of Transportation runs air traffic control in the first place. It is not a public good according to economic theory, and it could easily be provided by the private sector with funding from user fees. Canada adopted a nonprofit, private-sector air traffic control system in 1996 and it has maintained a high level of safety while also modernizing its technology faster than the U.S.—all without costing Canadian taxpayers a penny. One of the biggest problems the FAA faces is having to beg Congress for funding every year rather than having a consistent, user-based revenue stream. . . . Privatization proposals have bounced around for decades and include a 2017 House bill, which received bipartisan support, to create an equivalent to the Canadian system. It’s time to clear the runway for this idea.”
—“The Week,” National Review, Feb. 6, 2023
“Extensive research by ACI World and InterVISTAS has demonstrated the critical need to modernize global policy frameworks on airport charges towards ones that incentivize sustainability, efficiency, investment in infrastructure, and that generate a multiplier of socio-economic benefits and connectivity. In consideration of the changed competitive landscape, it is critical that airport charging policies be focused on market needs and signals, and that the best way forward for the benefit of the traveling public and local communities, is through commercial agreements between airports and airlines.”
—Luis Felipe de Oliveira, ACI World, “Building on the Successes of 2022,” International Airport Review, Dec. 2022