WASHINGTON, DC (July 31, 2008) – Dr. Dorothy Robyn, a principal of The Brattle Group, argued for major changes in the US air traffic control system at a recent forum on infrastructure investment in which former treasury secretaries Robert Rubin and Lawrence Summers also participated. The forum, “Investing in America’s Infrastructure: From Bridges to Broadband,” was hosted by The Hamilton Project at the Brookings Institution in Washington, DC on July 25.
Dr. Robyn’s remarks were based on her paper, “Air Support: Creating a Safer and More Reliable Air Traffic Control System,” one of six new papers written for The Hamilton Project around which the forum was organized. The paper argues that the nation’s air traffic control system, run by the Department of Transportation’s Federal Aviation Administration (FAA), has not kept up with the explosive growth in air travel. For instance, in 2007 flight delays cost passengers and airlines more than $12 billion in lost time and fuel. Moreover, controllers and pilots continue to rely on antiquated air traffic control technology, which contributes to delays and the rising cost of the system.
Dr. Robyn explains that flight delays and antiquated technology are symptoms of a more fundamental problem with the way the federal government manages the air traffic control system. According to Dr. Robyn, the system is a $9 billion per year, capital-intensive, high-tech service “business.” As a traditional government agency constrained by federal budget rules and micromanaged by Congress, the FAA is poorly suited to run such an enterprise, she argues. Although the FAA plans to move to a next-generation, satellite-based system, the transition is currently scheduled to take nearly twenty years. The severe and systemic problems that have plagued past FAA modernization efforts are almost certain to persist, she added.
The paper highlights a second problem with the current governance structure – the FAA both operates the air traffic control system and regulates its safety. This represents a potential conflict of interest because the FAA is regulating its own operation. It would be preferable to have independent regulation, Dr. Robyn suggests, because the fundamental issue of how much space to maintain between planes involves a trade-off between safety and efficiency. She notes that the US is one of the only industrial countries in which air traffic control is still operated and regulated by the same agency.
Dr. Robyn proposes that Congress create a new agency within the Department of Transportation focused exclusively on the delivery of air traffic control services and regulated at arm’s length by the FAA. The separation of the air traffic control operator from its FAA regulator would enhance safety by eliminating the potential conflict of interest that now exists. In addition, separation would help to clarify the respective missions of the air traffic control service provider and the FAA safety regulator, which should improve the performance of both entities.
Dr. Robyn stops short of calling for moving the air traffic control system to a government corporation outside the traditional government bureaucracy altogether. Since 1987, Canada, the United Kingdom, and many other countries have “corporatized” their air traffic control service provider so that it can operate more like a business. Although Dr. Robyn maintains that such a change would be highly beneficial, she says it does not appear to be politically feasible.
Additionally, Dr. Robyn proposes that Congress replace the current excise tax-based approach to financing the air traffic control system with direct charges on commercial and business aircraft operators. She argues that prices will provide valuable market signals – if aircraft operators have to pay their way, they will have an incentive to use scarce capacity more sparingly, thereby reducing delays. Moreover, the air traffic control operator will get the kind of feedback that price signals routinely provide, encouraging more efficient production of services.
“The problems of the air traffic control system are the predictable result of flawed public policy. The changes I propose will not solve all of the problems of the system, but they represent a significant step in the right direction,” concluded Dr. Robyn.
The Hamilton Project at Brookings, named for Alexander Hamilton, was established with support from Robert Rubin to put forward innovative and sometimes controversial policy ideas that can improve U.S. economic policy. Rubin, who served as treasury secretary from 1995 to 1999, moderated the July 25th forum. Lawrence Summers, who succeeded Rubin and served from 1999 to 2001, delivered remarks to the forum on the contribution of infrastructure investment to economic growth. Virginia Governor Tim Kaine also addressed the forum, which was broadcast on C-SPAN.