President's Position: The Perils of Privatization

As a pilot for more than 35 years, I have enjoyed the opportunities that flying has provided throughout most of my life, and would like to ensure that future generations have the same opportunities. It’s up to us to speak out against privatization, and share how other countries have suffered after adopting this model.

Nearly every major airline here in the United States has filed for bankruptcy at one point in time, some even multiple times, and we’ve seen significant consolidation. When Air Canada, Canada’s largest commercial airline, filed for bankruptcy, NavCanada was forced to increase fees because of revenue shortfalls. This proposal before us today would create a “too-big-to-fail” entity and could lead to many unintended consequences and risks given the competition and challenging economic environment faced by the airline industry.

General aviation in Canada no longer thrives, and it’s unfortunate to see that pilots there don’t have the same options we enjoy here in the United States. I would hate to see us follow the same destructive path.

In a statement signed by 120 GA groups in July 2017 opposing privatization, top GA industry leaders wrote “the billions of dollars and time that would be spent transitioning our nation’s ATC system to a not-for-profit entity can be better applied to the continuing progress to update and modernize our ATC system.”

The very same White House that is supporting this measure also reports that this transition will add between $20 billion and $40 billion to our debt.

This bill will not result in competition, air fares will not be reduced, and delays will not decrease. This is a move by the airlines to control the system. We must be observant of the fact that privatization is designed and supported heavily by the big commercial airline lobby and will not actually be a true definition of a not-for-profit entity. This bill will not result in competition, air fares will not be reduced, and delays will not decrease. This is a move by the airlines to control the system.

Many supporters of privatization are being led to believe the plan will result in better, faster service with fewer delays. According to the Bureau of Transportation Statistics, 80 percent of system delays are caused by the airlines and weather. This proposal would not fix this ongoing issue—and will hand over more power to the airlines, who already reap billions of dollars annually while getting away with treating their customers as third-class citizens.

Research also shows privatization would not lead to lower costs for travelers, but would ultimately raise costs by exorbitant amounts. According to a Delta Air Lines study, after privatization, Canadian fliers faced a 59-percent increase in ATC fees on airline tickets, while the United Kingdom saw a 30-percent surge. The same study estimates an increase of 20 to 29 percent in the United States under privatization.

The way this legislation is designed, the system will also be run as a quasi-governmental, public/private entity, like Fannie Mae or Amtrak.

Andrew Langer, president of the Institute for Liberty, put it best when he wrote, “The history of such GSEs [government-sponsored enterprises] is hardly private. From their codified monopolies to their government-appointed leadership and powerful unions, GSEs usually represent the worst of both worlds: none of the profit motivation of the free market, but none of the oversight or political accountability of a federal agency. And when they fail, taxpayers are on the hook.”

It’s not too often that I’ll choose the government to run something instead of the private sector, but in the proposed reforms there will be winners and losers. GA will be on the losing end of this deal. Today, we have a system that works for all users and with some improvements, it will be even better. AOPA strongly supports the continued modernization of our system, but the proposed privatization would force GA and the American public to hand over air traffic control to commercial airlines, and that’s not good for GA or rural America.

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