A major debate is underway concerning how to fix the United States’ bureaucratic air traffic control network, and stakeholders are searching north to Canada’s privatized system for a model of the way it should be done.
The U.S. Federal Aviation Administration has struggled for years to secure enough funding to update its aging infrastructure, while Ottawa-based Nav Canada has quietly turned itself into a world leader in technology, exporting its know-how all over the world.
And because the clock ticks down towards a March 31 deadline for Congress to authorize new funding for that FAA, several key players have been visiting Ottawa to learn about Canada’s air navigation service, said Sid Koslow, chief technology officer at Nav Canada.
Koslow said he recently hosted Bill Shuster, the Pennsylvania Republican who chairs the home Transportation Committee, in addition to senior executives from United Continental Holdings Inc. and American Airlines Group Inc.
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“Chairman Shuster particularly seems quite interested in the Nav Canada model and he’s the important thing person there, so certainly our model is getting a lot of attention,” Koslow said in an interview.
Shuster is anticipated to incorporate an offer within the FAA bill that will take air traffic control from the hands from the government agency and change it with a privatized, non-profit organization modelled after Nav Canada.
Most from the major U.S. airlines offer the idea, said Sharon Pinkerton, senior vice-president for legislative and regulatory policy at Airlines for America, a business lobby group.
“We are advocating for a federally chartered, non-profit, independent organization,” Pinkerton said within an interview.
Pinkerton said she doesn’t believe you can simply “cut and paste” air traffic control systems across countries, but Nav Canada may be the closest model as to the they’re recommending.
“(Nav Canada) has that non-profit element that I think is essential,” she said.
She added the U.S. also studied other models, including Britain’s for-profit system and Germany’s government corporation (something like a Crown corporation in Canada).
“We have the luxury of getting had other people move forward first and pave the way in which,” she said.
One from the major issues in the U.S. continues to be the possible lack of stable funding for air traffic control, which turns into a problem each time Democrats and Republicans start wrangling over the federal budget. As a result, the FAA has “a terrible record with regards to capital investment,” said Chris Edwards, director of tax policy studies in the Cato Institute, a Washington-based libertarian think tank.
“I think the Canadian model is a great model for the United States,” Edwards said in an interview. “There’s a motivation to innovate and generate new revenues just like inside a private, for-profit business because the entity’s got to satisfy the main point here without subsidies.”
Nav Canada was founded Two decades ago when it purchased the country’s civil air navigation system in the federal government for $1.5 billion. The company inherited a mess: Capital projects were facing major delays and cost overruns, and the revenue generated from airline ticket taxes wasn’t keeping pace with escalating costs.
The company’s history has been impressive. Since 1996, it’s invested a lot more than $2 billion in infrastructure, cut staffing levels by 25 %, improved its safety record and become a global leader in technology. The organization also revamped its fee structure – service charges are now according to aircraft weight and distance flown – and has actually reduced its fees twice since 2004.
“I think that from almost every aspect, it has been successful,” said Koslow.
Not everyone props up Canadian model, however. Capt. Steve Dickson, senior vice-president of flight operations at Fuel prices Inc., also visited Nav Canada recently and said he came away unimpressed.
“We learned that Nav Canada’s privatization model may work well for Canadian airspace, which is about one-tenth the size and complexity of U.S. airspace,” Dickson wrote in an editorial for Crain’s New York Business.
“But the possible lack of any solid data from Nav Canada that would have supported moving to privatization in the U.S. was startling.”
He added that he saw “zero quantifiable data showing operational efficiency” or cost advantages as a result of privatization.
Proponents reject the arguments that U.S. airspace is simply too busy for the Canadian model to work.
“That’s complete nonsense,” said Edwards. “There’s no evidence for that. Actually, I would say it’s the opposite: it’s harder for a government bureaucracy to operate a massive system than a private company.”
Nav Canada’s Koslow agreed, saying U.S. airspace may be busier, but it also has more resources.
“Scale should work in their favour,” Koslow said. “If you will find advantages to our model, then the benefits ought to be multiplied by size.”
Another critique originates in the private aviation community, that is worried it will lose its unrestricted, affordable access to airports and airspace.
But Rudy Toering, CEO of the Canadian Business Aviation Association, asserted was not a problem in Canada.
“Our knowledge about Nav Canada continues to be positive,” Toering said in an email.
The privatization debate is expected arrive at a head in the future once the proposal is officially added to the FAA funding bill. The legislation should be went by March 31, once the agency’s existing funding runs out.
kowram@nationalpost.com
Twitter.com/KristineOwram
