Amer­ica’s un­friendly skies

Fa­vors go to pri­vate and cor­po­rate jet own­ers over the le­git­i­mate in­ter­ests of other avi­a­tors

The Washington Times Weekly - - Commentary - By Stephen Moore

Lib­er­als love to por­tray the Repub­li­cans as the party of the rich and pow­er­ful. The GOP has tried valiantly to shed that crit­i­cism, but then why are so many in the party de­fend­ing the spe­cial in­ter­est fa­vors that go to pri­vate and cor­po­rate jet own­ers over the in­ter­ests of all the rest of us? Do War­ren Buf­fett and LeBron James re­ally need a tax­payer sub­sidy to jet across the coun­try?

At is­sue here is the pro­posed mod­ern­iza­tion of the op­er­a­tions and pric­ing of Amer­ica’s air traffic con­trol sys­tem. Pres­i­dent Trump has pro­posed an ATC up­grade that would take the sys­tem out of the di­rect con­trol of the gov­ern­ment bu­reau­cracy and con­vert it into a self-funded, non­profit group. The air traffic con­trol sys­tem would be­come di­rectly ac­count­able to the in­dus­try and pas­sen­gers — not politi­cians, five con­gres­sional com­mit­tees, and the gov­ern­ment bu­reau­cracy. The Clin­ton ad­min­is­tra­tion pro­posed some­thing very much like this 20 years ago.

This would up­grade an air traffic con­trol sys­tem that still op­er­ates as it did when “The Brady Bunch” was still the hit TV show. The Fed­eral Avi­a­tion Ad­min­is­tra­tion con­tin­ues to spend bil­lions of dol­lars to try to bring the in­fra­struc­ture and man­age­ment into the 21st cen­tury (a pro­gram called Nex­tGen) with lit­tle to show for it. Amaz­ingly, many air traffic con­trollers still don’t have the ca­pac­ity to see the air space be­yond their radar screen. It’s like they are work­ing with Atari com­put­ers.

This in­ef­fi­ciency makes air travel more ex­pen­sive for ev­ery­one who flies. Trans­porta­tion ex­pert Bob Poole of the Rea­son Foun­da­tion finds that “the cost per con­trolled flight hour in do­mes­tic airspace is $335 in Canada, but $453 in the United States, a 35 per­cent dif­fer­ence.” Canada has gone pri­vate as have many other na­tions, in­clud­ing the U.K. and Ger­many.

Mean­while, we burn through an es­ti­mated $30 bil­lion a year in lost man hours, wasted fuel, and lost pro­duc­tiv­ity due to flight de­lays. Many of these de­lays are due to weather, but thou­sands of flight de­lays and can­cel­la­tions are not due to acts of God, but man­made dis­as­ters. The air traffic con­trol sys­tem is just too an­ti­quated, bu­reau­cratic and ex­pen­sive to cope with the vol­ume of flights — with some 7,000 planes in the air at any given time.

The best so­lu­tion would be to move to a for-profit air traffic con­trol sys­tem, where the op­er­a­tors have a fi­nan­cial in­cen­tive to make things run smoothly. Noth­ing gen­er­ates ef­fi­ciency im­prove­ments faster than the profit mo­tive. But this is seen as too rad­i­cal, so the com­pro­mise is a non­profit en­tity with a board of di­rec­tors made up of all the stake­hold­ers in the sys­tem — in­clud­ing the air­lines, air­ports, and pas­sen­ger groups. That is the plan that the White House and House Trans­porta­tion Com­mit­tee chair­man Bill Shus­ter are push­ing. But many in Congress are show­ing signs of mo­tion sick­ness and are re­sist­ing the change. They are buck­ling un­der to a deep­pock­eted group called the Na­tional Busi­ness Avi­a­tion As­so­ci­a­tion (NBAA) that is spend­ing mil­lions of dol­lars to de­feat mod­ern­iza­tion.

NBAA is a lob­by­ing group that rep­re­sents cor­po­rate and pri­vate jet own­ers. It’s board is made up of many For­tune 100 com­pa­nies. I don’t have any­thing against pri­vate jets. I wish that some­day I could af­ford one. They are a won­der­ful way to fly if you ever get the chance.

But pri­vate jet own­ers have a sweet deal thanks to Wash­ing­ton. A new anal­y­sis by Bloomberg found that a “pri­vate jet could gen­er­ate as lit­tle as two per­cent of the taxes and fees paid by air­line pas­sen­gers on an iden­ti­cal route.” All told, pri­vate jets use about $1 bil­lion of ATC re­sources but con­trib­ute only about one-tenth that amount to cover those costs.

Pri­vate jets are ex­empt from the ticket tax and the $4.10 per pas­sen­ger tax paid by those of us who aren’t multi-mil­lion­aires and have to squeeze on to a South­west flight. But the air traffic con­trol sys­tem costs the same whether a plane has 3 cor­po­rate ex­ecs or a jumbo jet with 300 pas­sen­gers. These tax breaks mean that the poor sub­si­dize the rich to the tune of hun­dreds of mil­lions of dol­lars a year.

Fix this, and the cost of fly­ing for the rest of us goes down. A mod­ern­ized air traffic con­trol sys­tem would elim­i­nate many, if not all of, the air­line ticket taxes, and move to­ward a gen­uine user fee struc­ture for use of the air space — some­thing that will prob­a­bly never hap­pen as long as lob­by­ists are set­ting the pric­ing struc­ture.

In the days ahead Congress will vote on a pri­vate sys­tem so the ef­fi­ciency, num­ber of de­lays, and high op­er­at­ing costs go down. Many lib­eral Repub­li­cans and Democrats may vote with the cor­po­rate in­ter­ests and keep Congress in con­trol. This gives more clout to the politi­cians and re­tains the tax pref­er­ences for the mil­lion­aires. Keep that in mind the next time a lib­eral pro­fesses to care about the “lit­tle guy.”

The air traffic con­trol sys­tem is just too an­ti­quated, bu­reau­cratic and ex­pen­sive to cope with the vol­ume of flights — with some 7,000 planes in the air at any given time.

Stephen Moore is a se­nior fel­low at the Her­itage Foun­da­tion and an eco­nomic con­sul­tant with Free­dom Works. He served as a se­nior eco­nomic ad­vi­sor to the Trump cam­paign.


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