I was struck in preparing for today’s hearing by how long we have been considering serious reform of the Airport and Airway Trust Fund, and with it, addressing associated FAA and air traffic management issues. ATA has been on the issue since 1984. We had the Baliles Commission in the early 90’s, the Reinventing Government/U.S. Air Traffic Service proposal in the mid 90’s, Secretary Mineta’s National Civil Aviation Review NCARC Commission in 1997 – and on, and on.
The same message came through in each – we need to run air traffic service more like a business, with a clear understanding of costs; we need to provide predictable funding consistent with service demands; we need to provide the management tools and the clear authority to get the job done; we need accountability for performance.
Lots of discussion, lots of agreement – and yet little change.
That is not to say we have not made some progress. AIR 21 led to the Air Traffic Organization. Russ Chew and his ATO team have been making some real progress, but they are up against some great obstacles because, so far, we have only addressed a few of the issues we know are present.
I am a firm believer in the “critical mass” theory of government. That is a polite way of saying that things have to get really fouled up before we get serious about fixing them. When it comes to Trust Fund reauthorization and the associated issues, I think “critical mass” is at hand.
For reasons I won’t belabor, the commercial passenger industry is on its back, with even the successful carriers suffering; Trust Fund revenues per aircraft are down, reflecting what the public is willing to pay to fly; air traffic operations are climbing (and with them delays) reflecting not simply the commercial industry’s use of regional jets but also the substantial influx of business aviation; the Air Traffic Organization is confronted by the need for the multi-billion dollar wholesale replacement of its aging, and often outmoded, infrastructure; airport funding is totally out of synch with system demand; and now we are looking out to 2017 and asking in this Congress, how best to redesign the funding and operation of this critical infrastructure, getting it right is essential to aviation, a cornerstone of the nation’s economy. I’d call that “critical mass.”
What do we want? We want what has been talked about for decades:
- We want the Air Traffic Organization to run like a business; to understand its costs and the imperative to “spend smart” to improve efficiency.
- We want the necessary infrastructure reform to allow consolidation that will drive this efficiency, while continuing to improve to safety performance.
- We want an air traffic control system capable of adapting to the same market forces that impact its customers.
How do we get where we need to go? We believe that five key principles must guide decisions.
- First, we must assure a dynamic funding stream reflecting system use through an equitable, transparent, proportional, cost based mechanism where users pay for the service they consume. Commercial aviation can no longer be expected to fund over 90 percent of system cost while it is only a roughly 60 percent system user.
- Second, we must empower the Air Traffic Organization to make decisions, regarding system consolidation, cost controls and productivity gains, and make them stick, with the coequal understanding that business decision makers must be held accountable.
- Third, we need to eliminate funding and earmarks for FAA legacy programs which do not have an identifiable funding stream from user’s benefiting from those programs.
- Fourth, we need to distinguish between FAA and ATO programs, (including airport infrastructure funding) which are provided for public policy purposes. These should be funded through General Fund dollars. In contrast, real and services which are consumed by system users in the aviation business should be supported by customers.
- Fifth, we need to think creatively about the best type of management structure for the ATO, in order to enhance its management opportunities and consider, with appropriate safeguards, alternative funding mechanisms including bonding for long term investments.
Our bottom line is this – we can no longer expect to take billions of dollars out of the commercial airline industry to subsidize other system users or to support tangentially related public policies. At the same time, we need to empower the ATO to meet customer demand and give it the tools – and responsibility – to get the job done. We have the “critical mass” to get there. Now, we need to get the job done.
(Oral Statement)
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