Air traffic control is Trump’s problem in a nutshell: Privatization harms the GOP base.

Air Traffic Control Is Trump’s Problem in a Nutshell: Privatization Harms the GOP Base

Air Traffic Control Is Trump’s Problem in a Nutshell: Privatization Harms the GOP Base

Moneybox
A blog about business and economics.
June 8 2017 6:35 PM

Air Traffic Control Is Trump’s Problem in a Nutshell: Privatization Harms the GOP Base

Trump-Announces-Support-For-Privatization-Of-Air-Traffic-Control-System
Who wants to control this air traffic?

Getty Images

It’s a cliché to observe that the objectives of the Republican Party do not often align with the interests of its  constituents—that an unholy alliance of megacapitalists and forgotten men is bound to have its fissures.

Henry Grabar Henry Grabar

Henry Grabar is a staff writer for Slate’s Moneybox.

And one of those fissures runs right through the administration’s infrastructure plan, which returned (again, and briefly) to the headlines with a proposal to privatize the air traffic control system.

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The Trump proposal is based on a law sponsored by Rep. Bill Shuster, a Republican from Western Pennsylvania. But it's Wall Street tycoon, lifelong Democrat, and consummate New Yorker Gary Cohn, Trump’s chief economic adviser, who is the plan’s biggest backer in the White House, and who called ATC privatization “the single most exciting thing we can do.”

Conventional wisdom was always that Republican legislators would break from Trump on his trillion-dollar infrastructure plan, and that he’d need the support of public spending-minded Democrats to get it passed. The president appears to cling to that hope even now. He spent a portion of his meandering Ohio River speech on Wednesday lambasting Democrats as “obstructionists,” in what seemed to be an angry ad lib from a message urging unity.

But it’s a second and more fundamental rift in American politics that is grounding the air traffic control project: Rural representatives don't like privatization, because rural infrastructure isn’t profitable. When it comes to rural airports, Republicans are suddenly wary of how the invisible hand might squeeze precious public assets.

In February, Republican Sens. Thad Cochran and Susan Collins announced their opposition to ATC privatization. On Wednesday, Mississippi Sen. Roger Wicker called it a “tough sell.” “Proposals to privatize air traffic control threaten the reliable transportation options provided by small airports and the general aviation community for millions of Americans,” said Kansas Sen. Jerry Moran, a Republican, in a statement. “All but our largest airports nationwide stand to be hurt by this proposal."

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It’s all proof of a dictum that South Dakota Sen. John Thune elucidated in the confirmation hearing of Transportation Secretary Elaine Chao: "The urban-rural thing is my version of bipartisanship,” he said.

What makes the current, federally run ATC system so beloved in rural America? Funding, spending, and politics.

The federal Airport and Airway Trust Fund, which provides more than 90 percent of FAA funding, draws almost 75 percent of its budget from “transportation of persons,” which includes ticket taxes, taxes on mileage awards, taxes on international arrivals and departures, and domestic flight taxes (excluding trips to or from rural airports). Translation: Commercial airlines and their passengers pay for the system’s upkeep, including the airports on the ends of its longest and least viable spokes.

Advocates for general aviation (basically, all unticketed flights) and smaller airports, whose operations are subsidized by this arrangement, worry that funding structure could change to include user fees, which would shift some of the burden onto small-plane operators.

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Flying Magazine collected some of the statements from industry advocates, who painted a vision of corporate behemoths pinching rural fliers for every last penny:

  • “We will not support policies that impose user fees on general aviation,” said Mark Baker, the president and CEO of the Aircraft Owners and Pilots Association, in a statement.
  • “It's increasingly possible that airport access to general aviation aircraft could become restricted, and that a private organization could be empowered with taxing authority,” said Paula Derks, president of the Aircraft Electronics Association.
  • “The Trump proposal indicates access for rural America will be limited to their willingness to pay whatever the airlines demand,” said Martin Hiller, the president of the National Air Transportation Association.

For a certain type of old-fashioned, metropolitan Republican, like the Washington Post's Charles Lane or National Review’s Kevin Williamson, the privatization should have some popular appeal because it sticks it to private jet users. In NRO, Williamson writes: "The main opposition comes from . . . people like Donald Trump, i.e., the private-jet set and the firms that serve them. The general-aviation crowd fears that the board of the new nonprofit corporation will be too entirely dominated by the big commercial airlines, who may be tempted to use their position to shift some costs onto the smaller and less powerful private-flight industry.” Rural advocates say that’s a gross mischaracterization of general aviation users.

The second fear is over spending: More than 3,000 of America’s airports are deemed eligible for federal funding by the FAA, which means federally supported air traffic control towers, in addition to access to other funds. Would a private board, detached from the rural bias of Congress, agree that so many airports should qualify for support? At a congressional hearing on Thursday morning, Chao hemmed and hawed in response to a question about preserving rural access from Rep. Cheri Bustos, a Democrat who represents a Trump-leaning swath of northwest Illinois.

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“We’d like to preserve it and if you have ideas we’re more than willing to entertain it,” Chao said. “Some kind of essential air service will probably have to be maintained, but I can’t make a commitment about that at this point because i don’t have permission to say that.”

“It’s another instance of President Trump treating us like flyover country,” Bustos told me later. “She was not even prepared to talk about what safeguards would be in place. She didn’t seem to be briefed to any great degree.” (It didn’t help the administration’s case that its own recent budget had proposed a series of rural infrastructure cuts, including the elimination of $175 million from the Essential Air Service, which supports commercial air service to rural airports.

Under privatization, Bustos said, "the largest airlines would have more of an incentive to prioritize large urban airports at the expense of small rural airports.”

Indeed. Over 75 percent of commercial air traffic uses just 30 airports. The NextGen modernization improvements that advocates say aren’t progressing quickly enough under FAA control would make the biggest difference at the busiest airports. Rural representatives are already concerned about service declines of 24 and 20 percent, respectively, at medium-hub and small-hub airports between 2007 and 2013, seen as the result of airline consolidation.

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They see privatization as part of a scheme to redirect America’s investment in airspace over to urban areas. Many opponents of privatization cite a 2015 speech by JetBlue CEO Robin Hayes, in which he said that the airlines would use the change “to direct infrastructure improvements into regions of the country where they’ll produce the most benefits, like the Northeast corridor.”

It makes you wonder why representatives whose constituents don’t fly crop-dusters wouldn’t be happy to see FAA revenue funneled into the airports that need it most. And that brings us back to the first rift in the Trump infrastructure plan: Democrats just won’t support him.

The critique from the left can be summed up by three points in ascending order of importance: Privatization is bad, airlines are bad, and Trump is bad. And so even if America’s biggest cities stand to gain from privatization, which would favor commercial carriers (and their passengers) over general aviation, and favor big airports over small, the proposal (which was once pushed by Al Gore, of all people) will have a hard time winning over those politicians whose districts might benefit most.

That’s not to say that privatization is in fact a good thing for big airports, and you could certainly make the case that airlines are no better stewards of implanting new technology than the federal government. (They’re not great with computers, and have dragged their feet on NextGen just as the FAA has.)

But if privatization of air traffic control—one of the largest giveaways of a public asset in American history—was going to have any chance, it needed support from metropolitan politicians. And Trump lost them long ago.