Thanks to the recession, air travel delays are down from the highs of recent years. But even if flights this holiday season aren’t nightmarish, experts project far worse delays in coming years, unless fundamental changes are made.
Delays would not have become a problem if air travel had remained the province of the relatively well-off – as it was in the 1950s, ’60s, and ’70s. In those days, a federal agency called the Civil Aeronautics Board (CAB) tightly controlled which airlines could fly which routes, and strictly limited competition to keep fares high and profits virtually guaranteed. But in 1978, thanks in part to the late Sen. Ted Kennedy, Congress deregulated air travel, permitting real competition on routes and fares.
The result has been rightly called the “democratization of air travel,” as competition created openings for low-fare airlines such as Southwest, JetBlue, AirTran, and others. Air travel became affordable to just about everyone, and studies show that consumers benefit to the tune of tens of billions of dollars per year.
When airline deregulation was enacted, there was lots of “slack” in the infrastructure; airports and the air traffic control system had lots of excess capacity. But the intellectual father of airline deregulation, economist and CAB chairman Alfred Kahn, warned at the time that airline competition would so stimulate the market that airports and air traffic control would get overwhelmed – unless Congress took action to enable them to become more nimble and better able to grow.
Unfortunately, Congress ignored Mr. Kahn’s warning. Air traffic grew and grew, but the air traffic control (ATC) system plodded along as a stodgy, bureaucratic government operation. It gradually introduced better displays and more modern computers, but most of these projects were delivered years late and way over budget. Airports were generally better managed, but remained passive when airlines scheduled far more flights at busy times of day than their runways could handle, leading to ever-longer delays in major cities.
As recently as the early 1990s, more than 81 percent of flights arrived on time, according to US Department of Transportation figures. By 2007, that number had plunged to 73 percent. Thus, prior to the current recession, about 1 out of every 4 flights arrived more than 15 minutes late.
During the 1990s, other countries began reforming the way their ATC systems were governed and funded. The common diagnosis was that ATC is essentially a high-tech service business that doesn’t really fit the model of a government department that depends on annual tax funding and micromanagement.
Instead, they decided that ATC should be operated like a business, charging its aviation customers directly for its services and able to go to the bond market to raise capital for large-scale modernization investments. Australia, New Zealand, Canada, Germany, and Britain all adopted this model, setting up ATC as a self-supporting entity run by a board of directors and regulated for safety by the national air-safety regulator.
As head of the Clinton administration’s “reinventing government” project, Vice President Al Gore proposed doing likewise, and a plan for a US Air Traffic Services corporation (USATS) was introduced as legislation. But Congress gave it the cold shoulder, unwilling to give up direct control. In 1997, the congressionally appointed Mineta Commission made a similar recommendation, but it produced only an internal reorganization of ATC, leaving it still firmly embedded within the Federal Aviation Administration.
This decade, an interagency effort has produced the NextGen plan for a complete replacement of current ATC technology. NextGen would at least double the capacity of the ATC system over the next 10 to 15 years. But it’s unclear where the needed $20 billion in FAA investment (or the $15 billion to $20 billion in airline investment) will come from, or how the changeover to NextGen can be coordinated effectively.
This is a task far better suited to an ATC corporation (such as USATS was intended to be) that can go to the capital markets for major funding, with decisions on implementation made by a board of directors representing all users of the airspace. Without those changes in funding and governance, implementing the capacity doubling on schedule is highly unlikely.
Even if the ATC revamp is delayed, congestion at major airports could still be addressed in the near term. As Kahn has long recommended, the way to do that is to charge market prices to use runways at congested airports.
Runway “congestion pricing” does two things simultaneously. First, it provides very tangible dollars-and-cents incentives for airlines to shift less-critical flights away from peak periods (and in some cases, to alternate airports). That directly reduces peak-period congestion.
But congestion pricing also produces new airport revenue that can be used over time to increase airport capacity. In some cases, that means installing NextGen-type landing aids that permit, say, 10 percent more planes per hour to safely land and take off. Longer term, at some airports it would help pay for needed runway additions.
Unless Congress gets behind these policy reforms for ATC and airports, don’t look for much relief from air travel congestion. Under status-quo policies, the only thing that reliably reduces congestion is recessions. We can, and should, do better than that.