Donald Trump could privatise ‘obsolete’ air traffic control in bid to improve transport infrastructure

President promises to roll back government regulations and reduce business tax

Joan Lowy,David Koenig
Friday 10 February 2017 11:48 GMT
President Donald Trump speaks during a meeting with airline executives in the State Dining Room of the White House
President Donald Trump speaks during a meeting with airline executives in the State Dining Room of the White House (Evan Vucci/AP)

President Donald Trump has told airline and airport executives that he is interested in privatising America's air traffic control system and improving the nation's airports and roads, which he called obsolete.

Trump also promised to roll back government regulations and said he will announce a plan in the next three weeks to reduce taxes on businesses. But he sounded sceptical about raising fees that airline passengers pay to fund airport improvements.

One issue was notably absent during the White House meeting - Trump's executive order to temporarily ban travel to the US from seven mostly-Muslim countries. Airline leaders had criticised the order, which a federal appeals court refused to reinstate after it was suspended by a lower-court ruling.

Airline and airport executives who emerged from the White House meeting called it a positive session.

Southwest Airlines CEO Gary Kelly told Trump the best way to help airlines would be to “modernise the air traffic control system.” He complained that money spent on the system has not improved it.

“I hear we're spending billions and billions of dollars, it's a system that's totally out of whack,” Trump said.

Some airline executives and Republicans in Congress have proposed privatising air traffic control because they say the Federal Aviation Administration has moved too slowly on modernisation and would benefit by being removed from the uncertain congressional budget process. Other lawmakers oppose reducing Congress' oversight of aviation, and business and private aircraft owners worry their costs will go up.

Nick Calio, president of Airlines for America, the trade group that represents most major airlines but not Delta, said Trump was “extraordinarily positive” when airline executives urged him to spin off air traffic control operations from the Federal Aviation Administration and place them under the control of a private, nonprofit corporation.

While Trump supported modernising the air traffic system, he did not explicitly endorse privatisation, said another participant, Kevin Burke, president of Airports Council International-North America.

Unlike the US, most countries separate air traffic control duties from their aviation-safety agencies. But it is unusual to actually privatise air traffic operations. Canada is an exception.

Republican congressman Bill Shuster, chairman of the House transportation committee, introduced legislation to privatise the system last year. The bill stalled, however, after running into opposition from other top lawmakers and business-jet owners, who fear that the private corporation's board would be dominated by airlines, and that they would lose access to larger airports and pay a larger share of the system's costs.

The privatisation effort has the backing of the National Air Traffic Controllers Association, although other FAA unions are opposed.

The FAA said it has spent $7.5 billion on modernising air traffic control in the last seven years, resulting in $2.7 billion in benefits to passengers and airlines. It predicts it will produce much larger benefits over the next 13 years.

Trump, who once ran his own airline, pledged to help the airlines deliver “the greatest service” with minimum delays and at the lowest cost. He compared infrastructure in the United States unfavourably with other countries.

“Our airports used to be the best, now they're at the bottom of the rung,” he said. “We have an obsolete plane system, we have obsolete airports, we have obsolete trains, we have bad roads. We're going to change all of that.”

Airport officials told Trump they'd like to increase the fee airline passengers pay airports as part of their tickets so that the money could help with modernisation. Airlines oppose an increase, and Trump said he doesn't like raising fees, participants said.

Airlines were partly deregulated in 1978 but must still work closely with government. They complain about recent regulations including fees that raise ticket prices, and rules on how they can advertise fares and what information they must disclose to the public.

American, Delta and United and their unions are appealing to Washington for help in blocking competition from Middle Eastern carriers that they say are unfairly subsidised by their governments, letting them offer artificially low fares. That issue came up only briefly on Thursday, with Trump saying he wants “to make life good” for foreign airlines too.

“They come with big investments,” Trump said. “In many cases those investments are made by their governments, but they are still big investments.”

Earlier this week White House press secretary Sean Spicer praised the economic impact of Norwegian Air, which is basing pilots in the US and ordering US-made planes from Boeing. The US airlines and their unions say Norwegian and the Middle Eastern carriers threaten American jobs.

Trump's travel ban never came up, Spicer said. Protests against last month's order clogged airports, and airlines struggled to comply with the requirement to ban some of their passengers from traveling.

American Airlines CEO Doug Parker said in a letter to employees that the Trump order “does not affect the values that this company is built upon - those of diversity, inclusiveness and tolerance.” Parker missed the meeting with Trump - he stayed home in Dallas for a previously scheduled meeting with 1,600 employees. United Airlines CEO Oscar Munoz, who was at the session with Trump, has also criticised the order.

Robert Mann, an airline consultant and former American executive, said airline leaders were wise not to bring up the subject on Thursday.

“They are in a business which requires a lot of 'go along to get along' with government agencies,” Mann said. “They want to try to make nice.”


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