Trump lays out plan to privatize air traffic control system

[June 06, 2017]  By David Shepardson

WASHINGTON (Reuters) - President Donald Trump outlined a plan on Monday to privatize the U.S. air traffic control system to modernize it and lower flying costs, but his proposal drew immediate criticism from Democrats who said it would hand control of a key asset to special interests and big airlines.

Trump's proposal to spin off air traffic control from the Federal Aviation Administration (FAA) was part of a weeklong White House focus on infrastructure. The administration is looking to shift the spotlight back onto Trump's agenda and away from a growing probe into alleged ties between his campaign and Russia.

"We're proposing reduced wait times, increased route efficiency and far fewer delays," Trump said. "Our plan will get you where you need to go quickly, more reliably, more affordably, and yes, for the first time in a long time, on time."

Executives from United Airlines, Hawaiian Airlines [HAII.UL], American Airlines and Southwest Airlines, all represented by the Airlines for America lobbying group, attended the Trump speech. The group praised the Trump plan, which most airlines back.

The proposal, which would require congressional approval, is opposed by many Democrats and some Republicans.

The FAA spends nearly $10 billion a year on air traffic control funded largely through passenger user fees, and has spent more than $7.5 billion on next-generation air traffic control reforms in recent years.

Trump said current air traffic reform efforts have failed and were a "total waste of money."

It is unclear if privatization would speed the rollout of new systems such as satellite-based aircraft tracking that replaces ground radar dating back to World War Two.

Proponents say a private entity could sign contracts with vendors more quickly than if deals are put through the FAA's procurement process, which also is subject to budget instability.

Opponents, including Delta Air Lines, say the U.S. system is so large that privatization would not save money, and would drive up ticket costs and could create a national security risk. Opponents also say technology upgrades would be sidetracked while the private entity was set up, potentially adding years to awarding contracts.

There also are concerns that airlines would dominate the private-company board and limit access to airports by business jets.

The new systems would represent major wins for U.S. companies that have been positioning for the shift. Technology company Harris Corp is a leading candidate to supply the FAA with real-time aircraft tracking data in partnership with satellite operator Iridium Communications Inc.

Harris already provides a similar data feed using 640 ground-based antenna towers, and the FAA is its largest customer, Chief Executive Bill Brown said in an interview.

Iridium has a joint venture that has partnered with air traffic control authorities in Canada, Italy, Ireland and Denmark to provide air traffic surveillance, in cooperation with Harris.

President Donald Trump announces his air traffic control initiative at the White House in Washington, U.S. June 5, 2017. REUTERS/Joshua Roberts

Under Trump's proposal, a board made up of airline, union and airport officials would oversee the nonprofit entity that would assume oversight after a three-year transition.

House of Representatives Democratic Leader Nancy Pelosi said in a statement that Trump was recycling "a tired Republican plan that both sides of the aisle have rejected" and would "hand control of one of our nation’s most important public assets to special interests and the big airlines."

The Aircraft Owners and Pilots Association said it will not support a plan that imposes fees on small plane owners.

"The U.S. has a very safe air traffic system today and we don’t hear complaints from our nearly 350,000 members about it," said Mark Baker, the group's president.

The infrastructure push comes as the White House seeks to refocus attention on core promises to boost jobs and the economy Trump made last year during his presidential campaign.

Those pledges have been eclipsed by the furor over Russia's alleged meddling in the election. That drama will come to a head on Thursday when former Federal Bureau of Investigation Director James Comey, who was leading the Russia probe until Trump fired him last month, testifies before a Senate panel.

Trump has denied any collusion between Russia and his campaign. He has struggled to keep the spotlight on plans that could give him a political boost.

On Wednesday, Trump will travel to Cincinnati to talk about improvements to the 12,000 miles (19,300 km) of inland waterways, dams, locks and ports critical for shipping farm products.

(Reporting by Steve Holland, David Shepardson, Roberta Rampton, Alwyn Scott and Ayesha Rascoe; Editing by Chris Sanders, Bernard Orr and Jonathan Oatis)

[© 2017 Thomson Reuters. All rights reserved.]

Copyright 2017 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.