Privatization Examining the Potential Solutions to FAA Reform

Summer 2015 | VOLUME 57, NO. 2

Plus • A Cost-Effective Approach to ATM Modernization

• The Career of Nevil Shute Norway

• Remote Tower Systems – A Domestic and International Conversation JMA Solutions is a pioneering government contractor • Air Traffic Management whose primary focus is Program Management, • Engineering Services Engineering Services, Financial and Air Traffic • Financial Management Management. JMA is committed to meeting customer • Curriculum Development and Design requirements and exceeding expectations by providing • Conference Planning knowledgeable, seasoned professionals who offer exceptional service and support to our government • Safety Management & Information Assurance clients. Our commitment to excellence and unparalleled • Strategic Management & Planning customer service has earned us a proven track record of • Web Development & Graphic Design successfully delivering outstanding results.

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600 Maryland Ave. SW, Suite 400 E, Washington, D.C. 20024 • Phone: 202-465-8205 • www.jma-solutions.com ATCA members and subscribers have access to the online edition of The Journal of Air Traffic Control. Visit lesterfiles.com/ pubs/ATCA. Password: ATCAPubs (case Contents sensitive). Summer 2015 | Vol. 57, No. 2 Articles Published for: 09 Managed Services Air Traffic Control Association

1101 King Street, Suite 300 A Cost-Effective Approach to ATM Modernization Alexandria, VA 22314 By Chris Giacoponello and Jerry Johnson Phone: 703-299-2430 Fax: 703-299-2437 13 Aerospace Engineer Turns Free Time into Literary Fame [email protected]

www.atca.org The Career of Nevil Shute Norway By David Hughes Published by: 16 Remote Tower Systems – A Domestic and International Conversation Leesburg Executive Airport Signs Testing Agreement By Dale Wright

140 Broadway, 46th Floor Special Section: Privatization New York, NY 10005 Toll-free phone: 866-953-2189 18 Privatization – A Case for the “Half a Loaf” Proposal Toll-free fax: 877-565-8557 By Frank L. Frisbie www.lesterpublications.com President, Jeff Lester 20 We Must Have Stable, Predictable Funding for the National Airspace System Vice-President & Publisher, Sean Davis Safety and Efficiency Must Remain the Main Mission EDITORIAL By Paul Rinaldi Editorial Director, Jill Harris Editorial Assistant, Andrew Harris 26 Corporatizing the U.S. ATC System How It Could Benefit American Aviation DESIGN & LAYOUT By Robert W. Poole, Jr. Art Director, Myles O’Reilly Senior Graphic Designer, John Lyttle Graphic Designer, Crystal Carrette 31 Modernization of U.S. Air Traffic Control Means Modernizing the Whole Graphic Designer, Jessica Landry Aviation System Graphic Designer, Gayl Punzalan It’s Time for Bold Solutions and Creative Approaches By Kevin M. Burke ADVERTISING Quinn Bogusky | 888-953-2198 Louise Peterson | 866-953-2183 33 The NAV CANADA Model Ken Hodgert | 866-954-8164 An ANS Model That Has Withstood the Test of Time By John Crichton DISTRIBUTION Jennifer Holmes | 866-953-2189 36 The NAV CANADA Track Record © 2015 Air Traffic Control Association, Inc. It Begins With Safety All rights reserved. The contents of this By John Morris publication may not be reproduced by any means, in whole or in part, without the prior written consent of ATCA. 40 One Wish for Aviation’s Future ATC Reform Disclaimer: The opinions expressed by the authors of the editorial articles contained By Charles M. Barclay in this publication are those of the respective authors and do not necessarily 42 Air Traffic Control Restructuring represent the opinion of ATCA. The What and Why of it All Printed in Canada. Please recycle By David Grizzle where facilities exist.

Cover image: Chris Parypa Photography/Shutterstock.com Departments

3 From the President 7 Member Benefits & Application 5 From the Editor’s Desk 47 Directory of Member Organizations

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By Peter F. Dumont, President & CEO, ATCA FAA Reform This Time, It’s Up to Us

’m not saying I’m old, but this debate except that the status quo is not acceptable members and the wider aviation industry. If about the best organizational structure and we need to think clearly and carefully you read through this issue and do not hear for the FAA is not new to me; in fact, about the issue. Just because we have been your voice or opinion, or a possible solution, I have participated in this discussion talking about FAA restructuring for years please let us know. Your article could be in for years. We all have. Most of us first does not mean we are ready for reform. the next publication or on our website. We I“met” Bob Poole (who weighs in on page We first need to identify what problems encourage debate, but we also realize that 26) when he was young and touting the we are trying to solve and then identify the our industry is being asked to move beyond benefits of FAA corporatization during the structural changes to solve those problems. debate and come together on an agreed upon Clinton Administration. Dorothy Robyn, If an organizational change is agreed on, “transformational change” to move FAA who recently testified before Congress on a thoroughly developed transition plan is reform beyond the discussion stage. the benefits of splitting the FAA’s regulatory crucial to the success of any solution. As specific proposals on FAA reform mission from its operating mission, originally Obviously, FAA reform will only hap- surface this summer, we are all likely to be argued her point 20 years ago from the White pen with a legislative change. In the past, quick to identify problems. I want to encour- House. The FAA’s effort to establish a cost while the industry is interested in change, it age us all to be both problem identifiers and accounting system was required under law is usually the Executive Branch that begins problem solvers. We will continue in those before we saw Administrator Jane Garvey the debate in earnest. In our current envi- roles as we shape the agenda for our annual board a plane to “ride out” the potential ronment, “aspirations, challenges, and some conference in November. I encourage you to Y2K disaster. In 2000, it was legislation that guiding principles” have been shared. We read this issue carefully, search out the addi- turned the FAA into a performance-based have been told that transformational change tional suggested reading referenced in this organization and created the Air Traffic is needed and coming and our industry is issue, and think about what is best for our Organization (ATO) and chief operating being encouraged to come together on a future air traffic system. It is our system, and officer (COO) position we have today. So, we proposed reform approach. We all know the it’s clear that our leaders are looking to the have been kicking around this idea of a better choices to reform come with a bag of poten- stakeholders to come to a consensus on our Chalabala/Shutterstock.comJaromir FAA organizational structure for a few years. tial long-term benefits and some possible future. Our air traffic control discussions should short-term costs. Former American airline be enhanced with data, ideas, and debate, and CEO Bob Crandall recently said at a U.S. I believe that ATCA is in a perfect position Chamber of Commerce event, “If some- to facilitate these discussions. This issue body’s ox is going to get gored, lets gore it of The Journal includes many ideas on the and get on with it.” Peter F. Dumont, President & CEO FAA’s current state and a potentially better One of ATCA’s many roles is to Air Traffic Control Association structure. ATCA is not taking a position encourage debate and discussion among our

The Journal of Air Traffic Control 3 SAME SYSTEM NEW LIFE Cost-Effective Solution to Enhance ATC System Longevity

Our Common Terminal Digitizer (CTD) offers a cost-effective COTS solution that extends the service life of existing primary and secondary ATC radar systems. Recently selected by the FAA, this ﬁeld proven solution digitizes analog data, improves target reporting, data ﬁdelity and provides 6-level weather processing. For more information, please contact a CTD Specialist at 631-549-6088 or email [email protected].

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39512 from the editor’s desk NEW LIFE SAME SYSTEM By Steve Carver Summer 2015 | Vol. 57, No.2 Editor-in-Chief, Cost-Effective Solution to Enhance ATC System Longevity The Journal of Air Traffic Control Air Traffic Control Association 1101 King Street, Suite 300 Alexandria, VA 22314 Phone: 703-299-2430 Fax: 703-299-2437 [email protected] www.atca.org Is the Grass

Formed in 1956 as a non-profit, professional membership association, ATCA represents the interests of all professionals in the air traffic Really Greener? control industry. Dedicated to the advancement of professionalism and technology of air traffic control, ATCA has grown to represent several he grass is always greener. How thousand individuals and organizations managing and providing ATC services and equipment many times have you heard that around the world. proverb? Is it possible this idea Editor-in-Chief: Steve Carver applies to the idea of privatization of the Federal Aviation Administration Publisher: Lester Publications, LLC (FAA)T – or any Air Navigation Service Provider (ANSP) for that matter? We all know how long it takes to move from the requirements phase to implemen- Officers and Board of Directors tation of National Airspace Systems (NAS). Chairman, Neil Planzer

Chairman-Elect, Charles Keegan Cost overruns, software updates, and budget gyn9037/Shutterstock.com President & CEO, Peter F. Dumont slowdown can sometimes stop the progression Treasurer, Rachel Jackson of new NAS concepts, systems, and software. East Area Director, Susan Chodakewitz The NAS is full of intelligent and So consider the differences between Pacific Area, Asia, Australia Director, Peter Fiegehen dedicated employees restricted by a safety- these systems and their users – and how South Central Area Director, William Cotton concentrated culture. This restriction will implications would uniquely affect systems Northeast Area Director, Mike Ball in different countries and regions of the Southeast Area Director, Jack McAuley not disappear with privatization. So, is the North Central Area Director, Bill Ellis grass really greener? Perhaps – but there world. Privatization is not a topic that will West Area Director and Secretary, Chip Meserole are many factors to consider. I get closer to lose steam anytime soon, so it is worthy of Canada, Caribbean, Central and South America, looking over that fence every day. thoughtful consideration. Mexico Area Director, Rudy Kellar In this issue, we feature theories, case Europe, Africa, Middle East Area Director, Jonathan Astill

Director at Large, Rick Day studies, and success stories on privatization Director at Large, Vinny Cappezzuto of and from ANSPs. As you read through Our Common Terminal Digitizer (CTD) offers a cost-effective COTS solution that Director at Large, Michael Headley these articles, I urge you to keep in mind that all things are not created equal, and that Steve Carver, Editor-in-Chief extends the service life of existing primary and secondary ATC radar systems. includes ANSPs. Staff Recently selected by the FAA, this ﬁeld proven solution digitizes analog data, Marion Brophy, Director, Communications Ken Carlisle, Director, Meetings and Expositions improves target reporting, data ﬁdelity and provides 6-level weather processing. Ashley Haskins, Office Manager Kristen Knott, Writer and Editor The Journal of Air Traffic Control (ISSN 0021-8650) is published quarterly by the Air Traffic Control Association, Inc. For more information, please contact a CTD Specialist at 631-549-6088 or Christine Oster, Chief Financial Officer Periodical postage paid at Alexandria, VA and additional entries. Paul Planzer, Manager, ATC Programs EDITORIAL, SUBSCRIPTION & ADVERTISING OFFICES at ATCA Headquarters: 1101 King Street, Suite 300, Alexandria, Virginia 22314. Telephone: (703) 299-2430, Fax: (703) 299-2437, Email: [email protected], Website: email [email protected]. Claire Rusk, Vice President of Operations www.atca.org. POSTMASTER: Send address changes to The Journal of Air Traffic Control, 1101 King Street, Suite 300, Rugger Smith, International Accounts Alexandria, Virginia 22314. Sandra Strickland, Events and Exhibits Coordinator Ashley Swearingen, Press and Marketing Manager © Air Traffic Control Association, Inc., 2015 Tim Wagner, Membership Manager Membership in the Air Traffic Control Association including subscriptions to the Journal and ATCA Bulletin: Professional, $130 a year; Professional Military Senior Enlisted (E6–E9) Officer, $130 a year; Professional Military Junior Enlisted (E1–E5), $26 a year; Retired fee $60 a year applies to those who are ATCA Members at the time of retirement; Corporate Member, $500–5,000 a year, depending on category. Journal subscription rates to non-members: U.S., its territories, and possessions—$78 a year; other countries, including Canada and Mexico—$88 a year (via air mail). Back issue single copy $10, other countries, including Canada and Mexico, $15 (via air mail).

Contributors express their personal points of view and opinions that are not necessarily those of their employers or the Air Traffic Control Association. Therefore The Journal of Air Traffic Control does not assume responsibility for statements made and opinions expressed. It does accept responsibility for giving contributors an opportunity to express such views and opinions. Articles may be edited as necessary without changing their meaning. www.telephonics.com The Journal of Air Traffic Control 5 39512 RVA_WO1_2014 half page ad_v3 [OUTLINES].pdf 1 7/9/14 11:37 AM

CMY

K Letter from the editor

The Names & Faces of Air Traffic Gather at The Names & Faces of Air Traffic Gather at The Names & Faces of Air Traffic

ATCA Members are part of the global air traffic dialogue. Your access to ATCA committees, publications, and meetings will increase your awareness of the current aviation landscape and current workATCA towards Members improving are ATC part safety, of the global air#6%# traffic dialogue. Air Trac Control Association Your efficiency,access to and ATCAATCA capacity. committees, Members are publications, part of the andglobal meetings air traffic will dialogue.increase your awareness ofYour the accesscurrent to aviation ATCA committees, landscape and publications, current work and towards meetings improving will increase ATC safety,your awareness efficiency, of the current aviation landscape and currentand capacity. work towards improving ATC safety, efficiency, What you get andas ancapacity. ATCA Member? What you get as an ATCA Member • ConneCtions. • partnerships. Connections. Meet with Meet other with otherindustry industry professionals at networking ATCA events collaborates throughout with the year. professionalsWhat at networking you events get as an theATCA U.S. Department Member of Defense, Federal Expert Opinions. Members have exclusive access to ATCA Publications including: Connections.throughout Meet the with year. other industry professionalsAviation at networking Administration, events ICAO, throughout CANSO, the year. Valuable Content. Daily Headline News, the ATCA Bulletin, & The Journal of Air Traffic Control Expert Opinions. Members have exclusive accessacademic to ATCAinstitutions, Publications and many including: other Partnerships.• expert opin ATCAions. Memberscollaborates have with the U.S. Department of Defense, Federal Aviation Valuable Content. Daily Headline News, the ATCA Bulletin,global organizations. & The Journal of Air Traffic Control Administration,Partnerships.exclusive access ICAO, ATCA to ATCACANSO,collaborates Publications. academic with theinstitutions, U.S. Department and many of otherDefense, global Federal organizations. Aviation • reduCed rates. Members get Administration,Reduced• Valuab Rates.le C ICAO,ontent. Members CANSO, Daily Headlineget academic significant institutions, discounts and to manyall ATCA other events global and organizations. conferences. significant discounts to all ATCA events ReducedNews, theRates. ATCA Members Bulletin, & getThe significantJournal discounts to all ATCA events and conferences. and conferences. of Air Traffic Control. www.atca.org/JoinNow www.atca.org/JoinNowwww.atca.org/JoinNow

Managed Services

Managed Services A Cost-Effective Approach to ATM Modernization By Chris Giacoponello and Jerry Johnson, Thales

lobally, air traffic management (ATM) systems are Today’s Air Navigation Service Providers (ANSPs) are moving undergoing a transformation. Initiatives such as the away from large, multi-year capital expenditure campaigns. Due to Next Generation Air Transportation System (NextGen) shrinking or constrained budgets, ANSPs are looking for innovative and Single European Sky ATM Research (SESAR) are ways to make investments go further, and to apply those investments focused on enabling new capabilities, improving efficiencies, and and resources to areas that are most critical to their primary mission. modernizingG aging infrastructure. With several programs in process, One option is a managed service approach. Managed services can and more anticipated in the coming years, these initiatives create an play a significant role in reducing total cost of ownership, extending ideal opportunity to consider the advantages that can be delivered capabilities and providing service life beyond those supported by using a managed services approach rather than traditional procure- traditional original equipment manufacturer (OEM) procurement ment models. models. Due to the mission critical nature of ATM, modernization programs have historically taken many years to complete. Additionally, The Managed Services Approach because of the time and expense associated with avionics equipage, Managed services are a fundamental change in purchasing philos- new capabilities must be deployed while maintaining existing sys- ophy – instead of the traditional “procure, deploy, maintain, repeat tems, often for decades. This further adds to the procurement cost when obsolete” approach, purchasers of managed services do not challenges, as new systems and legacy systems operate in parallel, procure, deploy, or maintain technology – they purchase the services michaeljung/Shutterstock.com putting a strain on financial and human resources. that are enabled by the technology. Continued on page 11 The Journal of Air Traffic Control 9 Experience where it matters Strategy.Execution.Integration.

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About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a detailed description of DTTL and its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

Copyright © 2015 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsu Limited saturation in developed markets in 2008. The laptop market took 10 years to mature and hit saturation by 2012. Smartphones and tablets are expected to mature in 2015 – for a life cycle of just seven years and five years, respectively.2 While the ATM industry moves more slowly than the consumer high-tech industry, new ATM OEM system procurements will still use commercial off-the-shelf (COTS) IT equipment – and the implications of these trends for technology in general, and IT systems built using today’s COTS components are clear: a rapidly accelerating product cycle. Further, this presents an interesting challenge for ANSPs whose deployment cycles are deliberate and operational life expectancies are long. While the marginal cost of the new equipment and technology may be lower than the previous generation, the life cycle maintenance costs are likely to be higher. Today’s IT systems are more integrated (fewer discrete components), and more highly specialized (embedded software and ASICs) than a generation ago. The result is fewer options for sourcing spare components and the need for more highly skilled technicians to make repairs. For the traditional OEM procurement model, the long-term cost implications are problematic: a requirement for an extensive depot of spare parts, and an expensive, highly skilled maintenance staff. Combine this with shorter product/com- In recent years, there has been a significant trend toward the ponent life-cycles, and within five to 10 years of commissioning it procurement of managed services in the field of information tech- quickly becomes challenging and expensive to support the system. nology (IT). As service capabilities evolve and system complexities With a managed service procurement model, the technology increase (particularly those which demand 99.99 percent availabil- supplier typically assumes responsibility for long-term support and ity), many service providers have turned toward managed service maintenance. Further, with a contract structure that focuses on contracts. The benefits of this approach are clear – businesses oper- output-based requirements (e.g., system availability) and service- ating with a managed services model are able to focus on their pri- level agreements (SLAs), the configuration of the system itself may mary business objectives, while their solution partners (the managed be treated as black-box. This relieves the client (SP) of any obligation service providers) address the proactive prevention of issues, and the to manage operational details such as configuration management and continuous upgrade and modernization of systems and capabilities. support, freeing resources to be applied to areas that are most critical For example, managed service contracts for critical infrastruc- to their stakeholders. Bottom-line: if the system is performing per ture typically include 24/7 monitoring, ongoing maintenance and the agreed upon SLA, everything is copasetic. support, and Service Level Agreements (SLAs), which contractually Another significant benefit of the managed services model is bind the managed service provider to ensure an agreed upon avail- the ability to structure a continuous, self-sustaining cycle of mod- ability or quality of service. Figure 1 (next page) illustrates several of ernization. With a clear, contractual obligation to maintain system the benefits of the managed services contracts model. availability, it is often in the solution provider’s best interest to Most importantly, however, managed services offer a means to upgrade the system in advance of problems, in order to minimize reduce total cost of ownership (TCO) over an extended period of maintenance costs. This eliminates the costly cycle of recapitaliza- time. By allowing the client or service provider (SP) to focus on the tion and procurement for the SP, because the solution provider has business or service offering, rather than maintaining the tools that the incentive to modernize the system as part of the service contract. enable the service, costs can be reduced, customer experience can be improved, and competitiveness increased. ATM’s Transition to Managed Services The longer the expected service life, the more important it is As the urgency for modernization is squeezed by the fiscal pressure to focus on reducing the TCO. Analysis and field experience have to deliver within a constrained operating budget, the ATM industry repeatedly shown that the cost of maintaining systems over time can is turning toward managed services. The programs differ by region greatly exceed the capital investment in those systems.1 In fact, the and customer, the type of service being provided and the SLAs inexorable progress of technology development is likely to exacerbate that govern performance; however, they all share a common set of this challenge. objectives – delivering the required service, reducing the total cost of ownership and assuring system non-obsolescence. Accelerating Product Life Cycles In the U.S., three prominent examples of managed service con- As consumers, we are all familiar with the benefits of technological tracts exist with the Federal Aviation Administration (FAA): the Flight advancements and improvements. Today’s products are not only bet- Service Station service contract awarded in 2005, the Surveillance and ter than last year’s models, they are often cheaper. According to Citi Broadcast Services Contract in 2007, and the Data Communications Images courtesy of Thales Research, the desktop PC market took 12 years to mature and hit Network Service (DCNS) Contract awarded in 2012.

The Journal of Air Traffic Control 11 efficiently and safely by reducing errors associated with voice communications. The DCNS contract specifies service volumes with certain attributes such as geography, latency, and throughput – all defined in SLAs. The SP is tasked with defining how it works (the specific implementation), as well as monitoring and reporting performance relative to the SLAs. Again, there are incentives for meeting performance objectives and penalties associated with failure to meet the SLAs.

Signals in Space Several ATM navigation and surveillance programs have moved toward managed service contract models. The SLAs are typically measured by the quality and availability of one or more “Signal-In- Space” metrics – that is, the air navigation beacon or surveillance data which is provided by the system to aircraft or ATM systems and controllers. In the United Kingdom, the Ministry of Defence (MoD) has been a major proponent and champion of the benefits of managed service contracts. For more than a decade, the UK MoD has con- tracted the modernization and operation of much of its ground-based terminal area and en-route navigation systems as a managed service. This includes tactical air navigation (TACAN), ILS systems and Precision Approach Radars for Royal Air Force (RAF) fields in the UK and overseas.

Project Marshall More recently, in October 2014, a major contract award was finalized Flight Service Stations for the safe, flexible modernization and operational management of Prior to the award of this contract, the FAA maintained a system of 63 RAF airspaces: Project Marshall. The scope of Project Marshall flight service stations consisting of 56 sites. The infrastructure was – a 22-year program – includes 15 technical services and systems, obsolete and in desperate need of modernization. Under this service- including primary and secondary radars, navigation aids, approach based contract, the FAA achieved facility consolidation down to systems, data communications, and simulators, among others. While five sites, infrastructure modernization, and highly effective service Project Marshall will deliver modern ATM services to the RAF, the provision. The current system operates with an overall cost savings real beneficiaries are the UK taxpayers – by MoD’s calculations, this of more than several hundred million dollars per year. managed services contract, valued at more than £1.5 billion ($2.4B USD), will save the UK government more than £1 billion ($1.6B Surveillance and Broadcast Services USD) over its duration. A major underpinning of the FAA’s NextGen program is the satellite- based Surveillance Broadcast (SBS) Network. A ground-based radio Conclusion network with more than 600 stations, SBS supports bi-directional In an era of constrained budgets and technology transformation, Flight and Traffic Information Service Broadcast messages between managed service contracts are a proven approach to solve the chal- equipped aircraft and ATM controllers. Developed and operated as lenges associated with maintaining and modernizing the global a managed service, the SBS contract is an excellent example of the ATM infrastructure. By reducing total cost of ownership, managed benefits of this approach. The contract includes SLA performance service contracts allow ANSPs and Defense communities to refocus metrics such as service availability, message update rate, and latency. limited resources on mission critical functions and services, leaving The contract also includes monetary incentives for performance the maintenance, operations, and modernization of infrastructure exceeding SLA levels, and penalties for missing minimum standards. to service providers. Through the establishment of successful, long- The service-based approach adopted by the FAA for SBS pro- term managed service partnerships, ANSPs and private industry vided the ground work for a program deployed on schedule and bud- have demonstrated the capability to deliver cost effective, efficient, get and one that is delivering outstanding performance. Additionally, and highly reliable ATM solutions to their governments and public the approach has abstracted the FAA from maintaining maintenance constituents. and logistics infrastructure for the system and from worries about system obsolescence. Chris Giacoponello is responsible for business development at Thales, and Jerry Johnson is technical director at Thales. Data Communications Network Services Another example from an FAA NextGen program is the DCNS References portion of the Data Communications Integrated Service (DCIS) [1.] Sept. 11, 2013, Still Hot — or Not? Technology Firms Face Faster Product Contract. DCIS will enable the National Airspace System (NAS) Cycles; Knowledge@Wharton, www.upenn.edu to handle more traffic, reduce flight delays, and route aircraft more [2.] 2014, Thales Group, plc. Proprietary Research

12 Summer 2015 Nevil Shute Norway

Aerospace Engineer Turns Free Time into Literary Fame

The Career of Nevil Shute Norway By David Hughes

A painting owned by Dan Telfair of Nevil Shute Norway

n flight, Nevil Norway climbed out recently graduated after the Great War, the same time; one helps you to rest from of the giant experimental airship he wasn’t just doing stress analysis on the air- the other and the fact that in the evenings helped design. Emerging near the bow ship. In the evenings, Nevil Shute Norway my mind was fully occupied upon the novel he knew the wind would be at his back was also writing fiction for his own amuse- gave me a clearer view of the airship prob- as he negotiated the catwalk. ment. lems next morning, I think, than some of IUp on top, riggers looking for tears in For nearly two decades, the author my colleagues could achieve,” Shute wrote in the R-100’s fabric nonchalantly walked with known as Nevil Shute pursued a demanding Slide Rule, a 1954 autobiography that covers hands in pockets, while Norway crawled on career in aerospace while writing a series his days in the aviation industry. hands and knees clinging to guide ropes. He of novels. These and his later novels, many In the 1920s, Norway rose to become would talk to them while sitting by the fins with aviation themes and some made into the deputy chief engineer on the R-100 and later recalled the sunlit rides as pleasant. movies, remain popular today. airship working under Barnes Wallis, who

Norway, a British aerospace engineer “I have always liked to do two jobs at became a legend in British aerospace and Photo by Bill Donald of painting owned by Evgenii/Shutterstock.com Vasilev ; Dan Telfair

The Journal of Air Traffic Control 13 Nevil Shute Norway

The R-100 with Shute on board made it safely across the Atlantic to Canada and back to Britain despite being damaged in a thunderstorm

defense engineering. The airship was being Shute thought it best to keep his day job. hook attached to 500 feet of climbing rope to built by a subsidiary of Vickers Ltd. “I think it is a very good thing that we the top of a cliff so the Rangers could grab The R-100 with Shute on board made cannot see into the future. If I had known ahold and scramble up to attack the German it safely across the Atlantic to Canada and that a future as an author awaited me I sup- soldiers firing down on them. back, despite being damaged in a thunder- pose I should have given up engineering at an Shute became so well known as a writer storm. However, the government cancelled early stage, and my life would certainly have of novels that the Ministry of Information the program after the rival R-101 experimen- been the poorer for it,” he wrote in Slide Rule. sent him to cover D-Day. A U.S. Navy tank tal airship it was developing crashed with few Once the airship project ended, Shute landing ship with him aboard arrived on D survivors in Europe on its way to India. co-founded a civil aircraft manufacturing plus one, and he got ashore by first stepping As Shute worked on the airship, he company, Airspeed Ltd., in 1931. The fledg- off the ship onto a wrecked landing craft wrote a novel good enough to be published. ling aircraft company started by producing a near shore and then waiting for the tide to But he thought Vickers management might glider and moved on to create small passen- recede. take a dim view of one of the company’s ger aircraft. Later in the decade, the compa- Several of his wartime novels were sto- aerospace engineers writing novels. He also ny designed the twin engine Airspeed AS.10 ries about the lives of fictional military avi- thought his “hard bitten professional engi- Oxford. The British government had more ators. One features a woman armorer who neer” colleagues might conclude he was “not than 8,000 built when the aircraft became is servicing an anti-aircraft gun on a ship a serious person.” So he chose a pen name, the mainstay for preparing crews to fly at anchor when a Luftwaffe bomber attacks shortening his name to Nevil Shute, hoping Bomber Command aircraft in World War II. and she shoots it down. none of his aviation colleagues would notice. However, as Shute’s success as an author Shute was a born storyteller who created Shute had written Marazan in 18 progressed, his interest in directing a mass characters who seemed to sit at a table right months during his spare time and he didn’t production aircraft company waned. He had across from you sipping a cup of tea. He put expect to make much money on it. The story published a series of novels and sold the ordinary people in extraordinary circum- follows a pilot as he investigates the mur- movie rights to two of them. In 1938, he stances and readers turned the page to see if der of a friend. The hero was modeled after decided to quit the aviation industry to focus they would rise to the challenge. His deep several test pilots Shute met while work- on writing full-time. knowledge of aviation showed in many of ing for another legendary aircraft designer: During World War II, he continued his novels. Geoffrey de Havilland. writing novels while serving in the Royal For example, in No Highway, an eccen- The publisher did earn back the meager Naval Volunteer Reserve experimenting tric British air safety engineer named 30 pounds advanced to the author in 1928, with secret weapons. He devised a rocket- Theodore Honey worries about a structural but no more. And then the book went out of propelled lanyard used by U.S. Army flaw in a new airliner. The engineer thinks print for 26 years. Rangers on D-Day. The small rocket shot a metal fatigue will cause the tails to fall off

14 Summer 2015 Nevil Shute Norway after 1,440 flying hours. The novel was published in 1948 and made into a movie star- “I have always liked to do two jobs at the same time; one ring Jimmy Stewart in 1951. helps you to rest from the other and the fact that in the Then in 1952, the de Havilland Comet made its debut as the first commercial jet evenings my mind was fully occupied upon the novel gave aircraft. About a year later, three Comets me a clearer view of the airship problems next morning.” broke up in flight with sudden structural failure. It took some innovative scientif- ic detective work by a team at the Royal Aircraft Establishment at Farnborough to determine that the fuselages failed due to metal fatigue. During a stop in Sumatra on the trip, Shute died in 1960 but a love of his In another aviation novel, Round the Bend, he met a Dutch woman who had been part books goes on in a surprisingly strong way. the narrator is a World War II veteran who of a group of civilian women moved during Nostalgia plays a key role in readers’ affec- starts up an air charter company in Bahrain World War II around the island from one tion. Shute said he got to mess around with with just a few aircraft. He serves the oil fields Japanese prisoner of war camp to another, airplanes when they were small, easy to at first then starts carrying cargo and passen- again and again. build, and experiment on flights that always gers all the way to Australia. His lead aircraft Shute used this story as the basis for his turned up some fresh discoveries. And he engineer sees good aircraft maintenance as a novel, A Town Like Alice, one of his best known tells stories of those exciting times that look, religious experience and attracts a large fol- stories. The tale occurs near Singapore, where a sound, and feel authentic. lowing of wrench turners to his non-denom- group of British women and children are being Shute still has an active fan club. A lot inational services in or near aircraft hangars. marched around the Malayan peninsula by a of information about his novels, including In 1948, Shute flew a single engine, low Japanese guard. The guard is unable to find a plot summaries, reviews, and a list of real wing Percival Proctor aircraft from England Japanese commander willing to take custody of and fictional aircraft mentioned, is posted to Australia on an adventure that led him to the prisoners, so the women have to march on. on the Nevil Shute Foundation website, the subject of one of his most well known The heroine, a woman who worked as a typist http://www.nevilshute.org. The group also novels. The trip also prompted him to move to before being captured, befriends an Australian has a free newsletter and a biennial get-together – Australia for the rest of his life. truck driver who is also a prisoner of war. usually in Britain or Australia.

The Journal of Air Traffic Control 15 Remote Tower Systems – A Domestic and International Conversation Leesburg Executive Airport Signs Testing Agreement

By Dale Wright, National Air Traffic Controllers Association

ver the past several years, the conversation on remote towers has been making its way across the Atlantic to the United States. Several countries have been testing thisO technology for years and now Sweden is actually working an airport via their remote tower technology. The air traffic services at Örnsköldsvik Airport have been transferred to a remote tower center (RTC) at Sundsvall Airport, about 60 miles away. In the U.S., the interest in remote towers did not take off until the threat of closing federal contract towers became real. Many small communities were faced with the real possibility of having their federally funded contract towers closed due to sequestration. The communities that were still hoping for inclusion into the contract tower program have realized the possibility that may never happen. The construction costs associated tower. The local pilot community seems Germany is the country that has a robust with building a brick and mortar tower is to have welcomed this demonstration with test going on at this time, and Searidge approximately twice what a remote tower open arms. Technologies already has some camera tech- system would be. This makes the remote Air traffic controllers in the United nology being used in the United States at var- tower concept appealing to small commu- States have asked to be involved in the ious airports, such as Oakland International nities with limited budgets and may also demonstration at KJYO. While the system Airport (KOAK). In addition, Saab has test- provide an opportunity for more than one deployed in Sweden did meet all ICAO 4444 ed their system in Australia. community to locate their systems in a com- regulations for air traffic control, controllers Working with the Federal Aviation mon location to reduce staffing challenges. in the United States work a totally different Administration’s (FAA)’s Next Generation The one unknown expense with the remote type of traffic at airports such as KJYO. The Air Transportation System (NextGen) and tower system is the cost of moving data in general aviation traffic in the United States Requirements Offices, controllers are pro- the different communities. Some smaller offers some unique challenges to the remote viding input into safety and technical con- communities may be better suited to move tower system, such as controllers being able cerns of both the FAA and users. The the data at lower costs than others. to visually acquire the target on the video equipment is being delivered to KJYO and is When discussing possible locations for a screens and also the ability to observe the expected to be online in the fall of 2015. The remote tower demonstration, the discussion aircraft on the surface. The National Air camera tower will be located on the terminal focused on benefits. With its unique location Traffic Controllers Association (NATCA) building at the airport and the remote tower close to Washington-Dulles International enjoys a good relationship with Saab (Sensis) displays will be in the airport’s conference Airport (KIAD) and the airspace challenges that started many years ago with the Airport room. of the Washington, D.C. airspace, Leesburg, Surface Detection Equipment (ASDE-X) NATCA looks forward to participat- Va. had the most benefits to be gained. project. ing in the upcoming research, testing, and The Virginia SATSLab, Inc. (VSATS) While Saab does not have the only demonstration of the Remote Tower System group and Saab have signed an agreement to remote tower system, it is the one that has at KJYO. Through collaboration with both test remote tower technology at the Leesburg an agreement to be demonstrated in the the FAA and industry, our nation’s air traffic Executive Airport (KJYO). The Leesburg United States. Companies such as Searidge controllers will be provided a great opportu-

Airport Authority and Saab briefed the local Technologies (Canada) and FREQUENTIS nity to validate the benefits and technology Image courtesy of ATCA pilots at KJYO on the benefits of the remote have systems being tested in various stages. of the Remote Tower System.

16 Summer 2015 Slepecia S ction Hluboki Dzianis, zzveillust/Shutterstock.com PRIVATIZATION

O ur air traffic control discussions should be enhanced with data, ideas, and debate, and ATCA is in a perfect position to facilitate these discussions. This section of The Journal includes many ideas on the FAA’s current state and a potentially improved structure. There are many options being considered, and ATCA is neutrally positioned to moderate and encourage debate and discussion among members and the industry at large.

Consider the perspectives on the following pages. If you do not hear your own voice represented, contact us and let us know.

The Journal of Air Traffic Control 17 Privatization A Case for the “Half a Loaf” Proposal By Frank L. Frisbie, P.E., Double F Consulting, LLC

A word from ATCA president, Peter F. Dumont: Some of our members will remember that I recently chaired a session on this subject. Privatization is a subject with which I have past experience and which I believe can benefit from open and vigorous discussion. So, while I am not ready to endorse the approach taken by the author here, I do want to commend the article to you as a thought-provoking option on a subject that we all need to take seriously.

ost will remember back to in what the ATO legislation created but what ously considered. It is this glimmer of hope the time when the U.S. it failed to do – ATO remained encased in that gave birth to the “half a loaf” proposal seemed poised to join the the web of the Executive Branch of the U.S. embodied herein. popular movement to pri- government, dependent upon the associated vatize its air traffic management functions, federal budget processes and the whims of The “Half a Loaf” Proposal onlyM to see that movement stopped short of the Congress that appropriates the funds. Simply put, the idea is to privatize all domes- the mark by “settling for” the Air Traffic After much all-around discussion, while tic high-altitude Enroute air traffic control Organization (ATO). Not that the creation there is agreement that the status quo is defi- services in the continental United States, of ATO was without significant benefit – it cient, there is little agreement on a new solu- inclusive of all directly associated facilities3 did create an organization sharply focused tion. I believe that there is a common failure and personnel. This can be seen as either the on air traffic operations and infrastructure in the alternatives that have been advanced end state or, more likely, as a prudent transi- and attract an elite business-oriented lead- so far – they are dependent on an “all or tional step of indeterminate length, wherein ership team. The creation of the ATO1 also nothing” approach to ATO reorganization. the multitude of consequential details is invigorated the rank and file and ushered This all or nothing approach has the inher- worked out in a more constrained environ- in a discipline that emphasized measurable ent disadvantage that, by its very nature, it ment before full NAS privatization. objectives and associated traceable metrics2 embraces all stakeholders. In so doing, the The benefits that follow from the pri- inside the Federal Aviation Administration ATO stakeholder constituency, inside and vatization have been praised elsewhere.4 (FAA) and visibility to the external stake- outside of government, is solicited as a body They are, in my view, substantial for all holder community. to agree to any privatization proposition with stakeholders – service user and provider. Now, some 10 years later, the ATO the predictable result that has led to the cur- They include inter alia, access to capital, “solution” is being widely criticized and rent impasse. needs-based staffing, and freedom to con- calls for “real” privatization are increasingly Even given the prevailing pessimism, solidate facilities. For purposes here they get heard. Ironically, the reasons for dissatisfac- there is movement in the U.S. Congress short shrift in lieu of fleshing out the “half a tion with the ATO organizational form are that promises an innovative FAA authori- loaf” proposition. not rooted in its performance or that of the zation, leading the optimists among us to For this case – detaching high altitude FAA staff. The fundamental reasons lie not think some privatization plan could be seri- control – identifying the affected air traf-

18 Summer 2015 OPINION

The idea is to privatize all domestic high altitude Enroute air traffic control services in the continental United States, inclusive of all directly associated facilities and personnel.

fic and airway facilities personnel5 at the are surmountable. For all of these reasons I believe we need ARTCC sites is straightforward. Less obvi- Even if this half-loaf [half-vast?] idea to press on to build a constituency around a ous is the demarcation of facilities and person- seems indigestible to some, putting aside more fully elaborated proposal that can be nel that provide communications [RCAG], the parallels that can be drawn from the offered for national debate. surveillance [ARSR], and NAVAID services to formation and operation of EuroControl support Enroute operations along with shared multinational high altitude services, there Frank Frisbie began a career in civil aviation in communications infrastructure and services are domestic precedents for the transfer of 1958. He held senior executive positions in both [e.g., NOTAMs & Weather] as they presently NAS services to the private sector. The prec- DoD and FAA. At FAA, he served as deputy associate/associate administrator for develop- integrate with service to the low altitude and edents I would cite are the very successful ment and logistics as well as the first NAS pro- terminal services. “contracting out” [A-76]6 undertaking that gram director. Assuming that demarcation of the peo- resulted in flight services being outsourced to ple and facilities listed above can be negoti- a private contractor and the more recent lease References ated, there are more vexing challenges to be of critical surveillance services [ADS-B] [1.] Created by law in 2000, ATO officially began faced, the principal of which is definition from a contractor. Both of these moves were operations in February 2004. and designation of the privatized entity. heretical to the idea that the government [2.] Incorporated into the “Harmonized Operational For purposes of opening this discussion, the [e.g., FAA] needed to own and operate all Metrics” since 2012 author suggests that an existing ANSP entity NAS facilities and services and both exam- [3.] FAA 2012 Fact Book includes Honolulu, Anchorage, San Juan, and Guam, which are [e.g., NAVCANADA, NATS] or something ples, having been in place for some time now, excluded from this proposal for CONUS Air new [e.g., Aireon] be approached to create are universally seen to have been successful. Route Traffic Control Centers [ARTCC]. and capitalize a new U.S.-centric entity. In A further attractive feature of the half a [4.] “Unshackle the FAA,” ATCA Proceedings 2014, any event, to the new entity falls the job of loaf idea is that it lends itself to a transition et al. negotiation the labor agreements, engaging “waterfall,” where ARTCC service areas [5.] Estimated between 312 [ZSE] and 545 [ZOB] FAA employees [Controllers + Tech Ops] at an the people, and completing real property can be transitioned to the private operator ARTCC today. acquisitions and the like. In the case of the one by one, allowing the former to be fully [6.] OMB Circular No. A-76 “Performance of

ANSPs mentioned, their prior experience stabilized and operational before the next is Commercial Activities.” PHOTOCREO Bednarek/Shutterstock.com Michal ought to give confidence that these hurdles transferred.

The Journal of Air Traffic Control 19 We Must Have Stable, Predictable Funding for the National Airspace System

20 Summer 2015 NATCA Perspective Safety and Efficiency Must Remain the Main Mission

By Paul Rinaldi, President, National Air Traffic Controllers Association

he current funding uncertainty infrastructure. The funding difficulties have for our nation’s air traffic con- also caused the FAA to struggle to maintain trol system is unacceptable. As proper resources and staff at our busiest air a result, NATCA is advocating traffic control facilities. for alternative funding models in order to NATCA believes that the FAA’s prob- Tmaintain and advance the system’s safety and lems are not due to a lack of sufficient fund- efficiency. ing to the system. Rather, they are the result The lack of stable, predicable funding of a process where the predictability of fund- has led to serious problems at the FAA, ing has been affected by short-term funding including, but not limited to, the inability bills, government shutdowns, partial FAA to finance long-term projects, develop the shutdowns, threatened government-wide and National Airspace System (NAS) for new FAA-specific shutdowns, sequestration, and users, and modernize our country’s aging 23 authorization extensions.

The Journal of Air Traffic Control 21 NATCA Perspective

The professionals NATCA represents in the world is perfect, much less suitable for In my recent testimony before Congress want to perform their work to the best of a system as large, complicated, and diverse as about FAA Reauthorization and air traf- their abilities, without the burdens of unpre- ours. Any new model must be mission-driven fic control reform, I provided members of dictable funding. NATCA wants to find and must ensure continued robust aviation the House Committee on Transportation & a solution to the problems that plague the sector growth throughout every segment Infrastructure, Subcommittee on Aviation FAA and our nation’s airspace system. The of our industry and throughout the entire with an overview of alternative funding and solution is stable, predictable funding for the country. We must protect and strengthen structural models that could address the NAS, which can be handled in the upcom- our great national asset that is the air traffic funding problem. Below are some of those ing FAA Reauthorization Bill. We under- control system. alternatives followed by a brief description. stand that addressing the funding problems NATCA believes any reform must • Status Quo Model: In this model, the may lead to the consideration of potential include the following principles: FAA would remain as-is with the same structural changes for the FAA. Any struc- 1. Safety and efficiency remain the mission funding and structure. Governance would tural changes must be carefully examined 2. Stable, predictable funding to ade- remain within the U.S. Department of to prevent unintended consequences that quately support air traffic control ser- Transportation (DOT). would negatively affect other aspects of the vices, staffing, hiring and training, • Enhanced Status Quo Model: In this system. NATCA’s priority is to ensure that long-term modernization projects, pre- model, governance would remain within we continue to safeguard the world’s best air ventative maintenance, and ongoing the U.S. Department of Transportation traffic control system during any transition, modernization to the physical infra- (DOT) but changes would be needed to and that any potential change addresses the structure address the manner in which the FAA is funding issue. 3. Robust and continued growth in the avi- funded without changing it structurally. We look forward to working with ation system • Government Corporation or Independent Congress and other stakeholders to determine 4. A dynamic aviation system that contin- Agency: This model would pull out the a solution that protects air traffic control ues to provide services to all segments of entire FAA, or parts of the FAA, and create and secures its future growth. But before the aviation community, from commer- a government corporation or independent NATCA can support any change, we must cial passenger carriers and cargo haul- agency. The government corporation model carefully examine all of the specifics. Details ers, to business jets, to general aviation, would require a Governing Board that matter in this process. No system is like the from the major airports to those in rural includes stakeholders and government United States’ and no model used elsewhere America officials. This model would leave air traffic cherezoff/Shutterstock.com

22 Summer 2015 NATCA Perspective

control functions within the government, of the size of the United States’ NAS. The that safety could not be adequately measured or but would remove them from the DOT. United States has 21 centers, compared to forecasted at the time. • Not-For-Profit Model: This model seven in Canada, and 315 towers compared would require a Governing Board with to 42. According to Airport Council NATCA believes the U.S. must have a stakeholders and government officials. An International’s Top 30 Busiest Airports in mission-driven model; we oppose any model example of this would be NAV CANADA; the world (based on aircraft movements), that derives profit from air traffic control its board has three directors elected by the the U.S. currently has eight of the top 10 services. Government of Canada. In this model, busiest airports in the world, and 16 of the We also believe it is critical that the safety oversight and regulatory functions top 30. Canada has one – Toronto, which is specifics of any reform are vetted among would remain within the FAA. number 15. all stakeholders. Not only do the principles • NATS in the UK: This private, for-profit need to be sufficient to meet the needs of the I invite you to read the full testimony, corporation works with the government NAS, the details of any overhaul, regardless available on www.natca.org, for key points to create a public-private partnership. of how significant, must as well. and details of the potential models, including However, the profit motive remains. A More than 70,000 flights and over advantages and disadvantages of each and December 2014 large-scale failure caused two million passengers are handled daily how each would affect the air traffic system. delays and cancellations. Some have by air traffic controllers in the busiest and In our exploration of solutions to the attributed that incident to the cost-cutting most complex airspace in the world. There funding problem we have also examined efforts that have delayed upgrades. In are roughly 5,000 planes in the sky at any how other Air Navigation Service Providers addition, in the fall of 2014, NATS lost given moment. Domestic airlines served an (ANSPs) are structured, and how well they a bid to provide air traffic services for estimated 756.3 million passengers in 2014. deliver air traffic control services. There Gatwick Airport in the UK. Instead, the Every day, millions of individuals and busi- has been significant discussion of the NAV airport agreed to contract air traffic services nesses in the U.S. economy rely on the CANADA model. While it may pres- to the German ANSP (described below). services provided by the complex web of ent benefits, NATCA is uncertain if that • Deutsche Flugsicherung in Germany: aviation routes. Aviation drives nearly 12 Canadian model is scalable to the size, com- The government now has control of air million jobs that contribute $1.5 trillion to plexity, and diversity of our airspace. traffic functions, which were transferred the nation’s gross domestic product. We can- • NAV CANADA: This privately owned, to a state-owned corporation, called not afford a mistake that upsets this critical not-for-profit company established in 1996 Deutsche Flugsicherung (DFS), in 1993. engine of economic growth. There cannot be works to control the operations of the air The system is funded through user fees, a disruption in services during a transition. traffic control system. Its revenue source is which are sufficient enough to continue The U.S. invented aviation, and we have user fees. The advantage of this system is with modernization efforts. Likewise, the world’s safest system; it is incomparable, its single-focused mission that prioritizes it has seen improved productivity and unequaled, and unrivaled by any other coun- efficiency. The disadvantages were in its operational efficiency through investments try. Our NAS is a national treasure. We must difficult and lengthy transition period. It in facilities and equipment. At the time, continue to grow aviation, allow integration may also be difficult to apply that model Germany’s federal budget constrained of new users, and maintain a competitive to one as diverse and complex as ours. For efforts to modernize the air traffic control edge to continue to be the leader in the glob- example, the United States controls 132 infrastructure. According to a 2005 GAO study al aviation community. There is too much million flights annually (2012), compared of ANSPs, Germany saw improved safety after at stake to continue on the current path of to 12 million in Canada in an area a fraction its transition, although the report acknowledged unstable, unpredictable funding.

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By Robert W. Poole, Jr., Reason Foundation

n March 24, 2015, I was one of seven people who with most supporting separation of the ATO from the FAA as a provided testimony on restructuring the U.S. self-funded ATC corporation. air traffic control system (ATC) before the House What follows is a slightly edited version of my written testimo- Aviation Subcommittee. The chairman of the parent ny from that hearing. Transportation & Infrastructure Committee, Rep. Bill Shuster (R, PA),O has spoken repeatedly about the many problems the FAA Air My Credentials on Today’s Topic Traffic Organization (ATO) has experienced with uncertain fund- I direct the transportation policy program at Reason Foundation, a ing, implementing the Next Generation Air Transportation System non-profit think tank with offices in Los Angeles and Washington, (NextGen) modernization in a timely and cost-effective manner, and D.C. My dad worked for Eastern Airlines, so I have been flying on dealing with the aging legacy infrastructure of facilities and equip- commercial planes since the age of five. I’m an MIT graduate with ment. He has called for a “transformational” FAA reauthorization two degrees in mechanical engineering and my first position after bill this year that could include a major restructuring of how this graduating was with a large aerospace firm, Sikorsky Aircraft. country funds, manages, and oversees air traffic control. I have been studying the performance of the U.S. ATC system The hearing included testimony from Matt Hampton of the since before the 1981 controllers’ strike. Following that strike, I gave Department of Transportation (DOT) Office of the Inspector an invited presentation to DOT Secretary Drew Lewis and FAA General; Doug Parker, CEO of American Airlines; Craig Fuller, Administrator Lynn Helms on a corporation approach to rebuilding former head of the Aircraft Owners and Pilots Association (AOPA) the system. I presented my first paper on ATC corporatization at the and now vice chairman of the FAA Management Advisory Council; Transportation Research Board annual meeting in 1982.1 Paul Rinaldi, president of the National Air Traffic Controllers In 1985, I was an advisor to the Air Transport Association’s Association (NATCA); David Grizzle, former chief operating offi- white paper on corporatizing the ATC system. Likewise, I cer of the FAA ATO; Dorothy Robyn, formerly the infrastructure advised Vice President Gore’s National Performance Review in expert on the Clinton Administration’s National Economic Council; 1993-1994 on what became the DOT’s proposal for a U.S. Air and myself. All seven of us favored funding and structural reform, Traffic Services (USATS) corporation. I was also an advisor to the

26 Summer 2015 ATC Corporatization

For more than a decade, separation of ANSPs from safety regulators has been ICAO policy, and the United States is the last developed country that has not taken this step.

Mineta Commission in 1997, which recommended an approach ing this vital service. I have visited the headquarters and met with similar to corporatization. In 2001, a Reason Foundation study the leaders of Airways New Zealand (in Wellington) and NAV that I co-authored with Viggo Butler was a detailed proposal CANADA (in Ottawa). I served on the advisory board of the first for a user-funded ATC corporation.2 That plan received the empirical study of the performance of corporatized ATC provid- support of 12 retired FAA officials, including three previous ers, alongside former Administrator Langhorne Bond and future administrators.3 Administrator Randy Babbitt.4 I have met their counterparts at This decade I have been a member of two working groups a number of other corporatized Air Navigation Service Providers seeking to develop consensus recommendations for fundamental (ANSPs) conferences organized by ATCA and the Civil Air ATC restructuring, of which one was convened by the Business Navigation Services Organization (CANSO). Roundtable, starting in 2011. It has included a number of former DOT and FAA officials, as well as leading aviation researchers Assessment of the Problem and consultants. The other working group was convened by the Broadly speaking, I agree with the assessments made by the FAA Eno Transportation Center in 2013. Co-chaired by former DOT Management Advisory Council in January 2014 and many others Secretary Jim Burnley and former Sen. Byron Dorgan, it has engaged about the problems plaguing the FAA’s ATO. These problems can 16 aviation stakeholder groups to seek agreement on ATC reform be grouped into three categories, as follows: principles. I also serve on the National Aviation Studies Advisory • Funding: Uncertain, unstable, and poorly suited to paying for Panel of the Government Accountability Office (GAO) and on large-scale capital modernization programs such as NextGen a special TRB committee that is planning a symposium on ATC • Governance: A system with so many legislative branch and restructuring. I am also a long-time member of the Air Traffic executive branch overseers that it focuses ATO management Control Association (ATCA). attention far more on overseers than on ATO’s aviation Over the years, since the first ATC corporatization in 1987 customers

(Airways New Zealand), I have followed the progress of this change • Culture: An organizational culture that is risk-averse and status- dibrova/Shutterstock.com in the structure, funding, and governance of the entities provid- quo oriented

The Journal of Air Traffic Control 27 ATC Corporatization

These problems are all interrelated, but since the culture prob- by contractors, which can lead to costly additions that make the lem has received less attention than the others, I will focus mostly on systems more complex than is needed and more costly than nec- that in my testimony today. essary. My most recent research on ATC reform was a study commis- 3. Loss of management expertise. For the same reasons that FAA sioned by the Hudson Institute as part of their Initiative on Future has limited technical expertise, it also has trouble attracting and Innovation. My task was to examine the extent to which the FAA keeping top-notch program managers who are used to being held generates innovation in its area of operation (the ATC system) and accountable for results. to explore what would lead it to be more successful in doing that.5 In 4. Excessive oversight. Inherent in being a large government the project I selected seven disruptive innovations in air traffic con- agency that is spending taxpayers’ money, the FAA must be held trol and did brief case studies on each, observing how each innova- accountable to all the normal government overseers. The ATO tion has been dealt with by the ATO and by its corporatized ANSP must respond to oversight by the FAA administrator, the DOT counterparts overseas. The innovations are as follows: secretary, the DOT inspector general, the Office of Management 1. Digital communications between pilots and controllers & Budget, the Government Accountability Office, and up to 535 (DataCom) Members of Congress. Responding to all these overseers takes up 2. Replacing ILS with GPS-based landing systems (GBAS) a large amount of senior management time. 3. Using GPS for surveillance (ADS-B) 5. Lack of customer focus. Because the ATO gets its funding 4. Performance-based navigation (PBN) from Congress, it ends up – de facto – acting as if its customer is 5. Real-time weather data Congress, rather than the aviation customers it is set up to serve. 6. Remote towers 7. Facility consolidation Fixing the ATO’s Organizational and Structural Problems When I compared this set of problems with what I have observed The ATO’s approach to each of these was far more hesitant over the past 15 years in corporatized ANSPs, the remedies appeared than that of corporatized ANSPs in other countries. These find- to be fairly straightforward. ings illustrated its conservative culture and status-quo bias. I next To directly change the status-quo culture to something more identified five possible explanations of why this culture exists, and like the innovative culture we observe in the Boeings and Honeywells the draft report was then sent out to about 15 highly knowledgeable of the world, the first requirement is to organizationally separate the peer reviewers. Hudson convened a one-day workshop at which these ATO from its safety regulator parent. That would put the ATO at reviewers provided feedback, which supported all five hypotheses arm’s length from its safety regulator, like all the other key players in based on their experience either within the FAA or working with aviation – airlines, business aviation, general aviation, airframe man- the FAA over many years. Those five detrimental aspects of organi- ufacturers, engine producers, pilots, mechanics, etc. For more than a zational culture are as follows: decade, separation of ANSPs from safety regulators has been ICAO 1. Self-identity as a safety agency, rather than as a technology policy,6 and the United States is the last developed country that has user. This stems from the ATO being embedded within FAA, not taken this step. This change is necessary for changing the ATO’s whose mission is safety. Nearly all the innovations relevant to organizational culture, but is not sufficient by itself. NextGen come largely from the aerospace/avionics industry, The second requirement is to change the funding system. which has a much more innovative, dynamic culture. All those Instead of having users of the system pay taxes to the government, companies are regulated at arm’s length by FAA safety regulators which channels the funds through the federal budget process and – but the ATO is embedded inside the aviation safety regulation leads to the ATO acting as if Congress is its customer, shift to the organization. system used everywhere else in the world in which airspace users 2. Loss of technical expertise. Partly due to its status-quo culture pay fees and charges directly to the ANSP, which in this case would and partly due to civil service pay scales, the FAA has a chronic be the newly separate ATO. That would refocus the organization’s problem with not attracting or not being able to retain the best attention on satisfying its aviation customers, as is true of every other engineers and software professionals. This means that a lot of high-tech service business. This is also the model on which airports the detailed requirements for new systems end up being defined operate in nearly every developed country, including the United

28 Summer 2015 ATC Corporatization

Cost per IFR Flight-Hour (US$)

ANSP Country 2010 2011 2012 2013 FAA ATO United States $444 $452 $454 $450 Nav Canada Canada $335 $338 $325 $334 Airways NZ New Zealand $385 $404 $416 $414 Table 1. Source: CANSO, Global Air Navigation Services Performance Report, 2014, adjusted for exchange rates.

States. Airports issue revenue bonds, based on their predictable lessons learned in other countries to U.S. ATC reform. The IBM stream of revenues that come directly from users, to finance large- Center for the Business of Government had Oster and Strong pro- scale capital modernization efforts. So do the larger corporatized duce a 65-page report using the Canadian and British experiences to ANSPs. recommend a corporatization approach for the United States.9 The third needed change is a different governance model. Since In recent years, two international organizations have been the revamped ATO would no longer be spending taxpayers’ money, collecting and publishing data on ANSP performance and cost- the proper oversight should come from those providing the reve- effectiveness: Eurocontrol and CANSO. Eurocontrol’s Performance nues – its aviation customers. So those customers, along with other Review Commission deals only with the ANSPs of the 39 European key stakeholders such as airports and employees, should be the ones members of Eurocontrol. CANSO, which has 90 ANSP members responsible for oversight and governance (apart, of course, from arm’s worldwide, relies on voluntary reporting from member ANSPs, and length safety regulation by the revamped FAA). If organized as a some of the higher-cost ones have not always released their numbers. non-profit corporation governed by a stakeholder board, the result CANSO’s 2014 report includes performance figures for a number would be an organizational form called a user co-op. There are many of developed-country ANSPs, including the FAA’s ATO. One key thousands of user co-ops in America, particularly in electric and performance indicator is cost per IFR flight-hour. Figures for several water utilities. ANSPs are presented in Table 1 (above). For comparison purposes, the latest available figures for several Evidence from Abroad other developed countries are for 2011, and are $650 for Germany’s There is growing evidence over the past 25 years that ATC corpora- DFS, $774 for the UK’s NATS, and $801 for Spain’s ENAIRE. tization has led to better performance by self-funded ANSPs. While many factors account for differences in ANSP performance, The first major study was published in 2006, carried out by it is noteworthy in comparing NAV CANADA and the FAA ATO MBS Ottawa with support from George Mason University, Syracuse that the former is significantly more productive, as measured by cost University, and McGill University.7 It assembled before-and-after per IFR flight hour, despite NAV CANADA being only one-ninth data from 10 corporatized ANSPs, and assessed their performance the ATO’s size and activity level. on safety, modernization, service quality, cost, financial stability, and public interest considerations. From the executive study comes the Which Organizational Form Is Best? overall conclusion, backed up by detailed data in the 103-page report: Of CANSO’s 90 full members, including the FAA’s ATO, about “The major finding is that commercialization models two-thirds (60) are commercialized, i.e., self-supporting from fees that provide the right balance of incentives have resulted and charges and regulated at arm’s length by the government’s safety in significant cost reductions, dramatic improvements in regulator. modernization, and major improvements in service quality, In its recent report on ATC corporatization, the Congressional while improving safety. Commercialized ANSPs exhibit Research Service provided a table listing 22 ANSPs with their three main strengths – sensitivity to customer needs, agil- number of centers, number of employees, and organizational form.10 ity in reaching a decision, and ability to carry it through. The most common form (13 of the 22) is a government-owned These characteristics have led to continuous improvements corporation. Another five are government agencies, and three are in efficiency, business discipline that delivers projects on various forms of non-government companies. These three are NAV schedule and on budget, and rapid deployment of modern CANADA, Skyguide (Switzerland), and NATS (U.K.). Though not technology to enhance service quality.” listed in the CRS table, AeroThai is also a non-government corpo- A second major study appeared in book form in 2007, researched ration. and written by Clinton V. Oster, Jr. of Indiana University and John In choosing between a government corporation model and a S. Strong of the College of William and Mary.8 Their book pro- non-profit corporation model, it is important to understand the provides a detailed review of the transition from government agency to found difference between a “government corporation” in countries self-supporting ANSP in Australia, Canada, Europe, New Zealand, such as Australia, Germany, and New Zealand versus the typical and the United Kingdom. This is followed by three chapters on ATC “government corporation” in the United States. In most modern problems in the United States and suggestions on how to apply the western nations, a government corporation is for all practical pur- Vectomart/Shutterstock.com

The Journal of Air Traffic Control 29 ATC Corporatization

poses a real business, incorporated under normal corporate law, but Service and the TVA. with all of its shares owned by the government. In most cases, it is There is also extensive U.S. experience with the nonprofit entirely self-supporting from customer revenues and has access to the user co-op model. There are thousands of examples of rural utility bond market to finance long-lived assets. co-ops, agricultural co-ops (Sunkist, Ocean Spray) and federally That is dramatically different from most government corpo- chartered credit unions. User co-ops are also common in U.S. avia- rations in the United States. Most of our government corporations tion. There are many common-use co-ops in operation at airports, remain part of the federal budget. Many have congressional over- such as LAXFuel Corporation, jointly owned by airlines serving Los sight committees, require OMB budget approval, and are subject Angeles International Airport to operate a fuel farm and provide to audits by GAO and possibly by an inspector general. Even the aircraft fueling services. And two major entities in aviation were nominally independent U.S. Postal Service is subject to congressio- organized as user co-ops – ARINC and SITA. ARINC was set up nal intervention in what should be business decisions such as closing by fledgling U.S. airlines in 1929 to be the licensee for air-to-ground unneeded facilities, and its rates are overseen by a Postal Regulatory radio services. It went on to develop the earliest air traffic control Commission that pursues multiple goals beyond ensuring a well-run, services (which were taken over by the Commerce Department cost-effective business. Even the Tennessee Valley Authority, one of in 1936). ARINC remained in business as a user co-op providing America’s largest electric utilities, though only nominally on budget, worldwide communications and other services to aviation into the still has congressional oversight committees, an arbitrary cap on first decade of the 21st century, when it was purchased by the Carlyle bond issuance, and a politically appointed board. Group and more recently acquired by Rockwell Collins. SITA has An alternative that has received serious attention from the retained its original nonprofit, user co-op status and among its many Business Roundtable is a federally chartered nonprofit corpora- aviation services is partnering with CANSO to provide ANSP bill- tion. The American Red Cross and the U.S. Olympic Committee ing services worldwide. were chartered by acts of Congress as self-supporting, tax-exempt, Canada’s ANSP, NAV CANADA, is similar to the user co-op nonprofit corporations. COMSAT, which pioneered communica- model. It was chartered by an Act of Parliament as a not-for-profit, tions satellites, was originally organized this way, but later became stakeholder-governed corporation, designated by Canada as its an ordinary for-profit company. The Red Cross and Olympic provider of ATC services, consistent with ICAO policies. It has an Committee boards are not political appointees; they are selected by excellent track record, and as noted in Table 1, is delivering ATC these organizations based on candidates’ relevant knowledge and services at higher productivity than the nine-times-larger ATO. experience. This model is actually closer in how it functions to the To me, that suggests the potential for significant productivity gains well-managed government ATC corporations like Airways New from corporatizing the ATO as a federally chartered, nonprofit, tax- Zealand, than typical U.S. government corporations like the Postal exempt, stakeholder-governed corporation. After three decades of research on ATC reform, my conclusion is that the nonprofit corporation model with stakeholder governance is the best organizational form. In particular, it is most likely to pro- duce the kind of organizational culture we need to regain U.S. leadership in air traffic control. And I’m happy to report that this is also the conclusion of the Business Roundtable’s extensive efforts.

References [1.] Robert W. Poole, Jr., “Privatizing Air Traffic Control,” Transportation Research Record 912, 1983 [2.] Robert W Poole, Jr. and Viggo Butler, “How to Corporatize Air Traffic Control,” Policy Study No. 278, Reason Foundation, February 2001 [3.] “A Statement Concerning the Future of the U.S. Air Traffic Control System,” 12 former FAA officials, May 1, 2001 (http://reason.org/news/show/1002978. html) [4.] MBS Ottawa Inc., Air Traffic Control Commercialization Policy: Has It Been Effective? January 2006 (www.icao.int/Meetings/ICAO-McGill- Conference/Documents/2006-Conference/McDougall.pdf) [5.] Robert W. Poole, Jr., “Organization and Innovation in Air Traffic Control,” Hudson Institute, January 2014 (http://reason.org/files/air_traffic_control_ organization_innovation.pdf) [6.] International Civil Aviation Organization, Safety Oversight Manual, Doc. 9734, Part A, Paragraph 2.4.9 (2001) [7.] MBS Ottawa Inc., op cit. [8.] Clinton V. Oster, Jr. and John S. Strong, Managing the Skies: Public Policy, Organization, and Financing of Air Traffic Management, Ashgate Publishing, 2007 [9.] Clinton V. Oster, Jr. and John S. Strong, “Reforming the Federal Aviation Administration: Lessons from Canada and the United Kingdon,” IBM Center for the Business of Government, 2006 (www.uquebec.ca/observgo/fich- iers/92684-fichier%2013.pdf) [10.] Bart Elias, “Air Traffic, Inc.: Considerations Regarding the Corporatization of Air Traffic Control,” Congressional Research Service, 7-5700, January 5, 2015

30 Summer 2015 Modernization

of U.S. Air Traffic Control Means Modernizing the Whole Aviation System

It’s Time for Bold Solutions and Creative Approaches

By Kevin M. Burke, Airports Council International-North America

n Feb. 24, Congressman Air Transportation System (NextGen) to the nation’s air traffic control system. Bill Shuster (R-Pa.), chair- and bureaucracy of the Federal Aviation As the president and CEO of Airports man of the House of Administration (FAA), and particularly the Council International-North America (ACI- Representatives Transportation burgeoning congestion of the American air- NA), I represent members in both the U.S. & Infrastructure Committee, wrote in an space. and Canada, which privatized its air traf- opinionO editorial published in The Hill: “[A] transformative aviation bill fic control in 1996 with the creation of Today, we have the busiest avia- is one of the highest priorities of the NAV CANADA, and which is regarded tion system in the world. Fifty million House Transportation and Infrastructure as a model by many in Congress and other flights and 800 million passengers tra- Committee this year,” he concluded, refer- proponents of decoupling air-traffic control verse our skies every year. In the next ring to the 2015 FAA reauthorization leg- from the FAA. Whether or not U.S. air decade or so, our system is expected to be islation, which will set the course not just traffic control was to be privatized in the moving one billion passengers annual- for the agency for the next five years, but near future, it is absolutely clear that prior- ly… As the number of passengers grows will influence the shape of the U.S. aviation ities for safe, secure, and efficient skies will over the coming year, Americans stand landscape for years to come. remain constant. From the perspective of the to lose more time and money to delays. It’s no secret in Washington that the airport industry, the conversation around Congressman Shuster’s context was the focus of conversation surrounding a transfor- privatization is not so much about air traffic

slow implementation of the Next Generation mative FAA reauthorization is major reform control itself, but rather how its reform is one View Apart/Shutterstock.com

The Journal of Air Traffic Control 31 Modernization

piece of a much larger puzzle. It’s import- airports are still constrained by outdated ty. Equipping airports and their communi- ant to understand that in 1996 Canada capacities. ties with the financial mechanisms to best also reformed its airport-financing model by There exist many additional projects at address their individual needs would mean moving to a user fee system. airports across the country to meet capacity that airlines would have to adapt to stron- ACI-NA agrees it’s time for a growth and accommodate aircraft innova- ger – and ultimately healthier – competition transformational bill, one that considers bold tion; enhance safety, security, and environ- amongst one another. This is exactly the solutions and creative approaches to long- mental compliance; and maintain and reha- environment the U.S. will need to stay com- standing challenges. Once completed, this bilitate existing airport facilities. Looking petitive with the rest of the world. new FAA authorization will set the tone at just the next five years, these necessary Rising consumer demand for air trav- for airport operations through 2020 and projects total more than $75 billion, or more el, meanwhile, only further underscores the well into the 21st century. However, we than $15 billion per year. A frequent refrain need to simultaneously transform U.S. air can’t just transform air traffic control. We made by the major U.S. airlines is that they traffic control. But without modernizing must also transform the “on the ground” have helped invest in certain airport capital funding mechanisms for airport infrastruc- 20th century infrastructure that supports improvement projects, but this only tells a ture and capital improvement projects, there air traffic control goals. With the number fraction of the story. will be no tangible advancements in alle- of people flying in the U.S. on track There are three primary mechanisms viating an increasingly congested airspace. to surpass one billion within the next that fund airport capital improvement proj- Ultimately, any conversation about privat- 20 years, our aviation system and all of ects: the Airport Improvement Program ization is moot without comprehensively the players – airports, airlines, air traffic (AIP) grant fund, the Passenger Facility overhauling and upgrading the antiquated equipment providers, controllers, and other Charge (PFC), and airport-generated reve- technology that compromises the maximum industry partners – are at a crossroads. nue. AIP grants provide the financial cor- efficiency for passengers, cargo shippers, air- Having the focus on air traffic control, nerstone for airside projects at many airports, ports, and airlines. however, should not preclude airport priori- while the PFC does so for terminal improve- U.S. airports are prepared to lead a ties in FAA reauthorization discussions. In ments. In recent years, however, both mech- transformed commercial aviation system and addition to both aspects being vital parts of anisms have been weakened by decisions maintain our position in the global aviation a larger whole, U.S. air traffic control and made in Washington. AIP has been targeted system. Exploring and implementing solu- U.S. airports share the striking similarity in to fill unrelated federal budgetary shortfalls tions to modernize and improve how we that they are fixed assets affected by increas- – including for air traffic control – while the support and invest in our total aviation infra- ing capacity. While the forecasted growth purchasing power of PFC has significantly structure, from our airports to our airspace, in air traffic will undoubtedly be a driver of eroded. In the 15 years since Congress last will best position us for improved safety, economic growth for communities served by set its maximum, the PFC’s $4.50 value has security, efficiency, and capacity for the pas- airports and the travelers and cargo shippers decreased by roughly half. sengers and cargo that will take to our skies they help connect to the rest of the world, a A modernized PFC and a strong AIP well into the 21st century. Stubbornly adher- still-congested airspace governed by outdat- allow airports to determine their future in ing to the status quo will only keep us from alice-photo/Shutterstock.com ed technology will limit the gains. Likewise, terms of competition, traffic, and capaci- seeing what is beyond the horizon.

32 Summer 2015 NAV CANADA The NAV CANADA Model An ANS Model That Has Withstood the Test of Time

PART 1

By John Crichton, NAV CANADA

AV CANADA has owned and share capital corporation model; how these improved efficiency failed to get off the operated the Canadian civil air elements interact to support a safe, efficient drawing board, or were failing in the devel- navigation service (ANS) since and cost-effective air navigation service; and opmental stages. With funding tied to the Nov. 1, 1996, after having pur- why they make as much sense today as they federal appropriations process, the needs of chased the system from the Government of did in 1996. the ANS often took a back seat to programs Canada for $1.5 billion. in other areas of government. The result was N The Need for Reform NAV CANADA is a private-sector poor service and increasingly costly delays. company, in charge of air traffic control, A good place to start is to look at some of the Everything pointed to a system flight information, airport advisory, and the problems the company was designed to solve. stretched to the limit. The situation pro- many other services typical of an air naviga- Simply put, by the 1980s, Canada’s ANS was duced a consensus among ANS stakeholders tion service provider. There is no longer any not working well. – including airlines, employees, and the gov- substantive debate about the effectiveness of The federal government, operator of the ernment itself – that the system was badly in the NAV CANADA model as the organiza- service since 1939, was struggling with huge need of reform. tional and corporate basis for managing the budget deficits and was no longer willing or world’s second largest ANS, in terms of air able to make the capital investments need- Establishing a New Structure traffic movements, airspace size, and phys- ed to modernize the system. Resources and Early on, three groups came together to ical assets. infrastructure had not kept pace with the form the initial collaboration that led to This article focuses on the essential ele- steady growth in air traffic. the privatization – commercial aviation ments that make up NAV CANADA’s non- New technologies that would have management, airline pilots, and air traffic Panzeri/Shutterstock.comStefano

The Journal of Air Traffic Control 33 NAV CANADA The NAV CANADA model has proven to be a constructive approach to air navigation system governance and management. The lack of shareholders and share equity is accepted on the basis that the ANS is a natural monopoly, not motivated to create wealth, but rather to provide ANS services. Customers provide the critical financial backing to the corporation through the revenue stream for these services. Since there are no shareholders, there is no distribution of profits, and the customer presence on the board (five directors out of 15) helps ensure investments are directed at enhancing customer value. Time has demonstrated that this approach obviates the need for prescriptive economic regulation.

controllers. Together, they made fundamental holders. The lack of shareholders and share • A private sector entity acknowledged by decisions that proved to be the cornerstone of equity, while novel, was accepted on the basis the financial markets, and thus able to be the Canadian ANS commercialization process. that the ANS is a natural monopoly, which financed without government support Those decisions were: should not be motivated to create wealth, but • The ANS had to be taken out of rather to provide a service to aviation. The Monopoly Status government, while government would significant customer presence on the board The acceptance of the non-share capital retain its role as safety regulator ensures that the company is service-oriented model by all of the stakeholder commu- • The key stakeholders had to have a and customer-focused. nity also made it relatively easy for the significant voice in the new operational From the standpoint of the key labor federal government to grant the system an entity stakeholders, the absence of direct share- effective civil air traffic control monopoly • Each group had to work together for the holders and the structural balance on the in the enabling legislation, the Civil Air common goal and respect the others’ board (which includes union appointees), Navigation Services Commercialization Act legitimate, but sometimes differing, provides comfort that the corporation is (the ANS Act). interests motivated to focus on its operational mis- Other than safety regulation by sion without the preoccupation of the profit Transport Canada, this monopoly is largely This alliance grew over time to embrace motive for individual investors. self-regulating due to the significant involve- other stakeholders such as business aviation, From the government’s viewpoint, the ment of the customers or “payers” in the general aviation, and the bargaining agents non-share capital corporation is seen in a management of the corporation through of other ANS employees. It proved to be a politically favorable light for similar reasons the board and the charging principles in the powerful force, in terms of influencing gov- including: ANS Act. It is also a monopoly, which, in the ernment and the financial markets. But how • No perceived sell-out to private interests eyes of the ever-competitive airline industry, did the alliance do that? • Balanced participation for key stakeholders is seen as neutral because of the non-share • A high degree of ongoing motivation to capital nature of the corporation and the Non-Share Capital Corporation run the system safely and efficiently ability of airlines to elect a significant num- The private, non-share capital corporation • Seats at the board table for government to ber of Directors to the Corporation’s Board.

model balances the needs of all ANS stake- oversee the general public interest Under the NAV CANADA non-share Illustration: NAV CANADA

34 Summer 2015 NAV CANADA capital model the company is not profit- important as it has the effect of import- Beyond the revenues from its core busi- oriented. Rather, charge-out rates to airline ing established international principles into ness, NAV CANADA has had success in customers are established to recover company Canadian domestic law and enhancing their selling technology and related services to costs, capital expenditures are funded out enforceability. other air navigation service providers. of operating cash flows, and debt levels are Service charges can only be changed progressively reduced. after advance notice and consultation with Financing and Service Charges customers and are subject to appeal to an The company is financed through the bond The Model at a Glance independent tribunal on the grounds that the markets and makes use of additional financ- NAV CANADA has “members” that per- notice periods were not complied with or that ing through bank credit lines. form many of the traditional duties of share- one or more of the charging principles in the From the beginning, NAV CANADA holders such as electing directors, amending legislation was breached. (There have been has enjoyed AA credit ratings due to a vari- by-laws, and appointing public accountants only two occasions when a proposed change ety of factors such as its statutory monopoly, (auditors). in charges was appealed to the Canadian its position in the industry providing an The five members of NAV CANADA Transportation Agency and both appeals essential safety service, and the underly- elect directors as follows: were denied.) ing characteristics of the airline business, • Airlines – elect four people to the NAV with continued expectations of growth and CANADA board, the most of any single Service Delivery Oversight expansion in the long term despite some member Subject to safety oversight by Transport short-term volatility. • Federal Minister of Transport – on behalf Canada, the corporation is free to alter its As a result, and based on the company’s of the federal government, elects three levels of service and may reduce, expand, or track record, NAV CANADA continues to people to the board close facilities, provided that material chang- enjoy broad debt market access at low rates. • ANS Unions – together elect two people es are first the subject of consultation with The company’s financial model allows it to the board affected customers. to incur deficits during downturns, through • The Canadian Business Aircraft In practice, the corporation consults the use of its rate stabilization account. This Association – elects one director to the closely with customers and stakeholders prior mechanism reduces the amount of custom- board to embarking on any major initiatives, be er service charge volatility due to cyclical • The Director Member – on behalf of the they technical or financial. In addition, fluctuations in air traffic volume. Of note, board as a whole, elects four directors, who discussions on key issues and plans are held service charges did not increase in the period must be unrelated to any ANS stakeholder with leading industry associations and with 2004-2014, and there were two reductions in customers directly at the executive and oper- 2006 and 2007. During this 10-year period, The president and CEO is also a direc- ational levels. NAV CANADA charges were 25 percent tor. The result is a board of directors where less than the cumulative inflation rate. all stakeholder interests are represented but Operating as a Business By the same token, the company’s rate none dominates. In order to ensure the A key element of meeting customer needs setting powers do allow for rate increases when board’s independence from management, the was the realization that the company had to these are required to meet its fundamental offices of chair and that of the president and be run as a business, with the same focus on financial requirements, part of its financial CEO cannot be held by the same person. costs, consistent with safety, as its customers. strength which the markets recognize. In fact, in many ways the company’s cus- Service Charges: Oversight tomers are the “notional” shareholders of the Accountability The legislation governing NAV CANADA business, due to their continual investment in The NAV CANADA governance model activities stipulates numerous principles with the company through the payment of service leaves management with a great deal of dis- which the company must comply. For exam- charges. cretion and accountability in dealing with ple, service charges must not be set at a level The pre-NAV CANADA system was external financial challenges. The company’s that, based on reasonable and prudent projec- funded through a tax on passengers, and col- response to downturns in air traffic and rev- tions, would generate revenues exceeding the lected by the airlines. Now the service is paid enues has been to apply strict expenditure company’s financial requirements, includ- for directly, so customers have a much greater controls and productivity initiatives that have ing debt service and those amounts needed stake in the outcome. translated into a measured program of person- to maintain prudent financial reserves and It is no surprise then that the level of the nel reductions, while ensuring optimal staffing credit ratings. company’s service charges is a major focus in the company’s operational facilities. Service charges, based primarily on for the airlines that fly through Canadian aircraft weight and distance flown, must be airspace. There was only one period when Original Promise set in accordance with a methodology that general service charges had to go up, fol- Has the original promise of NAV CANADA is developed in consultation with customers lowing the 9/11 attacks as traffic volumes as a constructive alternative to a traditional and published. The structure of the charges plummeted. But for the most part, service government function been met? follows a set of principles set out in the leg- charges have evolved at far less than the rate Looking back over the years of expe- islation and which reflect those set out in of inflation. These charges are the primary rience and achievements since 1996 – and International Civil Aviation Organization source of funding for the ongoing operation ahead to the promise of new initiatives such (ICAO) guidelines. of the Canadian ANS, generating approxi- as global, space-based ADS-B – the answer For non-Canadian airlines, this is mately $1.2 billion in fiscal 2014. would be a clear “yes.”

The Journal of Air Traffic Control 35 The NAV CANADA Track Record It Begins With Safety

By John Morris, NAV CANADA

PART 2

NAVCANSuite integrated ATM technology includes a fully harmonized suite of air traffic control tools, combining flight data, operational data, surveillance, and airfield lighting control. It provides air traffic controllers with an environment that enhances safety and efficiency, and reduces controller workload. NAV CANADA’s technology has been sold to other Air Navigation Service Providers around the world.

36 Summer 2015 NAV CANADA

he NAV CANADA track record importance of proper pilot-controller com- conducted by the Transportation Safety Board. begins with safety. It is our busi- munications and other safety related issues, ness imperative since no aviation while collaborative activities with customers, Delays Down, Efficiency Up business can afford a loss of pub- airport authorities, and other stakeholders Since 1996, NAV CANADA has seen steady lic confidence. have been undertaken to reduce safety-relat- success in reducing flight delays and improv- TThe company has seen a decline in IFR- ed events such as runway incursions. ing efficiency. to-IFR losses of separation, the industry safety Our safety culture and management Working collaboratively with the indus- benchmark, from 1.4 per 100,000 air traffic system are reinforced through the activities try, NAV CANADA initiatives range from movements in 1997 to 0.77 per 100,000 in of our independent Office of Safety and airspace changes that enable more direct 2014. By far, the majority of these were tech- Quality, in conjunction with our operational routings, to more significant technological nical infringements with no risk of collision. groups. At the same time, we have strength- advancements offering considerable improve- Safety improvements have been gained ened our reporting culture through joint ments in efficiency, capacity, and safety. on a number of fronts. Investment in tech- management/union efforts to encourage Our Collaborative Initiatives for nology, such as advanced surveillance, new early reporting of a broad range of incidents Emission Reductions (CIFER) report pro- communication systems, and automated in a supportive environment. vides a comprehensive description of our warning functions, have enhanced safe- The company is subject to regulatory efficiency programs and their benefits to our ty awareness. Educational programs have oversight by Transport Canada, the safety reg- airline customers, including fuel savings, and been developed to increase awareness of the ulator, in addition to the safety investigations reductions in greenhouse gas emissions. All images courtesy of NAV CANADA

Since 1996, NAV CANADA has seen steady success in reducing flight delays and improving efficiency.

The Journal of Air Traffic Control 37 NAV CANADA

The world’s most advanced Oceanic air traffic management system, GAATS+, is used by controllers at the Area Control Centre in Gander, Newfoundland, to direct more than 1,000 flights a day as they transit over the North Atlantic. This system was recently implemented by NATS of the UK, ensuring seamless service across the busiest oceanic airspace in the world.

Cost Management The initial NAV CANADA business restructuring – from 1997 to 2001 – generated hundreds of millions in cumulative savings by reducing administrative headcount, closing regional administrative offices, and re-engineering key processes, while at the same time increasing controller staffing to address a shortage inherited from government. Today, the cost management focus continues through consistent control of staffing levels (a reduction of approximately 30 percent from the outset) and ongoing technology and process improvements.

Infrastructure Renewal The company committed to make ongoing investments in infrastructure renewal, from new facility construction, to lifecycle replacement of navigation aids, to the instal- lation of alternate surface surveillance, most of which is now complete. This renewal program has improved service, and proved to be more cost-effective by reducing maintenance costs and improving system efficiency.

Technology and Systems It is difficult to find an area of the Canadian ANS that has not been subject to our modernization drive. As a result, many of the company’s systems have been consolidated, reducing complexity and improving performance and reliability. NAV CANADA purchases equipment and systems where practicable, but has in-house expertise to build or adapt to meet specific operational requirements or improve efficiency – especially with regard to air traffic management applications, an area in which it is an acknowledged global leader.

38 Summer 2015 NAV CANADA Canadian Automated Air Traffic System (CAATS) CAATS has been the company’s most ambi- tious and complex modernization project to date. Fully operational for several years, it is the ANS backbone flight-data processing system offering key safety, efficiency, and time-saving improvements. CAATS integrates all individual flight information, allowing controllers to handle increased traffic more efficiently and safely. It has been enhanced to enable domestic controller pilot data link communications (CPDLC) and medium-term conflict detection (MTCD). As reported in The Journal of Air Traffic Control, CPDLC has been fully deployed (1) Average changes since September 2004. in Canadian domestic airspace for use in en (2) Consumer Price Index - Growth assumed to be 1.8 per cent for 2014. route operations, and has been operational in the North Atlantic region for well over a decade. With the recent domestic deployment, use of CPDLC has been growing include technology solutions for tower, ter- rapidly, with associated safety and efficiency minal, en route, and airport operations. benefits. NAVCANatm technology has been sold to other ANSPs around the world, such as Gander Automated Air Traffic System the UK, Denmark, Australia, Dubai, Italy, (GAATS+) Hong Kong, India, Luxembourg, and the GAATS+, another advanced air traffic man- Dutch Caribbean. This type of program agement system, is at the center of our efforts provides ANSPs and other industry coun- to improve flight efficiency over the North terparts the opportunity to avoid the costs Atlantic, which is the busiest oceanic air- of duplicate development and quicken tech- space in the world. nology deployment by using systems with a The system automates flight data pro- proven track record. A NAV CANADA air traffic controller commu- cessing so controllers can manage both nicates with pilots through Controller-Pilot random and track-based traffic. Integrated Automatic Dependent Surveillance- Datalink Communications (CPDLC), a system into GAATS+ are not only CPDLC, but Broadcast that allows the exchange of many routine air- also Automatic Dependent Surveillance When the company was faced with a decision ground communications to occur via digital text message rather than voice. NAV CANADA Broadcast (ADS-B) and Automatic to extend air traffic surveillance coverage in recently completed the implementation of Dependent Surveillance Contract (ADS-C), the Hudson Bay area, it selected Automatic CPDLC in its domestic airspace above 29,000 which facilitates reduced separation in the Dependent Surveillance-Broadcast (ADS-B) ft., with significant benefits in safety and effi- North Atlantic, allowing equipped aircraft to provide radar-like information at a much ciency. to request optimal flight profiles. lower cost than radar. The advanced features of GAATS+ Since then, ADS-B air traffic surveillance proved attractive enough to NATS in the has been further expanded into the Eastern UK that they bought the system from NAV Arctic and over Southern Greenland. Airlines and remote areas. Through more efficient CANADA. The result is a seamless approach are seeing big savings as a result of more spacing and more fuel-efficient routes and to oceanic air traffic services provision from efficient routes and altitudes made available altitudes, this new capability will lead to North America to Europe. through expanded airspace capacity. billions of dollars in annual fuel savings for the world’s airlines, with more than $100 NAVCANatm Aireon million in savings per year in the North The company continues to lever the benefits But this is only the beginning. In an exciting Atlantic alone. of technology we have developed through our joint venture with Iridium Communications, NAV CANADA is a major player international technology-marketing program. known as Aireon, ADS-B receivers will be in this joint venture in partnership with The NAVCANatm suite of integrated installed on Iridium’s next generation of Low Iridium, ENAV of Italy, the Irish Aviation ATM products includes electronic flight Earth Orbit (LEO) satellites to expand air Authority, and Naviair of Denmark. NATS strips, an operational information display traffic surveillance around the globe. of the UK signed on as an early customer, system, a digital-automatic terminal infor- The resulting expansion in airspace and since then customer agreements have mation service, surveillance displays, and capacity will revolutionize the way air traffic been signed with other ANSPs around the airfield lighting control. Other products services are provided over the world’s oceans world, and the list is growing.

The Journal of Air Traffic Control 39 One Wish for Aviation’s Future

ATC Reform By Charles M. Barclay

The following is an excerpt from a speech by Charles M. today if they had continued to operate as a federal agency with annu- Barclay to the Aero Club of Washington on Nov. 18, 2014. al appropriations financing, and now under sequestration? During efore offering my one wish for aviation’s future, allow me the 1970s and early1980s, everyone with authority over the airports to recall a piece of history that I believe is highly relevant. in FAA, DOT, and Congress were top-notch people who wanted the In the 1970s and 1980s, an increasingly important airports to succeed, but they didn’t have the governance and finance question being debated was, “What’s the proper gover- tools to make it happen. MWAA is an under-celebrated success that nance structure for National and Dulles airports?” As part of the we take for granted today. BFAA at the time, the airports’ ultimate “Board of Directors” was So that brings me to a public policy question we started wres- Congress, which as it turns out, had a lot of others things to do tling with decades ago, and one that is still unresolved after all this besides worry about giving focus and attention to running a couple time. That question is about the proper governance structure for of commercial airports. Of even greater impact, the capital-intensive operating and financing our air traffic control (ATC) system. airports had no access to capital finance and the bond market. Unlike My one wish for the aviation industry’s future is that today’s all other airports in the U.S., they could not sell bonds to finance leaders successfully deal with “the one that got away” from my gen- improvements over their useful life. If National airport needed a new eration of aviation and government leaders – ATC reform. $1-billion terminal – it did – the FAA executives had to try to get it The fundamental issues of governance and finance are identical from a single year’s DOT appropriation… something they couldn’t to the National and Dulles airports’ debate, despite the significant get, and wouldn’t even dare ask for if they were smart. differences in scale and technology. Governance structure in this In 1987, thanks to people like Jim Wilding, Elizabeth Dole, case comes down to whether or not you have the tools to deal with Norm Mineta, and many others, the Metropolitan Washington management authority, rapid change, major investment, and funding Airports Authority (MWAA) was formed. It gave the airports a reliability. In those regards, ATC is in great need of reform – for focused board with authority to act on modernization and com- the same reasons the microcosm of this debate, MWAA, required mercial operations, reliable financing, and access to the capital reform. markets. That act created the professional, modern airports Air traffic control is a 24/7, high-tech, capital intensive we know in Washington, D.C. today. “production line” of a major commercial industry. It is also a But ask yourselves, what would those airports look like critical service provider to important private aviation interests

40 Summer 2015 ATC Reform and the military. As you look around the federal government today, In my wish, we would recognize that air traffic control will you can’t find another production line of a major commercial indus- always be a monopoly. So, no matter how we organize its operating try. And for good reason – a high-tech, networked production line and financial governance, some continued federal regulation of key requires the continuous focus of an empowered board of directors, rights and economic access to the system is an appropriate part of reliable funding, and capital finance. comprehensive oversight going forward. Day-to-day operations and I want to clarify that, for me, this question is not about phi- financing are separate from those regulatory functions, and there are losophy or politics – rather, it is simply about providing the tools a number of models for designing both of those appropriate roles. designed to achieve an organization’s mission. We can’t expect any Obviously, my wish won’t come true for the aviation industry institution – government or private – to do big, complex things it is without an agreement being hammered out by the industry’s con- not designed to do. stituents to solve this Rubik’s cube of interests, governance, finance, Imagine any modern commercial telecommunications network, and regulation. That’s hard. But, I think few people would argue another reasonable metaphor for our ATC system, trying to finance that the record of modernization, as well as the prospect of future and keep pace with technology as a federal government agency under funding reliability, has earned air traffic control a presumption that the annual appropriations process. the status quo structure is the best we can do – that it deserves to The people in FAA, DOT, and Congress responsible for ATC continue, unreformed. oversight, operations, and financing are not the problem. They are I congratulate Administrator Huerta on his speech last October exceptional professionals doing their best in a governance structure and subsequent agreement with industry on NextGen. Those are that is missing the tools and incentives needed for a high-tech net- important steps to take at this time. But, to be clear, my wish is about work’s reliable financing and ongoing modernization. something different. In my wish, the goal is not ATC moderniza- Now, for those of you who have tuned me out, please tune back in tion, but instead, continuous ATC modernization as an institution- for one moment. It’s my wish that the federal government would con- alized, reliably funded, ongoing process. tinue to have two critical roles – roles we designed government to do. I know the current crop of smart and talented leaders in avia- The first is safety regulation. In the same manner that airlines tion and government are up to the task of wrestling this one wish to and airports operate commercial services while the FAA regulates conclusion at long last. safety, and does it well, the same pattern would follow for ATC services. About the Author The second thing government is designed to do and does well Over his four decade career, Charles M. Barclay became an acknowledged – frustratingly well, at times – is the protection of minority interests. leader in the aviation industry, leaving an indelible mark on public policy If I had to point to a single reason why ATC governance reform through his roles in the top levels of government and as chief executive of has not happened while other big issues of my generation were dealt the American Association of Airport Executives (AAAE). Barclay’s career in public service began with the Civil Aeronautics Board and continued with, it would be that some aviation constituents with minority eco- to the U.S. Senate, where he served as a senior professional staff member nomic influence over the ATC system fear their critical operational for the aviation subcommittee. Barclay was recently awarded the Donald interests won’t be safeguarded in a change. Worry about the fate of D. Engen Aero Club Trophy for Aviation Excellence from the Aero Club Ruslan Grumble/Shutterstock.com minority interests being protected is at least one major reason we of Washington. haven’t successfully dealt with ATC reform.

My one wish for the aviation industry’s future is that today’s leaders successfully deal with “the one that got away” from my generation of aviation and government leaders – ATC reform.

The Journal of Air Traffic Control 41 Air Traffic Control Restructuring

Based on historical experience, a government- owned air traffic control entity would suffer from two opposite inclinations on the part of its political overseers: too little attention or too much attention.

42 Summer 2015 ATC Restructuring The What and Why of It All

By David Grizzle, Dazzle Partners

ollowing the hearings before the House Transportation & Infrastructure Committee and its Aviation Subcommittee on Nov.18, 2014 and March 24, 2015, a growing number of participants in the aviation industry have come around to the belief that something is going to happen Fto restructure air traffic control. What exactly should and will occur continues to be fiercely debated; but a consensus is growing around the proposition that something will be done to change the status quo. The most striking testimony at the March 24 hearing came from Craig Fuller, speaking on behalf of the Management Advisory Council (MAC) of the Federal Aviation Administration (FAA).1 Created by the Air Traffic Management System Performance Act of 1996, the MAC consists of 15 members all experienced in the field of aviation and appointed by the Secretary of Transportation.2 One of the matters on which Administrator Michael Huerta asked the MAC to provide counsel was with respect to restructuring air traffic control. The prior MAC, which finished its work in 2013, had also looked at air traffic control restructuring and had concluded, among other points, that air traffic control should be separated from the rest of the FAA and funded by user-fees that bore some relationship to the cost of providing services.3 In a recommendation that was either a “see you and raise you” in poker or playing the trump in bridge, the MAC, as reported by Mr. Fuller, suggested that not only air traffic control but all of the FAA be structurally transformed. The MAC put forward the concept of a federal government corporation, with a private board to whom the administrator would report, that would oversee operations of the entire FAA, with the authority to decide down the road whether to move to user-fee funding and spin off the Air Traffic Organization – or not. The MAC called its proposal a “bold idea,” and it certainly is. The MAC’s proposal set many heads spinning, with some experts questioning whether it could actually be legal for the administrator, with all of his regulatory and enforcement power, to report to a private board. Irrespective of people’s views about the feasibility of the MAC’s proposal, its bold idea evidences clearly that even at the highest levels of the FAA there is consensus that transformative change is necessary if the FAA is going to deliver the safety, efficiency, and access that users of the National Cylonphoto/Shutterstock.com Airspace System (NAS) want and deserve.

The Journal of Air Traffic Control 43 ATC Restructuring

And when air traffic control is not ignored and receives intense attention, the focus is on political concerns, which are completely appropriate concerns for elected officials, but often have nothing to do with what is best for the critical operation of air traffic control.

Exploration of better ways to operate significant changed. aviation background and with or without air traffic control is hardly a new fascination In 2003, another ineffectual effort a Presidential appointment and Senate for Washington. The concept of stabilizing was undertaken to reform air traffic con- confirmation. ATC funding by resorting to user fees dates trol during the administration of President • Establish a non-stock, not-for-profit back to the 1960s. Major restructuring of air George W. Bush.6 To use Ms. Robyn’s imag- corporation to conduct the operations of traffic control outside of the rest of the FAA ery, again, the efforts failed to score. air traffic control under the auspices of a began in earnest during the Clinton admin- So, the current inquiry is at least the board appointed by aviation stakeholders istration, which Dorothy Robyn, a senior third attempt in recent memory to find a way outside of the political appointment member of President Clinton’s economic to transform air traffic control to enable it process and funded entirely by user fees team, described in her testimony before the more nearly to fulfill the needs and expecta- supplemented by funds borrowed pursuant Aviation Subcommittee as “an effort that tions of the industry. At this juncture, three to the new entity’s independent (i.e., advanced the ball but failed to score a touch- concepts have emerged: without federal credit support) bonding down.”4 • Preserve the status quo, perhaps with authority. Multiple times over the last 20 years, greater intentionality, with continued Congress has expressed its frustration and perhaps intensified engagement by Any effort to assign percentages of with the performance of the FAA and stakeholders like what has been provided stakeholders among these three positions its inability to modernize its equipment. by the MAC and the NextGen Advisory would be perilous. Most stakeholders hold In the Air Traffic Management System Committee under the auspices of Radio their cards pretty close to their chest, waiting Performance Act of 1996,5 Congress found Technical Commission for Aeronautics for others to speak first while taking a little that “In many respects the [Federal Aviation] (RTCA). more time to see more Congressional cards Administration is a unique agency, being one • Create a federal government-owned face up. It is obvious, however, that among of the few non-defense government agencies corporation to conduct the operations of those who strongly advocate change, they that operates 24 hours a day, 365 days of the air traffic control, or the entire FAA; and prefer a private not-for-profit corporation year, while continuing to rely on outdated usually this concept comes with some over a government owned and controlled technology to carry out its responsibilities for degree of user-fee funding to insulate corporation. a state-of-the-art industry.” the enterprise more completely from the What would such a private entity look The 1996 Act gave the administrator vagaries of the federal budgeting and like, and why is it preferred by those who sweeping new powers to govern the agency appropriations process and with a board advocate significant change in how air traf- with less external interference, almost in with lots or little authority comprised of fic control is conducted in the United States? a non-governmental way, especially in the members who are generally garden-variety Having served for four and a half years in

areas of personnel and acquisitions. Nothing political appointees with or without an the FAA, with most of that time as the chief Chalabala/Shutterstock.comJaromir

44 Summer 2015 ATC Restructuring operating officer and head of the Air Traffic tinuing to exist in current law, it was ignored; not be employees or directors of a commer- Organization, I put myself squarely in the all of the intentional insight it should have cial airline or Airlines for America. camp among those who believe that signif- provided was disregarded and forgotten. icant restructuring is necessary and that the Would the board of directors of a Assets Acquisition not-for-profit option is the way to go. government-owned air traffic entity receive NewATO must completely control its Seven elements are essential to under- more consistent attention than the ATSC assets, most likely through a purchase, standing this preferred alternative. received? Perhaps not. For most of the so that it is free from interference (except for time, air traffic control is not a policy- safety oversight) as it makes decisions to elim- Structure rich environment. It is a hardcore, 24/7/365 inate obsolete assets and increase efficiency Congress would create a federally operation that simply isn’t interesting to and performance. NewATO should acquire chartered, not-for-profit entity (which those who have principally political all assets currently deployed by the FAA’s we will call “NewATO” here). NewATO responsibilities. So, it tends to be ignored. Air Traffic Organization and the NextGen would have no stockholders, but would be And when air traffic control is not Organization, but also shared assets on controlled by its board of directors – simi- ignored and receives intense attention, the which these organizations currently depend, lar to the American Red Cross. NewATO focus is on political concerns (such as the and a part of the Aeronautical Center and would be independent of the federal govern- location and dimension of facilities and the most, if not all, of the Technology Center. ment except for safety oversight and appeal winner of procurement contracts), which are NewATO should pay a fair price. of the rates NewATO charges for use of completely appropriate concerns for elected Because these assets are unique, there are the system. A not-for-profit structure is officials, but often have nothing to do with no clear benchmarks such as book value, fair preferred over a for-profit entity for several what is best for the critical operation of air market value, or replacement cost that can reasons. The not-for-profit corporate form traffic control. be used; the price will have to be determined reduces concerns that the operator might To form a government-owned air traffic using good judgment and the application cut corners either in safety, employee care, control entity, almost all of the thorny issues of sound valuation principles. A significant or access, merely for the sake of enhancing associated with any restructure must still be factor in determining the price should be stockholder returns. It also addresses anxiety addressed (user-fee levels, asset transfers, a consideration of how we want NewATO about excessive rates and charges, because and employee-benefit programs). But history to use its capital: to pay for old assets or to there would be no value leakage from the shows us that even if we resolve all of those develop and deploy new ones. NewATO will enterprise to incentivize generating income issues, the combination of too little attention have access to substantial, well-priced capital above what is required to provide efficient punctuated by too much inappropriate atten- because of its market position and its ability access. Finally, not-for-profit entities are tion from our political leaders will leave us to borrow money through the issuance of intrinsically multiple bottom-line organiza- with a generally unimproved operation. both revenue- and asset-backed securities. tions. It is in their nature to balance the mul- NewATO will receive no credit support – tiple values of safety, efficiency, and access. Board Composition and explicit or implied – from the federal gov- But, why not create a government- Governance ernment. owned corporation, like Amtrak or the NewATO would be controlled by a There is some angst about whether we United States Postal Service? Many developed board of directors, whose members are des- can get the price right for the assets. The countries manage to accomplish significant ignated by stakeholders who have a continu- price-determination process should be done tasks with government corporations. We ing, substantial interest in air traffic control. deliberately and professionally. But, if the don’t seem to do so well here. Based on The board will appoint the chief executive price is inadvertently too low, the only people historical experience, a government-owned officer. The board should certainly include who will benefit from the underpricing will air traffic control entity would suffer from representatives of users of the system who be the users, passengers, shippers, and com- two opposite inclinations on the part of its depend upon it and the employees who make munities who basically paid for the assets in political overseers: too little attention or too it happen. It may also include representa- the first place through aviation taxes. much attention. tives of other constituencies that have a sub- In the 2003 Congressional effort to stantial interest in the operation. Critically, E mployees improve the performance of air traffic with few exceptions, members of the board It is essential that the current employ- control, Congress created the Air Traffic should be appointed by private stakeholders ees who conduct the operations that Services Committee, a Presidential- who pursue no objective in making their move to NewATO not be subjected to risk appointed, Senate-confirmed board of direc- appointments other than the best interests and uncertainty. Their pay and benefits, as tors for the Air Traffic Organization. The of the enterprise and the quality of its oper- well as their pension expectations, should be committee had quite significant power, ation. The board would, for the most part, maintained. NewATO will need to consider including approval of ATO strategic and not be political appointees. All members of more modern benefit structures going for- modernization plans and of all acquisitions the board should have a fiduciary duty to ward, but only for future employees who will over $100 million. The committee was also the new entity that is unencumbered by any then be able to make their employment deci- supposed to make budget recommendations. employment or other connection with the sions based on the benefits they are offered at No sooner had the ink dried on the legisla- stakeholder representative that appointed the time. The collaborative environment and tion than the committee began to be ignored. them. To take the commercial airlines as an processes between management and labor Its vacancies were not filled and soon it example, the board members designated on that have been developed in the Air Traffic ceased to meet and, despite its authority con- their behalf by Airlines for America could Organization over the last five years must be

The Journal of Air Traffic Control 45 ATC Restructuring

preserved by NewATO. over sufficient time to attend to details, discover unforeseen challenges and to per- Revenue mit the industry to adjust to new methods. NewATO should be funded princi- Benchmarking against other transactions of pally through fees paid by users of comparable scale and complexity, a two-year the system, based on formulas that are trans- transition consisting of two or more distinct parently determined and easily calculated, phases properly balances the need for prompt which cover NewATO’s operating and capi- change with the avoidance of organizational tal costs. In order to avoid the risk of future risk. “double taxation,” all existing aviation taxes Fortunately, on its first day of oper- should end at the same time user fees begin. ations, NewATO will already be a fully NewATO should not rely upon the federal scaled-up operation, with hundreds of facili- government for any financial support, except ties, complete management and labor leader- for potential fees for services rendered by ship, supply chains and contract support – all the new entity. Military flights operated by available to be more productively leveraged the federal government will be exempt from with predictable and more generous funding user fees. and governance that respects the peculiar demands of this critical operation. Regulation Air traffic control operations will Conclusion continue to receive safety oversight It seems that about every 10 years, Congress from the FAA. Contemporaneously with gets energized about restructuring air traf- the creation of the new entity, significant fic control. We are now in the midst of this steps should be mandated to move the FAA decade’s efforts, and there is evident momen- more completely to a performance-based tum. We may not succeed, though. If we mode of oversight, consistent with the safety fail this time, no doubt the efforts will be risk management systems the industry and repeated again a decade from now, at which the Agency are implementing. Users would time our current NextGen implementations be able to appeal to the federal government will then be running technology that is more increases in rates and charges that they con- than 20 years old. We can always start the sider unreasonable in light of the needs and “next NextGen,” but we might not be able services of the new entity. to regain the global technical leadership in Some have expressed concern about ATC that will have been forfeited if we do whether the current level of safety will be not seize the current opportunity. maintained if the operator and the regulator are separated. Safety should increase as the References division of labor between NewATO and the [1.] http://transportation.house.gov/uploaded- regulatory side of the FAA is clarified, as files/2015-03-24-fuller.pdf [2.] Although members of the MAC were to have been visibility into safety processes (such as new Presidential appointed, Senate confirmed, that route design) is increased and, consequent- burdensome provision was subsequently delet- ly, greater accountability is possible. Today, ed in favor of appointment by the Secretary of even when the industry senses that some- Transportation. thing is not working right between the ATO [3.] “FAA and Aviation Policy Reform: Now is the Time,” FAA Management Advisory Council, and the regulatory part of the FAA, they Joint Meeting of MACs. January 29, 2014. don’t know whom to blame. Stephen D. Van Beek, Ph.D. [4.] http://transportation.house.gov/uploaded- Transition and Scale files/2015-03-24-robyn.pdf Although air traffic control con- [5.] PUBLIC LAW 104–264 [6.] Congress created the Air Traffic Services stitutes a large civilian government Committee, a Presidential-appointed, Senate- operation, as private-sector entities go, it confirmed board to oversee the system. The is not massive; each of the four major air- Committee’s responsibilities included approval lines in the U.S. is at least three times the of ATC strategic and modernization plans and size of the air traffic control operation. of all acquisitions over $100,000,000. The Committee was also supposed to make budget Operating a safety-intensive enterprise of recommendations. It was allowed to fall into somchai rakin/Shutterstock.comsomchai the scale of NewATO will not constitute the complete disuse, with its vacancies unfilled in a treading of any new ground. At the same decade, with no meetings and no execution of its time, because of the criticality of NewATO’s responsibilities, even though its required role is safety mission, the transition from govern- still current law. ment to stakeholder control should be done

46 Summer 2015 Member COMPANIES Directory of Member Organizations

A cADEMIC/Research ROMATSA-Romanian ATS Idustryn - Products & Service Business Integra Inc Institutions Administration Providers Bethesda, MD Bucharest, Romania C Speed, LLC AIMS Community College 1st American Systems and Liverpool, NY CACI Greeley, CO Aviation Associations Services, LLC Arizona State University Washington, DC Arlington, VA CANSO Mesa, AZ AAAE-American Association of A3 Technology, Inc. Daniel Webster College Airport Executives Egg Harbor City, NJ 2132 J H Hoofddorp, Netherlands CGH Technologies, Inc. Nashua, NH Alexandria, VA Adacel Systems, Inc Embry-Riddle Aeronautical Airlines for America Orlando, FL Washington, DC Chickasaw Nation Industries University Washington, DC Advanced C4 Solutions Daytona Beach, FL AOPA-Aircraft Owners & Pilots Tampa, FL Norman, OK Hampton University, Association Advanced Sciences & CI2 Aviation, Inc. Department of Aviation Frederick, MD Technologies LLC Dunwoody, GA CNA Corporation Hampton, VA APROCTA Berlin, NJ Inter American U. of Puerto Rico Madrid, Spain Aerospace Engineering & Research Alexandria, VA COMSOFT Bayamon, PR FAA Managers Association, Inc. Associates, Inc. Kent State University Chandler, AZ Owings, MD Karlsruhe, Germany Concept Solutions, LLC Kent, OH MDA Corporation AIRBUS MIT Lincoln Laboratory Vancouver, BC Herndon, VA Reston, VA CPS Professional Services Lexington, MA NATCA Airtel ATN Stockton Aviation Research and Washington, DC Glasthule, Ireland Fairfax, VA Technology Park of National Safe Skies Alliance All Weather, Inc. Crown Consulting, Inc New Jersey, Inc. Alcoa, TN Sacramento, CA Arlington, VA Galloway, NJ PASS-Professional Aviation Safety Antenna Associates, Inc. The Community College of Specialists Brockton, MA Baltimore County Washington, DC ARCON Corporation Baltimore, MD Professional Women Waltham, MA The MITRE Corporation/CAASD Controllers, Inc. AT&T Government Solutions CSC McLean, VA Washington, DC Oakton, VA Falls Church, VA University of North Dakota/JDOSAS ATAC Corporation CSSI, Inc. Grand Forks, ND Government & Military Orgs Santa Clara, CA Washington, DC Vaughn College of Aeronautics & ATECH - Negocios Em Technologias Diamond Antenna and Microwave Corporation Technology AFSBw Bundeswehr ATS Office Sao Paulo, SP Flushing, NY Frankfurt am Main, Germany Aurora Sciences Littleton, MA DIGITALiBiz, Inc. University of Oklahoma DOT/RITA/Volpe Center Washington, DC Norman, OK Cambridge, MA Aviation Management Rockville, MD VT UASTS EUROCONTROL Associates, Inc. DSI-Dynamic Science, Inc. Blacksburg, VA Brussels, Belgiun Alexandria, VA Phoenix, AZ FAA Academy AvMet Applications Inc. ECS-EnRoute Computer Solutions Air Navigation Service Providers Oklahoma City, OK Reston, VA Egg Harbor Township, NJ NASA AxiosTec EMCOR Enclosures-Crenlo AEROTHAI Washington, DC Hermitage, TN Rochester, MN Engility Corporation Bangkok, Thailand NCAR - National Center for B3 Solutions, LLC Airservices Australia Atmospheric Research Alexandria, VA Chantilly, VA Ernst & Young Canberra, Australia Boulder, CO BCF Solutions, PMA Division ANS CZ US Army Air Traffic Services Arlington, VA McLeary, VA Evans Consoles 252 61 Jenec, Zech Rep Command BCI-Basic Commerce & Austro Control GmbH Fort Rucker, AL Industries, Inc Vienna, VA Vienna, Austria US Navy SSC LANT Moorestown, NJ HungaroControl Zrt. N. Charleston, SC Beacon Management Group Budapest, Hungary USAF Flight Standards Agency Mitchellville, MD Exelis NATS Oklahoma City, OK Black & Veatch Edinburgh, United Kingdom USAF HQ Air Mobility Command/A3 Arlington, VA McLean, VA NAV CANADA Scott Air Force Base, IL BlueWater Federal Solutions, Inc.

Ottawa, Canada William J. Hughes Technical Center Chantilly, VA Patrick Poendl/Shutterstock.com Atlantic City International Booz Allen Hamilton Airport, NJ Washington, DC

The Journal of Air Traffic Control 47 Member COMPANIES Directory of Member Organizations

Flatirons Solutions Joint Venture Solutions (JVS), LLC OST, Inc. Subsystem Technologies, Inc. Arlington, VA Washington, DC McLean, VA Arlington, VA FreeFlight Systems JTA Plastic-View ATC, Inc. Sunhillo Corporation Waco, TX Washington, DC Simi Valley, CA West Berlin, NJ FREQUENTIS Kearney & Company Pragmatics, Inc. Systems Atlanta, Inc. Columbia, MD Alexandria, VA Reston, VA Atlanta, GA General Dynamics C4 Systems Kongsberg Gallium Talend Scottsdale, AZ Ottawa, ON Irvine, CA General Dynamics IT L-3 STRATIS Tantus Technologies, Inc. Needham, MA Reston, VA Raytheon Company Washington, DC Grant Thornton LLP Landrum & Brown, Inc. Marlborough, MA TAPE-Technical and Project Alexandria, VA Cincinnati, OH Red Hat, Inc. Engineering LLC LMI - Logistics Management Raleigh, NC Alexandria, VA Institute Regulus Group, LLC McLean, VA Woodstock, VA Ricondo & Associates Guntermann & Drunck GmbH Chicago, IL Wilnsdorf, Rigil Corporation TASC Lockheed Martin Washington, DC Chantilly, VA Rockville, MD Robinson Aviation (RVA) Inc Telegenix Inc LS Technologies, LLC Manassas, VA Rancocas, NJ Washington, DC Rockwell Collins Telephonics Corporation Harris Corporation MCR, LLC Cedar Rapids, IA Farmingdale, NY Melbourne, FL Bedford, MA Russ Bassett Corp. Tetra Tech AMT HCRQ, Inc. Whittier, CA Arlington, VA Williamsburg, VA MCR LLC HP Bedford, MA Herndon, VA Human Solutions, Inc. Thales Air Traffic Management U.S. Washington, DC Saab Sensis Corporation Overland Park, KS I.S. Technologies, LLC. dba CSD LLC Metron Aviation, Inc. East Syracuse, NY Oklahoma City, OK Dulles, VA SAIC-Science Applications IBM MicroSystems Automation Group International Corporation Bethesda, MD Falls Church, VA Washington, DC ICF International Midwest ATC Services, Inc. Searidge Technologies The Boeing Company Fairfax, VA Overland Park, KS Ottawa, ON Alexandria, VA IDS North America Mosaic ATM, Inc. Thinklogical Montreal, QC Leesburg, VA Milford, CT IHSE USA, LLC Mosaic Technologies TKO’s Cranbury, NJ Fulton, MD East Syracuse, NY Imtradex Hor-/Sprechsysteme NEC Corporation Triumph Enterprises, Inc. GmbH Tokyo, Japan Selex Systems Integration Inc. Fairfax, VA Dreieich, Germany New Bedford Panoramex Washington, DC UFA, Inc. Indigo Arc LLC Corporation Serco Inc Burlington, MA Rockville, MD Claremont, CA Reston, VA Vaisala Intelligent Automation, Inc. Noblis Sierra Nevada Corporation Louisville, CO Rockville, MD Falls Church, VA Sparks, NV Veracity Engineering Inventive Electronics SkyWard Washington, DC Niceville, FL Portland, OR WCG-Washington Consulting Iron Bow Spectrum Software Technology Group, Inc. Niceville, FL Egg Harbor Township, NJ Bethesda, MD Jeppesen - A Boeing Company Northrop Grumman SRA International, Inc. WIDE USA Corporation Englewood, CO McLean, VA Fairfax, VA Irvine, CA JMA Solutions Orion Systems, Inc. STR - SpeechTech Ltd. Washington, DC Huntingdon Valley, PA Victoria, BC

48 Summer 2015 Directory of Member Organizations

Midwest Air Traffic Control Service, Inc., is a leading provider of Air Traffic Control, Airfield Management, Air Terminal, Ground Handling, Weather Observation and Reporting and other aviation support services to US civilian and military federal government agencies, as well as international customers. Founded in 1978, Midwest ATC supports a diverse customer base, including the US Federal Aviation Administration, the FAA International Office, the US Department of Defense, the North Atlantic Treaty organization, and the Canadian Department of Defense. With our solid reputation and team of highly qualified aviation experts, Midwest ATC is dedicated to providing clients with an outstanding level of service and commitment to safety at a reasonable price. Midwest takes seriously our role in ensuring the safety of the traveling public and in supporting the efforts of both the US government and global partners overseas. Using Midwest ATC's flexible and professional approach will enable you to achieve the success you seek.

Midwest Air Trafﬁc Control Service, Inc. Phone: + 1 913 782 7082 7285 W 132nd Street, Suite 340, Overland Park, KS 66213 Web: www.atctower.com

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