Aging airport infrastructure is creating headwinds at Newark Liberty International Airport in New Jersey, prompting U.S. Department of Transportation Secretary Sean Duffy to announce a reduction in flights while also unveiling a plan to reconstruct the nation's air traffic control system.
"Decades of neglect have left us with an outdated system that is showing its age," said Duffy. "Building this new system is an economic and national security necessity, and the time to fix it is now."
"The unprecedented coalition of support we've assembled – from labor to industry – is indicative of just how important it is to this administration to get done what no one else could."
The DOT is one of the four federal agencies that received an increase in President Trump's skinny budget proposal while the House Transportation and Infrastructure Committee approved a
The methodology for transforming the funding into ATC modernization has been called into question.
"For equipping large numbers of facilities with new technology the Federal Aviation Agency's limited annual funding means a 10-to-15-year waterfall of equipping a small fraction of the facilities each year," said Robert Poole, director of transportation policy for the Reason Foundation, a libertarian think tank.
"In some cases, by the time the last ones get the new system, it's already obsolete."
Poole is advocating for a different approach to keeping airport technology up to date that relies on bond financing, user fees and treating ATC like a utility.
"Revenue bond financing is well-suited to large capital investments such as a new system needing to be rolled out to numerous facilities, or replacing a number of major facilities," he said. "FAA has no bonding authority and is unlikely to get it for various policy reasons."
"Credible bond financing requires a reliable, non-political revenue stream. All FAA's funding comes from Congress via annual appropriations, so it is far too little for either of the above needs and unreliable."
Jackson Shedelbower, executive director of the Center for Transportation Policy, believes Congress can still cure the problem be declaring an emergency.
"The FAA needs more long-term funding certainty to move capital projects forward. An emergency modernization funding package from Congress combined with the leadership of Duffy would satisfy that appetite," he said.
Airport infrastructure is currently supported through the Airport and Airway Trust Fund, federal government grants, airport generated revenue and the Passenger Facility Charge. The PFC is a fee charged on airline tickets which has been stuck at $4.50 a head since 2000.
Improvements are often financed at the local level with tax-exempt general revenue airport bonds, which so far have emerged
Many airports are carrying
Poole points to Airservices Australia, Nav Canada, and National Air Traffic Services in the United Kingdom as examples of how ACT operations and upgrades are financed with revenue bond sales supported by user fees.
"The transformation that has taken place over the last three-plus decades is for national governments to remove their ATC provider from the transport ministry and from the national budget," said Poole. "They become ATC utilities, with their dedicated revenue streams coming from ATC user fees."
The concept has been floated in the U.S. via former Rep. Bill Shuster, a Pennsylvania Republican who chaired the House T&I Committee from 2013 through 2018.
Shuster now works as a senior policy advisor for the multinational law firm Squire Patton Boggs and still voices support for a non-profit privatization option.
