Institutional Reform of Air Navigation Service Providers

Institutional Reform of Air Navigation Service Providers

A Historical and Economic Perspective

Transport Economics, Management and Policy series

Institutional Reform of Air Navigation Service Providers deals with the changes that have taken place in this major, technologically progressive industry as many countries moved away from direct provision by the government to forms of corporate or private provision. The author provides an up-to-date institutional and economic analysis of air navigation service providers’ efforts to reform their governance and funding structures under these changes.

Chapter 5: The US experience

Subjects: economics and finance, transport, innovation and technology, organisational innovation

Extract

The US airspace is both the biggest in the world, with 12 million km2 of continental airspace and 65 million km2 of oceanic airspace, and the most heavily used, with 25 million instrument flight rules (IFR) flight-hours flown in 2012, along with 23 million IFR airport movements and 15 million controlled visual flight rules (VFR) airport movements. Air navigation services are provided by the Air Traffic Organization (ATO), an arm of a federal governmental agency, the Federal Aviation Administration (FAA), making it one of the few developed nations where the air navigation service provider (ANSP) is still directly controlled by the national government. Furthermore, instead of funding its operations via user fees on the airspace users, it still relies on taxation for its funding needs. Since the 1980s there have been several attempts to reform both the governance and funding mechanisms, but these efforts have always failed to be implemented. This chapter will explore the history of the US system, the failed attempts at reform and future developments. Government involvement with aviation in the US began as early as 1911 with the first experiments of carrying mail by air. After World War I, and using aeroplanes that were in surplus after the conflict had ended, the Post Office Department expanded the airmail service to a great extent, taking over the service in 1918.

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