Air Traffic Control:

Issues Presented by Proposal to Create a Government Corporation

T-RCED-95-114: Published: Feb 23, 1995. Publicly Released: Feb 23, 1995.

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GAO discussed proposals to reform the air traffic control (ATC) system, focusing on the administration's proposal to create a privatized ATC system. GAO noted that: (1) under the proposal, the Federal Aviation Administration (FAA) would continue to provide safety oversight, but a self-sufficient government corporation would operate the ATC system; (2) the corporation could be viable if the proposals' budget, cost, and revenue estimates are accurate; (3) the proposal's revenue estimates are sensitive to future economic growth and the extent of business travel; (4) the corporation would need to be exempt from the Budget Enforcement Act's spending caps; (5) the corporation would have to borrow from the private sector to increase the pace of ATC system modernization; (6) it is concerned over how FAA and the corporation would divide safety responsibilities and resolve regulatory disputes; (7) FAA has had problems in proactively identifying safety problems and attracting skilled staff; (8) FAA would have to compete with the corporation for skilled personnel; and (9) the corporation would have little incentive to maintain services to general aviation and small airports, since the value of the services provided to those users would be greater than the value of the revenue they generated.

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