PRESIDENT CLINTON ANNOUNCES ACTIONS TO IMPROVE
AIR TRAVEL FOR AMERICAN CONSUMERS
December 7, 2000
President Clinton today will announce three actions to reduce airline
delays and improve air travel for America: an Executive Order directing
the Federal Aviation Administration to create a performance-based
organization to focus solely on efficient operation of the air traffic
control system; appointment of a group of business and labor leaders from
outside of the aviation industry to serve as a board of directors for this
organization; and a review of impediments to congestion pricing at
airports. Joined at the White House by the Secretary of Transportation,
the Administrator of the Federal Aviation Administration (FAA), and the
editor of National Geographic Traveler, a consumer travel magazine, the
President also will call on Congress to reform the way air traffic control
services are financed.
CHALLENGES TO OUR AIR TRAVEL SYSTEM. Our nation has the safest air
transportation system in the world, but air travel is no longer as
efficient as it is safe. The recent, explosive growth in air travel is
straining the limits of the air traffic control system operated by the FAA
as well as the runway capacity at key airports. Flight delays and
cancellations have soared, costing passengers and airlines billions of
dollars and contributing to widespread passenger frustration and anger.
To address this problem, the FAA must be structured to manage the
high-tech, high-demand operations of a 21st century air traffic control
system. As 24/7 service provider, the air traffic system in some respects
is more like a business than a typical government activity. It should
operate with a clear mission, measurable performance goals, and
identifiable users. The Clinton Administration has worked with the
Congress to provide the building blocks of a more efficient air traffic
control system, including flexibility from federal personnel and
procurement rules. Today?s action by the President builds on these steps by
creating a distinct management unit for the air traffic system ? the Air
Traffic Organization ? and giving it the incentives and tools to operate
more flexibly and efficiently. The FAA Administrator will continue to
regulate the air traffic sytem to ensure that it operates safely and
securely, as well as efficiently. At the same time, because it is freed
from the day-to-day operational concerns of air traffic, the rest of the
FAA will be able to focus its energies on leading our aviation system at
large.
PRESIDENT CLINTON WILL TODAY ANNOUNCE STEPS TO REDUCE AIR TRAFFIC CONTROL
AND AIRPORT DELAYS. To accelerate efforts to reduce delay and improve air
travel for consumers, the President will announce the following steps:
? Executive Order Directing FAA to Create a Performance-Based Organization
to Make Air Traffic Control More Efficient: The President is issuing an
Executive Order directing the FAA to create a ?performance-based
organization? -- the Air Traffic Organization -- to manage the operation of
air traffic services. It will be located within the FAA, but will be
separate from, and overseen by, the FAA's safety, regulatory and
enforcement arm. Establishment of this new organization is a major step
towards development of a 21st century aviation system.
The new organization will be devoted exclusively to its ?core business? ?
the delivery of air traffic control services. It will be managed by a
Chief Operating Officer, who will be hired through a nationwide competitive
search; the COO will negotiate a performance agreement with the FAA
Administrator and be paid partly based on performance. In collaboration
with its customers (airlines and other air traffic control users), the
organization will set clear performance goals, which will be spelled out in
a performance agreement; using agreed-upon indicators, customers can
measure the organization?s performance and hold it accountable.
? Designation of Business and Labor Leaders to Oversee Air Traffic PBO:
Secretary of Transportation Rodney E. Slater is designating five
distinguished individuals for appointment to the Air Traffic Services
Subcommittee of the FAA's Aviation Management Advisory Council. Congress
created the five-member Subcommittee in recent legislation. It will
function as a board of directors, overseeing the management and budget of
the Air Traffic Organization and ensuring that it becomes more
customer-driven and performance-based. The designees are:
? John J. Cullinane, President, The Cullinane Group
? Nancy Kassebaum Baker, former U.S. Senator from Kansas
? Leon Lynch, International Vice President, United Steelworkers of America
? Sharon Patrick, President and COO, Martha Stewart Living Omnimedia, Inc.
? John W. Snow, Chairman, President and CEO, CSX Corporation
? DOT/FAA Federal Review of Impediments to Airport Congestion Pricing:
The President is directing the Department of Transportation (DOT) and the
FAA to review the statutory and regulatory impediments to the use of
congestion pricing and other market mechanisms to provide for more
efficient use of existing runway capacity and encourage the creation of new
capacity. For instance, charging airlines more to land at airports during
peak hours could reduce congestion and delays. The FAA is already looking
at options for congestion management, including market mechanisms, to
reduce delay at LaGuardia Airport. DOT and FAA should expand that effort
and seek statutory relief where appropriate.
THE WHITE HOUSE WILL RELEASE A REPORT OUTLINING NEED FOR A NEW AIR TRAFFIC
ORGAN IZATION. The White House report outlines the challenges facing the
aviation system, the steps the FAA has taken to address them, and the need
to create an a new performance-based organization to operate the air
traffic system more efficiently.
CONGRESS MUST TAKE ADDITIONAL ACTION. These Executive actions, building
upon current reforms within the FAA, are necessary but not sufficient to
allow the Air Traffic Organization to operate a 21st century air traffic
system. As the Administration said in 1995, the individual reforms of the
ATC system are interrelated, and "fundamental air traffic reform requires
that these changes be made together or the benefit of individual changes
will be greatly reduced." Thus, the President also will call on Congress
to reform the way air traffic services are financed, in keeping with
recommendations from both the Administration and the congressionally
created National Civil Aviation Review Commission:
? Congress should replace the excise tax on passengers with authorization
for the Air Traffic Organization to set cost-based charges on commercial
users of the air traffic control system. (General aviation should continue
to pay the fuel tax.). The Air Traffic Organization must be able to price
its services, in order to balance supply and demand in the short run and
meet customer demand in the long run.
? As soon as the Air Traffic Organization is fully financed by cost-based
fees, Congress should allow it to borrow funds from Treasury or on private
markets to finance long-term capital investments. Fees would replace
direct appropriations for capital, and would enable debt financing of
needed capital investment.
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