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Trump Endorses Controversial U.S. Air-Traffic Spinoff Plan (1)

Bloomberg logo Bloomberg 6/5/2017 Alan Levin and Mark Niquette
Air traffic controller specialists work at the Frederick Municipal Airport control tower in Frederick, Maryland, U.S., on Wednesday, March 27, 2013. The U.S. will close 149 air-traffic control towers run by contractors at small and mid-sized airports beginning on April 7 as a result of automatic budget cuts at government agencies, known as sequestration. The Frederick Municipal Airport control tower is one of contract towers on the Federal Aviation Administration's (FAA) closure list.: 1495042527_air-traffic-hp © Bloomberg/Bloomberg 1495042527_air-traffic-hp

(Bloomberg) -- Donald Trump on Monday unveiled his proposal to hand over control of the U.S. air-traffic control system to a non-profit corporation as he kicked off a week-long push for his infrastructure plan.

The proposal, designed to lower costs and improve efficiency of the system that oversees flights, would transfer about 15,000 controllers and thousands of other managers and technical workers to a new government-sanctioned corporation.

In an attempt to gain support for a plan that fell short in Congress last year, the White House said the 13-member board of directors for the new corporation should be made up of appointees from industry stakeholder groups. Critics had charged the proposal last year gave too much power to airlines.

The plan is part of the White House’s goal to transform U.S. infrastructure. Later this week Trump is expected to travel to Ohio to garner support for his strategy -- a key campaign promise -- to channel $1 trillion into the nation’s roads, bridges, inland waterways and other public facilities.

The proposal is also designed to shrink government and reduce taxes, said DJ Gribbin, a special assistant to the president who gave a briefing on the plan Monday morning.

“All of those elements line up very nicely with the president’s view” of how to run government, Gribbin said.

Democratic Opposition

Senate Minority Leader Chuck Schumer issued a statement blasting the Trump infrastructure plan, saying it would impose “tolls from one end of America to the other.” The focus on privatization will lead to “less construction and far fewer jobs,” Schumer said in a statement.

Trump’s air-traffic control proposal will be based largely on legislation introduced in 2016 by Representative Bill Shuster, the Pennsylvania Republican who is chairman of the House Transportation and Infrastructure Committee, according to a White House official.

Trump will sign a decision memo, and a letter to Congress on the principles in his air-traffic control plan at the White House Monday. It would create a new user fee on aircraft using the system to replace current taxes on aviation fuel and airline tickets.

Critics of the air-traffic plan have said it would jeopardize small airports by giving too much power to airlines and large hubs.

NextGen or Not?

While the Federal Aviation Administration is already years into a technology upgrade known as NextGen, the efficiency improvements it promises can be better accomplished outside of direct government control, say backers of the White House plan. The FAA would continue to monitor safety and write air-traffic regulations under the plan.

Most airlines, which have favored the idea for more than a decade, cheered the proposal.

American Airlines Group Inc., the world’s largest carrier, said it looked forward to working with the Trump administration “to make air travel cleaner, safer and more efficient.”

“The antiquated system we rely on today is inefficient and causes thousands of avoidable flight delays,” Shannon Gilson, a spokeswoman for American, said in an emailed statement. “If we aren’t able to modernize and innovate using the latest technology, the impacts to the traveling public will continue to grow.”

Some former high-level FAA managers also favor the privatization plan, which is opposed by many Democratic lawmakers and private-aviation groups. The opponents say the current system works well, and they fear the transition would be a setback to the introduction of new technology.

About 60 countries, including Canada and the U.K., have gone to similar semi-private management of their air-traffic networks.

Infrastructure Tour

On Wednesday, Trump plans to visit Cincinnati, located on the Ohio River on the border with Kentucky. The event will highlight the locks, dams and other elements of the inland waterways system crucial for moving agricultural products and other goods. The key principles of Trump’s plan, released May 23, called for a fee on commercial navigation to finance future capital investments.

On Thursday, Trump will host governors and mayors at the White House for a bipartisan listening session.

Trump plans to finish the week at the Department of Transportation offices in Washington to discuss its efforts to streamline the regulatory approval and permitting process for road and rail projects. Approvals that can take 10 years should be done in two years or less, Trump administration officials have said, and the White House has convened a task force of 16 agencies to examine policies, rules and laws that should be targeted to speed up the process.

(Updates with plan details, comments from briefing starting in third paragraph.)

--With assistance from Jennifer Jacobs

To contact the reporters on this story: Alan Levin in Washington at alevin24@bloomberg.net, Mark Niquette in Columbus at mniquette@bloomberg.net.

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Elizabeth Wasserman

©2017 Bloomberg L.P.

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