Oct 17, 2018

The FAA Reauthorization Could “Make America Boom Again”

After years of revision and delays, the long-overdue FAA Reauthorization Act of 2018 has finally been signed into law. In this case, the wait was worth it. The law contains promising provisions that could stimulate a new wave of innovation in aviation.

In April, my colleague Brent Skorup drew up a list of liberalizing reforms to kick-start an air travel renaissance that Congress could promulgate through the reauthorization. He specifically identified supersonic flight and flight-sharing (“Uber for airplanes”) as examples of low-hanging fruit well within lawmakers’ grasp to boost growth and consumer welfare.

I am delighted to report that many of these ideas are reflected in the final reauthorization; but as I’ll discuss, there is more work to be done.

First, let’s break down the good news.

Leadership on Supersonic Flight

For a too brief period in American history, passengers were free to zip around the skies in a super-fast, supersonic jet. These crafts, which could reach speeds above Mach 1, harken to a time of national optimism and airspace romanticism. But the death of the supersonic industry was all but a foregone conclusion when the FAA suddenly moved to ban all supersonic aircraft over the continental US in 1973.

Supersonic flights were still allowed to operate outside of the US, and majestic Concorde routes from the East Coast to Europe operated until its demise in 2003. There were many reasons to cease the flight of the Concordes, some of them economic and technical. But one reason for their lack of economic viability was that companies were limited from operating routes over the US heartland.

There was a small but dedicated public resistance to supersonic flight as well, which petitioned policymakers here and abroad to shut the whole thing down. Topping their complaints were concerns about environmental effects, most prominent among them being the “boom” sound that supersonic jets gave off.

But these concerns did not justify banning this technology outright. Rather, as Mercatus research by Eli Dourado and Samuel Hammond pointed out, policymakers should have crafted rules that left space for innovation. Dourado and Hammond specifically suggested a maximum noise threshold that engineers could have targeted. This would allow Americans to enjoy super-fast flight without subjecting those on the ground to irksome or harmful noise pollution.

Fortunately, Congress appears to have heard their appeal. The FAA Reauthorization Act contains exciting provisions that direct the FAA to prepare for revived supersonic flight.

The bill calls on America’s flight regulator to “exercise leadership in the creation of Federal and international policies, regulations, and standards relating to the certification and safe and efficient operation of civil supersonic aircraft.” In particular, it calls for regulators to propose “noise standards for landing and takeoff, and noise test requirements that would apply to a civil supersonic aircraft” by March of 2020. The FAA may also develop a near-term certification procedure to allow companies to operate supersonic flights, and data on noise and performance will be periodically evaluated to fine-tune standards and determine if—and hopefully, when—the ban on overland supersonic flight can be repealed.

Paving a Path for Safe and Affordable Flight-Sharing

The sharing economy has expanded options and lowered costs in the ground transportation and hospitality industries. Why not aviation?

Actually, a “proto-sharing economy” arrangement existed for decades among private aviators and was allowed by the FAA. It was low-tech: basically, a bulletin board system that advertised planned small craft flights and offered to share fuel costs if someone was going the same way. Some entrepreneurs tried to bring this system into the digital age and migrate it to the Internet. It was only then that the FAA decided to clamp down on these activities.

Christopher Koopman detailed the short saga of Internet-based flight-sharing in a research paper for Mercatus. Essentially, the FAA expansively interpreted its own definition of a “common carrier” in an effort to put the kibosh on flight-sharing innovation.

Large airlines may have breathed a sigh of relief because a potential competitor was put out of business. But consumers were robbed of a development that could have lowered prices and expanded access for less popular routes.

Some critics argue that expanded flight-sharing is unsafe since non-aviator passengers would have no way of evaluating the flight chops of their part-time pilots. There are questions about liability placement, too. Commercial pilots are subject to a stricter (and more expensive) licensing regime. By expanding the interpretation of a “common carrier,” the FAA effectively reclassified any would-be flight-sharers as commercial pilots. This is just too expensive for the cohort in question, which meant that the classification was a de-facto ban.

But we already have a case study to evaluate claims about safety: Europe. The European Aviation Safety Agency (EASA) has embraced flight-sharing arrangements since 2016 and developed rules that gave the green light to companies like Wingly to innovate with an eye toward safety. The European system boasts thousands of bookings and pilots, with more than ten thousand happy customers. No accidents or fatalities have been recorded, perhaps because EASA works closely with the industry to develop robust safety procedures.

The FAA Reauthorization Act does tackle “pilots sharing expenses with passengers” explicitly. The fact that it is on its radar is a good first step. Specifically, the bill instructs the FAA to more clearly define which activities may allow passengers to share costs with pilots, and which are verboten. This is a recommendation that Koopman specifically made in his paper. Unfortunately, it does not direct the agency to undertake any liberalizing efforts. Still, the fact that the FAA is being made to more clearly lay out its policies will at least remove regulatory uncertainty. It also provides a jumping off point to make the case for liberalization, using the European model as a successful case study.

Next Steps

Clearly, there is a lot to like about the FAA Reauthorization Bill. It encourages leadership and liberalization on supersonic flight and paves a path for safe flight-sharing. Policymakers appear to be receptive to the ideas put forth in Mercatus research by Dourado, Hammond, and Koopman, which gives much reason for optimism.

Still, many of these provisions are merely a first step.

Legally-minded readers will note a good amount of wiggle room in the legislative text, particularly in regards to supersonic flight. It is heartening that Congress is instructing the FAA to “be a leader” on supersonic flight, but that is rather subjective and could leave the door open for dawdling. Merely establishing commissions and producing reports could be considered “leadership” by some.

To really pack a punch in terms of economic growth, innovation, and consumer welfare, the FAA should develop concrete liberalizing reforms to bring supersonic transit back to our skies. More comprehensive legislation that specifically outlines supersonic liberalization may be needed.

The text concerning flight-sharing is more straightforward, but flight-sharing advocates may find that it does not go far enough. Specifying exactly which activities are allowed and which are illegal will certainly do a lot to clear up regulatory uncertainty. But if the FAA merely makes it clear that most cutting-edge flight-sharing arrangements are illegal, that does not move us closer to a world of affordable and accessible small-scale flight.

As Koopman noted in his paper, Congress could improve our posture towards flight-sharing by passing legislation that defines common carriage in a way that allows more innovation in this area. Policymakers should take a close look at the European model to surmise how such a system might work here.

There is a lot of good momentum in the FAA Reauthorization Bill, and the provisions on supersonic flight and flight-sharing are certainly positive developments. To truly unlock the potential of these innovations, policymakers should continue with their liberalizing reforms.

Editor’s Note: Eli Dourado currently serves as the Head of Global Policy and Communications at Boom Supersonic, a supersonic plane manufacturer. His Mercatus research cited by the author of this post predates that employment and was published during his time as a Mercatus Center Senior Research Fellow.

Photo credit: Justin Lane / EPA/Shutterstock

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