Why it is Crucial for a State to Own Air Traffic Control Services
Ownership and management of airports across the world generally remained government-owned until privatization slowly emerged by the 1980s and gained momentum in the 1990s before slowing down in the 2000s.
Due to diverse circumstances among states, ICAO does not recommend one organization format and recommends the states to consider establishing entities to operate airports and air navigation services to the best interest of providers and users of the state.
Although privatization of airports in certain circumstances may be favorable for the development and growth of air traffic, air navigation services differ fundamentally from that of airports in several aspects.
It is crucial for a state to manage air navigation facilities and the services as it generally extends over the entire territory of the state concerned. It is also closely connected to the safety of aircraft operations.
Additionally, air navigation services have national defense and external relations implicated concerning the sovereign airspace of the state.
Almost all of the state governments favor to maintain control over air navigation services, usually by the Civil Aviation Administration of the state.
Private engagement in control of air navigation services is minimal, from a survey conducted by ICAO on Ownership, Organization and Regulatory Practices of Airports and Air Navigation Services Providers, 85.8 % of air traffic services in Africa, Asia/Pacific, South America, Europe, Middle East, and North America was owned by nationals companies, 13.6% was a mix of national and private interest while just .50% was foreign-owned.
Only one air traffic service was owned by a foreign organization across 6 regions globally.
However, ICAO does not restrict any state from delegating functions of airports or air navigation services to private entities.
It is also the state's overall responsibility for ensuring that all provisions are in compliance with the Convention and Standards and Recommended Practices (SARPs).
It is also recommended that the state must have appropriate legal powers to intervene whenever necessary to ensure the safety of operations.
The Maldives Ministry of Economic Development revealed amendments to the Foreign Direct Investment (FDI) policy which allows for 100% foreign-owned companies to operate and manage airports including air traffic control in the Maldives.
This allows foreign nationals or foreign companies owned 100% by foreigners to:
Operate and manage airports (including terminal facilities such as airway terminal)
Airport and air-traffic control activities
Ground service activities and airfields etc
Before the changes, foreign shareholders for H3 Air Transport Services were allowed a maximum of 75% foreign shareholding through government approval.