(FORTUNE Magazine) – Last year air travel went from unbearable to insufferable. At the end of 2000, the Federal Aviation Administration reported a record 450,000 delays, 20% more than in 1999. No one thinks this year will be any better.

Some on Capitol Hill have fingered the 43-year-old air-traffic-control system. The latest in wonk-think: The ATC system--with its 36,000 controllers and technicians, 553 control towers, and 190 terminal radar facilities--needs to be wrested from the federal government's control and run like a business. Reformers use different words to express their ideas--"corporatization," "commercialization," or "streamlining"--but their battle cry is the same: The FAA should not run the ATC system. "I can't say that I can see any arguments against it," says Michael Lexton, managing director of Merrill Lynch's public financing group.

Most reform proposals advocate financing an independent ATC with user fees paid by airlines and aircraft operators. This would free it from competing with federal budget items such as Medicare, Medicaid, and welfare. For quick cash it could go directly to the bond market like any other private corporation, says Ron Utt, senior research fellow at the Heritage Foundation. A similar model in Canada is thriving. Nav Canada, a private not-for-profit that boasts a board of directors composed of representatives from airlines, general aviation, unions, and government, has raised $1.75 billion (Canadian) in the long-term debt market.

Reformers argue a spinoff is necessary for technological reasons too. They say the FAA's lengthy, bureaucratic procurement process and--there's just no way to put this nicely--institutional incompetence have left the ATC with equipment that is hopelessly out of date. The best example: In 1982 the FAA embarked on a major modernization effort; after 12 years of delays and $1.5 billion in waste, the government declared it "out of control" and shut it down. (The FAA admits to inefficiency.) A semi-private business, the thinking goes, couldn't afford to waste so much time and money. With less red tape, improvements could be implemented much more rapidly.

ATC defenders argue that the FAA is still the way to go for a number of reasons. First, they point to administrator Jane Garvey's recent technology initiatives and the new Air Traffic Organization, an independent division of the FAA that will make ATC operations more responsive to demand. "We believe we have made progress," says FAA spokesperson William Shumann. Second, they fear that a private corporation would scale back costly safety measures to boost its profits--a recipe for an Airport '77-sized disaster. Most important, they say aviation's woes go way beyond a simple question of who owns the ATC system. "If I sell you my car tonight, it's not going to run any faster tomorrow," says John Carr, president of the Air Traffic Controllers Association. "Until we pour more runways, passengers are going to continue to wait."

ATC reformers won't wait that long; a motley crew is pushing the issue right now. The Reason Public Policy Institute published a report last month that recommends commercializing the ATC; Delta CEO Leo Mullin favors a "government-sponsored corporation modeled on the private sector"; new Transportation head Norman Mineta (a Democrat) is thought to be a reform sympathizer; and Senator John McCain recently endorsed "looking into" privatization. In short, a new ATC system might be getting ready for takeoff, whether or not everyone's onboard.