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Reason Foundation

Air Traffic Control Reform Newsletter #44

Topics include: Senate FAA reauthorization bill; cracks in the general aviation anti-reform monolith?; glitches in flight service modernization; breaking the mold on controller training?; moving NextGen from concept to implementation; and other news.

Robert Poole
May 1, 2007

In this issue:


Senate Bill Tiptoes Toward ATC Reform

Some Disney character from my youth said, "If you can't say something nice, don't say nothing at all." So be advised that there are some good things in the FAA reauthorization bill passed by the Senate Commerce Committee earlier this month. First, it includes a modest new ATC user fee--$25 per IFR (instrument flight rules) flight by turbine-powered aircraft. Second, in contrast to the FAA's reauthorization bill, it would permit the issuance of real revenue bonds to fund modernization, dedicating the new ATC user fee as the revenue stream for such bonds. And third, it creates an ATC Modernization Oversight Board that—at least on paper—would have budgetary approval authority for NextGen projects, and which would consist largely of aviation stakeholders.

But in broader terms, the bill fails to cope with the need for fundamental reform and restructuring of how ATC is provided in this country. It leaves in place a tax-based funding system that both the FAA and the Government Accountability Office have shown to be out of sync with the growth in aviation activity. Tacking on a tiny user fee does little to fix this (though it's better than simply reauthorizing the status quo). And while the bonding authority is an improvement over what FAA proposed, the total bonding is still capped at only $5 billion, versus an investment need of about $20 billion for FAA's costs of the NextGen system.

Perhaps most seriously, the Modernization Oversight Board (MOB) is not likely to be effective. First, its membership is not broad enough to reflect the complexity of the U.S. aviation community. With just seven members, there are only four representing aviation stakeholders: one for all the various kinds of air carrier, one for all of general aviation, one for airports, and one for ATC employees. Both airlines and GA can legitimately complain that no single person can adequately reflect the diverse interests of legacy carriers, regionals, low-cost-carriers, cargo carriers, or of air taxis, fractionals, corporate jets, drop-dusters, and single-engine piston operators. A much larger and more diversified group of stakeholders, as on Nav Canada's board or as in the FAA's own proposal, would be far better.

But even more critically, the MOB would repeat the flaws of the ineffective Air Traffic Services Subcommittee created by the 2000 reauthorization. That body was also supposed to have approval authority over the ATO's strategic plan, the selection of the ATO chief operating officer, and above all, of the ATO budget. But in fact, since it had no staff other than those provided to it by the FAA, it was totally dependent on those staff. It had no independent means of evaluating and analyzing plans and budgets, and so became, in effect, a rubber stamp. The same defect is built into the Senate bill's MOB.

Although there is no indication that a forthcoming House Aviation Subcommittee bill will be any better, one can always hope. Plus, there is also a chance that reauthorization will prove too complex to get done this year, leaving more time for reform advocates to create a critical mass of support for more sweeping change. Sen. Ted Stevens (R, AK) suggested at a May 10 budget hearing that there might be a two-year extension of the status quo, given all that was on the Committee's plate this year (and with nothing substantive likely to happen in 2008, a presidential election year).

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Is the Anti-Reform General Aviation Monolith Starting to Crack?

For the past two years, the strategy of the general aviation alphabet groups (AOPA, GAMA, NBAA) has been to form a united front against any form of ATC user fee, raising loud (if spurious) objections, such as that it would require a huge and costly bureaucracy to collect, that even a token fee would start a slippery slope toward such absurdities as charging piston pilots for weather briefings, and that any increase in cost responsibility for GA flying would cripple the industry.

But this loud and well-funded campaign hasn't been winning the debate. A growing number of newspapers have editorialized in recent weeks about the bizarre nature of a Challenger business jet paying just $343 in aviation user taxes to go from Los Angeles to New York, while an A320 airliner pays $2,275 for the very same ATC services. An Associated Press story about the related issue of airline ticket taxes paying for airport grants to small-jet havens like Aspen, Colorado appeared not only all across America but in many papers overseas. U.S. News & World Report's May 20th article mocked the cries of alarm from corporate jet operators. That story, like many others, picked up the FAA's cost-allocation finding that high-end GA planes account for 16% of the ATC system's costs but provide only 3% of the revenue. And Fox News's Brit Hume did a stunning piece on May 16th titled "Corporate Jets Need to Pay Their Fair Share," using billionaire Warren Buffett as an example of those opposed to change.

Perhaps this change in public discussion helped to account for GA's first defeat in the congressional debate over FAA reauthorization. AOPA pulled out all the stops to rally its troops to bombard Senate Commerce Committee members in support of an amendment to delete the $25 per flight ATC user fee from the Committee's bill. But despite this all-out effort, the amendment failed by a vote of 11 to 12 on May 16th.

Even more noteworthy is an article in the May issue of Professional Pilot. Alongside an article by Cessna CEO Jack Pelton making the by-now familiar GA arguments is a companion piece titled "ATC—the Case for Change." It makes a thoughtful case for fundamental reform of the U.S. ATC system along the lines of NavCanada, recommending creation of a similar U.S. entity, funded and governed by aviation users. The co-authors are both long-time GA leaders: Jim Haynes, a former chairman of NATA, and Jonathan Howe, a former president of NBAA. Jim Haynes has posted the article on his company web-site, so you can read it there: www.avgroup.com/propilot_atc.pdf. Once again, kudos to ProPilot for being willing to host genuine debate on this vitally important subject.

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Flight Service Modernization Beset by Glitches

Last year, under contract to the FAA, Lockheed Martin began a major project to modernize and consolidate the network of Flight Service Stations (FSSs) that provide weather briefings and flight plan filing services for general aviation pilots. The project is an important test case, since it incorporates several of the key concepts integral to the overall NextGen modernization of how air traffic control is provided: specifically, consolidation of facilities, automation of routine functions, and system-wide information management. The idea is that with today's information and communications technologies, we will no longer need to have ATC or FSS facilities located in every part of the country, in order to provide services tailored to local conditions. Instead, massive amounts of information can be shared with a much smaller network of facilities, providing locally relevant information regardless of where each is physically located.

Thus, Lockheed Martin's Flight Service 21 (FS 21) plan involves replacing the former set of 58 Flight Service Stations with three hub facilities (Ashburn, VA, Fort Worth, TX, and Prescott, AZ) linked to just 17 satellite facilities. The hubs are configured as data repositories, each containing all the information (weather, notices to airmen, flight plans, etc.), so they can back each other up. The plan also includes internet-based flight planning and weather briefing capabilities, still being developed.

But as with most such transitions, glitches are occurring as the hubs go into operation and the old facilities have their functions consolidated into the new satellite facilities. By April, pilots were complaining about being left on hold for long periods when they called in pre-flight. Flight plans were sometimes lost. System crashes have occurred, and backup systems didn't automatically kick in.

Apparently, because of problems with its new FS 21, Lockheed Martin has been using the FAA's backup system in parallel, which means the briefer must enter the same data twice, creating time delays. And each time one of the old facilities is shut down, the specialists working there have to leave for off-site training on the new system, meaning further disruptions. (All such training is supposed to be finished by August.)

Fixing these problems has become a priority for both the FAA and Lockheed. This is partly because the contract requires high performance, and that is not yet being delivered. But it's also important because FSS modernization is a prototype for similar but larger-scale changes that will be needed in implementing the NextGen system. The FAA cannot afford to get this wrong.

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Breaking the Mold on Controller Training?

The FAA's Air Traffic Organization (ATO) faces major challenges as it seeks to hire and train some 12,000 new controllers over the next decade, to replace the wave of retirements of the workforce hired in the wake of the infamous strike of 1981. In December 2005, the DOT's Office of Inspector General issued a report on ways of reducing the time and cost of training (Report No. AV-2008-021, Dec. 7, 2005). The main recommendation was that the FAA should take better advantage of colleges and universities that offer aviation-related coursework by eliminating such coursework from the FAA Academy and making such coursework a prerequisite for getting hired as a controller trainee. The report estimated that, in addition to cutting overall training time, the plan could save $17-21 million over a nine-year period.

Currently, 13 colleges and universities participate in the FAA's Collegiate Training Initiative (CTI) program. Graduates receive either an AA or a BA, but regardless of the extent of their aviation-related coursework, they still must complete the full FAA Academy curriculum. Changing the model to avoid this duplication would not only save the agency money and time, but "could provide FAA with a larger pool of candidates that are well-versed in the general academics of aviation and air traffic control," the OIG report said. These recommendations were seconded last October in a Congressional Research Service report on issues related to this year's FAA reauthorization ("Reauthorization of the Federal Aviation Administration: Background and Issues for Congress," Oct. 18, 2006, Order Code RL33698). It suggested that Congress consider "allow[ing] CTI program graduates to enter directly into on-the-job training."

The reaction from the FAA has been mixed. On the one hand, it has announced its intention to expand the CTI program and has solicited expressions of interest from industry for what it calls Air Traffic Controller Optimum Training Solutions (ATCOPS), envisioned as a large training program contract to be awarded this September. But simultaneously, my sources report, the FAA Academy is moving rapidly to expand its own teaching staff and contractors, which some interpret as an effort to strengthen its hold on controller training in the face of expanded competition from CTI institutions and the private sector (if ATCOPS actually goes forward).

Last year I reported on a presentation by former FAA Associate Administrator George Donohue, arguing that the planned NextGen system will be such a departure from the status quo that a new breed of controller will be required—with a college degree and training very different from what the Academy provides. I think he's right, and it will be interesting to see whether the FAA can come to terms with this challenge.

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What Will It Take to Implement NextGen?

As you know, I'm a big supporter of the concept involved with the proposed NextGen ATC system—making full use of GPS and related technologies to provide far more precise data on where planes are and where they are going, providing systemwide information to all participants, automating routine tasks, and consolidating facilities based on being able to control aircraft "anywhere from anywhere." The potential really is there to double or triple the system's capacity, while dramatically increasing productivity.

But how to get from concept to actual implementation? Both the DOT Inspector General and the Government Accountability Office have continued to stress the very high-risk nature of such a transformation. A Feb. 12, 2007 OIG report called it "an extraordinarily complex and high-risk effort" (AV-2007-031). Given the problems that afflicted past modernization efforts, it said, the JPDO and FAA need to spell out how they will avoid such problems in this far more ambitious undertaking. A similar report from the GAO referred to the "staggering complexity of this ambitious effort," and questioned "FAA's ability to manage the systems acquisitions and integration needed to implement a system as broad and complex as NextGen." (GAO-07-490T, Feb. 14, 2006)

These questions attracted significant attention at the Air Traffic Control Association's technical conference in Atlantic City earlier this month. Neil Planzer, vice president of strategy for Boeing ATM, questioned the recent decision to put NextGen implementation under FAA's Operational Evolution Partnership (OEP) office. "The management structure that exists in ATO today forces a vertical silo-ing, and there is almost no horizontal integration," he said. Neither the JPDO nor OEP has much clout in Washington, Planzer added. "Leadership is necessary, but the [organization in charge] must have position power to cross barriers and break down silos." According to Aviation Daily's account, another expert said that some NextGen funding is being handed out to individual ATC programs to spend, also without horizontal integration.

Clay Jones, CEO of Rockwell Collins, proposed the creation of an industry consortium to implement NextGen, perhaps analogous to European Union's SESAR consortium. "The world is awash in private equity," Jones said, "so why not take the next step and let industry do what it does best?"

That approach is worth considering, though it raises a host of tricky questions about how to ensure robust competition for individual system elements, if all the major providers are part of a cartel—excuse me, consortium. An alternative, of course, is the model being used for modernization in Australia, Canada, Germany, the U.K., and elsewhere: ATC commercialization. If the ATO were separated from the FAA and made financially self-supporting based on payments from its aviation customers, it would be free to hire the best managers of complex technology programs from the private sector, and hold them accountable for results. It would also be able to tap the private capital markets for funding, freed of all the constraints of the federal budget process.

Whatever happens this year with FAA reauthorization, the real impetus for sweeping financial and governance reform will come from the need to implement NextGen in a credible way. There is little or no understanding in Congress or the media that NextGen represents a paradigm shift in how we manage the skies, and that the existing FAA funding and governance models are an extremely high-risk way to proceed with such an endeavor. Once this realization finally sinks in, the door will be opened to debate meaningful reform.

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News Notes

Commercialized ATC, All the Way Across the North Atlantic. The UK's air navigation services provider, NATS, has completed installation of a new ATC oceanic system, known as SAATS, adapted from Nav Canada's GAATS. Together they form a seamless system across the North Atlantic, incorporating controller-pilot data link communications (CPDLC) and greater positional accuracy. That should lead to reductions in both lateral separation and longitudinal separation, increasing the capacity of North Atlantic airspace.

Good Reading #1. An excellent essay on why we need real ATC reform appeared as a Viewpoint column on the back page of Aviation Week's April 30th issue. "Time for U.S. to Reform Its Soviet-style Approach to ATC" was written by Ken Button, director of the George Mason University Center for Transportation Policy, Operations, and Logistics.

Good Reading #2. Further evidence that the case for ATC reform is penetrating the mainstream media is the lead editorial, by Steve Forbes, in the June 4th issue of Forbes. "Avoiding More Air Travel Turbulence" links the case for a Next Generation ATC system with commercialization a la Australia, Britain, Canada, and Germany.

Good Reading #3. My own modest contribution to the debate is a paper I prepared for an ICAO conference in Montreal last fall, cosponsored by McGill University's Institute of Air & Space Law. McGill has now published the proceedings, under the title Essays on Air Navigation: Flying Through Congested Skies. My chapter is "The Relationship of U.S. ATC Funding Reform to Implementation of the Next Generation System."

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Quotable Quotes

"I don't think many of us really want to go back and revisit the whole concept [of commercializing Canadian ATC]. I think most us believe that the system is more service-oriented and certainly has introduced innovative technology ahead of what would have likely occurred under a government-managed system."
--Rich Gage, President and CEO, Canadian Business Aviation Association, Aviation International News, July 1, 2005.

"To individuals and companies fortunate enough to own these planes, a $25 fee is comparatively miniscule, especially considering that the average cost per hour of operating a turboprop is $802, while the cost of operating a private jet is $3,605. the average purchase prices for these aircraft are $8 million and $40 million, respectively."
--Sen. Trent Lott, [Jackson] Clarion-Ledger, May 15, 2007.

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Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy


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