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Reason Foundation

Air Traffic Control Reform Newsletter #49

Topics include: an economist's approach to ATC reform; fixing runway incursions; world's best ATC providers; implementation failure--a warning for NextGen; misrepresenting air traffic delays; and other news.

Robert Poole
January 1, 2008

In this issue:


An Economist's Prescription for ATC Reform

A growing number of media accounts correctly put the primary blame for flight delays on the federal government. But most of these assessments point the finger largely at bureaucracy and obsolete technology. Economist Dorothy Robyn thinks the problem is more fundamental: "[Flight] delays are a direct result of the government's perverse system of charging for aviation infrastructure. Airline overscheduling is a classic tragedy of the commons, and current financing mechanisms not only permit the equivalent of overgrazing—they promote it."

That's one of the provocative opening sentences in an important new paper, "Reforming the Air Traffic Control System to Promote Efficiency and Reduce Delays," which Robyn prepared last fall for the Council of Economic Advisers. Robyn handled this issue (among others) as a senior economist on the National Economic Council in the Clinton White House; she is highly knowledgeable about aviation policy.

Like a number of other reform advocates, Robyn cites the two primary needs as reforming ATC governance and financing. But unlike most of the others, she devotes the major emphasis of the paper to the economic benefits of replacing current aviation excise taxes with efficient pricing of ATC (and airport) services. In the short term, such pricing would provide incentives to get the best use out of the existing, limited airport and airway capacity—which would reduce delays as users replaced low-value flights with high-value ones. In the medium term, prices would encourage more efficient provision of ATC services by the FAA (including offering of services not currently provided, such as priority access during bad weather). And in the longer term, pricing would encourage efficient investment in next-generation systems, by targeting new investment to locations and uses for which users were most willing to pay.

She offers the FAA's Ground Delay Program (GDP) as an example of transforming a function via pricing. Today, when FAA implements a GDP due to bad weather, "slots" are handed out on a first-come-first-served basis. Alternatively, FAA could "allow airlines to buy and sell GDP slots based on the marginal value of a reduction in delay faced by their flights." Such a market could be set up in advance or could operate as a real-time spot market on the day of operations. A variant would be for "FAA to sell the equivalent of 'non-interruptible' service—to a particular airport at a given time—in advance of a ground delay." She notes that opportunities for such markets will increase as satellites and next-generation avionics allow more of the responsibility for aircraft separation to reside in the cockpit, a key feature of the planned NextGen system.

Yet as Robyn points out, so far the NextGen concept has been "highly centralized and technology-centric," with the benefits only emerging at the end of a several-decade transition period. "In these and other respects, NextGen seems to embody much of what is wrong with the current command-and-control, one-size-fits-all system." She suggests an alternative approach of "delivering targeted improvements in specific regions that users want and are willing to pay for—and doing so in the near and medium term," as Nav Canada is doing in implementing ADS-B.

I've only hit a few of the highlights here. I encourage you to download and read this very important new policy paper: www.brattle.com/RobynReport_Reforming_Air_Traffic_Control_System.

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Going After Runway Incursions

Shortly after Thanksgiving, the Government Accountability Office released a rather stinging report, "Aviation Runway and Ramp Safety," GAO-08-20 (available at www.gao.gov/new.items/d0829.pdf). A major focus of the report is runway incursions (potential collisions between an aircraft and some other object, including another plane). On this topic, the report had good news and bad. Most media focused on the bad, which is that both the number and rate of incursions increased in 2007, to nearly the record levels of 2001, despite this problem being a high-profile target of the National Transportation Safety Board and (supposedly) the FAA itself. The FAA has emphasized the good news, citing Figure 3 in the GAO report, which shows a steady downward trend since 2001 in the most serious two categories of runway incursions. But the GAO report also pointed out tha t "FAA's categorization of runway incursions involves a level of subjectivity, raising questions about the accuracy of the data," as attested to by a 2006 internal FAA audit. So it's not clear if the downtrend in serious incursions is real or reflects a tendency to classify some incidents as less severe than they actually were.

One of the principal tools for reducing runway incursions is a ground-based surveillance system called ASDE-X. It uses data from both airport surveillance radar and transponders on planes (and ground vehicles, if equipped with transponders), to keep track of where planes are with respect to other vehicles and (using software) to predict impending conflicts. When it detects such a situation, it warns the control tower, and the controller is then supposed to warn the pilot(s) in question. ASDE-X is the successor to earlier systems, based on radar alone, called AMASS and ASDE-3; those systems are deployed at 34 busy airports. Thus far, ASDE-X has been installed and put into operation at 11 airports, and is scheduled for another 24 airports by 2011. But since most of these installations are replacing one of the older systems, when this deployment is completed, only 45 airports will have ground surveillance, not 69 (34 + 35).

ASDE-X, in principle, is a big improvement over the previous systems, especially if all ground vehicles at the airports in question get equipped with transponders. But it's expensive, it needs to be precisely fine-tuned to the specifics of each airport, and it only warns the controller, which introduces a potentially dangerous time lag before the pilot is made aware of the impending collision.

Commendably, the FAA procured all 35 ASDE-X systems in a single contract, for reasons of economies of scale and parts-standardization, and all have been produced. The first one was delivered (to Milwaukee) in March 2002, but it took until the end of October 2003 to "commission" the system as fully operational. This overall process—from delivery to commissioning--has averaged 22.6 months at the first 10 airports, with two of the more recent ones taking 40+ months each. The one recent exception was Chicago O'Hare, where former Administrator Marion Blakey refocused funding and staff to shorten the process to a mere five months. FAA sources tell me that such acceleration is not generalizable. And that has led GAO and others to question the credibility of FAA's plan to have all 24 remaining systems fully operational by January 2011, just three years from now.

As for the time lag between ASDE-X alerting the controller and the controller alerting the relevant pilot(s), that problem is being addressed in a pilot project under way by avionics supplier Honeywell and ASDE-X producer Sensis Corp. At Syracuse, NY's Hancock International Airport, they have set up a system that transmits the ASDE-X warning to the cockpit via the transponder used for the Traffic-Alert and Collision Avoidance (TCAS) unit on the aircraft. A voice synthesizer on the TCAS alerts the pilot at the same time as the controller in the tower. All that's needed is a software modification to the ASDE-X and TCAS units. The system has worked in tests, but the Aviation Week (Sept. 3, 2007) article quotes the developers as expecting it to take years before industry standards are developed to make this capability widely available.

Given the seriousness of runway incursions, perhaps the NTSB should take another look.

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World's Best ATC Providers

At the Air Traffic Control Association's annual meeting in Washington, DC last fall, every attendee received a complimentary copy of Air Traffic Management's Fall 2007 issue, whose cover story was "Global Leaders: The High Fliers in Air Traffic Control." The resulting feature stories were based on a survey of 400 senior aviation people worldwide, asking them to rate not only ATC/avionics suppliers but also the air navigation service providers (ANSPs) themselves. The top five ANSPs, in order, were:

  1. NATS (U.K.)
  2. Nav Canada
  3. FAA's Air Traffic Organization (ATO)
  4. Airservices Australia
  5. DFS (Germany)

Each winning ANSP was given a long profile article, detailing its major accomplishments. I don't have space to do them justice, but will simply quote the heading at the top of each article, to give you something of the flavor of them:

This ranking is worthy of note for several reasons. First, it will shock many Americans (especially members of Congress) that the FAA was not ranked number one, though there's little doubt that it would have been 20 years ago. Second, four of the top five ANSPs are commercialized entities—i.e., they are self-supporting from fees paid to them by their customers, they exist outside the government's budget process, and they are regulated for safety at arm's length by a separate national government safety regulator. Such entities did not exist 20 years ago, but are now setting the pace. Third, the FAA's ATO did make the top five, which is a tribute not only to former Vice President Gore's National Performance Review (which came up with the idea of a performance-based ATO after Congress rejected its full commercialization proposal, USATS) but also to the yeoman work of former COO Russ Chew in turning the ATO from an idea on paper into a functioning reality.

Congratulations to all five winners. You can read their profiles at www.airtrafficmanagement.net.

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Implementation Failure: A Warning for NextGen

On Nov. 11th, 2007, the New York Times published a long investigative article called "Death of Spy Satellite Program," by Philip Taubman. It relates the sad tale of the failure of the National Reconnaissance Office's Future Imagery Architecture (FIA) program, which sought to create a new generation of smaller imaging satellites—one electro-optical, the other radar-imaging. Awarded to Boeing in 1999 at what everyone now concedes was a ridiculously low (but congressionally mandated) $5 billion, the project ended up as "perhaps the most spectacular and expensive failure in the 50-year history of American spy satellite projects." By the time the project was cancelled six years later, the projected cost had ballooned to as much as $18 billion; the government ended up spending $4 billion before cutting its losses.

As I read this long and well-researched story, I could not help but thinking about the planned NextGen program to completely replace the current architecture of the ATC system with a new and far superior concept of operations. In some ways, this project is far more ambitious than FIA, which was merely an attempt to invent more compact versions of already proven imaging technologies. Perhaps by looking at what went wrong with FIA, we can discover some lessons to prevent NextGen from turning into a comparable disaster.

Taubman's assessment, based on interviewing many knowledgeable insiders, is that there were (or are) fundamental weaknesses in how NRO and other defense-related agencies manage complex contracts. NRO followed the then-new policy of delegating responsibility for monitoring the project to the contractors. That policy, combined with budget cuts at NRO, led to "the loss of seasoned staff members," meaning that NRO then "lacked the expertise to make sound engineering evaluations of its own." Congress's rigid spending guidelines created perverse incentives for the contractor to put the most optimistic spin on its progress reports, when it knew that developing the satellites on such a tight budget was not possible. Moreover, the NRO added new requirements as the development went along, adding another billion dollars to the projected cost. And when it finally became evident that the proje ct was not do-able (at least at anything like the available budget), the NRO's review group failed to pull the plug "because of its powerful supporters in Congress and the Bush administration."

This all sounded horribly familiar. What it most brought to mind was a GAO report released in April 2005, "Experts' Views on Improving the U.S. Air Traffic Control Modernization Program" (GAO-05-333SP). Among its key findings was that "the key technical factor affecting modernization [problems] . . . has been a shortfall in the technical expertise needed to design, develop, or manage complex air traffic systems. Without the technical proficiency to 'scrub' project proposals for potential problems early and to oversee the contractors . . ., FAA has to rely on the contractors, whose interests differ from its own." The GAO panel also cited various budgetary constraints, congressional micromanagement, and "requirements creep" (i.e., the adding on of new requirements after a contract has been awarded)—all of which factored into the FIA fiasco.

I hope this case, and the GAO expert panel findings, will lead the Joint Planning & Development Office to start thinking seriously about institutional and incentive issues as is begins planning for the implementation of NextGen. Aviation cannot afford a $20 billion fiasco that leaves us with a hopelessly overworked and under-performing ATC system as our only fallback.

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Misrepresenting Air Traffic Delays

In the debate over whether the FAA reauthorization bill should include a $25 per IFR turbine flight user fee, the private plane lobby has pulled out all the stops. In his December 2007 editorial in AOPA Pilot, Phil Boyer takes credit for arming House aviation subcommittee chairman Jerry Costello (D, IL) with "a white paper AOPA prepared using government statistics, not airline lies, about the 35 most congested airports and the low GA use of these facilities."

That AOPA white paper is not readily available on the organization's website, but since I've been researching this subject, poring over data from FAA's OPSNET and ETMS databases, let me share with you what I've learned. What the airlines (via their trade association, the Air Transport Association) have been pointing out is the extent to which general aviation operates in the congested airspace around the major congested airports, taking up controller time and attention. For example, the GA category in FAA's 2006 OPSNET database accounts for 37% of all flight activity in the Southern California TRACON airspace, 38.5% in Northern California, 36% in the Potomac TRACON airspace, and 27% in New York TRACON. If you add together GA and AT (air taxi) categories, those numbers soar to 56% Southern California, 56% Northern California, 65% Potomac, and 59% New York.

Looking more closely at the New York region, in the policy paper I co-authored on New York flight delays, Figure 10 shows the sources of flight delays (from OPSNET) from 2004 through 2007. Over that four-year time, the total delays tripled, but more interesting to me, airspace—as opposed to airport—delays have grown to more than one-third of the total delay. (www.reason.org/ps366.pdf)

So Boyer's claim is one of those statements that is technically true—GA planes make very little use of big congested airports like JFK, ORD, and LAX—but highly misleading.. GA planes and their air taxi colleagues are major users of the TRACON airspace around major airports, where they add to what is an increasing component of that airspace's congestion. A modest $25 per IFR turbine flight in such airspace would be a small step in the direction of better incentives to make wise use of that scarce and valuable airspace.

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News Notes

Who Should Govern the ATC System? In an article in the December issue of Professional Pilot, I tackle the GA groups' claim that the best way to govern the ATC system is for Congress to serve as its "board of directors." I use several current issues to contrast the way a board of directors representing aviation users might deal with them versus how Congress deals with them. I think you will find it thought-provoking. Go to www.propilot.com/December/OMI.pdf.

DFS Privatization Still on Hold. Financial Times Deutschland reported in late October that German Transport Minister Wolfgang Tiefensee has postponed plans for offering up to 74.9% of DFS, the corporatized air navigation service provider, to investors. The hold-up is due to the lack of action on amending the German constitution to overcome an objection raised by German President Horst Koehler, who declined to sign the legislation on constitutional grounds. No timetable for pursuing such an amendment was announced.

Commercialized ANSPs Now Total 46. During the last quarter of 2007, three more self-supporting air navigation service providers joined the Civil Air Navigation Services Organization (CANSO) as full members. They are: ISAVIA of Iceland, CAAS of Singapore, and GACA of Saudi Arabia. That brings the membership total to 46 ANSPs in this young and growing organization.

India May Commercialize ATC. December saw the announcement that the Airports Authority of India (AAI), which owns and operates that country's ATC system as well as nearly all its major airports, was embarking on a restructuring process that could involve spinning off the ATC system. AAI shortlisted three firms as consultants and selected KPMG International. Its brief calls for it to "assist in the corporatization of air navigation services (ANS) either by creating a new government company or separating ANS from AAI to be undertaken by a subsidiary of AAI."

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Quotable Quotes

"[W]e need new institutional arrangements if we are to realize our vision of a globally integrated, harmonized, and interoperable air navigation system. . . . Fundamentally, it requires a re-think of the role of the State in ATM. . . . Recognizing that [service] provision and regulatory oversight vested in the same organization can lead to conflicts of interest . . . States have for some time separated these functions, granting greater financial and managerial autonomy to the ANS entity. . . . The need to separate provision from regulatory functions will surely continue (along with increasing commercialization and privatization) as this has been shown to enhance ATM performance, encouraging a business approach in service delivery and an improved quality of service. This trend must continue because it is a key ingredient of the performance-based and customer-focused global ATM system of the future."

--Eugene Hoeven, Director of ICAO Affairs, CANSO, "ANS in the Future: The Nature of Regulation," CANSO News, Issue 36, December 2007.

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


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