Air Traffic Control Reform Newsletter #20

Topics include: ATC safety regulation, Nav Canada's rate increase, increasing airspace capacity, and controller-pilot data link communications.
In this issue:

ATC Safety Regulation: Not What It Appears

On March 25th, DOT Secretary Norm Mineta proudly announced the creation of a new office within FAA's safety regulatory branch (AVR). Its purpose would be to provide "independent safety oversight" of the new Air Traffic Organization (ATO). Thus, the relationship between the ATO and AVR would be like that between airlines and AVR or aircraft manufacturers and AVR: arms-length safety regulation and oversight. This would parallel the safety oversight provided in a growing number of countries that have created separate ATC corporations while retaining safety regulatory oversight within the national transportation agency. "This is a new way of doing business," added FAA Administrator Marion Blakey.

Having long advocated the separation of ATC operations and safety regulation, I cheered this announcement. But a week later, attending a session on this issue at the Air Traffic Control Association's conference in Atlantic City, I was taken aback. After a presentation by the head of the new ATC safety regulator, Dave Canoles, former FAA Administrator Langhorne Bond asked a key question: Will Canoles' office be issuing Federal Air Regulations like those issued by the other two regulatory offices (Flight Standards and Certification)? Canoles replied in the negative, to the surprise of many in the room.

I followed up with Bond, who is very outspoken on the subject. Along with a number of other former Administrators, he has long advocated arms-length safety regulation of ATC, with the development of FARs subject to input from users and the public. Having the new safety office work entirely internally means it will be "toothless" as a regulator, merely offering advice and suggestions to the ATO.

This is no mere academic question. As Bond points out, FAA is dealing with a serious ATC capacity crunch, and is working on a number of technology initiatives to bring about reduced vertical separation, reduced in-trail separation, higher landing rates, etc. All such changes involve new risks. "As necessary as such changes are," says Bond, "they should be made in compliance with a set of safety performance standards, formally adopted after public discussion and agreed to by stakeholders."

The rationale for creating the ATO, discussed in detail by the Mineta Commission, was to create a businesslike ATC entity, regulated at arms-length for safety by FAA's regulatory branch. Furthermore, the FAA is supposed to have complied by now with the requirement of the International Civil Aviation Organization that all member states provide independent oversight of ATC operations. Internal FAA resistance to such a change was to be expected, and it looks as if that resistance has, so far, won out. If so, Administrator Blakey has been misled, and Secretary Mineta has not accomplished what his March 25th announcement implied. They should take action now to fix this problem.


Nav Canada Rate Increase Justified, though Painful

Last month Canada's independent ATC corporation, Nav Canada, gave formal notice that it would be increasing its ATC fees by an average of eight percent in August, and asked for comments and feedback from users. Several airlines quickly denounced the increases, with some suggesting that, as a monopoly, the company had simply caved in to its unionized employees, knowing that it could pass along the increase to its users. But there's more to the story than that.

First, the law shifting ATC from the Canadian government to Nav Canada set it up as a user-controlled, not-for-profit corporation, but required it to be self-supporting from fees and charges. With no shareholders to earn profits for, the company has no motivation to increase its fees beyond what is needed to cover its capital and operating costs. It is proposing the rate increase to keep from operating in the red, since air traffic has still not recovered to pre-9/11 levels.

So the next question becomes: Has Nav Canada been diligent about controlling its costs? To assess that issue, you first have to realize that the company took over an ATC operation that was woefully short of controllers. Despite large reductions in trans-Atlantic traffic post-9/11, it needed to beef up its controller workforce, which it has done over the past eight years. But it has also cut back on bureaucracy, reducing its overall head-count from 6,300 in 1996 to 5,450 by January 2004. Over that time period, total payroll-related costs (salary, benefits and pensions) increased from $471 million to $579 million — a 23% increase (2.85% per year). Over the same time period, the FAA's Operations budget (largely personnel costs) ballooned from $4.6 billion to $7.6 billion, a 65% increase. Yet FAA is not required to cover all its costs from user fees, so it's had much less incentive to control its payroll costs.

How about the actual impact of Nav Canada's fees on users? When Nav Canada replaced the now-abolished ticket tax with ATC fees in 1999, the cost to airlines dropped significantly. Even after the proposed August 2004 rate increase, the cost to airlines will still be less in real terms (after inflation-adjustment) than they were paying in 1999.

In short, the transition from government ATC to provision by a private non-profit has been good for airlines using Canadian air space. Having to cover all of its costs from fees and charges has exerted a strong impetus for cost control, in sharp contrast to the soaring growth in FAA costs over the same period.


Increasing Airspace Capacity

The past month has seen a number of stories about the imminent start-up of air-taxi networks using the new generation of micro-jets now entering production. Most prominent among them is the as-yet-unnamed new venture being launched by People Express founder Donald Burr and former American Airlines chairman Robert Crandall. It has ordered 75 Adam A700s, a six-seat very light twinjet. Burr told Aviation International News that he can foresee, within 10 years, operating 10 regions serving city pairs within 500 miles of a hub, requiring a total of 750 to 1,000 planes. And that's just one operator. Another micro-jet developer, Eclipse Aviation, has orders for 2,000 of its $1 million micro-jet.

The proliferation of micro-jets, combined with the soaring growth of regional jets, poses an enormous challenge for U.S. airspace capacity. DOT Secretary Norm Mineta has said the United States needs to triple that capacity, and this projected growth in small jets flying at the same altitudes as large jetliners is the principal reason. So how are we going to do that? Not with business as usual — either in technology or in institutional arrangements.

Actually, the technology is probably the easier part. NASA's Langley and Ames labs are developing dramatic prototype software that will permit "autonomous operations" of properly equipped planes outside terminal areas. No more filing a flight plan or sticking to a series of waypoints across the country. Instead, the entire sky would be available, as long as the plane was equipped with the required gear. NASA estimates that fairly widespread use of autonomous operations could triple airspace capacity.

Planes with the required equipment would follow autonomous flight rules (AFR), using an Autonomous Operations Planner (AOP) in the cockpit. Among AOP's functions would be to detect a conflict and display possible new flight paths to the pilot. Air traffic control, while being kept posted on autonomous operations, would be free to concentrate on non-AFR flights and overall strategic traffic flow management. AFR planes would receive real-time information on nearby traffic via Traffic Information Service Broadcast (TIS-B) and weather information from Flight Information Services Broadcast (FIS-B).

Two key enabling technologies, besides the software NASA is developing, are ADS-B and CPDLC. The first of these is Automatic Dependent Surveillance-Broadcast, a system that continually broadcasts each plane�s GPS-determined position and altitude to other planes and to air traffic control. After extensive field-testing by FAA with general aviation planes in Alaska and by UPS on cargo planes in and around Louisville, the FAA is expanding ADS-B this year in three locations: an east-coast network from New Jersey to Florida, a western location centered on Prescott, Arizona, and a 10-station network for the Gulf of Mexico.

According to Aviation Week (June 7, 2004), "NASA researchers expect that by the time AFR flight is implemented, ADS-B will be common on most aircraft." But that remains to be seen. In Europe, Eurocontrol is "aiming for its mandatory installation in all aircraft by 2007," because so much of projected safety and efficiency benefits require all aircraft to be equipped. Because of the much larger general aviation fleet in the United States, mandating ADS-B is probably unthinkable, due to the cost burden imposed on individual owners.

But what if we think outside the box? What if our ATC system became a user-funded, user-controlled corporation? Would it make sense for the system to give discounts on ATC charges to planes that equipped with ADS-B, as Eurocontrol is already doing for CPDLC (Controller-Pilot Data Link Communications)? Or even to give low-end units to certain types of GA planes? To be sure, there would be a real cost to the system to do this, but there would also be large benefits in terms of safety and capacity. That kind of change in institutions will be harder to bring about than the wonderful hardware and software that's already in at least prototype form. But that doesn't mean we shouldn't try.


Speaking of CPDLC . . .

As noted above, Controller-Pilot Data Link Communications (CPDLC) is another key enabling technology for expanded airspace capacity. It essentially provides email to replace voice communications for routine communications between pilots and controllers, increasing accuracy and therefore safety, while relieving congestion on voice channels.

Last month the other shoe dropped at FAA. In addition to its previously announced decision to stop further development of CPDLC, the agency now says the very promising initial operations at Miami Center will be terminated October 1st, to save money. The FAA's original rationale for putting the program on hold was that airlines could not afford to equip their planes. But there's quite a bit of evidence to the contrary. American eagerly equipped several dozen planes that operate regularly in Miami, and Southwest is busily equipping its entire fleet. In Europe, where CPDLC is moving steadily forward, airlines snapped up all 100 "pioneer" positions under which Eurocontrol is paying their installation costs, and many more are expected to equip partly in order to take advantage of the offered reductions in en-route charges for CPDLC-equipped planes.

American's fleet modernization director, Brent Blackwell, lamented the FAA's decision, saying that "We believe CPDLC is one of several key elements that will expand airspace capacity," and noting that it would continue to equip planes for CPDLC in Europe. But under FAA's revised plans, the United States may bring up the rear in implementing CPDLC. Current Eurocontrol plans project that all of Western Europe's upper airspace will be covered by 2007, with at least 25% of the fleet equipped by 2009. That would increase airspace capacity by 3.4%; 50% equipage would mean an 8% capacity increase. FAA's revised plans defer CPDLC's re-start until after the host computer system replacement program is completed in 2009-11. If that $2 billion procurement proceeds like most large FAA modernization programs, it will be 2015 before it's done. By that time, even Vietnam will have implemented CPDLC.

I've never found the FAA's argument about airline costs to be persuasive. Rather, the real clue lies in Inspector General Ken Mead's recent report on bungled modernization projects. He notes that the FAA estimates that its equipment costs would be $69 million more than originally forecast to field less than half the CPDLC locations originally planned. But in addition, the controllers' union had to be bought off to accept the new system. That added a projected $63 million in costs for "controller training and overtime." It's these added FAA costs that have killed the program.


NATCA and 9/11

Early last month the Inspector General reported to Congress on what their office had learned about the destruction of an audio tape made by controllers at New York Center shortly after two planes had been flown into the World Trade Center towers. The Center manager asked the controllers to record their observations so they could be made available to law enforcement. But another staffer later destroyed the tape without getting authorization or telling anyone. The news stories covering the IG's report duly reported that the FAA had subsequently disciplined that employee, suspending him for 20 days without pay.

But what few of the stories probed was why this bizarre scenario unfolded as it did. The IG report discloses that prior to the taping, the local union (NATCA) president prevailed upon the Center Manager that any such tapes be temporary and be destroyed once standard written witness statements were obtained. And more damningly, "After the taping, the Quality Assurance Manager [the one who was disciplined] separately committed to the union that he would 'get rid of' the tape." Neither manager told anyone at higher levels in FAA of the tape's existence, nor was its existence ever disclosed to law enforcement. And the QA Manager �made a conscious decision not to include the tape� in New York Center's package of evidence because he would lose control of it "and thus be unable to keep his word to the union that he would 'get rid of' the tape." The IG report further notes that under FAA policy, the tape "should have been considered an original record and retained for five years."

I'll leave it to the 9-11 Commission to comment on this sorry episode, as it relates to national security. What I want to note here is what it says about the mindset at the operating level within at least portions of the FAA. In discussions I've had with various FAA managers over the past few years, a recurring refrain is the extreme degree to which de-facto control shifted during the Jane Garvey era from management to the unions. This little episode is a case in point. Both the Center Manager and the QA Manager were more concerned about making nice to the union president than about national security. They ignored or defied directives from FAA headquarters that if there was any doubt about whether or not to retain any records relating to 9/11, the mandate was 'retain it.' I find that mind-set very troubling.

Administrator Blakey and COO Russ Chew really do have their work cut out for them.


News Notes

ATC Corporations Expanding Overseas. AirServices Australia just announced that it has signed a 10-year contract with Nauru to manage its upper air space. That service was formerly provided by the FAA out of its Oakland oceanic center. AirServices won a similar contract from the Solomon Islands in 1998, and has recently renewed it for 10 years. German ATC provider DFS is providing controller training services to China, Croatia, Italy, and Latvia. CEO Dieter Kaden has a 10-year plan for global business services outside Germany, reports ATM Global.

FAA Wins Accounting Award. Though still gaining some brickbats from the Inspector General for slow accounting system progress, the FAA has managed to improve enough to win a certificate of excellence from the Association of Government Accountants. It got the award for its 2003 Performance and Accountability Report, which tracks its progress in assessing program performance.

Two More Corporatized ATC Systems. The Civil Air Navigation Services Organization (CANSO) reports the addition of two new full members in May. The Airports Authority of India and Slovenia Control have both joined, meaning that they are operated as separate entities from the air safety regulator and are supported by ATC fees and charges paid to them by aviation customers. The new additions bring the total number of full members in CANSO to 36, representing 25% growth in the past year.

Kerry Promises No More Contract Towers, if Elected. Winning the endorsement of NATCA, Sen. John Kerry told the controllers union several months ago that no control towers would be privatized during a Kerry administration. Ironically, no control towers have been outsourced during the Bush administration, but 116 of the 219 contract towers were outsourced during the two terms of President Bill Clinton.

Nav Canada Creation Detailed in New Book. A case study recounting how and why Nav Canada was created to take over ATC operations from the Canadian government is included in a new book edited by George Mason University professor Kenneth Button. The chapter is written by Glen McDougall, who was a Canadian government official involved with this historic effort. The book is titled Defining Aerospace Policy: Essays in Honor of Francis T. Hoban, and is published by Ashgate Publishing Co. It's available from Amazon.

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





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