Air Traffic Control Newsletter #107

GAO on dire FAA budget prospects, UAS tidal wave may hit ATC, Fees for ATC

In this issue:

GAO on Potential FAA Budgetary Death Spiral

It looks like just another in a long line of reports on the FAA from the Government Accountability Office. But reading GAO-13-693, dated August 2013, reveals a budget dilemma not even hinted at by the report's bland title: "Improved Budgeting Could Help FAA Better Determine Future Operations and Maintenance Priorities." With typical GAO understatement, the report paints a frightening picture of what could well be described as a budgetary death spiral: NextGen program delays and cost overruns lead to keeping aging systems and facilities in place years longer than planned, requiring more operations and maintenance spending on legacy systems, which reduces funding for NextGen systems, which in turn further delays NextGen capabilities while requiring even more spending to keep legacy systems running, etc.

Nominally, the report covers five topics. It notes some FAA progress on the first two—having sustained leadership for the transition to NextGen and managing NextGen as an overall set of interdependent projects. On the other three—equipage, FAA workforce, and facility consolidation—the report goes into more detail, and that's where the major problems are documented

First, the long-standing problem of getting aircraft operators to equip their planes with an estimated $19 billion in new gear (by 2030) in sync with FAA standing up NextGen capabilities, remains unsolved. Congress in 2012 authorized public-private partnerships making use of loan guarantees, but FAA has yet to decide on a plan to implement this (despite the several-year existence of the private-sector NextGen Equipage Fund). The latest word from FAA is that they hope to have something specific by sometime next year. Congress also required FAA to report by June 2012 on its plans for a "best-equipped/best-served" incentive plan, but this, too, is still being worked on. And the earliest expected date for a schedule of when aircraft operators can expect various NextGen benefits to be available is now September 2014.

The workforce situation is more troubling. Workforce planning for the NextGen era "remain[s] a work in progress," says GAO. Even though NextGen is intended to provide productivity-increasing improvements such as replacing much voice traffic with digital text messages and increased automation tools, current FAA workforce planning assumes zero increases in controller productivity. As for technicians, workforce plans do not yet take into account that the ground-based equipment for both ADS-B and DataComm will be maintained for many years by the contractors who will own and operate these systems, not FAA technicians. The FAA's acquisitions workforce is going to need many new hires, given that 39% of current program and project managers will be eligible to retire in 2015. Fortunately, the National Academy of Sciences is doing an overall workforce study for FAA. One hopes it will take a critical look at how the roles of controllers and technicians will likely change under NextGen, and especially how that will require a significant revamping of controller training.

After all this, we come to the real beef: a long discussion of aging facilities and the need for consolidation. It's already well-known that 45% of the 20 domestic en-route centers are more than 35 years old, as are 39% of the TRACONs. There is an increasingly important trade-off between devoting larger and larger amounts of scarce Facilities & Equipment budgets to refurbishing aged facilities when many of them ought to be replaced by a smaller number of brand-new facilities as part of NextGen, achieving economies of scale in the process. Yet FAA has still not produced the overall facility consolidation plan that Congress asked for by June 2012. GAO reports that as of July 2013, FAA "had developed a process for identifying potential facilities for consolidation" and "were evaluating realignment options," but had not yet decided which facilities would be involved or any kind of timeline (emphasis added).

Did you know that FAA's unstaffed ATC facilities have an accumulated deferred maintenance backlog of $3.7 billion? And that a growing number of ground-based navaids (such as DMEs) are difficult to repair, since replacement parts are no longer being manufactured, and FAA is making do by cannibalizing old equipment that has been stored after decommissioning? FAA does not have a complete estimate of deferred maintenance on staffed facilities, such as towers, TRACONs, and centers. Over the past decade scheduled outages within the National Airspace System doubled, and unscheduled outages increased 45%, and the durations of both types of outages more than doubled. But GAO reports that as of 2012, FAA has stopped reporting (to Congress and its aviation customers) its former operational availability measure.

GAO concludes by painting a stark picture of what I described above as an emerging budgetary death spiral, as the combination of declining budgets, increasing maintenance and refurbishment costs for legacy systems, and increased deferrals of NetGen replacements for legacy systems produces the worst of all worlds. This situation deserves priority attention from the NexGen Advisory Committee. And it further strengthens the case for governance and funding reform of the Air Traffic Organization.

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UAS Tidal Wave to Hit Future ATC Systems

At the Aviation Week NextGen conference last month in Washington, DC, one of the most fascinating panels concerned Unmanned Aircraft Systems (UAS) in the National Airspace System. Five panelists, including representatives from NASA, DoD, and FAA  discussed the potential growth and economic impact of such vehicles in domestic airspace between now and 2035. A focal point of the session was a new report from the DOT's Volpe Center in Cambridge, MA: Unmanned Aircraft System (UAS) Service Demand, 2015-2035, prepared for the U.S. Air Force. (http://ntl.bts.gov/lib/48000/48226/UAS_Service_Demand.pdf)

The report uses a variety of techniques to project possible growth in UAS usage for three principal user groups: DoD itself, other public agencies (federal, state, and local), and commercial. Just within the Defense Department, the projection sees 14,000 UASs of all sizes and types (including optionally manned aircraft) to be in the 2035 fleet, constituting more than half of all military aircraft by that point. The non-military federal fleet is projected to be 10,000 by 2035, mostly in the nano, micro, and small categories. States and other public-sector users are projected to have 70,000 UASs in operation, of which nearly half would be used by first-responders (police, fire, EMS). And the commercial market, which scarcely exists today, is forecast to have 175,000 UASs in operation by 2035, offering a whole array of services such as crop-dusting (in use in Japan today), pipeline inspection, cargo delivery, and many other uses. Overall, the UAS market is estimated to be $30 billion per year by 2035.

Obviously, any such forecast rests on numerous assumptions, and you can make your own judgments after reading the Volpe report. All five panelists at the conference took it very seriously, and because this was presented at a NextGen-oriented conference, much of the discussion concerned the needed ATC infrastructure to handle such an expansion in both numbers and types of air vehicles. Panelist Gary Church, one of the Volpe report co-authors, gave me a brief paper afterwards outlining some of the impacts on the U.S. ATC system from this UAS tsunami. To begin with, the research identified 25 FAA orders and notices that will need to be revised to enable large-scale UAS operation in civilian airspace. The UASs themselves will need capabilities such as flight management systems and integrated avionics systems similar to those of manned aircraft.

Moreover, all the major elements comprising NextGen will need modifications to handle large numbers of UASs in the airspace. For example, controllers in Centers and TRACONs will need to be able to display flight plans and track UAS flights, most of which will not originate at airports. The National Voice System will need to provide for communication (voice and data) between a ground-based UAS pilot and various ATC facilities, probably via Voice Over Internet Protocol (VOIP). System Wide Information Management (SWIM) must be able to rapidly move UAS information around the system, to ensure that every relevant party has the right information at the right time. And because there will be no pilot on board a UAS to report in-flight weather, this seems to be an obvious application for equipping UASs with weather-data-sensors such as those developed for the TAMDAR system I have written about in previous newsletters.

Developing and implementing these additional capabilities, which were not contemplated when NextGen was being conceptualized by the JPDO a decade ago, will add to NextGen's cost. The report estimates the added cost at $500 million to $1 billion per year over a 20-year period. Since 70% the 2035 UAS fleet is projected to be commercial users, there will need to be a charging process for the ATC services they will use. And there is no good reason why the other 30% that are public-sector users should not also pay for their share of UAS ATC services. This is all the more reason to reform the funding and governance of the air traffic control system, creating a system of user charges for each category of user, including UASs.

Note: The Air Traffic Control Association has announced a one-day symposium on UAS in the NAS, taking place Nov. 1st in Crystal City, VA. Details at: www.atca.org/uas

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No More Tax Funding for Air Traffic Control

One of the findings of the landmark 2006 empirical study Air Traffic Control Commercialization Policy: Has It Been Effective? was that financial independence is a key feature of high-performance air navigation service providers (ANSPs).

There are several reasons why this is the case. First, recall the old saying that "He who pays the piper calls the tune." When a legislative body provides the funding, it plays a large role in deciding what the ANSP can and cannot do. And acting in its own best interest, the ANSP then seeks to please the party that provides its budget, the legislative body. By contrast, when the funding comes from the ANSP's customers, the focus changes to an ongoing process of figuring out what those customers want (and don't want), as expressed in the evolving customer-provider relationship. As the reformers who brought about ATC reform in Canada frequently put it, "User pay means user say." So not only does financial independence reduce or eliminate political interference in what ought to be business decisions, it also refocuses the corporate culture towards pleasing the aviation customers.

Another reason to liberate ANSPs from tax funding is to make it possible to finance large-scale capital modernization programs, such as NextGen. There is a lot of confusion in the popular media between the terms "funding" and "finance." The former is what current federal programs do for highways, airports, and ATC. Those programs take in mode-specific tax revenue and then appropriate it on a cash basis to provide annual highway grants, airport (AIP) grants, and FAA Facilities and Equipment appropriations. What that means is that these programs are paying for major capital investments on an annual cash basis. By contrast, when a railroad, an electric utility, or a toll road needs to make a major capital investment, the usual process is to finance it. That means raising the total amount needed up-front from investors (usually bond buyers) and paying it back over time out of annual revenues from customers. Airports actually finance most of their major projects by issuing revenue bonds, with AIP grants helping out here and there as supplemental funding. And to bring it closer to home, very few of us fund the purchase of our homes (i.e., save up enough to pay cash for the whole thing). Rather, we finance it, as most infrastructure owners do with a mixture of debt (mortgage loan) and equity (down payment).

Funding a $20 billion capital program like NextGen out of annual cash appropriations is bizarre. Corporatized ANSPs have ready access to the bond market, and the larger of them, such as NATS and Nav Canada, have investment-grade bond ratings. In today's federal budget environment, relying on annual appropriations creates additional uncertainty on the part of airspace users about when FAA will actually have various NextGen capabilities in place. And that contributes significantly to aircraft operators' reluctance to invest in equipping their planes to use these NextGen capabilities.

It's for reasons like these that the nearly universal practice among ANSPs in the 21st century is to obtain financial independence from their national government budgets. Instead of relying on any kind of tax-derived funds, they become self-supporting from customer fees and charges. If we are to succeed in reforming the funding and governance of ATC in this country, by separating the ATO from FAA, the revamped ATO must be able to charge its customers for the services it provides to them, and to issue revenue bonds based on the far more reliable revenue stream that ATC charges will constitute.

This critically important difference between aviation taxes paid to the Treasury and ATC fees paid directly to a self-supporting ANSP has gradually become better understood by aviation stakeholders, especially during the past year of budget turmoil, controller and technician furloughs, partial FAA shut-downs, etc. In nearly all the previous battles over "ATC user fees" proposed by the government during the past decade, that crucial difference has been muddled. What the White House has proposed time and again is an ATC tax, to be paid to the Treasury. What nearly all developed countries have adopted in the past two decade are ATC charges paid directly to their self-supporting ANSP.

Aviation stakeholders should be having reasoned discussions not about whether or not there should be "ATC user fees" but rather over what structure of true user fees (paid to the ANSP) is both adequate to fund the ATO's capital and operating costs and also fair to all categories of ATC users. We can learn some lessons of what to do and what not to do by observing ATC fee structures in other countries.

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First European ANSP Merger Fails to Occur

Last month I reported that the two finalist bidders for a partial stake in the UK air navigation service provider NATS were the German ANSP—DFS—and a UK pension fund, the Universities Superannuation Scheme (USS). The Airline Group, which had owned 42% of NATS prior to the sale, ended up choosing USS rather than NATS to buy a portion of its stake. And that meant that a partial de-facto merger between two of the largest European ANSPs did not happen.

Whether that would have been a productive merger is somewhat beside the point. Shared ownership between DFS and NATS would have marginally moved forward the struggling European Commission plan to restructure European airspace into nine Functional Airspace Blocks (FABs) with streamlined airspace and fewer costly en-route centers. That's because the UK-Ireland FAB shares a border with FABEC, the large FAB that includes Germany and France. But we have yet to see cross-border facility consolidation even within a single FAB, not even the two-country UK-Ireland one.

Yet as I have pointed out in Air Traffic Management as well as at the CANSO World ATM Conference in February, the best hope for achieving the consolidation of airspace and ATC facilities for the Single European Sky is mergers and acquisitions among ANSPs. To be sure, as Andrew Charlton pointed out in the October issue of Aviation Intelligence Reporter, nearly all European ANSPs other than NATS are government corporations operating mostly or entirely as monopolies. But the fact is that both part-privatized NATS and government-corporation DFS have succeeded in consolidating en-route centers within their borders, since each has considerable commercial freedom. So if governments were persuaded (or required by the EC) to allow cross-border M&A activity, it's at least conceivable that the merged ANSP would be better positioned both to rationalize the shared airspace and to replace excessive centers with a smaller number of high-tech ones tailored to the revamped airspace.

CANSO Director General Jeff Poole (no relation) hinted at this in an address last month at The Economist's "Future of Airspace Summit." He called for reducing national government political controls and regulations and argued for getting beyond the "one-state/one ANSP" model. He also said that "States should allow ANSPs to operate as normal businesses with a focus on the customer and on performance," while avoiding "the temptation to micro-manage the businesses of ANSPs." Lest I be accused of putting words into his mouth, I appreciate that as the head of the trade association for ANSPs, he is not in a position to directly advocate that some of them should no longer exist as state-specific entities. But that is the reality of what is needed in order to achieve the goal of a Single European Sky.

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ADS-B Moving Slowly in US Domestic Airspace

Air Traffic Management reported that as of mid-August, only a bit over 1,600 U.S. aircraft were operating with ADS-B/Out installed. That's a pretty small percentage of the overall airline and business aviation fleet that are all required to have that capability installed and operating by the beginning of 2020. Putting a good face on it, NATCA's Surveillance Broadcast Service rep Eric Labardini noted that there are advantages to having a relatively small number of ADS-B transmissions during a time when key NextGen building blocks that need to interface with ADS-B (such as ERAM, STARS, and CARTS) are still being deployed and tested, and controllers are being trained in their use. Which I guess does make sense.

But if you look at who is equipping now, a clear pattern emerges. United is nearly finished equipping its entire international fleet, primarily to meet overseas equipage deadlines. US Airways has equipped its A-330s used in trans-Atlantic service with ADS-B/In as well as ADS-B/Out, not only to meet the European deadline but also to permit reduced in-trail spacing in oceanic airspace. JetBlue has equipped 35 A-320s with ADS-B/Out to permit more direct routes across the Gulf of Mexico where there is no radar separation. But because there are no ADS-B ground stations in the Caribbean, it has been unable to achieve similar benefits on its routes from the Northeast to destinations there; the airline is looking into alternative ways of getting such stations installed. American faces similar situations regarding oceanic airspace, but is concerned about the cost of equipping the rest of its fleet for ADS-B domestic, seeing little or no business case benefits, according to a report in AINOnline last month.

And indeed, the near-term business case for ADS-B domestic seems weak for aircraft operators, though the increased precision of ADS-B surveillance should eventually make possible reduced domestic separation between planes, expanding overall airspace capacity. But no such procedural changes have been announced as going into effect by the 2020 equipage deadline. The arrival of global satellite-based ADS-B service by the time of the deadline will facilitate major reductions in separation in oceanic airspace and in sparsely populated regions (Australian Outback, northern Canada, Siberia, etc.). The benefits in those regions are very clear. One also has to wonder if the FAA's large investment in a national network of ADS-B ground stations would have been made if the plans for space-based ADS-B had been announced several years earlier.

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Equivalent Visual Operations Now in Prospect

In the last few years we have heard very little about one of the original NextGen concepts: EVO, equivalent visual operations. Primarily relating to landings, it is the goal of being able to operate just as effectively in very poor visibility conditions as under visual flight rules (VFR) conditions. But new technology being pioneered by avionics companies appears close to making EVO a reality, if FAA safety regulators agree.

For years, companies such as Honeywell and Rockwell Collins have been developing and gaining FAA certification for enhanced vision systems, which they have marketed successfully mostly to business jet operators. But most of what's been approved have been systems that were authorized for "situational awareness only" and not to be relied on in place of actual human vision for the last N hundred feet of an approach under low-visibility conditions.

But in June FAA safety regulators published for comment in the Federal Register FAR 91-176 for Enhanced Flight Vision Systems (EFVS). Unlike previous regulations which have always required the use of a specific technology (e.g., forward-looking infrared), the new regulation is performance-based. It specifies the performance that is required for a system that would overlay real-time electronic imagery of the runway onto a synthetic image pulled from a database for the runway in question. The pilot would view the combined imagery on either a head-up display or a head-mounted display, so that he would be looking toward where the runway would or will appear as the aircraft gets very near to it. In its draft form, the regulation would accept imagery from forward-looking infrared, millimeter wave radar, millimeter wave radiometry, or low-light level image intensification.

Work on the new regulation began when now-retired Nick Sabatini headed the FAA Flight Standards office, and in an article in the September issue of Professional Pilot, he praised FAR 91-176 as the apparent breakthrough for EVO that it is. He did note one apparent glitch in the Federal Register notice—a reference to a 1000 ft. visibility requirement that is contradicted by the zero-ft. text elsewhere. Let's hope this was just a drafting error!

The significance of EFVS for airline operations could be profound, if airlines decide to equip with this technology. Most major airports lose a significant fraction of their effective runway capacity when conditions shift from VFR to IFR. In the appendix to their book Terminal Chaos, George Donohue and Russell Shaver calculate these capacities for 17 major airports. On average, IFR capacity is 72% of VFR capacity, but depending on airport configuration, it can be as low as 50% (SFO), 51% (IAD), or 65% (DFW). So achieving Equivalent Visual Operations via EFVS would be a very big deal for commercial aviation.

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News Notes

WAM Replaces Radar at Newcastle International. A wide-angle multilateration (WAM) system from ERA has received U.K. certification and gone into operation at the Newcastle airport, to replace an aging secondary surveillance radar (SSR). It provides radar-like separation out to 50 nm, via its nine ground stations. A fusion tracker integrates WAM and ADS-B data, with the latter initially being received from ground vehicles. This is the second airport WAM system in the UK (the first is at East Midlands), but it the first one to replace, rather than supplement, an SSR.

Boeing 787s Approved for RNP AR Procedures. The FAA has certified Boeing to assist purchasers of its 787 airliners to get up to speed in using its advanced navigation equipment to fly RNP AR procedures, for which these new aircraft are equipped. The "AR" means an operator must complete rigorous demonstrations that they have trained flight crews in using the precise RNP procedures and can keep required navigation charts and databases up-to-date.

Papua New Guinea ANSP Selects CANSO Billing System. PNG Air Services Ltd., the six-year-old self-supporting ANSP for Papua New Guinea, has selected the new FlightYield billing services offered by CANSO, the global organization for air navigation service providers. FlightYield is a joint venture among Airways New Zealand, SITA, and CANSO. Other customers include China, Saudi Arabia, and Fiji.

FAA Renews Lockheed Martin FSS Contract. Since 2005 Lockheed Martin has been the operator of the agency's Automated Flight Service stations, which provide flight-planning and other services to general aviation pilots. Under the initial contract, Lockheed consolidated the FSS facilities and introduced modern hardware and software. The contract extension covers two more years, beginning October 1st, at a total price of $221 million. Prior to FSS being outsourced, the cost to FAA had been running in excess of $600 million per year.

RNP AR Operational in Faroe Islands. Atlantic Airways has equipped its Airbus A319 aircraft for RNP operations in order to fly shorter approaches and to operate more reliably in poor weather in the remote North Atlantic islands where it is based. By receiving regulatory approval for RNP AR 0.1, it has become one of the world's RNP pioneers. The new capability has significantly increased the reliability of its service to the Faroe Islands from Europe, the company told Aviation Daily (Aug. 26, 2013).

Airways New Zealand Marketing Aero Database. New Zealand's ANSP has set up a joint venture with Germany's GroupEAD to jointly market the latter company's aeronautical database services in the Asia-Pacific region. GroupEAD has been under contract to Eurocontrol for the past decade to manage Europe's principal aeronautical database.

Surface Management System for Ho Chi Minh City Airport. Vietnam's ANSP, Vietnam Air Traffic Management Corporation, has implemented an advanced surface management guidance and control system (A-SMGCS) at Tan Son Nhat International Airport. The system was developed by HITT, recently acquired by Saab Sensis. In its initial configuration, it uses data from a surface management radar to track aircraft and ground vehicles, but it also has the capability to integrate data from multilateration and ADS-B.

Montana's Lighted Airway Beacons. The Transportation Research Board's TR News has reported that a system of lighted airway beacons, dating to the 1920s and 1930s, is still in operation in Montana's mountainous west. In the rest of the country, lighted beacons were replaced by VORs, but because the FAA lease requires the state to maintain the beacons or return the land to its original condition, the state figures that maintaining the 19 beacons is less costly than spending $250K apiece to dismantle them and restore the land. (www.mdt.mt.gov/aviation/beacons.shtml)

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Quotable Quotes

"'First-come-first-served' is an increasingly outdated concept in ATM. Some airlines adopt new technologies and capabilities faster than others, but they are asking why they should invest if there are no advantages and if they cannot realize the full capability of their equipment. CANSO has started a major initiative, with its industry partners, to move to the concept of 'most-capable-best-served.' This will encourage airlines to invest and enable them to make best use of advanced technology such as increased surveillance capability in remote places and improvements in communications and decision-making tools."
—CANSO, "A Strategic Vision for the Future," Airspace, Quarter 3, 2013

"NextGen had an original design goal of three times capacity of the current airspace system. It was a bad design goal, it was not achievable, but it was what the design goal was. We've put a lot of treasury on developing NextGen. We're now backing off, dummying down the outcomes, looking at NextGen as an efficiency capability."
—Neil Planzer, quoted in Aimee Turner, "Waving or Drowning?" Airtrafficmanagement.net, posted Sept. 23, 2013

"NATS became a public-private partnership in 2001. . . . [S]afety is our core business, and it always comes first. Our performance since 2001 in improving and maintaining safety at the same time as growing our business demonstrates that commercial drivers and safety can sit comfortably together. . . . Being able to manage our own financial planning has enabled us to invest in modernizing our service with research into new technological and operational developments. This has allowed us to improve safety and efficiency and reduce excess fuel usage, leading to substantial improvements in environmental performance and reduction in fuel costs for our customers. Commercialization has become a powerful catalyst for driving efficiency and promoting collaboration with users. More importantly, it transforms the organization into a culture that is motivated to achieve benefits under rigorous performance targets."
—Van Espahbodi, NATS U.S. Business Development Manager, "Celebrating ANSP Independence," July 5, 2013 (www.nats.aero/blog/2013/07/celebrating-ansp-independence)

"Let's look at a possible future model for delivering ATM [air traffic management] services. States would retain sovereignty of their airspace and retain responsibility for designating the service provider. Regulators and national supervisory agencies would collaborate across borders to set common standards. And groups of activities would be addressed by multi-state commissioning authority that would provide some services across a number of states. Privatization, competition, and good governance would help to drive down costs and charges."
—Jeff Poole, "The Future of International Aviation Regulation," delivered at The Economist's "Future of Aerospace Summit, Oct. 15, 2013

"It is a remarkable fact that even today, with all the equipment and technology available, each and every flight is lovingly hand-made, as if it were artisanal cheese. Not only are flights planned in meticulous detail, but they are then escorted by hand across the sky. It is expensive, it is time-consuming, and it ignores the benefits that technology can bring. It also has to stop. We can no longer afford to hold each flight up by hand. Instead, we need to find new ways of working that marshal technology, create efficiency, and give us room for growth. Oh, wait, no—we have all the technology already. So why are we not implementing it?"
—-Andrew Charlton, "The ANSP-Airline Relationship: Handmade Cheese, But No Maturity?" Aviation Intelligence Reporter, August 2013

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





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