Air Traffic Control Newsletter #120

Air Traffic Control Reform Newsletter

Air Traffic Control Newsletter #120

FAA's dire funding situation and Aireon announced global flight tracking

In this issue:

FAA’s Dire Funding Situation

I would hate to be in FAA Administrator Michael Huerta’s shoes these days. In presenting the agency’s FY 2016 budget request, he and his team are doing the best they can to set priorities among conflicting demands to address a long-standing shortfall in “sustainment” of aging facilities and technology while moving forward with the most important NextGen investments. In a recent speech, reported in CANSO’s Airspace magazine (Quarter 4, 2014), Huerta said

“We have to prioritize our work, and the current budget environment is making us take a closer look at what we can do differently or perhaps stop altogether. In addition to modernizing through NextGen, we have to maintain our existing infrastructure. We are having discussions with our stakeholders about our mission and our work-what should be high on the list and what shouldn’t be on the list at all. . . . We are at a critical point in aviation, where the decisions we make today will affect the industry for decades to come.”

That perspective is reflected in the FAA portion of the President’s FY 2016 Budget Submission. The overall request is for $15.836 billion, a slight decrease from the enacted $15.847 for FY 2015. And that is after the proposed reduction in Airport Improvement Program (AIP) grants from $3.35 billion to $2.9 billion-a cut unlikely to be approved by Congress. Aviation Daily described the budget request as seeking “to patch holes created by chronic under-investment and the 2013 sequestration.” Indeed, the $2.85 billion requested for the Facilities & Equipment account, according to the budget submission, aims to “restore the F&E program to a more balanced level after major reductions in FY 2013. The funding appropriated to F&E over the past few years has forced FAA to choose between deferring maintenance of current infrastructure and keeping NextGen progress on track.” The $2.85 billion is nearly a 10% increase, and is intended to permit spending $2.0 billion on sustainment of existing infrastructure and $850 million on NextGen priorities identified by the NextGen Advisory Committee (NAC). But the budget language goes on to note that “real progress on the [deferred maintenance] backlog will require sustained support over several years, complemented by divestiture and decommissioning of infrastructure where feasible.”

Reactions from the aviation community reflect the gravity of the situation. Former DOT Secretary Jim Burnley told the ATC reform working group of the Eno Center that he has never seen such candor from FAA regarding the funding shortfall and the trade-offs between sustainment and new capabilities. The executive director of the FAA Managers Association, in the current issue of its Managing the Skies magazine, wrote that “At the heart of this problem is the dysfunctional system for funding the FAA, a broken budget process that begins with the Office of Management and Budget and ends with finger pointing across Capitol Hill.” In providing context for this broken process, several people have been re-circulating a 10-year graph presented to the NAC last fall by Assistant Administrator for Policy Rich Swayze. It projects the maximum OMB-allowable growth in the FAA Operations Account (most of which is for the ATO) compared with a projected GDP growth rate of 3.2% for the coming decade. The cumulative difference is a shortfall of $5.1 billion between now and FY 2024.

Given that Trust Fund revenue has been relatively flat in recent years, how is the FAA able to propose increased capital spending? One way, of course, is its proposal to reduce AIP grants by $450 million (in exchange for letting airports replace those funds via an increase in local Passenger Facility Charges). But the other rabbit out of the hat is to spend down the balance in the Trust Fund. In FY 2014 the general fund accounted for 19.9% of the total FAA budget authority, a fairly typical percentage over the past decade. But this was slashed to 7.2% in the current FY 2015 and is proposed to be 8.6% in FY 2016. The difference is made up by draining the Trust Fund-a process that cannot go on many years longer. And all of these projections make the optimistic assumption that Congress repeals the remaining eight years of Sequestration. As Assistant Administrator Edward Bolton told the NAC last fall, referring to the sequester and other imposed cuts, “You can’t prioritize your way out of that.”

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Global Emergency Flight Tracking Service Announced by Aireon

During this month’s meeting on global aircraft tracking in Montreal, delegates to the International Civil Aviation Organization (ICAO) agreed on plans for a Global Aeronautical Distress and Safety System (GADSS), while “strongly encouraging” airlines to begin flight tracking for planes in oceanic and remote airspace, via routine position updates every 15 minutes. Once GADSS is fully implemented on new aircraft (starting in 2021), it would have an autonomous mode that would activate automatically when certain attitude or other indicators of problems occur, triggering once-per-minute updates.

At the same ICAO meeting, space-based ADS-B provider Aireon announced its own Aircraft Locating and Emergency Response Tracking (ALERT) system, to be available after the company’s full complement of 66 Iridium NEXT satellites is operational by the end of 2017. ALERT will be managed for Aireon by the Irish Aviation Authority (IAA) from its North Atlantic Communications Center in Ballygirreen. The 24/7 service will be made available free of charge to airlines, ANSPs, and search & rescue agencies. Any of these will be able to ask ALERT for the last known location of an aircraft, based on its position information provided via ADS-B/Out over Aireon’s global surveillance network. The company estimates that by 2018 about 90% of commercial airliners in international service will be equipped with ADS-B/Out.

Aireon is on track in developing its global system. Aviation Daily (Feb. 6, 2015) reports that some 24 ADS/B receiver packages have been completed by Harris Corp., four of which have been installed on Iridium Next satellites by Orbital Sciences Corp. The first two satellites will be launched this year, and the remaining 70 (including spares) will be launched in groups of 10 on SpaceX Falcon 9 rockets in 2016 and 2017. Aireon is a joint venture of Iridium and four ANSPs (from Canada, Denmark, Ireland, and Italy). Thus far, it has signed 12-year contracts with those four ANSPs plus NATS in the U.K. It also has exploratory agreements in place with the FAA, Portugal, and Singapore to study concepts of operation, business cases, and safety cases.

Aireon and its partner ANSPs have asked ICAO’s help in protecting spectrum in the 1090 MHz band between aircraft and satellites for the safety-of-life service. Such protection already exists for communications between aircraft and the ground. That request is on the agenda of this year’s World Radio Communications Conference.

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CRS Provides Perspective on ATC Corporatization

Just in time for this year’s debates on ATC restructuring, the Congressional Research Service has produced a comprehensive report called “Air Traffic Inc.: Considerations Regarding the Corporatization of Air Traffic Control,” dated January 5, 2015 (CRS 7-5700, R43844). Researched and written by aviation policy specialist Bart Elias, it is the most comprehensive overview, at digestible length, that I have encountered, and is must reading for members of Congress and aviation stakeholders involved in the ongoing discussions of this subject.

First, it provides a good summary of “40 years of privatization proposals” dating back to the original 1974 proposal by pioneer air traffic controller Glen Gilbert. Other highlights include the Clinton Administration’s 1995 USATS legislative proposal, the Mineta Commission’s quasi-corporation proposal of 1997, and most recently the FAA Management Advisory Council’s January 2014 final report, recommending that the ATO be separated from the FAA, made self-supporting from fees and charges (like airports), and be governed by a board made up of aviation stakeholders.

Elias then discusses the politics that has accompanied previous corporatization proposals, with airlines generally being in favor, controllers unions sometimes for and sometimes against, and general aviation mostly against. He also attributes FAA personnel and procurement reforms, and the creation of the ATO via internal reorganization, as measures taken in response to corporatization proposals.

The report provides a concise but useful overview of air traffic corporations in other countries. Despite a misleading first sentence saying that “several” countries have done this, the rest of that section makes clear that dozens of them now have ATC corporations, with some of the more notable ones listed in Table 1 on page 14. It describes the somewhat different organizational models of six key countries (Australia, Canada, Germany, New Zealand, Switzerland, and the U.K.) to illustrate the range of organizational and governance models now in use. Especially important is the report’s summary of objective data indicating higher productivity, improved cost-effectiveness, and generally increased safety following corporatization in these cases.

The final portion of the report provides a useful discussion of key questions that must be considered and addressed in any corporatization applied to the U.S. ATC system. I found a couple of strange notions in this section, and want to point them out, lest anyone think they would actually apply to any serious corporatization plan put forward in the current debate. First is the idea that separating the ATO from the FAA would leave the ATC facilities and equipment behind, separate from the ATC operating entity. There is no functioning example of anything so foolish, since the whole idea is to enable the ATO to gain a new lease on life by restructuring it to operate as a business-and of course that means ownership and control of its facilities, equipment, intellectual property, etc. When the ATO was first stood up, it was clear to everyone that it (finally) brought together under one chief operating officer both the capital and operating functions that had been separate silos within FAA. One page later, Elias seems to acknowledge the case for keeping it all together, noting that the 1995 USATS legislation called for the FAA to divest to USATS “possession, use, and controlof all real property, equipment, frequency licenses, patents, and software rights necessary” to carry on with the business of air traffic control.

The other strange discussion concerns Elias’s de-facto assumption that the new ATC corporation would most likely have to issue debt at taxable rates, rather than at tax-exempt rates. The only way I could imagine that being the case would be if the corporation were set up as a for-profit entity with equity owners-which nobody is proposing. But as his later discussion acknowledges, USATS was defined as non-profit and the legislation specified that its bonds would be tax-exempt. Interestingly, a few pages before this discussion he mentions the MITRE Center for Advanced Aviation System Development as a congressionally chartered not-for-profit corporation, which is the model being proposed by at least one prominent group working on the corporatization question.

Those minor quibbles aside, this report is an excellent guide to all the questions that must be thought through and addressed in crafting a new corporate home for the struggling Air Traffic Organization.

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Why General Aviation Shouldn’t “Pay at the Pump”

Just about everyone in aviation agrees that the funding mechanism for the FAA is broken, unsustainable, and needing to be replaced. If there is any consensus proposition in the ongoing debate over the future provision of air traffic control, an unsustainable funding system is that proposition.

Yet just this week, in a Roundtable Policy Discussion on ATC restructuring, convened by the House Transportation & Infrastructure Committee (at which I was one of the invited speakers), Jim Coon of AOPA repeated the organization’s long-time position that general aviation prefers to “pay at the pump,” meaning contribute its piece of ATC funding via the current GA fuel tax rather than any form of ATC fee paid to the corporation. But this position is, by definition, at odds with what it will take to resolve the “unsustainable funding” problem.

In essence, the problem is that the ATO’s funding comes from the federal budget process, and is therefore encumbered by all the constraints of that process. Even though the GA fuel tax, like all the other aviation excise taxes, can only be used for aviation, the money so generated cannot be spent at all until it is authorized by one set of House and Senate committees and appropriated by another set of committees. And the amount so designated in any year is only as much as the White House, via its Office and Management & Budget, will approve. Congress, of course, can spend more or less than that, but Congress is encumbered by its own government-wide spending rules, such as the Budget Control Act that has produced the current 10-year sequester. Moreover, when Congress is unable to agree on an FAA reauthorization bill, it sometimes reaches such an impasse that the authorization for collecting the excise taxes expires altogether.

So the only sure way to resolve the uncertain and unsustainable funding situation is to remove the ATC system from the federal budget process. That will remove it from the control of OMB, from annual appropriations, from the uncertainties and instabilities of sequesters and lapsed authorizations, etc. In short, the problem with the GA fuel tax is that it is a tax. A tax is paid into the U.S. Treasury, and can only be spent after that complicated federal budgetary process has done its work every year.

By contrast, what more than 50 countries have done over the last 25 years is to liberate their ATC providers from being part of their government budgets, setting them up instead as self-supporting ANSPs. Instead of paying taxes to the government-and then hoping for the best-airspace users pay fees to use the system and those fees are paid directly to the ATC provider. That eliminates a host of political and bureaucratic middle-men. And when the ATC provider has a predictable revenue stream, it is able to issue bonds based on that revenue stream, to pay for large-scale capital modernization programs (like the various components of NextGen).

So if AOPA continues to argue for paying by means of a tax, it is undercutting the logic of the solution to the ATC system’s unsustainable funding system. I suppose the organization could decide to continue paying fuel taxes to help support the AIP grant program, which would leave it as a non-participant in the corporatized ATC system. But it would be hard to justify giving GA a seat on the stakeholder board if it doesn’t provide financial support to the ATC corporation.

Actually, I think AOPA leadership understands these points. Last year its top management and many of its board members visited Nav Canada headquarters in Ottawa and learned first-hand how the company operates. In particular, they learned that GA planes in Canada do not pay per-transaction fees. Instead, as I have reported here a number of times, they pay a flat fee once-a year for access to the system. For planes of two metric tonnes or less, the charge is $68 per year, and it is $227 per year for those between two and three metric tonnes-which covers just about every single-engine and twin-engine piston plane. The only other charge for these planes is a $10 daily charge levied only at Canada’s seven largest commercial airports.

Lending support to my point is AOPA’s year-end fund-raising mailing. While “opposing user fees” has been an AOPA mantra for several decades, last December’s mailing used different language. It asked donors to add their names to an “Official Petition to the United States Congress” urging them to join the GA caucus and adding the words, “I urge you to oppose per-flight user fees.” That is a very significant change in wording, which suggests that AOPA leadership appreciates the distinction between large-aircraft en-route and terminal ATC fees and flat annual fees like those used by Nav Canada for GA aircraft. That distinction will prove to be very important as the ATC corporation discussion evolves.

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Would Corporatizing ATC Mean a Long Disruptive Transition?

In discussions taking place in Washington, DC over ATC restructuring, I keep hearing concern that separating the Air Traffic Organization from the FAA, allowing it to charge directly for its services, and be governed by a board of aviation stakeholders, would lead to a long disruptive transition period. While a change of this magnitude would be bigger than any of the previous reforms (personnel, procurement, reorganizing units to create the ATO), let’s consider what evidence there is for this concern.

First, recall that more than 50 countries have carried out this kind of transition since the creation of Airways New Zealand in 1987. While not all of these were trouble-free, there is no record of serious problems or very long (some are speculating about a decade or more) transitions. In the case I know best, Nav Canada, the official transition period was two years, to get the stakeholder board and top management team in place, work out the initial schedule of user fees, obtain liability insurance, and many other details. Over the next several years, more controllers were hired (to address a previous shortfall) and some middle managers who could not adjust to the corporate environment resigned or took early retirement, with replacements hired from the private sector.

We need to keep in mind that corporatization is not outsourcing the whole operation to an outside aerospace firm-which would likely be far more disruptive. Rather, it is a reform in place, giving the existing ATO a new lease on life, with a new funding system and a greatly simplified governance model (a 10 to 15-member stakeholder board replacing 535 members of Congress plus the FAA Administrator, the DOT Secretary, the Inspector General, the GAO, and OMB). On the day after the corporation formally begins its life, 99% or more of the employees who went home from FAA the day before will come to work as employees of the corporation. What else will not change? All union contracts will remain in place. So will all current procurement contracts, so there will be no disruption in ongoing NextGen projects, as some seem to imagine.

Longer term, of course the stakeholder board and top management will be concerned to take a fresh look at all the ATO’s operations and plans, looking anew at which planned technologies and procedures have the strongest business cases, whether some no longer are worth doing, and how best to deal with a whole raft of obsolescing facilities. The availability of revenue bond financing will make it feasible to accelerate some programs and to launch others that cannot currently even be considered due to current funding limitations.

Another red herring is the idea that the large scale of the ATO’s responsibilities-nine times the annual transaction volume of the world’s second largest ANSP (Nav Canada)-somehow makes corporatization more difficult or not translatable. But that argument should apply down the scale as well as up. Among the more than 50 ATC corporatizations that have taken place over the last 25 years are many that are one-third or one-fifth Nav Canada’s size, and some even smaller. We are talking here about a corporate organizational form that has worked worldwide for ANSPs over a very large array of sizes, and there is no reason to think it would not work just as well here.

A variant of the “disruption” argument is that we can’t risk interrupting the progress toward full implementation of NextGen. Given the ATO’s chronic problems of large cost overruns and late completions, and given how far in the future are projected operational dates for ADS-B/In, Datacom in all phases of flight, and other advanced capabilities already in full use in other countries, one can make a stronger case that fundamental reform is urgently needed in order to speed up full implementation of those aspects of NextGen for which a sound business case exists.

And in this regard, what we have now is a far stronger felt need for change than has ever existed in the long history of ATC reform proposals. We have frustrated airlines, frustrated private pilots, and frustrated controllers. We also have motivated congressional leaders and growing support from the business community (in the form of the Business Roundtable). To those who say “not yet,” my answer is: If not now, when; and if not us, who?

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News Notes

Wired Faults Outdated ATC System. In a story that appeared the same day as a House T& I Committee Roundtable Policy Discussion on ATC reform, Wired‘s Sara Breselor posted “Why 40-Year-Old Tech Is Still Running America’s Air Traffic Control,” a well-done article taking off from the Chicago Center disaster of last September. Everyone interested in ATC reform should read this article. (www.wired.com/2015/02/air-traffic-control)

Summary of Nav Canada’s ATC Fee System Now Online. Previously, if you were curious about how Canada’s not-for-profit ANSP charges customers for its services, you could go online to peruse a detailed manual. But for those interested in a basic overview of the charging system, the company last month posted online a seven-page article from its January 2015 newsletter. Go to:

http://www.navcanada.ca/EN/products-and-services/Documents/
Service%20Charges-Eng.pdf

India May Separate ATC Function from Airports Agency. India’s Civil Aviation Minister this month argued that the air navigation function should be formally separated from the Airports Authority of India. Air navigation requires a different set of skills than airports, making it wise for Parliament to separate the two, giving India its own ANSP, he said. The proposed ANS Corporation would encompass the functions of air traffic control, CNS infrastructure, and administrative functions such as training and human relations.

Hungary’s ANSP Abolishes All Fixed Routes. HungaroControl announced earlier this month that Hungarian Free Route Airspace went live across the country on February 5th, enabling aircraft to fly the shortest direct trajectory between entry and exit points of the country’s airspace. Annual fuel savings from the change are estimated at $3 million. Hungary is the first country in Europe to implement free route airspace, but under the Single European Sky program this is to be mandatory for all EU countries as of Jan. 1, 2022.

Terminal Airspace for Adelaide to Be Managed from Melbourne. Australia’s ANSP, Airservices Australia, has announced that control of the terminal airspace near the Adelaide Airport (currently Australia’s fastest growing airport) will be shifted from the Adelaide control tower to the center in Melbourne. Take-offs and landings at Adelaide will continue to be managed by the airport’s tower. Terminal-area controllers will be offered positions at Melbourne or given retraining to serve in another facility.

Moldova Opts for Nationwide Wide Area Multilateration. MoldATSA, the ANSP of Moldova, announced last month that it had selected ERA as the provider for a nationwide Wide Area Multilateration (WAM) system to improve upon the limited surveillance provided by radars. The contract also includes a new surface surveillance system for the country’s largest airport, Chisinau International, which serves the capital city. That system includes both ADS-B and multilateration. The contract calls for site acceptance testing by summer 2015.

NATS and Nav Canada Debut Improved North Atlantic System. With installation of the Nav Canada Gander Automated Air Traffic System (GAATS+) in the NATS center at Prestwick completed, the two ANSPs now offer seamless advanced air traffic management across the North Atlantic. The system will make use of ADS-B ground stations in Greenland and Iceland, prior to the start of global space-based ADS-B surveillance by Aireon in 2018. With advanced data communications and radar-like surveillance, the system will enable far more flights to use their preferred trajectories in this busy airspace.

Middle East Advised to Separate Air Traffic Management from Safety Regulation. The Civil Air Navigation Services Organization has proposed five key steps to improve air traffic management in the Middle East, one of the world’s fastest-growing airline markets. Besides making the airspace seamless across the region and adopting flexible use of military airspace, another key recommendation is “separation between regulation and service provision,” to eliminate conflicts of interest and enable ANSPs to concentrate on delivering efficient air navigation services, under arm’s-length safety regulation.

Nav Canada Tower Automation for More Australian Airports. Earlier this month Airservices Australia announced a $20 million contract with Saab Sensis to install the Nav Canada tower automation system INTAS at four more towers: Brisbane, Cairns, Gold Coast, and Perth. INTAS last year became operational at Adelaide, Broome, Melbourne, and Rockhampton. The system eliminates paper flight strips and reduces the need for voice transmissions, while providing greater visual situational awareness.

Vietnam Implementing ADS-B Surveillance. In December a subsidiary of Vietnam Air Traffic Management Corp. (VATM) announced a contract award to COMSOFT to provide ADS-B surveillance for northern Vietnam, as far south as Da Nang, citing it as an alternative to radar. With nearly 1900 miles of coastline, the new system will provide surveillance beyond 250 nautical miles.

ATCA Recommends Book on ATC Corporations. The latest issue of the Air Traffic Control Association’s Journal of Air Traffic Control includes a book review recommending the book Managing the Skies by Clinton V. Oster and John S. Strong. The book provides an overview of the global trend of separating the ATC function from the government’s transportation agency and converting it into a self-funded corporation. Included are detailed profiles of the transitions in Australia, Canada, New Zealand, and the U.K., along with several chapters on lessons for the United States. Reviewer Mike Ball terms it “a fact-filled book that sheds light on FAA reauthorization.” I read the book when it first came out and agree with this recommendation.

Google Joins GPS Backup Organization. The Winter 2015 Resilient News from the RNT Foundation, which supports implementation of a comprehensive backup capability for the position, navigation, and timing functions of GPS, announced that Google has joined as a corporate member. The foundation’s Annual Membership Meeting and Dinner will take place in Washington, DC on April 8th.

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Quotable Quotes

“Flight tracking is at a sweet spot between new ATM technologies, passenger demand for continuous internet connectivity, and the introduction of new aircraft with significantly more capability. To be tied down now to any standard, even less a product, would be madness. We must let the potential energy of competition work its magic. True it is that we want all of this to happen within agreed bands of spectrum, if that is necessary to avoid duplication, but maybe we do not yet need to know which band. Maybe more than one spectrum band will not be a technical drawback. We should wait and see.”
-Andrew Charlton, “Tracking the ITU Plenipotentiary Conference, Aviation Intelligence Reporter, Dec. 2014/Jan. 2015

“The only reason we have 20 centers in the U.S. is that when these were developed 50 years ago there were limitations to the technology and the algorithms. Do these limitations apply anymore? No, you can build a tracker covering the whole world. You can have a system that could manage tens of thousands of flight plans. Just look at what the CFMU does in Brussels. The FAA does have the national command center in Warrenton, Virginia, but there the flow is going the wrong way: the command center is not actually driving the system; it is simply feeding off the system and being used to optimize operations, rather than telling the centers what to do.”
-Steve Winter, former chief technologist at NATS, “Viewpoint,” Air Traffic Management, Issue 4, 2014

“I believe if we choose to restructure the FAA, and even if we don’t, we should not lock ourselves into an existing model. There are approximately 50 air navigation service providers (ANSPs) around the world that operate under a non-government or quasi-government model. We should look at these models and extract the best practices that would transfer to a U.S. solution and incorporate them into a model that is developed specifically with our requirements, capabilities, and unique procedures in mind. Where best practices don’t exist that fit a U.S. model, we should develop them ourselves.”
-Pete Dumont, “How Will the Midterm Elections Factor into FAA Reauthorization?” The Journal of Air Traffic Control, January 2015

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Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation.