Air Traffic Control Newsletter #153

Air Traffic Control Reform Newsletter

Air Traffic Control Newsletter #153

In this issue:

Further Thoughts on a Separate Air Traffic Organization

Last month’s article on a near-term reform that would remove the ATO from safety regulator FAA and make it a separate DOT modal agency has generated a lot of feedback, nearly all positive. For those who are not persuaded, I first offer some background on how the original model of a business-like Air Traffic Organization was subverted by FAA. After that, I suggest some additional specifics of the proposed reform measure that could be included in the 2018 FAA reauthorization bill between now and September 30th.

The first two Chief Operating Officers of the ATO did yeoman work in an effort to convert a large and unwieldy bureaucracy into a business-like entity. But those changes did not sit well with new DOT Secretary Ray LaHood and FAA Administrator Randy Babbitt, who took office in mid-2009. Babbitt’s first change was to forbid the ATO from referring to airspace users as “customers,” confusing the difference between those being regulated by the FAA’s regulatory function and those receiving services from its air traffic function.

But far worse was his effort to break down the separation between the ATO and the rest of FAA. In 2010 he commissioned the Monitor Group to do an organizational review. The study was kept under wraps so tightly that even the DOT Inspector General’s Office did not learn about it until well after I wrote about it in the May 2011 issue of this newsletter. And I only learned about it when an ATO insider leaked me the link to a March 2, 2011 “all-hands video briefing” on the results of the study. Monitor Group, like all good consultants, figured out the results Babbitt wanted–and delivered them. It identified “duplication” between FAA and ATO, so its number-one recommendation was to “optimize shared services.” Another was to “build one FAA culture.” The title of my newsletter article was “Is the ATO Being Dismantled?” and the answer clearly was yes.

Two major changes stemmed from those recommendations One was to take the overall NextGen responsibility away from the ATO, having it report directly to the FAA Administrator rather than the ATO Chief Operating Officer. And the other was that the ATO lost control of its personnel policies-and especially the recruitment of new controllers. Despite both internal and external studies having recommended relying heavily on recruiting from graduates of the Collegiate Training Initiative, FAA’s human resources people (in the name of “diversity”) substituted a bizarre off-the-street recruitment process that required applicants to “pass” a Biographical Questionnaire-which excluded many highly qualified CTI graduates. This change provoked bipartisan congressional outrage and was subsequently scaled back, but not eliminated.

With this as background, here are some specifics about what should be included and excluded in separating the ATO from FAA. Clearly, as a new modal agency the New ATO would need to have control of its own personnel system, including recruitment and training. It should also have its own legal and administrative functions. It should not include either the FAA Tech Center in Atlantic City or the Aeronautical Center in Oklahoma City. The New ATO would be able to contract with those entities for any services it needed (and a revamped approach to controller training might reduce or eventually eliminate the current training at the Academy in Oklahoma City, as has been recommended by outside studies).

Clearly, New ATO should regain full control of all of NextGen. A key premise of creating the ATO was to combine technology development/procurement with ATC operations, rather than these being separate domains, as had been FAA practice. Years ago, Congress enacted FAA procurement reforms, which have never really been used to rethink and streamline how the FAA/ATO develop and procure new systems. That procurement freedom should be passed along intact to New ATO.

But would New ATO actually reform development and procurement? That is unlikely unless New ATO is also freed from civil service constraints. Making that admittedly large change would have large benefits. First, it would permit the organization to recruit and compensate highly qualified engineering, software, and program management people-and hold them accountable for results. Second, it would permit termination of people whom some refer to as “on-the-job retirees,” whose de-facto interest is in a large, complex bureaucratic system. This reform will likely be opposed by the FAA Managers Association, but would likely be supported by controllers’ union NATCA, which has been on board with the non-civil-service status of the planned ATC Corporation-and NATCA’s membership vastly outstrips FAAMA’s.

Finally, New ATO should be run by a Chief Executive Officer, not a Chief Operating Officer. The CEO would be accountable to the Secretary of Transportation, and would be advised by a New ATO Advisory Board, separate from the current FAA Management Advisory Council. Its headquarters should be entirely separate from the current FAA building in Washington. (Several people have suggested locating it adjacent to the Command Center in Warrenton, VA.) And of course the revamped entity would require its own website and email addresses. How about NewATO.org?

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ATC Labor Questions from Europe

A friend sent me a copy of a paper to be discussed at a London conference of the International Transport Workers Federation in January. At that time, I was told the report was not public, so I did not write about it. But following the conference, the report’s author, Ian Thompson, published an article summarizing the paper in Air Traffic Management, so I am now writing about it.

“What Has Been the Impact on Air Traffic Controllers, Engineers, and Technicians from the Commercialization of Air Navigation Service Providers? A Union Perspective,” is the title of Thompson’s 45-page paper. It is based on his “semi-structured interviews with union officials representing staff” at six corporatized ANSPs (Airways New Zealand, Airservices Australia, Italy’s ENAV, the UK’s NATS, Spain’s ENAIRE, and Nav Canada). Thompson’s recent article focuses primarily on employee changes resulting from competitive contracting of control towers (in Spain and the UK), but the paper also devotes considerable attention to changes in ANSP engineering and technician workforces.

One large theme in the paper is Thompson’s claim that efficiency initiatives undertaken by commercialized ANSPs result from airline pressure and risk serious controller under-staffing. Some of this appears simplistic, such as the statement, “improved ANSP efficiency is achieved by changes that reduce headcount and thereby costs, resulting in lower air navigation service charges.” This ignores real productivity gains achieved by new technologies and procedures, as well as changes in work rules that dramatically reduce costly overtime. His paper cites ENAIRE as an example, with the highest cost per controller hour in Europe as of 2009 (€193/hour) prior to corporatization. The reform increased ordinary (non-overtime controller hours) from 1,200 per year to a still-low 1,600 hours/year, which “drastically reduced overtime payments.” ENAIRE’s cost/hour was down to €166/hour by 2015-still high, but no longer highest in Europe.

Thomson also points out that “Nav Canada does not have a prevailing airline influence on its board of directors,” but the only other case he cites where airlines are represented on the board is NATS-and he gets that wrong. He writes that the Airline Group holds a 42% shareholding in NATS, but that was true only during the company’s first decade. In 2013, the Airline Group sold half of that interest to a UK public sector pension fund, Universities Superannuation Scheme.

A long section of the paper discusses the plight of technicians and engineers at corporatized ANSPs. Thompson notes that “Commercialization has coincided with technological change in [ATC] systems, new repair strategies, and initiatives for suppliers to assume greater responsibility.” All true, and uncomfortable for unionized engineers and technicians who appreciate stability. I got some useful perspective on this from Sid Koslow, former Vice President and Chief Technology Officer of Nav Canada, who has also read Thompson’s paper. When Canada’s system was converted to private, nonprofit Nav Canada, Koslow tells me,

“We found a less-than-optimized workforce in a system that had not fully taken into account the changes driven by the advent of digital devices. They were slow to recognize the changes driven by the advent of digital devices. They were being trained to fix digital devices as though they were analog. You inspect analog devices to anticipate failure and then replace components. You leave digital devices alone and replace the whole device when it fails. . . . The reality is that most things are now digital. That means that new skills are required, and previously valued skills are less needed. The design of systems depends more on computer science and less on electrical engineering. It means that fixing a failed system entails replacing a box, not repairing a circuit board. That is the way of the world.”

To his credit, Thompson acknowledges that Nav Canada’s non-profit model results in a better deal for employees than the other ANSP models. As he writes:

“A non-share capital corporation, like Nav Canada, does not require a financial return to shareholders, [and] airlines do not dominate decision-making. Income surpluses result in lower user charges, thereby keeping airlines supportive of organizational performance. As a result, it is the least likely [ANSP] model to result in organizational pressure to reduce air traffic controller numbers and drive other workplace efficiencies. . . . Nav Canada staff are likely to have greater protection and be able to take advantage of role changes that may take place in the [ATC] industry sometime in the future.”

He also acknowledges that most corporatized ANSPs have accepted the principles of “Just Culture,” which means focusing investigations of safety incidents on the underlying causes, not seeking someone to blame. As he reports, “Just Culture has led to high levels of cooperation between unions and management.”

Overall, Thompson’s report represents the views of union officials at the six ANSPs selected. And while labor relations are not smooth at all of them, neither are they smooth at airlines. These views provide a partial picture of what is going on as these ANSPs continue their ongoing evolutions from government agencies to customer-serving businesses. A report such as this would have been more useful had it included quantitative data on various performance measures.

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What Does FAA’s Forecast Mean for Air Traffic Control?

The annual FAA Aerospace Forecast, this year covering FY 2018 through 2038 was released last month and is available on the FAA website. Most headlines focused on the projections for continued growth in passenger and air cargo traffic. Airline passenger totals are projected to grow from 840.8 million in 2017 to 1.26 billion in 2038, averaging 2% annual growth over that period, slightly higher than in last year’s forecast. But the mainline airline fleet is forecast to grow at only 1% per year, due to ongoing increases in average aircraft passenger capacity. By contrast, the general aviation fleet shows a mixture of growth and decline, with turbine GA growing at 2% per year and piston GA shrinking at 0.9% per year.

My primary interest in the Forecast, for this newsletter, is in projected levels of ATC activity. Data tables 32, 33, and 34 provide a bit of historical data and then 20-year projections for flight activity at towers, TRACONs, and centers. This year’s tables use 2010 as the base year for comparisons, but in my summary below I add figures from 2000, which is still the peak year for flight activity. Those high levels led to the very optimistic projections of air traffic growth on which the original NextGen planning was done. So it’s still useful to see where we are today, and are projected to be by 2038, compared to 2000’s historic highs. The table below is my summary.

FAA Forecasts of ATC Flight Activity, 2000 through 2038
Airline Air Taxi/ Commuter General Aviation Military Total
TOWERS
2000 15,159 10,760 39,878 2,888 68,686
2017 15,047   7,179 25,570 2,526 50,322
2038 24,362   6,288 27,351 2.526 60,527
% v. 2000 +61% -42% -31% -12% -12%
% v. 2017 +62% -12% + 7%    0% +20%
TRACONS
2000 16,395 11,198 20,799 3,467 51,859
2017 15,276   7,281 13,276 2,254 38,087
2038 24,582   6,226 14,505 2,254 47,567
% v.2000 +50% -44% -30% -35% –   8%
% v. 2017 +61% -14% + 9%    0% +25%
Centers
2000 24,987 8,101 8,744 4,192 46,025
2017 26,074 8,591 7,428 1,765 43,858
2038 42,174 6,614 8,822 1,765 59,375
% v. 2000 +69% -18% +  1% -58% +29%
% v. 2017 +62% -23% +19%    0% +35%

The overall message of these numbers is that the baseline for comparison makes a considerable difference. Using 2000 as the base, the projected growth in total tower activity by 2038 is negative, due to decreases in air taxi and piston GA traffic. But compared to where we were in 2017, there is double-digit growth in activity at towers. The comparison is similar for TRACON activity. It is only in the category of centers that strong airline flight activity offsets decreases in air taxis and only modest GA growth to yield double-digit increases by 2038, regardless of which baseline is used.

But please note that whereas airline passenger volume is projected to increase by 50% between now and 2038, tower activity will increase only 20%, TRACON activity 25%, and center activity 35%, per FAA’s latest forecast. And for towers and TRACONs, the flight activity in 2038 will still be less than in 2000. Rather than suggesting any need for additional towers and TRACONs, these numbers suggest the potential savings to be gained via facility consolidation and the use of new technology, such as remote towers (especially for the smallest airports). And while more total center activity is forecast, that could easily be handled by a smaller number of centers, equipped with productivity-increasing technology.

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ENAV Plans Transformation of Italy’s Air Traffic Control

In July 2016, the already corporatized ANSP of Italy-ENAV-was listed on the Milan stock exchange. The government sold a 49% interest in ENAV to investors. Those of us wondering what difference this might make found out last month, when the company unveiled its 2018-2022 business plan. In short, the company plans a radical transformation of ATC in Italy.

Highlights of the business plan, as reported by Air Traffic Management, are as follows:

  • Consolidate from four en-route centers to just two-Rome and Milan.
  • Convert the other two (Padua and Brindisi) into remote tower centers, handling ATC services at many smaller airports.
  • Invest over €500 million in four major technology platforms:
    • Controller-pilot data link;
    • Medium-term conflict detection;
    • A new flight data processing system; and,
    • The E-Net 2 switching system, that will provide between 10 and 100 times more bandwidth to enable remote tower operations from the new remote tower centers.
  • Create a joint venture company to develop and operate a UAS traffic management system, which will charge users of its services.

Even before the stock market listing, ENAV had become one of the original investors in space-based ADS-B provider Aireon. It expects to begin receiving revenues from Aireon starting in 2019 as the global service begins serving its paying customers (various ANSPs that subscribe).

Overall, the five-year business plan, investing a total of €650 million, is intended to “future-proof” ENAV’s business. This will certainly be an ANSP to keep an eye on.

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FAA’s Bizarre Budget Windfall

As we also observe in banana republics, Congress giveth and Congress taketh away. So the big surprise in March was an unexpected 4% increase in FAA’s FY 2018 budget, courtesy of the budget-busting $1.3 trillion Omnibus spending bill.  In addition to a random assortment of spending increases (and a few decreases from FY 2017 figures), the bill also extends the current FAA authorization another six months to Sept. 30, 2018.

In the Operations budget, the largest increase was in the tiny commercial space transportation line item, up 13.9% over 2017’s figure. The Air Traffic Organization-the largest operations account-got a mere 1.8% increase. But in the Facilities & Equipment budget, the ATC account got a 19.9% increase, to $2.148 billion. That’s still far short of FAA budget projections from 2011 that expected F&E to reach $3.7 billion by FY 2015, but who’s counting. And the largest boost of all was a one-time increase in the Airport Improvement Program, which got an extra $1 billion, for a total of $4.35 billion.

Also tucked away in the surprise FAA budget is $5 million for the previously non-existent remote tower program. But in a break with long-standing practice, that billion-dollar AIP increase came not from the Airport & Airways Trust Fund (i.e., from aviation user taxes) but from the general fund-which means another billion added to the federal budget deficit and hence to the national debt. And that change reversed the long downward trend in the fraction of FAA’s budget derived from general taxpayers (as opposed to those using aviation and paying aviation taxes). In FY 2017, the general fund covered only 5.2% of FAA’s budget, but the new FY 2018 budget, as now enacted six months late, covers 13.1%.

I’m sure none of the recipients of these windfalls minds getting a larger budget than they’d expected. But this kind of budget roulette is a far cry from the “steady, predictable” budget that aviation stakeholders (such as NATCA) have been calling for. The more that aviation infrastructure depends on an increasingly unpredictable federal budget, the harder it is to plan sensible long-term investments.

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Further Thoughts on Multilateration vs. Radar

Last month I reported on comments by several air traffic experts expressing cautionary thoughts on my February article suggesting that it may make sense to replace aging secondary surveillance radars (which receive transponder signals from aircraft) with wide-area multilateration (MLAT). I gave examples of several other countries that have done this (Austria) or are considering doing this (New Zealand). Last month’s commentators suggested that since at least three (preferably four) MLAT sites must see each target to compute its location, such a system might be more-costly than I’d implied, including communications and land-rent costs-so the cost tradeoff is not that clear-cut.

In response to that, an engineer who’s an expert on multilateration responded that the costs of secondary radar also include considerable operations and maintenance costs: labor, buildings, grounds, roads, fences, etc. He also noted that unlike radar, each MLAT installation costs between $100K and $200K, has no moving parts, no rotary joint, no pedestal, etc.-hence much lower cost to operate and maintain. He said FAA has estimated the cost of updating only the electronics of the Mode S radars at over $400 million. These complex radars require air-conditioned buildings and extensive ongoing maintenance, as well as backup generators and fire safety systems. Replacing all 450 secondary radars would cost around $1 billion-and would still saddle FAA with extensive ongoing operating and maintenance costs.

He also reiterated that implementing Wide-Area Multilateration (WAM) rather than replacing or patching up aging secondary radars would provide the non-GPS backup for ADS-B that FAA puts forth as its rationale for not retiring the secondary radars, as originally planned in the overall NextGen vision. And he concluded by stating that Austria’s program to do this was cost-effective, factoring in all of the above. As my original article notes, both Denmark and Norway are doing likewise.

Overall, I think there is considerable evidence that WAM is a viable alternative to replacing secondary radars with more of the same. FAA is seriously off-base in not analyzing the cost-effectiveness of doing this. A solution that included a few secondary radars as redundant backups at major hubs has not been examined by FAA, but would likely pass a safety case. And as I noted in February, the proposed SENSR program to replace all radars is still something of a gold-plated pie-in-the-sky solution.

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Upcoming ATC Event

FAA Infrastructure Modernization, Innovative Financing & Public Private Partnerships, June 4-5, 2018, National Press Club, Washington, DC (Robert Poole speaking). Details from: eleanor@nexacapital.com

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News Notes

“How the White House Grounded Shuster’s FAA Bill”. That was the headline on an April 2nd Politico story, confirming what I reported last issue: that after previously being outspoken in favor of the ATC corporation provision in the bill, President Trump abruptly pulled his support in mid/late February. “Without the White House to help cajole and twist arms, Shuster decided to pull the plug on the bill.” The unanswered question is why Trump changed his mind at the 11th hour. Perhaps his “personal pilot” gave him the Ed Bolen propaganda points?

NATS and HungaroControl Announce Remote Tower Collaboration. Two ANSPs that are pioneering remote towers-respectively at London City Airport and Budapest Airport-announced on March 19th that they will collaborate on remote/digital towers worldwide. HungaroControl will shift Budapest ATC operations from the old physical tower to the now-certified remote tower full-time by 2020. NATS is also a shareholder in Searidge Technologies, which will work with the two ANSPs on remote tower projects.

Japan Moving Forward with GPS Landing Systems. The ANSP of Japan, JANS, has been developing GBAS capabilities since 2010, when it installed a Category I GBAS at Kansai International Airport for testing. JANS finalized a GBAS equipment specification in 2015 and began the process for installing the technology at Tokyo’s Haneda Airport in 2016; after evaluations in 2019, Cat. I operations there should begin in March 2020. A GBAS Cat. III prototype was installed at Ishigaki Airport in 2014, and JANS reports that implementation plans for GBAS Cat. III should be finalized in 2020.

Spain Implements Controller-Pilot Data Link Communications (CPDLC). CANSO announced in mid-March that the ANSP of Spain, ENAIRE, has rolled out CPDLC in two of its four en-route centers: Canary Islands and Barcelona. Commissioning CPDLC at the other two centers-Madrid and Seville-is planned for later this year. The system is provided by Indra, which provided the first European CPDLC capability in 2008, for Eurocontrol’s Maastricht center. The company has also provided CPDLC technology for the Polish ANSP (PANSA), and it is operational in the Warsaw center.

Aireon Now Has 50 Iridium Satellites in Orbit. Thanks to the launch of 10 more Iridium NEXT satellites by a SpaceX Falcon 9 on March 30th, the space-based ADS-B provider now has 50 satellites in orbit equipped with the Aireon ADS-B payloads. On April 3rd, the company announced that all 10 of the new payloads were functioning and it had begun the testing and validation process. Aireon and FlightAware announced that airlines will soon be able to conduct beta testing of their Global Beacon service, aimed at meeting the ICAO Global Aeronautical Distress Safety System standards.

Belgocontrol Seeks Investors. The self-supporting ANSP of Belgium, currently wholly owned by that country’s government, has announced that it is open to having other public-sector shareholders. CEO John Decuyper told news media, “In Italy, the organization doing the same work as us [ENAV] is listed on the stock market. I am not saying that we must do the same thing, but we have reached a stage where we can consider opening of capital to third parties.” Belgocontrol is also seeking “a more stable legal framework,” reports Air Traffic Management.

DFS Subsidiary Takes Over Edinburgh Tower. DFS’s Air Navigations Solutions subsidiary was the winner of a 2016 competition for a 10-year contract to operate the control tower at the Edinburgh, Scotland airport. The actual handover took place over the March 31-April 1, 2018 weekend. Edinburgh Airport is owned by Global Infrastructure Partners, which also owns London Gatwick Airport. The DFS subsidiary also operates the Gatwick control tower. The former provider at both airports was the control tower division of NATS, the ANSP of the United Kingdom. UK control towers are owned by the airport, and operated either by the airport itself or a competitively selected contract operator.

NAV Portugal Joins COOPANS Alliance. The ANSP of Portugal last month became the sixth member of the COOPANS Alliance, a group of ANSPs that use common ATC systems provided by Thales. The same software is now in operation at seven area control centers across the five original Alliance members: Austro Control, Croatia Control, Naviar (Denmark), IAA (Ireland), and LFV (Sweden). Organizational cooperation of this kind is a step towards what Eurocontrol’s network manager Joe Sultana has called for: reorganizing European airspace based on traffic flows rather than borders.

CANSO Director General Wins Award. Jeff Poole (no relation), the DG of air traffic management organization CANSO, was selected as Leader of the Year as part of the 2018 Air Transport Awards, presented at the Burj Al Arab in the UAE. Airport of the Year winner was Singapore Changi Airport.

GAO’s Gerald Dillingham Retires. The highly respected Director of Civil Aviation at the Government Accountability Office, Gerald Dillingham, retired on March 30th. His successor will be Heather Krause, assisted by Andrew Von Ah. Congratulations to all.

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Quotable Quote

“I don’t believe that an industry funded by central government can have a long-term strategy, competing for funds against more politically-sensitive sectors such as health and education. The only commercial relationship that works is user-pays-the airlines, the major customer group, should pay [ATC] charges direct, and then have a say in prioritizing ANSP programs. Any other system is sub-optimal.”
-Ashley Smout, former CEO, Airways New Zealand, “Ashley Smout: Parting Thoughts,” Airspace, Quarter 2, 2011

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