[Senate Hearing 108-1019]
[From the U.S. Government Publishing Office]




                                                       S. Hrg. 108-1019
 
                    FEDERAL AVIATION ADMINISTRATION

=======================================================================

                                HEARING

                               before the

                        SUBCOMMITTEE ON AVIATION

                                 of the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 18, 2004

                               __________

    Printed for the use of the Committee on Commerce, Science, and Transportation
    
    
    
    
    
                             
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South 
CONRAD BURNS, Montana                    Carolina, Ranking
TRENT LOTT, Mississippi              DANIEL K. INOUYE, Hawaii
KAY BAILEY HUTCHISON, Texas          JOHN D. ROCKEFELLER IV, West 
OLYMPIA J. SNOWE, Maine                  Virginia
SAM BROWNBACK, Kansas                JOHN F. KERRY, Massachusetts
GORDON H. SMITH, Oregon              JOHN B. BREAUX, Louisiana
PETER G. FITZGERALD, Illinois        BYRON L. DORGAN, North Dakota
JOHN ENSIGN, Nevada                  RON WYDEN, Oregon
GEORGE ALLEN, Virginia               BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire        BILL NELSON, Florida
                                     MARIA CANTWELL, Washington
                                     FRANK R. LAUTENBERG, New Jersey
      Jeanne Bumpus, Republican Staff Director and General Counsel
             Robert W. Chamberlin, Republican Chief Counsel
      Kevin D. Kayes, Democratic Staff Director and Chief Counsel
                Gregg Elias, Democratic General Counsel
                                 ------                                

                        SUBCOMMITTEE ON AVIATION

                   TRENT LOTT, Mississippi, Chairman
TED STEVENS, Alaska                  JOHN D. ROCKEFELLER IV, West 
CONRAD BURNS, Montana                    Virginia, Ranking
KAY BAILEY HUTCHISON, Texas          ERNEST F. HOLLINGS, South Carolina
OLYMPIA J. SNOWE, Maine              DANIEL K. INOUYE, Hawaii
SAM BROWNBACK, Kansas                JOHN B. BREAUX, Louisiana
GORDON H. SMITH, Oregon              BYRON L. DORGAN, North Dakota
PETER G. FITZGERALD, Illinois        RON WYDEN, Oregon
JOHN ENSIGN, Nevada                  BILL NELSON, Florida
GEORGE ALLEN, Virginia               BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire        MARIA CANTWELL, Washington
                                     FRANK R. LAUTENBERG, New Jersey
                                     
                                     
                                     
                                     
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 18, 2004.....................................     1
Statement of Senator Burns.......................................    36
Statement of Senator Fitzgerald..................................    47
Statement of Senator Lautenberg..................................     2
    Prepared statement...........................................     3
Statement of Senator Lott........................................     1
Statement of Senator Rockefeller.................................    43
Statement of Senator Smith.......................................     1
Statement of Senator Wyden.......................................    34

                               Witnesses

Blakey, Marion C., Administrator, Federal Aviation Administration     4
    Prepared statement...........................................     6
Hecker, JayEtta Z., Director, Physical Infrastructure Issues, 
  U.S. General Accounting Office.................................    23
    Prepared statement...........................................    26
Mead, Hon. M. Kenneth, Inspector General, U.S. Department of 
  Transportation.................................................    11
    Prepared statement...........................................    14

                                Appendix

McCain, Hon. John, U.S. Senator from Arizona, prepared statement.    53
Response to written questions submitted to Marion C. Blakey by:
    Hon. John D. Rockefeller IV..................................    53
    Hon. Frank R. Lautenberg.....................................    58
Response to written questions submitted by Hon. Frank R. 
  Lautenberg to:
    Hon. Kenneth M. Mead.........................................    63
    JayEtta Z. Hecker............................................    64


                    FEDERAL AVIATION ADMINISTRATION

                              ----------                              I


                         TUESDAY, MAY 18, 2004

                               U.S. Senate,
                          Subcommittee on Aviation,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 9:33 a.m. in 
room SR-253, Russell Senate Office Building, Hon. Trent Lott, 
Chairman of the Subcommittee, presiding.

             OPENING STATEMENT OF HON. TRENT LOTT, 
                 U.S. SENATOR FROM MISSISSIPPI

    Senator Lott. If the witnesses would come forward and take 
their seats, we'd be glad to get started this morning. Well, 
first I'd like to thank our witnesses for appearing again 
before the subcommittee to take a look at FAA as a whole and 
its attempt to modernize and the plans to deal with the 
expected record air travel this summer. I look forward to 
hearing the testimony again of Marion Blakey, the Administrator 
of FAA; Ken Mead, Inspector General of the Department of 
Transportation; and JayEtta Hecker, Director, Physical 
Infrastructure Issues, GAO. Thank you all for being here.
    I've said many times that the only way FAA can ever become 
efficient is if they're allowed to modernize. We've talked a 
lot about it, we've put some money in it, but we still have a 
long way to go, and I want to continue to see what the vision 
is and how we're going to get to where we need to be in the 
future of aviation.
    Under the direction of current Administrator Blakey, the 
FAA has been making strides in this area. They are preparing 
for the future, but we need to know how it's going. Congress 
should continue to monitor the FAA and ensure that they are 
indeed prepared for what the future will hold.
    I'd like to ask the members if they would withhold their 
opening statements, just go ahead and hear the testimony of the 
witnesses, and we'll give you extra time if you need it for 
your questions. Do you object, Conrad? Good.

              STATEMENT OF HON. GORDON H. SMITH, 
                    U.S. SENATOR FROM OREGON

    Senator Smith. Mr. Chairman?
    Senator Lott. Yes, sir.
    Senator Smith. I have to go preside shortly. I just want to 
pose a question I know my colleague will pose as well. We have 
a major fire season coming up. MTSB has said--they've grounded 
these airplanes that are older than I am. I understand why 
they're grounding them. However, we need your help. We need 
them certified safe. We need something to replace them, if not 
them, we need something, or else a lot of people are going to 
be in a lot of jeopardy.
    So, thank you, Mr. Chairman, that's all I wanted to say.
    Senator Lott. Well, those are the aircraft that are used in 
fire fighting?
    Senator Smith. Correct.
    Senator Wyden. I've got a follow up to that too.
    Senator Lott. All right. You're posing----
    Senator Lautenberg. I'd like to chime in also.
    Senator Lott. On the fires in Oregon?
    Senator Lautenberg. No, but if you have airplanes that's 
older than you, that's one problem. The airplanes are older 
than me.
    Senator Lott. That's a huge problem.
    [Laughter.]
    Senator Lott. And all I have to say is, if you want new 
airplanes, we'll build them.
    Senator Lautenberg. Mr. Chairman, on a serious note, and 
this is a serious hearing, I have to leave. I planned my 
morning accordingly and I have, as my colleagues have also, a 
schedule that's already laid out based on the fact that we 
would be able to make our statements and if necessary----
    Senator Lott. I think my idea to move forward with the 
testimony of the witnesses has been overridden by the need for 
the members to make statements and pose questions, and to 
accommodate that, we'd be glad to do it. Are you OK? We want 
that issue addressed when you respond, and I'm sure Senator 
Wyden will follow up on it.
    Senator Burns, you want to----
    Senator Burns. No, I'm just going to listen to the 
witnesses.
    Senator Lott. All right. Senator Lautenberg, you want to 
make a statement here before you have to go? Go ahead.

            STATEMENT OF HON. FRANK R. LAUTENBERG, 
                  U.S. SENATOR FROM NEW JERSEY

    Senator Lautenberg. Thank you very much, Mr. Chairman. I 
appreciate it. This is a subject of which I've been deeply 
involved, and I'm glad to see Marion Blakey, Ken Mead and Ms. 
Hecker. These are very important players in the decisions we're 
going to make and I am happy to see you despite my throat.
    Airline travel, such an important component of the economy 
and the rebuilding of our economy, 700 million passengers a 
year depend on the FAA to ensure that planes are safe to fly 
on, facilities are operating properly, and that flight 
operations are conducted in a safe manner.
    There are two major challenges I foresee for the FAA, 
modernizing the equipment, as the Chairman already mentioned, 
used to manage and control air traffic in our air space; and 
ensuring an adequate workforce to operate and maintain the air 
traffic control system. And I'm hopeful that the newly formed 
Air Traffic Organization will have access to the tools to 
address these challenges adequately. But I remain concerned 
that the policies of the administration are being forced on the 
FAA.
    It's no secret that I believe very strongly that the 
management of our skies is something that should be performed 
by the government and no one else. Our air traffic control 
system is too important to jeopardize by playing budget or name 
games, and I don't care whether it's called contracting out, 
privatizing, or outsourcing. I will oppose shifting ATC 
functions to the lowest bidder as long as I'm a United States 
Senator.
    And when I look at what happened with NASA when that agency 
contracted out too much of its in-house expertise, it didn't 
have enough people who could properly oversee the contractors. 
And right now FAA is spending millions of dollars in an attempt 
to begin privatizing part of the air traffic control system, 
the flight service stations. Congress did not specifically 
authorize this endeavor, and in the end, there aren't any 
assurances that any money will actually be saved.
    The DOT Inspector General advised the FAA to look at 
consolidating these facilities, but said nothing about the 
privatizing or outsourcing the operations and their 
maintenance. And I'm also concerned about the staffing level of 
the air traffic controllers. Now, it's my understanding that 
about 7,100 controllers, nearly half of the work force, are 
eligible for retirement in the next 9 years, and I'd like to 
know why there hasn't been any hiring of controllers this 
entire Fiscal Year. What can Congress expect to have--when can 
Congress expect to have FAA's plan to deal with the upcoming 
wave of retirements? We know that it takes a long time to get a 
controller fully operational.
    There are some things which are rightly expected from the 
Federal Government. One of them, is the highest possible level 
of safety when they travel by plane, and we ought not to 
diminish that in any way. And I thank you, Mr. Chairman, for 
the opportunity to speak.
    [The prepared statement of Senator Lautenberg follows:]

            Prepared Statement of Hon. Frank R. Lautenberg, 
                      U.S. Senator from New Jersey
    Mr. Chairman:

    Thank you for holding this hearing on a subject I am passionate 
about: air safety.
    Airline travel is such an important component of our economy and 
our way of life. 700 million passengers every year depend on the FAA to 
ensure that planes are safe to fly on, facilities are operating 
properly, and flight operations are conducted in a safe manner.
    There are two major challenges I foresee for the FAA: (1) 
modernizing the equipment used to manage and control air traffic in our 
airspace; and (2) ensuring an adequate workforce to operate and 
maintain the air traffic control system.
    I am hopeful that the newly formed Air Traffic Organization will 
have access to the tools to address these challenges adequately, but I 
remain concerned that the policies of White House ideologues are being 
forced on the FAA.
    Modernization of the equipment used to control traffic in our skies 
is a multi-billion dollar proposition.
    The FAA has a spotty record managing the upgrade.
    In a study last year, the DOT Inspector General found that cost 
growth, schedule delays, and performance problems continue, with 20 
major projects experiencing overall cost growth of about $4.3 billion 
and schedule slips ranging from one to seven years.
    I'm anxious to hear what progress FAA has made in getting its arms 
around these major acquisitions, and what more needs to be done.
    It's no secret that I believe very strongly that the management of 
our skies is something that should be performed by the government and 
nobody else.
    Our air traffic control (ATC) system is too important to jeopardize 
by playing budget and ``name'' games--I don't care whether it's called 
``contracting out,'' ``privatizing,'' or ``outsourcing.''
    I will oppose shifting ATC functions to the lowest bidder for as 
long as I'm a U.S. Senator.
    Just look at what happened with NASA and the Space Shuttle. When 
NASA contracted out too much of its in-house expertise, the agency 
didn't have enough people who could properly oversee the contractors.
    Right now, the FAA is spending millions of dollars in an attempt to 
begin privatizing part of the air traffic control system--the flight 
service stations.
    Congress did not specifically authorize this endeavor and in the 
end, there aren't any assurances that any money will actually be saved.
    The DOT Inspector General advised the FAA to look at consolidating 
these facilities, but said nothing about privatizing or outsourcing the 
operations and their maintenance.
    I'm also concerned about the staffing level of air traffic 
controllers. I understand that 7,100 controllers--nearly half of the 
workforce--are eligible to retire in the next nine years.
    I want to know why the Administration hasn't hired any controllers 
this entire Fiscal Year. When can Congress expect to have FAA's plan to 
deal with the upcoming wave of retirements?
    I understand there's an effort to allow controllers to serve longer 
than current rules allow, and FAA is also looking to cut training for 
controllers.
    These are not long-term solutions to an emerging staffing crisis. 
Either you have enough properly-prepared controllers or you don't.
    We need to know that there are enough controllers, that they are 
employed by and directly accountable to the Federal Government, and 
that they aren't being forced to deal with any more stress than they 
already have on the job.
    There are some things which people rightly expect from the Federal 
Government. One of them is the highest possible level of safety when 
they travel by plane.
    Thank you, Mr. Chairman.

    Senator Lott. Thank you, Senator Lautenberg. Administrator, 
we'd be glad to hear from you.

         STATEMENT OF MARION C. BLAKEY, ADMINISTRATOR, 
                FEDERAL AVIATION ADMINISTRATION

    Ms. Blakey. I appreciate the opportunity to appear before 
you, Chairman Lott, and members of the Subcommittee. It's a 
pleasure, in fact, to discuss the future of the United States 
air traffic system. This little question that traffic levels 
are coming back since 9/11, we've already taken a number of 
steps to avert a repeat of the delays that plagued us during 
the summer of 2000.
    In March, the FAA convened an important conference with 
airline and aviation decisionmakers to iron out a plan to 
address looming congestion as the traffic comes back this year. 
Together, we developed express lanes that are essentially 
highways in the sky designed to speed departures from busy 
airports. The group also agreed to delay triggers, which spread 
minor delays in the system as necessary to avoid bottlenecks at 
major intersections.
    I'm also pleased to say that Secretary Mineta and I were 
able to broker a 5 percent reduction in the flight schedule of 
United and American at Chicago's O'Hare with an additional 2.5 
percent cutback scheduled in mid-June. It's unfortunate, but 
the fact of the matter is, as Chicago goes, so goes the system, 
and a runway can only handle so many planes in an hour. Posted 
schedules now at Chicago still exceed that number. So far, 
we've successfully averted what could become a bottleneck that 
could choke the entire system. We'll continue to track O'Hare 
delays to determine if additional action is needed.
    But while we're working to handle the increase in traffic 
that comes with this summer, we're also getting ready for what 
is to come a few years from now. Step number one for the FAA is 
to take a hard look at how we operate. Taking advantage of 
personnel and procurement reforms already in place, we're 
transitioning to a much more business-like, bottom-line focused 
model. We're following the best practices from the private 
sector and academia. In our new Air Traffic Organization, we've 
stripped away about a half-dozen layers of management. We've 
taken responsibility and accountability to the right levels.
    The people who develop and buy the equipment to modernize 
our system are also responsible for that purchase throughout 
its life cycle now. By integrating the authority and 
accountability for capital investments within the new 
organization, the goal is to link our capital budget to the 
operating budget that will lead to reductions in future 
operating costs.
    Safety. Safety is one thing, however, that hasn't changed. 
It remains our highest priority. In fact, the three-year 
average for fatal commercial accidents is at its lowest in 
history. This is a cause for tremendous credit to this Congress 
and to the work here in this country of all of the partners in 
aviation. We've put in place two new safety organizations to 
further enhance safety for air traffic control to make sure 
that our world-leading safety record remains second to none. 
The first office monitors day-to-day operations. The second is 
positioned outside the new Air Traffic Organization to enhance 
and exercise independent review.
    In terms of investments, our flight plan is serving the 
taxpayer well. It's a five-year blueprint, a lens through which 
all of our activities our measured. For the first time ever, 
all of our activities are linked directly to our budget and our 
performance measures are metrics driven. The flight plan is 
serving as a to-do list essentially for accountability. The 
results are there for all to see posted on our website on a 
quarterly basis. You can go to www.faa.gov and see exactly how 
we're doing.
    The flight plan, of course, addresses our near-term needs, 
and incorporated within it and stretching further down the road 
is the Agency's operational evolution plan, a rolling ten-year 
effort that's well underway. The OEP, as it's known, is 
designed to address arrival and departure delays, weather, and 
congestion. The OEP set a robust goal to squeeze 30 percent 
more capacity out of the system without increasing delays, and 
the latest news from this program is good. The Nation's top 35 
airports already have an increase in capacity of 6.5 percent 
over the year 2000, our baseline year, with an average of less 
than 14 minutes of delay.
    At this point, I'd be remiss not to mention a commitment we 
made to this Congress to address the issue of the wave of 
controller retirements that are coming up in future years. 
We've committed to get a plan to you by the end of the year. As 
you see on this chart, we have projected retirements through 
the year 2015, and while our track record in forecasting 
retirements has been remarkably good, we can't be precisely 
sure of the retirement rate in the future. As you know, there 
are many factors that will affect an individual employee's 
decision, and that what this cumulatively is all made up of.
    But during this year, we're planning to drill down to the 
facility level and understand to the greatest degree possible 
when these retirements will occur, and therefore, what our 
planned hiring and training plans should be.
    Now, under the leadership of Secretary Mineta and at the 
direction of Vision 100, the landmark legislation that this 
committee got enacted last year, we're also looking to take the 
longer view with the creation of a joint planning and 
development office called the JPDO. This office is an 
intergovernmental body composed of DOD, DHS, NASA, FAA, 
Commerce, Transportation, and the Vice President's Office of 
Science and Technology Policy.
    The effort brings together some of aviation's best minds to 
focus on aviation in the year 2025 and beyond. Specifically, 
the JPDO's mandate is to manage the development of our national 
plan for the next generation air transportation system. The 
first edition of this plan will be published in December and 
serve as a road map for our future aviation system.
    I think most telling about this effort is the 
organization's motto: New ideas are welcome. That demonstrates 
a willingness to think beyond what might always be considered 
the traditional course for the FAA and much of government and 
create a road map for the future. It represents an 
unprecedented collaboration among all aviation system 
stakeholders, ranging from government to industry. It also 
represents a new day for aviation, and I think it's clear, it 
represents a new FAA.
    I thank you for your time and I look forward to your 
questions.
    [The prepared statement of Ms. Blakey follows:]

        Prepared Statement of Marion C. Blakey, Administrator, 
                    Federal Aviation Administration
    Chairman Lott, Senator Rockefeller, and Members of the 
Subcommittee:

    Good morning. It is my pleasure to appear before you this morning 
to discuss the future of the air traffic system in this country. This 
is a very timely hearing as we approach Memorial Day weekend and the 
start of the busy travel season with its daily reminders of the 
benefits and challenges of air travel in this country. Today, I would 
like to bring you up to date on what we at the Federal Aviation 
Administration (FAA) are doing to manage the system while planning for 
the future.
    As you all know, September 11 triggered a severe downturn in 
aviation. However, based on our recent forecasts, aviation is 
rebounding, and we are taking steps to be ready for its resurgence. We 
are already working with the aviation community to stay ahead of the 
curve. In the near term, we have taken several concrete steps to ensure 
that delays are kept to a minimum. In March, we convened ``Growth 
without Gridlock,'' an unprecedented three-day conference with aviation 
decision makers to develop a strategy to reduce delays this summer. We 
sat down with representatives of the airlines, pilots, controllers, 
military, business, regional and GA airports, and a collection of 
aviation organizations. As a result, working together, we developed a 
new approach. We agreed on ``express lanes,'' that allow for reduced 
departure delays by keeping certain parts of the airspace around 
congested airports clear to allow for more rapid departures. The group 
also agreed to ``delay triggers'' that can reduce bottlenecks at our 
busiest airports by imposing minor delays on the ground at airports 
sending flights into a congested area until our controllers can clear 
the congestion. The theory is that by imposing minimal delays when 
necessary, where necessary, we can reduce major delays that clog the 
entire system. I must emphasize that these near-term steps do not 
resolve long-term capacity issues. We must continue to build runways 
where needed, improve our airspace designs, and field new capital 
investments, and improve our management of the air traffic system. We 
at the FAA must act more like a business with a customer focus. This 
will pay real dividends.
    That's why we are working to transform the way the FAA's Air 
Traffic Organization (ATO) does business. We have designed the ATO to 
be a more streamlined, effective means of providing the safest air 
traffic control in the world to the most complex airspace in the world. 
The ATO will execute our Flight Plan, implement our Operational 
Evolution Plan (OEP) and lead us into the future with the Joint 
Planning Development Office (JDPO). As you know, last August, after a 
long and comprehensive search, Russ Chew became the ATO's first Chief 
Operating Officer (COO), a position created by statute under the 
leadership of this Committee. He is primarily responsible for all 
aspects of providing air traffic services and products.
    Our foundation has not changed: any conversation about air traffic 
is premised upon the uncompromising commitment to safety by Secretary 
Mineta and me. Every decision we make is done with the safety of the 
flying public in mind. I am pleased to announce that the three-year 
commercial airline accident rate is the lowest in history. That's a 
tribute to the highly skilled men and women of the FAA and the industry 
we support.
Air Traffic Organization
    Thanks in large part to the continuing support from this Committee, 
the FAA is completely restructuring how we manage air traffic services. 
Congressional support for greater efficiency and accountability at the 
FAA has enabled FAA to be more flexible, adaptable, and business-like. 
Today, I want to briefly describe how our recent changes will position 
us to meet once again a growing aviation system.
    Those who use our system want an agile organization that can create 
greater access--and that is what we intend to provide. Indeed, with 
every change, we will continue to ensure that safety remains our top 
priority. Accordingly, we have added a new office--the Air Traffic 
Safety Oversight Service--to monitor the safety of our air traffic 
operations and help us ensure accountability. We have placed this 
office outside the ATO to ensure its independence, locating it within 
the FAA's Office of Regulations and Certification. We have also added a 
Vice President for Safety Services inside the ATO, and we will conduct 
risk-targeted, data-informed audits that will provide trend analysis 
and review systemic issues.
    To obtain a more results-oriented, more accountable process that 
will reduce future operational costs, we are also integrating the 
authority and accountability for capital investments within the ATO. In 
the past, capital programs and operations have been managed separately, 
and success had been driven and defined by building the system, not 
measuring the operational benefit. Thus, the definition of success was 
not always results oriented. Further, from a fiscal perspective, the 
capital budget was inadequately linked to the future operating costs of 
any given procurement. Consequently, operational costs have increased 
year after year with little consequence to capital decisions or the 
program portfolio.
    Through a more integrated approach to managing capital and 
operations, past mistakes will be corrected and the ATO will have 
greater fiscal insight to make long-term investments. We expect to be 
able to reduce our unit operating costs and fund near term operational 
improvements that pay the biggest dividends.
    To do this, we are developing new financial management tools to 
pinpoint unit cost and productivity, which will enhance our fiscal 
effectiveness. Field managers need to know the full import of their 
financial decisions and headquarters' managers need to know which 
facilities are most efficient. In the future, each Vice President will 
know the value of their decisions by measuring their service 
performance--in terms of safety and efficiency--and what resources are 
required to achieve it. To that end, we are developing new cost reports 
that include labor distribution information. Timely reporting on 
safety, costs, and operational performance will give us a better 
understanding where our resources are being used.
    The ATO must ensure the highest rate of return for each dollar 
invested. Ensuring organizational excellence means more people actually 
providing the products and services, with fewer, more effective people 
managing them. Russ Chew, our COO, has already flattened the 
organization, which has resulted in better communication and more 
efficient decision-making. He now is six management layers from the 
controller or technician versus 11 in the original structure. We arc 
increasing our target average ratio of the number of eight staff 
employees per manager. But streamlining the organization, in and of 
itself, means little unless you empower the managers by creating new 
financial reports and processes that give them the information 
necessary to make informed, data driven decisions, and then be 
accountable for them. We are not waiting for our final realignment 
before making changes. No longer will one line of business make 
purchasing decisions for another line of business to use. Even though 
the ATO was only started in February, we are optimistic about seeing 
some early productivity and efficiency improvements by the end of this 
Fiscal Year.
Future Aviation Capacity and Delays
    We have put in place an even more effective organization that will 
help us meet the air traffic demands of this century. This more agile 
organization will be better positioned to implement our Flight Plan and 
the Operational Evolution Plan. The Flight Plan links the agency's 
activities through 2008 to our budget requests. It aligns all of our 
business plans to ensure accountability at all levels. Beyond the 
Flight Plan, the OEP, a rolling ten-year plan, takes our capacity and 
efficiency plans out a decade to 2014. Looking even further into the 
future, the JPDO is crafting a plan for the Next Generation Air 
Transportation System to meet air traffic demand in the long-term, out 
to 2025.
    The OEP's objective is to add capacity enhancements that will 
accommodate a 30 percent increase in demand over the ten-year period. 
Since the plan's inception in 2001, there has been a 6.5 percent 
increase in effective capacity (i.e., the amount of traffic that can be 
handled within a 14 minute delay) due to OEP activities and industry 
changes. The OEP's capacity solutions are divided into four core areas: 
Arrival/Departure Rates, Airport Weather, En Route Congestion, and En 
Route Severe Weather. Within each core area, we have identified 
specific strategies for addressing known or projected capacity 
problems. The OEP also tracks 35 airports that are the most heavily 
traveled and located in the most densely populated areas because the 
OEP activities at these airports will have the greatest positive effect 
on the system.
    We are increasing capacity and reducing delays in a number of ways. 
First, let me start with runways, for they are the means to provide the 
single most significant capacity increases and delay reduction. Runways 
are expected to account for a significant part of the overall expected 
30 percent gain in capacity over next ten years. In the last five 
years, eight new runways have opened at the 35 OEP airports allowing 
almost a million more operations annually. The OEP currently includes 
seven runway projects (six new runways and one runway extension) that 
will be commissioned in the next five years allowing these airports to 
accommodate an additional 840,000 more operations annually. Taken 
together, these 15 runway projects represent a 12 percent increase in 
capacity over the period from 1999 through 2008.
    New runway construction and runway extensions are the most 
effective method of increasing passenger throughput, or ``arrival and 
departure rates''. Because the 35 OEP airports account for 73 percent 
of all passenger enplanements, by increasing the throughput of those 
passengers' flights, we affect the entire system. We know that runways 
themselves are just one part of the solution and cannot maximize 
capacity alone. For example, studies have shown that 40 to 60 percent 
of the projected capacity gained from new concrete will be lost without 
the necessary changes to terminal and en route airspace. The OEP is 
instrumental in attaining the maximum capacity increases from a new 
runway. It provides a coordination mechanism to ensure that all 
procedures, navigational equipment and pilot training are ready when 
new runways are opened.
    A second critical element of the OEP, and of particular interest to 
this Committee, is our ongoing National Airspace Redesign (NAR). The 
U.S. airspace has remained largely unchanged while technology, demand 
and diversity of aircraft using the system have advanced. The NAR is a 
multi-year initiative to review, redesign, and restructure the nation's 
airspace to meet the increasing operational demands on the national 
airspace system. This effort is addressing, both locally and system-
wide, the congestion, complexity and limited departure points in the 
current airspace that cause operation.
    In addition, next January, we plan to implement a program in the 
airspace over the continental U.S. that will enable us to reduce 
vertical separation at certain altitudes that will make six additional, 
more fuel efficient, flight levels available for aircraft operations. 
It will enhance both air traffic control flexibility and efficiencies 
for our customers. Canada and Mexico are planning for full 
implementation at the same time. This program, known as the Reduced 
Vertical Separation Minimum (RVSM), has been successfully implemented 
in Europe, the Pacific Ocean, Australia and parts of Canadian airspace 
already.
    Redesign efforts will occur at the higher altitudes as well as in 
the terminal area, taking advantage of new navigational technologies 
such as advanced area navigation (RNAV) and Required Navigational 
Performance (RNP) that increase the potential for pilots to fly more 
efficient routes and altitudes they select. This is in contrast to the 
more rigid assigned routes and altitudes that have been the basis for 
air traffic control in congested airspace. Performance procedures will 
also allow for more efficient use of the constrained terminal airspace. 
Benefits associated with these changes will be dependent on the level 
of equipage of aircraft. While non-equipped aircraft will still be 
accommodated, airspace and procedures will be designed to offer 
additional benefits for those aircraft having additional capabilities.
    Recent airspace redesign has already proven its value in several 
critical regions of the country. For instance, because airspace between 
Chicago and the New York often clog capacity, we created new sectors to 
mitigate these bottlenecks. A new departure fix at Philadelphia has 
increased aircraft arrivals and departures to the west. Modeling to 
support this new route projected departure increases of up to 4 to 5 
aircraft an hour, thus reducing delays at a critical east coast hub 
airport. Moreover, two new off-shore radar sectors created for our New 
York Center have permitted 65 percent of departures to leave on time. 
They otherwise would have been delayed or cancelled due to sever 
weather. These and other near-term solutions show a real benefit to the 
traveling public and have already provided FAA customers with $100 
million per year in savings.
    Recognizing that there are limited resources, the OEP examines 
solutions that would make use of existing systems, especially aircraft 
avionics. At the same time we continue to pursue new technology that 
brings capacity enhancements. In some cases, we are just beginning 
implementation of new tools and making investment decisions so that our 
customers can expect to see increased benefits over time. For example, 
we are providing improved weather products to ATC facilities that can 
help our controllers minimize traffic flow disruption from fast moving 
weather by optimizing safe routes that avoid the storm. We are also 
providing our controllers with new tools to help them manage traffic 
levels and the predicted traffic increases. Some of our controllers now 
have the tools to predict spacing conflicts, with the User Request 
Evaluation Tool, known as URET. At the ten sites where URET has been 
deployed, airlines are saving both time and fuel and other operating 
costs. We are in the process of equipping the rest of our en route 
centers with this technology. Once that phase is complete, we project 
an increase of direct routings by 15 percent which will further reduce 
users operating costs. Also, controllers at five of our facilities can 
sequence arriving and departing aircraft with technology known as 
Traffic Management Advisor (TMA). At each location where TMA is now in 
use, we get a three to five percent increase in capacity. All of these 
tools ultimately reduce delays.
    We are also seeing the safety and capacity benefits from technology 
that supplements radar coverage. Pilots and air traffic controllers can 
``see'' aircraft and ground vehicle traffic with greater precision 
creating additional airspace, runway and taxiway efficiencies. What 
this means is that we can now provide ``radar like'' service in remote 
airspace. Alaska's Capstone program is using this technology and seeing 
the benefits of shorter, more efficient routings during inclement 
weather. We also expect to use this technology to increase the arrival 
and departure rate at some airports. The diverse application of this 
technology may also allow visual approaches to continue into marginal 
visual flight rules conditions as bad weather moves into the approach 
airspace, reducing the need to divert aircraft.
    We are always working to anticipate changes in aviation trends that 
require us to adjust our strategies for increasing capacity. Today, the 
OEP focuses on 35 of the Nation's busiest airports, but it will be 
expanded to include other airports needing capacity in the future. Just 
over a year ago, we began assessing the capacity of the Nation's 
airports given the anticipated demand for air travel. This analysis, A 
Look into the Future: An Analysis of Airport Demand and Operational 
Capacity Across the NAS, should be released this month. We looked at 
socioeconomic trends in demand with changes in population and income 
and compared those to existing and forecast capacity. We identified 
locations where additional capacity is needed now, and where capacity 
would be needed in 2013 and in 2020. We also found that if certain OEP 
capacity targets are not met, then we will experience even greater than 
anticipated capacity constraints at airports already identified as 
needing capacity in 2013 and 2020. The long-term projections of the 
Capacity Study support the OEP initiatives as well as the JPDO's 
efforts to assess system growth out to 2025. The Capacity Study tells 
us that the FAA and the aviation industry must continue to work 
together to ensure that adequate capacity is in place when and where 
needed, and reinforces the importance of keeping pace with current and 
future demand, and publishing a formal plan to identify and track our 
improvements.
    For the development of longer-term plans and concepts, and under 
the direction of Vision 100, we have established the JPDO. Its mandate 
is to coordinate goals, priorities, and research activities within the 
Federal Government as well as with United States aviation and 
aeronautical firms to create a National Plan-a roadmap for our future 
aviation system in furtherance of the Next Generation Air 
Transportation System Initiative.
    In developing the National Plan, the JPDO will establish the 2025 
target and capture the major priorities that represent the coordinated 
decisions of member agencies. While these decisions will be in broad 
four-to-five year windows, it will be the individual agencies that will 
prioritize the specific projects and programs needed to carry out their 
individual portions of the National Plan. Both the Secretary and I 
believe that the combination of these plans and programs will position 
us to meet future needs of the system. This would not be possible 
without the unprecedented commitments of support provided by the 
Departments of Defense, Commerce, and Homeland Security, NASA and the 
White House Office of Science and Technology Policy. Even the JPDO 
motto--``New Ideas Are Welcome''-demonstrates a willingness to think 
beyond what otherwise might be considered ``traditional'' as they 
create the roadmap for the future. These efforts represent 
unprecedented collaboration among all aviation system stakeholders 
ranging from government to industry.
    At the forefront of the National Plan's goals for the future air 
transportation system, is the goal of increased capacity. While we are 
still building the plan that will take us to 2025 and beyond we expect 
to see an ``early victory'' for future capacity. As you know full well, 
weather creates significant delays--delays that we can't eliminate but 
delays that can be ``managed'' with skill, technology and procedures. 
To this end, the JPDO is developing an Integrated Plan for Aviation 
Weather, the first step toward bringing all of these efforts together 
for maximum benefit.
    We are encouraged by this early success but it represents a 
fraction of the work that must be done to maintain our leadership role 
in aviation and to create the infrastructure for the future system.
Cape Town Treaty
    Finally, Mr. Chairman, you had requested that we briefly address an 
issue that is particularly important to the aviation community: the 
Cape Town Treaty, which is now awaiting action by the Senate Foreign 
Relations Committee. The Treaty is composed of two instruments: the 
Cape Town Convention, containing the basic terms and provisions that 
underlie the regime that reflects modern asset-based financing 
practices in this country, and the Aircraft Protocol, which makes the 
Treaty operational specifically as to aircraft, aircraft engines and 
helicopters above a certain size. Once in force, the Treaty will 
provide significant economic benefits both here at home and abroad. By 
creating an internationally recognized system of rights and enforceable 
remedies in aircraft equipment, the Treaty reduces the risk assumed by 
creditors in financing transactions and thus should reduce the costs of 
those transactions.
    For countries such as the U.S. that manufacture aircraft, those 
reduced costs should encourage increased exports and export-related 
economic growth--not just by major manufacturers, but also by smaller 
companies that make the parts and provide related aviation services. In 
addition, the Convention and Aircraft Protocol will benefit the 
companies that provide the capital that finance the sale of such 
equipment around the world. U.S. financial institutions are major 
players in aircraft financing. The creditor protections provided for by 
the Convention and Protocol will benefit them by significantly reducing 
the risk they now incur when financing aircraft in countries whose laws 
do not meaningfully protect creditors in the event of a default or 
insolvency.
    The full implementation of this Treaty should hasten the 
replacement of older equipment with state-of-the-art aircraft, making 
the world's skies safer and cleaner as newer equipment is acquired and 
brought into service. This will benefit aviation both within the United 
States and abroad, particularly in developing countries whose carriers 
have had to pay high interest rates or who have not been able to access 
the commercial credit markets at all because of their credit risk. In 
short, Mr. Chairman, this Treaty is a ``win-win-win'' proposition. It 
is a fine example of how international legal cooperation can benefit 
all parties. I want to highlight the extraordinary collaborative nature 
of the Cape Town Treaty effort. It is an example of what a strong 
government/industry partnership can produce.
    The financing provisions on secured interests under the Treaty do 
not require any implementing legislation here in the U.S., because they 
are fully consistent with U.S. law under the Uniform Commercial Code. 
To this extent, the Treaty is self-executing. However, certain 
technical amendments to the FAA's Civil Aircraft Registry functions are 
required to fully integrate our Registry with the new, fully 
computerized International Registry that will be established under the 
Treaty. Last week, the House Transportation and Infrastructure 
Committee favorably reported a bill that we support, H.R. 4226. 
Although it is somewhat different from the Administration's proposal 
that we sent to Congress last fall, it nevertheless accomplishes 
essentially the same goal full implementation of the Treaty. The bill 
designates the FAA's Registry as the ``entry point'' for authorizing 
filings to the International Registry while maintaining the full 
documentation system of the FAA registry. It also provides for 
expedited rulemaking so that the FAA may quickly update its regulations 
and put into place all requirements for implementing the Treaty. And 
importantly, to avoid any confusion over what legal standards apply 
during the rulemaking process, the bill provides that the Treaty's 
provisions would supercede inconsistent FAA regulations. We support the 
bill and look forward to working with this Committee as the Treaty and 
legislation advance.
    That concludes my testimony, Mr. Chairman. I would be pleased to 
answer any questions you may have.

    Senator Lott. Thank you, Ms. Blakey.
    Mr. Mead, welcome back.

  STATEMENT OF HON. KENNETH M. MEAD, INSPECTOR GENERAL, U.S. 
                  DEPARTMENT OF TRANSPORTATION

    Mr. Mead. Thank you, Mr. Chairman. You'll recall that our 
office was heavily engaged during the summer of 2000 when we 
experienced gridlock and during that time we reported on that 
situation as well as a host of airline customer service issues. 
This summer we probably won't see the same magnitude of system-
wide disruption that we saw in the summer of 2000 when nearly 
30 percent of flights were delayed or canceled, but the 
potential for congestion and delays this summer in some key 
airports is very real and will approach 2000 levels.
    Today I want to address four areas, current traffic and 
delay conditions, the changing drivers of conditions. They're 
different than they were in 2000 to some extent, and FAA's 
actions in the past 4 years, and some recommendations for next 
steps. I'd like to emphasize though, as we did in the summer of 
2000 and its aftermath, that while the focus as we approach the 
summer is necessarily on Band-Aids and quick fixes to get you 
through the summer, you can't afford to postpone the quest for 
longer-term solutions, and DOT and FAA have welcome initiatives 
on the way in that regard, and they're clearly steps in the 
right direction. The key is going to be follow-through and 
closure on the actions to be taken.
    Also, you have important issues of controller retirement. A 
big bubble is approaching, and that's because a lot of the 
controllers that were hired right after the strike are now 
retirement eligible. Another big issue is the adequacy of 
revenues inflowing to the trust fund. They're not materializing 
as had been anticipated 2 or 3 years ago, and as a result of 
that, you've got multi-billion dollar declines.
    A couple reasons, Mr. Chairman. One is, a large component 
of the trust fund revenues is derived from the ticket tax, 
which is 7.5 percent applied to the ticket price. In the summer 
of 2000, for example, there were a lot of $1,000, $2,000 
tickets that business travelers were paying. That market has--
the bottom has fallen out of that market. So you have the 7.5 
percent being applied to a much smaller ticket base.
    Second, there are a lot--there's a recurrence of point-to-
point service in the system. Part of the trust fund's revenue 
is based on a lot of segments, and as you reduce the number of 
segments, so too goes the revenue.
    Traffic is nearly back to the 2000 levels and delays are 
emerging in several key markets. Twenty-one percent of flights 
delayed system-wide in the first quarter of 2004, the average 
delay is about 46 minutes. Still below 2000 levels, but delays 
are up 24 percent in the first quarter of 2004 compared to the 
first quarter of 2003. The story is worse at some individual 
airports. Administrator Blakey mentioned Chicago O'Hare. 
Thirty-seven percent of the flights were delayed there in the 
first quarter of 2004, average delay 64 minutes. That was worse 
than 2000. Another airport that bears watching is our own 
Washington Dulles Airport. Independence Air, formerly Atlantic 
Coast, has announced its intent to add as many as 300 new 
flights by the end of the summer. If that occurs, passenger and 
traffic levels will stress the airport's runways, gates, 
security checkpoints, and the air traffic control system.
    Other airports to watch this summer are listed on the 
handout. You have it front of you. This is the one with yellow, 
and that's on page 4 of my testimony. Of particular note are 
Philadelphia, Atlanta, LaGuardia, and Cincinnati. All of those 
airports have more traffic than they did in 2000, had at least 
one in five flights delayed last summer, and are further 
increasing their schedules this summer.
    New factors are contributing to the delays that did not 
exist or were less prominent four summers ago. Those forces 
include increased reliance on regional jets, new and expanded 
low-cost carrier service, and post-9/11 security screening 
requirements.
    Take regional jet growth. Since May 2000, scheduled 
regional jet departures have increased by 180 percent system-
wide. In 2000, 9 percent of flights were on regional jets. Now 
it's 29 percent of flights. These aircraft use the same runways 
as larger jets, but they can cause heavy congestion at some 
airports and in airspace and they carry fewer passengers. 
That's why system operations can be up but emplacements can 
still be down.
    Low-cost carrier expansion. Contrary to the situation in 
2000, low-cost carriers are now entering the weakened legacy or 
network carriers' hubs and are expanding into transcontinental 
markets. Low-cost carriers now control 21 percent of the 
domestic market, up from 15 percent just 4 years ago.
    Passenger security screening delays. When the TSA 
instituted new post-9/11 screening procedures at airports, 
Secretary Mineta established a wait-time goal of 10 minutes or 
less at screening checkpoints. The TSA is now under, of course, 
the Department of Homeland Security, and they report that their 
national wait time in April was 3.8 minutes during off-peak 
hours and about 8 minutes during peak hours, but they correctly 
note that those averages are quite misleading in that they 
don't represent the peak times within a week or seasonal 
fluctuations.
    Just some examples. Atlanta, the news media reported, had a 
half-mile line last week. LaGuardia terminal B routinely on 
weekdays evenings 30 to 60 minutes. There is a host of other 
airports we can get into in a Q&A period that are experiencing 
times that go well over 10 minutes.
    I think that information on all parts of the travel 
experience is necessary for consumers to make decisions based 
on door-to-door trip times, not just takeoff to landing times. 
Therefore, we're recommending that the government, just like 
the airlines are required to report their on-time performance, 
we think the Transportation Department, in coordination with 
DHS, ought to be reporting monthly airport-specific wait times 
at security screening checkpoints for peak and off-peak hours. 
And I also want to tell you that yesterday Secretary Mineta 
directed the appropriate departmental officers to take the 
steps necessary to do that.
    I'd like to speak to some of the FAA actions over the past 
4 years. I think you have a pretty good report card on steps 
the FAA has taken in the last 4 years, and it should help this 
summer. Steps taken by the FAA and the Department include 
negotiating, directing, or brokering or scheduling reductions 
with the carriers at Chicago O'Hare. That was clearly not the 
case in the summer of 2000. I think there was a lack of 
willingness to do that.
    Plans for this summer include, as the Administrator was 
noting, express lanes in the sky, holding flights at origin 
airports when delays at a destination airport reach 90 minutes 
or more. FAA and the airlines now have traffic management calls 
daily and FAA completed its choke point initiative to address 
bottlenecks between Chicago, Washington, D.C., and Boston. New 
runways provide the largest increases in capacity. In the last 
several years, six of them have been built at key hub and 
destinations airports and they will help this summer. Seven new 
ones are expected to be completed between now and 2008. But of 
the five airports that are experiencing the most congestion, 
only one of them's going to have one in the next couple years, 
and that would be Atlanta.
    Also, a number of airspace redesign and technology-related 
efforts, such as a new precision landing system, were advanced 
in the aftermath of the summer of 2000. For the most part, 
those efforts have not progressed sufficiently to help out this 
summer.
    Now, with summer fast approaching and traffic back to 2000 
levels at a dozen airports, an action item we're recommending 
FAA move forward on promptly is to complete and publish its 
revised capacity benchmarks, preferably before the end of this 
month. These benchmarks were first developed in the aftermath 
of the summer of 2000 and set forth the number of flights an 
airport can support within the constraints of the airport and 
air traffic system under good and bad weather conditions. They 
are useful for, among other things, disclosing capacity levels 
at that airport in relation to what the airlines are 
scheduling, and by comparing capacity to scheduling, FAA and 
the airlines are in a much better position to anticipate and 
ameliorate delays before they materialize.
    And finally, Mr. Chairman, as air traffic operations 
increase, it's important not to lose sight of safety. Two key 
areas to watch, runway incursions, potential collisions, which 
are potential collisions on the ground, and operational errors, 
which are when planes are allowed to come close together in the 
air.
    There has been progress in both of these areas over the 
past year, but the numbers are much too high and as the traffic 
is increasing with those numbers really must come down.
    Thank you.
    [The prepared statement of Mr. Mead follows:]

    Prepared Statement of Hon. Kenneth M. Mead, Inspector General, 
                   U.S. Department of Transportation
Short and Long-term Efforts to Mitigate Flight Delays and Congestion
    Mr. Chairman,

    Thank you for inviting us to testify today. As the Subcommittee 
will recall, our office was heavily engaged during the summer of 2000 
when congestion and delays created gridlock conditions in some parts of 
the aviation system. We were also directed, by statute, to review 
airline customer service issues that grew out of the delay problems. 
Since then, we have regularly reported on air traffic control 
modernization and industry operations and finances. Our next report 
updating the performance of the aviation system will be issued in June. 
Our testimony today is based on this body of work.
    Given the difficult financial circumstances within parts of the 
airline industry, it seems counterintuitive that we would be here today 
talking once more about some of the same congestion and delay problems 
that existed 4 years ago as a result of the economic robustness of the 
industry. Although we are unlikely to see the same levels of disruption 
that we saw during 2000, when nearly 1 in 4 flights were delayed or 
cancelled, the potential for congestion and delays this summer in some 
key airports is very real and the highest it has been since that 
terrible summer in 2000.
    Today we would like to address four areas: current traffic and 
delay conditions, the changing drivers of congestion--including new 
security-related airport congestion, FAA's actions in the past 4 years, 
and what these all mean as we move forward this summer and beyond. This 
summer, our focus will necessarily be on finding quick fixes when 
problems surface. That will help us through the short term, but at the 
same time, we cannot afford to postpone the quest for long-term 
solutions to address the underlying root problems. We note that for the 
longer term, the Department and Federal Aviation Administration (FAA) 
have established a Joint Planning and Development Office to develop a 
longer term vision for the next generation air transportation system.
    In addition to the Department's efforts to move forward this 
summer, we are making two recommendations today.

   First, FAA should complete and publish its revised capacity 
        benchmarks as soon as possible, preferably before the end of 
        May. These benchmarks were first developed in the aftermath of 
        the summer of 2000 and set forth the number of flights a 
        specific airport could support within the constraints of the 
        airport's runways and the air traffic control system under 
        varying weather conditions. As such, they were useful for 
        disclosing capacity levels at specific airports in relation to 
        proposed airline scheduling as well as for projecting 
        additional capacity that could be gained through new runways, 
        technology, and procedures.

   Second, the Department of Transportation, in collaboration 
        with the Department of Homeland Security, should collect and 
        report, on a monthly basis, airport-specific data disclosing 
        wait-times at airport passenger security screening checkpoints, 
        just as the airlines are required to report their on-time 
        performance to the Department of Transportation. Secretary 
        Mineta has directed DOT's Office of Aviation and International 
        Affairs and the Bureau of Transportation Statistics to develop 
        a statistically valid means to measure and report on security 
        wait-times at the Nation's most congested airports. Such 
        information, in conjunction with currently collected causation 
        data, will form a complete picture of delays in the aviation 
        system and pinpoint where action is needed.
Current Conditions: Traffic is Rebounding and Existing Delays Are 
        Likely to Worsen This Summer
    Even though we are not yet into the summer months--typically the 
busiest for the airlines--we are already seeing delays and congestion 
resulting from the rebound in airline traffic. As Figure 1 illustrates, 
traffic levels in the past few months have come very close to or 
exceeded levels for comparable months in 2000.



    As traffic has grown, so have delays. Although average arrival 
delays \1\ in the first quarter of 2004 of 21.3 percent were below 
those experienced in the first quarter of 2000 (23.7 percent), they are 
up 24 percent from the same period in 2003.
---------------------------------------------------------------------------
    \1\ At the 55 Airports tracked by the FAA in the Aviation System 
Performance Metrics (ASPM) database.



    This recent delay growth is particularly pronounced at some key 
airports. At Chicago-O'Hare, 37 percent of flights were delayed in the 
first quarter of 2004 compared to a delay rate of 21 percent in the 
first quarter of 2003. The average length of delay in the first quarter 
of 2004 at O'Hare totaled 64 minutes versus an average delay of 54 
minutes in the first quarter of 2003. In the first quarter of 2000, 27 
percent of flights at O'Hare were delayed for an average of 50 minutes.
    One situation that bears watching, in particular, is the impact of 
the expected service growth at Washington's Dulles airport. In June, 
when Independence Air is launched by former regional carrier Atlantic 
Coast Airlines as a new low-cost carrier, traffic at Dulles will 
increase significantly. With Independence Air's announced intent to add 
as many as 300 additional daily flights by the end of the summer, and 
United's intent to bring new regional partners to Dulles to replace the 
flights once operated by Atlantic Coast, the level of operations will 
increase significantly. Security lines are likely to be an issue in 
addition to airside congestion.
    Other airports to watch include Philadelphia, Atlanta, New York-
LaGuardia, and Cincinnati. All have operations levels that exceed those 
of the summer of 2000, experienced delay rates greater than 20 percent 
last summer, and are increasing their schedules this summer by more 
than 6 percent. Figure 3 identifies other airports that experienced 
delays last summer that are expecting increased operations in the 
summer of 2004.

            Figure 3: Airports With Delays Last Summer That are Increasing Schedules for Summer 2004*
----------------------------------------------------------------------------------------------------------------
                                                            Percent Flights    Average     Percent Increase in
                                       Airport              Delayed Summer      Delay      Flights Summer 2004
                                                                 2003         (Minutes)      vs. Summer 2003
----------------------------------------------------------------------------------------------------------------
1                          Newark                                     27.00       59.19                       7%
----------------------------------------------------------------------------------------------------------------
2                          Philadelphia                               25.40       51.27                       9%
----------------------------------------------------------------------------------------------------------------
3                          NY-Kennedy                                 25.13       56.36                      20%
----------------------------------------------------------------------------------------------------------------
4                          West Palm Beach                            24.47       46.49                      12%
----------------------------------------------------------------------------------------------------------------
5                          Atlanta                                    24.24       48.78                       9%
----------------------------------------------------------------------------------------------------------------
6                          Raleigh-Durham                             23.45       48.29                      13%
----------------------------------------------------------------------------------------------------------------
7                          Fort Lauderdale                            22.95       49.12                      10%
----------------------------------------------------------------------------------------------------------------
8                          Washington-Dulles                          22.53       51.59                      17%
----------------------------------------------------------------------------------------------------------------
9                          Orlando                                    21.76       49.28                       9%
----------------------------------------------------------------------------------------------------------------
10                         NY-LaGuardia                               21.66       59.66                       8%
----------------------------------------------------------------------------------------------------------------
11                         Baltimore                                  21.65       53.45                       5%
----------------------------------------------------------------------------------------------------------------
12                         San Antonio                                21.28       45.55                       6%
----------------------------------------------------------------------------------------------------------------
13                         Chicago-O'Hare                             21.18       64.26                       9%
----------------------------------------------------------------------------------------------------------------
14                         Boston                                     20.97       49.74                       9%
----------------------------------------------------------------------------------------------------------------
15                         Cincinnati                                 19.57       48.41                       6%
----------------------------------------------------------------------------------------------------------------
* Airports in boldface all have scheduled operations for the summer of 2004 that exceed schedules filed in the
  summer of 2000.

As Operations Increase, Focus Must be Kept on Safety
    As air traffic operations increases, it is important not to lose 
sight of safety. There are two key areas to watch--runway incursions 
(potential collisions on the ground) and operational errors (when air 
traffic controllers allow planes to come too close together in the 
air). Operational errors pose a significant safety risk, with an 
average of three operational errors per day and one serious error 
(those rated as high risk) every 7 days in Fiscal Year (FY) 2003. We 
have seen some progress on runway incursions during the first 7 months 
of FY 2004; however, the most serious runway incursions have continued 
to increase. In addition, although operational errors decreased 
marginally, they are still much too high.

                Runway Incursions and Operational Errors
     For the 7 month Period  October 1, 2003 through April 30, 2004*
------------------------------------------------------------------------
                              Total Incidents     Most Serious Incidents
                         -----------------------------------------------
                            FY     FY    Percent    FY     FY    Percent
                           2003   2004   Change    2003   2004   Change
------------------------------------------------------------------------
Runway Incursions           185    182       (2)     13     19        46
------------------------------------------------------------------------
Operational Errors          601    589       (2)     32     22      (31)
------------------------------------------------------------------------
* FY 2004 information is preliminary as all incidents may not have
  received a final severity rating. Serious incidents for runway
  incursions include category A and B incidents. Serious incidents for
  operational errors include high severity incidents.

Changing Drivers of Congestion: Regional Jets, Low-Cost Carrier 
        Expansion, and New Security Screening Procedures
    In addition to the traditional causes of delays, including weather 
and over-scheduling, there are new forces in place this summer that did 
not exist or were less prominent four summers ago. These forces, 
including significantly increased reliance on regional jets, new and 
expanded service by low-cost carriers, and post-9/11 security screening 
requirements, are presenting new challenges for our airports and 
airways.

   Regional Jet Growth Places Heavy Demands On Airports and Air 
        Traffic Control.

    In recent years, the network carriers have begun to rely more 
        heavily on their regional partners to serve smaller markets 
        with their fleets of smaller regional jets. In May 2000, 
        scheduled flights aboard regional jets accounted for only 9 
        percent of all flights. In May 2004, scheduled flights aboard 
        regional jets will account for 29 percent of all offered 
        flights. Since May 2000, scheduled regional jet departures have 
        increased by 180 percent.
        

        
    Data from all 31 large hub airports that are tracked by the FAA 
        indicate that the growth is more pronounced on an airport-by-
        airport basis. In 12 of the 31 airports, including some of 
        those that experienced serious delays in 2000, the number of 
        scheduled flights in May 2004 exceeded the number of scheduled 
        flights in May 2000. In 9 of those 12 airports, however, the 
        number of available seats scheduled still lagged behind the 
        number of available seats offered in May 2000, indicating, at 
        least in part, how smaller number of passengers.

   Low-Cost Carrier Expansion Adds New Flights to Large and 
        Medium-sized Markets

    Low-cost carriers, which once opted to operate at alternative, but 
        more affordable secondary airports, are now challenging legacy 
        carriers in their hubs in most large and medium-sized markets, 
        and in transcontinental markets which they had previously not 
        served. Earlier this month Southwest Airlines began operations 
        at Philadelphia International Airport, going head-to-head 
        against incumbent carrier U.S. Airways on several of its most 
        profitable routes. Frontier Airlines is scheduled to begin 
        serving Philadelphia from Los Angeles later this month.

    Low-cost carriers together now control about 21 percent of domestic 
        air capacity-up from 15 percent 4 years ago. From a consumer 
        standpoint, the impact of a low-cost carrier entering a market 
        is often a sudden and significant reduction in average 
        airfares. In fact, most low-cost carrier strategies are built 
        on generating new passenger demand rather than shifting 
        existing passengers from incumbent carriers. As a result, from 
        an operational standpoint, the low-cost carriers new 
        operations, coupled with incumbent carriers' competitive 
        response to new entry can produce significant additional 
        demands on an airport's runways and airspace.

   Post 9-11 Security Screening Process Increases Travel 
        Complexity.

    When the Transportation Security Administration (TSA) was created 
        within the Department of Transportation after September 11, 
        Secretary Mineta established a goal that airline passengers be 
        processed through new Federally-staffed airport passenger 
        screening checkpoints in 10 minutes or less; a standard that 
        was considered appropriate to meet the dual needs of ensuring 
        secure airways while maintaining national mobility.

    TSA is periodically collecting data at a rotating list of selected 
        airports. In April, TSA reports that average national wait time 
        in April was 3.8 minutes during off-peak hours and 7.9 minutes 
        during peak hours, although TSA advises that these numbers may 
        be misleading as they do not reflect particular peaks during 
        the week or in different seasons.

    Meanwhile, many airports, airlines, and consumers are becoming very 
        vocal about lines at security checkpoints that routinely extend 
        an hour or longer. For example, at Atlanta-Hartsfield Airport 
        last week, news media reported that security lines stretched 1/
        2-mile long on one morning. At LaGuardia's ``B'' terminal, 
        which houses all of the airport's low-cost carriers, security 
        lines routinely stretch 30 to 60 minutes long in the evenings. 
        With an anticipated growth in passengers during the busy summer 
        season-some predict even longer delays.
        

        
        At Phoenix-Sky Harbor International Airport, lines at security 
        checkpoints averaged nearly 30 minutes in April 2004.

    Passengers, airlines, and airports need accurate information 
        concerning all aspects of the travel experience. It is time for 
        detailed airport-specific data to be collected and reported, 
        similar to the process used by the airlines to report delay 
        occurrences and causes. If there are problems such as those 
        being anecdotally reported, the first step to addressing them 
        is to adequately quantify them.

    The national goal is to provide high quality security in such a way 
        that recognizes the importance of passenger mobility. In our 
        work related to airline customer service commitments, one of 
        the key shortfalls by the airlines was in how frequently and 
        accurately they communicated with passengers about the 
        occurrence of delays. The airlines made significant investments 
        in systems to improve communications and the Government should 
        adhere to the same standard.
Since 2000, FAA Has Made Progress in Managing and Enhancing Capacity, 
        But Additional Actions Need to Be Taken
    An important lesson from the summer of 2000 is that it is very 
difficult to make decisions and take action in the middle of a busy 
travel season. FAA and the airlines have taken a number of actions 
since the summer of 2000 that will help to enhance the flow of air 
travel this summer. Nevertheless, several efforts, including a new 
precision and approach landing system, that FAA believed held promise 
in the aftermath of the summer of 2000 have not materialized.
Actions Taken

   The Department and FAA have demonstrated a willingness to 
        work with airlines at Chicago O'Hare to adjust airline 
        schedules when flights exceeded the physical capacity of the 
        airport. This willingness to take a hands-on approach to 
        address delays was not present in 2000.

   FAA and the airlines have worked together to develop plans 
        specifically for this summer. These include establishing 
        express lanes in the sky and establishing a 90-minute delay 
        trigger. When delays at an airport reach 90 minutes or more, 
        other airports sending flights into the congested area will 
        hold until congestion clears.

   FAA and the airlines now have daily conference calls about 
        the status of the National Airspace System and expected weather 
        patterns to help manage traffic, which provides an automatic 
        feedback mechanism.

   FAA completed its ``choke point'' initiative to address 
        bottlenecks in airspace that caused delays in the heavily 
        traveled airspace triangle between Chicago, Washington DC, and 
        Boston.

   New runways have been built at Phoenix, Detroit, Miami, 
        Denver, Houston, and Orlando airports. The first phase of a 
        runway project in Cleveland was also completed last year. 
        Without a doubt, congestion would be much worse this summer 
        without the new capacity in the system, particularly since five 
        of the new runways are at hubs for network carriers and Orlando 
        is a destination airport for much of the Eastern U.S.

   We note that for the longer term, the Department and FAA 
        have established a Joint Planning and Development Office to 
        develop a longer-term vision for the next generation air 
        transportation system.
Actions Needed
    During the summer of 2000, it was clear that a number of factors, 
including airline scheduling, impact of weather on various runway 
configurations, and air traffic control considerations determined how 
many aircraft an airport could handle under good and bad weather 
conditions. In 2000, FAA did not coordinate these data.
    This was highlighted in Congressional hearings, and the Agency 
developed and published capacity benchmarks for the 31 busiest airports 
in 2001. These benchmarks set forth the number of flights a specific 
airport could support within the constraints of the airport's runways 
and air traffic control system under varying weather conditions. As 
such, they were useful for disclosing capacity levels at specific 
airports in relation to proposed airline scheduling as well as for 
projecting additional capacity that could be gained through new 
runways, technology, and procedures. Because of the reduced traffic 
that followed the economic downturn and 9111, the benchmarks were not 
as critical to FAA for decision-making purposes in 2002 and 2003.
    As of today, we do not have updated capacity benchmarks but we 
understand that they are almost done. FAA has been updating its 
capacity benchmarks for months, and has expanded its analysis to 
include 35 airports, but has not yet released them. FAA should move to 
finalize and publish these updated benchmarks as soon as possible, 
preferably before the end of May 2004.
    A number of efforts were advanced in the 2000-2001 time-frame for 
enhancing capacity in the near-term, including airspace redesign, the 
Local Area Augmentation System (a new precision landing system), and 
Controller-Pilot Data Link Communications (a new way for controllers 
and pilots to exchange information). There was even some discussion 
about accelerating the development of the Local Area Augmentation 
System. Since then, all three of these efforts have experienced 
problems.
    While FAA completed its choke point initiative, our recent work 
shows that much work remains to get airspace redesign efforts on track 
and determine what can be accomplished in the near-and long-term. For 
example, FAA has over 40 ongoing airspace redesign projects but many of 
the them are not on schedule due to environmental issues, changes in 
the scope of projects, and/or difficulties in developing new 
procedures. In addition, the Local Area Augmentation System and 
Controller-Pilot Data Link Communications clearly had merit but they 
faced fundamental problems with respect to misjudging technological 
maturity or unexpected cost growth that needed to be addressed before 
they could move forward.
    New runways provide the largest increases in capacity, and seven 
new runways are expected to be completed between now and 2008. There 
are about 10 other new runway projects in various planning stages, 
including a major effort at Chicago O'Hare, but FAA does not yet have 
firm completion dates for them. While the six recently completed 
runways will enhance capacity and limit delays at those airports, only 
one of the five airports (Atlanta) currently seeing the most delays is 
expected to have a new runway within the next 2 years. It is important 
that FAA continue to monitor the status of new runway projects to 
ensure they come on line.
Status of Major New Runway Projects--May 2004



Where Do We Go From Here?
    Increased flights and the onset of summer weather disturbances are 
likely to exacerbate the problems already apparent in the system. 
Summer schedules filed by the airlines indicate significant increases 
in flight operations, including those in markets already experiencing 
significant delays. Also, passenger counts are likely to increase 
during the airlines' busiest season, further exacerbating security-
related delays.

   FAA Needs to Complete and Publish Revised Capacity 
        Benchmarks. FAA needs to complete its updates and finalize its 
        work on airport capacity benchmarks and publicly release them. 
        These benchmarks show the maximum number of flights that can be 
        handled each hour for both good and bad weather at the airports 
        analyzed.

    If the airlines' scheduled flights at an airport exceed its good 
        weather capacity or far exceed its bad weather capacity 
        (particularly if it is an airport that can be expected to 
        experience many days of severe weather in the summer), then we 
        can expect delays radiating out into the aviation system from 
        this airport. But by having updated benchmarks and using them 
        to analyze scheduled operations, the Department and FAA will be 
        in a position where they can anticipate and attempt to 
        ameliorate delays before they materialize this summer.

   Accurate and Specific Airport Security Wait-time Data Needs 
        to be Collected and Publicly Disclosed. Information on all 
        parts of the travel experience is necessary for consumers who 
        make travel decisions based on total door-to-door trip times--
        not just take-off to landing times. Both the Department of 
        Transportation and the Department of Homeland Security have 
        mandates concerning air transportation. DOT has a mandate to 
        ensure safety and mobility, while DHS has a mandate to ensure 
        security. The two agencies need to work collaboratively to find 
        a way to meet these missions. As a start, a reasonable wait-
        time standard needs to be developed at each airport, for peak 
        and off-peak hours. Data measuring performance against this 
        standard should be submitted to the Department of 
        Transportation, similar to the monthly delay data the 
        Department required from the air carriers following the 
        gridlock experienced in 2000.

    The collection of this data has had some positive impacts on the 
        industry. Monitoring and publishing performance statistics has 
        exerted pressure on the airlines to publish more realistic 
        schedules and improve on-time performance.

    In response to this emerging problem, Secretary Mineta has directed 
        the Office of Aviation and International Affairs and the Bureau 
        of Transportation Statistics to develop a statistically valid 
        means to measure and report on security wait-times at the 
        Nation's most congested airports. Such information, in 
        conjunction with currently collected causation data, will form 
        a complete picture of delays in the aviation system and 
        pinpoint where action is needed.

   Short-term Allocation of Capacity. We are likely to see 
        travel disruptions this summer as demand once again exceeds 
        capacity in some markets. The Administration has several 
        options for addressing the problems. It could take a ``hands-
        off' approach and rely on airlines to take actions to match 
        schedules to available capacity. In recent years, some major 
        airlines have taken actions to depeak their dominated hubs to 
        alleviate self-imposed congestion and the self-imposed 
        penalties of delays and cancellations that result.

    At airports where no single carrier dominates, airlines are 
        reluctant to voluntarily reduce schedules for fear of ceding 
        market share to competitors. In these situations, the 
        Administration could take a more interventionist, command and 
        control approach such as brokering or ordering schedule 
        adjustments. The Administration has shown that it is willing to 
        do so by its actions to deal with the spiraling delays at 
        Chicago O'Hare earlier this year, although it is still too 
        early to tell whether the most recent round of schedule 
        reductions will have its desired impact. Administrative 
        intervention within a competitive marketplace is not an ideal 
        long-term solution, but given the severity of delays in 
        Chicago, there were few other options available with potential 
        for immediate relief.

    If neither of these options provides relief, and the situation 
        continues to get worse, the time may be appropriate to begin to 
        identify and evaluate market-based solutions. Even if 
        administrative solutions work this summer to reduce queuing and 
        customers' dissatisfaction with uncertain and unreliable 
        service, their continued use would introduce distortions into 
        aviation markets over time.

   Long-Term Solutions Will Require Rethinking of How System is 
        Funded. One of the most significant changes between 2000 and 
        2004 is the loss of the premium business passengers. In 
        addition to hurting the industry's revenues, the Aviation Trust 
        Fund took a hard hit when the market for thousand dollar 
        unrestricted tickets dried up. The Trust Fund's primary funding 
        source the 7.5 percent ticket tax--applied to lower average 
        fares results in lower tax revenue to the trust fund. In 2001, 
        FAA estimated that Trust Fund revenues in 2005 would be about 
        $14.5 billion. That estimate has now been reduced to $11.1 
        billion.
Figure 6: Aviation Trust Fund: Comparison of Trust Fund Receipts
$ in billions



    It is against this backdrop that aviation funding is constrained 
        and any material increases are going to require either a change 
        in the tax structure, i.e., how revenue is generated for the 
        Trust Fund, or a greater reliance on the General Fund.

    Mr. Chairman, this concludes my statement. I am happy to answer any 
questions that you might have.

    Senator Lott. Ms. Hecker, thank you for being here.

           STATEMENT OF JAYETTA Z. HECKER, DIRECTOR,

                PHYSICAL INFRASTRUCTURE ISSUES,

                 U.S. GENERAL ACCOUNTING OFFICE

    Ms. Hecker. Thank you very much. I'm very pleased to be 
here, really honored to represent a long-term body of work on a 
number of issues. My focus today will be a little longer-term 
perspective than you've heard, focusing on the challenges that 
FAA faces in transitioning into a performance-based 
organization.
    Basically, I'll cover three issues, the context being, the 
first, the major challenges in the environment that FAA is in. 
The second will be some of the promise and status of the major 
implementation reforms, including acquisition reform, personnel 
reform, and the establishment of a performance-based 
organization. And then finally drawing on some best practices 
work I'll discuss some critical success factors that are key to 
FAA transforming into a performance-based organization.
    The first point on the challenges really is captured in 
some ways by the front page of my statement, which has a chart 
on it, which basically outlines, graphs on an index, FAA 
expenses relative to air carrier operating expenses. As we 
know, this industry is still recovering from financial losses 
of unseen proportions, and as a result, tax receipts are also 
falling by significant levels, over 20 percent since 1999. Yet 
during that same period, we see an escalation of clear 
proportions relative to air carrier costs.
    Now, these cost pressures on FAA and the decline in the 
trust fund really have to be taken in the context of really 
what is a grave financial crisis facing the country and the 
obvious pressure that is on any general fund contributions to 
any sector of the economy. Basically, the bottom line of this 
is that cost cutting really has to be a watch word of FAA. It 
is, there's no doubt that it's a critical part of a lot of the 
plans and that's really an extremely important environment that 
the FAA has recognized that it's in.
    Now, looking to the types of improvements that have been 
put in place, both administratively and by legislative 
direction, of acquisition reform, personnel reform, and the 
ATO, it's interesting because we have nearly 10 years since the 
first two of those initiatives were in place, and yet despite 
those reforms, systemic management issues, including inadequate 
management controls and oversight of human capital issues have 
continued to contribute to cost overruns, schedule delays, and 
performance shortfalls.
    Quickly in the personnel area, FAA has in fact used some of 
its extensive new authority and implemented another many 
reforms, but those are far from fully implemented, and notably, 
the organization is still working to implement tools that are 
absolutely essential to tracking cost and workforce data.
    In the acquisition area, similarly, reforms have been 
introduced, improvements in oversight of investment risk, but 
again, continued weaknesses impede FAA's ability to manage 
investments effectively and make sound decisions. It perhaps in 
some ways explains why despite billions of dollars in 
investments in both ongoing and completed ATC modernization 
projects, there's really very little expectation of 
improvements in operating efficiencies as a result of these 
modernization efforts in controlling or reducing overall costs.
    So clearly we haven't had a cost-conscious management of 
the capital budgeting. In fact, Administrator Blakey recently 
noted the core problem is that the operational outcome of 
capital investments hasn't been measured, the definition of 
success of these projects was not results-oriented, and in 
particular, the capital budget was not linked to future 
operating costs.
    All of that sets the stage for perhaps one of the most 
significant reforms for the organization and it's the 
establishment of an air traffic organization with the focusing 
on becoming a performance-based organization. It clearly holds 
promise for needed change and long overdue improvements in many 
areas. But while it has just gotten started really in February, 
it's just beginning to be staffed up, progress has been slow 
relative to some initial milestones, and moreover, the office 
faces extraordinary challenges in implementing reforms.
    Again the Administrator has recognized this, said that 
success of the ATO is absolutely crucial to the future of air 
travel, noting, this is a quote from one of your statements, we 
can't be more accountable, cost efficient, and customer service 
oriented unless we change our way of doing business.
    That brings us to the third point that I have in this best 
practices and global panel that we had, bringing together high 
performing organizations and honed in an what the critical 
success factors are for organizations transforming to be more 
performance oriented. The four characteristics are the clear 
mission, effective use of partnerships, a clear client focus, 
and strategic management of human capital.
    Our past work has shown, however, that while there has been 
real progress in defining the mission and even quantifying it 
and having performance goals, that employee behaviors have not 
reflected a strong commitment to the mission focus.
    In the strategic partnership area, while there have been 
efforts in this area, it has always been difficult and really 
time consuming to form effective partnerships.
    On the client focus, FAA has clearly recognized that it has 
failed to have a consistent and clear customer focus, again 
noting that the Administrator has said, we must be more 
customer-driven in all our activities.
    The strategic management of people is absolutely critical. 
They've begun to put in place a pay-for-performance system, and 
one of the more important early challenges will be to watch the 
new contract negotiations with air traffic controllers. Again, 
because of the bottom line of personnel costs, the Agency 
cannot control operational costs without taking a look at 
making more effective use and ensuring productivity of its 
people.
    In summary, then, while FAA has taken promising steps 
through the creation of the ATO, and is working to restructure 
itself, it still faces significant and long-standing systemic 
management challenges. The core of these challenges and the 
focus of continuing oversight and the focus of these activities 
already within FAA are assuring that the costs of its services 
are well understood, effectively tracking and documenting 
improvements in productivity of both its acquisition and 
control of work force, and better aligning capital decisions 
with measurable customer valued performance outcomes.
    That concludes my statement. We have a number of ongoing 
assignments in many of these areas for you and others and we 
hope we can be of support to the Congress in providing 
oversight of these critical reforms. Thank you.
    [The prepared statement of Ms. Hecker follows:]

                             GAO Highlights
Federal Aviation Administration

    Challenges for Transforming Into a High-Performing Organization

Why GAO Did This Study
    Over the last two decades, FAA has experienced difficulties meeting 
the demands of the aviation industry while also attempting to operate 
efficiently and effectively. Now, as air traffic returns to pre-9/11 
levels, concerns have again arisen as to how prepared FAA may be to 
meet increasing demands for capacity, safety, and efficiency.
    FAA's air traffic control (ATC) modernization efforts are designed 
to enhance the national airspace system through the acquisition of a 
vast network of radar, navigation, and communication systems. Nine 
years have passed since Congress provided FAA with personnel and 
acquisition reforms. However, projects continue to experience cost, 
schedule and performance problems. FAA's Air Traffic Organization (ATO) 
is its most current reform effort. Expectations are that the ATO will 
bring a performance management approach to ATC modernization.
    This statement focuses on three main questions: (1) What are some 
of the major challenges and demands that confront FAA? (2) What is the 
status of FAA's implementation of reforms and/or procedural relief that 
Congress provided? and (3) What are some of the critical success 
factors that will enable FAA to become a high-performing organization?
What GAO Recommends
    GAO is making no recommendations.
What GAO Found
    A forecasted increase in air traffic coupled with budgetary 
constraints will challenge FAA's ability to meet current and evolving 
operational needs. The commercial aviation industry is still recovering 
from financial losses exceeding $20 billion over the past 3 years. Many 
airlines cut their operating expenses, but FAA's budget continued to 
rise (see figure). However, transportation tax receipts into the 
Airport and Airways Trust Fund, from which FAA draws the majority of 
its budget, have fallen by $2.0 billion (nearly 20 percent) since 1999 
(in constant 2002 dollars). Cost-cutting and cost-control will need to 
be watchwords for FAA from this point forward.
    FAA has implemented many of the reforms authorized by Congress 9 
years ago, but achieved mixed results. Despite personnel and 
acquisition reforms the agency contended were critical to modernizing 
the Nation's air traffic control (ATC) system, systemic management 
issues continue to contribute to the cost overruns, schedule delays, 
and performance shortfalls. FAA's most current reform effort, the Air 
Traffic Organization (ATO)--a new performance-based organization 
mandated by AIR-21 that is operating the ATC system--is just now being 
put in place.
    To meet its new challenges, FAA must fundamentally transform itself 
into a high-performing organization. The key characteristics and 
capabilities of high-performing organizations fall into four themes: 
(1) a clear, well articulated, and compelling mission; (2) strategic 
use of partnerships; (3) focus on the needs of clients and customers; 
and (4) strategic management of people. FAA has taken some promising 
steps through its new ATO to restructure itself like high-performing 
organizations, but still faces significant and longstanding systemic 
management challenges. Even modest organizational and operational 
changes at FAA can be difficult and time consuming.



    Source: GAO analysis of data from the U.S. Office of Management and 
Budget and the DOT Bureau of Transportation Statistics.
                                 ______
                                 
Statement of JayEtta Z. Hecker, Director, Physical Infrastructure Team, 
                United States General Accounting Office
    Mr. Chairman and Members of the Subcommittee:

    We appreciate the opportunity to participate in today's hearing to 
discuss the challenges that FAA faces both in the immediate environment 
and over the next decade. We all recall that in the summer of 2000, the 
air traffic control system lacked the capacity to handle demand 
efficiently, and flight delays produced near-gridlock conditions at 
several U.S. airports. A combination of factors--the downturn in travel 
caused by the general economic slowdown, SARS, and of course the crises 
instigated by the events of 9/11--reduced traffic significantly and 
reduced pressure on the air traffic control system.
    Passenger traffic and airline operations are slowly returning to 
previous levels, making this an appropriate time to re-examine the 
status of nation's aviation leadership and infrastructure and its 
preparations for the future of air transport over the next decade. 
FAA's budget request for 2005 provides a starting point from which to 
review the agency's direction.
    My statement today focuses on three main questions: (1) What are 
some of the major challenges and demands that confront FAA? (2) What is 
the status of FAA's implementation of reforms and/or procedural relief 
that Congress provided? And (3) What are some of the critical success 
factors that will enable FAA to become a high-performing organization? 
Our statement is based on our past reports on ATC modernization and 
airline competition work--updated to reflect important milestones and 
recent interviews with key stakeholders in the aviation community, 
including several current and former FAA officials. We performed our 
work in accordance with generally accepted government auditing 
standards.
    In summary:
    Significant external and internal demands will challenge FAA's 
ability to meet current operational needs and require it to adapt to 
meet the evolving needs of the aviation industry. The commercial 
aviation industry is still recovering from financial losses exceeding 
$20 billion over the past 3 years. The downturn in travel has affected 
the Airport and Airways Trust Fund, from which FAA draws the majority 
of its budget. Transportation tax receipts into the Trust Fund fell by 
a total of $2.0 billion (19.6 percent) between 1999 and 2003. The 
overall condition of the Federal budget adds more pressure on FAA's 
budget. Taken together, cost-cutting and cost-control need to be 
watchwords for FAA from this point forward. To meet the demands of the 
aviation industry for safe, secure, and efficient operations and for 
additional capacity to meet forecasted growth, FAA will need to 
continue to improve its management controls. Traditionally, FAA's 
ability to operate efficiently and effectively--particularly regarding 
its air traffic control modernization projects--have been hampered by 
inadequate management of information technology and financial 
management controls.
    Nine years have passed since Congress provided FAA with the 
personnel and acquisition reforms the agency contended were critical to 
successfully modernizing the Nation's air traffic control (ATC) system. 
Despite these reforms, systemic management issues, including inadequate 
management controls and human capital issues continue to contribute to 
the cost overruns, schedule delays, and performance shortfalls that 
FAA's major ATC projects have consistently experienced in the past.

   Personnel reforms addressed three broad areas: (1) 
        compensation and performance management, (2) workforce 
        management, and (3) labor and employee relations. FAA has taken 
        steps to implement a number of reforms in each of the three 
        areas.\1\ For example, in the area of labor and employee 
        relations, FAA implemented initiatives establishing new 
        partnership forums for union and nonunion employees and a new 
        model work environment program.\2\ However, in February 2003, 
        we found that the agency had not fully incorporated elements 
        that are important to effective human capital management, 
        including data collection and analysis, performance goals and 
        measures, and establishing links between reform goals and 
        program goals.
---------------------------------------------------------------------------
    \1\ FAA's Modernization Efforts--Past, Present, and Future (GAO-04-
227T): October 30, 2003.
    \2\ Human Capital Management: FAA's Reform Effort Requires a More 
Strategic Approach, GAO-03-156, February 2003.

   As part of its procurement reforms, FAA introduced a new 
        acquisition management system in 1996 to reduce the time and 
        cost to deploy new products and services. To FAA's credit, our 
        work has shown improvements in the agency's oversight of 
        investment risk, tracking key information from the investment 
        selection process in a management information system, and 
        implementation of guidance for validating costs, benefits, and 
        risks. However, in estimating the costs of new projects, FAA 
        has not yet incorporated actual costs from developing related 
        systems. Moreover, the agency has not yet implemented processes 
        for evaluating projects after implementation in order to 
        identify lessons learned and improve the investment management 
        process. These weaknesses have impeded FAA's ability to manage 
        its investments effectively and make sound decisions about 
---------------------------------------------------------------------------
        continuing, modifying, or canceling projects.

   FAA's Air Traffic Organization (ATO) is one of its most 
        current reform effort. Under the leadership of a Chief 
        Operating Officer, the ATO is a new performance-based 
        organization that is operating the ATC system. While the ATO 
        holds promise for laying the foundation for much needed and 
        overdue organizational change, progress has been slow, and the 
        office still faces significant challenges to implementing 
        reform.

    To meet the challenges of the 21st century, FAA must fundamentally 
transform itself to become a high-performing organization. Our work has 
shown that high-performing organizations have adopted management 
controls, processes, practices, and systems that are consistent with 
prevailing best practices and contribute to concrete organizational 
results. Specifically, the key characteristics and capabilities of 
high-performing organizations fall into four themes (1) a clear, well 
articulated, and compelling mission; (2) strategic use of partnerships; 
(3) focus on the needs of clients and customers; and (4) strategic 
management of people. To facilitate the transformation of Federal 
agencies to high performing organizations, we have also recommended 
that agencies apply the Chief Operating Officer concept to provide 
long-term attention and focus on management issues and transformational 
change. FAA has begun implementing this concept. While FAA has taken 
some promising steps through its new ATO to restructure itself in a 
manner consistent with high-performing organizations, the agency still 
faces significant and longstanding systemic management challenges which 
must be overcome if it is to meet the demands and match the pace of 
ongoing changes in the aviation industry and transform itself into a 
world-class organization. Our work for more than two decades has shown 
that even modest organizational and operational changes at FAA can be 
difficult and time consuming, which underscores the difficult road 
ahead for FAA's leadership.
Significant External and Internal Demands Will Challenge FAA's Current 
        and Evolving Operations
    FAA faces significant demands that will challenge its ability to 
operate both in the current environment and in what it expects to 
encounter in the coming decade. With the industry still attempting to 
recover from the most tumultuous period in its history, FAA's funding 
is constrained by lowered Airports and Airways Trust Fund receipts and 
increased pressure on the contribution from the General Fund. To meet 
its current and future operational challenges, FAA is facing demands 
for greater efficiency and accountability. And it goes without saying 
that FAA must continue to meet demands for maintaining safety 
standards.
The U.S. Commercial Aviation Industry Is Still Recovering From 
        Unprecedented 
        Financial Chaos
    Since 2001, the U.S. airline industry has confronted financial 
losses of previously unseen proportions. Between 2001 and 2003, the 
airline industry reported losses in excess of $20 billion. A number of 
factors--including the economic slowdown, a shift in business travel 
buying behavior, and the aftermath of the September 11, 2001 terrorist 
attacks--contributed to these losses by reducing passenger and cargo 
volumes and depressing fares. The industry has reported smaller losses 
since 2001, but still may not generate net profits for 2004.
    To improve their financial position, many airlines cut costs by 
various means, notably by reducing labor expenditures and by decreasing 
capacity through cutting flight frequencies, using smaller aircraft, or 
eliminating service to some communities. According to data from the 
Bureau of Transportation Statistics, large U.S. air carriers cut their 
operating expenses by $7.8 billion from 2000 through 2002. The drop in 
total large air carrier operating expenses stands in sharp contrast to 
increases in FAA's budget. (See Figure 1.)



    Source: GAO analysis of data from the U.S. Office of Management and 
Budget and the DOT Bureau of Transportation Statistics.
Budgetary Pressure on FAA Will Increase Over Time
    FAA's budget--which has increased from $9 billion in 1998 to $14 
billion in 2004--will be under pressure for the foreseeable future. 
Over the past 10 years, FAA has received on average approximately 80 
percent of its annual funding from the Airports and Airways Trust Fund 
(Trust Fund), which derives its receipts from taxes and fees levied on 
airlines and passengers.\3\ The downturn in passenger travel, 
accompanied by decreases
---------------------------------------------------------------------------
    \3\ The Trust Fund was established by the Airport and Airway 
Revenue Act of 1970 (P.L. 91-258) to help fund the development of a 
nationwide airport and airway system and to fund FAA investments in air 
traffic control facilities. It provides all of the funding for the 
Airport Improvement Program, which provides grants for construction and 
safety projects at airports; the Facilities and Equipment account that 
funds technological improvements to the air traffic control system; and 
a Research, Engineering, and Development account, which supports 
aviation safety, mobility, and environmental goals. In Fiscal Year 
2002, the Trust Fund provided 79 percent of the funding for FAA 
Operations, which represented almost 50 percent of Trust Fund 
expenditures. The Trust Fund is supported by 10 dedicated excise taxes. 
In Fiscal Year 2002, the Trust Fund received about $10 billion in 
revenue from these taxes and interest. in average yields, has resulted 
in lowered receipts into the Trust Fund. On average, domestic yields 
have fallen since 2000, and are at their lowest levels since 1987. As a 
result, the total amount of transportation taxes that were remitted to 
the Trust Fund declined by $2.0 billion (19.6 percent) between Fiscal 
Years 1999 and 2003 (in 2002 dollars).
---------------------------------------------------------------------------
    Contributions from the General Fund have averaged about 20 percent 
of FAA's budget since 1994, but total Federal spending is under 
increasing stress because of growing budget deficits. According to the 
March 2004 analysis from the Congressional Budget Office, the Federal 
deficit under the President's fiscal 2005 budget will be $358 billion.
    Clearly, a major challenge for FAA both now and into the future 
will be cost-cutting and cost control.

   Operating costs represent over half of FAA's budget. For 
        2005, the Administration has requested $7.8 billion for 
        Operations. Because salaries and benefits make up 73 percent of 
        that total, restraining the growth in operations spending will 
        be extremely difficult, even with improvements in workforce 
        productivity.

   Capital expenses (i.e., the Facilities and Equipment 
        account) represent less than 20 percent of FAA's budget, but 
        virtually none of the projects requested for funding for 2005 
        is expected to generate any savings in the Operations account.

   Funds for airports' capital development have more than 
        doubled since 1998, rising from $1.6 billion (18.3 percent of 
        the total) to a requested $3.5 billion (25.1 percent of the 
        total) in 2005. Current funding levels are sufficient to cover 
        much of the estimated cost of planned capital development. 
        However, building new runways is not always a practicable way 
        to increase capacity. FAA must decide how to increase capacity 
        and service, as well as improve system efficiency and safety.
Financial Pressure Adds Premium to Improving Management Controls
    FAA's ability to operate efficiently and effectively--particularly 
regarding its air traffic control modernization projects--have been 
hampered over time by inadequate management of information technology 
and financial management controls. FAA's ATC modernization projects 
have consistently experienced cost, schedule, and performance problems 
that we and others have attributed to systemic management issues.
    The effect has been extraordinary cost growth and a persistent 
failure to deploy systems. FAA initially estimated that its ATC 
modernization efforts could be completed over 10 years at a cost of $12 
billion. Two decades and $35 billion later, FAA still has not completed 
key projects, and expects to need another $16 billion thru 2007, for a 
total cost of $51 billion. GAO has kept major FAA modernization systems 
on the watch list of high-risk Federal programs since 1995.
    We believe that, in the current budget environment, cost growth and 
schedule problems with ongoing modernization efforts can have serious 
negative consequences: postponed benefits, costly interim systems, 
other systems not being funded, or a reduction in the number of units 
purchased.
Forecasts of Future Aviation Activity Add Further Demands for Immediate 

        Improvements in FAA Operations
    FAA recognizes that future U.S. air transport activity will likely 
place significant demands on its ability to keep the system operating. 
FAA's most recent forecasts project significant increases in overall 
system activity by 2015. Along with increased movements of aircraft and 
passengers comes an increased workload for FAA, as well as demands for 
more efficient operations and/or an expansion of capacity. (See Table 
1).

 Table 1.--Forecasted Increase in Commercial Air Passengers, Operations,
                            and FAA Workload
------------------------------------------------------------------------
                                                                 Percent
                                            2003   2015 (est.)   change
------------------------------------------------------------------------
Industry activity     Enplanements          641.4       1057.6      65.0
 measure               (millions)
                     ---------------------------------------------------
                      Large carrier fleet   4,090        5,732      40.1
                     ---------------------------------------------------
                      Regional carrier      2,672        4,303      61.0
                       fleet
------------------------------------------------------------------------
FAA workload measure  Instrument             26.3         36.8      39.9
                       operations
                       (millions)
                     ---------------------------------------------------
                      Commercial             31.9         44.9      40.8
                       instrument flight
                       rule aircraft
                       handled at Air
                       Route Traffic
                       Control Centers
                       (millions)
------------------------------------------------------------------------
Source: FAA.

    Evidence of FAA's inability to meet system capacity demands already 
exists from the experience at Chicago O'Hare earlier this year. To 
reduce flight delays, FAA asked American Airlines and United Airlines 
to reduce their peak scheduled operations by 7.5 percent by June 10. As 
Secretary Mineta has already recognized, unless system capacity 
expands, the nation will face ``. . . more and more O'Hares as [the] 
economy continues to grow, and as new technology and competition bring 
even greater demand.'' It seems clear, however, that FAA's Operational 
Evolution Plan,\4\ a few additional runways, and updating more 
controller workstations with the Standard Terminal Automation 
Replacement System (STARS) \5\ are not the answer to the system's need 
for capacity. We cannot pave our way to the year 2025.
---------------------------------------------------------------------------
    \4\ The Operational Evolution Plan is an ongoing 10-year plan 
developed by the FAA to increase the capacity and efficiency of the 
national airspace system, while enhancing safety and security.
    \5\ STARS will replace controller workstations with new color 
displays, processors, and computer software at FAA and DOD terminal air 
traffic control facilities--within 5 to 50 nautical miles of an 
airport.
---------------------------------------------------------------------------
Despite Personnel and Acquisition Reforms, Systematic Management Issues 
        Continue to Impede ATC Modernization
    Over the years, systematic management issues, including inadequate 
management controls and human capital issues have contributed to the 
cost overruns, schedule delays, and performance shortfalls that FAA has 
consistently experienced in acquiring its major ATC modernization 
systems. Historically, some of the major factors impeding ATC 
acquisitions included an ineffective budget process and an inability to 
provide good cost and schedule estimates. A number of cultural problems 
including widely diffused responsibility and accountability, inadequate 
coordination, and poor contract management/oversight also slowed the 
progress of individual projects. Problems within FAA's acquisition and 
procurement processes included an inability to obligate and spend 
appropriate funds in a timely manner, a complicated procurement and 
acquisition cycle, failure to field systems in a timely fashion, and an 
inability to field current technology systems. FAA lacked a means to 
strategically analyze and control requirements, and good cost and 
schedule estimates were often not effectively developed and integrated 
into acquisition plans. To address many of these issues, Congress 
passed legislation in 1995 exempting FAA from many of the existing 
Federal personnel and procurement laws and regulations and directed the 
agency to develop and implement new acquisition and personnel systems. 
More recently, in 2000, the Congress and the administration together 
provided for a new oversight and management structure and a new air 
traffic organization to bring the benefits of performance management to 
ATC modernization.
FAA Has Taken Steps to Implement Human Capital Strategies, but Further 
        Efforts are Needed
    According to FAA, burdensome government-wide human capital rules 
impeded its ability to hire, train, and deploy personnel and thereby 
hampered its capacity to manage ATC modernization projects efficiently. 
In response to these concerns, Congress granted FAA broad exemptions 
from Federal personnel laws and directed the agency to develop and 
implement a new personnel management system.

   Human capital reforms: Following the human capital 
        exemptions granted by Congress in 1995, FAA initiated reforms 
        in three primary areas: compensation and performance 
        management, workforce management, and labor and employee 
        relations. In the area of compensation and performance 
        management, FAA introduced two initiatives--a new, more 
        flexible pay system in which compensation levels are set within 
        broad ranges, called pay bands, and a new performance 
        management system intended to improve employees' performance 
        through more frequent feedback with no summary rating. Both new 
        systems required an exemption from laws governing Federal 
        civilian personnel management found in title 5 of the United 
        States Code. In the area of workforce management, FAA 
        implemented a number of initiatives in 1996 through the 
        establishment of agency-wide flexibilities for hiring and 
        training employees. In the area of labor and employee 
        relations, FAA established partnership forums for union and 
        nonunion employees and a new model work environment program. 
        Other human capital initiatives have included restructuring 
        FAA's organizational culture and implementing means to provide 
        sustained leadership.

   Organizational culture: FAA issued an organizational culture 
        framework in 1997 that attempted to address some of the 
        vertical ``stovepipes'' that conflicted with the horizontal 
        structure of ATC acquisition team operations. A key piece of 
        this framework included the establishment of integrated product 
        teams in an attempt to improve collaboration among technical 
        experts and users. Moreover, integrated teams have not worked 
        as intended. For example, competing priorities between two key 
        organizations that were part of the Wide Area Augmentation 
        System's integrated team ultimately negated its effectiveness 
        and undermined its ability to meet the agency's goals for the 
        system.

   Sustained leadership: Until former Administrator Garvey 
        completed her 5-year term in 2002,\6\ FAA had been hampered by 
        a lack of sustained leadership at FAA was also problematic.\7\ 
        During the first 10 years of the ATC modernization effort, the 
        agency had seven different Administrators and Acting 
        Administrators, whose average tenure was less than 2 years. 
        Such frequent turnover at the top contributed to an agency 
        culture that focused on short-term initiatives, avoided 
        accountability, and resisted fundamental improvements to the 
        acquisition process.
---------------------------------------------------------------------------
    \6\ To provide FAA's ATC modernization efforts with needed 
direction and stability, the Congress established a 5-year term for the 
FAA Administrator in 1994. Former Administrator Garvey was the first to 
complete a term of this length in 2002.
    \7\ Congress established a 5-year term for the FAA Administrator in 
1994.

    Nine years have passed since the agency received broad exemptions 
from laws governing Federal civilian personnel management. While FAA 
has taken a number of steps since personnel reforms were implemented, 
it is not clear whether and to what extent these flexibilities have 
helped FAA to more effectively manage its workforce and achieve its 
mission. The agency did not initially define clear links between reform 
goals and program goals, making it difficult to fully assess the 
impacts of personnel reform. FAA has not yet fully implemented all of 
its human capital initiatives and continues to face a number of key 
challenges with regard to personnel issues. In our February 2003 
report, we found that the agency had not fully incorporated elements 
that are important to effective human capital management into its 
overall reform effort, including data collection and analysis and 
establishing concrete performance goals and measures. Currently, the 
agency is still working to implement tools to keep accurate cost and 
workforce data. The new Air Traffic Organization has announced plans 
for establishing cost accounting and labor distribution systems, but 
they are not yet in place. More comprehensive cost accounting systems 
and improved labor distribution systems are necessary to maximize 
workforce productivity and to plan for anticipated controller 
retirements. More broadly, taking a more strategic approach to reform 
will allow the agency to better evaluate the effects of human capital 
initiatives, which it sees as essential to its ATC modernization 
effort.
ATC Projects Continue to Experience Cost, Schedule, and Performance 
        Problems
    FAA established its current acquisition management system (AMS) in 
1996 following acquisition reform. The agency has reported taking steps 
to overseeing investment risk and capturing key information from the 
investment selection process in a management information system. It has 
also implemented guidance for validating costs, benefits, and risks.
    FAA has also taken steps to improve the management of its ATC 
modernization efforts. For example, it implemented an incremental, 
``build a little, test a little'' approach that improved its management 
by providing for mid-course corrections and thus helping FAA to avoid 
costly late-stage changes. In the area of management controls, FAA has 
(1) developed a blueprint for modernization (systems architecture) to 
manage the development of ATC systems; (2) established processes for 
selecting and controlling information technology investments, (3) 
introduced an integrated framework for improving software and system 
acquisition processes, and (4) improved its cost-estimating and cost-
accounting practices. Nonetheless, ATC modernization efforts continue 
to experience cost, schedule, and performance problems.
    FAA is not yet incorporating actual costs from related system 
development efforts in its processes for estimating the costs of new 
projects. Further, the agency has not yet fully implemented processes 
for evaluating projects after implementation in order to identify 
lessons learned and improve the investment management process. Reliable 
cost and schedule estimates are essential to addressing some of the 
ongoing problems with ATC acquisitions.
    In addition to controlling cost and schedule overruns, FAA needs to 
take concrete steps to identify and eliminate redundancies in the 
National Airspace System (NAS). FAA must review its long-term ATC 
modernization priorities to assess their relative importance and 
feasibility in light of current economic constraints, security 
requirements, and other issues. The ongoing challenges facing air 
traffic control modernization efforts led Congress and the 
administration to create a new oversight and management structure 
through the new Air Traffic Organization (ATO) in order to bring the 
benefits of performance management to ATC modernization.
Progress in Establishing the New Air Traffic Organization Has Been Slow
    The ATO was created by an executive order in 2000 to operate the 
air traffic control system. In the same year, Congress enacted 
legislation establishing the Air Traffic Services Subcommittee, a five-
member board to oversee the ATO and a chief operating officer to manage 
the organization. The ATO was designed to bring a performance 
management approach to ATC modernization efforts.
    The Air Traffic Services Subcommittee has made some initial efforts 
with regard to the establishment of the ATO. They have taken steps to 
focus on the structure of the ATC system, including reviewing and 
approving performance metrics for the ATO, establishing a budget, and 
approving three large procurements that FAA initiated.
    However, progress in establishing the organization has been slow, 
given that FAA received the mandate to establish the ATO nearly four 
years ago. FAA encountered difficulties finding a qualified candidate 
to take the position of chief operating officer, and did not fill the 
vacancy until June 2003. The final executive positions for the 
organization including the Vice-Presidents of Safety and Communications 
were just filled last month.
    Key tasks for the ATO will include organizational restructuring, 
implementing effective financial management and cost-accounting 
systems, evaluating day-to-day business practices, and fostering growth 
with efficiency. Rapidly changing technology, limited financial 
resources, and the critical importance of meeting client needs will 
present significant challenges in order for the ATO to truly evolve 
into a high performing organization.
FAA's Future Success Hinges on Several Critical Success Factors
    To successfully meet the challenges of the 21st century, FAA must 
fundamentally transform its people, processes, technology, and 
environment to build a high-performing organization. Our work has shown 
that high-performing organizations have adopted management controls, 
processes, practices, and systems that are consistent with prevailing 
best practices and contribute to concrete organizational results. 
Specifically, the key characteristics and capabilities of high-
performing organizations fall into four themes as follows:

   A clear, well-articulated, and compelling mission. High-
        performing organizations have a clear, well-articulated, and 
        compelling mission, strategic goals to achieve it and a 
        performance management system that aligns with these goals to 
        show employees how their performance can contribute to overall 
        organizational results. FAA has taken its first steps toward 
        creating a performance management system by aligning its goals 
        and budgetary resources through its Flight Plan--blueprint for 
        action for Fiscal Year 2004 through 2008--and its Fiscal Year 
        2005 budget submission. In addition, the new ATO has published 
        both its vision and mission statement.

    Our past work has found that FAA's ability to acquire new ATC 
        modernization systems has been hampered by its organizational 
        culture, including employee behaviors that did not reflect a 
        strong commitment to mission focus. Given the central role that 
        FAA's employees will play in achieving these performance goals 
        and overall agency results, it is critical for them to both 
        embrace and implement the agency's mission in the course of 
        their daily work. In addition, our work has found regularly 
        communicating a clear and consistent message about the 
        importance of fulfilling the organization's mission helps 
        engage employees, clients, customers, partners, and other 
        stakeholders in achieving higher performance.

   Strategic use of partnerships. Since the Federal Government 
        is increasingly reliant on partners to achieve its outcomes, 
        becoming a high-performing organization requires that Federal 
        agencies effectively manage relationships with other 
        organizations outside of their direct control. FAA is currently 
        working to forge strategic partnerships with its external 
        customers in a number of ways. For example, the agency recently 
        announced a program to create ``express lanes in the sky'' to 
        reduce air traffic delays this spring and summer and is in the 
        early stages of working with selected Federal partners to 
        develop a long-term plan for the national aerospace system 
        (2025) and to leverage Federal research funds to conduct 
        mutually beneficial research. In addition, FAA has ongoing 
        partnerships with the aviation community to assess and address 
        flight safety issues (e.g., development of technology to 
        prevent fuel tank explosions and to reduce the potential for 
        aircraft wiring problems through development of a ``smart 
        circuit breaker'').

    However, our past work has shown that forging strategic 
        partnerships with organizations outside of FAA can be difficult 
        and time-consuming. For example, FAA's efforts to establish 
        voluntary data sharing agreements with airlines--Flight 
        Operational Quality Assurance Program (FOQA)--spanned more than 
        a decade, due in part, to tremendous resistance from aviation 
        community stakeholders who formed a rare alliance to oppose 
        several of FAA's proposals. In addition, when attempting to 
        increase airport capacity (e.g., new runways), FAA and airport 
        operators have frequently faced opposition from the residents 
        of surrounding communities and environmental groups. Residents 
        are often concerned about the potential for increases in 
        airport noise, air pollutant emissions, and traffic congestion.

   Focus on needs of clients and customers. Serving the needs 
        of clients and customers involves identifying their needs, 
        striving to meet them, measuring performance, and publicly 
        reporting on progress to help assure appropriate transparency 
        and accountability. To better serve the needs of its clients 
        and customers, FAA published Flight Plan, which provides a 
        vehicle for identifying needs, measuring performance, and 
        publicly reporting progress. Flight Plan includes performance 
        goals in the areas of safety, greater capacity, international 
        leadership, and organizational excellence, which are linked to 
        the agency's budget and progress monitored through a Web-based 
        tracking system.

    However, over the years, FAA's efforts to meet client and customer 
        needs have not always been successful, and some have had a long 
        lasting negative impact. FAA has had particular difficulty 
        fielding new ATC modernization systems within cost, schedule 
        and performance goals to meet the needs of the aviation 
        community. Agency promises to deliver new capabilities to 
        airlines via improvements to the ATC system led some airlines 
        to install expensive equipment in their aircraft to position 
        themselves to benefit from expected FAA services; however, when 
        the agency failed to deliver on those promises, participating 
        air carriers were left with equipment that they could not use--
        no return on their investment. In addition, shifting agency 
        priorities have made it difficult for the aviation industry to 
        anticipate future requirements and plan for them in a cost-
        effective manner (e.g., providing air carriers with adequate 
        lead time to purchase new equipment and airframe manufacturers 
        with lead time to incorporate changes into new commercial 
        airplane designs). Furthermore, the absence of a full-
        functioning cost-accounting system makes it difficult for FAA 
        to assess the actual cost of providing services to users of the 
        National Airspace System.

   Strategic management of people. Most high-performing 
        organizations have strong, charismatic, visionary, and 
        sustained leadership, the capability to identify what skills 
        and competencies the employees and the organization need, and 
        other key characteristics including effective recruiting, 
        comprehensive training and development, retention of high-
        performing employees, and a streamlined hiring process. Toward 
        this end, FAA has hired a Chief Operating Officer (COO) to 
        stand up its new ATO. Our work on high-performing organizations 
        has recommended use of the COO concept to facilitate 
        transformational change in Federal agencies and to provide 
        long-term attention and focus on management issues. 
        Furthermore, FAA has placed 78 percent of its workforce under a 
        pay-for-performance system \8\ and implemented a training 
        approach for its acquisition workforce which reflects four of 
        the six elements used by leading organizations to deliver 
        training effectively.\9\ However, it is too soon to know the 
        extent to which these elements of effective training will be 
        incorporated into the new ATO. Finally, FAA is currently 
        conducting an Activity Value Analysis, a bottoms-up effort to 
        establish a baseline of ATO headquarters activities and their 
        value to stakeholders. The results of this analysis are 
        intended to help FAA's leadership target cost-cutting and cost 
        savings efforts.
---------------------------------------------------------------------------
    \8\ Inspector General, U.S. Department of Transportation, Key 
Issues for the Federal Aviation Administration's FY 2005 Budget, CC-
2004-038 (April 22, 2004).
    \9\ To deliver training effectively, leading organizations' 
training approaches generally include six elements: (1) prioritize 
initiatives most important to the agency; (2) demonstrate top-level 
commitment and provide resources; (3) identify those who need training 
on specific initiatives and set training requirements; (4) tailor 
training to meet the needs of the workforce; (5) track training to 
ensure it reaches the right people; and (6) measure effectiveness of 
training. GAO found that FAA's acquisition organization has highly 
developed processes for elements 1, 2, 4, and 5.

    Despite FAA's efforts to date, our past work has found the agency's 
strategic management of human capital lacking. For example, 
organizational culture issues at FAA (e.g., its vertical, stovepiped 
structure) have discouraged collaboration among technical experts and 
users of the ATC system and contributed to the agency's inability to 
deliver new ATC systems within cost, schedule and performance goals. 
One of the most significant early challenges facing the ATO will be 
negotiating a new contract with air traffic controllers, which is due 
to expire in September 2005. The DOT IG has repeatedly noted that 
despite the importance of controllers' jobs, that FAA simply cannot 
sustain the continued salary cost growth for this workforce, which rose 
from an average salary of $72,000 in 1998 to $106,000 in 2003. Given 
the inextricable link between FAA's operating costs and its controller 
workforce, striking an acceptable balance between controllers' contract 
demands and controlling spiraling operating costs will be a strong 
determinant of the ATO's credibility both within FAA and across the 
aviation industry.
    While FAA has taken some promising steps through its new ATO to 
restructure itself in a manner consistent with high-performing 
organizations, the agency still faces significant and longstanding 
systemic management challenges. These challenges must be overcome if 
FAA is to keep pace with ongoing changes in the aviation industry and 
transform itself into a world-class organization. Our work for more 
than two decades has shown that even modest organizational, 
operational, and technological changes at FAA can be difficult and time 
consuming, all of which underscores the difficult road ahead for FAA 
and its new ATO.
    This concludes my statement. I would be pleased to respond to any 
questions that you or other Members of the Subcommittee may have at 
this time.

    Senator Lott. Thank you, Ms. Hecker. Your testimony was 
very interesting. I look forward to having a chance to ask you 
some questions, but in order to accommodate my colleagues, I'll 
save my questions for a little later. Senator Wyden, would you 
like to go now?

                 STATEMENT OF HON. RON WYDEN, 
                    U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you for your thoughtfulness, Chairman 
Lott, and for holding this hearing. Ms. Blakey, as you know, we 
have this huge problem in the West with respect to fires. We're 
hundreds of millions of dollars short in terms of the Forest 
Service budget for reducing the acreage that's at risk. We 
already have had fires there. We need to know what you're doing 
now with the Forest Service in cooperation to deal with this 
air tanker situation. As you know, a lot of the tankers the 
Forest Service relies on are not airworthy. The agency is 
scrambling to find alternative plans, and I would like you to 
start by telling us exactly what the plan is that you're 
pursuing with the Forest Service to turn this around.
    Ms. Blakey. Well, I'm very pleased to respond, Senator 
Wyden, because I do understand that this is a significant 
problem from the standpoint of the upcoming season as well as a 
long-term problem that we've been aware of for some time. I 
must start by testimony on this though by pointing out that the 
FAA has no public authority over public use aircraft.
    Senator Wyden. We understand that. What we need to know is 
what you're doing though with the Forest Service cooperatively 
to turn this situation around.
    Ms. Blakey. Well, with the understanding that the Forest 
Service, of course, has the lead on this, and we're doing our 
best to help them from a technical standpoint, I would say 
this, that we have pulled together a highly experienced 
technical group from our aviation, regulation, and 
certification staff. We have sat down with the Forest Service, 
looked at the history to the best degree we know it of these 
aircraft, and I would stress that because what you're really up 
against here is former military aircraft that were close to the 
end of their useful life when they were mustered out of the 
military, and at that point it was extremely difficult to judge 
issues of fatigue, issues of corrosion, what may have been the 
kind of flight history that they have had.
    But nevertheless, at that point, of course, they came into 
the fire fighting fleet, and in many cases have served 
extremely well. But as I say, there is a background lack of 
data which hampers all of us. Recently we sat down, in fact, in 
the last couple of days, with one of the contractors who is 
providing service to the Forest Service and learned that they 
have a system where they're able by instrumentation on board 
these aircraft as well as further mining data, in this case 
from the Navy, to try to get a more accurate picture of what 
the upcoming maintenance, what the upcoming repair requirements 
may be from the standpoint of these aircraft. So there are some 
measures that we are looking into that we can take beyond 
providing technical advice and as much skilled review with the 
Forest Service as we can. Ultimately it will be up to the 
Forest Service to determine the resources that are necessary.
    Senator Wyden. Would you assume someone who would work with 
Senator Smith and I on an ongoing basis until we turn this 
situation around? He and I are very concerned about it. We're 
going to be asking Chairman Lott's staff if we can have a field 
hearing on it. Would you assign someone who can work with us 
and report to us even weekly now until we get this turned 
around?
    Ms. Blakey. We have some dedicated people already and I'd 
be delighted to have one of our senior people work with you, 
absolutely.
    Senator Wyden. Very good. Question for you, Mr. Mead, and I 
appreciate the Chairman's thoughtfulness. You know, before the 
tragedy of 9/11, we had these huge service problems and this 
whole question of people being bumped and overbooking and the 
like. I'm hearing constantly again about these kinds of 
problems. Have there been improvements made that you know of to 
deal with these kinds of problems when people are being bumped?
    I just had a constituent tell me about this horror where 
they basically spent days floating around the countryside 
trying to get a flight when they were bumped without any 
notice, a large family.
    Mr. Mead. Our report recommended the Department of 
Transportation issue some regulations on this bumping area, and 
just to summarize what some of the problems we found----
    Senator Wyden. Have they done that?
    Mr. Mead. No, they have not.
    Senator Wyden. So today there are no additional rights. If 
you get bumped this summer, there are no additional rights and 
the Department of Transportation did not follow your 
recommendations with respect to bumping?
    Mr. Mead. They did not implement those recommendations. I 
cannot say what individuals airlines may have done on their 
own. We'd have to go out and do another follow up review on 
that. You know, one of the problems was, if you are a voluntary 
bumpee, you get more money or more compensation than if you end 
up being, if you hold out and you ultimately become an 
involuntary bumpee.
    Another issue, which was a case, was I think three or four 
airlines, was where the airlines would decide their bumping 
process would--customers that were paying, for example, full 
coach or were paying business would not be bumped or they would 
not follow the order of check-in, which is, reverse order of 
check-in is the normal process for selecting bumpees. So, yes, 
I can--the Department--we had asked the Department to issue 
some regulations and they didn't.
    Senator Wyden. My time is about up. One last question if I 
might, Ms. Blakey. Repair station oversight, that was 
identified as a problem by Mr. Mead in the past. It's an 
outsourcing issue. We talk about jobs being outsourced. Some of 
this stuff is being done by foreign companies, foreign 
governments as well. You all are late with respect to the 
report that was required earlier by the legislation. When are 
we going to be getting that?
    Ms. Blakey. I'll have to check and make sure that we have 
it on the way. What I am proud to tell you is that we've issued 
the regulations, a revised set of regulations having to do with 
repair stations in January in fact, which really does a 
comprehensive overhaul of the way we are exercising oversight 
in this area.
    We're also reorganizing the way we have structured our 
staff to more closely match where the actual work is now being 
done, because as you correctly note, much of it has moved from 
the airlines' own maintenance shops to the floor of repair 
stations. Much of it in this country, I would point out, there 
has been tremendous growth in terms of repair stations here in 
the U.S., but we are exercising greater oversight here and 
abroad as a result of these new regulations.
    Senator Wyden. My time is up, but if you would, I do think 
that seeing the report that documents how the Agency is 
responding to the criticisms that Mr. Mead talked about is 
important. It sounds like what you've done is constructive, and 
we appreciate that, but we really do need to have the report 
that describes how the Agency is responding to what Mr. Mead 
said earlier. Thank you, Mr. Chairman.
    Senator Lott. Thank you, Senator Wyden. Senator Burns.

                STATEMENT OF HON. CONRAD BURNS, 
                   U.S. SENATOR FROM MONTANA

    Senator Burns. Thank you, Mr. Chairman. I've just got a 
couple questions. You know, they always define public service 
as trying to accommodate, and I'm getting the feeling here with 
these tankers that we're not trying to accommodate to take care 
to relieve this problem. Can you tell me when you--when all 
airplanes that fly in this country other than military you 
don't have any supervision or jurisdiction over? Is that what 
you're telling me?
    Ms. Blakey. No, not at all. In fact, we have jurisdiction 
over most aircraft that fly in this country, certainly in the 
civil airspace, civil aviation, absolutely. What we do not 
have, and this is the case by statute, we do not have authority 
over public use aircraft, those that are operated by other 
entities of government.
    Now, having said that, Senator Burns, I would say this, 
that in many, many cases we are asked by agencies, and this is 
the case with the Forest Service as well, to review the 
aircraft that they acquire into their fleets at the point they 
do so and we will review them and issue a type certificate, 
meaning that we determine as best we can, given the fact that 
these do not have a history that we know from the point of 
design and production all the way through, but we determine as 
best we can what the operational characteristics of those 
aircraft should be, flight hours, ability or not to carry 
cargo, ability or not to carry passengers, all sorts of 
operational issues. And we will issue a type certificate at 
that point which gives at least the government entity 
guidelines if you will, but from that point on, the operation 
of those, the maintenance of those, it is the authority for the 
public government agency, not the FAA.
    Senator Burns. Well, I know when you go down this path, 
that'd be fine, but these airplanes are not owned by the Forest 
Service, the Forest Service do not pay the pilots. I guess I 
don't, I just don't understand where that line is one way or 
another. I'm just amazed that we can't get together and certify 
these airplanes to be airworthy. I think we've got a fire 
season that's coming up that's going to be a dandy and I think 
we need airplanes. Now, I don't think we need unsafe airplanes. 
That's not to say at any cost. But if we knew what the problems 
were in these airplanes, we could fix them before we get right 
into the heart of the fire service. That's what I'm saying. 
Somebody has to be calling somebody and making some 
accommodations for the public here and public service and 
that's kind of what I'm--I'm really concerned about this, and I 
think we're trying to push something off we don't want anything 
to do about and we're doing it with a definition of under a 
statute that's very fuzzy at best.
    Ms. Blakey. Well----
    Senator Burns. Am I wrong on that?
    Ms. Blakey. I think the statute is clear in terms of 
authority. The--at this point, as I say, the FAA, and this has 
been true since the beginning of the FAA's existence has not 
had authority over other government agencies' aircraft.
    That said, we have set up a group of our staff who are very 
expert in issues of fatigue and corrosion to work with the 
Forest Service on this particular problem, and I think they are 
making progress together. There was a big meeting this morning, 
in fact, up here with some other colleagues of yours on the 
Hill with the idea of trying to step through the specifics on 
this, and I'd be happy to share with you a briefing on this 
whenever that works for you.
    Senator Burns. Well, I think it's going to have to happen 
one way or the other. Now, I have another question. Ever since 
I've been in the Senate, which is 15 years, we're still looking 
for a radar system between Bozeman, Butte, and Helena.
    Senator Lott. There's not one big enough, I guess.
    Senator Burns. Well, I tell you what, we still have a dark 
spot out there, and I don't know how may times we got to 
request it, and I don't know how many other places in the 
country is like that, but I don't like that situation too much 
because I fly through that zone a little bit.
    Ms. Blakey. All right. I made a note, I took an assignment 
here. Let me get back to you on the specifics.
    Senator Burns. I would certainly appreciate that, because 
we've been trying to get that out there. There's just a dark 
spot in that little triangle right there and there shouldn't 
be, and we've been trying to get that all fixed up. Thank you, 
Mr. Chairman.
    Senator Lott. Well, thank you, Senator Burns, and having 
flown with Senator Burns in that area, I can say it is scary 
and we need to do something about it and I don't intend to do 
it again until we get some coverage.
    Senator Burns. Actually, you know what he's complaining 
about, we had to fly rather low for about an hour and a half 
and he didn't like to look at water tanks or read brands.
    Senator Lott. He landed me in a cow pasture, Madam 
Administrator. I'm sure he broke every rule in the book. I 
started to call you right then.
    Senator Burns. That's why they have cow pastures.
    Senator Lott. In all seriousness, several years ago we did 
try to get the Forest Service to try to take a look at their 
fleet and upgrade and modernize the planes that they have for 
fighting fires and to go with affordable planes designed 
specifically for fire fighting, and we could not get them to do 
that, and that was several years ago, and now obviously there's 
a real problem with fatigue and corrosion. It's a serious one. 
I think the Forest Service is going to have to face up to 
getting some aircraft for this purpose, because they could do a 
lot more good, a lot more efficiency and more affordable, I 
think.
    Let me ask you, Madam Administrator, a couple of questions 
that I know we need to get on the record here. FAA is 
requesting nearly $500 million less than the authorized levels 
for the facilities and equipment account for Fiscal Year 2005 
and these authorizations were based on language FAA submitted 
to us for the multi-year reauthorization bill. The cuts have 
caused concern at FAA. Modernization is seriously underfunded 
and further delays to the schedule that many of the projects 
we're counting on, and they could certainly have delays as a 
result.
    Can you justify this decrease in funding for projects and 
explain how you're coping with it? Now, I know how it works. 
OMB, you go up through the chain of command and you make your 
request and you get a number back at some point. I can imagine 
you're not happy with this, but it's a fact of life, $500 
million for your agency is a significant blow. What do you have 
to say about that?
    Ms. Blakey. The capital account, what we call F&E, is one 
that has a number of different programs in it, some of which 
are fairly immediate in terms of modernization, others of which 
are longer term, further out on the horizon. What I can assure 
you is that the modernization programs, our major capital 
programs, are proceeding. This is the terminal modernization, 
the deployment of STARS, the change that we need to make in the 
host system, the brains if you will, for air traffic control, 
it's called ERAM, and again, that is on track, and the early 
stages of this, I'm happy to report, are also on schedule. So 
those are funded and we are moving ahead with this.
    We also have a number of other critical programs that we 
are moving very smartly ahead with and I think will show real 
results in the near term. There are several programs that we 
have essentially deferred at this point. They are what I would 
characterize as the further-out programs, much more R&D is the 
way I believe they should be looked at.
    But this is not a function solely of funding. It is also a 
function of the maturity of the technology involved. One of 
them is called LAAS, Local Area Augmentation System, and this 
goes to the issue of providing a very precise signal to 
aircraft to achieve ideally 2 and 3 instrument landings. Right 
now we are finding that the actual ability to have a verified 
signal that has real integrity has been elusive. We have not 
been able to achieve that yet. These are going where no one's 
gone before. I would really stress that some of this 
technology, it's not as though this is off the shelf. It is 
something that has to be developed and smart, scientific brains 
are working it.
    Another program we've deferred is called----
    Senator Lott. Now, you did say you were deferring this LAAS 
program?
    Ms. Blakey. We are, we are, and that is a very substantial 
program. It was projected to cost as much as $900 million over 
the life span of the development.
    Senator Lott. But you could--you'd be replacing as many as 
8 to 10 instrument landing systems with one LAAS, so while it 
costs $1 million per system, over the long run it would save 
you a lot of money and they're a lot more efficient. Isn't that 
correct? Why was the decision made not to fund this project?
    Ms. Blakey. Well, that is what it is intended to do, we 
would like for it to do, but that does not mean it is what it 
can do at this point, and we are moving ahead with research in 
this area, but we do not feel that there is any justification 
at this stage for a full-scale deployment in this area because 
I say, it cannot----
    Senator Lott. So it's not a cost factor, you're saying? 
You're saying that you're not convinced the system is yet ready 
for full acquisition and deployment?
    Ms. Blakey. I'm confident the system is not ready for full 
deployment, in fact. Yes, that's correct. And we have several 
others. I mean, I could tick through several that we have 
essentially at this point put on hold. One of them has to do 
with the fact that we're not running out of spectrum as quickly 
as we thought we were. That's a next generation communications 
system, another controller pilot data link, essentially e-mail 
between the cockpit and the ground, which in the long run 
certainly will reduce the amount of voice transmission between 
air traffic controllers and pilots.
    But again, we just completed a pilot study in Miami. There 
are factors involved with that that meant it was going to be a 
very expensive system if we pursued the system that we piloted 
there. It's time to step back, take a look at what we can do, 
learn from that, and then go forward with one that will be 
frankly more capable and more cost efficient.
    Senator Lott. Madam Administrator, I am concerned about 
this summer. You've all testified that we expect traffic to be 
back up to 2000 levels. There are a lot of explanations for the 
delays. I guess it begins when you get to the airport. TSA 
obviously is having problems. There are articles today in the 
news media, TSA to shift screeners to ease airport lines. Maybe 
that'll help. I know of instances where people have gotten to 
the airport in plenty of time to wait in line, but by the time 
they waited in line, 30, 40, 50 minutes, they get up to the 
counter and it's sorry, it's too late to screen your baggage, 
you don't get to go on.
    So the problem begins with TSA and we're going to be 
aggressively pursuing them. I still think TSA is not employing 
common sense with their screeners and we'll have to get into 
that. But the delays at the airports is a whole other thing. 
This is ridiculous, average delay minutes 59 minutes, 51 
minutes, 53 minutes. What in the world is going on? I think a 
lot of it is attitudinal. I don't think that the airlines, the 
workers, the air traffic controllers, any of them have a 
mentality, we've got a job to do here, we need to do it 
efficiently, on time, and with a lot of energy and enthusiasm. 
But what are we going to do about the increased traffic and the 
delays, and particularly at Dulles Airport I understand they'll 
have three runways closed for construction throughout the 
summer at the same time the airport expected an additional 300 
flights a day. How do you make that work?
    Ms. Blakey. It's going to be challenging. I think that's 
the honest truth. Although we have done everything we know in 
terms of both assigning sufficient controllers to Dulles as 
well as the consolidated Potomac TRACON, which was put in place 
and funded such that it is now operational, and this has 
allowed us to redesign the airspace around Dulles to have a 
much more efficient system, if you will, in the upper airspace.
    So these are things that certainly are handling the needs 
at Dulles now, and we are cautiously optimistic about Dulles 
this summer as these operations come in. I will tell you that 
we're watching it very carefully, there's no question about it.
    Senator Lott. Well, maybe Dulles is unique, but where is 
the problem? I mean, you say, like at Chicago and Atlanta there 
are just too many flights, too many people for the system. But 
I cannot understand how the airlines or anybody feels like 
they're gaining when they make everybody fly mad, you know. 
It's just a miserable experience. And I've warned the airlines 
and everybody in this industry, you got to be careful because 
this is the one industry we all have to endure as Members of 
Congress, and if we get mad, if our constituents get mad 
enough, we will do some things that won't be very pretty.
    Now, let me ask you, Ms. Hecker, a couple of questions if 
my colleagues will bear with me. Your testimony I found very 
interesting. You're saying employee performance has not shown 
support for the changes or something to that effect that you 
must be customer driven. Exactly who were you referring to? Is 
it air traffic control? When you say employee performance has 
not shown support, who are you talking about?
    Ms. Hecker. Well, controllers in particular and their 
performance and their linkage to the actual performance of the 
system is really just a new undertaking at the Agency, so the 
idea of what kind of linkage there is of individual 
controllers, the information is limited. It has been limited in 
part by contract and that's one of the reasons that the new 
contract will be so important to enable the Agency to proceed 
to get the kind of measurement of employee performance and 
reward performance in a more comprehensive and systematic way 
than they've been able to within the constraints of the current 
contract.
    Senator Lott. Are you saying there's no control of the 
controllers? Is that what I thought I heard you saying?
    Ms. Hecker. There is no systematic measurement of their 
contribution to the goals. There has been a new initiative to 
begin to try to document their----
    Senator Lott. Are you saying there's not a clear commitment 
to the new goals that are being set? Is that what you're 
saying?
    Ms. Hecker. That the data isn't there of what kind of 
contribution is made and that that is just a new initiative to 
improve the data, but part of it is also a constraint in the 
contract. There's a new provision for certain increments of 
extra bonus. I think Ken has done work that documents it's 
about two-tenths of 1 percent of the overall salary, but 4.9 
percent increase is given automatically. So the linkage of pay 
to performance is extremely weak.
    Senator Lott. Madam Administrator, I did think that you had 
a significant percentage of your pay that was linked to 
performance. Now, isn't that correct?
    Ms. Blakey. We have just moved in that direction, Senator 
Lott, and I would point out that there are very few places in 
government where this is the case, so in fact we're really the 
leading edge on this, and we did just negotiate a new extension 
of our contract with air traffic controllers, which in fact 
does link a percentage of their pay to four key metrics-driven 
performance measures so you can see whether you hit the numbers 
or not.
    So I would suggest that we in fact are moving out on this. 
Seventy-five percent of the FAA's workforce is no under a pay-
for-performance system. I will grant you the percentages are 
small, but again, in government, we're doing something that 
really very few others are even attempting.
    Senator Lott. That's good. Mr. Mead, your testimony is 
always interesting, but let me ask you the same question I 
asked the Administrator, only just more direct. Why the big 
increase in delays? I know that there's a multiple answer. What 
are they?
    Mr. Mead. One big one is the increased use of regional 
jets. They're much more cost-effective----
    Senator Lott. They're clogging the system up just by 
numbers?
    Mr. Mead. I don't want to be negative on the use of 
regional jets. I mean, they definitely serve their purpose. But 
yes, because they carry fewer passengers and the growth has 
been huge, as I mentioned, 180 percent growth in just 4 years, 
and a lot of the larger air frames that can carry more people 
are off parked in the desert. That's one reason.
    And another--I noticed you were looking at the charts, it's 
on page 4 of my testimony, the one in yellow--you know, I 
mentioned that FAA needs to get out its capacity benchmarks and 
they need to get them out soon. Those basically say how many 
flights an airport can handle at peak hours in good and bad 
weather conditions. Now somebody ought to be looking at those 
capacity benchmarks and comparing them to the projected airline 
schedules this summer, and if they're totally out of kilter, I 
don't mean just by a little bit, but materially out of kilter, 
I think that the government and the airlines ought to sit down 
and have a face-to-face.
    Senator Lott. Madam Administrator, are you doing that?
    Ms. Blakey. I would point out that the benchmarks for 
airports are publicly available right now. The study that the 
Inspector General is referring to is one that we will be 
bringing out in June so that--and it will be a much expanded 
study. In fact, it gives a good bit more information than 
before.
    Senator Lott. He did suggest that you have a sit-down, 
face-to-face meeting on this. Sounds like a good idea to me.
    Ms. Blakey. Well, we have, as you know, very actively 
worked with the airlines in terms of Chicago O'Hare, which is 
where we are having truly excessive delays, 90 minutes or more 
in may cases.
    I would point out that a lot of the weather delays we have, 
of course, are due to weather, and we do need to see that with 
the convective weather season coming this spring and summer, 
some of this is inevitable regardless of the overall capacity.
    The other thing I would say is this, that while we do 
believe that there are situations in which we have to step in, 
we'd like to see the market work. This is a market-based 
system, and so therefore, for the government to reach in 
wherever we're experiencing delays is something that we want to 
do very, very carefully.
    Mr. Mead. Mr. Chairman, may I add something?
    Senator Lott. Yes, Mr. Mead, go ahead, because I 
interrupted you to get the Administrator's response.
    Mr. Mead. I didn't think you interrupted me. Let's go deja-
vu back to the summer of 2000. There was an extreme reluctance, 
extreme, to get into the issue of airline scheduling, so we had 
situations all across the country. Chicago O'Hare was just one 
of several poster children where airlines were scheduling 
routinely more flights to depart at a given time of day than 
could physically be handled at the airport and FAA knew it. But 
there was this reluctance because of the system of deregulation 
we have to interfere.
    Now, this time around, the Administration has showed a 
willingness, at least at O'Hare, to intervene, and I think in 
the short term, since you can't construct a runway overnight, 
the new technologies aren't going to be in place, that we have 
to do something.
    Senator Lott. Well, let me respond to your comment and 
maybe the Administrator will hear me. I understand about 
letting the market work, but we know there's a problem coming. 
And we also know, and I've got a proven record of trying to be 
supportive of the airlines and the aviation industry, they are 
not able to control themselves. They cannot help themselves 
until we make it very clear to them you're creating a mess here 
that we're going to have answer for, I don't think they're 
going to deal with it, and I think somebody's going to have to 
be very aggressive in trying to get their attention. I'll try 
to do it, but I would think that the government is going to 
have to step in, not make them do this or that, but make them 
understand we cannot have this kind of chaos and delay, 90 
minute delays, that's ridiculous.
    This is the United States of America 2004 and they're 
creating a guaranteed mess and I'm not going to take the blame 
for it. And so I'll go on the record right now, say it's 
coming, let's do something about it. Airlines do it, airports 
do it, FAA do it. Somebody's got to do it because we've got a 
problem coming here.
    Ms. Blakey. Senator Lott, may I point out one thing, 
because this really is a credit to this committee. You all have 
given us a new tool with Vision 100 and that is the ability to 
convene the carriers on a spot basis looking at a particular 
airport and set some targets on schedule that we would like to 
see them step up to if we really run into difficulties, so that 
is a new tool.
    Senator Lott. I hope you will. It's just human nature. I 
found, even in the Senate, if you can get Senators of different 
persuasion to sit down it's amazing how many problems are 
resolved or go away. It works in every walk of life. Senator 
Rockefeller.

           STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 
                U.S. SENATOR FROM WEST VIRGINIA

    Senator Rockefeller. Thank you, Mr. Chairman, and I want to 
follow on line with your questioning, because I agreed with 
everything that you said. I'm actually very interested in your 
phrase, Ms. Blakey, it is after all a free enterprise system, 
and therefore it's not the place of the government, with the 
exception of O'Hare in a later part, to enter in. How does that 
balance with the needs of the public?
    In other words, you have something called eminent domain. 
People have to get from Washington to Clarksburg, West Virginia 
and somebody wants to build an interstate, the government 
intervenes and has eminent domain and takes people's property, 
and that's because there's a higher order here.
    And I think what we've all decided is that aviation is more 
a part of the future than roads in terms of location of 
business and international traffic and all the rest of it. So 
what is the derivation of your statement? From whence does that 
come that the public interest follows the--that is, delays, 
which are just stunning here, just stunning, that it follows, 
the public interest follows entrepreneurship's rights. I mean, 
I think that's a very basic question here.
    Ms. Blakey. I certainly would say that the intent that 
we're operating from the FAA standpoint is to support the 
public's interest in every way that we know how to do so. And I 
think that we have seen a great deal of good public result from 
deregulation of the airline industry and from the kind of 
proliferation we've seen.
    Senator Rockefeller. But you're not answering my question. 
The philosophy that causes you to ad lib that statement that 
you just made, which I thought was the most important thing you 
said----
    Ms. Blakey. What I would say is this, that I think there's 
a balance that you have to achieve and you also have to look at 
of course the cause of delays and whether or not the government 
in intervening is going to be effective in those situations. I 
think there are situations such as O'Hare where it is the 
responsibility of the government to reach in because we do 
believe it is an overscheduling, pure and simple. At other 
airports, it is a function of a multiplicity of factors, a lot 
of which can be weather, and that is a variable that is much 
harder to therefore be arbitrarily setting the rates and 
capacity and schedule at those airports. So it's a balance is 
what I would suggest to you.
    Senator Rockefeller. So you're saying that weather is not a 
problem, or that where the delays, which after--I mean, O'Hare 
is up there at the top, but so are a lot of other places, and 
they're all shocking, that you would just let it rest unless it 
was--it was God-given.
    Ms. Blakey. No, we wouldn't let it rest.
    Senator Rockefeller. Whatever the result was, you'd let it 
just go.
    Ms. Blakey. In fact, let me tell you what we have just 
done, because I think it's a good example of where the 
government really can step in and exercise significant 
influence on this. We had a conference in March where we 
brought together all the players, literally all of the major 
carriers, as well as air traffic control, as well as the 
general aviation community, and said, look, we're all going to 
have to take a step back for the good of the system. Everyone 
is going to have to compromise a little bit to make this system 
run better.
    And that was what we achieved in 3 days, and it was not 
easy hammering out with folks to say that, look, when we're 
taking significant delays at one airport, we're going to ask 
everybody else to hold back. Significant delays, the group came 
together and said, OK, 90 minutes, that's too long. At that 
point, its exercise of what we call a delay trigger, and that 
means that other airports are going to have ground delays until 
we can flush the one that is experiencing significant delay 
out.
    Senator Rockefeller. So the airport triggers were in fact a 
government solution?
    Ms. Blakey. They were. But I want to point out we worked 
very closely in collaboration with all of the interest parts of 
the aviation community to try to achieve this. We did the same 
thing in terms of establishing express lanes, where if the 
traffic flow all needs to go in one direction, a handful of 
folks wanting to go in the opposite direction cross-wise are 
going to have to fly high or low, they're going to have to fly 
on a different pattern, and it may not be optimal from their 
standpoint, but that's because we want to move passengers, we 
want to move the public as efficiently as is possible, and that 
does mean that others may have to stand down.
    Senator Rockefeller. OK.
    Ms. Blakey. So that's two key examples where--and this is 
for the system as a whole. This affects airports all over the 
country. When we run into a problem, we now have a better 
mechanism to do it. And what I think is that with this on 
board, if this works this summer, I think we can achieve some 
other measures as well operationally.
    Senator Rockefeller. And I understand, Madam Administrator, 
I would just caution you not to use that phrase publicly.
    Ms. Blakey. OK. I must have misspoken and I apologize.
    Senator Rockefeller. Oh, you didn't misspeak. I think you 
said what you felt, and I'm not going to argue with you because 
you have a right to your views, but I just wouldn't use that 
publicly where the convenience is up to the airlines and the 
government will step in in a couple of cases but not otherwise. 
I don't think you want to get into that.
    Second question is Secretary Mineta, you said he wanted to 
triple the capacity of air traffic within the next two decades. 
Now, we are all well aware and accustomed to people coming up, 
administrators coming up and sloughing off $500 million cuts 
because OMB has to review your testimony, you can't come up 
here unless they've looked at your testimony and they made the 
cuts, but you asked for the money, and you asked for them for 
such things as facilities and equipment, the F&E account, 
safety, modernization, capacity programs, things of this sort.
    I'm trying to pin you down a little bit here. You walked 
away from the fact that you'd been deprived of money that you 
had asked for for specific programs, and you said, well, the 
LAAS program, you said, well, that's not really ready yet, and 
that was the end of that.
    What I want to know, what is it that you were not able to 
get as a result of the $500 million which you requested which 
the OMB declined to give you after the Secretary set out as his 
ambition the tripling of all of this in 10 to 20 years, some 
examples?
    Ms. Blakey. I was going to say I could provide you with a 
more comprehensive list than I probably can do here, but I 
would say this, that in some cases we are slowing down some of 
the deployment of specific systems, the deployment, for 
example, in the area of WAAS is somewhat slower. This is the 
Wide Area Augmentation System, the most advanced radar 
deployment. This is somewhat slower than it might have been 
otherwise. So there are a number of steps that we're taking 
throughout.
    Senator Rockefeller. Is that Herndon style the most 
advanced radar?
    Ms. Blakey. It's ASR-11. That is--that's the specific 
system that I have in mind. But certainly there are a number of 
areas----
    Senator Rockefeller. What does Herndon use?
    Ms. Blakey. I think it's an ASR-11, but I'd have to check. 
There may be someone here that----
    Senator Rockefeller. Because that's the state-of-the-art.
    Ms. Blakey. Is Herndon, does it--I don't think Herndon has 
an ASR-11, right? Herndon has the contribution of a number of 
different radar sources. So I'll tell you where ASR-11 is most 
prominently is Willow Grove, Pennsylvania. That was the first 
deployment we'd made of that back about 6, 7 months ago now. So 
it's a new radar and it's beginning to come online. It links up 
with the STARS terminal modernization program, and it's an 
enabler from that standpoint.
    Senator Rockefeller. But you're not saying that you were 
pleased when your budget was cut?
    Ms. Blakey. What I would suggest is this, that these are 
tight budget times. It's something that I think we all 
understand that not only from the standpoint of the Federal 
Government as a whole, but we are working with a much 
diminished trust fund. Our industry is down, and that does mean 
that there therefore is a diminution of resources to draw on, 
and I think we have to adapt when the budget climate shifts, 
and that's what we're doing.
    Senator Rockefeller. Well, I mean, you could also argue 
that the airline industry is absolutely crucial to the Nation, 
the security of the nation, could be a danger to the Nation as 
we've already seen. When the President decides he is going to 
go to war in a certain place or whatever, money is not an 
object, he just goes around to the appropriators and gets it 
very quietly, something which Senator Lott and I are not 
thrilled about. So that's the priority. It seems to me aviation 
is a clear national priority and it doesn't occur to me that 
the Administrator of the FAA ought to be saying, well, we have 
to adjust to fiscal realities. I would have thought that your 
job was to fight for every single darn nickel you could get and 
go face to face with OMB and raise a stink, short of getting 
fired. I mean that. Do you want to comment, Mr. Mead?
    Senator Lott. She's from Tupelo, Mississippi originally, so 
I'm sure she raised a huge stink.
    [Laughter.]
    Senator Rockefeller. I like her very much and she's very 
good, but I'm still asking these questions.
    Mr. Mead. I would like to offer a perspective on the half a 
billion dollars that you were referring to. First, the 
Administrator was correct when she described where the things 
that were the objects of the cuts were in terms of their 
development. FAA had been representing that one of the 
precision landing systems, for example, that they were 
purchasing, was capable of doing precision landings 1, 2, and 
3. That was not so. Categories 2 and 3 were ones that had to 
go, that had to go, need to go to R&D. I think that they would 
be using that money for R&D if they had it.
    Second point I'd like to make is if you look at the size of 
the cut, it correlates almost exactly with the increase in the 
operations account, which is the salaries account. The salary 
base at FAA is rather high, it's very generous, and on page 13 
of my testimony there's a chart about what's happening to the 
aviation trust fund, and there are about $3 billion less money 
going into it than they thought was going to be going into it 3 
years ago. But I think you're going to be looking at very tight 
fiscal times for the foreseeable future, unless you're prepared 
to go make greater incursions into the general fund at the 
Treasury.
    Senator Rockefeller. I'll accept that. The second question 
I was going to ask will be vigorously opposed by one Senator 
who's here now, and that is that some of us really, and 
obviously you do too, Ms. Blakey, that O'Hare is a major, major 
national priority, that those runways are not laid out 
efficiently, and that until they are, along with other 
adjustments that are made, it's going to clog up the entire 
system, and I don't think there's a huge coincidence between 
the 64 percent average, minutes average delay, and the layout 
of those runways.
    Now, that was a big subject last year. I remember waiting 3 
hours on the floor to give a speech on it, but the other 
Senator here present other than the Chairman was talking all 
during that time so I wasn't able to do that. Now, where does 
that stand and how hard are you fighting for doing O'Hare 
correctly? What happens at O'Hare directly affects what happens 
in Charleston, in Huntington, in Beckley, West Virginia.
    Ms. Blakey. I couldn't agree more. In fact, O'Hare has 
proven at this point to be the central, if you will, nerve 
center for the aviation system these days because so many 
carriers are hubbing through there and so much of our 
population either as destination or must go through there.
    At this point, we have established a program office, a 
dedicated office to focus explicitly on the modernization 
program there and looking at the plans that have been advanced 
there from the airport authority, working closely of course 
with both the city and the state on this. Our expectation is 
that we will be able to put out for public comment as of 
February of this year the environmental impact statement, which 
is one of the key, as you know, steps in terms of being able to 
move forward with that modernization.
    I don't know what that is going to tell us right now. We're 
working on that and the design of the airport layout plan. But 
our expectation is to move this as fast as we can doing it well 
and carefully. I must stress though that this is the most 
complex airport project bar none in history, $6.6 billion is 
what the city is projecting will be the cost involved here. And 
as a result of that, we are moving forward intensely.
    But as I say, we have to do this right and we have to do 
the correct analysis and modeling, and so that does mean that 
it will probably be--in fact, it will be--September 2005 before 
we expect to issue a final record of decision on it, and that 
will of course be what triggers the ability to move forward 
with the construction work, and I can't prejudge what that will 
look like at that point and how that will be put together.
    Senator Lott. Speaking of Chicago, Illinois, Senator 
Rockefeller, maybe it'd be a good time to hear the questions 
from the Senator from Illinois.

            STATEMENT OF HON. PETER G. FITZGERALD, 
                   U.S. SENATOR FROM ILLINOIS

    Senator Fitzgerald. Thank you, Mr. Chairman, and boy, I 
don't know where to begin with all this stuff. I want to 
compliment the Chairman and the Ranking Member for doing this 
hearing, want to compliment Ms. Blakey for the wonderful job 
she's doing and Director Mead and Ms. Hecker.
    First on delays, though, let me urge the members of this 
committee to think back to 1999 when this committee passed 
legislation which later cleared the Senate and then the House 
lifting the FAA's regulation that imposed delay controls. That 
regulation had been in effect since 1969 and it stopped delays 
at O'Hare, at Newark, and at LaGuardia. And it did that by 
limiting the scheduled takeoffs and departures and arrivals to 
the capacity of each of those airports.
    And I was a freshman Senator at the time and I remember 
standing on the floor of the Senate with an internal chart from 
the FAA that had been prepared by an FAA consultant that said 
if Congress lifts, or if the FAA lifts the delay controls at 
these airports, delays will go up exponentially. Well, Congress 
went ahead and lifted the delay controls and immediately by the 
summer of 2000, passengers were brought to their knees all 
around the country. So it's not the FAA's fault, those delays, 
it's Congress' fault. We lifted the delay controls.
    Now, O'Hare has capacity to do three takeoffs and landings 
a minute, and if the airlines are only allowed to schedule 
three takeoffs and landings a minute, there will be no delays. 
But after those delay controls were lifted, United and American 
were scheduling as many as 25 to 30 takeoffs at the same on-
minute period, 8:45 in the morning there will be 25 to 30 
planes scheduled to take off, and everybody knows only three of 
them are going to be able to take off. So it's Congress' fault, 
specifically it's this committee's fault for the delays, and so 
if Americans are angry at delays, they should look right back 
here.
    And I want to compliment the FAA for going back this year 
and trying to put some delay controls back on at O'Hare. I want 
to urge you to be tougher though because you have only put 
those delay controls on United and American. They do have 87 
percent of the capacity at O'Hare, or the flights at O'Hare, 
but the other airlines have then just filled the void, and so 
we're really not reducing the number of flights to match the 
capacity of the airport.
    And I hate to sound like Cassandra, but I think in this 
case I am. If we go back to my speech on the floor of the 
Senate, I predicted all this would happen and it immediately 
did happen. That's why I'm asking you to take me seriously when 
I try to rebut Senator Rockefeller on O'Hare. We can spend--and 
it's not $6 billion, it's $6.6 billion for the runways--but the 
full project is $15 billion at O'Hare. It's going to drain all 
the AIP funds from everybody else's airports in the country for 
the next 10 years, and my prediction is we will get almost no 
additional capacity at O'Hare because the limiting space, the 
limiting factor is not runway capacity at O'Hare, it's 
airspace. We have the most congested airspace in the country, 
the class B airspace over Chicago O'Hare, and you can spend all 
that money and you're not going to get much more capacity 
because they can't put--stuff any more planes in that.
    And also I have to fault the Clinton administration. 
Governor Thompson back in the 1980s in Illinois started 
following up on an FAA mandate. FAA ordered Chicago in 1984 to 
build another airport, and Governor Thompson and then Governor 
Edgar, they got the ball rolling. In 1993, Mayor Daley called 
President Clinton and asked him to remove the Chicago third 
airport from the NPIAS list, the National Plant for--otherwise, 
that third airport would have been up and running by the year 
2000. We wouldn't be talking about delays in O'Hare. And we 
still have a viable--we have now restored the third airport to 
the NPIAS list. I hope the FAA will give due consideration to 
that proposal.
    Also, airlines block new airports all over the country. 
We've only built one new airport, and that's in Denver, even 
though passenger travel has increased 400 percent since 
deregulation. The hub carriers have blocked every new airport 
because they don't want--in Chicago, for example, United 
doesn't want any new entrants coming in and competing with 
their effective monopoly.
    And anyway, I've got to go to my questions, but I wanted to 
take some of the heat off the FAA on those delays, because I 
think it's Congress' fault. On the O'Hare expansion, I'm just 
wondering, and maybe Mr. Mead or Ms. Blakey can answer this 
question. I know you're considering that proposal, the 
environmental study is underway, and you're also looking at 
this suburban airport. I'm wondering, I don't think there's 
anything in the statutes that allows you to consider the 
economic forces at play in analyzing O'Hare's proposal. I don't 
know if you can look at market realities, but I'm urging you if 
you have that statutory ability to look at market realities.
    The average ticket price at O'Hare has dropped from $170 in 
1999 to $140 last year. Meanwhile, this O'Hare expansion plan 
will raise the current per passenger landing fees from $8.70 
currently to about $26, even assuming a $5 billion contribution 
from the AIP fund toward the expansion program. And this is all 
at a time while the main carrier at O'Hare, United, is in 
bankruptcy, has a $5 billion unfunded pension liability and has 
even defaulted on the bonds issued 20 years ago to build their 
terminal at O'Hare, and yet they're being relied on to pay this 
$26 per passenger along with American, which is also in poor 
financial shape.
    To what extent can you look at economics and the 
feasibility of this being paid for when you consider the O'Hare 
expansion project, either of you?
    Mr. Mead. Senator, you know we have a letter of inquiry 
from you on the O'Hare project, and we can't look at the cost 
effectiveness per se, but you mentioned earlier the delta 
between what are the stated costs of the runway per se, and all 
the supporting collateral projects that are in the 
modernization plan.
    I think Chicago should be prepared to demonstrate where the 
money's going to come from and how much they are going to be 
relying on the Federal Government for, and they should be able 
to perform a cash-flow analysis. And that is one of the key 
issues that we're currently exploring.
    We've seen this issue develop in other modes of 
transportation. Virginia is a recent example where there are a 
bunch of highway, highway bridge projects in the Virginia State 
transportation plan, but we were interested in is, well, Wilson 
Bridge was there in Springfield and when we looked closely at 
the plan, the same dollar bill was going to three or four 
different projects.
    And in response to your inquiry, a core issue we're 
examining is just how much of the modernization plan are they 
prepared to go forward with, and if they are prepared to go 
forward with, where is the money going to come from?
    Senator Fitzgerald. So to that extent you are looking at 
the economics. They have to demonstrate a cash-flow.
    Mr. Mead. The financials, yes.
    Senator Fitzgerald. As a former banker, let me just remind 
you, I've never seen a poorer pro forma submitted by a 
potential borrower, so I wouldn't be surprised if they're able 
to put something together that looks plausible, we----
    Mr. Mead. Well, we've had experience with these, Senator, 
and a lot of other projects in this country, so I think we know 
what rocks to turn over.
    Senator Fitzgerald. With respect to air traffic control at 
Chicago, the controllers in my area, and they're meeting with 
me today, they complain, they believe there's a dangerous 
understaffing at Chicago TRACON. The delays and operational 
errors have increased. Chicago TRACON has 100 authorized 
controllers, but only 75 are now employed, and I'm told that a 
third of those are eligible to retire within the next 2 years.
    Ms. Blakey, have you looked at that understaffing situation 
at Chicago TRACON and do you have any ideas about that?
    Ms. Blakey. We have as a matter of fact. In fact, we sent a 
team in because the issue of operational errors certainly had 
got our attention back in January, and so we sent in a team to 
look on a very intensive basis at all aspects of the operation 
as well as question some staffing, training, what might be the 
issues to be addressed there.
    That report is currently in the works and I think we're 
going to have some good results out of that. But I can tell you 
it is not a staffing issue. I'd be happy to get you the 
numbers. In fact, if you're having a meeting today, that might 
be helpful if I turned that around for you fairly quickly.
    Senator Fitzgerald. If we could get them real quickly, I 
think my meeting's in about an hour, so maybe if somebody could 
shoot them to Robin in my office.
    Ms. Blakey. I'd be delighted to.
    Senator Fitzgerald. I'd appreciate that. And Mr. Mead, you 
did mention my inquiry to your office. Do you have any idea of 
when we might be able to expect a report back from you on that?
    Mr. Mead. Let me get back to you.
    Senator Fitzgerald. OK.
    Mr. Mead. I don't want to publicly state a date and then 
have to recant it.
    Senator Fitzgerald. I understand that. Now, the City of 
Chicago has recently publicly accused the FAA of moving too 
slowly in completing the environmental impact statement, and 
says that the FAA has greatly expanded the scope of studies to 
be completed before it rules. And I understand that the FAA has 
denied these charges, and I was personally unaware of any 
expansion of the scope of the studies that you're requiring, 
and I'm wondering, has the FAA changed the scope? And if the 
scope of the studies has been changed, can I see any FAA 
documents that do in fact expand the scope?
    Ms. Blakey. I believe the FAA is pursuing the kind of 
analysis and the kind of review that's really required by both 
our approach to the airport layout plan as well as the EIS. So 
we consider this to be important, and as I said, something that 
has to be done with real care, because it must be something at 
the end of the day that I think will withstand criticism from 
all sides, and certainly something that because many of these 
airport projects, as you well know, have been delayed by 
litigation for many, many years thereafter. It is better for us 
to do the up-front work and to do it with rigor than to later 
be trying to fill in things that should have happened 
initially, and so I would argue for that.
    Senator Lott. Madam Administrator, on that point, if you'll 
yield for this, in Vision 100, we specifically provided the FAA 
with a number of new tools aimed to streamlining the 
environmental review process for key airport capacity projects. 
This is a good example here of hopefully how that could be 
helpful. Is it helping, those new tools?
    I know you don't want to have lawsuits, but I was in hopes 
that new language would give you authority to cut through some 
of the ridiculous environmental delays and impediments.
    Ms. Blakey. What streamlining has allowed us to do--we are 
applying increasingly. But essentially what it has allowed us 
to do is to not have sequential review where everything has to 
line up trunk to tail, and therefore have a very prolonged 
process. We can do concurrent review. We can also look at 
issues of redundancy and try to achieve where we may be 
requiring, or other agencies are requiring similar or some 
kinds of analysis. Let's pull it together and be certain that 
we are performing what's important here, but not doing it time 
and time again.
    So that's what I would say we've got with this, and 
certainly we're trying to do everything that is smart and 
efficient in Chicago. It's a big project and we want to make 
sure that we're doing that.
    Mr. Mead. I can't speak to the scope of the environmental 
impact assessment, but I do know that one of the concerns about 
the timing, the FAA's timing of this, is that the September 
2005 conclusion of that effectively means a loss of a 
construction season, because there isn't much time before the 
cold sets in in Chicago and so there's that concern that, well, 
can it be accelerated somehow or completed earlier so that they 
can, if they're going to build another set of runways, that 
they can get construction underway when they have good weather.
    Senator Fitzgerald. We're talking about the delays caused 
by construction at Dulles. Wait until Chicago is torn up for 10 
years with a 10 year unremitting construction season.
    One final question, Mr. Chairman, if I may. The city I 
guess has already applied for hundreds of millions of dollars 
of airport improvement programs grants, and my prediction is 
eventually to do this whole project they'll have to take all 
the AIP funds for years so that there will be no money for any 
other airport in the country.
    But my question is, will concerned communities around 
O'Hare and individuals like myself have an opportunity to 
comment as the grant review process goes forward? I'd like to 
make arguments, for example, that it would not be a wise usage 
to drain all the AIP funds for the next 10 years into this 
project, which I ultimately argue won't increase capacity, it's 
just an expenditure of money.
    Ms. Blakey. Well, I can tell you this, that they've got 
some other folks who are ahead of them in the queue in terms of 
use of those funds to the extent they are discretionary. As you 
know, a great deal of this is essentially entitlement money, 
and therefore is allotted throughout the airports in the system 
on a formula basis.
    But to the extent there is discretionary money there, there 
are some very vigorous competitors for it, and in fact, we have 
lots of calls on that. So that said, the rationale is certainly 
something that we are very willing to make public, in fact, we 
do make public on a regular basis.
    Senator Fitzgerald. Can other people--can individuals like 
myself who are concerned about the issue comment on their 
application for a grant?
    Ms. Blakey. So far as I know, this is all public 
documentation and certainly one can comment. There is not a 
formal comment period in the sense you have with the 
rulemaking, for example, or an environmental impact statement.
    Senator Fitzgerald. OK.
    Ms. Blakey. But the documents are public.
    Senator Fitzgerald. OK. Well, Mr. Chairman, thanks for 
doing this. You're a great Chairman of the Aviation 
Subcommittee. You love aviation and you're engaged in it, and 
Madam Blakey, thank you, and Mr. Mead, Ms. Hecker, thank you 
all very much.
    Senator Lott. Thank you, Senator Fitzgerald. Let me just 
say I want the record to reflect since you did foretell what 
would happen, I supported you all the way on this issue.
    [Laughter.]
    Senator Lott. One last question, Ms. Blakey, and maybe Ms. 
Hecker might want to respond on this too. AIP funds, I've been 
very concerned about how the AIP funds have been rated for 
legitimate reasons in the immediate aftermath of 9/11 for 
security costs, but we stopped that in the FAA reauthorization 
I believe. But I'm still worried about FAA funds being used for 
noise abatement projects well beyond what had been indicated or 
called for earlier. And I'm worried that it's going for 
commercial portions of terminals like perhaps shop concessions, 
parking garages, off-airport road construction, and things of 
that nature.
    Are those things happening? And in the alternative, are we 
limiting these hopefully to where we really need planning 
instruction for runways, taxiways, aprons, and things that 
really are needed for safety and to expand the capability of 
the airport?
    Ms. Blakey. I'll tell you, we are guarding those AIP funds 
pretty jealously these days, because we do understand how much 
the actual fundamental infrastructure, as you say, the runways, 
the taxiways, are going to make calls on them. The Vision 100 
did give a bit more flexibility for small airports, but as you 
know, that's a relatively small amount of the money as well, 
and that's the only place where I think you will see a bit of 
expansion in terms of applicability, and part of that is to let 
those small airports be more economically viable, because 
again, for the growth of the system in the long run, that's 
what they need as well. But that was the new statutory 
allowance.
    Senator Lott. Well, we are going to be having a vote on the 
floor in a few minutes. Senator Fitzgerald, do you have any 
more questions? One other thing is that, you know, who's going 
to keep an eye on what's going on in Chicago at O'Hare when the 
Senator from Illinois is not with us? I worry about that.
    Senator Fitzgerald. That's a very good question.
    Senator Lott. Very good question. I'll suspect you'll keep 
on eye on it no matter where you are.
    Senator Fitzgerald. I'll try.
    Senator Lott. Thank you all for being here and this will be 
a part of our continuing effort to be supportive and to keep up 
with what you're doing and make sure that we're providing the 
assistance you need from Congress. Thank you very much.
    [Whereupon, at 11:08 a.m., the hearing was adjourned.]

                            A P P E N D I X

   Prepared Statement of Hon. John McCain, U.S. Senator from Arizona
    Four years ago, the biggest problem facing the Nation's aviation 
system appeared to be the congestion. The system could not keep up with 
demand.
    Since then, we have rightfully concerned ourselves with security 
and the financial state of the airline industry. I am convinced, 
however, that aviation will never fully recover unless the Federal 
Aviation Administration (FAA) can provide an air traffic control system 
that will accommodate the predicted growth in air travel. Without an 
adequate aviation system, airlines will be constrained from true 
competition. And without competition, consumers will suffer. Already we 
have seen that the Secretary of Transportation has imposed flight 
restrictions at Chicago's O'Hare airport. I would hope such reductions 
are temporary and that the FAA, the airport, and the airlines can find 
a better solution. Hopefully we have used the breathing room afforded 
by the downturn in traffic to prepare for the future.
    I am also convinced that the FAA will only be able to develop and 
provide an air traffic control system that can meet future demand, if 
the FAA itself starts doing its job differently. We must ensure that 
the FAA spends its resources wisely and that it manages its 
modernization program to ensure projects are on budget, on time, and 
delivers the benefits promised.
    Over the last 10 years, the Congress has passed legislation to 
reform the FAA The FAA has been removed from the Federal procurement 
and personnel rules, it has been given a board of directors, and has 
recently hired a Chief Operating Officer to oversee the operation and 
modernization of the air traffic control system. I am eager to hear 
today how these steps are working.
    I believe that this is a critical juncture for an aviation 
community which is facing very difficult times. However, we must be 
equally concerned about the FAA and its programs and work to ensure 
that our Nation's aviation system has proper oversight. Our aviation 
system is the leader in safety and efficiency. We must ensure that this 
remains the case.
    I thank the witnesses for coming and look forward to their 
testimony.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                          to Marion C. Blakey
    Question 1. At the start of this year, DOT Secretary Mineta 
expressed a desire to triple the capacity of air traffic within the 
next two decades, and indicated the need to ``modernize and transform 
our global transportation system, starting right now.'' Less than a 
month after the Secretary's statement, the Administration released a 
budget plan that would cut more than $350 million from last year's 
funding level for the FAA's Facilities and Equipment (F&E) account--
which funds air traffic modernization and capacity programs.

   What steps are you taking at the FAA to ensure that gutting 
        funding for modernization and safety programs by such a drastic 
        amount will not have an adverse impact on the system?

   If Congress provides more funding than requested, where will 
        it be used?
    Answer. The President's FY 2005 request includes sufficient funding 
to safely operate and maintain the existing NAS infrastructure. There 
is no significant impact to our major modernization programs, including 
the Terminal Automation Modernization Program, the En Route Automation 
Modernization (ERAM) program, and the Wide Area Augmentation System 
(WAAS), which are budgeted and continuing as planned. Program 
reductions were carefully considered and limited to projects that had 
minimal benefits or could not be implemented in the near term due to 
economic downturn and aircraft equipage. Among projects deferred as a 
result of the lower budget request were the Local Area Augmentation 
System (LAAS), the Controller-Pilot Data Link Communications (CPDLC), 
and the Next Generation Air to Ground Communications System (NEXCOM 
1B). Delaying funding for these systems will have no near-term impact 
on the operation or the safety of the NAS. Consideration for any 
additional capital funding would be given to infrastructure 
modernization and facility projects that help reduce FAA operations and 
maintenance costs and system outages and/or projects providing near-
term user benefits.

    Question 2. Air traffic and passenger levels are expected to 
continue to rise as we head into the busy travel season. We are 
starting to see indications that delays could be bad this summer. 
Already, the Administration has pushed American and United to reduce 
their schedules at O'Hare by five percent and down to 7.5 percent by 
mid-June, in an effort to reduce traffic. At the same time, FAA has 
released a report indicating that O'Hare is one of five airports that 
need additional flight capacity immediately to meet passenger demands 
and alleviate delays across the country.

    (a) How have the cuts to United and American Airlines schedules 
affected traffic at O'Hare?
    Answer. Beginning November 2003, significant increases in scheduled 
operations led to major delays and flight cancellations at O'Hare. In 
order to reduce delays and improve on-time performance, the FAA 
separately obtained the agreement of the two largest operators at 
O'Hare, American Airlines and United Airlines, to reduce proposed 
scheduled flights during peak hours by five percent by early March 2004 
and an additional 2.5 percent by mid-June 2004. FAA's Orders 
subsequently implementing the reductions applied only to those two hu 
carriers since their flights account for most of the growth since the 
phase-out of the High Density Rule. The Orders will expire October 30, 
2004.
    In June, both carriers complied with the 2.5 percent reduction 
during peak hours, while slightly increasing their total daily 
operations over May schedules. Even after the combined 7.5 percent peak 
hour reductions from proposed schedules, preliminary analysis indicates 
that delays are still excessive.

    (b) Are you looking at staffing levels and procedures in an effort 
to develop a solution to this problem?
    Answer. We will be reviewing facility by facility staffing over the 
next several months as we work on the development of a ``Comprehensive 
Workforce Plan for Air Traffic Controllers'', due to Congress this 
December. O'Hare and the other OEP airports are likely to be reviewed 
for appropriate staffing levels.

    (c) After some fighting, locals agreed to move forward on 
increasing capacity at O'Hare and we provided FAA the authority to take 
action promptly by enacting airport construction streamlining 
legislation. What is the status of this effort? Why has the FAA not 
been able to move faster to address this situation?
    Answer. The City of Chicago is pursuing an aggressive construction 
schedule for their proposed O'Hare Modernization Program (OMP). The 
start of OMP construction, however, is dependent on the FAA's 
completion of an Environmental Impact Statement (EIS) and issuance of a 
favorable Record of Decision (ROD).
    Considerable effort has been made by the FAA to streamline the EIS 
process and schedule for the proposed OMP project. Even prior to the 
passage of Vision 100 Reauthorization legislation last fall, the FAA 
had already applied its best practices from past lessons learned to 
assemble adequate resources and put in place a process that would 
result in timely and successful completion of the OMP EIS. We have 
continued to look for opportunities to work even more effectively at 
our task. The resulting OMP EIS schedule is the product of extensive 
coordination between the FAA and its consultants and other agencies. 
The Chicago OMP is a large and complex undertaking unlike any other 
airport expansion in the U.S. Therefore, certain planning and 
environmental analyses associated with the OMP EIS are some of the most 
complex and detailed work undertaken by the FAA to date. The FAA views 
the projected EIS schedule as an aggressive yet achievable schedule. 
The OMP EIS schedule projects a draft EIS by February 2005 and the EIS 
ROD by September 2005.
    Significant effort has and will continue to be devoted to applying 
EIS streamlining provisions while still ensuring full compliance with 
the National Environmental Policy Act (NEPA) to produce a defendable 
EIS. FAA's streamlining efforts have included the development of 
written agreements with other governmental agencies involved in the OMP 
EIS process. These agreements have and will continue to yield 
efficiencies in our streamlining efforts towards a successful and 
accelerated environmental assessment of the OMP proposal.
    The FAA and those involved with the O'Hare EIS process schedule 
have moved to address the O'Hare proposal faster than any other major 
FAA Operational Evolutionary Plan (OEP) proposal. The FAA Administrator 
has established a dedicated Chicago Area Modernization Program Office 
to provide corporate oversight for the integration of all necessary FAA 
activities.

    Question 3. The Aviation Daily on May 18, 2004, reports that 
Administrator Blakey is considering charging fees to controllers for 
classes. Reports indicate that up to 7,000 controllers may retire in 
the next several years, and it takes up to 3 years to fully train a 
controller.

    (a) What analysis has the FAA done on a fee proposal? Please 
provide any such reports or analysis.
    Answer. The Air Traffic Organization has been looking at 
alternative methods for lowering training costs for newly hired air 
traffic control specialists. One of the options being considered is 
charging tuition for newly hired candidates attending the Federal 
Aviation Administration Academy in Oklahoma City. To date no in-depth 
analysis has been conducted on the feasibility of this proposal.

    (b) Please provide any reports and analysis on staffing recruitment 
efforts.
    Answer. The agency has nine different sources from which it can 
hire controllers. These sources include students from special college 
programs, veterans, retired military controllers and other former 
controllers. Recently, we have opened the door to the broader 
population of individuals with no aviation background or prior training 
to apply for employment as a controller. To be considered for 
employment from other than the traditional sources, applicants must 
pass a comprehensive test that evaluates skills necessary to perform 
air traffic duties. This test is called the Air Traffic-Selection and 
Training (AT-SAT) examination. Candidates for AT-SAT would be recruited 
mostly at job fairs or locations near air traffic facilities where 
hiring is most needed.

    (c) Please provide any reports and analysis on how the FAA intends 
to address future staffing needs, and its analysis and projections of 
staffing retirements.
    Answer. Per direction from Congress under section 221(b) of Vision 
100 (P.L. 108-176, Dec. 12, 2004), FAA will provide Congress by 
December 2004 a detailed report on how the agency plans to meet its 
future controller staffing needs. This report will include plans on how 
the FAA will address expected increases in controller retirements.

    Question 4. I was concerned to learn that an arbitrator recently 
found the FAA in violation of an agreement with PASS to maintain 
systems specialist staffing at a minimum of 6,100. As a result, the 
arbitrator ordered the FAA to immediately raise the total number of 
technical employees to the minimum staffing level of 6,100. The systems 
specialist workforce is already stretched thin, and it is my 
understanding that 6,100 systems specialists is the absolute minimum 
number necessary to safely maintain the air traffic control system.

    (a) How many systems specialists is the agency below 6,100?
    Answer. As of 06/07/2004, there are 5861 PASS technical employees 
on board which is 239 under the agreed upon staffing level of 6,100. 
Additionally, there are 172 PASS technical employees on board in the 
Operations Control Centers that are not counted in that number.

    (b) How quickly can the agency hire the systems specialists 
necessary to meet its agreement of 6,100?
    Answer. Pending availability of funds, it is anticipated that the 
agency can hire this number of PASS technical employees within 180 days 
of initiating the process. Currently, funding to support the increased 
number of employees is not available.

    (c) What are the agency's plans to prevent falling below 6,100 
systems specialists in the future?
    Answer. Pending availability of funds, the agency intends to hire 
on a continual basis throughout next Fiscal Year to ensure that the 
number agreed upon is met. It is anticipated that attrition of current 
PASS technical employees will require the agency to hire approximately 
300 specialists on an annual basis to sustain the number agreed upon.

    Question 5. I understand that the agency intends to hand over the 
inspections and reviews required by the Aging Aircraft Safety Rules to 
private individuals known as designees.
    In light of the agency's decision to hand over these [aging 
aircraft] inspections to private individuals, is there really an 
adequate number of FAA Inspectors? If so, why was it necessary for the 
agency to designate these inspections?
    Answer. Yes, there are an adequate number of inspectors. The FAA 
safety mission requires the FAA to promote aviation safety by 
establishing standards and ensuring compliance to those standards. 
Ensuring compliance with standards is a shared responsibility between 
industry and the FAA. The FAA relies on qualified private persons 
designated by the FAA to leverage our safety workforce.
    Section 506(c) of Vision 100 directed the agency to have the 
National Academy of Sciences (NAS) conduct a study of the methods used 
by the FAA to estimate staffing standards for inspectors to ensure 
proper safety oversight. On June 5, 2004, FAA and NAS reached final 
agreement on the study and NAS will submit a final report to Congress 
within 20 months. Meanwhile, the agency will continue to review 
aviation safety inspector (ASI) staffing levels necessary to accomplish 
its safety mission as part of Fiscal Year 2006 budget submission.
    Regarding the aging aircraft inspections, FAA intends to perform 
these inspections through the use of a combination of ASIs and 
designees. There are approximately 2,500 aircraft requiring inspections 
in the next 4 years.
    The Aging Aircraft Statute of 1991 requires the Administrator to 
perform the records review and airplane inspections and allows for the 
use of designees. FAA is not handing over the records reviews and 
airplane inspections to its designees. However, FAA is supplementing 
the current workforce with the use of designees, specifically 
designated airworthiness representatives, or organizational designated 
airworthiness representatives, to conduct inspections and records 
reviews in conjunction with the ASI workforce.

    (b) How many inspectors does the agency plan to hire in FY 2005?
    Answer. The current number of inspectors is 3,547. The FAA will 
maintain current levels of inspector staffing. FAA anticipates losing 
approximately 180 inspectors in FY-05 due to attrition. New inspectors 
will be hired as required to fill vacancies.

    (c) In 2002, the FAA produced a document called ``Workforce 
Planning and Restructuring'' which included demographics on the FAA 
workforce. According to the document, the average age of an FAA 
Inspector is 52.3 years old with significant retirements expected over 
the next several years. I understand that it takes a minimum of three 
years to train an FAA Inspector, what are your plans to ensure that we 
have an adequate number of FAA Inspectors?
    Answer. The Flight Standards' aviation safety inspector (ASI) 
workforce has an average age of 52.9 years. FAA's Flight Standards 
Office hires new ASIs with demonstrated skills and experiences and 
gives them an extensive formal training curriculum. In addition, an ASI 
receives on-the-job training before he or she is considered fully 
qualified to perform the job tasks of an aviation safety inspector. At 
a maximum, a new ASI completes both aspects of training within three 
years.
    In order to ensure an adequate number of ASIs, FAA has developed a 
Human Capital Plan that is a proactive approach to succession planning 
for retiring inspectors. This plan takes into account various 
demographic and geographical data and identifies the appropriate skill 
sets required to perform the job. FAA has a centralized applicant pool 
with a registry of approximately 3,300 qualified applicants that we use 
to fill our vacancies. Attrition rates are consistent within the 
inspector work force. Our manufacturer inspector attrition rate for the 
past 5 years has been 5 percent per year. The rate for aviation safety 
inspectors is 4.7 percent for this same time frame. We closely monitor 
both of these rates.

    Question 6. At least 70 FAA Operational Supervisors have recently 
written the National Transportation Safety Board (NTSB) expressing 
their opposition to the FAA's plans to consolidate the Center Weather 
Service Units (CWSUs) at the 20 Air Route Traffic Control Centers in 
the continental United States into five Units. It appears that very few 
if any ARTCC managers or supervisors were ever consulted about the 
feasibility of such a consolidation of the CWSUs or whether this 
consolidation would affect the real operational environment. Is the FAA 
continuing with its plans to consolidate the 20 CWSUs in the face of 
opposition from the agency personnel who rely on their services on a 
day to day basis?
    Answer. Although some FAA supervisors are on record as opposing any 
change to the status quo, the National Transportation Safety Board 
(NTSB), the National Research Council (NRC), and our site visits (as 
summarized in the Assessment of Current Operations) have made it clear 
that the status quo is unacceptable. Therefore, FAA leadership and 
management are developing a proposal for the safe, efficient, and most 
cost-effective change to provide weather support to the FAA. Expert 
opinions from field supervisors will be considered as the proposal is 
developed. No decisions have been made, and we certainly understand the 
National Weather Service employees' anxiety and the need for timely 
weather advisories to be available to all air traffic controllers. One 
of the plans being considered would consolidate and enhance the weather 
products being disseminated to the entire National Airspace System 
(centers and other air traffic facilities). This proposal would provide 
the latest technology to forecast and distribute weather products 24 
hours a day, seven days per week. We believe that safety can be 
enhanced by implementing some version of the recommendations in the NWS 
report ``Integrated Concept for Enhancing Weather Support,'' dated 
December 2003. Again, no decision has been made on the proposed 
concept.

    Question 7. In a January 20 letter to the National Weather Service 
Employees Organization, the NTSB wrote that ``the loss of CWSU staffing 
at the majority of ARTCCs, the lack of face-to-face interaction between 
meteorologists and controllers, and the potential for deficiencies in 
the timeliness of information dissemination during critical events 
could negatively impact safety'' if the CWSUs were consolidated and 
that the NTSB was withholding judgment on the FAA's plans to 
consolidate the CWSUs until the FAA addressed these issues. What has 
the FAA done to satisfy the NTSB's serious concerns about your plans to 
consolidate the CWSUs and leave 15 ARTCCS without any meteorologists? 
Will you proceed with your consolidation plans without the approval of 
the NTSB?
    Answer. In response to recommendations from the NTSB concerning the 
Center Weather Service Units (CWSUs), the FAA has prepared reports to 
the NTSB every 6 months for the past 8 years--most recently on November 
21, 2003, and June 8, 2004 (draft). In addition, the FAA prepares 
informal briefings to the NTSB staff, held March 5, 2002, and most 
recently on June 29, 2004. In all of these discussions, the FAA and the 
NTSB have realistically assessed the current operations of the CWSUs, 
and the FAA has been consistently candid in stating its intentions. The 
FAA is proceeding with planning the restructuring of the CWSUs while 
maintaining an open and transparent relationship with the NTSB. It is 
our desire that the NTSB will support the final plan selected for 
restructuring the CWSUs.

    Question 8. From time to time, small general aviation or commercial 
aircraft experience difficulty, either due to weather conditions, or 
problems within the aircraft itself such as instrumentation failures. 
During these events when weather is degraded, requiring flight under 
instrument flight rules (IFR), aircrews contact the Air Route Traffic 
Control Centers (ARTCC) for assistance to locate an airport with 
favorable weather conditions so they can operate under visual flight 
rules (VFR) to enable the aircraft to land safely. Air traffic 
controllers depend on the immediate advice of the on-site meteorologist 
who knows what airports are VFR and, more importantly, will remain VFR 
for an aircraft in distress to be directed to. In some of these cases, 
aircraft have been low on fuel, and every second counts in getting the 
right information to the air traffic controller to relay to the 
aircrew.
    How realistic is it to believe that an air traffic controller who 
is controlling other aircraft within a sector he is operating to stop 
and make a phone call to, or set up a video conference with, a remotely 
located meteorologist?
    How much time would be needed for that remotely located 
meteorologist, who is responsible for a vastly larger area of airspace 
than under the present configuration of CWSUs, to become familiar with 
the weather situation in a particular area?
    Answer. There are abundant weather information sources available to 
pilots at automated flight service stations (AFSS), at Flight Watch 
offices, at terminal radar approach controls (TRACON), and lastly, even 
from the air route traffic control center (ARTCC) coordinators.
    The time that it would take for a meteorologist to respond to a 
request for weather information will depend entirely on what CWSU 
resources are available at the time of the request, and the available 
weather information from other sources. The plan the FAA accepts for 
restructuring the CWSUs will seek to reduce the time required to 
retrieve and respond to all requests for current weather information 
and forecasts.

    Question 9. The National Transportation Safety Board has 
recommended that the FAA provide meteorological coverage at all times 
during forecasted significant weather. The FAA has claimed that it 
cannot afford to hire the 42 additional meteorologists it would take to 
keep all the CWSUs open 24 hours a day.
    Rather than reducing the number of CWSU's in the continental United 
States from 20 to 5 so that they can be staffed 24 hours a day, has the 
FAA given consideration to staffing 5 CWSUs on a 24/7 basis to cover 
the minimal aircraft operations overnight across the country and leave 
the remaining CWSU staffed as they are?
    The National Weather Service has offered a number of improvements 
for the CWSU program including products, services, training, and cost 
sharing. As for cost sharing, the NWS has offered to provide the FAA 
with AWIPS, their weather communication system. Won't this cover the 
cost of the 10 additional meteorologists needed to keep 5 Centers open 
24 hours a day?
    Answer. The suggestion of operating the national Center Weather 
Service Unit program with five centers, 7 days a week and 24 hours a 
day, will be given thoughtful consideration. The concept of remote 
meteorological support is used throughout the industry and the private 
sector. As we consider several options, our concern for safety remains 
paramount.
    The FAA will carefully examine the potential contributions from the 
National Weather Service and the potential savings from any proposed 
replacement to the current Weather and Radar Processor (WARP) display 
system. Any potential cost savings that could be realized would be used 
to develop, jointly with the NWS, a substantially improved and 
efficient Federal program that operates 7 days a week and 24 hours a 
day.

    Question 10. With trust fund revenues down, the AIP process has 
obviously been affected. At the same time the Airbus A-380 will require 
significant changes at many of the airport s in the U.S. that it would 
serve. How much money is the FAA providing through the AIP process to 
accommodate the A-380? How much funding is being provided by airport 
and project?
    Answer. The FAA has provided $37.5 million of AIP funds for 
projects needed to accommodate the A-380. In FY03, the FAA issued a 
Letter of Intent to the Anchorage International Airport (ANC) of which 
$37.5 million is for improvements related to the A380 ($15 million for 
rehabilitating runways 6R/24L and $22.5 million for construction of 
taxiway Y).
    The FAA also anticipates funding projects related to the A380 at 
the following two airports:

   Memphis International Airport (MEM): $34 million in FY06-07 
        to widen two runways, Runways 18L/36R and 18C/36C

   San Francisco International Airport (SFO): $17 million in 
        FY05 and $4 million in FY06 for rehabilitating and widening 
        Runway and Taxiways.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                            Marion C. Blakey
    Question 1. What are the expected costs of extending mandatory 
retirement ages for air traffic controllers, rather than hiring newly 
trained controllers? Are there safety implications extending mandatory 
retirement ages for air traffic controllers?
    Answer. The agency has conducted an extensive review of the 
feasibility of extending the employment of controllers who reach the 
mandatory retirement age of 56 as an alternative to hiring new 
controllers. The major parameters involved in such a review are: (1) 
the salaries of the senior controllers and new hires; (2) the cost of 
overtime while new hires are being trained; and (3) training costs. 
Because of the myriad of variables involved, it is not feasible to 
ascertain the cost/benefit of this option with any practical level of 
certainty. However, of the various scenarios studied, we found that the 
high cost of senior controller salaries indicated that a clear case 
could not be made to support the economic feasibility of this approach. 
However, the agency does believe that, primarily at large high volume 
facilities, operational needs will clearly justify retaining some 
controllers on duty past age 56. To that end the agency has developed 
controller selection criteria, which is currently being reviewed by the 
Office of Personnel Management (OPM) that can be used for this effort. 
Once approved, the criteria will be used on an as needed basis, but 
such retentions will not have a major effect on our need to hire new 
controllers. Although safety implications have not been looked at in a 
separate review, we believe that the selection criteria developed will 
make this a non-issue. Furthermore, because exemptions under current 
law, we now have 540 en route and terminal controllers over the age of 
56 in our system. Of that number, approximately 350 were PATCO rehires. 
Many of them are either exempt from mandatory separation or came back 
under FERS which allows them to remain in a covered position until they 
have 20 years of covered service before being separated.

    Question 2. Is FAA in complete compliance with the terms of OMB 
Circular A-76 in preparing for the competition of this [sic] contract?
    Answer. FAA is in complete compliance with OMB Circular A-76. 
Pursuant to Public Law 104-50 (the 1996 DOT Appropriations Act), 
Congress directed FAA to develop and implement a new acquisition 
management system. The FAA Acquisition Management System (AMS) took 
effect on April 1, 1996, pursuant to 49 U.S.C. 40110(d). FAA has since 
amended the AMS to accommodate use of the OMB Circular A-76. Therefore, 
where the OMB Circular refers to the Federal Acquisition Regulation 
(FAR), the Agency will apply the AMS.
    FAA requested and OMB granted three deviations from the Circular 
specifically for the Automated Flight Service Station (AFSS) public-
private competition. Deviations include permission for:

   a performance period that exceeds five years;

   a waiver from the requirement that the evaluation factor for 
        cost must equal at least 50 percent of the weight of all 
        evaluation factors; and

   provision for staggering the submission of technical and 
        cost proposals for all offerors and tenders.

    In accordance with the Circular, the Competitive Sourcing Official 
(CSO) also granted two waivers for the AFSS public-private competition:

   an extension of the timeline from 12 to 15 months from the 
        date of Public Announcement; and

   use of the trade-off source selection method.

    Question 3. What is FAA doing to address the problem of dense, 
continuous smoke in the cockpit?
    Answer. The FAA's transport airplane airworthiness requirements 
address protection of the flight crew from smoke in the cockpit. The 
emphasis is to prevent or control small fires before they erupt and 
cause catastrophic conditions. Smoke goggles and oxygen masks are 
required for the flight crew and flight deck smoke evacuation 
procedures must be developed and presented in the FAA approved airplane 
flight manual (AFM).
    An Emergency Vision Assurance System (EVAS) from Vision Safe 
Corporation has been approved by the FAA for installation on a number 
of airplane models. The device was neither evaluated in flight nor in 
the presence of dense smoke and was approved on what is known as a non-
interference basis. This approach is used by the FAA to evaluate 
certain types of equipment that are not required and for which no 
defined minimum safety standard exists, to ensure that the equipment 
does not adversely affect any of the required equipment on board 
necessary for the aircraft's safe operation.
    EVAS addresses a very rare event where multiple failures of smoke 
detection and fire suppression must occur to the extent of defeating 
the normal smoke evacuation process allowing very dense smoke to 
accumulate. Accident case history indicates that aircraft fire 
scenarios that progress to the point that the flight crew vision is 
impaired usually are catastrophic for reasons other than flight crew 
not being able to see the instruments. The FAA has not mandated EVAS 
installation because data does not support imposing such a design 
concept at this time given the current operational concerns and the 
outstanding safety record of the existing fleet.

    Question 4. Why does FAA equip its own fleet of aircraft with 
smoke-protection systems to allow pilots to fly under conditions of 
dense, continuous smoke in the cockpit?
    Answer. The FAA currently has equipped a portion of its fleet with 
a smoke protection system that allows the flight crew, in the unlikely 
event of a smoke filled environment, an unobstructed view of the flight 
path and primary instruments was well as the ability to read approach 
plates and emergency procedures.

    Question 5. A recent Washington Post article (``Airline Safety 
Costs a) Billions or b) Pennies. Answer Below'' by David Evans on April 
4, 2004) cites the cost of equipping the U.S. commercial fleet of 
planes with FAA-certified smoke protection equipment at about three 
pennies per ticket. Do you agree with that assessment? If not, what is 
the cost estimate based on both current and future technology to 
provide protection from dense continuous smoke in the cockpit?
    Answer. The FAA is not currently considering a smoke protection 
rule and consequently has not estimated the cost of such a proposal. 
However, the principles employed by the agency in rulemaking are much 
broader than simply ``cost per ticket.''
    It is in the interest of the aviation industry to provide a safe 
transportation system, and it provides many safety improvements without 
regulation. The FAA promulgates only such regulations as are required 
by law or that address a compelling need to protect public health and/
or safety.
    When a rule is considered, cost and benefit analysis is a primary 
tool the FAA employs to evaluate its likely consequences. It provides a 
formal way to assist in finding the most efficient way to achieve the 
desired objective and to help determine if the benefits of a proposed 
rule justify the costs. Economic analysis is just one factor in making 
the final judgment on whether to promulgate a rule.

    Question 6. How will allowing designees to perform inspections and 
reviews required by the Aging Aircraft Safety Rules affect the safety 
of operations of these aircraft? Will designees have the same training 
and experience that their FAA counterparts have?
    Answer. The safety of aging airplanes will not be affected in any 
way by the use of designees to perform a portion of the inspections and 
records reviews mandated by the Aging Airplane Safety Act of 1991. FAA 
is revising guidance and developing training for implementation in FY 
05 so that designees will have the same training and experience as 
their FAA counterparts.
    The FAA has been using designees to augment FAA functions for 
approximately 60 years. Under 49 U.S.C. 44702(d), the Administrator may 
delegate these functions. To become a designee of the Administrator, 
applicants must meet stringent requirements for experience and 
training, present three letters of recommendation and finally, be 
screened by the National Examiner Board (NEB). The designees must also 
attend specific training and recurrent training every two years.
    Through a designee oversight system, the FAA conducts surveillance 
activities on all designees to determine continued compliance with 
their authorized functions. The FAA retains the authority to terminate 
designations upon a finding that the designee has not properly 
performed his/her duties under the designation or for any reason that 
the Administrator deems appropriate.

    Question 7. Is the FAA evaluating whether to extend mandatory 
retirement ages for pilots?
    Answer. No. The FAA is not currently evaluating whether to extend 
the mandatory retirement age for pilots. The FAA has reviewed the rule 
multiple times over the years and on each occasion has decided to 
retain the rule.
    Some background information may be helpful. The ``Age 60 Rule'' 
first went into effect in 1959 because of the growing complexity of 
commercial aviation and the recognition that aging is associated with a 
progressive deterioration of certain abilities necessary for flying. It 
is clear that there is progressive anatomic, physiological and 
cognitive decline associated with aging. While it is variable in 
severity and onset among individuals, impairment cannot yet be 
predicted in a specific individual.
    In 1993, the FAA released the report of an extensive study that 
correlated available accident data with the amount of flying by pilots, 
as a function of age. After conducting a public hearing and considering 
thousands of written comments, it was again decided to retain the rule. 
In 1997 an appeals court ruled in favor of the FAA's decision not to 
initiate a rulemaking to change the Age 60 rule. On May 18, 1998 the 
U.S. Supreme Court refused to hear an appeal of that decision by the 
Professional Pilots Federation and others. The FAA, upon request by 
Congress, once again assessed accident and incident data in respect to 
pilot age and provided a final report of this study to Congress in 
March 2003. Because it is unacceptable to work as a pilot until failure 
or obvious impairment, the age of 60 has served well as a regulatory 
limit.

    Question 8. How many systems specialists does the FAA currently 
employ?
    Answer. As of 06/07/2004, there are 5861 PASS technical employees 
on board which is 239 under the agreed upon staffing level of 6,100. 
Additionally, there are 172 PASS technical employees on board in the 
Operations Control Centers that are not counted in that number.

    Question 9. When does the FAA plan to submit its air traffic 
controller staffing plan per paragraph (a) of Section 221 of P.L. 108-
176?
    Answer. That plan is under development and we expect to meet the 
December 12, 2004 deadline for submission to Congress.

    Question 10. Does the FAA have any plans to require equivalent 
safety standards and safety reporting standards for both air traffic 
control towers operated under the contract tower program and FAA-
operated towers?
    Answer. The safety standards and safety reporting standards 
required for FAA-operated air traffic control towers are currently 
required for air traffic control towers operated under the contract 
tower program.
    More specifically, FAA contract tower employees are required to 
possess an FAA control tower operator certificate, and a qualified FAA 
certifying official performs certification of contract employees. Each 
contractor is required to submit a Quality Assurance Plan to the FAA 
for each contract facility, which is reviewed and approved by the FAA.
    Each facility is subject to the FAA quality assurance and 
evaluation program. Each undergoes a full facility evaluation conducted 
separately by the contractor and by the FAA. In addition, the 
facilities are covered by and required to comply with all FAA processes 
relative to incident and accident reporting investigation and follow-
up. Finally, each contract facility falls under an FAA parent hub 
facility and is subject to oversight by the FAA Hub Manager.

    Question 11. Why does the FAA allow repair stations not subject to 
its regulation to perform work on U.S. aircraft?
    Answer. Under controlled circumstances, an FAA-certificated repair 
station can outsource maintenance if it has procedures in place to 
assure the airworthiness of the articles that are being maintained. The 
recently revised repair station rules require FAA approval of 
maintenance functions outsourced to non-certificated facilities. The 
following requirements must be met before an item may be returned to 
service:

   The FAA-certificated repair station remains directly in 
        charge of the work performed.

   The non-certificated facility must follow a quality control 
        system equivalent to the system followed by the certificated 
        repair station.

   The certificated repair station verifies, by test and/or 
        inspection, that the work has been performed satisfactorily and 
        is airworthy.

    Certificate holders use non-certificated maintenance facilities to 
perform maintenance functions that require precise skills such as 
machining operations or heat-treating that are not limited to aviation 
applications. Often there is not a certificated person that can perform 
these functions in the vicinity of an FAA certificate holder. FAA 
surveillance can now be conducted at the non-certificated facility in 
accordance with 14 CFR 145.223(b) and the certificated repair station 
cannot return the article to service if the non-certificated source 
does not permit the FAA to inspect the facility.

    Question 12. The FAA was scheduled to award a contract on the 
flight service A-76 study on March 17, 2005. Is this still the case?
    Answer. Yes, the contract will be awarded on or before March 17, 
2005. The exact date is contingent upon the number of potential service 
providers who will actually submit proposals.

    Question 13. Do you intend to seek any form of Congressional 
approval or briefings before awarding this contract?
    Answer. The AFSS public-private competition performance award will 
be handled like any other FAA major system acquisition. The established 
Congressional notification system will apply.

    Question 14. FAA's own training plan called for 80 percent of the 
Airways Facilities workforce to receive basic core skills training and 
certification by this year, but I understand less than 40 percent of 
the workforce has been fully trained and received their certification. 
How does FAA plan to accomplish this goal of 80 percent?
    Answer. The initial Memorandum of Agreement (MOA), Appendix V 
attachment to the Professional Airways Systems Specialists (PASS) and 
Airway Facilities (AF) Bargaining Unit Agreement, 2000-2005, 
established a goal of 80 percent for achieving A+ and Network+ 
certification for technical bargaining unit employees.
    However, under a subsequent agreement made in 2003 between a joint 
FAA and PASS workgroup, the agency shifted from tracking the percentage 
of the entire workforce receiving this training, to ensuring that only 
the employees who need this training based on their respective areas of 
responsibility are required to complete it. The annual training 
requirement based upon employees' area of responsibility was completed.
    At present, we are ensuring, on case-by-case bases, that those 
technicians that need this certification for their job performance are 
receiving it.

    Question 15. How much money is included in the agency's FY 05 
budget for this task?
    Answer. Approximately $5,000,000 has been spent during the past 
three years to accomplish these certifications, which, as noted above, 
has been completed. In the future, this funding level will vary as it 
relates to prerequisite training for new equipment training courses 
and, therefore, depends upon the number of deployments of such 
equipment. There is not a separate line in our budget for this 
training, rather it is part of the agency's overall training program. 
We expect that the FY05 funding level to be approximately $2,000,000.

    Question 16. What core skills training has the agency scheduled for 
FY05?
    Answer. In addition to the A+/Network+ coursework, the FAA academy 
has classes scheduled in telecommunications, internetworking, 
applications, and personal computer hardware. Various technical 
training courses also have instruction on information technology skills 
specific to a particular type of equipment (such as programming 
language, e.g., UNIX), imbedded within the curriculum.

    Question 17. What are FAA's plans for using the Traffic Management 
Advisor (TMA) tool, which was designed to address bottlenecks, in areas 
outside of Chicago? Does FAA plan to continue to replicate its use in 
other areas?
    Answer. Traffic Management Advisor (TMA) has been installed at 
seven Air Route Traffic Control Centers: Denver, Minneapolis, Los 
Angeles, Miami, Atlanta, Oakland, and Houston. TMA has also been 
installed at Chicago and upcoming installations are planned at 
Albuquerque and Memphis. Initial daily use of the Chicago TMA is 
expected during September 2005.

    Question 18. You testified that ``we have designed the ATO to be a 
more streamlined, effective means of providing the safest air traffic 
control in the world to the most complex airspace in the world.'' Is 
this FAA's goal for the safety level of the operations of the U.S. air 
traffic control system? If so, which metrics does FAA intend to use to 
compare levels of safety? If not, what safety levels are sought by FAA 
in the design of the ATO and how will they be gauged?
    Answer. On March 8, 2004, the Administrator announced the 
establishment of the Air Traffic Safety Oversight Service (AOV). The 
primary mission of the AOV will be oversight of the safety related 
issues pertaining to the provision of air traffic services. This 
includes establishing safety standards for air traffic services 
provided by the FAA nationally and internationally and monitoring the 
system for compliance with those standards. The Service is also 
responsible for developing and maintaining the policy and requirements 
for the Safety Management System (SMS), monitoring compliance with the 
SMS, providing leadership and direction in planning and managing audits 
and evaluating SMS performance and assessing the adequacy of the 
follow-up recommendations in accordance with approved safety standards 
and SMS criteria.
    Concurrent with the establishment of the AOV, the level of safety 
of the NAS was baselined via a comparative gap analysis of ICAO 
requirements and FAA standards. We determined that FAA meets, and in 
many cases exceeds, ICAO safety requirements. This baseline will serve 
for future measurement of safety performance. Changes to the existing 
safety standards will be accepted provided they are in compliance with 
the SMS. Additionally, any changes to existing aircraft separation 
standards require specific approval that will only be granted when the 
SMS documentation indicates they are safe.

    Question 19. Your testimony infers that the head of the new Air 
Traffic Safety Oversight Service office director will report directly 
to the Director of the Office of Regulations and Certification. If this 
new office is to remain independent in its oversight capacity, why 
doesn't its director report directly to the FAA Administrator?
    Answer. The new organization will essentially regulate the ATO in 
much the same way that the agency regulates the airlines. As one of its 
first tasks, it will approve a standardized way to assess the safety 
ramifications of changes to air traffic standards and procedures. Its 
duties will also include approving those procedures, stopping 
procedures if safety issues are involved and issuing safety directives.
    To guarantee independence, the director will not be a part of the 
ATO, meaning he/she will not be subject to the Chief Operating Officer 
of the ATO, but will instead report to the Associate Administrator for 
Regulation and Certification. That Office has a long history of 
regulating airlines and other service providers. This organizational 
approach complies with a recommendation from the National Civil 
Aviation Review Commission in 1997 that safety oversight of the FAA's 
air traffic function be provided by a separate part of the agency.

    Question 20. How will ATO be able to ``correct past mistakes'' in 
managing capital and operations? Do you mean that this organization 
will not repeat past mistakes?
    Answer. The Air Traffic Organization (ATO) is structured to improve 
management, accountability and communication at all levels and to 
operate in a more business-like manner. The business service unit 
concept has been implemented to push accountability for spending down 
to the lower operational service units. A Senior Vice President for 
Finance has been hired who is responsible for financial oversight, 
standards and practices of the ATO as a whole. He is responsible for 
the entire finances of the ATO, including the Research, Engineering & 
Development (R,E&D), Facilities & Equipment (F&E), and Operations (Ops) 
accounts. FAA will now have significantly more coordination across 
appropriations. Metrics are being implemented to push cost controls 
down to the lowest level and measure one facility's performance against 
another. We are restructuring our Acquisition Management System (AMS) 
to add additional justification for projects prior to initiating them. 
Business units now have a vested interest in ensuring that large 
capital projects are delivered on time and under budget. Finally, five 
levels of management have been eliminated, thereby allowing issues to 
surface in time to address them.
    The organizational changes made under the ATO are intended to 
improve both the efficiency of delivery and the quality of services 
provided to our customers. The potential for repeating past mistakes 
has been mitigated by the new organizational structure that takes into 
account lessons learned from the past.

    Question 21. What standards are the agency complying with in its 
contract competition for the maintenance and operation of flight 
service stations: Federal Acquisition Regulations, OMB Circular A-76, 
or other guidance?
    Answer. FAA is utilizing OMB Circular A-76 and FAA's Acquisition 
Management System, as appropriate.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                          Hon. Kenneth M. Mead
    Question 1. What are the expected costs of extending mandatory 
retirement ages for air traffic controllers, rather than hiring newly 
trained controllers? Are there safety implications for extending 
mandatory retirement ages for air traffic controllers?
    Answer. FAA has not estimated the additional costs of extending 
mandatory retirement ages for air traffic controllers rather than 
hiring newly trained controllers. However, at best, extending the 
mandatory retirement age is only a short-term solution and the costs 
would be greater as career air traffic controllers are paid at a higher 
rate than newly certified controllers. FAA is working on a rulemaking 
that establishes procedures for extending the retirement age based on a 
controller's qualifications, and the Agency is establishing a process 
to review each controller's request for a waiver. The waiver process 
should minimize any safety risk.

    Question 2. Is FAA in complete compliance with the terms of the OMB 
Circular A-76 in preparing for the competition of this contract?
    Answer. FAA is in the process of conducting an A-76 competition of 
the Flight Service Stations. We are receiving regular briefings but 
have not conducted an audit of the competition process. According to 
FAA's Office of Competitive Sourcing, the Agency has been working 
closely with OMB to ensure that the process strictly adheres to OMB's 
terms and that any deviations from the A-76 circular are approved by 
OMB.

    Question 3. What is FAA doing to address the problem of dense, 
continuous smoke in the cockpit?
    Answer. While we have not conducted any audit work on this safety 
issue, we do know that FAA has approved the use of one device, the 
Emergency Vision Assurance System (EVAS), to protect pilots from 
continuous smoke in the cockpit. The EVAS can be procured by operators; 
however, FAA has not mandated the system for commercial aircraft and 
has no plans to do so. FAA has also issued an advisory circular to the 
industry recommending (but not mandating) that operators test various 
ways to protect against smoke in the cockpit.

    Question 4. Why does FAA equip its own fleet of aircraft with 
smoke-protection systems to allow pilots to fly under conditions of 
dense, continuous smoke in the cockpit?
    Answer. According to FAA, the agency has equipped some of its 
aircraft with smoke protection equipment. It is perplexing that FAA has 
equipped its own aircraft but has not mandated similar action for the 
commercial transport fleet. FAA has not provided us with the specific 
information we requested on this (number of aircraft equipped) or the 
agency's rational, other than receiving a discount for FAA aircraft.

    Question 5. A recent Washington Post article (``Airline Safety 
Costs a) Billions or b) Pennies. Answer Below'' by David Evans on April 
4, 2004) cites the cost of equipping the U.S. commercial fleet of 
planes with FAA-certified smoke protection equipment at about three 
pennies per ticket. Do you agree with that assessment? If not, what is 
the cost estimate based on both current and future technology to 
provide protection from dense, continuous smoke in the cockpit?
    Answer. We cannot make judgments on the cost to equip the U.S. 
transport fleet with smoke protection equipment as presented in the 
article because reliable cost estimates do not exist, and we have not 
done work specifically on this matter. FAA is not planning to mandate 
that commercial air carriers equip their aircraft with smoke protection 
equipment at this time. Consequently, FAA has not conducted a formal 
cost and benefit analysis, which would be required for a rulemaking 
action.

    Question 6. How will allowing designees to perform inspections and 
reviews required by the Aging Aircraft Safety Rules affect the safety 
of the operations of these aircraft? Will designees have the same 
training and experience that their FAA counter parts have?
    Answer. The pending agency aircraft safety rules require aircraft 
to undergo inspections and record reviews after the 14th year of 
service, with an emphasis on detecting fatigue cracking. Given the 
anticipated workload from the rule, FAA envisions that Agency 
maintenance inspectors as well as designees will be used to perform the 
required inspections for the aging aircraft program. The details of 
exactly how this will work have yet to be determined. We note that air 
carriers must obtain approval from FAA before they can use a designee. 
FAA has established specific requirements for the experience and 
training of designees. For example, designees must have 5 years of 
applicable experience. In a related area, FAA has relied on designees 
to help certify aircraft and aircraft components for a number of years. 
As with other important safety issues, follow through and oversight 
will be critical once these changes for older aircraft have been 
mandated.
                                 ______
                                 
 Response to Written Question Submitted by Hon. Frank R. Lautenberg to 
                           JayEtta Z. Hecker
    Question. What are the expected costs of extending mandatory 
retirement ages for air traffic controllers, rather than hiring newly 
trained controllers? Are there safety implications for extending 
mandatory retirement ages for air traffic controllers?
    Answer. In June 2002, we issued a report Air Traffic Control: FAA 
Needs to Better Prepare for Impending Wave of Controller Attrition 
(GAO-02-591) that examined air traffic controller attrition issues, 
including a discussion of the mandatory retirement age. In this work we 
did not attempt to assess the costs of extending the mandatory 
retirement age for controllers beyond age 56. However, controllers 
approaching the mandatory retirement age would most likely have accrued 
extensive years in service as an air traffic controller, and thus there 
is a good possibility that they would be approaching the upper end of 
the salary scale at their specific facility. We note that FAA generally 
restricts hiring to those 30 and younger. Thus the salary of those at 
age 56 would be much higher than a newly trained controller. As such, 
there could be short-term costs of extending the mandatory retirement 
age. The actual extent of these costs would also depend on how many 
controllers actually choose to stay beyond age 56, given the 
opportunity. In our report, we found that about 30 percent of the 
controllers responding to our survey indicated that they would consider 
delaying their retirement date if they could obtain an age waiver.
    With regard to the potential safety issues associated with 
extending the mandatory retirement age, the report notes that the House 
Report associated with establishing the age 56 provision in 1972, 
justified the provision by stating that ``air traffic control is a 
young man's business . . . and that because of the natural forces of 
aging, magnified by the stresses of control functions, the productive 
and proficient life of the controller is substantially less than that 
which prevails in most other occupations.'' The House Report further 
states ``as the controller approaches age 50 his mental faculties of 
alertness, rapid decision making, and instantaneous reaction . . . 
begin a definite decline.'' In addition, the associated Senate Report 
states ``like skilled athletes, most controllers lose proficiency to 
some degree after age 40, and in the interest of the public's safety, 
should not be retained as controllers in busy facilities beyond the 
time they can perform satisfactorily.''
    While safety was cited a reason for establishing the age 56 
separation age, a number of controllers continue to control traffic 
beyond that age. For example, we found that as of June 30, 2001, about 
700 of the nearly 18,000 active controllers were beyond age 56 because 
of various exemptions. According to FAA, 287 of those controllers were 
appointed before May 16, 1972 and were thus exempt from the separation 
provision. There are also some exemptions related to FERS employees. As 
a result of the exemptions, there will likely be additional controllers 
in the future who will exceed age 56. For example, our report noted 
that FAA had rehired about 850 controllers that were fired in 1981, 
after President Clinton in 1993, lifted the ban on hiring former 
striking employees. FAA officials told us that most of the rehires are 
exempt from the mandatory separation provisions because they were 
originally hired before May 16, 1972. We found that the oldest such 
controller was 69, as of June 30, 2001.
    Only limited actions are taken to assess whether those controllers 
who are exempted from the age 56 provision have adequately retained the 
skills and abilities necessary to perform their duties. FAA requires 
all controllers to pass annual physical examinations that test sight, 
hearing, and overall health conditions but no additional tests--such as 
those for mental acuity or changes in reaction time--are given 
controllers who surpass age 56.
    We concluded in the report that the safety and equity issues 
associated with the age 56 separation exemptions could affect morale of 
the controller workforce and the safety of air traffic. As a result, we 
recommended that FAA study the safety and equity impacts of allowing 
controllers to work past the age of 56. Recently, FAA testified that in 
response to the Congress it is preparing regulations that would permit 
controllers, under certain conditions, to work beyond the mandatory 
separation age of 56. In addition, FAA was directed by the Congress in 
Vision 100 to prepare a workforce plan consistent with our earlier 
recommendations. FAA expects to complete the report in December 2004.

                                  

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