[Senate Hearing 109-373]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-373
 
  AVIATION CAPACITY AND CONGESTION CHALLENGES--SUMMER 2005 AND FUTURE

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

                                HEARING

                               before the

                        SUBCOMMITTEE ON AVIATION

                                 OF THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 26, 2005

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation




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       0SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                     TED STEVENS, Alaska, Chairman
JOHN McCAIN, Arizona                 DANIEL K. INOUYE, Hawaii, Co-
CONRAD BURNS, Montana                    Chairman
TRENT LOTT, Mississippi              JOHN D. ROCKEFELLER IV, West 
KAY BAILEY HUTCHISON, Texas              Virginia
OLYMPIA J. SNOWE, Maine              JOHN F. KERRY, Massachusetts
GORDON H. SMITH, Oregon              BYRON L. DORGAN, North Dakota
JOHN ENSIGN, Nevada                  BARBARA BOXER, California
GEORGE ALLEN, Virginia               BILL NELSON, Florida
JOHN E. SUNUNU, New Hampshire        MARIA CANTWELL, Washington
JIM DeMint, South Carolina           FRANK R. LAUTENBERG, New Jersey
DAVID VITTER, Louisiana              E. BENJAMIN NELSON, Nebraska
                                     MARK PRYOR, Arkansas
             Lisa J. Sutherland, Republican Staff Director
        Christine Drager Kurth, Republican Deputy Staff Director
                David Russell, Republican Chief Counsel
   Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
   Samuel E. Whitehorn, Democratic Deputy Staff Director and General 
                                Counsel
             Lila Harper Helms, Democratic Policy Director
                                 ------                                

                        SUBCOMMITTEE ON AVIATION

                    CONRAD BURNS, Montana, Chairman
TED STEVENS, Alaska                  JOHN D. ROCKEFELLER IV, West 
JOHN McCAIN, Arizona                     Virginia, Ranking
TRENT LOTT, Mississippi              DANIEL K. INOUYE, Hawaii
KAY BAILEY HUTCHISON, Texas          BYRON L. DORGAN, North Dakota
OLYMPIA J. SNOWE, Maine              BARBARA BOXER, California
GORDON H. SMITH, Oregon              MARIA CANTWELL, Washington
JOHN ENSIGN, Nevada                  FRANK R. LAUTENBERG, New Jersey
GEORGE ALLEN, Virginia               BILL NELSON, Florida
JOHN E. SUNUNU, New Hampshire        E. BENJAMIN NELSON, Nebraska
JIM DeMint, South Carolina           MARK PRYOR, Arkansas

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 26, 2005.....................................     1
Statement of Senator Burns.......................................     1
Statement of Senator Lott........................................    29
Statement of Senator E. Benjamin Nelson..........................    29
Statement of Senator Pryor.......................................    45
Statement of Senator Stevens.....................................     2

                               Witnesses

Blakey, Hon. Marion C., Administrator, Federal Aviation 
  Administration.................................................     2
    Prepared statement...........................................     6
Dillingham, Gerald L., Ph.D., Director, Physical Infrastructure 
  Issues, 
  Government Accountability Office...............................    30
    Prepared statement...........................................    32
ElSawy, Amr A., Senior Vice President/General Manager of the 
  Center for Advanced Aviation System Development, MITRE 
  Corporation....................................................    40
    Prepared statement...........................................    42
Mead, Hon. Kenneth M., Inspector General, Department of 
  Transportation.................................................    10
    Prepared statement...........................................    12

                                Appendix

Response to written questions submitted by Hon. Frank R. 
  Lautenberg to:
    Gerald L. Dillingham, Ph.D...................................    59
    Hon. Kenneth M. Mead.........................................    59


  AVIATION CAPACITY AND CONGESTION CHALLENGES--SUMMER 2005 AND FUTURE

                              ----------                              


                         THURSDAY, MAY 26, 2005

                               U.S. Senate,
                          Subcommittee on Aviation,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10 a.m. in 
room SR-253, Russell Senate Office Building, Hon. Conrad Burns, 

Chairman of the Subcommittee, presiding.

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

    Senator Burns. We'll call the meeting to order. We have 
some folks on the way I'm told. I'm one of these kind of guys 
who will count them when they show, but we've got a little bit 
of ground to cover today. We're also conflicted today with 
marking up the energy bill. Energy, that's where I'm supposed 
to be and here. I'm big enough to be two people, but it ain't 
working. And also Intelligence is marking up and is fairly busy 
today. So it's sort of a busy day here on the Hill. We're 
trying to get ready to go on the Memorial Day week break, and 
everybody kind of wants to go home.
    I thank the panel for showing up today. I appreciate you 
postponing any plans that you might have had for traveling for 
this Memorial Day weekend to be with us today. As most of you 
know, Memorial Day seems to be the beginning of a busy summer 
travel season for most Americans. We felt there would be no 
better time to take a look at the upcoming season than today.
    We also need to look beyond this summer and examine our 
long-term challenges. It's important to this Committee that we 
know the imminent problems that face us today, the long-term 
challenges, and what technologies and ideas are out there to 
effectively and efficiently modernize our system.
    Since Congress deregulated the airlines in the late 1970s, 
flying has become an essential form of transportation; and 
between 1980 and 2000 it grew faster than any other form of 
transportation. In fact, the number of travelers more than 
doubled during those years.
    By the year 2000 the growth was starting to cause large-
scale delays and bottlenecks. In 2001 we lived through the 
horrific events of 9/11. Those terrorist attacks drastically 
impacted the aviation system; and for the past 4 years, we're 
back to record numbers.
    We find ourselves approaching the summer of 2005, and many 
of the problems we were facing in 2000 have returned. The 
problem doesn't stop there though. FAA is forecasting one 
billion passengers in the next decade.
    Most of what we will hear today is dependent on the overall 
economy. We realize that, but I think most everyone would agree 
that there's going to be a lot of planes in the skies the next 
couple of years. We're seeing trends toward regional jets, and 
their use is projected to double by the year 2015.
    Additionally, we have exciting new markets for business. 
Micro, mini, air taxi and fractional ownership of jets. That 
market is also expected to double in the next decade, and we 
need to be ready.
    Our National Airspace System is complex, and it has many 
different aspects to it. The list of elements that cause 
congestion and delay numbers far too many times, and there are 
far too many of them to name today.
    I anticipate and I am hopeful that we will hear a multi-
pronged approach to the problem. It's extremely important we 
have adequate airport and air traffic control infrastructure in 
place to handle today's traffic and the traffic of tomorrow. We 
need to explore technology like the ADS-B; and it is important 
that we continue to design, manage and utilize airspace in the 
most efficient ways possible.
    Again, I want to thank everybody for coming today, knowing 
that we have a holiday ahead of us; and we appreciate you being 
here and sharing your ideas with this panel, with this 
Committee.
    We've been joined by the Chairman of the Full Committee, 
Senator Stevens of Alaska.

                STATEMENT OF HON. TED STEVENS, 
                    U.S. SENATOR FROM ALASKA

    The Chairman. I'm delighted to be here with you. I'm here 
to hear the witnesses.
    Senator Burns. That's very simple. He's never handed it off 
like that before. Surprising.
    We have Director Blakey, FAA. We look forward to your 
statement, and thank you for coming today.

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

    Ms. Blakey. Thank you very much, Mr. Chairman and Chairman 
Stevens. I'm delighted to have the opportunity to testify 
before you today on what truly is an important and critical 
issue for us these days.
    And Chairman Burns, I have to congratulate you too on the 
new leadership here. We have been looking forward to working 
very closely together. We are heading into the toughest part of 
the year, without question, in terms of aviation. The delays 
and congestion we worry about are right in front of us, and the 
summer and convective weather brings it out.
    I think it's important too for us to step back a minute. 
Our drive and determination have also brought us to the very 
safest point in aviation history.
    Our record right now is one fatal accident for every seven 
million departures. It's really remarkable. And if you look at 
just in-flight accidents, not things that happen with the 
baggage car on the tarmac, it improves to one fatal accident 
for every 11 million departures. So I'm very confident that 
with the same kind of determination and drive we can address 
the congestion and delay challenges we have in front of us.
    As this Subcommittee is very well aware and, as Chairman 
Burns just outlined, traffic is back. It's good news for the 
passengers because as we have low ticket prices and scheduling 
flexibility is good all around.
    Last year 688 million passengers flew. This year we expect 
the number to go up to around 715 million. But with increased 
traffic does come delays and congestion.
    Last year set a record for delays, some 455,000. I think 
it's important to note that 70 percent of those were weather 
related. So while we cannot control severe weather, I think we 
can work very hard to prepare for it; and we are.
    I'm especially proud of our program to reduce vertical 
separation in the domestic airspace. DRVSM, as it's 
affectionately known, has provided a tremendous boost since 
January because it essentially doubles the capacity in the high 
altitudes, adding six jet lanes above 29,000 feet. This is a 
huge deal because this procedure essentially permits 
controllers to separate properly equipped aircraft in the high 
altitudes so that they are only a thousand feet apart without 
diminishing safety.
    In addition, obviously, the issue of fuel efficiency is 
huge right now; and we estimate that at this point with current 
fuel prices, we are talking $5 billion in savings over the next 
10 years just for those procedures alone.
    We are also using airspace redesign as one of the ways to 
address the problem. We're using an air traffic concept known 
as Area Navigation, or RNAV for short; and while the concepts, 
I think, are a little difficult to envision, what it does for 
aviation is very clear.
    Simply, RNAV is an advance in navigation capability that 
begins to move us away from the ground-based navigational aids 
to a system that really is much more efficient. It's not the 
old system of Federal airways and jet routes that everyone 
knew. It gives us much greater predictability and precision for 
both the pilot and the controller.
    Now, I want to show you what this means because I'm very 
excited about this, I'll have to tell you. [refers to a chart.] 
I think this chart of Atlanta--these are departure routes that 
we just put in place. Over there before RNAV, you can see how 
it's all split out; and by the way, you have four departure 
fixes. Not very efficient for getting them out of a very 
congested airport.
    Take a look at this after RNAV. At this point you're 
talking about highly precise departure routes, six fixes. You 
get them out quicker. By the way, it helps from a noise 
standpoint because these are the optimal routes. It's not all 
over communities that don't want it.
    From the standpoint of fuel efficiency, Delta is at this 
point estimating a $30 million savings on an annual basis out 
of Atlanta just for this. So it's a very big deal, and it's 
something we are moving with a number of communities to do.
    At this point, I think it's important to go to the Required 
Navigational Performance. You all have heard us talk about RNP 
before because it also helps us boost efficiency. This is a 
marriage of onboard navigation technology and GPS satellites. 
Because it allows crews to fly precisely defined computer 
routes with unprecedented accuracy; and it's in places where 
you can't get conventional procedures. I don't have to tell 
Chairman Stevens how important RNP has been in Alaska. It is a 
very big deal for us; and it is going to give us also very big 
savings in places like Kennedy, LaGuardia. We're hoping we will 
be able to unveil an RNP procedure out here at Reagan before 
the year's out.
    As you'll hear in a moment, the Inspector General recently 
issued a report on our efforts with airspace redesign. The 
assessment I think was fair and balanced. The report emphasized 
that airspace redesign is important to enhance capacity and 
meet demands for travel, and we agree with this.
    Our redesign of national airspace continues to be a 
critical element in addressing congestion, especially when you 
don't have the option of putting in a new runway. Unfortunately 
we have a very few tied-up airports where that's the case.
    Our intensive effort also has been to address choke points. 
We've done that in the busy northeast and Great Lakes corridor 
where we are already establishing new centers and routes. They 
have increased the throughput. No question about it, we think 
this effort has saved airlines over $90 million in reduced 
delays and fuel.
    Now another thing that has just come up, which I'm hearing 
from the airlines; and I thought this Committee would find 
important is that the airlines are indicating that they plan 
this summer to fly full. What this means is that they 
anticipate full passenger loads; and they will not cancel 
flights as they did a lot last summer because of convective 
weather.
    They intend to keep to the schedules, flying later and 
opting to incur delays if need be to reach the destinations. 
It's good news for the passengers because it means you're not 
looking at cancellations; but boy, I'll tell you, we can be 
looking at some real delays.
    The lack of cancellations will extend the flying day while 
aircraft wait out the storms before departing. It puts pressure 
on the airports and will also require us to put additional 
staffing in place in the evening hours to accommodate all these 
later operations. Because I think, as you all know, the 
National Weather Service is talking about a very rough 
convective weather season this year. I hope they're wrong, but 
that's what they're telling us.
    So with this new approach by the airlines this summer, 
we're going to incur greater costs to cover the service that 
we're going to have to cover; and it's a cost, of course, that 
hasn't factored into the FAA's budget.
    We are making inroads wherever possible to find ways to 
increase capacity. We commissioned a study of 300 airports in 
300 metropolitan areas, looking at the socioeconomic trends, to 
see what's really coming at us in the future. This FACT study, 
as we call it, serves as an early warning, if you will, of 
anticipated aviation demands.
    The year 2020 and 2030 sounds like a long way out there, 
but it's not when we're talking about building runways. Our 
taskforce found that the capacity investment in making runways 
is money well spent. If our targets to boost capacity are not 
met, demand will exceed capacity at 27 of our major airports 
and metropolitan areas in that timeframe. That's why pavement 
is one of our major areas of focus.
    In the last 2 years we've opened runways at Cleveland, 
Denver, Miami, Houston, and Orlando. By the end of 2008, we'll 
have added a runway at Atlanta, and an extension in 
Philadelphia, both of which are on the top ten list of the 
airports with the most delays. This is a list that the 
Inspector General tracks pretty carefully.
    Also by the end of 2008, we will have added runways in 
Minneapolis, Cincinnati, St. Louis, Boston, Charlotte and 
Seattle. All of these projects represented investment of $4.75 
billion. The new runways' improvements already in place have 
added investments to our economy and will accommodate a million 
more operations annually.
    Even with all these advances, we know that our forecasts 
show ever-increasing operations in the system. We will have a 
greater likelihood that delays will get worse before they get 
better. This is all the more reason why I say with emphasis 
that the financial health of the Aviation Trust Fund is 
essential.
    Under Secretary Mineta's leadership we have begun a 
dialogue of how our services are funded. Our Next Generation 
Air Transportation System, which takes us through the year 
2025, is crucial if we're going to be able to handle the 
continued upward trajectory of traffic. We've got to have the 
capacity in place to handle it, and I don't think there's any 
way to get to the Next Generation System and be able to pay for 
it unless we expect to do that and commit to it.
    This body has directed the FAA to function more like a 
business, and I'm proud to say we are. We're controlling our 
costs; managing our resources much more efficiently; labor 
costs are the single-largest cost driver for the agency; and 
with our upcoming labor negotiations, I've gone on record to 
state we cannot and will not sign an agreement we cannot 
afford.
    We're consolidating services, such as accounting and 
personnel. We've just made the largest A-76 award in government 
history through a private/public competition over the provision 
of automated flight services. We're going to save the taxpayer 
$2.2 billion.
    So in closing, my message is that in the short term, 
specifically this summer, we're going to do everything we can 
to get ready for the traffic and the weather. The big unknown 
is the long term. We know that the FAA needs a stable, 
consistent revenue stream in place in order to be able to pay 
for the capacity enhancements we'll need.
    In the interim, you have our firm commitment we're going to 
be diligent in using the resources we have to provide the 
world's safest and most efficient aviation system. Thank you.
    [The prepared statement of Ms. Blakey follows:]

  Prepared Statement of Hon. Marion C. Blakey, Administrator, Federal 
                        Aviation Administration

    Good morning Chairman Burns, Senator Rockefeller, and Members of 
the Subcommittee. Thank you for the opportunity to be here this morning 
to discuss our plans to ease air traffic congestion this spring and 
summer. Secretary Mineta and I wish to offer our congratulations to 
you, Mr. Chairman, on assuming the Chair of this Subcommittee and to 
extend our good wishes to the new and returning Members of the 
Subcommittee. But before we discuss capacity and delays, let me address 
safety. As you know, safety is and will always be the FAA's top 
priority. Every decision we make is done with the safety of the flying 
public in mind. The system must be safe, as you know, and we deliver a 
remarkably safe system. I am pleased to note that over the last three 
years, the commercial airline fatal accident rate is the lowest in 
history. That's a tribute to the men and women of the FAA and the 
industry we support.
    The health of our aviation system is critical to our economy, and 
the good news is that air travel has rebounded. We now project that 
overall passenger demand and commercial activity at FAA air traffic 
facilities will return to pre-9/11 traffic levels by the end of this 
year, reaching about 710 million passengers. Commercial operations at 
17 of this country's top 35 airports have already exceeded their pre 9/
11 levels, with some airports like Salt Lake City and Fort Lauderdale 
already showing very high growth, above 11.5 percent and 6.6 percent 
over pre 9/11 levels respectively.
    With approximately 9 percent of our country's Gross Domestic 
Product tied to aviation, this is a very welcome rebound. However, we 
need to brace up because with this rebound will come delays, 
potentially serious ones, as early as this summer, and we need to do 
all we can to avoid them. That's why today's hearing is both important 
and timely.
    Certainly some aviation markets have fared better than others, and 
new trends have emerged. Low-cost carriers have increased their market 
share, while the larger ``legacy carriers'' have been restructuring and 
downsizing. Also, regional and commuter carriers have been replacing 
and supplementing flight routes once dominated by legacy carriers, as 
well as introducing new services that use longer range regional jets. 
As a result, we are seeing significant growth in the regional carrier 
market, and we expect it will continue to grow.
    Following 9/11, the agency worked with this Committee and industry 
stakeholders to prepare for the return of air traffic demand. We 
developed careful plans and worked to ensure that the agency was better 
situated to avoid the delay problems of past summers. We will continue 
the successful innovative steps begun in recent years that have helped 
to avert a repeat of past delay-riddled summers. To address and 
alleviate congestion and delays over the short term we will work to 
implement new procedures, more pavement, and better technology.
    Our plan takes into account the myriad of factors--some well beyond 
our control--that contribute to system delays, including weather, 
security, airline operations, air traffic control, airports, 
infrastructure, and equipment. We are confident that this approach will 
provide effective inroads to manage the surge in traffic that will 
coincide with the busy summer travel season.
    To emphasize the difficulty some of these factors create for the 
National Airspace System, you may recall that last summer four major 
hurricanes made landfall in the State of Florida, one of the country's 
primary tourist and travel destinations, in just a six-week period. 
Airports and air traffic facilities across the state suffered 
significant damage, including Southwest Florida in Fort Myers; Orlando 
International in central Florida--which was hit by three different 
hurricanes; and the FAA's Pensacola TRACON in the Panhandle. The FAA 
responded quickly to restore capabilities damaged by the storms. For 
example, the Pensacola TRACON was nearly destroyed by Hurricane Ivan. 
The facility was closed on September 15th because of the forecasted 
winds and storm surge. Employees volunteered to stay behind to monitor 
the facility condition and begin service restoration after the 
hurricane passed. However, during the height of the storm, the roof of 
the Pensacola TRACON was partially torn off. Employees on site quickly 
unplugged and protected the sensitive ATC equipment from the wind and 
rain, saving millions of dollars worth of equipment. Through the 
dedicated work of our employees and the cooperation of several 
agencies, the Pensacola TRACON was reopened for daylight operations 
only within two days, and to full ATC operations only 20 days after 
Ivan's devastation. Additionally, FAA's Airports Organization 
distributed $25 million from the Emergency Hurricane Supplemental 
Appropriations Act to 85 airports in Alabama, Florida, Kentucky, 
Mississippi, North Carolina, Pennsylvania, West Virginia and Puerto 
Rico in record time, allowing the airports to make repairs and resume 
operations.
    Many of the new procedures we are now using were the result of a 
first-of-its-kind meeting of industry decision makers and the 
government, known as ``Growth Without Gridlock,'' which we convened 
last year. The group agreed to a series of new procedures designed to 
relieve congestion during the heavy summer travel season. We moved away 
from the ``first come-first served'' model of air traffic when demand 
far exceeds capacity by issuing revised flight plans or rerouting some 
aircraft away from problem areas, allowing us to maximize utilization 
of available airspace under adverse conditions.
    The most innovative of these new procedures, a concept we call 
``delay triggering,'' imposes minor delays on the ground to avert 
massive delays across the National Airspace System. When delays at an 
airport are anticipated to reach 90 minutes or more, other airports 
sending aircraft into the congested area will hold flights until our 
controllers clear the congestion. Although this may mean brief delays 
for some flights, it helps prevent the massive delays that can occur 
system-wide when critical airports become gridlocked. This procedure 
has been so successful that we have incorporated the philosophy into 
other areas of managing demand and delays. Most recently, we began 
using this concept in managing departure delays from Fort Lauderdale. 
The feedback from our customers has been very positive, and we will 
continue to apply this procedure during the upcoming convective weather 
season.
    A major accomplishment this year is our implementation of Domestic 
Reduced Vertical Separation Minimums or DRVSM. This is a tremendous 
boost to air traffic capacity because it essentially doubles capacity 
at high altitudes, adding six cruising altitudes or jet lanes above 
29,000 feet. The procedure permits controllers to reduce minimum 
vertical separation at altitudes between 29,000 and 41,000 feet from 
2000 feet to 1000 feet for aircraft that are equipped with dual 
altimeter systems and autopilots. Not only does this double the 
capacity options for controllers and pilots, but the higher altitude 
routes are more fuel efficient. We estimate the DRVSM will save 
airlines approximately $5 billion through 2016, an estimate that will 
prove to be conservative if fuel prices remain high.
    Another major initiative is the expanding implementation of Area 
Navigation (RNAV) procedures to additional airports. RNAV procedures 
have been implemented and are performing successfully at Las Vegas, 
Philadelphia, and Dulles airports. Just last month, 13 RNAV departure 
procedures went into full operation at Atlanta Hartsfield-Jackson 
International Airport--the world's busiest airport. These procedures 
provide flight path guidance incorporated in taxi procedures, with 
minimal instructions required during departure by air traffic 
controllers. This significantly reduces routine controller-pilot 
communications, allowing more time on frequency for pilots and 
controllers to handle other safety-critical flight activities. Key 
benefits of the RNAV procedures include more efficient use of airspace, 
with improved flight profiles, resulting in significant fuel 
efficiencies to the airlines. RNAV procedures are scheduled for 
implementation at Dallas-Ft. Worth airport this year as well.
    Another technological innovation, known as Required Navigation 
Procedure or RNP, promises to add to capacity. RNP is on-board 
technology that allows pilots to fly more direct point-to-point routes 
reliably and accurately. RNP gives pilots not only lateral guidance, 
but vertical precision as well, and the system is highly precise and 
accurate. RNP reaches all domains of flight--departure, en route, and 
arrival. This not only will allow more efficient airspace management, 
but also provide savings in fuel costs for the airlines. For example, 
in January 2005, in partnership with Alaska Airlines, we implemented 
new RNP approach procedures at Palm Springs International Airport, 
which is located in very mountainous terrain. Under the previous 
conventional procedures, planes could not land unless the ceiling was 
at least 2,300 feet. With the new RNP procedures, approved air carriers 
can now operate to a ceiling of 684 feet, which allows much better 
access during bad weather. Additionally, RNP has enabled aircraft to 
cut significant mileage out of their flight path into Palm Springs--
nearly 30 miles--which translates into substantial fuel savings for 
operators. The U.S. is leading the world in RNP, by issuing the first 
set of criteria and standards in this area in the very near future. 
Boeing and Airbus support RNP, and our standards are being embraced in 
Europe, Asia and South America, and by our neighbors to the north in 
Canada.
    In addition, we improved communication among the system users and 
the FAA. Airlines agreed to improve their input to the FAA's flight 
schedule monitor system using new software so that it will more 
accurately reflect the latest airline schedule plans. This move 
minimizes unused airport capacity when flights are rescheduled or 
cancelled. Also, airlines are encouraged to file flight plans earlier, 
allowing for more time to address potential congestion problems. In 
addition, our relationship with the air carriers who participate in our 
daily conference calls is genuinely cooperative, reflecting our common 
understanding that we all have a stake in the process. The conference 
calls--scheduled every 2 hours during the busiest portion of the day--
also provide an opportunity for feedback. Customers let us know if they 
believe they were disadvantaged by a prior day's delay reduction 
measures or offer ideas on how we can all improve the system. We all 
know that continued cooperation is essential to the success of our 
spring and summer airspace management plans. Delays are bad for 
business, regardless of whether you are a large, legacy carrier, a low-
cost carrier or a regional airline.
    I'd like to take a moment to recognize this Committee's role in 
addressing system capacity constraints. With the passage of Vision 
100--Century of Aviation Reauthorization Act, you provided the FAA and 
DOT with additional tools to address unexpected challenges that 
threaten to reduce capacity or cause delay at critical chokepoints. We 
must be ready to react to situations when they unfold. For example, the 
authority provided by Vision 100 enabled us to take initial action last 
year at Chicago O'Hare International Airport to address over-scheduling 
by air carriers and the resultant excessive delays that affected the 
entire National Airspace System.
    As you know, two major carriers, American Airlines and United 
Airlines, have hubs at O'Hare. The competition for market share is 
compounded by the obvious physical limitation on the number of planes 
that can take off and land during any time period. Moreover, it has 
been well demonstrated over the years that delays at O'Hare have the 
potential to cause delays at as many as 40 other airports nationwide. 
Consequently, managing delays at O'Hare is essential to the effective 
management of air traffic nationally. In November 2003, major delays 
began occurring as a result of steady increases in flights, as O'Hare's 
slot rules phased out, and a shift by American Airlines of flights from 
St. Louis to O'Hare. Vision 100 enabled us to take action.
    Early last year, Secretary Mineta and I asked United and American 
to make a voluntary 5 percent schedule reduction during peak travel 
times. This voluntary reduction took effect March 4, 2004. American and 
United further agreed to reduce their overall peak-hour schedules by 
another 2.5 percent by June 10, 2004. This voluntary agreement was 
extended through last summer, as negotiations between the FAA and all 
airlines serving O'Hare continued in an effort to craft a more 
comprehensive plan to reduce flight delays, and one which treated all 
air carriers serving O'Hare fairly. Eventually, in August 2004, a 
voluntary agreement for schedule reductions during peak hours was 
reached involving all airlines currently serving O'Hare, and which 
allowed some leeway for new entrant carriers as well. This agreement 
took effect in November, and in March 2005 was extended through October 
29, 2005. At the same time we extended the agreement, we also published 
a Notice of Proposed Rulemaking (NPRM) which proposes options to 
address congestion at O'Hare for the next three years. By that time, if 
approved by FAA, O'Hare's proposed Modernization Project or a 
reasonable alternative to that project could provide additional airport 
capacity.
    Since the voluntary agreement took effect last November, O'Hare's 
on-time arrival performance has improved by more than 10 percent, and 
overall delay minutes from November through this past February have 
been cut by 22 percent, as compared to the previous year. We estimate 
that maintaining limits on the number of arrivals through April 2008 
will result in a reduction in delays at O'Hare, and save airlines and 
passengers over $700 million lost through delays as compared to 
November 2003. As noted above, the proposed rule is timed to expire as 
airport capacity improvements are expected to take hold. Under the 
terms of the NPRM, we will review every six months the level and length 
of delays and other operating conditions, to determine if the airport 
can accommodate more arrivals. If additional capacity becomes available 
while the rule is in effect, we propose a method to assign the 
additional capacity to air carriers interested in initiating or 
expanding service at O'Hare.
    We partner with airports to address capacity and delay concerns and 
we support implementation of solutions with funding from the Airport 
Improvement Program (AIP). By the end of 2008, eight new runway 
projects are scheduled for commissioning. These include new runways at: 
Minneapolis-St. Paul; Cincinnati; St. Louis; Atlanta; Boston; 
Charlotte; and Seattle, and a runway extension at Philadelphia. Beyond 
2008, we are working with other airports to increase capacity. We 
recently announced our final Record of Decision for Los Angeles, which 
will permit the airfield reconfiguration project to go forward. We 
continue to maintain and monitor the schedule for the Environmental 
Impact Statement at Chicago as well. We are also working closely with 
Fort Lauderdale on a major runway extension, and three major 
metropolitan areas Chicago, Las Vegas, and San Diego who are 
considering the need for new airports. We are supporting, through AIP 
funding, the preparation of regional studies in the New York 
Metropolitan area and the LA Basin.
    While new runway construction typically provides the largest 
increase in capacity, there are new technologies and procedural 
improvements, such as Traffic Management Advisor (TMA) and Precision 
Runway Monitor (PRM), which add capacity, as well. TMA is a tool that 
assists the air traffic controller to sequence and schedule aircraft to 
the runway to maximize airport and terminal airspace capacity without 
compromising safety. PRM approaches have been implemented at San 
Francisco, Philadelphia, Cleveland and Minneapolis-St. Paul, and are 
planned for Atlanta and St. Louis. PRM allows air traffic controllers 
to run simultaneous operations on closely spaced parallel runways. It 
should be noted that increases in capacity from new runway construction 
often cannot be fully realized unless implemented along with new 
procedures and technology.
    As with other networks that experience peak period demand surges, 
congestion management, such as congestion pricing, could be an option 
at a small number of airports where demand may come to exceed capacity 
in the short term, pending capacity expansion, or in the long term if 
capacity expansion is not a practical option.
    In FY 2004, the FAA completed a study analyzing system capacity, 
taking into account the socio-economic and demographic trends expected 
to occur in the United States through 2020. This study expanded the 
focus of the 35 OEP airports and evaluated nearly 300 commercial 
service airports nationwide. This study identified airports and 
metropolitan areas expected to have significant growth in population 
and/or income that could result in an increase in the demand for air 
transportation that may not have been previously anticipated. The study 
identified the airports that need additional capacity and any 
constraints to enhancing capacity. Without capacity improvements at 
airports in these areas, this demand may go unsatisfied. In FY 2005, 
the FAA will complete a second phase of this study that will take a 
more detailed look at the non-OEP airports and will begin to identify 
possible solutions to increase long-term capacity
    We must also make sure we are using the best technology to maintain 
a safe and efficient air traffic system. One example of this is the 
Wide Area Augmentation System, known as WAAS. WAAS is a precise 
navigation system that enhances the satellite signals from the Global 
Positioning System (GPS) to provide the accuracy and reliability 
necessary for pilots to rely on GPS during flight. Because the system 
is satellite-based, WAAS procedures cost a lot less to implement and 
maintain than traditional ground-based navigation systems. WAAS makes 
more airspace usable to pilots, provides more direct en route paths, 
and provides new precision approach services to runway ends. The 
implementation of WAAS into the NAS will result in safety and capacity 
improvements. Since WAAS became operational in July 2003, the FAA has 
developed 3,000 WAAS approaches. This is a significant accomplishment 
in modernizing how we use our airspace, and one which will have a 
lasting, positive effect on capacity.
    In the longer term, however, we know that these short and mid-term 
efforts will simply not be enough. The recent FAA aviation forecast 
provides further evidence that our current system, already coming under 
stress in some areas, will be stretched to its limit as future demands 
continue to grow. Passenger totals are expected to exceed one billion 
by 2015, and we project up to a tripling of passengers, operations and 
cargo by the year 2025. As Secretary Mineta said in a speech before the 
Aero Club in January 2004: ``The changes that are coming are too big, 
too fundamental for incremental adaptations of the infrastructure. We 
need to modernize and transform our air transportation system--starting 
right now.''
    Our overarching goal in the Next Generation initiative is to 
develop a system that will be flexible enough to accommodate very light 
jets and large commercial aircraft, manned or unmanned air vehicles, 
small airports and large, business and vacation travelers alike, and to 
handle up to three times the number of operations that the current 
system does with no diminution in safety, security and efficiency. At 
the same time, the system would minimize the impact of aviation on the 
environment.
    However, the move to a modern, efficient and technology-driven 
aviation system is going to require sustained, long term investments. 
The problem we face is that the status of the Aviation Trust Fund, 
which supports these investments, is inextricably tied to the fortunes 
of the aviation industry. Policy makers need to know that there is a 
gap that exists between our revenue and expenses, and this gap is 
quickly eroding the Trust Fund. The FAA needs a stable source of 
funding that is based both on our costs and the services we provide so 
that we can meet our mission in an extremely dynamic business 
environment. Tying fees to the cost of providing service protects both 
FAA and the customers who use FAA services by not subjecting our 
ability to provide a critical level of service to unrelated factors 
like ticket prices. A stable, cost-based revenue stream can also ensure 
funding for long-term capital needs. We also believe that a cost-based 
revenue structure would provide incentives to our customers to use 
resources efficiently and to the FAA to operate more efficiently, as 
stakeholder involvement can help us ensure that we are concentrating on 
services that the customer wants and is willing to pay for.
    Mr. Chairman, with a comprehensive plan in place, cooperative 
initiatives underway, and thanks to the tools provided to us by this 
Committee, we are ready for the spring and summer travel season. This 
completes my statement. I will be happy to answer your questions at 
this time.

    Senator Burns. Thank you very much. The Honorable Kenneth 
Mead, Inspector General, United States Department of 
Transportation.

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

    Mr. Mead. Thank you, Mr. Chairman, Chairman Stevens, and 
Senator Nelson. On May 18 of last year, this Committee had a 
hearing on the same subject; and it's timely as we approach the 
unofficial start of summer this weekend. In 2004 the number of 
passengers on planes were nearly 700 million, just short of 
2000 levels; and flight operations this past April were 4 
percent greater than in April of 2000. One factor stimulating 
growth is the decline in airfares.
    Last month the average fare on a thousand-mile flight was 
$118. In 2000 the fare on that same flight was $147. A major 
exception to the rebounding traffic levels is in the area of 
small communities and cities with non-hub airports like 
Missoula, Texarkana, and Charleston. Scheduled flights to these 
airports this coming July are down 21 percent from July of 
2000. Congestion-related delays are also coming back. In the 
first quarter of this year, delays affected more than one in 
every four flights and in some airports, one in every three 
flights.
    Last year delays affected 22 percent of all flights. Delays 
this year are averaging about 52 minutes a flight, last year it 
was 49 minutes. This summer you can expect delays to get worse. 
In addition, as Administrator Blakey pointed out, there's the 
inevitable, but unpredictable, summer storms that can compound 
delays.
    The airports to watch this summer include Philadelphia, 
Washington-Dulles, New York-Kennedy, Newark, Fort Lauderdale, 
New York-LaGuardia, and Atlanta. All these airports are 
currently experiencing delays, and traffic at most of them is 
projected to grow substantially this summer.
    Now, you'll note that Chicago-O'Hare was not on my list. 
O'Hare went from the worst airport last year to number 14 this 
year. The delay rate went from 37 percent in 2004 to 27 percent 
this year. The improvement is at least, in part, due to the 
Department's interventions three times this past year.
    Here's another interesting factoid: Only five of the 
fifteen most delayed airports are among the Nation's fifteen 
busiest airports. And based on the lessons we learned this past 
Christmas season when one airline's understaffing, weather 
problems and traffic volume nearly tripled traffic in 
Philadelphia, to say nothing of the luggage problems, it's 
imperative that FAA, airports and the airlines are ready for 
what I think is shaping up to be the busiest summer travel 
season in 6 years.
    Several factors are driving delays. These factors change a 
bit from year to year, but here's what it appears to be for 
this summer:
    Low-cost carrier growth, especially in markets that have 
historically been legacy carrier strongholds. This is driving 
down fares, stimulating demand, and sparking scheduling 
battles.
    Another factor is legacy carrier hub downsizing. For 
example, US Airways downsized its Pittsburgh hub and shifted 
operations to hubs in Philly, Charlotte and Fort Lauderdale. At 
those airports delays increased by more than 60 percent. 
Another factor, Administrator Blakey pointed out, is traffic 
growth by smaller jet aircraft. It is really driving congestion 
as network carriers continue to shift service to regional jets. 
Benchmark back to 2000 when regional jets accounted for about 
10 percent of flights. Now it's about 32 percent.
    Also general aviation jet traffic is growing. Beyond this 
summer, congestion's likely to grow as low-cost carriers 
continue to expand. We also expect international cargo and 
international passenger flights to pick up as well.
    More affordable microjets. That's a price tag of $1 
million, compared to about $4 million for a business jet today. 
They may come online as early as next spring and will pose 
challenges to air traffic control. This is because microjets 
are likely to operate in the same airspace as the larger jets.
    Since the gridlocked summer of 2000, FAA has taken actions 
to improve the flow of air traffic. These include putting 
administrative controls in place at O'Hare, improving 
communications between airlines and FAA's Command Center, and 
relying on new procedures to better manage effects of bad 
weather. Also, this past January FAA reduced vertical 
separation for aircraft traveling at high altitudes, in effect, 
creating more highways in the sky.
    Moreover, seven new runways have come online since 1999. So 
without question, things would be much worse if these things 
had not been done. I'd like to highlight five key actions. I 
think they're important for both the short and long term.
    First, keeping new runway projects on schedule. There are 
projects in Minneapolis, Cincinnati, St. Louis, Atlanta, 
Boston, Philadelphia, Charlotte and Seattle. Only three of 
those fifteen, though, are among the fifteen most congested 
airports. Those airports are Atlanta, Boston, and Philadelphia. 
All three are expected to complete new runway projects within 
the next two to 3 years.
    This year, we are facing a key decision point on Chicago 
O'Hare's Runway Expansion and Modernization Program. This 
decision point focuses on the environmental impact statement.
    A second factor that I think FAA needs to move on is taking 
steps to materially improve its management of Airspace Redesign 
projects. Sometimes you can complete a runway project; but if 
you don't make changes in the airspace, you're not going to 
yield the benefits of the runway. And I know Administrator 
Blakey alluded to that. I think they're committed to making a 
good number of changes that we recommended there.
    A third factor is addressing the wave of controller 
retirements. Over the next 10 years, three-quarters of the 
controller workforce is planning--will be eligible to retire. 
FAA has published a plan, and later this year they need to come 
out with numbers by facility. There's over 300 of them in the 
country.
    The fourth factor focuses on getting a handle on exactly 
what FAA's new office for developing a Next Generation Air 
Traffic System can do in 5 and 10 year benchmarks. The 2025 
timeframe is just not that meaningful. It's difficult for 
people to relate to 25 years from now, and that is why I think 
we need benchmarks in 5 and 10 year intervals.
    Also, the current air traffic system was designed to handle 
a much lower level of traffic than we have today. It's largely 
based on a paradigm of ground based systems and procedures that 
hasn't changed appreciably in the last three decades. So I'm 
hoping that this year FAA will be able to articulate what new 
capabilities it needs, when they need them, and what the 
financing requirements will be for them.
    Finally, in the short term we are facing decision points at 
two airports, O'Hare and LaGuardia. I mentioned the runway 
decision for September, but administratively imposed flight 
caps are in place now at O'Hare. They're set to expire this 
November, and FAA is considering whether or not to extend them 
for another 3 years until the runway is built.
    At LaGuardia slot restrictions imposed under the High 
Density Rule are in place. They are due to expire, I believe, 
in January 2007. New construction's not an option at LaGuardia. 
FAA will have to do something at LaGuardia.
    Market-based solutions may offer some relief, but the 
devil's going to be in the details if we move to market-based 
solutions. Some of those details will be how to value capacity, 
how to price it, small community access, and of course, who's 
going to get the money. That concludes my statement.
    [The prepared statement of Mr. Mead follows:]

    Prepared Statement of Hon. Kenneth M. Mead, Inspector General, 
                      Department of Transportation

    Mr. Chairman and Members of the Subcommittee,
    Thank you for inviting us to testify today. As we venture into the 
summer months--historically the peak air travel time--congestion and 
delays are on the forefront of concern. In many markets, traffic and 
delays are back at a rate as severe as 2000, when travel disruptions 
were at their peak. And in some markets they are worse. Today I want to 
describe the scenario--what we've seen recently, and where we're likely 
to be this summer, what is driving the delays, and what FAA must do to 
address congestion in both the short- and long-term.

Traffic Levels Are Growing as Are the Number, Rate, and Length of 
        Delays in Key Markets
    Both enplanements and operations are back to or greater than 2000 
levels, when air travel was at its peak. Enplanements in 2004 were 
698.7 million, just about 250,000 short of 2000 enplanements. Flight 
operations in April 2005 actually exceeded April 2000 operations by 4 
percent.
    One of the factors stimulating traffic growth is the continued 
decline in average airfares. In April 2000, the average one-way airfare 
on a 1,000-mile flight was $147--this past April the fare was down 20 
percent to $118. The one exception to rebounding traffic levels is in 
the area of small communities. In cities with non-hub airports like 
Missoula, Montana; Texarkana, Arkansas; Yuma, Arizona; and Charleston, 
West Virginia, scheduled flights in July 2005 to large, medium, small, 
and other non-hub airports are down 21 percent and seats are down 12 
percent from July 2000. \1\ Service levels remain depressed despite a 
doubling in recent years in Essential Air Service funds, and a near 50 
percent increase in the number of subsidized cities.
---------------------------------------------------------------------------
    \1\ Includes all domestic and international flights.
---------------------------------------------------------------------------
    As traffic has increased, so have delays. In the first quarter of 
2005, arrival delays were up 17 percent over the first quarter of 2004, 
and affected more than 25 percent of all flights. The average length of 
delay is also rising, with first quarter 2005 delays averaging 52.3 
minutes compared to 48.5 minutes in the same period in 2000. During the 
first quarter of 2005, more than one-third of all arrivals were delayed 
at five airports, including LaGuardia, Philadelphia, and Newark. We 
note that the most delayed airports are not necessarily the busiest 
airports. In fact, of the 15 highest-volume airports during the first 
quarter of 2005, only 5 are among the top 15 most delayed airports.
    Overall, we expect the traffic and delay growth to continue, 
especially in those markets where we are already experiencing problems. 
Total operations are continuing to increase, and summer storms are 
notorious for adding delays in Southeast and Northeast markets like 
Atlanta and New York which are already suffering from capacity-related 
delays.

Outlook for This Summer and Beyond: Six Airports to Watch
    Airports to watch this summer include Philadelphia, LaGuardia, 
Newark, Washington-Dulles, Atlanta, and Fort Lauderdale. All have some 
or all of the following characteristics: significant delays last 
summer, in most cases exceeding summer 2000 delays; substantial 
projected traffic growth this summer; or consistently elevated delay 
rates sustained over the past year or longer. On a cautionary note, we 
learned a hard lesson last December when weather problems and traffic 
volume in a handful of cities bumped up against the pared-down 
operations of one network carrier. Many network carriers have been 
trimming operations to lower costs and improve their financial 
conditions. With traffic expected to grow this summer, the airlines--as 
well as FAA and the airports--need to ensure that staff and resources 
are commensurate with the level of scheduled operations.
    On a positive note, delays appear to be improving at Chicago-
O'Hare, an airport which has been plagued by congestion for more than 
30 years, despite regulatory intervention. We expect the improvement to 
continue through the summer months. O'Hare ranked fourteenth in delays 
during the first quarter of 2005 in contrast to its rank of first in 
the same period in 2004. The improvement appears to be, at least in 
part, a result of the Department's administrative actions in 2004 to 
cap hourly operations at O'Hare at a level consistent with available 
capacity. The controls on landing slots and schedules have temporarily 
brought some short-term relief, but in the long run, controls do not 
accommodate demand and can stifle competition.

Causes of Delay Growth Include Significant Low-Cost Carrier Expansion, 
        Down-Sizing of Network Carrier Hubs and Subsequent Transfer of 
        Service to Alternative Hubs, and Continued Growth in Regional 
        Jet 
        Operations
    Incursion of Low-cost Carriers into Legacy Hubs Spurs Traffic and 
Congestion Growth. Low-cost carriers are now challenging legacy 
carriers in their hubs in most large- and medium-sized markets, 
increasing traffic and contributing to delays. For example, the 
increasing presence of JetBlue and other low-cost carriers at New York-
JFK are causing delays in an airport that has been operating at under-
capacity since traffic dropped off in late 2000. During the first 
quarter of 2005, low-cost carrier traffic increased more than five-fold 
while other traffic \2\ was down by 34 percent from the first quarter 
of 2000. During this same period, delays at JFK were 34.5 percent 
higher than during the same period in 2000 and represented an increase 
of more than 52 percent over the first quarter of 2004. Likewise, 
following the start-up of new low-cost carrier Independence Air at 
Washington-Dulles, traffic levels there increased by 79 percent and 
delays more than doubled.
---------------------------------------------------------------------------
    \2\Domestic and international operations by U.S. flag carriers, 
international operations by foreign flag carriers, and charter service.
---------------------------------------------------------------------------
    New market entry by low-cost carriers can have dramatic effects on 
the average fares in those markets, often stimulating demand and 
driving additional service frequencies. For example, when Southwest 
began service between Philadelphia and Providence in 2004, the average 
one-way fare dropped from $328 to $54 and the number of passengers in 
the quarter following Southwest's market entry (third quarter 2004) 
increased from fewer than 10,000 to more than 100,000.
    Displaced Traffic from Down-sized Legacy Carrier Hubs Contributes 
to Congestion Growth in Other Hubs. In an effort to reduce costs and 
improve efficiency, several mainline carriers have closed hub 
operations at some airports and transferred operations into remaining 
hubs. For example, US Airways downsized its Pittsburgh hub operations 
by 3,800 flights in the fourth quarter of 2004 and shifted mainline 
aircraft and operations to its hubs in Philadelphia, Charlotte, and 
Fort Lauderdale. While delays in Pittsburgh were down minimally in the 
first quarter of 2005 from the first quarter of 2004, delays increased 
in each of the other three hubs by more than 60 percent.
    Increased Regional Jet Operations and Rebounding Jet-powered 
General Aviation Traffic Are Increasing Demands on High-Altitude 
Airspace and Airport Runways. Network carriers continue to shift 
service to regional jet aircraft. In July 2000, scheduled flights 
aboard regional jets accounted for 10 percent of all flights. In July 
2005, they will account for 32 percent of all flights. Unlike their 
turbo-prop driven predecessors, regional jets occupy the same airspace 
and require access to the same runways as larger jet aircraft.
    While the rest of the industry has shown signs of recovery, general 
aviation (GA) operations as a whole have continued to decline and 
remain 12.4 percent below 2000 levels. However, within the GA market, 
one sector--jet aircraft activity--is improving. Flight hours logged by 
GA jets in 2004 were up 6.2 percent over 2000 levels.

Future Drivers of Congestion Will Include Continued Low-Cost Carrier 
        Growth, Increased International Operations, and Expanding 
        Jet-powered General Aviation Traffic
    Continued growth of low-cost carrier networks in hubs formerly 
dominated by legacy carriers will increase demand on airport and air 
traffic control operations.
    International traffic, which has lagged behind domestic rebounding 
traffic, is once again picking up. In the summer 2005, scheduled 
international passenger and cargo operations are projected to exceed 
summer 2000 levels by 16 percent and 12 percent, respectively.
    One of the new challenges that we are likely to encounter within 
the next year is operations by a new class of aircraft called Very 
Light Jets (VLJs) or microjets, which are scheduled to enter the market 
as early as March 2006. Priced as low as $1 million per aircraft, 
microjets may be more attractive to the business travel market than the 
currently available comparable aircraft priced at about $6 million. 
Microjet manufacturers anticipate that these twin-engine, 4-6 passenger 
jets, will find a niche among a variety of corporate and private owners 
as well as on-demand air taxi service. While supporters believe that 
microjets have the potential to redefine business travel, others are 
more conservative about how quickly, where, and to what extent the 
market will materialize.

FAA Has Made Progress in Managing and Enhancing Capacity but 
        Additional Actions Need To Be Taken To Meet the Demand for Air 
        Travel in the Short- and Long-Term
    Since the Summer of 2000, FAA has taken a range of actions that 
have improved the flow of air travel. These include putting 
administrative controls in place at Chicago O'Hare, improved 
communications between airlines and FAA's Command Center, and 
procedural changes to help manage the affects of bad weather. Moreover, 
a number of new runways have come on-line. Most recently in January 
2005, FAA reduced vertical separation for aircraft traveling at high 
altitudes (between 29,000 and 41,000 feet) to enhance the flow of air 
travel.
    Without question, congestion and delays would be much worse this 
summer without these actions, particularly the administrative controls 
at Chicago O'Hare and the commissioning of new runways. However, the 
anticipated demand for air travel highlights the need for additional 
actions in both the short- and long-term.
    Keeping new runway projects on schedule, including projects at 
Minneapolis, Cincinnati, St. Louis, Atlanta, Boston, Philadelphia, 
Charlotte, and Seattle Airports, is important because FAA reports that 
new runways provide the largest increases in capacity. We note that of 
the 15 most congested airports (in terms of percent of operations 
delayed in the first quarter of 2005), only 3 airports (Atlanta, 
Boston, and Philadelphia) are expected to complete new runway projects 
within the next 2 to 3 years.
    Getting FAA's airspace redesign efforts on track is critical to 
enhance capacity. Earlier this month, we issued a report on FAA's 
airspace redesign efforts and found that cost and schedules for 
projects are not reliable, projects are delayed 3 years or more, and 
airspace redesign efforts are not effectively coordinated among FAA 
organizations. We made recommendations aimed at strengthening and 
speeding the transition from project planning to implementation by 
establishing cost and schedule controls for airspace projects, 
prioritizing efforts, and linking airspace projects to agency budgets.
    Addressing the pending wave of controller retirements will be a 
challenge. Over the next 10 years, FAA estimates that approximately 73 
percent of the organization's 15,000 controllers will become eligible 
to retire. This past December, FAA issued the first in a series of 
reports outlining how the problem will be addressed. While a good first 
step, the plan does not discuss cost nor hiring and staffing needs by 
location. This information is critical because FAA has over 300 air 
traffic control facilities, and many (like Chicago O'Hare) have the 
potential to impact the entire National Airspace System. Without 
accurate facility-level planning, FAA runs the risk of placing too many 
or too few controllers at key locations and could waste a one-time 
opportunity to address longstanding concerns about controller staffing 
imbalances. FAA must also be cognizant that a much higher percentage of 
its controller workforce will be trainees. FAA will need to continually 
monitor the training results from individual facilities to ensure that 
the significant increase in trainees does not adversely impact 
efficiency or safety.
    Setting expectations for FAA's new Joint Planning and Development 
Office is critical. This office was mandated by Congress to develop a 
vision for the next generation air traffic management system in the 
2025 timeframe. There are a number of reasons why this effort is 
important, including the forecasted demand in air travel and the 
factors (i.e., microjets) that may drive increased operations. It is 
also important because much of FAA's current capital account focuses on 
keeping things running (i.e., infrastructure sustainment), not new 
initiatives. FAA reports that the current air traffic control system 
(or ``business as usual'') will not be sufficient to accommodate future 
growth in traffic or the changes facing the aviation community. Key 
issues focus on what new systems are needed and how new systems, 
capabilities, procedures, and changes in airspace management can 
transform the way air traffic services are provided. FAA needs to 
determine what the new office can do in 5- and 10-year intervals and 
establish corresponding funding requirements.
    In the immediate term, there are two airports--Chicago-O'Hare and 
New York-LaGuardia--where traffic, if unchecked, is likely to overtax 
available capacity. Slot restrictions were in place in both airports 
through 2002, when O'Hare's were lifted. At LaGuardia, slot controls 
were lifted in 2002 and then reinstated when delays became 
unmanageable. At O'Hare, the Administration has imposed administrative 
controls to cap the number of hourly flights at a level consistent with 
the airport's capacity. The Department has a rulemaking underway that 
would extend these caps for 3 years until planned runway projects can 
add capacity.
    At LaGuardia, however, new construction is not a viable option 
because of land constraints. At LaGuardia, and potentially other 
airports where delays may return to a crisis level faster than capacity 
can be added, market-based solutions may offer some temporary, or even 
permanent, relief. Market-based solutions such as congestion pricing or 
slot auctions may allocate scarce capacity without distorting the 
market, but they entail difficult policy decisions such as how to value 
capacity, what the appropriate price is for the respective users, who 
should determine the price, who collects the revenues, and how the 
revenues should be used.
    Mr. Chairman, this concludes my formal statement. An attachment to 
this statement includes charts, graphs, tables and other data that 
further illustrate the issues I have highlighted today. I would be 
happy to answer any questions.

ATTACHMENT

Traffic Growth In Key Markets Is Driving Delays and Congestion While 
        Smaller Communities Continue To Experience Depressed Service 
        Levels
    Both enplanements and operations are back to or at even greater 
levels than 2000, when air travel was at its peak. Enplanements in 2004 
were 698.7 million, just about 250,000 short of 2000 enplanements. 
Flight operations in April 2005 actually exceeded April 2000 operations 
by 4 percent.



    Traffic growth has led to a resurgence in congestion and delays. 
Systemwide arrival delays in the first quarter of 2005 were up 17 
percent over the first quarter of 2004, affecting more than 25 percent 
of all flights. The number and percentage of delays in the first 
quarter of 2005 were also greater than the number of delays in the 
first quarter of 2000, generally considered to be the hallmark of poor 
on-time performance. The average length of delay is also rising, with 
first quarter 2005 delays averaging 52.3 minutes compared to 48.5 
minutes in the same period in 2000.



    The increased rate of flight delays for the first quarter of 2005 
was concentrated in airports in the Northeast and Florida. We note that 
the most delayed airports are not necessarily the busiest airports. In 
fact, of the 15 highest-volume airports during the first quarter of 
2005, only 5 are among the top 15 most delayed airports. The following 
table identifies the Top 15 highest-volume airports as ranked by 
scheduled arrivals and their delay profiles.



Most of the Top 15 Delayed Airports Experienced Traffic Growth, 
        Increased Delay Rates, and Longer Average Delays.
    Twelve of Fifteen Airports Experienced Traffic Growth. Among the 
top 15 delayed airports, as ranked by percent of flights delayed, 12 
airports experienced traffic growth of between 1 and 18 percent over 
first quarter 2004 levels, with the largest growth at Indianapolis (+18 
percent), Philadelphia (+16 percent), and Fort Lauderdale (+15 
percent). Scheduled arrivals were flat at LaGuardia and scheduled 
arrivals at Newark and O'Hare actually declined by 2 percent and 3 
percent, respectively. Both O'Hare and LaGuardia are operating under 
administratively-imposed traffic caps.
    Fourteen of Fifteen Airports Experienced Growth in Delay Rates. The 
percent of flights delayed increased over first quarter 2004 levels in 
all of the top 15 delayed airports except O'Hare, most notably at Fort 
Lauderdale (+11.3 percentage points), LaGuardia (+11.2 percentage 
points), and Philadelphia (+9.6 percentage points). The percentage of 
flights delayed at O'Hare actually decreased by nearly 10 percentage 
points from this period.
    Fourteen of Fifteen Airports Experienced Increased Average Lengths 
of Delay. In the first quarter of 2005, the average length of delay 
increased over the first quarter of 2004 at 14 of the 15 airports, with 
the greatest increases at Fort Lauderdale (47 to 57 minutes), 
Philadelphia (50 to 60 minutes), and Atlanta (52 to 61 minutes). The 
average length of delay at O'Hare was 62 minutes, which was more than a 
2 minute decrease from the average 65 minute delay experienced during 
the first quarter of 2004.
    The following table identifies the 15 most delayed airports and 
their net growth in traffic, percent of flights delayed, and change in 
average length of delays. Chicago-O'Hare is highlighted because it is 
the only airport on the list that improved in the first quarter 2005 
over the first quarter of 2004.



    Of the top 15 delayed airports, the only airport to improve over 
the first quarter of 2004 was O'Hare. For the first quarter 2005, 
O'Hare ranked fourteenth in percent of delayed arrivals (27 percent), a 
sea-change from its ranking of first in the same period in 2004, when 
37 percent of flights arrived late. This improvement, at least in part, 
can be attributed to the Administration's interventions with the 
carriers serving O'Hare. In 2004, the Department intervened on three 
separate occasions to negotiate and/or impose schedule reductions to 
cap operations at a level consistent with O'Hare's available capacity. 
The first intervention in March 2004 resulted in a 5 percent reduction 
in schedules by United and American. The second intervention in June 
2004 reduced schedules another 2.5 percent. The third and final 
intervention in November 2004 capped scheduled peak-hour departures at 
88 combined among all carriers. Congestion in the Chicago area was also 
mitigated after bankrupt ATA Airlines reduced operations out of 
Chicago-Midway Airport by 19 percent.

Growth in Low-Cost Carriers, Hub Consolidation, and Regional Jet Growth 
        Drive Congestion
    Incursion of Low-Cost Carriers into Legacy Hubs Spurs Traffic and 
Congestion Growth. Low cost carriers (LCCs), 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. Based on July 2005 scheduled flights, low-cost carriers 
will account for 26 percent of all departures, compared to 18 percent 
in 2000. The share of service provided by network carriers and their 
regional affiliates has likewise declined from 82 percent in July 2000 
to 74 percent in July 2005.


    The entry of new low-cost carrier service can have dramatic effects 
on the average fares on those markets as all carriers are pressured to 
reduce fares to levels competitive with the new low-cost service.
    Significant fare reductions often stimulate demand, driving 
additional service offerings. For example, when Southwest began service 
between Philadelphia (PHL) and Raleigh-Durham (RDU), the average one-
way fare dropped from $213 to $61, spurring passenger growth of 263 
percent in the third quarter of 2004 over the third quarter of 2003.
    Similar effects occurred when Southwest initiated service from 
Philadelphia to Providence (PVD), AirTran began service to Newport News 
(PHF) and Akron (CAK) from Boston (BOS), Independence Air began service 
to Raleigh Durham and Portland, Maine (PWM) from Washington (WAS-
Dulles), and JetBlue began service to Oakland (OAK) and Long Beach 
(LGB) from Boston.



    Systemwide, the effects of low-cost carriers are taking their toll 
on average airfares. In April 2005, the average fare for a 1000-mile 
trip \3\ was $118, a drop of 20 percent from the $147 average fare for 
a 1,000-mile trip in April 2000.
---------------------------------------------------------------------------
    \3\ For eight major U.S. Airlines, as reported to the Air Transport 
Association.



    The new low-cost carrier operations, coupled with competitive 
responses from existing service providers can significantly tax runways 
and airspace at airports that may be already congested. Examples of the 
impact of low-cost carrier entry on congestion include Independence 
Air's operation out of Washington-Dulles and JetBlue's growing 
operation at New York- JFK.
    In 2004, Independence Air (formerly Atlantic Coast Airlines) 
launched a new low-cost service with its hub operation at Dulles 
Airport. United, the incumbent legacy carrier, matched Independence Air 
on fares, further stimulating growth in the markets served by both 
carriers. As a result, flights increased 79 percent in March 2005 over 
March 2004 levels. In the same period, the number of delayed flights 
increased by 7,700 or more than 100 percent.
    Growth at New York- JFK is almost entirely attributable to growth 
in low-cost carrier service, led predominantly by JetBlue. In the first 
quarter of 2005, total JFK traffic was down 11 percent from the highs 
of the first quarter of 2000, largely as a result in lagging 
International traffic. However during this period, low-cost carrier 
traffic increased more than five-fold while other traffic \4\ was still 
down by 34 percent. Delays as well have increased as traffic has grown. 
In the first quarter of 2005, the number of delayed arrivals was 35 
percent higher than the same period in 2000 and represented a more than 
52 percent increase over the first quarter of 2004.
---------------------------------------------------------------------------
    \4\ Domestic and international operations by U.S. flag carriers, 
international operations by foreign flag carriers, and charter service.



    Displaced Traffic from Down-sized Legacy Carrier Hubs Contribute to 
Congestion Growth in Other Hubs. In an effort to reduce costs and 
improve efficiency, several mainline carriers have closed hubs and 
transferred operations to remaining hubs. For example, Delta Airlines 
eliminated 7,500 flights from its hub operations in Dallas/Fort Worth 
Airport (DFW) during the first quarter of 2005 and shifted its DFW-
based mainline and regional affiliate aircraft to Atlanta, Cincinnati, 
and Salt Lake City. Other carriers backfilled some of the vacated 
slots, but the net impact was a 17 percent decrease in total scheduled 
operations at DFW.
    On the flip side, however, operations in Atlanta, Cincinnati, and 
Salt Lake City in March 2005 were 7 percent, 5 percent, and 22 percent 
greater than operations in March 2004, respectively. Delays in the 
first quarter at these airports showed effects of these shifts, with 
delays down 14.4 percent at DFW from the first quarter of 2004 and up 
in Atlanta, Cincinnati, and Salt Lake City 7.9 percent, 13 percent, and 
3.4 percent, respectively.
    In a similar pattern, US Airways cut its Pittsburgh hub operations 
by 3,800 flights during the fourth quarter of 2004, shifting mainline 
aircraft and service to Philadelphia, Charlotte, and Fort Lauderdale. 
Overall traffic in Philadelphia increased by 29 percent, and was up 20 
percent in Charlotte and 23 percent in Fort Lauderdale. Compared to the 
402 daily Philadelphia departures scheduled on a typical day last 
summer, US Airways is now scheduling 495 daily flights, an increase of 
23 percent. While delays in Pittsburgh were down minimally in the first 
quarter of 2005 over the first quarter of 2004, they were up 62.4 
percent in Philadelphia, 65.2 percent in Charlotte, and 63.7 percent in 
Fort Lauderdale.
    Increased Regional Jet Operations and Rebounding Jet-powered 
General Aviation Traffic Are Increasing Demands on High-Altitude 
Airspace and Airport Runways. The shift from turboprop or piston 
aircraft to jet aircraft (regional jets, jet-powered general aviation 
aircraft, and microjets) are posing new challenges to airports and air 
traffic control. The shift essentially pushes the former low-altitude 
turboprop traffic up to the 35,000 to 40,000+ foot airspace--the same 
altitudes where larger jet aircraft fly--and thus crowding the high-
altitude airspace. In addition, regional jets and jet-powered general 
aviation aircraft have the same airfield requirements, utilizing the 
same runways as larger jets. In some congested airports, such as 
Newark, the runways that once accommodated propeller-driven regional 
aircraft are underutilized, while delays mount as jet-powered general 
aviation, regional jets, and large aircraft vie for landing slots on 
the longer runways.
    Regional Jets Now Represent Nearly One-third of All Scheduled 
Flights. The airlines are continuing to shift service to jet aircraft. 
In July 2000, scheduled flights aboard jets accounted for 66 percent of 
all flights offered. In July 2005, scheduled flights aboard jets will 
account for 81 percent of all offered flights. In contrast, scheduled 
turboprop flights decreased from 28 percent in July 2000 to 14 percent 
in July 2005. The growth in jet traffic reflects, in large part, 
significantly increased reliance on regional jets. In July 2000, 
scheduled flights aboard regional jets accounted for 10 percent of all 
offered flights. In July 2005, scheduled flights aboard regional jets 
will account for 32 percent of flights.



    General Aviation Jet-powered Aircraft Activity Is on the Rebound. 
While the rest of the industry has shown signs of recovery, general 
aviation (GA) has not improved since a steep drop-off after September 
11th. In fact, GA operations at combined FAA and contracted towers 
declined 1.6 percent in 2004 and remain 12.4 percent below 2000 levels. 
However, within the GA market, one sector--jet aircraft activity--is 
showing signs of improvement. The number of GA jets filing instrument 
flight rule flight plans (generally not filed by locally operating 
recreational pilots) and the number of flight hours were up 1.6 percent 
and 6.2 percent, respectively, during 2004.
    And it appears the trend will continue. The General Aviation 
Manufacturers Association (GAMA) reports that shipments of business jet 
units were up 26 percent in the first quarter of 2005 compared to the 
first quarter of 2004. FAA forecasts the number of general aviation 
hours flown by jet aircraft to expand at an average annual rate of 6.7 
percent over the next 12 years. The large increase in jet hours is 
largely due to expected increases in the fractional ownership fleet and 
its activity levels. The growth of this traffic sector is a concern to 
the FAA because GA jets fly at the same altitudes, occupy the same 
airspace, and could potentially require use of the same runways as 
large commercial jets.
    Microjets Have Potential To Further Crowd Dense Airspace. Beginning 
as early as March 2006, microjets or VLJs (Very Light Jets) are 
scheduled to enter the market priced between $1 million and $3 million 
per aircraft. \5\ Manufacturers anticipate that these twin-engine jets 
carrying four to six passengers will be attractive to a variety of 
owners and operators. For example, Florida-based DayJet has ordered 239 
Eclipse 500 microjets and plans to use them to operate what it calls 
``Per-Seat, On-Demand'' jet services. The company plans to provide 
point-to-point service to and from small community airports, including 
markets that have limited, if any, scheduled airline services. The 
Eclipse 500TM and several other VLJ models are undergoing 
testing this spring, and manufacturers have announced that customer 
deliveries will begin in 2006, pending FAA certification.
---------------------------------------------------------------------------
    \5\ Compared to comparable aircraft currently priced at around $6 
million.
---------------------------------------------------------------------------
    Beyond the air taxi business model, manufacturers of VLJs also see 
a market in private ownership, corporate business jet fleets, and 
logistics (on-demand air cargo--when ``overnight'' is not fast enough). 
While supporters believe that the microjets have the potential to 
redefine business travel, others are more conservative about how 
quickly and to what extent the market will materialize. FAA's forecast 
assumes that the VLJs begin to enter the fleet in 2006 (100 aircraft) 
and grow by between 400 to 500 aircraft a year thereafter, reaching a 
total of 4,500 aircraft by 2016. However, some industry estimates 
suggest that the market could reach 5,000 aircraft by as early as 2010, 
although it is not clear to what extent this represents domestically 
deployed aircraft.



Short-term Outlook Is for Trouble Spots This Summer
    The summer travel season is historically the busiest travel time 
for the airlines. Schedules increase to accommodate increased demand 
and traffic volume increases, elevating the potential for an increased 
number of delays. Extreme weather conditions often add an additional 
layer of difficulty in meeting on-time performance goals. The following 
table identifies the 13 airports with summer 2004 arrival delays of 
greater than 25 percent. The airports with an asterisk, (Washington-
Dulles, New York- JFK, and Fort Lauderdale) are those airports whose 
absolute delays in the summer of 2004 exceed the number during the 
summer of 2000 (considered the peak in aviation delays), and are 
projecting scheduled operations growth of greater than 10 percent for 
the summer of 2005.
    In addition to Washington-Dulles, New York-JFK, and Fort 
Lauderdale, three other airports are likely to experience significant 
disruptions this summer. Delays in Philadelphia last summer affected 
more than 29 percent of all flights and scheduled departures this 
summer are 18 percent higher than the summer of 2004. Newark and 
Atlanta bear watching as both have sustained consistently high delays 
since the summer of 2000 and are likely to experience similar delay 
levels this summer.



Long-Term Outlook Calls For Continued Growth
    International Traffic Is on the Rebound. International traffic is 
forecast to exceed pre-September 11th levels this year, with 
approximately 145 million passengers traveling to and from the United 
States; an increase of 11 million passengers since 2004. In the summer 
2005, scheduled international passenger and cargo operations are 
projected to exceed summer 2000 levels by 16 percent and 12 percent, 
respectively. According to the FAA, the move toward deregulation 
overseas, privatization of national carriers, and expansion of open-
skies agreements could result in significantly greater international 
traffic growth. This month the United States signed a bilateral open-
skies agreement with the Maldives which follows agreements recently 
signed by India, Sri Lanka, Paraguay, and Pakistan.
    General Aviation Will Continue To Grow. The Department will need to 
closely monitor the growth and utilization of VLJs, which will expand 
jet traffic in airspace above 38,000 feet and increase the demand for 
air traffic services for jet aircraft. Depending on how and where VLJ 
traffic materializes--much of which is unknown at this point--the 
impact on safety, staffing needs, airspace, and infrastructure could be 
significant. In addition, VLJs could raise complex policy issues in 
areas such as landing rights, airport congestion, and security.

Despite Growth in Traffic and Congestion at Large and Medium-Sized 
        Hubs, Small and Non-hub Airports Still Lag Their Larger 
        Counterparts in Service Recovery Since 2000
    Service this summer connecting the smallest airports--otherwise 
known as non-hub airports--to large, medium, and small hub airports 
will remain significantly below service scheduled during the summer of 
2000. Non-hub airports include those in cities like Key West, Florida; 
Missoula, Montana; Roanoke, Virginia; Lincoln, Nebraska; Charleston, 
West Virginia; and Redmond, Oregon. Access to large hub airports (like 
Phoenix, Honolulu, and Newark) from non-hub airports is down 16 percent 
from July 2000 levels. Scheduled flights to medium-sized hub airports 
(like San Antonio, San Jose, and Manchester) are down 26 percent from 
July 2000 levels. Scheduled flights to small-hub airports (like 
Spokane, Washington; El Paso, Texas; and Portland, Maine) are down 32 
percent. Finally, flights between non-hub airports (e.g. Helena-Great 
Falls, Montana; Juneau-Ketchikan, Alaska; and Ithaca-Elmira (New York) 
are down 24 percent.
    Service levels remain depressed despite funding increases in the 
Essential Air Service (EAS) program. Annual funding between FY 2002 and 
FY 2005 has averaged about $100 million, or twice the level of subsidy 
available in 2000 and 2001. The number of cities with EAS subsidies has 
increased also, growing from 106 in 2000 to 151 in 2005.



The Department Faces Short- and Long-term Challenges in Addressing 
        Congestion and Delays
    Since the Summer of 2000, FAA has taken a number of actions in 
managing and enhancing capacity. These include putting administrative 
controls in place at Chicago O'Hare, improved communications between 
airlines and FAA's Command Center, and procedural changes to help 
manage the impact of bad weather (including greater use of joint 
civilian/military airspace on the East Coast). FAA has also established 
a new office to develop a vision for the next generation air traffic 
management system. Most recently in January 2005, FAA reduced vertical 
separation for aircraft traveling at high altitudes which provided for 
six new flight levels between 29,000 and 41,000 feet. In addition, a 
number of new runways have come on-line.
    Without question, congestion and delays would be much worse without 
these actions, particularly the administrative controls at Chicago 
O'Hare and the commissioning of new runways. However, the anticipated 
demand for air travel and the factors we discussed earlier highlight 
the need for additional actions. We see several areas that require 
attention in the short- and long- term:

   Keeping new runway projects on schedule,

   Getting FAA's airspace redesign efforts on track, which is 
        critical to enhance capacity,

   Determining what FAA's new Joint Planning and Development 
        Office can do in 5- and 10-year intervals and establishing 
        corresponding funding requirements, and

   Continuing to explore market-based and administrative 
        solutions where alternatives for providing new capacity are 
        limited in the immediate term, for Chicago O'Hare and LaGuardia 
        airports.

Keeping New Runway Projects on Schedule
    FAA reports show that new runways provide the most significant 
increases in capacity but these increases vary by location. New runways 
have been built at the Phoenix, Detroit, Miami, Denver, Houston, 
Orlando, and Cleveland airports. Without a doubt, congestion would be 
much worse this summer without the new capacity in the system.
    Between 2005 and 2008, eight additional new runway projects (7 new 
runways and a major extension of an existing runway) are expected to be 
completed. FAA will need to make sure, among other things, that new 
procedures and navigation equipment are in place when new projects are 
commissioned. We note that of the 15 most congested airports (in terms 
of percent of operations delayed in the first quarter of 2005) only 3 
airports (Atlanta, Boston, and Philadelphia) are expected to complete 
new runway projects within the next 2 to 3 years. The following table 
provides information on the eight runway projects FAA is monitoring as 
part of its Operational Evolution Plan (OEP), the agency's blueprint 
for enhancing capacity.

              Status of Major New Runway Projects--May 2005
------------------------------------------------------------------------
            Initial OEP
            (June 2001)    Current                  Cost       Current
 Airport     Estimated    Estimated     Phase   Estimate as      Cost
            Completion    Completion            of Oct 2001    Estimate
               Date          Date                (Millions)   (Millions)
------------------------------------------------------------------------
Minneapol  Dec. 2003     Oct. 2005    Construc         $563         $682
 is                                    tion
Cincinnat  Dec. 2005     Dec. 2005    Construc         $233         $255
 i                                     tion
St. Louis  May 2006      Apr. 2006    Construc       $1,100       $1,043
                                       tion
Atlanta    May 2005      May 2006     Construc       $1,200       $1,200
                                       tion
Boston     Dec. 2005     Nov. 2006    Construc          $95         $118
                                       tion
Philadelp  Not in        Dec. 2007    Design            n/a          $40
 hia        initial OEP
Charlotte  June 2004     Feb. 2008    Design           $187         $201
Seattle    Nov. 2006     Nov. 2008    Construc         $773       $1,129
                                       tion
------------------------------------------------------------------------
Note: The Philadelphia project is a runway extension
Source: FAA and Airport Sponsors

    There are about 10 other new runway projects in various planning 
stages, including major efforts at Chicago O'Hare, Los Angeles, and 
Washington-Dulles. However, FAA does not yet have firm completion dates 
for them and therefore has not yet included them in the OEP. \6\ We 
will issue a report shortly on plans to revamp Chicago O'Hare, which 
represents the largest and most costly reconfiguration of an existing 
airport in the United States.
---------------------------------------------------------------------------
    \6\ FAA includes a new runway in the OEP when all the planning and 
environmental processing has been completed, a Record of Decision has 
been issued, and the sponsor has provided FAA with the dimensions, 
timing, and planned use of the runway. FAA just recently added 
Philadelphia to the plan.
---------------------------------------------------------------------------
    While adding new capacity (via new pavement) may ultimately be the 
most comprehensive solution, it is not always a feasible one. For 
example, at congested New York-LaGuardia, where slot controls are 
slated to expire in 2007, land constraints preclude new construction. 
This is why FAA and some airports are looking into market-based or 
administrative solutions to manage congestion and delays. However, a 
number of policy questions need to be resolved with such approaches.

Getting FAA's Airspace Redesign Efforts on Track Is Critical to Enhance 
        Capacity
    Airspace redesign efforts are critical in getting the most benefits 
(in terms of capacity and delay reduction) from new runways. FAA's OEP 
indicates that 40 to 60 percent of projected capacity improvements from 
new concrete will be lost without corresponding changes in airspace. In 
some cases, airspace redesign plays an even greater role.
    For example, very few of the benefits of the Chicago O'Hare 
Modernization Program (the addition of one new runway, the extension of 
two runways, and the relocation of three others) will be realized 
without significant airspace changes. For the first stage of the O'Hare 
Modernization Program expected to be complete in 2007 (the new north 
runway only), a combination of airfield and airspace changes provides 
for more than a 50 percent reduction in the average minutes of 
projected delay per flight, from 19.6 to 9.6 minutes. FAA and Mitre 
analyses show the new north runway, without corresponding airspace 
changes, will have little impact on delays.
    On the other hand, the Choke Point initiative (following the summer 
of 2000) demonstrated that airspace changes can also have important 
benefits even without new runway construction. FAA reports that the 
Choke Point initiative reduced delays and resulted in an annual savings 
to airspace users of $70 million. The Choke Point initiative was 
successful because it was placed on a fast track, had significant 
management oversight, and linked plans and resources--all of which are 
best practices that need to be transferred to all airspace projects.
    We recently issued a report on the importance of FAA's airspace 
redesign projects in enhancing capacity and the range of actions the 
agency needs to take to get these efforts on track. \7\ We reviewed the 
42 approved airspace redesign projects in FY 2004 and found that FAA's 
overall process for controlling costs, mitigating risks, and 
coordinating local, regional, and headquarters efforts is diffused and 
fragmented. Specifically, we found:
---------------------------------------------------------------------------
    \7\ OIG Report Number AV-2005-059, ``Airspace Redesign Efforts Are 
Critical To Enhance Capacity But Need Major Improvements,'' May 13, 
2005.

   Cost and schedule estimates for the vast majority of 
        airspace redesign projects are not reliable. Cost estimates--
        for the program as well as individual projects--include costs 
        for planning but not for implementation. Therefore, we could 
        not, nor could FAA, determine the cost of implementing the 42 
---------------------------------------------------------------------------
        approved projects in FY 2004.

   FAA's redesign projects are often delayed 3 years or more 
        because of changes in a project's scope, environmental issues, 
        and problems in developing new procedures for more precise 
        arrival and departure routes. For example, of the 42 approved 
        projects in FY 2004, 7 were affected by environmental concerns, 
        10 by problems in developing new procedures, and 21 by changes 
        in a project's scope.

   Projects are not effectively coordinated among agency 
        organizations that manage resources (e.g., new equipment and 
        radio frequencies) or linked to the agency's budget process. 
        This directly affects a project's implementation. We found that 
        19 of the 42 approved projects in FY 2004 had unresolved 
        equipment issues.

    We recommended that FAA (1) establish cost and schedule controls 
for airspace redesign projects (and include costs for both planning and 
implementation), (2) establish procedures to ensure projects are 
coordinated among agency offices, (3) prioritize airspace projects and 
establish criteria for assessing a project's systemwide impact, and (4) 
re-evaluate how resources are used at the local and regional levels. 
FAA has actions underway to address our recommendations.

FAA's Joint Planning and Development Office--Determining What Can Be 
        Done in 5- and 10- year Benchmarks and Establishing Funding 
        Requirements
    Another important effort to help meet the anticipated demand for 
air travel is FAA's Joint Planning and Development Office (JPDO). The 
establishment of this new office was mandated by Congress to coordinate 
research and development efforts among diverse Federal agencies, 
including the National Aeronautics and Space Administration and the 
Department of Defense, and develop a vision for the next generation air 
traffic management system in the 2025 timeframe.
    There are a number of reasons why this effort is important, 
including the forecasted demand in air travel as well as the factors 
(i.e., microjets) that may drive increased operations. The new office 
is also important because the majority of projects in FAA's current 
capital account ($2.4 billion for fiscal year 2006) focus on keeping 
things running, or ``infrastructure sustainment.'' The combined effects 
of increased operations costs and the fact that modernization projects 
have suffered so much cost growth over the years has left little room 
for new initiatives. \8\ This is one of the reasons why there is so 
much discussion about how to finance new air traffic management 
initiatives.
---------------------------------------------------------------------------
    \8\ We reviewed 16 of FAA's major acquisitions. We found that 11 of 
the 16 experienced cost growth of about $5.6 billion, which is more 
than double the amount of FAA's Fiscal Year 2006 budget request for its 
Facilities and Equipment account. Additionally, 10 of these 16 projects 
accounted for schedule delays ranging from 2 to 12 years and 2 projects 
have been deferred until at least 2008. For additional details on FAA's 
major acquisitions as well perspectives on the JPDO, see our testimony 
entitled ``Next Steps for the Air Traffic Organization'' (CC-2005-022, 
April 14, 2005).
---------------------------------------------------------------------------
    FAA reports that the current air traffic control system (or 
``business as usual'') will not be sufficient to accommodate the 
anticipated future growth in traffic or the changes facing the aviation 
community. Key issues focus on what new systems are needed and how new 
systems, capabilities, procedures, and changes in airspace management 
can transform the way air traffic services are provided. The JPDO 
published its first plan this past December. It laid out goals and 
strategies but did not provide details on what capabilities will be 
pursued or how much they would cost to implement.
    While the 2025 timeframe has merit, benchmarks for what can be done 
in 5- and 10-year intervals are also important. Other imperatives focus 
on determining what level of funding is actually required, how much 
other agencies will contribute, what specific capabilities will be 
pursued, and when they can be implemented. The Department committed to 
Congress that by the year's end, it would provide specifics on how much 
money is needed, when, and for what purposes.

Administrative and/or Market-Based Solutions May Provide Congestion 
        Relief in Markets Where Alternatives are Limited
    As delays return, FAA and some airports are considering a variety 
of administrative and/or market-based solutions that would allow 
variable pricing of access in order to control congestion and delays. 
Some of the congestion management alternatives under study include slot 
auctions, congestion pricing, administratively imposed scheduling caps, 
and incentives for up-gauging aircraft.
    In 2004 and 2005, the FAA used administrative actions to reduce 
delays at Chicago-O'Hare by first negotiating and later imposing 
schedule reductions with the carriers serving O'Hare. The FAA is now 
soliciting comments on whether to continue the administrative controls 
at O'Hare for another 3 years, until ultimately, the first phase of the 
O'Hare Modernization Plan is complete and additional capacity could 
relieve some of the congestion. At LaGuardia, another airport where 
scheduled operations are anticipated to exceed capacity when slot 
controls expire in 2007, new construction is not a viable option. At 
LaGuardia, some demand management tool--whether market based or 
administrative, will likely be needed to prevent what could be 
crippling delay conditions.
    Market-based approaches, while on paper appear to be a reasonable 
solution for some airports, entail difficult policy considerations, 
such as who sets the fees, how the fees should be set, who collects the 
fees, how (and whether) fees are shared between airports and the FAA, 
how general aviation will be treated, and small community access. These 
are difficult questions that will need definitive answers--the 
consequences of moving forward without working out the details could 
result in severe market consequences. We believe this debate needs to 
be joined with the debate taking shape on financing FAA--there should 
be some degree of equity between who benefits from premium services 
(i.e., rush hour departure slots), and who pays for these privileges.

    Senator Burns. Thank you very much. We've been joined by 
Senator Nelson of Nebraska. He's worried about McCook 
International. And I'm sorry, Senator, I didn't recognize you 
before we went to Mr. Mead. Do you have a statement----

             STATEMENT OF HON. E. BENJAMIN NELSON, 
                   U.S. SENATOR FROM NEBRASKA

    Senator Ben Nelson. No. Thank you for the opportunity, but 
I'm anxious to get to their statements first. Thank you.
    Senator Burns. We have with us this morning Mr. Gerald 
Dillingham. He is Director of Aviation Issues with the GAO, and 
he'll be next.
    Senator Lott, thank you for being here. We were just going 
over the advances that have been made in the FAA and in 
aviation under your tutelage when you were Chairman of this 
Committee, and we thank you for your service.
    Do you have a statement or anything?

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

    Senator Lott. Yes. Just very briefly, Mr. Chairman. Thank 
you for having the hearing, and thank you for your comments. 
I've enjoyed very much working with the FAA Administrator, Mr. 
Mead, and all those involved in aviation. I think we have made 
some progress, and we dealt with this industry. And with what's 
trying to be done at FAA, we obviously still have work to do.
    Modernization still has a long way to go, and we still have 
airlines that have a great deal of difficulty. But actually, I 
just came from a meeting on dealing with that very issue, how 
we're going to deal with the pension problem; and I expect the 
Finance Committee to take this issue up in June. If it doesn't, 
I'm going to offer it as an amendment on the floor in June or 
July.
    I made it clear we're going to act on this pension issue, 
and we're going to do it this summer. I think that would, set 
up a way for the pension issue to be dealt with appropriately 
while we move from the old system to the new.
    But I just want to thank our witnesses today for being 
here.
    Keep up the work. We need to make more progress. This is a 
vital part of our economy, and we must find a way to make it 
healthy and safe. Thank you, Mr. Chairman.
    Senator Burns. Thank you, Senator. And now Mr. Gerald 
Dillingham from the Government Accountability Office.
    And thank you for your report, Mr. Dillingham. Good report. 
And it's sort of an eye-opener to many of us who are going to 
be dealing with this business of keeping everybody in the air 
and getting there on time. So thank you for joining us this 
morning. We look forward to your testimony.

 STATEMENT OF GERALD L. DILLINGHAM, Ph.D., DIRECTOR, PHYSICAL 
               INFRASTRUCTURE ISSUES, GOVERNMENT 
                     ACCOUNTABILITY OFFICE

    Dr. Dillingham. Thank you, Mr. Chairman, Chairman Stevens, 
Senator Lott and Senator Nelson.
    A few months after 9/11, GAO issued a report to this 
Committee on airspace capacity issues. The key message in that 
report was that the decline in air traffic was only a temporary 
reprieve for system congestion and delays. We characterized it 
as a window of opportunity to develop and implement plans for 
long-term capacity enhancements.
    As you may recall in 2000, which was billed as one of the 
worst years for aviation delays, one in every four flights 
experienced a delay. In 2004 one in every five flights 
experienced a delay. The 2004 ratio was achieved even though 
air traffic was near pre-9/11 levels. This could be seen as an 
indicator of some progress in reducing delays. It could also be 
seen as an indicator that much more needs to be done.
    For example, the Air Transport Association has reported 
that flight delays in 2004 cost the airline industry an 
estimated $6.2 billion in direct operating costs. These are 
costs that the airline industry can ill-afford. Neither can the 
Nation's economy nor its position in the global economy 
continue to withstand what has been estimated to be a $30 
billion annual loss to the Nation's economy when people and 
products do not reach their destination within expected time 
periods.
    Since our earlier report, and as you've heard from the 
previous witnesses, FAA and the other stakeholders have 
undertaken or planned a wide variety of initiatives to address 
the delay problems this summer. FAA and the airlines have also 
focused special attention on some of the choke points in the 
system, such as in the New York area and Chicago, where delays 
and congestions tend to have a ripple effect throughout the 
system.
    Mr. Chairman, we believe that the initiatives that FAA and 
the other stakeholders have implemented will minimize system 
delays and congestion for the upcoming travel season. To 
address system congestion and delays for the longer term, FAA 
has also developed a long-term strategy, the OEP.
    The centerpiece of the OEP and, by general consensus, the 
OEP initiative which holds the greatest promise for increasing 
system capacity is runway construction. Under the OEP, 15 new 
runways are scheduled to be in service by the end of 2008; but 
only three of the nine airports that experienced the highest 
rates of delay in 2004 are scheduled for additional runways. 
There is a general consensus that even if all of the OEP 
initiatives are implemented, the National Airspace System is 
not expected to keep up with demand, resulting in increased 
congestion and delays over the 10-year OEP time frame.
    The question seems to be, how much congestion and delays 
will there be? On the one hand, FAA's Management Advisory 
Council estimates passengers will experience 63 percent more 
total delay hours in 2012 than they did in 2000. On the other 
hand, FAA's position is that if all the OEP initiatives are 
implemented, delays will be maintained at or below the delay 
levels of 2000.
    You will recall that in 2000, one in every four flights was 
delayed. Both of these scenarios indicate that the OEP 
initiatives will not be enough to solve the delay and 
congestion problems. Our written statement identifies some 
other potential capacity-increasing options that are not in the 
OEP but have been cited by GAO and others over the last decade. 
These options basically fall into two categories.
    The first category involves measures to add new 
infrastructure, such as building new airports or greater 
utilization and development of regional airports near major 
cities.
    The second category focuses on developing alternative modes 
of intercity travel other than air transportation, such as 
high-speed rail to reduce the number of short-haul flights.
    We recognize that adopting many of these other options is 
likely to be a much greater challenge than implementing 
initiatives in the OEP principally because of stakeholder 
opposition.
    Mr. Chairman, as has been made clear from the statements 
this morning, there are certainly numerous challenges that lie 
ahead for enhancing system capacity and moving toward the Next 
Generation Air Transportation System for 2025. FAA has taken a 
first and very important step toward addressing the challenges 
by developing a series of plans, including the 5-year flight 
plan, the 10-year OEP, and the twenty-year Next Generation Air 
Transportation System plan, all of which give direction and 
focus to enhancing system capacity.
    However, we think one of the most serious challenges to the 
successful implementation of the plans is the availability of 
funding. We agree with the Administrator that the FAA is in an 
untenable financial position where its costs are exceeding its 
revenues.
    In 2004 the gap between its costs and revenues was about $4 
billion. Although FAA has been able to fund its key systems 
acquisitions, the FAA budget accounts that fund capacity-
enhancing projects and the acquisition of ATC systems had 
reduced funding in 2005, and further reductions are proposed 
for 2006.
    Additionally to meet budget targets, FAA also eliminated 
all of the $1.4 billion that it had designated for early R&D 
activities in support of new system projects. Taken together, 
it would seem that FAA will have a difficult time moving from 
its current investment strategies, wherein as much as 80 
percent of its annual budget is to maintain the status quo 
rather than increasing capacity and efficiency within the 
system.
    In a final analysis, Mr. Chairman, we think that most of 
what can be done for the short term is at various stages of 
implementation. However, meeting the challenge of keeping up 
with the increasing demand for safe and efficient air 
transportation services in the 21st Century will require 
additional actions including integrating the various plans that 
currently exist and adequate funding to implement the plan 
through new or existing funding mechanisms.
    Meeting the challenge will also require continuous use and 
improvement of sound business practices and cost control 
efforts by the FAA.
    Thank you, Mr. Chairman.
    [The prepared statement of Dr. Dillingham follows:]

 Prepared Statement of Gerald L. Dillingham, Ph.D., Director, Physical 
        Infrastructure Issues, Government Accountability Office

    Mr. Chairman and Members of the Subcommittee:
    We are pleased to be here today to discuss flight delays and 
capacity issues in the national airspace system. Since the 
unprecedented flight delays in 2000, a year in which flight delays 
totaled 1.4 million and one in four flights were delayed, our aviation 
system has been adversely affected by many unanticipated events--such 
as the September 11 terrorist attacks, the Iraq war and associated 
security concerns, and Severe Acute Respiratory Syndrome (SARS)--that 
significantly reduced the demand for air travel. However, that demand 
for air travel is rebounding. For example, the number of passengers 
traveling by air increased from 642 million in 2003 to 688 million in 
2004. FAA estimates that by 2015 there will be as many as one billion 
travelers per year in the United States.
    The current rebound in air travel has been a significant factor in 
a resurgence of flight delays today. Flight delays have many causes. 
Historically, the major cause of flight delays has been bad weather. 
For example, 70 percent of the flight delays from 2000 to 2004 were 
weather-related. Apart from weather, the next main cause is lack of 
capacity--that is, the inability of the national airspace system to 
handle the amount of traffic seeking to use it. Changes in the 
composition of the aircraft fleet--including the airlines' greater 
reliance on regional jets with an average of 49 seats--has also 
increased the number of aircraft in the national airspace system, which 
has placed greater demand on the system. Besides airlines, other parts 
of the aviation community are also likely to place more demands on the 
national airspace system. For example, corporations may make increasing 
use of their corporate jets, which often use the same airports and 
airspace as those used by airlines.
    Flight delays have also been among the most vexing problems in the 
national airspace system and are defined by the Department of 
Transportation as instances when aircraft arrive at the gate 15 minutes 
or more after scheduled arrival time. In 2004, the number of flight 
delays totaled over 1.4 million and almost one in five flights were 
delayed primarily at New York La Guardia, Newark International, Chicago 
O'Hare, and Atlanta Hartsfield. Because these are some of the busiest 
airports in the country, their delays generally have significant 
ramifications for the rest of the national airspace system. Our 
Nation's airspace system is a critical engine of economic growth that 
facilitates the safe and efficient movement of people and goods around 
the globe, consequently flight delays and capacity issues have 
significant ramifications. According to the Commission on the Future of 
the United States Aerospace Industry, consumers stand to lose $30 
billion dollars annually if people and products do not reach their 
destinations within expected time periods. The Air Transport 
Association also reports that flight delays in 2004 cost the airline 
industry an estimated $6.2 billion in direct operating costs (e.g., 
pilots, flight attendants, and fuel).
    My statement today updates our 2001 report entitled: National 
Airspace System: Long-Term Capacity Planning Needed Despite Recent 
Reduction in Flight Delays \1\ and addresses the following questions:
---------------------------------------------------------------------------
    \1\ U.S. Government Accountability Office, National Airspace 
System: Long-Term Capacity Planning Needed Despite Recent Reduction in 
Flight Delays, GAO-02-185 (Washington, D.C.: December 14, 2001).

   What initiatives are ongoing by the Federal Government, 
        airlines, and airports to address flight delays and enhance 
---------------------------------------------------------------------------
        capacity?

   What are some of the challenges in reducing flight delays 
        and enhancing capacity?

   What other options are available to address flight delays 
        and enhance capacity?

    To answer these questions, we obtained and analyzed information 
from FAA, Airports Council International, and the Air Transport 
Association on the status and impact of initiatives to reduce flight 
delays that were identified in our December 2001 report. We performed 
our work in accordance with generally accepted government auditing 
standards.
    In summary:
    Several initiatives to reduce flight delays, such as those shown in 
figure 1, and enhance capacity are ongoing.



    Many of these initiatives are reflected in FAA's February 2005 
Operation Evolution Plan which is a 10-year plan to increase capacity 
and efficiency of the national airspace system and focuses on airport 
congestion, air traffic management flow efficiency, en route 
congestion, and terminal area congestion at 35 of the busiest airports 
in the United States. \2\ FAA acknowledges, however, that the OEP is 
not intended as the ultimate solution to congestion and delay problems. 
Also, over the last six years, new runways were opened at the Phoenix, 
Detroit, Denver, Miami, Cleveland, Houston, and Orlando airports, which 
provided those airports with the potential to accommodate about one 
million more annual operations (take-offs and landings). Seven more 
runways and one runway extension are scheduled to open by the end of 
2008 with the potential to accommodate 889,000 more annual operations. 
In addition to building runways, several new systems or technologies 
were implemented. For example, in January 2005, FAA implemented the 
Domestic Reduced Vertical Separation Minimum which is designed to 
increase available high altitude routes which gives pilots and air 
traffic controllers more choices so that aircraft can fly more direct 
routes at the most fuel-efficient altitudes. FAA is also pursuing some 
additional solutions for flight delays that are not in the OEP. To 
reduce flight delays at some of the delay-prone airports such as New 
York La Guardia and Chicago O'Hare, FAA is also exploring 
administrative and market-based options. For example, FAA is 
considering auctioning off landing and take off rights and using 
congestion pricing at New York La Guardia and limiting the number of 
takeoffs and landings during peak periods at Chicago O'Hare.
---------------------------------------------------------------------------
    \2\ See appendix 1 for a list of the 35 airports that are in the 
OEP.
---------------------------------------------------------------------------
    A number of challenges in reducing flight delays and enhancing 
capacity remain. Chief among them is obtaining funding for many of the 
initiatives mentioned above; their successful implementation is 
predicated on the availability of funding from several sources, 
including FAA, airlines, and airports. However, since 2000, the 
financial condition of the aviation industry has changed significantly. 
Many structural changes, such as the growth of the low cost carriers 
which led to lower average fares and external events (e.g., global 
recessions and a steep decline in business travel) have caused a dip in 
demand for air travel and resulted in sharp decreases in airline 
industry revenue and the amount of revenues flowing into the Airport 
and Airway Trust Fund. \3\ FAA expects that over the next four years 
there may be an $8.2 billion dollar gap between its costs and revenues. 
In 2004, the airline industry losses totaled $14 billion and the 
industry is expecting similar losses in 2005, which will make it 
difficult for them to equip their aircraft with some of the new air 
traffic control technology, according to Air Transport Association 
officials.
---------------------------------------------------------------------------
    \3\ The Airport and Airway Trust Fund help funds the development of 
a nationwide airport and airway system and air traffic control 
facilities.
---------------------------------------------------------------------------
    Other options are available to address delay problems. One option 
is to add new capacity--not by adding runways to existing capacity-
constrained airports, but rather by building entirely new airports. 
According to FAA, airport authorities in Chicago, Las Vegas, and San 
Diego are evaluating the need for new airports. Another option is to 
develop other modes of intercity travel, such as, but not limited to, 
highspeed rail where metropolitan areas are relatively close together. 
These options may conflict with the interests of one or more key 
stakeholder groups, and, in many cases, would be costly.

Background
    Although recent events may have moved airport congestion off center 
stage as a major national issue, delays remain a pervasive problem, in 
part because of the interdependence of the Nation's airports. The 
effect of delays can quickly spread beyond those airports where delays 
tend to occur most often, such as New York La Guardia, Chicago O'Hare, 
Newark International, and Atlanta Hartsfield. Delays at these airports 
can quickly create a ``ripple'' effect of delays that affects many 
airports across the country. For example, flights scheduled to take off 
from these airports may find themselves being held at the departing 
airport due to weather or limited airspace. Similarly, an aircraft late 
in leaving the airport where delays are occurring may be late in 
arriving at its destination, thus delaying the departure time for the 
aircraft's next flight.
    Delays have many causes, but weather is the most prevalent. Figures 
compiled by FAA indicate that weather causes about 70 percent of the 
delays each year. Apart from weather, the next main cause is lack of 
capacity--that is, the inability of the national airspace system to 
handle the amount of traffic seeking to use it. Capacity can be 
measured in a variety of ways. For example, at individual airports, one 
measure is the maximum number of takeoffs and landings that can be 
conducted in a given period, such as 15 minutes or 1 hour. In our 2001 
report, we noted that FAA had established such a capacity benchmark at 
each of the 31 of the Nation's busiest airports. \4\ FAA's data on 
capacity and demand at these airports showed that even in optimum 
weather conditions, 16 airports had at least three 15-minute periods 
each day when demand exceeded capacity. \5\
---------------------------------------------------------------------------
    \4\ FAA updated its capacity benchmark report in 2004.
    \5\ The current OEP includes 35 of the busiest airports in the U.S.
---------------------------------------------------------------------------
    Weather and capacity problems are often linked, because bad weather 
can further erode capacity. For example, some airports have parallel 
runways that are too close together for simultaneous operations in bad 
weather. When weather worsens, only one of the two runways can be used 
at any given time, thereby reducing the number of aircraft that can 
take off and land. FAA's data in 2001 showed that in bad weather, 22 of 
the 31 airports had at least three 15-minute periods when demand 
exceeded capacity. Another measure of capacity, apart from the capacity 
of individual airports, is the number of aircraft that can be in a 
given sector of the airspace. For safe operations, aircraft must 
maintain certain distances from each other and remain within authorized 
airspace. If too many aircraft are trying to use the same airspace, 
some must wait, either on the ground or en route.
    Addressing flight delay problems also requires action by multiple 
aviation stakeholders because no single entity has the authority or 
ability to solve delay-related problems. The Federal Government, 
especially through the Federal Aviation Administration (FAA) and its 
parent agency, the Department of Transportation (DOT), plays a major 
role by operating the national airspace system, distributing Federal 
funding for airports, and setting operating standards for all aircraft 
and airports. Airports and airlines are also important decision makers 
and funding sources. The Nation's airports are primarily owned and 
operated by local units of government, so that decisions about such 
steps as expanding airport capacity are primarily local in nature. 
Airlines' business decisions have a strong effect on the volume and 
routing of flights, the type and size of aircraft used, and the degree 
to which aircraft are upgraded to take advantage of new technology.

A Number of Initiatives to Reduce Flight Delays and Enhance Capacity 
        Are Ongoing
    Several initiatives to reduce flight delays and enhance capacity 
are ongoing. These initiatives which FAA, the airlines, and the 
airports are implementing are incorporated into FAA's major capacity-
enhancing effort: the Operation Evolution Plan (OEP). The OEP is a 
rolling 10-year plan to increase capacity and efficiency of the 
national airspace system and focuses on airport surface infrastructure, 
and technological and procedural initiatives at 35 of the busiest 
airports in the United States. FAA acknowledges, however, that the OEP 
is not intended as the ultimate solution to congestion and delay 
problems. Responsibility for the various initiatives is still shared 
among the various segments of the aviation community. In February 2005, 
FAA published version 7 of the OEP and organized it into the following 
four quadrants:
    Airport Congestion. The Airport Congestion quadrant focuses on 
capacity enhancements for the airport surface. One of the most 
effective ways to increase capacity is to build runways; however, it 
takes an average of 10 years from the time planning begins for a runway 
until it is commissioned. To help expedite the process for building 
runways, Congress and FAA streamlined the environmental review phase of 
the runway process. In addition, according to FAA, over the last six 
years, seven new runways were opened at Phoenix, Detroit, Denver, 
Miami, Cleveland, Houston, and Orlando airports which provided those 
airports with the potential to accommodate about one million more 
annual operations (take-offs and landings). Seven more runways and one 
runway extension are included in the OEP and are scheduled to open by 
the end of 2008. These runways are expected to provide those airports 
with the potential to accommodate 889,000 more annual operations in the 
system, as shown in figure 2.



    In addition to the runways listed in the OEP, nine more projects 
are in the planning or environmental stages, including one new runway, 
three airfield reconfigurations, one runway extension, and three new 
airports in major metropolitan areas. FAA also has additional flight 
reduction activities that are not included in the OEP. To reduce flight 
delays at some of the delay-prone airports, such as New York La Guardia 
and Chicago O'Hare, FAA is exploring administrative and market based 
options. For example, FAA is considering auctioning off landing and 
take off rights at New York La Guardia and is currently limiting the 
number of scheduled arrivals during peak periods at New York La Guardia 
and Chicago O'Hare.
    Air Traffic Management Flow Efficiency. This quadrant focuses on 
new technology and procedures to optimize the flow of traffic and 
maximize system throughput which may allow better control and 
utilization of current airspace. Included is the Collaborative 
Convective Forecast Product which is a graphical forecast of potential 
convective activity areas (i.e., thunderstorms) for use in the 
strategic planning and management of air traffic. It is intended to 
provide advance planning for long haul flights and allows for schedule 
predictability based on 2-, 4-, and 6-hour forecasts. This tool is most 
useful during the severe weather avoidance procedures season, which is 
from March to October. Another program is Collaborative Decision 
Making, which is a joint government/industry initiative. Collaborative 
Decision Making focuses on electronic data exchange; optimized airspace 
utilization; shared planning and decision-making; and post-analysis 
reporting. In addition, the Traffic Management Advisor, which is in 
operation at eight air route traffic control centers, is an automated 
decision support tool, is intended to provide controllers and traffic 
management coordinators more information on airport arrival demand and 
available capacity for making decisions on aircraft spacing.
    En Route Congestion. Although the flying public is impacted by 
delays at the airports, many times this occurs in the en route areas as 
the airways become congested. The tools in this quadrant reduce delays 
and contribute to time and fuel savings for the vast majority of 
airspace users. One of the tools currently in use is reduced lateral 
(side-to-side) separation may provide space for additional routes 
between current city pairs or allow for new direct routes. Reduced 
longitudinal (nose-to-tail) separation may provide more opportunities 
to add flights without incurring delays. For domestic flights, Domestic 
Reduced Vertical Separation Minimum was implemented in Fiscal Year 2005 
in the contiguous United States and Alaska and adds six additional 
flight levels between existing flight levels. The User Request 
Evaluation Tool which was installed at l7 air route traffic control 
centers and is operational at 13 air route traffic control centers, 
allows controllers to predict aircraft-to-aircraft and aircraft-to-
airspace conflicts, which allows them to construct alternative flight 
paths. Airspace redesign projects also provide significant capacity 
improvements. For example, new routes added as part of the High 
Altitude Redesign increased en route throughput from the Pacific 
Northwest into the San Francisco Bay and the Los Angeles Basin areas.
    Terminal Area Congestion. Terminal airspace is a critical component 
in the efficient use of airport capacity. In instances where volume has 
increased and the current airspace structure is the limiting factor, 
redesigning arrival and departure procedures, including the addition of 
Area Navigation and Required Navigation Performance procedures, will 
allow more efficient use of constrained terminal airspace. Also, by 
applying existing technology with new procedures may provide instrument 
approaches to nearly all runways greater than 5,000 feet and under a 
wider range of meteorological conditions that are insensitive to 
airport surface traffic. Area navigation procedures provide flight path 
guidance from the runway to the en route airspace with minimal 
instructions given by air traffic controllers. As a result, routine 
controller/pilot communications are reduced, which frees time to handle 
other safety-critical flight activities. Other key benefits include 
more efficient use of airspace, with improved flight profiles, 
resulting in significant fuel efficiencies to the airlines.
    Additional solutions for increasing capacity in this arena are Time 
Based Metering which is used in conjunction with Traffic Management 
Advisor, \6\ became operational at seven air route traffic control 
centers. By optimizing the flow of aircraft from the en route to the 
terminal area, Time Based Metering with Traffic Management Advisor may 
help an airport to efficiently use the full capacity of its runways 
which increases acceptance rates as well as peak throughput. An air 
traffic management tool called Integrated Terminal Weather System which 
provides full color graphic displays of essential weather information 
to promote the safety, capacity, and efficiency of air traffic control 
operations was also implemented at Boston Logan, Denver International, 
and Minneapolis-St. Paul airports in 2004. According to FAA, the plan 
is to install the production version of Integrated Terminal Weather 
System at the New York terminal radar control facility in 2006.
---------------------------------------------------------------------------
    \6\ Traffic Management Advisor provides an aircraft arrival 
schedule in the en route and terminal units and produces meter lists 
for controllers that display that estimate optimal arrival times.
---------------------------------------------------------------------------
Challenges in Reducing Flight Delays and Enhancing Capacity Remain
    A number of challenges in reducing flight delays and enhancing 
capacity remain. A daunting challenge that FAA and other aviation 
stakeholders will have to address is funding the various initiatives 
that are designed to address flight delays and enhance capacity. The 
successful implementation of many of these initiatives is predicated on 
the availability of funding. However, since 2000, which is to date the 
worst year in history for delays, the financial condition of the 
aviation industry has changed significantly. A number of structural 
changes within the airline industry, such as the growth of the Internet 
as a means to sell and distribute tickets, the growth of the low cost 
airlines, and fare reductions by legacy carriers, all transformed the 
industry and led to lower average fares. These lower fares have 
resulted in lower ticket taxes and less revenue into the Airport and 
Airway Trust Fund. In addition, a series of largely unforeseen events, 
including the September 11 terrorist attacks, war in Iraq and 
associated security concerns, SARS, global recessions, and a steep 
decline in business travel seriously reduced the demand for air travel 
and resulted in sharp decreases in airline industry revenue.
    Consequently, FAA expects that over the next four years there may 
be a multi-billion dollar gap between its costs and revenues. According 
to one aviation expert, this gap could have consequences that would 
increase air traffic delays. For example, FAA's Facilities and 
Equipment account, which provides funding for modernizing the air 
traffic control system and improving its reliability, capacity, and 
efficiency, was reduced by 15 percent in Fiscal Year 2005 and the 
President's 2006 budget proposes to reduce it by 20 percent in Fiscal 
Year 2006. These are the funds that are key to the national airspace 
system's future ability to handle demand and to minimize delays. For 
example, to provide the $4.4 billion needed for its major system 
acquisitions while remaining within its budget targets through fiscal 
year 2009, FAA has made significant cuts elsewhere in its capital 
funding plans. Specifically, FAA eliminated all of the $1.4 billion 
that it had set aside for what it calls the ``architecture segment.'' 
These funds would have been used to perform about two years' worth of 
early research on new programs before they are mature enough to receive 
formal Joint Resources Council approval. \7\ FAA also made significant 
reductions in planned investments for facilities--an action that runs 
counter to its reported need to refurbish or replace its physical 
infrastructure. Thus, even if all OEP initiatives are implemented the 
national airspace system is expected to fall behind demand, resulting 
in an increase in congestion and delays over the 10-year period of the 
OEP. FAA's Management Advisory Council estimates that passengers would 
experience 63 percent more total delay hours in 2012 than they did in 
2000.
---------------------------------------------------------------------------
    \7\ The Joint Research Council is a FAA executive body consisting 
of associate and assistant administrators, acquisition executives, the 
chief financial officer, the chief information officer, and legal 
counsel. The council determines, among other things, whether an 
acquisition meets a mission need and should proceed.
---------------------------------------------------------------------------
    In contrast, FAA states that if all of the OEP initiatives are 
implemented, delays will be maintained at or below the flight delay 
levels in 2000. However, FAA also stated that capacity at some airports 
will not keep pace with demand and in these cases delays will get worse 
over time because not all airports have improvements planned. In 2004, 
the airline industry losses totaled $9 billion and the industry is 
expecting similar losses in 2005, which will make it difficult for them 
to equip their aircraft with some of the new air traffic control 
technology, according to Air Transport Association officials.
    Another important challenge is reducing flight delays and enhancing 
capacity at delay-prone airports, such as those shown in table 1, some 
of which have little capacity to physically expand and would find it 
difficult to build even one more runway, either because they lack the 
space or would face intense opposition from adjacent communities.

               Table 1: Most Delay-Prone Airports in 2004
------------------------------------------------------------------------
              Airport                    Delays per 1,000 operations
------------------------------------------------------------------------
Chicago-O'Hare                                                       97
Atlanta Hartsfield                                                   72
Newark International                                                 70
Philadelphia International                                           58
New York La Guardia                                                  56
Houston International                                                36
Washington Dulles International                                      36
San Francisco International                                          32
New York John F. Kennedy                                             27
------------------------------------------------------------------------
Source: FAA.

    Although eight runways were opened during the last six years and 
seven new runways are scheduled to be opened by the end of 2008, only 
three (Atlanta Hartsfield, Philadelphia International, and Houston 
International) of the nine airports that experienced the highest rate 
of delays in 2004 will receive new runways. Because these delay-prone 
airports can cause delays that ripple throughout the system, other 
airports that have increased their own capacity could still experience 
delays. For example, in 2000, Phoenix Sky Harbor International put an 
additional runway into service, and the airport had sufficient capacity 
to allow flights to take off on time. However, the airport ranked among 
the top 15 in the United States for flight delays. According to airport 
officials, most of the delays in Phoenix were the result of delays and 
cancellations at other airports--circumstances unrelated to the 
capacity at Phoenix. FAA also projects that the three New York-area 
airports--La Guardia, Newark, and Kennedy--will experience relatively 
small capacity gains during this decade--just 7 percent for Newark and 
1 percent each for the other two airports.
    In addition to addressing the capacity needs of the most delay-
prone airports, FAA, airlines, and airports will also have to address 
the emerging capacity needs of new metropolitan areas in the South and 
Southwest. Among those metropolitan areas FAA believes will need 
additional capacity by 2013 are Tucson, AZ; Austin-San Antonio, TX; and 
South Florida.

Other Options Could Help Address Capacity Needs
    Other options--not in the OEP--exist as potential measures to 
address capacity needs as shown in table 2. These options, which have 
been cited by various researchers and policy organizations over the 
last decade, basically fall into two categories. The first category 
involves measures for adding airport infrastructure besides adding 
runways to existing airports, such as building new airports or using 
nearby underdeveloped regional airports. The second category includes 
developing alternative modes of intercity travel other than air 
transportation, such as high-speed rail.

    Table 2: List of Potential Options--Not in OEP--to Reduce Airport
                              Capacity Gap
------------------------------------------------------------------------
            Options                            Description
------------------------------------------------------------------------
Category 1: Adding airport
 infrastructure
------------------------------------------------------------------------
Building new airports in        This measure involves new airports
 metropolitan areas.             within metropolitan areas to provide
                                 additional capacity, especially where
                                 the existing airport has little
                                 expansion potential. This measure has
                                 recent limited use since only two major
                                 new airports--at Dallas-Fort Worth and
                                 Denver--have been built in large
                                 metropolitan areas since 1973.
Developing regional airports.   Existing regional airports located
                                 within 50 miles of metropolitan hubs
                                 would be developed to take advantage of
                                 unused system capacity. A regional
                                 approach is in place at several
                                 airports including Boston Logan and is
                                 being contemplated in other areas such
                                 as New York and Los Angeles.
------------------------------------------------------------------------
Category 2: Using ground
 transportation alternatives
------------------------------------------------------------------------
Building high-speed, intercity  Building high-speed ground
 ground transportation.          transportation (e.g., rail) between
                                 populous cities within 200 miles of
                                 each other may free up capacity at
                                 congested airports by reducing the air
                                 traffic demand at those locations. Such
                                 trains could travel at speeds of 200
                                 mph or more. Technologically, high-
                                 speed rail has proven successful in
                                 Europe and Asia; efforts are under way
                                 in the United States to develop high-
                                 speed rail in several designated
                                 corridors.
Connecting nearby airports      Using high-speed ground transportation
 with high speed ground          to connect congested airports with
 transportation.                 underused airports nearby could
                                 accommodate passenger transfers within
                                 the current hub-and-spoke system. This
                                 measure has not been done in the United
                                 States.
------------------------------------------------------------------------
Source: GAO analysis of previous studies

    The applicability of any particular option is likely to vary by 
location, considering the circumstances at each major airport. There is 
no ``one-size fits-all'' solution; rather, substantially reducing 
delays will probably require a combination of options spread out over 
time. For example, the airspace surrounding the greater New York 
metropolitan area is perhaps the most congested airspace in the Nation. 
The three major airports in the area (La Guardia, Newark, and Kennedy), 
which currently are among the nation's most delay-prone airports, are 
expected to continue to experience substantial air traffic growth. But 
these airports have very limited expansion potential, largely because 
they cannot realistically build new runways. Building new airports or 
developing regional airports to serve these airports are long-term 
solutions that will likely take many years to materialize. In the 
meantime, other short-term options would need to be considered as 
passenger demand increases, such as ways to use existing facilities 
more efficiently. This is the direction that FAA and the New York/New 
Jersey Port Authority, which operates the three area airports, were 
moving before the drop in passenger demand following the events of 
September 11.
    As demand and delay are once again increasing, the FAA and Port 
Authority are reevaluating a regional approach to addressing these 
issues. As noted earlier, FAA and the Port Authority are also 
considering market-based and administrative approaches, such as 
auctioning off landing and take-off rights and congestion pricing for 
La Guardia. However, the airlines oppose auctions because of the 
uncertainty regarding the number of slots and gates that they might 
receive. The airlines also, to a lesser degree, oppose a market-based 
mechanism such as congestion pricing because of concerns over who would 
have responsibility for the revenue generated. Because major airports 
in other locations may face different circumstances than the New York 
airports face, they may need an entirely different set of solutions to 
address flight delays.
    Options--such as building new airports, developing regional 
airports, or using ground transportation alternatives--are likely to be 
a more daunting challenge than implementing initiatives in the OEP. 
Implementing the OEP's initiatives will not be easy, but the 
opportunity for success is enhanced because FAA has the support of 
major aviation stakeholders on nearly all of the initiatives. By 
contrast, gaining consensus on any of these other options could be much 
more difficult because they change the nature of the system to the 
degree that each one could adversely affect the interests of one or 
more key aviation stakeholder groups--including passengers; air 
carriers; and aircraft operators, airports, and local communities. For 
example,

   Large infrastructure projects, such as building new airports 
        that are located in metropolitan areas, could create major 
        controversy. Such projects are often opposed by adjacent 
        communities that are fearful of noise, displacement, or other 
        environmental concerns. Also, finding suitable sites for such 
        projects in crowded metropolitan areas--with enough land that 
        is compatible with other potential land uses--may be difficult. 
        Airlines may oppose some types of infrastructure projects if 
        they fear that the projects would adversely affect them. For 
        example, an airline with a dominant market position at a major 
        hub airport may oppose building an additional airport nearby 
        because the dominant carrier may view it as an opportunity for 
        their competitors to enter the market in that area. In 
        addition, some airlines are concerned about the need to divide 
        their hub resources between the current airport and a new 
        airport.

   Administrative, regulatory, and other measures for managing 
        the demand for existing capacity could generate opposition from 
        various sources as well. Airlines may oppose such measures if 
        they perceive that these measures would restrict their choices 
        in determining rates, schedules, and aircraft sizes--all of 
        which could affect their profits and competitive status 
        relative to other airlines. Smaller communities may also oppose 
        such measures, fearing that commercial air service to and from 
        their airports may be reduced or curtailed because airlines 
        would react by choosing more profitable routes for the limited 
        number of airport slots available.

   Cost, a factor to be weighed in adding runways to existing 
        airports, is also an important consideration when building a 
        new airport. For example, the last major new airport--the 
        Denver International Airport completed in 1995--cost almost $5 
        billion to build. This cost would have been greater had the 
        airport been located closer to the city, but since it was 
        located on open land away from established communities, the 
        costs of noise mitigation and other land-use issues were 
        minimized. Also, the construction of fast-rail service in 
        populated metropolitan corridors is likely to be costly. For 
        example, Amtrak estimates the cost to construct fast-rail 
        service in Federally designated, high-speed corridors and the 
        Northeast Corridor of the United States will be about $50 
        billion to $70 billion.

    In summary, the initiatives implemented by FAA, airlines, and the 
airports might help to reduce flight delays and increase capacity in 
the national airspace system in the short term. However, FAA and other 
aviation stakeholders continue to face a number of challenges in 
reducing delays at the most delay-prone airports and developing long 
term solutions for enhancing capacity. Addressing these challenges is 
perhaps more difficult today in comparison to 2000 because a number of 
issues have exacerbated the situation. Chief among them is funding 
these initiatives during a time when the Federal Government and the 
aviation industry are experiencing significant fiscal problems. 
Consequently, keeping up with the economy's increasing demand for air 
transportation services will require a tremendous amount of planning; 
making some tough choices about which initiatives, both short-term and 
long-term, to pursue; and efforts to ensure that such initiatives are 
adequately funded.
    For further information on this testimony please contact Dr. Gerald 
Dillingham by email at [email protected] or Tammy Conquest at 
[email protected]. Alternatively, we can be reached by phone at (202) 
512-2834. Individuals making key contributions to this testimony 
include Colin Fallon, Simon Galed, David Hooper, Maureen Luna-Long, 
Richard Scott, Laura Shumway, and Nicolas Zitelli.

        Appendix I: List of 35 Airports in the Federal Aviation 
        Administration's Operation Evolution Plan, February 2005

    1. Atlanta Hartsfield International
    2. Baltimore-Washington International
    3. Boston Logan International
    4. Charlotte/Douglas International
    5. Chicago Midway
    6. Chicago O'Hare International
    7. Cincinnati-Northern Kentucky
    8. Cleveland-Hopkins International
    9. Dallas-Fort Worth International
    10. Denver International
    11. Detroit Metro Wayne County
    12. Fort Lauderdale-Hollywood International
    13. George Bush Intercontinental
    14. Greater Pittsburgh International
    15. Honolulu International
    16. Lambert St. Louis International
    17. Las Vegas McCarran International
    18. Los Angeles International
    19. Memphis International
    20. Miami International
    21. Minneapolis-St Paul International
    22. New York John F. Kennedy International
    23. New York LaGuardia
    24. Newark International
    25. Orlando International
    26. Philadelphia International
    27. Phoenix Sky Harbor International
    28. Portland International
    29. Ronald Reagan National
    30. Salt Lake City International
    31. San Diego International Lindbergh
    32. San Francisco International
    33. Seattle-Tacoma International
    34. Tampa International
    35. Washington Dulles International

    Senator Burns. Thank you, and we appreciate your report.
    Now we'll hear from Mr. Amr ElSawy, Senior Vice President 
and General Manager of the MITRE Corporation. Thank you for 
coming this morning.

       STATEMENT OF AMR A. ElSawy, SENIOR VICE PRESIDENT/
          GENERAL MANAGER OF THE CENTER FOR ADVANCED 
         AVIATION SYSTEM DEVELOPMENT, MITRE CORPORATION

    Mr. ElSawy. Thank you, Mr. Chairman and Senator Burns, good 
morning. Thank you, Senator Nelson. In addressing the Committee 
today in my prepared remarks, I talk about four topics: Traffic 
and delay trends, factors contributing to the increased system 
duplicity, how the aviation community is responding; and 
finally, specific actions that we must pursue in order to meet 
the forecasted demand and maintain global leadership.
    As the Administrator, Inspector General and Dr. Dillingham 
have highlighted, there is a lot going on. There's a lot of 
changes that have been implemented, improvements have been--are 
in place; and the challenges have been described extremely 
well. So I would ask that my prepared statement be included in 
the record.
    But I'd like to focus this morning on how do we meet the 
future challenges. In order to meet the challenges of the 
future, the FAA and the aviation community need to be flexible, 
agile and adaptive to the very changing set of circumstances, 
requirements and demands. We must continue to implement changes 
in technology, procedures, avionics and policy that can 
together increase operational efficiency and productivity; and 
we believe that the following actions are required to achieve 
those goals.
    Specifically, first, as the Administrator mentioned, 
relying on the aircraft capabilities and avionics to implement 
a roadmap or performance-based navigation is extremely 
significant. This is a most significant change because it is 
equivalent to adding precise navigation lanes in the sky 
without requiring greater ground-based equipment.
    Moving to a performance-based system will transform the way 
that the National Airspace System operates by taking advantage 
of the aircraft's flight management system in avionics. Area 
Navigation and Required Navigation Performance procedures lead 
to safety, efficiency and capacity improvements, especially in 
complex and congested airspace such as Atlanta and the Eastern 
United States.
    Over 200 procedures are being planned for implementation 
over the next few years. The initial RNP procedure 
implementation will be in New York's Kennedy, Reagan National, 
and Houston Airport. The FAA's addressing key challenges to 
ensure these procedures are implemented expeditiously by 
streamlining both FAA and industry processes. I emphasize the 
collaboration required in those areas.
    This will provide direct operating benefits to customers 
and will enable the FAA to reduce the size, complexity and cost 
of its infrastructure to selective divestment of ground-based 
navigational aids.
    Second action is to accelerate the implementation of 
airspace changes--we've heard a lot about that this morning--to 
be more flexible and to accommodate the expected growth in 
traffic and new airspace users, such as unmanned area vehicles. 
Again, this has the real effect of streamlining flows into 
congested areas and providing more efficient, reliable arrival 
and departure paths for all users.
    Third action, emphasize enhancement of automation and 
decision support tools to enable controllers to handle more 
traffic by presenting them with automated conflict-free 
resolutions, thereby increasing system capacity and 
productivity and improving safety and the quality of the 
services provided to customers.
    Fourth, develop a firm plan for the implementation of air-
to-ground data link that will enable controllers and pilots and 
their respective ground and onboard aircraft automation systems 
to exchange digital messages that yield efficiency, 
productivity and safety improvements.
    Fifth, improve traffic flow management capabilities, such 
as access to timely and accurate information, especially for 
unscheduled flights. That will permit the FAA to identify and 
solve congestion problems more quickly and efficiently.
    Sixth, transition to a new technology, Automatic Dependent 
Surveillance-Broadcast. This is equivalent to providing pilots 
with electronic eyes in the sky and will permit the FAA to 
migrate to a less costly and more accurate surveillance system. 
By relying on aircraft avionics and the power of satellite 
navigation, we can improve situational awareness for the 
pilots, allowing better access and effective communications 
about weather and terrain. We can also achieve capacity and 
performance under instrument flight rules, which are only 
possible today under visual flight rules.
    The positive experience and the results shown by the 
Capstone Phase I program in Alaska are achievable in the rest 
of the United States.
    Seventh, use advanced simulation technologies to train the 
new controller workforce. This will reduce the time and cost 
needed to train controllers and will improve trainee 
proficiency and readiness to implement the advanced concept we 
talked about.
    Eighth, maintain a strategic view of investments in airport 
infrastructure and runways. The Administrator, Inspector 
General, and Mr. Dillingham have all emphasized that point.
    Ninth, develop a comprehensive air traffic infrastructure 
consolidation plan. To the extent that we have an aging 
infrastructure that adds to the cost, we need to figure out how 
to reduce that; and with the technologies that we discussed, 
that will be extremely achievable.
    And finally, develop and implement policies that enable 
enhanced access to airports through the use of modern and 
improved avionics and procedures instead of ground-based 
infrastructure.
    These actions will position us to meet ever-increasing 
demands and have the potential for improving overall 
productivity between 20 percent and 40 percent while reducing 
future operating costs by several hundred million dollars per 
year.
    Over the next year MITRE will be working the FAA's Air 
Traffic Organization and Joint Planning and Development Office 
to simulate and validate the productivity and development cost 
savings.
    Mr. Chairman, implementing these changes will keep the 
United States as innovators and leaders of the global aviation 
community; and we have a lot of opportunities ahead.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. ElSawy follows:]

  Prepared Statement of Amr A. ElSawy, Senior Vice President/General 
    Manager of the Center for Advanced Aviation System Development, 
                           MITRE Corporation

    Mr. Chairman, Senator Rockefeller, and Members of the Subcommittee, 
thank you for inviting me to appear before your Committee. My name is 
Amr ElSawy and I am a Senior Vice President at the MITRE Corporation. I 
am also the General Manager of MITRE's Center for Advanced Aviation 
System Development (CAASD), which is the FAA's Federally Funded 
Research and Development Center (FFRDC). I would ask that my statement 
be included in the record.
    In addressing the Committee today, I will focus on four topics: 
Traffic and delay trends, factors contributing to the increased system 
complexity, how the aviation community is responding, and finally 
specific actions that we must pursue in order to meet the forecasted 
demand and maintain global leadership in aviation safety, capacity and 
efficiency.
    Traffic levels and delays have returned to levels seen prior to 9/
11 in many areas of the country. These areas include airports in 
Chicago, Atlanta, the Washington area, the New York area, Las Vegas, 
and south Florida. There have also been increases in traffic in smaller 
airports in many areas of the country. Examples include Scottsdale, 
Teterboro, and West Palm Beach. Traffic in major en route corridors is 
also generating congestion not just due to higher traffic volume, but 
also as a result of increasing traffic pattern complexity.
    The following factors have created challenges that are different 
than those experienced in 1999 and 2000. For example:

   Regional jets have replaced larger jets and turboprop 
        aircraft resulting in different traffic flows and mix which 
        require changes in operational techniques and strategies.

   North/south traffic flows have increased in the winter 
        months changing how traffic flows must be managed around 
        ceiling and visibility constraints. Unscheduled traffic has 
        grown in south Florida and the Southwest.

   For the coming summer season, traffic growth is expected at 
        Houston, and the NAS will face its usual severe convective 
        weather challenges.

   Traffic increases in areas such as New York and Washington 
        with airports in close proximity to each other resulted in 
        greater complexity due to traffic climbing, descending, and 
        crossing other traffic in the same airspace.

   Denser overhead traffic streams in areas such as the 
        Chicago/New York corridor create challenges in merging the 
        departing aircraft into already full traffic streams.

   Increased security operations (such as Combat Air Patrol and 
        Temporary Flight Restrictions) have also generated challenges 
        in accommodating higher volume and more complex traffic around 
        restricted areas such as within the New York and Washington 
        airspace, as well as during major events.

    The FAA and aviation community have responded to these new 
challenges in such a way that performance across the NAS is good by 
most measures:

   The airport and customer community and the FAA worked 
        together on actions to minimize delays resulting from major 
        growth at Chicago's O'Hare and Washington's Dulles Airport. 
        Emerging issues resulting from growth at airports such as Fort 
        Lauderdale and Las Vegas are being actively worked.

   The FAA, the airports, and lead carriers have increased 
        airport capacity through the development of new arrival and 
        departure procedures that use aircraft navigation capabilities. 
        For example, new area navigation (RNAV) departure procedures 
        were implemented at Atlanta's Hartsfield Airport. In addition, 
        new procedures are being implemented at Dulles, Las Vegas, 
        Portland, Philadelphia, Dallas Fort Worth, and South Florida.

   Airspace changes have also been worked collaboratively to 
        relieve congestion points in new ``hot-spots'' such as south 
        Florida. In addition, the vertical separation minima have been 
        successfully reduced in high altitude airspace and are 
        providing controllers with more flexibility to move the 
        traffic.

   The FAA has been continually refining procedures and actions 
        in conjunction with the customer community to manage traffic 
        flows to minimize delays when congestion does occur.

   The FAA worked in collaboration with organizations that 
        provide flight services for unscheduled operations to receive 
        more timely and more accurate information on planned flights.

    Beyond this year, commercial and general aviation will continue to 
see changes. The NAS will likely continue to see traffic growth, 
changes in the traffic patterns between major airports and metropolitan 
areas, and changes in the mix of aircraft that make up the traffic. In 
addition, unmanned aerial vehicles (UAV), very light jets, and 
commercial space launches will need to be accommodated in the NAS, with 
each bringing their own challenges for the operation of airspace, 
controller workload, system complexity, and overall operational 
productivity. Projections developed by DOT, FAA and MITRE (and 
documented in the Capacity Needs in the National Airspace System) 
indicate that by 2013, 15 airports and 7 metropolitan areas will need 
additional capacity to meet expected demand.
    In order to meet the challenges of the future, the FAA and the 
aviation community need to be flexible and agile in adapting to 
changing requirements and demands. We must implement changes in 
technology, procedures, avionics, and policy that can--together--
increase operational efficiency and productivity. We believe that the 
following actions will be required to achieve those goals:
    Take advantage of aircraft capabilities and avionics to implement 
the Roadmap for Performance-based Navigation. This is a most 
significant change because it is equivalent to adding precise 
navigation lanes in the sky without requiring ground based equipment. 
Moving to a performance based system will transform the way the 
National Airspace System (NAS) operates. By taking advantage of the 
aircraft's flight management systems and avionics, Area Navigation 
(RNAV) and Required Navigation Performance (RNP) procedures lead to 
safety, efficiency and capacity improvements, especially in complex and 
congested airspace such as Atlanta, and the Eastern United States. Over 
200 procedures are being planned for implementation over the next few 
years. The initial RNP procedure implementations will be in New York's 
Kennedy, Reagan National, and Houston airports. FAA is addressing key 
challenges to ensure these procedures are implemented expeditiously by 
streamlining both FAA and industry processes. This will provide direct 
operating benefits to customers and will enable the FAA to reduce the 
size, complexity, and cost of its infrastructure through selective 
divestments of ground-based navigation aids.
    Accelerate the implementation of Airspace changes to be more 
flexible, and to accommodate the expected growth in traffic and new 
airspace users such as UAVs. Again this has the real effect of 
streamlining traffic flows into congested areas and providing more 
efficient arrival and departure paths for all users.
    Emphasize enhancement of automation and decision support tools to 
enable controllers to handle more traffic by presenting them with 
automated-conflict free resolutions, thereby increasing system capacity 
and productivity and improving safety and the quality of service 
provided to customers.
    Develop a firm plan for the implementation of air/ground data link 
that will enable controllers and pilots, and their respective ground 
and onboard aircraft automation systems, to exchange digital messages 
that yield efficiency, productivity, and safety improvements.
    Improve traffic flow management capabilities, such as access to 
more timely and accurate information (e.g., for unscheduled flights), 
will permit the FAA to identify and solve congestion problems more 
quickly and efficiently.
    Transition to Automatic Dependent Surveillance-Broadcast--This is 
equivalent to providing pilots with electronic eyes in the sky and will 
permit the FAA to migrate to a less costly and more accurate 
surveillance system. By relying on aircraft avionics and the power of 
satellite navigation, we can improve situational awareness for pilots, 
allowing better access and effective communication about weather and 
terrain. We can also achieve capacity and performance under instrument 
flight rules (IFR), which are only possible today under visual flight 
rules (VFR). The positive experience and results shown by the Capstone 
Phase I program in Alaska are achievable in the rest of the United 
States.
    Use advanced simulation technologies to train the new controller 
workforce. This will reduce the time and cost needed to train 
controllers and will improve trainee proficiency and readiness to 
implement advanced concepts of operation.
    Maintain a strategic view of investments in airport infrastructure 
and runways. We must continue to build runways and improve taxiways to 
stay ahead of the demand.
    Develop a comprehensive air traffic infrastructure consolidation 
plan.
    Develop and implement polices that enable enhanced access to 
airports through the use of modern and improved avionics and procedures 
instead of ground based infrastructure.
    These actions will position us to meet ever increasing demands and 
have the potential for improving overall productivity between 20 and 40 
percent while reducing future operating costs by several hundred 
million dollars per year. Over the next year, MITRE will be working 
with FAA's ATO and JPDO to simulate and validate the productivity and 
cost saving estimates.
    Implementing these changes will keep the United States as 
innovators and leaders of the Global aviation community. We have a lot 
of opportunities ahead.
    Thank you, Mr. Chairman. I would be happy to answer questions.

    Senator Burns. Thank you for your testimony, and I've just 
been handed a note by our Chairman. He has an obligation at 11 
that is sort of a must, and I'm going to give way to Senator 
Stevens. Senator Pryor's joined us.
    Do you have a statement?

                 STATEMENT OF HON. MARK PRYOR, 
                   U.S. SENATOR FROM ARKANSAS

    Senator Pryor. No. I'm anxious to hear Senator Stevens's 
question.
    Senator Burns. Thank you very much. I'm not too anxious to 
go to the end, but we are going to anyway. Senator Stevens.
    The Chairman. Thank you very much, and I'm sorry, but we do 
have a conference on allocations of funds, appropriations and 
it's----
    That leads me to my first question, Ms. Blakey. We had a 
long discussion about the concept of up-front money and paying 
it off over a period of years, a concept of creating some sort 
of an entity that would bond and go to the general market to 
get funds and be repaid through the normal flow of funds to 
FAA.
    Have we come anywhere close to that yet?
    Ms. Blakey. After your initial discussion about this in 
January, certainly we began looking at this very carefully; and 
we held a forum at the end of April where we were looking at 
the various ways to approach changing the funding structure for 
the Trust Fund and also looking at the challenges there. We 
also brought in a number of the analysts from the financial 
community who were real experts on the issue of bonding and 
debt financing and how it can be approached; and I was very 
encouraged by the number of ways that this can be addressed, 
even in a government context.
    I will also tell you that it was very interesting because 
we invited the Tennessee Valley Authority, the TVA, which is 
one of the examples where debt financing is being used in the 
Federal Government arena. And again, they talked about what 
this has made possible in terms of capital investment in the 
Tennessee Valley. It's very impressive.
    I can't tell you where we may go at this point from the 
standpoint of proposals; but we're looking forward very much to 
sitting down with you and others to discuss what the potential 
could be. But this is obviously one of the ways you can have a 
large trough of up-front capital to invest in the Next 
Generation System to really begin to get the benefits of that 
and lower the unit costs, which is something we all want to do 
when we're talking three times the travel.
    The Chairman. If we look at the myriad of instances in our 
Federal Government where immediate up-front capital is needed 
for modernization and look at the Federal budget, it's really 
not possible to achieve what we have to do in a short period of 
time without charting a concept similar to TVA in several 
different places in the government and relying on private 
capital to come in and take part of the risk; but actually, 
they will be relying upon the continued level of existing 
appropriations in various areas to repay the bonds to be 
issued.
    I still think that that's the only way to accomplish what 
we have to do in aviation, and I would--I think Chairman Barton 
and I would be pleased to call a summit between literally 
everybody to sit down and work out something jointly so we can 
introduce--to start this on its road.
    I think we absolutely have to have that money up front; and 
you have to know how much you have before you can really 
solidly follow Mr. Mead's suggestions that some of them--maybe 
not all of them, Mr. Mead--but most of them; and I think he's 
been very astute in pointing out the areas of real concern; and 
there has to be some prioritization on that. But I do hope we 
can get to that point.
    I want to applaud what you've done in terms of Reagan 
Airport. I think that solution, if it works, ought to be looked 
at to see how we might regulate the use of general aviation at 
some of these highly congested places. Now, they may not like 
to hear that, but there's just too many new business jets 
coming online for you to--and put them fully into the total 
freedom of the airways system as it's existed in the past.
    I think we'll have to find some way to prioritize flights 
and to have some flights--some entities know how many flights a 
week they can have in a certain airport, rather than just an 
announcement that they're coming 2 hours from now. That concept 
of advanced planning has got to come into this. Am I right? Mr. 
Mead, do you disagree?
    Mr. Mead. No, sir. No, sir.
    The Chairman. Are we going to have to move to a satellite-
based system for your communications? Are we going to change 
our basic concept of communications as these new technologies 
tumble in communications? Are you going to broadband? Are you 
going to save your existing system? What's going to be the 
basic communications concept for your airwaves into the future?
    Ms. Blakey. I think there's no question about the fact we 
will be moving very significantly to a satellite-based system; 
and we, of course, are looking at the communications issues in 
terms of spectrum and what will be required. We have a real 
expert at the table in Amr ElSawy.
    Amr, you might want to address that.
    Mr. ElSawy. Thank you, ma'am. I think the answer is, we'll 
have to use multiple communications systems. Satellite 
communications is an integral part of the future concept. ADS-B 
is an integral link, is an integral part of the concept.
    As we move to the future with routing technologies and 
Internet technologies, we are able to, in fact, have every 
element of it be addressable with an address so that we can 
know where it is; and we can direct communications to it. And I 
think that broadband communications, satellite communications, 
ADS-B are all elements of the future--for the future concept.
    The Chairman. Well, what you choose will really have an 
impact on the modernization of some of the aircraft, right? I 
think you have to be--people have to know in advance what 
you're going to do.
    Mr. ElSawy. Precisely.
    The Chairman. Let me thank you for your comment about 
Capstone.
    Mr. Mead, did you ever look into the Medallion program in 
Alaska as far as safety is concerned? Are you familiar with 
what we've done up there?
    Mr. Mead. I'm not familiar with the term Medallion, but I 
am familiar with Capstone and ADS-B.
    The Chairman. Medallion is a voluntary concept that was 
worked out with Ms. Blakey, and it is a concept of continued 
upgrading of pilot skills and commitment of the entities that 
own these aircraft to the expenditures that are necessary to 
accomplish that.
    We have reduced our fatalities in aviation dramatically; 
and we have increased awareness of not only the pilots and the 
basic operators but of the public, of the things that must be 
done to reduce the fatalities in aviation in our state where, 
as you know, we only have one main road system. We depend 
either on air or water for basic transportation. Seventy-five 
percent of all travel in Alaska is done by air.
    But I think you should study it and see if we can't take 
that out into other areas where they have substantial amounts 
of general aviation and make--this is a system for general 
awareness of--of the things that can be done to make flying 
safer.
    Mr. Mead. I think that program in Alaska has tremendous 
merit. I really think it is the wave for the future. The only 
sad part about it is it took so long to get started. There was 
a fair amount of resistance.
    The Chairman. A little bit of money helped.
    Mr. Mead. Money always helps.
    The Chairman. I think Congress would be perfectly willing 
to put that up. That was not that much money. After that it 
became all voluntary support, not Federal money now. Isn't that 
right, Ms. Blakey?
    Ms. Blakey. Absolutely. I must tell you, Mr. Chairman, we 
invited the Capstone Foundation down this spring to join a 
group of carriers that do not have scheduled service. Whereas, 
you know we are having some challenges in the lower 48 these 
days. We really felt that the Medallion Program was a great 
example of how you can incentivize the private carriers to 
really step up the pace on the safety front.
    The Chairman. I have a few of my friends coming up to join 
me for a little bit of marine research this summer. Maybe we 
can arrange to have some meeting there while we're there for 
them to talk a little bit about Capstone and about Medallion. 
They may be able to take it home with them.
    Thank you very much, Mr. Chairman.
    Senator Burns. In other words and where I'd say, we're 
going fishing. Senator Nelson.
    Senator Ben Nelson. Thank you, Mr. Chairman. Thank you, 
Senator Burns. My question with regard to the short-term 
response to congestion that we might be facing this summer or 
that we have faced is--I am thinking of capacity issues at 
O'Hare, just as one example, since many of the flights coming 
into and from Omaha and Lincoln will go through Chicago as a 
hub.
    Now, my first question is: When there is a backup and 
flights are getting canceled or delayed, how is it determined 
which ones to cancel or delay? Is it based on the size of the 
airplane and the capacity--the passenger capacity? Is it based 
on where the flight is coming from or going to? Is pain shared 
equally? Is it based on smaller airports versus larger 
airports? What is--how is the determination made for those 
decisions?
    I would--I guess, Ms. Blakey, you probably are under some 
duress to make those decisions or help airports establish 
priorities.
    Ms. Blakey. Well, I'll tell you, we certainly have paid a 
great deal of attention to the issue of service to smaller 
communities and trying to make sure there was an equitable 
approach in the system where we have had, in effect, limited 
capacity. Most of our airports, of course, we have not had to 
do that; but O'Hare is an example where we were forced into 
that; and we are talking about essentially 88 arrivals an hour 
in that congested period. That is to say, there was a very 
definite concern and a good bit of discussion given to making 
sure that the smaller communities remain served.
    The specific decisions, though, about which flights are 
delayed or canceled are those of the airlines. The carriers 
themselves look at what is happening in terms of delays at that 
airport. They realize that maybe we're only getting 62 flights 
an hour out instead of 88 because of low ceilings or other 
kinds of problems.
    As you know, O'Hare has wind problems and bad weather; and 
it is at that point that the carriers themselves have to look 
at such things as the load factor onboard the aircraft, how 
many people, where's it going, do they have backup service 
there, and will there be another flight in an hour or two. All 
those are kinds of things the airline itself and the dispatcher 
makes the decisions.
    Senator Ben Nelson. Is there any oversight over their 
determination? In other words, if our concern is for equitable 
consideration, is that applied to their decision-making process 
and the results of that process?
    Mr. Mead. I think there's very little oversight of the 
airline decision-making process on what flights to cancel.
    Senator Ben Nelson. Do you have any data that would show 
over a period of time the cancellation of or delaying of 
flights that might help us understand how they--how they've 
decided it or at least look at the results of their decisions?
    Mr. Mead. I can assemble that data.
    Senator Ben Nelson. I would like to see it.
    Mr. Mead. If you like. And we'll speak to your staff 
afterwards about it. A short discussion would be helpful.
    I also think--there were really two parts to your question. 
One part was, how do you get the flight scheduled in the first 
place? You know, in a place like out of O'Hare or LaGuardia----
    Senator Ben Nelson. Or McCook International or Lincoln or 
Omaha.
    Mr. Mead. You have plenty of departure space in your state. 
It's the question of getting from a hub--a place like Chicago 
O'Hare to there, especially now that Chicago O'Hare has 
administrative caps. And I think the first part of your 
question had to do with how much you set aside for service to 
small communities in terms of flights.
    The second part of your question is, well, once you've done 
that set aside, and a decision has to be made about whether to 
cancel one flight over another, how is that decision made?
    Senator Ben Nelson. Well, if pain is spread out equitably, 
I think everybody understands; but if pain is disproportionate, 
a lot of folks won't understand. Some people will be happier 
while other people will be clearly, less happy.
    And certainly in a state like Nebraska which would not--
Omaha is not going to be in the top one or twenty-five 
airports; but it's certainly number one in the State of 
Nebraska and Eastern Iowa; and Lincoln becomes important and so 
do all the other airports that experience Essential Air Service 
issues.
    So I would be very happy to see what--how this decision-
making is done and what the effects of it are because I think 
that we're certainly going to look at efficiency, cost 
effectiveness; but we have to look at the equitable treatment 
of passengers and communities as well.
    What--Ms. Blakey, what is the commitment to smaller 
airports? We continue to go through the battle for Essential 
Air Service funds every year, and they're cut. We fight. We get 
some money in; the next budget comes around; and they're cut; 
and we go through this dance every year.
    Is there a commitment to smaller communities that are, by 
nature, inefficient but totally dependent on travel? The 
Chairman says about Alaska that 75 percent of their travel is 
related to--not to road transportation or surface 
transportation but to air transportation and water 
transportation.
    I don't know how cost effective it is up there. I know it's 
probably not cost effective to some of the small airports in 
Nebraska, but it is essential. That's where we go for these 
Essential Air Service funds. What is the commitment?
    Ms. Blakey. Well, the Essential Air Service program is one 
that the Department is funding; and while it is a Department of 
Transportation program, not an FAA program so I do not have 
direct responsibility there, I can tell you that we are 
assiduously collecting the overflight fees from those carriers, 
that overfly the U.S, mostly foreign flights, obviously, to be 
able to put up the $50 million from that source.
    Senator Ben Nelson. Do you think that is--it's obviously 
better than nothing, and it's a lot better than nothing. How 
far off the mark would you say that this--how much more would 
we need to really fund Essential Air Service?
    Ms. Blakey. I've not done any analysis of this because, 
again, it's outside my realm of responsibility; but I will tell 
you this, there are several changes in terms of what's going on 
with the fleet mix that I think are very encouraging to smaller 
communities to move to smaller regional jets, which really can 
work out of smaller communities and make it cost efficient for 
the carriers which is, at the bottom of it, very critical.
    The move to the microjets is an example. As we're talking 
about this movement to four- and six-seat small jets, which are 
cost efficient, I think you will see much more service into 
these smaller areas. So those things I think will make a 
difference.
    One of the things, though, that's a countervailing pressure 
is the fact that many of the low-cost carriers are serving 
relatively significant city pairs. That means a lot of people 
are driving instead of flying out of the smaller communities. I 
can tell you when I sit down with small airport directors, they 
often bemoan the fact that they will find people in their town 
willing to drive 200 miles to get a good airfare rather than 
use the air service going out. So it is an issue there that 
there are countervailing pressures that the market is largely 
sorting out.
    Senator Ben Nelson. My time has expired. Thank you, Mr. 
Chairman.
    Senator Burns. Thank you, Senator Nelson.
    I think my microphone went dead. So I'll just lung it. I 
have a couple questions and a followup on what Senator Nelson 
said.
    We who live in rural areas not only whenever we start 
making the decisions of--in airports like O'Hare, usually those 
decisions--the delay of persons going to North Platte, 
Nebraska, or Omaha, Nebraska, that's not because that's where 
you usually terminate.
    What happens is, and when it gets very expensive for 
travelers, and you really get an amount of humor is when they 
leave North Platte or Scottsbluff or Omaha and they can't--and 
they--they're delayed getting into Chicago; and they 
misconnect; and then you go through this process of a rebook; 
and then that next flight is sold out.
    So we've got this big tie-up that is really--not only is it 
expensive for the airlines, but it's also expensive for the 
traveling public because you lose--sometimes you lose an entire 
day.
    In Montana, we've got to make the early morning flight or 
the evening flight. We don't have anything in between. So we 
are very, very much aware of those delays that's in a principal 
or a major hub. Minneapolis being mine to get--and of course 
you use Minneapolis.
    But I wanted to followup on that because sometimes I think 
we are--we are caught in sort of a catch-22.
    If the FAA doesn't, say, monitor some of this, so to speak; 
and you have a report on it, Mr. Mead, I would be interested in 
the same report; and if MITRE would have some of the same 
information, I would be anxious to look at that.
    New runways, environmental streamlining continue to be a 
challenge for us. I guess it is more from a financial end of it 
or economic end of it or the availability of capital end of it 
rather than the policies set by government. Is that a true 
statement? That's for anybody to address if----
    Dr. Dillingham. Mr. Chairman, I think you know, the things 
that Congress has done in terms of streamlining the runway 
construction process and, in fact, from the work that we've 
done, we see that there's ample funding for runways. The 
problem seems to come in the local jurisdiction more than 
anything else.
    There tends to be a lot of groups and persons who are not 
enamored about having an airport in their area or runway 
extension that may be involved with environmental issues or 
noise issues. So I think it's the latter as opposed to the 
former.
    Senator Burns. Do we--does MITRE have an estimate on what 
those kinds of discussions and those kinds of delays, what it 
costs us in the end to save--to expand an airport or to build a 
new one?
    Mr. ElSawy. We don't, sir; but we would be happy to look at 
it.
    Senator Burns. How about Ms. Blakey and the FAA?
    Ms. Blakey. Well, we've got some broad figures in terms of 
what it has cost recently. It's a little bit hard because every 
runway is different; so I don't want to extrapolate too much. I 
wouldn't want us to just divide this up. But the cost of the 
last eight runways that we did was approximately $1.96 billion; 
and out of that, the U.S. Government--the AIP funding was $941 
million. So about half, roughly, is what the AIP funds put up.
    Now, for 2008 we're expecting to have eight more runways 
come onboard. The price has jumped way up. At this point we are 
talking $4.75 billion for those; and again, AIP funding for 
this is going to be somewhat over a billion dollars.
    Senator Burns. I know it's costly whenever we start talking 
about getting things done in the local community and 
environmental rules and this type of thing. So I'm not real 
sure we shouldn't look at that.
    Our numbers of traveling people will almost equal 2000 
shortly. They may even make it in 2005; but yet even though our 
numbers are back, we have increased traffic in the air.
    Give me some idea of the comparison and the challenge you 
might have from--in those 2 years of trying to handle that 
traffic.
    Mr. Mead. Well, I think one example, a good one, is the 
regional jets. Regional jets, of course, hold fewer people. 
Back in 2000 10 percent of flights were regional jet based. Now 
they're 32 percent. There's an increase in operations there.
    Senator Stevens has pointed out repeatedly this phenomena 
that's expected to hit next year, these microjets. To buy a jet 
right now at the low end, you're probably talking seven or 
eight million dollars. There are jets that are going to be 
hitting the market next year that are--they are originally 
taking orders for slightly under $1 million and are now up to 
about $1.2 million. There's a lot of controversy about where 
exactly are these aircraft going to fly? Questions also focus 
on: Are they going to be air taxis? Are they going to be 
fractional ownership with business people? FAA is going to have 
to deal with this.
    Now, the big difference for FAA is that these planes are 
not propeller-driven. So they are flying up there at high 
altitudes with your big 777s. They basically have the same 
impact on air traffic control that's quite comparable to a 777, 
whereas the old propeller planes did not.
    Ms. Blakey. I have to admit, I will put in a plug for the 
fact that certain passenger traffic is coming back; and that's 
great. The fact of the matter is, we are seeing smaller 
aircraft carrying those passengers, which means from a workload 
standpoint for the FAA, it is really ramping up; and that is 
something we all need to recognize because more aircraft in the 
sky with fewer numbers of people in them--obviously from our 
standpoint, it costs the same thing to move a small plane as it 
does a big one.
    Senator Burns. Senator Pryor.
    Senator Pryor. Thank you, Mr. Chairman.
    I think that the witnesses have given us a good sense of 
what some of the challenges are. You've got some congestion 
problems; clearly you've got capacity problems, some now and 
maybe large capacity problems down the road. You've got 
changing circumstances with these microjets or very light jets, 
I've also heard them called; and the regional jet phenomenon, 
even though I like those personally because a lot of those fly 
in and out of places I fly in and out of.
    I understand it does exacerbate the problem or at least it 
adds to the circumstances in which you have to deal because 
they occupy airspace, ground space, etc., etc.
    Also another thing I think you've touched on, but I just 
want to make sure that we're on the same page here. So as 
another concern I have, and that is high-growth areas. We have 
one part of my state that's growing very very rapidly. It's the 
northwest corner of the state. It's about four, five counties 
up in this part of the state that are really among if not the 
fastest-growing part of the entire Nation.
    That's where Wal-Mart, Tyson Foods, University of Arkansas, 
J.B. Hunt and Trucking, among other companies, are located 
there; and it is expected to double in population over the next 
20 years. I mean, this is a very rapidly growing area. Ten 
years ago they didn't have a large airport at all. They've now 
built one.
    And the only reason why I mention that is because when I 
look at you all having to make funding priorities, and 
certainly you have a lot of challenges in making determinations 
on where to do capital improvements, where you should have 
runways and all those things, what makes sense today may not 
make sense 15 years down the road.
    And when you make a big investment in infrastructure, like 
a runway or more capacity in one way or another, I just hope 
you'll look to the future and look for areas like what we have 
in the northwest part of Arkansas; and I'm sure there are a lot 
of other areas around the country that are experiencing that 
type of growth; and I just hope you'll be sensitive to that 
growth.
    Another thing that we touched on, but I just would like to 
get your thoughts on--Ms. Blakey, maybe you're the best one to 
mention this--is trying to manage the congestion at these 
larger airports. Not to pick on O'Hare, but we'll talk about 
Chicago O'Hare.
    Let's just say that we've got a regional jet coming out of 
one of our airports in Arkansas directly to O'Hare; and then 
there are larger planes coming out of other cities that are 
connecting into O'Hare; and there's only so much capacity 
there. Might we get bumped out of O'Hare and our access to 
O'Hare if the capacity there--or if the capacity there is 
strained too much?
    And so I just have that concern. Do you have any thoughts 
on that? We kind of get squeezed out as you're trying to manage 
the slots in and out of, say, O'Hare.
    Ms. Blakey. Well, it was a legitimate concern of ours, I 
will tell you, when we did have to impose administrative caps 
on O'Hare. We analyzed pretty carefully what the major carriers 
were, therefore, planning to do in terms of either flights that 
they were moving to the less congested part of the day; there 
was a good bit of that going on, but also those that were 
actually canceled on a permanent basis.
    We actually found there was very little loss of service--
actually none, in fact, to small communities in terms of 
absolute service. Now, it may have dropped from four to three 
flights a day, two to one flight a day; but this was a handful 
of flights. We're not talking significant numbers at all. This 
was almost a year ago now when a lot of this took place. So I 
think at this point what the concern would be, I'm sure on your 
part, is when bad weather hits and cancellations hit, is there 
some view that it's the larger cities that are being served.
    I think the Inspector General is taking a look at that and 
giving us some sense of what happens--that would be a very 
valuable thing.
    Let me return, if I might, to--because as I say, it really 
is a decision of the carriers. It's a market-based decision.
    Senator Pryor. Right.
    Ms. Blakey. Let me return to your point on high-growth 
areas because you are hitting on an important point. One of the 
things we are doing right now is updating a study we did a 
couple years ago. We carried it out over last June; but we will 
quickly update it, looking at 300 communities around the 
country in terms of what their airport needs will be, looking 
at 2020 and 2030 and trying to forecast on the basis of the 
kind of economic and demographic trends you're talking about, 
where we really are going to--where we are going to need more 
infrastructure because I think it's vitally important that we 
anticipate that; and we plan for it.
    So we will be bringing out an update on that, and we will 
certainly be looking at that section of Arkansas.
    Senator Pryor. Great.
    Mr. Mead. One thing that would be good to look at, is FAA's 
planning profile for airports. I think it's called the NPIAS 
for short. It's like a national airport planning guide. It 
would be good to see what the State of Arkansas has submitted 
in terms of its own expectations for that area of Arkansas.
    FAA waits for the area to make suggestions, and there is 
the document I mentioned. I'll look at it and check it out when 
I get back to the office this afternoon.
    Senator Pryor. Great. Thank you. Because when you look at, 
say, the Little Rock area, it's growing about the same rate as 
the Nation is growing. It's kind of a steady, solid whatever. 
But that northwest part is really just booming.
    Let me--speaking of that northwest part of the state, 
general aviation, as I understand the microjet or the very 
light jet phenomenon that's coming, first question I had on 
that is: Are these coming on the market just because of market-
based dynamics? Or has the Federal Government somehow now 
authorized these lighter jets and so they're entering the U.S. 
market for the first time? I just don't know the history of 
that.
    Ms. Blakey. It's a market-based phenomenon. Some 
entrepreneurs looked around and decided there was a way to take 
this technology that had been developed and really be able to 
put it into a very highly cost-efficient very small aircraft. 
However, the FAA does have a significant role in certifying it. 
We must certify it from a safety standpoint before they will 
ever market it. That's in the process now.
    Senator Pryor. That's in the process now. So I guess 
another one of these things that you have to consider is you 
have a lot of congestion around a lot of airports and with 
these small microjets, or very light jets, that's just more 
planes in the air, more capacity that's needed, and more 
congestion's created.
    So I would assume that smaller airports maybe near large 
airports, but smaller airports might pick up a lot of that 
traffic because they just can't get into larger airports with 
the more congested airspace. And I assume, therefore, we need 
to look at the infrastructure requirements of these smaller 
airports and look at the general aviation needs of these 
smaller airports.
    Again, it may be very different. If this market does 
develop like you have indicated, just what will that look like 
over the next decade or two decades. Any comments on that, I'd 
appreciate it.
    Ms. Blakey. Well, I'll certainly say this, the intent, I 
think, in a lot of the utilization of these small jets is to be 
able to go into smaller airports, fly point-to-point, closer to 
where people want to be. After all, who wants to be in the 
downtown congestion of Chicago if there's another airport 
closer to where you actually want to go, using the pavement 
that's out there?
    We really don't have a pavement problem in this country. We 
have one only in terms of these large congested airports. 
Otherwise, we have a fair amount of tarmac to use. So I think 
you will see that going on; and it will be a very good thing 
from the standpoint of congestion.
    In terms of Federal funding for airports, you will see if 
you look at the funding from the Airport Improvement Program, a 
very significant amount of that funding does go to smaller 
airports. Larger airports have a lot more flexibility in terms 
of bond authority, in terms of going to private sources; and 
they also use passenger facility charges, PFCs, so they can 
raise money through that. Smaller communities get a fair slice 
of the AIP funding.
    Mr. ElSawy. If I may add, the issue of access. Senator 
Nelson asked a question; and you did too, Senator Pryor. I 
think one of the really pieces of good news here is with the 
Wide Area Augmentation System. You now have access and 
precision navigational capabilities at close to 5,000 airports 
in the United States with the procedures that we talked about.
    Now, the requirement for infrastructure, ground-based 
infrastructure is minimized while the access is actually 
increased because you now have precision navigation capability 
almost a category one to a lot of these airports. So in terms 
of enabling the small communities and enabling access to small 
communities, the area navigation procedures the Administrator 
mentioned earlier, the Required Navigational Performance, the 
higher capability in the aircraft all will contribute toward 
actually increasing the access with precise navigation and the 
satellite-based system; but we have to put the procedures in 
place to make sure that actually materializes.
    Mr. Mead. That's an important point because one thing that 
may happen with these smaller--these very light jets is--
depending on the market for on-demand air taxi service looks 
like to airports that don't really have scheduled service now. 
There will be an expectation that they have precision landing 
capabilities.
    Senator Pryor. Thank you, Mr. Chairman.
    Senator Burns. Thank you. I've got--oh, my light's back on.
    I've got a couple of questions, and I think everybody else 
has kind of covered them. A couple questions.
    Mr. Dillingham, in your report, how much will people put up 
with delays and problems in an airport before they start 
avoiding that airport? In other words, when I go into New York, 
I'm just going to go around LaGuardia. I'm going to try Newark 
or I'll try Kennedy or I'll try something else. What's our 
breaking point when we start saying, I'm not going to connect 
through Chicago anymore; and I want to go to Minneapolis or 
I'll try to hub out of somewhere else; but I don't want to go 
through Chicago?
    Dr. Dillingham. Mr. Chairman, it's pretty hard to predict 
where the individual tipping points are; but even personally, I 
try not to go through Chicago in the wintertime because you 
never know what will happen; but I think a part of it fits into 
the plan.
    That is, if people can, in fact, go to airports other than 
the major hub airports, that might help with the situation. So 
it's an individual decision, and I don't know if you can sort 
of make that for anybody.
    Senator Burns. Well, in other words, I guess we've all got 
different levels of intolerance, I would assume.
    Dr. Dillingham. Yes, sir.
    Senator Burns. Mr. ElSawy, would you like to comment on 
that?
    Mr. ElSawy. I agree with Dr. Dillingham.
    Senator Burns. This is something for the whole panel. Some 
technologies are under consideration, like better surveillance 
for controllers and pilots. They will require users to equip 
new avionics. I would imagine this is more geared toward the 
MITRE Corporation here. This has been a roadblock in the past.
    What incentives could FAA rely on to speed up the 
introduction in these new systems? Is there anything we can do 
or the FAA can do to require airspace users to install and 
equip new avionics?
    Mr. ElSawy. I think that, as the Administrator mentioned 
earlier, as we think about the aircraft as being an integral 
part of the system, to the extent that the aircraft is capable, 
the system will operate better; and the examples we saw with 
the area navigation which was just one example with avionics in 
the aircraft are really helping us change the procedures, 
changing the ways to control the traffic.
    If we think about the traffic and the volume and complexity 
and growth and the way we manage traffic today, the 
controller's actually voicing commands and vectors to the 
aircraft. Changes the frequencies, changes the vectors, re-
routes are all today voiced.
    If you think in the future, those routine types of 
communications can be, in fact, data-linked to the aircraft. 
Using existing avionics that they have on the aircraft today 
that they use for airline operational communications, we can, 
in fact, start the process of changing the procedures, reducing 
the requirements of voicing commands and increasing the 
precision and the predictability of the communications, also 
contributing to a reduction in the operational errors and that 
is as a result of hear-back/read-back errors.
    So I think that as you go forward, the data-link 
technologies will be critical in helping us improve; and I 
think the incentive will come from efficient streaming of flows 
in and out of major areas. And certainly the airlines are very 
very aware of the benefits of data link and for their 
operational control.
    Senator Burns. Anyone else want to comment on that?
    Mr. Mead. I think it's important to look at this transition 
that Chairman Stevens was referring to. How quickly it's going 
to occur; how quickly you're going to come to a vision of the 
future is going to be dependent on how quickly you have 
universal equipage. FAA's going to have to make some hard calls 
on some policy issues.
    Historically, FAA has tried to rely on voluntary equipage 
for long periods of time. It gets to be very controversial when 
you start to tell the carriers or general aviation that they 
must purchase and install certain avionics. So there's some 
hard calls ahead.
    Ms. Blakey. I do think, though, that the carriers respond 
very well when we begin to say you can reduce the unit cost. So 
we can have a lot more capacity for less money per aircraft in 
terms of what it's going to cost to move them through the 
system.
    The other thing that I would mention is that we do also 
have to remember that there's some foundation building blocks 
in modernization we're going to have to stick with. The host, 
if you will, for the entire aviation system of air traffic 
control is going to be based on a new program called ERAM.
    Now, I'm very pleased to say that ERAM is on schedule and 
on budget; but it really will be the enabling technology for 
all this. And we're going through a major modernization of our 
terminals; and again, terminal modernization will have to take 
place so that some of these other further-out-there 
technologies will really be incorporated.
    Senator Burns. Now, this leads me to my last question. The 
Subcommittee is worried about the comments being made that the 
U.S. airspace industry is losing its competitive edge and that 
other countries are moving forward technologies that we have 
abandoned, like controller/pilot data link. Are other countries 
ahead of us?
    Ms. Blakey. No, I don't think so.
    Senator Burns. In comparison, I mean around the world.
    Ms. Blakey. I think what's happening is this: we're seeing 
major resolve on the part of the European Union in terms of 
moving ahead with their aviation systems, both the Galileo 
satellite-based system as well as what they call SESAME, which 
is their Single European Sky initiative, with a major 
commitment to air traffic control technology.
    They're not ahead of us yet; but they are making major 
investments. And I think we have to recognize that so that as 
we are looking at this and the expressed desire on their part 
to assume the leadership position in aviation technology, which 
the United States has always held, it certainly is a challenge.
    Senator Burns. What do we have to do to stay ahead and be 
the imagination of air traffic control?
    Ms. Blakey. Well, I think one of the things we have to do 
is stick with the plan that we have laid out. We do have a plan 
for the Next Generation System, and we will be updating that 
and bringing that to this Committee before the year is out.
    I think you're going to see some very exciting progress on 
the very things that the Inspector General's saying. We need to 
have near-term deadlines. We need to know what the investments 
are, and we need to make real progress over the short range as 
well as the longer term. We're very committed to making that 
happen. I think we can do it.
    Mr. Mead. I second that. Senator Stevens made a point about 
financing. And he's right to be concerned about it. The current 
situation the FAA is facing, as Mr. Dillingham said, is 
untenable.
    But before you have a financing plan, people have the right 
to ask how much money do you need; and what do you need it for; 
and when do you need it? So I totally second what you just 
said.
    Senator Burns. Mr. Dillingham, I saw your eyes light up.
    Dr. Dillingham. We have just started a major study to 
answer just the question that you've just asked. Where are we; 
where do we need to be; and what do we need in order to get 
there?
    Senator Burns. I would imagine--policy has always been on 
this Committee no matter what field we talk about, we talk 
about communications or whatever. We try to kind of stay 
technology-neutral. We figure the marketplace determines what 
technology will be used and what can be the platform that will 
launch us into the future and that we can't make that decision 
as policymakers; but it has to be made by the folks who use 
these systems.
    And I'm wondering--I would hate to get into a position as 
policymakers to be dictating what we use because nine times out 
of ten, that will change. Technology changes every--well, more 
often now than ever before; and you know, we don't change all 
that quickly.
    I've always laughed at how long does it take with 
government, the bureaucracy to change a lightbulb? Nobody 
really knows because some of them don't change anything; and 
we're reluctant to do that; and I don't want to get locked into 
a technology or a system that prevents us from moving to the 
next generation because it will change.
    How much redundancy in our R&D do we find between NASA and 
FAA? And can we save dollars there on what each other's doing? 
Have you ever taken a look at that?
    Ms. Blakey. I think it's a very important question. What 
has happened is over time, in terms of R&D, more and more of 
the research for the air traffic control system has shifted 
from the FAA significantly to NASA. I might say MITRE also does 
very important work for us in that area, but NASA is doing some 
critical work.
    The great thing that I must really compliment this 
Committee on is Vision 100 because when you all called for this 
plan for the Next Generation System, you said you wanted five 
agencies of government to pull together: NASA, the FAA, the 
Department of Transportation, but also the Department of 
Defense and Homeland Security, they spend significant research 
dollars as well. And the Department of Commerce is also 
included because they have the Weather Service, and we've been 
talking about weather all morning.
    With all of that research, we are working very hard to 
align those research plans and to look at the budgets we're 
submitting to OMB and then to the Congress. You'll see a lot of 
that in 2007 where they really are aligned in a way that didn't 
happen before; and I think it is going to give the taxpayer a 
lot more benefit for the dollars that are going into that.
    Senator Burns. Do these agencies collaborate and 
communicate?
    Ms. Blakey. Absolutely. And they're doing it through a 
joint planning and development office that was part of the 
Vision 100 approach. So it is an office that the FAA and NASA 
are significantly putting resources into and so are the other 
agencies. We have eight different teams, and each of these 
agencies is leading at least one of them where they have the 
particular expertise. But the key is to look at the research 
dollars, look at the budgets and say, are we spending it on the 
right things; and are we duplicating or are we complementing 
and pulling it together?
    Senator Burns. Mr. ElSawy?
    Mr. ElSawy. I'd like to address the issue of leadership 
because I think there's a really good news story here.
    If you look at leadership, leadership comes with 
implementation. The United States was the first country in the 
world to have a conflict probe in the airspace most advanced in 
the world, and it's implemented its operating inspection system 
today. Time-based mirroring systems are implemented in the 
system today. We are providing leadership, really, for the 
entire world in area-based navigation, based on what is 
happening today.
    The implementations in Alaska, ADS-B is absolutely 
essential to helping the rest of the world move toward ADS-B 
concepts. So I think we've been very successful with 
implementing; and I think that ought to be our strategy going 
forward, getting it done, leading the way.
    Senator Burns. I would say we need competition in the 
research area because competition usually gives us a lot better 
product at the end of the day; but I do feel every now and 
again that redundancy is somewhat--I don't know how you judge 
it, to be quite honest with you; but I would look at that to 
save some dollars because we're going to have to do some more 
work.
    I have no more questions for this panel, and I appreciate 
you coming this morning. There are other Senators that have got 
conflicts this morning and couldn't make it. They will probably 
have some questions. If you could respond to their questions 
and submit your responses to the Committee for the record, we 
would appreciate that.
    And we appreciate your testimony this morning and also your 
work that you're doing because I know it's one of those--it's 
in progress every day. And I appreciate your dedication to that 
and to keep us flying. Keep us flying safely and hope we get 
from A to B.
    And have a nice Memorial Day weekend. Stand adjourned.
    [Whereupon, at 11:28 a.m., the hearing was adjourned.]

                            A P P E N D I X

 Response to Written Questions Submitted by Hon. Frank R. Lautenberg to
                          Hon. Kenneth M. Mead

    Question. We know rail is competitive with air for certain markets, 
and we need rail as part of a balanced transportation system. We all 
know how essential the aviation trust fund is to the aviation 
community. Could a Federal rail trust fund be used to provide for rail 
infrastructure?
    Answer. In theory, a rail infrastructure trust fund similar to the 
aviation trust fund could be used as a mechanism to fund some or all 
passenger rail capital needs, although developing such a vehicle and 
ensuring equitable distribution of funds would pose extremely difficult 
challenges.
    The Airport and Airway Trust Fund (aviation trust fund) was 
established in 1970 to help fund the development of a national system 
of airports and airways, and to fund investment in air traffic control 
facilities. To fund these activities, the aviation trust fund relies on 
a number of taxes for revenue, including passenger ticket, fuel, and 
cargo taxes That are paid by airline passengers and airlines.
    If a similar funding scheme were contemplated for a rail trust 
fund, Amtrak and commuter rail passengers would be asked to pay higher 
ticket prices--something which they may or may not be willing to do, 
especially at the level necessary to provide sufficient funding for 
infrastructure reinvestment. For example, according to the airlines, it 
has been difficult for them to pass through to passengers the 
additional security fees imposed by the government after September 11. 
This reflects the competitive ticket environment and passengers' 
unwillingness to pay. The airlines assert that the inability to raise 
fares to cover the new fees has forced them to lower base fares in 
order to keep absolute ticket prices constant.
    In the same vein, if an infrastructure ticket tax (similar in 
construct to the aviation security fees) were applied to Amtrak's 
fares, Amtrak would need to raise its fares. If passengers were 
unwilling to pay the higher fares, ridership and total revenue would 
decline, requiring an equivalent increase in Federal operating 
subsidies. If Amtrak were to respond as the airlines did--lowering base 
fares to keep total ticket prices constant--the same effect would 
occur. Amtrak's operating revenues would decline, resulting in a need 
for higher Federal subsidies. The fact that Amtrak operates at a 
deficit is strong evidence that this scenario would result. If rail 
passengers were willing to pay higher fares, Amtrak would have raised 
fares already so as to reduce the deficit and its dependence on Federal 
subsidies.
    In addition to funding, issues of fairness would need to be 
addressed. Unlike the aviation industry where the infrastructure is 
owned by public entities, much of the Nation's rail infrastructure is 
owned by privately-owned freight railroads. It is unlikely that 
passenger rail operators would be willing to subsidize the upkeep of 
privately-owned infrastructure for which they already pay access fees, 
just as it is unlikely that the privately owned freight railroads would 
be willing to subsidize (through fuel and cargo taxes) the investment 
in stations and track required to support higher-speed passenger 
service for which they receive little or no benefits.
    The ultimate challenge in funding the significant infrastructure 
requirements to support rail service is not the vehicle for funding, 
but the amount of funding. ``Creating'' a trust fund is not the same as 
``funding'' a trust fund. Funds distributed from the trust fund to 
address infrastructure needs would have to come from somewhere--
passengers, cargo taxes, and/or fuel taxes--and it is almost certain 
that any of these options could potentially result in a greater need 
for increased operating subsidies.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Frank R. Lautenberg to
                      Gerald L. Dillingham, Ph.D.

    Question. We know rail is competitive with air for certain markets 
and we need rail as part of a balanced transportation system. We all 
know how essential the aviation trust fund is to the aviation 
community. Could a Federal trust fund be used to provide for rail 
infrastructure?
    Answer. We have not conducted any studies to determine whether a 
Federal trust fund is a viable option for funding rail infrastructure. 
However, we think that the costs and benefits of this option would need 
to be assessed to determine its viability.
    Past GAO reports and other research have indicated that for rail 
transport to provide a viable alternative to air service, the distance 
between markets has to be either short enough, generally between 100-
500 miles, or trains must travel at high enough speeds to make rail 
travel time competitive with air travel, generally with 2 to 3 hours 
total travel time. \1\ Both of these issues could potentially require 
significant investment in rail infrastructure.
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    \1\ See GAO, Intercity Passenger Rail: Issues or Consideration in 
Developing an Intercity Passenger Rail Policy, GAO-03-712T (Washington, 
D.C.: April 30, 2003); Economic Research Centre, Airports as Multimodal 
Interchange Nodes (Paris, France; 2005); Reconnecting America and 
Center for Neighborhood Technology, Missed Connections II (Chicago, 
Illinois: 2003); IATA, Air/Rail Intermodality Study, (United Kingdom, 
2003); DOT, Airport Congestion Impacts Resulting from Introduction of 
Improved Service in Eleven FR Designated High-Speed Rail Corridors 
(Cambridge, Massachusetts: March 2002).
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    As we have reported in prior reports, transportation programs and 
funding mechanisms are already largely stovepiped by transportation 
mode through mode-specific trust funds, and this situation makes it 
difficult for intermodal projects and other modal projects (e.g., 
freight or passenger trail) to be integrated into the transportation 
system. This stovepiping can also prevent states and local governments 
from choosing the best transportation investment to solve a mobility 
problem. To break down these stovepipes. there are a number of steps 
the Federal Government could take, short of creating a new trust fund, 
such as increasing the flexibility of current programs, applying 
different Federal matching criteria for projects that reflect federal 
priorities, establishing a performance-oriented funding or reward-based 
system, or expanding support for alternative financing mechanisms. \2\
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    \2\ See GAO, Executive Guide: Leading Practices in Capital 
Decision-Making, GAO/AIMD-99-32 (Washington, D.C.: December 1998); GAO, 
Marine Transportation: Federal Financing and a Framework for 
Infrastructure Investments, GAO-02-1033 (Washington, D.C.: Sept. 9, 
2002); GAO, Surface Transportation: Many Factors Affect Investment 
Decisions, GA0-04-744 (Washington, D.C.: June 30, 2004); GAO, 21st 
Century Challenges: Reexamining the Base of the Federal Government, 
GAO-05-325SP (Washington, D.C.: 2005).
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