[Senate Hearing 114-294]
[From the U.S. Government Publishing Office]
S. Hrg. 114-294
FAA REAUTHORIZATION: AIR TRAFFIC CONTROL MODERNIZATION AND REFORM
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HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
MAY 19, 2015
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri MARIA CANTWELL, Washington
MARCO RUBIO, Florida CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin TOM UDALL, New Mexico
DEAN HELLER, Nevada JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado GARY PETERS, Michigan
STEVE DAINES, Montana
David Schwietert, Staff Director
Nick Rossi, Deputy Staff Director
Rebecca Seidel, General Counsel
Jason Van Beek, Deputy General Counsel
Kim Lipsky, Democratic Staff Director
Chris Day, Democratic Deputy Staff Director
Clint Odom, Democratic General Counsel and Policy Director
C O N T E N T S
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Page
Hearing held on May 19, 2015..................................... 1
Statement of Senator Thune....................................... 1
Statement of Senator Nelson...................................... 3
Statement of Senator Wicker...................................... 43
Statement of Senator Peters...................................... 46
Statement of Senator Manchin..................................... 49
Statement of Senator Klobuchar................................... 51
Statement of Senator Markey...................................... 53
Statement of Senator McCaskill................................... 55
Statement of Senator Blumenthal.................................. 58
Statement of Senator Daines...................................... 60
Witnesses
Hon. Michael P. Huerta, Administrator, Federal Aviation
Administration................................................. 4
Prepared statement........................................... 6
Hon. John Engler, President, Business Roundtable and former
Governor, State of Michigan.................................... 9
Prepared statement........................................... 10
Hon. Byron Dorgan, Senior Policy Advisor, Arent Fox LLP and
former U.S. Senator from North Dakota.......................... 14
Prepared statement........................................... 15
Eno Center for Transportation NextGen Working Group--
Statement of Principles for Air Traffic Control Reform..... 19
Jeffery A. Smisek, Chairman, President, and CEO, United Airlines. 21
Prepared statement........................................... 23
Paul M. Rinaldi, President, National Air Traffic Controllers
Association, AFL-CIO (NATCA)................................... 25
Prepared statement........................................... 27
Ed Bolen, President and CEO, National Business Aviation
Association.................................................... 33
Prepared statement........................................... 34
Appendix
Mike Perrone, National President, Professional Aviation Safety
Specialists, prepared statement................................ 65
Thomas L. Hendricks, President and CEO, National Air
Transportation Association, prepared statement................. 68
Response to written questions submitted to Hon. Michael P. Huerta
by:
Hon. John Thune.............................................. 69
Hon. Roy Blunt............................................... 70
Hon. Deb Fischer............................................. 71
Hon. Richard Blumenthal...................................... 72
Hon. Brian Schatz............................................ 73
Hon. Cory Booker............................................. 74
Hon. Tom Udall............................................... 76
Response to written questions submitted to Hon. John Engler by:
Hon. John Thune.............................................. 77
Hon. Deb Fischer............................................. 78
Hon. Bill Nelson............................................. 79
Hon. Brain Schatz............................................ 81
Response to written questions submitted to Hon. Byron Dorgan by:
Hon. John Thune.............................................. 81
Hon. Deb Fischer............................................. 82
Hon. Bill Nelson............................................. 83
Hon. Brian Schatz............................................ 84
Response to written questions submitted to Jeffery A. Smisek by:
Hon. John Thune.............................................. 85
Hon. Deb Fischer............................................. 87
Hon. Bill Nelson............................................. 87
Hon. Richard Blumenthal...................................... 88
Hon. Brian Schatz............................................ 89
Hon. Cory Booker............................................. 89
Response to written questions submitted to Paul M. Rinaldi by:
Hon. Deb Fischer............................................. 89
Hon. Bill Nelson............................................. 90
Hon. Brian Schatz............................................ 90
Hon. Cory Booker............................................. 92
Response to written questions submitted to Ed Bolen by:
Hon. Deb Fischer............................................. 92
Hon. Brian Schatz............................................ 92
FAA REAUTHORIZATION: AIR TRAFFIC CONTROL MODERNIZATION AND REFORM
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TUESDAY, MAY 19, 2015
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 10 a.m. in Room
SR-253, Russell Senate Office Building, Hon. John Thune,
chairman of the Committee, presiding.
Present: Senators Thune [presiding], Wicker, Blunt, Ayotte,
Fischer, Moran, Heller, Gardner, Daines, Nelson, McCaskill,
Klobuchar, Blumenthal, Schatz, Markey, Booker, Udall, Manchin,
and Peters.
OPENING STATEMENT OF HON. JOHN THUNE,
U.S. SENATOR FROM SOUTH DAKOTA
The Chairman. Today the Commerce Committee concludes its
series of planned hearings on reauthorization of the Federal
Aviation Administration with an examination of the Nation's air
traffic control system.
Let me begin by thanking Aviation Subcommittee Chair Ayotte
and Ranking Member Cantwell for taking us through several
valuable hearings on the way to this full committee hearing. It
has been a busy work period and a great deal of progress has
been made, thanks to their efforts.
The U.S. Air Traffic Control, or ATC, system involves
thousands of dedicated air traffic controllers guiding tens of
thousands of flights safely across the country on a daily
basis. We can all be proud of the system's safety record.
At the same time, increasing demand, the need to improve
efficiency, and changes in technology all underscore the need
to modernize a system that is still radar-based and operated
using concepts and procedures developed decades ago.
Efforts to modernize ATC hardware and software have made
some progress recently but the long view indicates
modernization programs have often taken too much time and cost
too much.
We have stacks of reports from the DOT's Office of
Inspector General and the Government Accountability Office
detailing the implementation delays and cost overruns that have
plagued these efforts for decades and stymied leadership from
multiple administrations.
The most recent and visible initiative in this area is the
Next Generation Air Transportation System, or NextGen. Before
NextGen was given a name, the original goal was something
called ``Free Flight,'' which was expected to result in a
genuine transformation of the system away from air traffic
control to air traffic management.
Taking advantage of GPS for navigation and surveillance was
at the heart of this idea. As initially envisioned, FAA would
save money eliminating most radars and airspace operators would
save time, money, and fuel by choosing their own direct routes.
But more than 15 years after the FAA began talking about
Free Flight, we still seem to be more than a decade away from
anything resembling it. In fact, a recent study by the National
Research Council concluded that NextGen currently seems to be
more about incremental programs and improvements rather than a
transformational change.
Also, airlines and other operators in the system now feel
burdened with the expense and effort of implementing changes
that will not yield direct benefits for them for many years to
come.
This situation has led several stakeholders and policy
makers to question whether the current ATC structure is best
suited for the tasks at hand. Long-standing difficulties with
modernization are just one reason to consider reform.
The system's reliance on annual transportation
appropriations and the vagaries of the political process make
long term planning for system capitalization and management of
the agency's footprint difficult and probably more costly.
The FAA will always face challenges attracting and
retaining the talent needed to drive major technological change
when it must compete with cutting edge businesses in the
private sector.
To address these challenges, we must carefully consider if
there is a better way to deliver ATC services for the traveling
public and airspace users, and I am open to considering all
ideas.
FAA has a great record as a safety regulator, something
that would certainly continue if air traffic control services
were moved out of the FAA or government.
Many countries around the world have undergone such
transitions with success, and I look forward to hearing from
our witnesses about what reform of our system might look like
and how reform could serve the needs of all airspace users.
To be sure, the matters we discuss today are just part of a
larger effort on FAA reauthorization where we will address a
host of other important issues. I am looking forward to working
with Ranking Member Nelson, as well as Senators Ayotte and
Cantwell, and other members of the Committee to advance such
legislation.
Last, I want to stress that our interests about ATC
modernization are not focused only on the current leadership
team at FAA. As I mentioned before, it seems clear there are
structural limitations that have impeded success over the
years. I suppose the key question is whether, if we were to
build an air traffic control system from scratch today, we
would necessarily conform to the old strictures or strike a
better path.
I look forward to this discussion, and now want to turn to
my colleague, Senator Nelson, the Ranking Member, for his
opening remarks.
STATEMENT OF HON. BILL NELSON,
U.S. SENATOR FROM FLORIDA
Senator Nelson. Thank you, Mr. Chairman. Senator Thune
joins me to acknowledge the families of those lost on Colgan
Air Flight 3407. Your presence here is a reminder of how much
is at stake with the safe operation of our aviation system, so
thank you for being here.
Obviously, we have the busiest, the most complex airspace
in the world, and thanks to the hard work and the dedication of
the FAA employees, we have an agency that is providing the
safest, most efficient airspace in the world, yet the negative
impacts of the uncertainty of the funding and the sequestration
have led to widespread concern about the funding of Federal
programs and the Federal operations.
If you take a meat cleaver approach instead of the scalpel
approach, the sequester forces irresponsible budget decisions
in our domestic and defense programs.
Some of you are going to suggest that the answer is to
privatize the FAA and air traffic control. This Senator feels
like we ought to get budget certainty and repeal sequestration.
If we do not, the situation will worsen when additional budget
cuts return in 2016.
The FAA has faced unpredictability for too long. The last
FAA bill took 4 years and involved 23 extensions and a partial
FAA shutdown. The good news is that Senator Thune and I are
working together, we are going to do anything possible to get
this FAA reauthorization going.
In the past, because of that uncertainty, because of that
sequestration, the FAA has had to furlough employees, implement
a hiring freeze, temporarily close their Academy, and halt a
lot of the work that I have had the privilege of seeing with
the Administrator on the NextGen programs.
This has set the FAA back in its progress to advance air
traffic control modernization. The conversation about moving
air traffic control into private not-for-profit entities has
impact far beyond you witnesses here today.
Take, for example, the Department of Defense. They share a
responsibility for controlling airspace with the FAA, and they
have for more than 65 years. Today, the Department of Defense
controls about 20 percent of our airspace for civilians as well
as the military.
FAA and DOD coordinate activities to ensure our military
can train warfighters, test new concepts, equipment, and defend
the Nation. Air defense right here in the continental U.S.
No other country in the world has the defense assets of the
U.S., and we must ensure that our defense interests are not
harmed by removing the government from air traffic control, and
I can tell you the Department of Defense has visited me, and
they do not want any of this privatization.
Look at the airlines. Even the airlines are not in
agreement. Let me quote from a letter from Delta: ``Rather than
wasting months of collective energy only to find ourselves with
a less efficient, less responsive, more bureaucratic-like,
costlier new monopoly service provider, we should instead focus
our efforts on achieving real reform in the next authorization
that brings about tangible benefits for operators and more
importantly for the traveling public.'' That is Delta.
Since aviation is the backbone of our U.S. economy, we must
prioritize air traffic control investments for the good of this
country.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Nelson. We have a great
panel today led off by the Honorable Michael Huerta,
Administrator of the Federal Aviation Administration. He will
be followed by the Honorable John Engler, who is currently the
President of Business Roundtable, and of course, a former
Governor.
The Honorable Byron Dorgan, Senior Policy Analyst at Arent
Fox, former colleague of ours from the other Dakota, and also a
former member of this committee.
Mr. Jeff Smisek, Chairman, President and CEO of United
Airlines. Mr. Paul Rinaldi, President of the National Air
Traffic Controllers Association, and Mr. Ed Bolen, President
and CEO of the National Business Aviation Association here in
Washington.
A great panel, we look forward to hearing from all of you.
We will start on my left and your right with the Administrator.
Mr. Huerta, please proceed.
STATEMENT OF HON. MICHAEL P. HUERTA, ADMINISTRATOR, FEDERAL
AVIATION ADMINISTRATION
Mr. Huerta. Thank you. Chairman Thune, Ranking Member
Nelson, members of the Committee, thank you for inviting me to
speak today about the reauthorization of the FAA.
The upcoming FAA reauthorization provides us with the
opportunity to propel our system to the next level of safety
and to foster the kind of innovative climate that has long been
the hallmark of our proud aviation heritage.
This reauthorization has provided a forum for many in
industry and government to openly discuss possible changes in
the governance structure of the FAA and to help us create the
aviation system that will sustain our Nation's economic growth
well into the future.
We are open to having this discussion, but we must all
agree on the most important problems reauthorization should
fix. In our view, those are budget instability and the lack of
flexibility to execute our priorities.
These challenges exist for the entire agency, not just for
the air traffic control system and the NextGen organization, as
some have suggested. In addition to finding agreement on the
problem we are trying to solve, we should agree on finding ways
to avoid unintended consequences.
Our ability to deploy NextGen technologies and capabilities
hinges on interdependencies and relationships within the
agency. NextGen is more than installing technology in our air
traffic facilities and on aircraft. It involves the close
participation of our safety organization to ensure that the
technology is safe and the controllers and pilots know how to
use it safely.
We believe that any decision about governance must take
into account these issues so that we may best serve our nation
and the flying public.
Some have argued for change saying the FAA has not
delivered on air traffic modernization. I would argue that the
FAA has already made major progress in modernizing our airspace
system through NextGen.
We completed the installation of a more powerful technology
platform with our new high-altitude air traffic control system,
known as ERAM. This system will accommodate the applications of
NextGen and allow controllers to handle the expected increase
in air traffic efficiently.
Last year, we finished the coast to coast installation of
the ADS-B network that will enable satellite-based air traffic
control.
On a parallel track, through our collaboration with
industry, we identified key priorities in implementing NextGen
air traffic procedures. We now have more satellite-based
procedures in our skies than traditional radar-based
procedures. We have created new NextGen en routes above some of
our busiest metropolitan areas, saving millions of dollars in
fuel, decreasing carbon emissions, and cutting down on delays
in each city.
In addition to these improvements, we have set clear
priorities on delivering more benefits in the next three years.
These range from improved separation standards for heavy
aircraft, better coordination of traffic on the airport
surface, and streamlined departure clearances using data
communications.
NextGen has already yielded $1.6 billion in benefits to
airlines and the traveling public. In the next 15 years, the
changes we have already made will produce $11.5 billion in
benefits.
We recognize, however, that it is not enough to rely on
projected benefits. That is why we go back and study the
benefits that certain improvements have provided to users.
For example, in Atlanta, we safely reduced weight
separation standards to improve efficiency at the airport.
Because of this change, Atlanta's Hartsfield-Jackson
International Airport has increased the number of planes that
can land by up to 5 percent or about five planes more per hour.
Delta Airlines is also saving up to two minutes of taxi time
per flight. These improvements are saving them between $13
million to $18 million in operating costs annually.
We are aware of the criticisms of the FAA's implementation
of NextGen. I would like to explain our approach. There are
different theories about how to deploy technology in a complex
operating environment. Some take the position that you should
start from a wide ranging vision and work back from there in
developing a range of scenarios. Others suggest mapping out the
entire picture and only proceeding when you are sure of the end
gain.
Others say to take a more pragmatic approach, and this is
the path the FAA has chosen, based on close consultation with
industry. This approach, used by the Office of Management and
Budget, closely matches investments with tangible benefits to
airlines and passengers.
We acknowledge that it requires up front investment, but we
are careful not to strand programs in the middle of
implementation.
When dealing with widespread change in the dynamic airspace
system, there is no margin for error. The system must transport
750 million passengers every year with the highest levels of
safety. Any technology we implement must be reliable and safe
from the outset. To achieve this high standard, we must remain
nimble and we must have flexibility.
Our aviation system is a valuable asset for the American
public. We should use the upcoming reauthorization to provide
the FAA with the tools necessary to meet the demands of the
future and to minimize disruption to the progress we have
already made with NextGen and our work to integrate new users
into our airspace system.
I thank you for the opportunity to appear before your
committee today, and I am happy to take your questions.
[The prepared statement of Mr. Huerta follows:]
Prepared Statement of Hon. Michael P. Huerta, Administrator,
Federal Aviation Administration
Chairman Thune, Ranking Member Nelson, Members of the Committee:
Thank you for inviting me to speak with you today on the future
direction of the FAA. The FAA has a tremendous opportunity to make a
difference for stakeholders by laying the foundation for the National
Airspace System (NAS) of the future. We are focusing our
accomplishments on well-defined strategic priorities, including
achieving the benefits of the Next Generation Air Transportation System
(NextGen).
In the context of FAA reauthorization and the future direction of
the FAA, some members of the aviation community and of Congress have
discussed making governance changes at the agency. The Administration
welcomes the opportunity to evaluate any governance-related proposals
and we look forward to having those discussions with Congress and
stakeholders. We would anticipate, however, that any such proposal that
might include a fundamental shift in current policy would need to be
very clear in its identification of both the issue to be solved and a
proposed mechanism to resolve it. While we would not support a
fundamental change for the sake of change alone, we remain open-minded
and welcome the chance to further engage with you on that subject.
Further, with respect to reauthorization, some of the major
challenges facing the FAA involve funding levels, funding stability,
and flexibility. We believe that any governance-related proposals would
need to address these issues while ensuring that our Nation continues
to maintain the safest and most efficient airspace system today and in
the future.
The needs of the system and the aviation community it serves are
evolving. New users, such as operators of unmanned aircraft systems and
commercial space vehicles, are entering our Nation's airspace with
increasing frequency. As we invest in long-term modernization and
recapitalization projects and build on the successes of NextGen, we
also have to think about sustaining critical parts of our existing
infrastructure, much of which is beyond its projected useful life. We
have to address these challenges in a budget environment with a great
degree of uncertainty. We are increasingly being asked to do more with
less.
In recent years, funding uncertainties resulting from
sequestration, government shutdowns, and short-term reauthorization
extensions have hindered the FAA's ability to efficiently perform our
mission and have impeded our ability to commit to long-term
investments. The FAA has grappled with funding challenges by focusing
and prioritizing its work, knowing that we cannot continue to provide
all of the services we have in the past and understanding that safety
cannot be compromised. We're having discussions with our stakeholders
about what we might be able to consider no longer doing, or do
differently, through innovative business methods and technologies. We
look forward to working with the aviation community and Congress to
form consensus on the appropriate path for the future direction of the
FAA.
Looking ahead, the benefits that we continue to deliver through
NextGen will enable a safe and efficient NAS of the future that will
meet the needs of its users. NextGen is increasingly delivering
benefits to system users, such as reduced fuel costs, reduced delays,
reduced environmental impacts, and increased safety. In the midst of
funding challenges, the agency has focused resources on leveraging
available technologies to deliver near-term NextGen benefits. This
strategy has paid off. For example, the FAA's Metroplex program
improves airspace efficiencies in major metropolitan areas, simplifying
air traffic flows. In collaboration with the aviation industry, the FAA
is working with 11 busy metropolitan areas where improved air traffic
performance could benefit not only the region but the entire national
airspace. The FAA works with collaborative teams of air traffic
controllers, airport officials, airline representatives, general
aviation operators, other industry stakeholders, and community
representatives to study, design, and implement comprehensive
approaches for each Metroplex. Metroplex solutions include Performance-
Based Navigation (PBN) procedures that enable aircraft to fly more
directly from departure to destination by using satellite signals and
airspace redesign. The FAA has introduced into the NAS more than 7,000
PBN procedures.
A recent example of the success of Metroplex is the 60 new routes
into and out of Houston Metroplex airports that were launched last
year. The initiative improved merging techniques that begin aligning
planes hundreds of miles away. The preliminary data from the analysis
of the Houston Metroplex implementation identified $6 million in annual
savings and a reduction of 400,000 fewer nautical miles flown each
year, reducing carbon emissions by 20,000 metric tons and saving
operators 2 million gallons of fuel. That's like taking more than 4,000
cars off the streets.
In addition to focusing on near-term benefits, we continue to
invest in new infrastructure to support precision satellite navigation;
digital, networked communications; integrated weather information; and
more. When the next generation transformation was in its infancy, the
Government Accountability Office described the effort as
``staggering.'' When I joined the FAA team in 2010 as Deputy
Administrator, I experienced that the program was already on its way to
new levels. Today, I am proud to report the completion of a major
milestone that will enable NextGen solutions. We've finished installing
our new high altitude air traffic control system known as En Route
Automation Modernization (ERAM), one of the largest automation
changeovers in the history of the FAA. ERAM is fully operational at the
20 FAA en-route centers across the continental United States. This
network replaces the HOST computer system that had its roots in the
1960s.
ERAM is the backbone of the Nation's airspace system. More than
simply a faster computer, this new system is a network of computers
designed to know about your flight, where you plan to go and how you
plan to get there, from the moment you enter the national airspace from
anywhere in the country. ERAM's flexible and expandable system design
will accommodate en-route processing necessary for NextGen technologies
such as Automatic Dependent Surveillance Broadcast (ADS-B) services,
System Wide Information Management, and Data Communications. ERAM
processes data from nearly three times the number of sensors as the
legacy system. With this system in place, we're able to make available
new tools for our air traffic controllers including the ability to
track more high altitude flights, which will result in more efficient
routing, reducing fuel burn and improving the predictability of airline
schedules.
What we've achieved with ERAM was facilitated by introducing
increased discipline and structure to the way we do business at the
FAA. In 2012, we created a Program Management Organization to better
manage the deployment of this and other technology. We also worked
closely with our air traffic controllers, who provided feedback
throughout the system development phases. The fact that we turned ERAM
around, and that it is now operating nationwide, is a testament to what
the FAA can accomplish as an agency when it sets milestones and pulls
together to make fundamental changes.
ERAM links with ADS-B, a more precise and efficient satellite-based
alternative to radar that will revolutionize how we manage our Nation's
air traffic. ADS-B opens up new routes to air carriers and increases
capacity. Last year, we completed nationwide deployment of the ADS-B
ground stations. The FAA is currently providing nationwide broadcast
services to equipped users. We are working closely with the entire
aviation community, including general aviation operators, to work
toward the mandatory ADS-B Out equipage by January 1, 2020 deadline.
For aircraft with the additional equipment, which is not required by
the 2020 deadline, ADS-B delivers traffic and weather information
directly to the cockpit, giving the pilots more information and
awareness.
The success of NextGen is not the FAA's alone. Collaboration with
all stakeholders, including the aviation industry, our union members,
and Congress, is key to its success and we can continue to leverage one
another's commitments to produce benefits. Last year, subject matter
experts from the FAA met with aviation industry representatives to
determine what high-benefit, high-readiness NextGen capabilities the
FAA will be able to accomplish in the next one to three years, and what
industry commitments are necessary for those activities to be
successful. The FAA and the NextGen Advisory Committee (NAC) worked
together to reach agreement on a joint implementation plan consisting
of capabilities within four focus areas. Taken together, this plan will
advance our navigation capabilities through PBN, increase capacity on
parallel runways through Multiple Runway Operations, enhance airport
surface operations through data sharing, and introduce Data
Communications between cockpit and air traffic control. The plan
identifies timelines, specific locations, and costs for each priority.
These priorities leverage equipment that operators have already
invested in for other capabilities.
We hope the benefits that stakeholders are realizing in these areas
will incentivize them to make larger NextGen investments. A prime
example of the benefits already being achieved through this focused
collaboration with industry is the more narrowly tailored and safely
defined wake turbulence separation standards, which are based on the
performance characteristics of aircraft and have been implemented at
several major airports across the Nation. This Re-categorization of
Wake Turbulence Separation Minima (RECAT) updates and decreases
separation standards, which are primarily based on aircraft weight
classes. Because of wake RECAT, FedEx can take advantage of a 13
percent increase in departure capacity at Memphis. Passenger carriers
are seeing the benefit, too. At Atlanta's Hartsfield-Jackson airport,
Delta Airlines and FAA have found a one and one-half minute reduction
in departure queue delays. Delta projects to save $14-19 million
dollars in operating costs over a one-year period.
The FAA will rely on the same high degree of collaboration with
industry as we monitor our progress against the milestones in the plan.
The agency is conducting internal meetings at least monthly to monitor
progress against the plan, while the NAC will work with industry
stakeholders to ensure their commitments are funded and met. Progress
reports are provided publically through the NAC, and the FAA is
reporting progress against the milestones on its NextGen Performance
Snapshot website. To date the FAA has completed 17 of the plan's
milestones, including two that were finished ahead of schedule.
Industry has also met its commitments. This is a significant beginning
that demonstrates the great potential for future partnerships between
the FAA and industry to move the NAS forward.
Last year the FAA convened a call to action to engage the aviation
industry in meeting the January 1, 2020 deadline to equip aircraft with
ADS-B Out. FAA experts and industry leaders identified barriers
delaying operators from equipping and formed the Equip 2020 working
group to collaboratively resolve those issues. The goal of Equip 2020
is to ensure the fleet is equipped with technology to utilize the
benefits of the ground ADS-B infrastructure. The collaborative aspect
of the Equip 2020 working group put the right stakeholders together to
solve one of the general aviation (GA) community's biggest barriers:
cost of equipment. Low-cost equipment options are now available from
manufacturers; those products and other available avionics are tracked
in a database with suppliers' equipment data and air carriers'
purchasing data. Analysis of these equipage trends will indicate
potential risks to achieving compliance by the deadline so that we may
adjust our efforts as necessary. To further assist GA owners determine
their compliance options, the FAA has created an easy to navigate Equip
ADS-B website \1\ and will host information sessions across the country
this year. We need to continue to ensure that users of the system make
timely and necessary equipage investments to maximize the widespread
deployment of NextGen. Government and industry have a shared
responsibility to create the aviation system that will carry this
Nation well into the 21st century.
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\1\ https://www.faa.gov/nextgen/equipadsb/
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If you look objectively over the last five years, the FAA has made
major progress on both completing NextGen's foundation and expanding
the delivery of NextGen benefits to the users of the system. Continuing
to build the NAS of the future and accommodating new services will
require difficult decisions. The aviation community is diverse and does
not always see eye-to-eye. Nevertheless, I believe consensus on the
future direction of the FAA is absolutely critical if we are going to
resolve our long-term funding challenges. We need stable, predictable
funding to effectively operate our air traffic control system, build on
our investments in NextGen, and efficiently recapitalize our aging
facilities. This would best be achieved with the passage of a long-term
reauthorization bill.
Chairman Thune, Ranking Member Nelson, I look forward to working
with you and the Committee as we move forward toward a reauthorization
bill.
The Chairman. Thank you, Administrator Huerta. Mr. Engler?
STATEMENT OF HON. JOHN ENGLER, PRESIDENT, BUSINESS ROUNDTABLE
AND FORMER GOVERNOR, STATE OF MICHIGAN
Mr. Engler. Good morning, Mr. Chairman, committee members.
Thanks for the opportunity to testify this morning.
The Business Roundtable members include leaders of major
U.S. aerospace companies. Every one of our members relies on
air transportation as customers of cargo and passenger
airlines.
As the 20th century drew to a close, U.S. aviation set the
standard for the world's largest, safest, most technologically
advanced system. Sadly, we have lost our preeminent position
and our future leadership is in doubt. The U.S. air traffic
system remains the world's largest, the world's safest, but it
is not the most technologically advanced nor the world's most
cost effective.
Our national air traffic control system relies on
essentially the same technology, ground-based radar and voice
radio transmission, as it did in the 1960s. Almost all of the
FAA's surveillance technology is still analog.
Like many other stakeholders, we are concerned about the
halting pace of the modernization represented by the FAA's
NextGen program. A National Academies report that was released
this month clearly stated the problems, the original vision for
NextGen is not what is being implemented today. Airlines are
not motivated to spend money on equipment and training for
NextGen.
A modern innovative air traffic control system would offer
tremendous benefits to the users of the airspace; more
efficient flight paths, reduce fuel consumption and crew time,
lower emissions and less noise pollution, global commercial
leadership leading to expanded exports, and increase services
to small community airports.
What are the obstacles? Last year, FAA Administrator Huerta
offered one explanation in a speech at the Aero Club of
Washington, and I quote ``There is simply no way the FAA can
implement NextGen, recapitalize our aging infrastructure, and
continue to provide our current level of services without
making some serious tradeoffs,'' something Senator Nelson
referred to really in his opening comments.
Administrator Huerta and I would agree, I believe, on this
critical point, the current funding system clearly does not
provide the needed resources, but a deeper problem is the
broken budgetary process itself, which prevents the FAA from
pursuing the kind of step by step technological improvement
that is standard elsewhere, certainly in the business world.
For an example of what works, look at AT&T and Verizon. In
the years the U.S. Government has been talking about NextGen,
four generations of cellular technology from powering a basic
flip phone to 4G streaming video in today's modern iPhone have
been adopted.
The FAA is trying to fund a $20 billion capital
modernization effort out of annual and unpredictable cash flow.
Most other transportation sectors issue long term revenue bonds
to finance large capital modernization, but bonding is
something the FAA cannot do. States do it. The private sector
does it. The Federal Government does not.
I convened at the Roundtable an expert group to help study
this issue, including former FAA and Transportation Department
officials, knowledgeable aviation policy advisors. Their
conclusion, the status quo is simply too costly and too
inefficient.
They identified the necessary elements of an alternative
system--separation of the air traffic control operator from the
regulator to improve transparency and accountability, and to
further increase safety, an organizational structure that
accounts for multiple objectives so that safety and access are
valued along with cost efficiency.
Governance of the air traffic control by a board appointed
by stakeholders. A revenue structure that enables air traffic
control to be fully self-supporting, without government
financial support, and completely free of the Federal budgetary
process.
The ability for air traffic control to finance capital
expenditures and accelerate modernization. Wage and benefit
structures to protect employees, prevent disruption of
employees' reasonable career expectations, and preserve a
collaborative culture.
Over the last two decades, most other Western countries
have restructured the way air traffic control is funded and
governed, determining that it is a high tech service business,
part of critical infrastructure that could be funded directly
by its aviation users and customers.
Separating air traffic control into an entity independent
from the rest of the FAA is a manageable process. Tools and
precedents exist for addressing the risks that come with any
innovation, and a thorough planning process is, of course,
necessary.
In the end, I hope that you as the Senators responsible for
the oversight of the FAA use the reauthorization process to put
America on a trajectory to a modern air traffic control system
that is again the gold standard for the world.
Now is the time for decisive bipartisan action to restore
America's global leadership. The Business Roundtable looks
forward to working with you to achieve these important goals.
Thank you for the opportunity, members.
[The prepared statement of Mr. Engler follows:]
Prepared Statement of Hon. John Engler, President, Business Roundtable
and former Governor, State of Michigan
Good morning, Chairman Thune, Senator Nelson. Thank you for the
opportunity to join you this morning to testify on the operation and
needed modernization of the Nation's airspace.
I'm pleased to speak on behalf of Business Roundtable, an
association of more than 200 CEOs of major U.S. companies. Business
Roundtable's CEO members lead companies with $7.2 trillion in annual
revenues and nearly 16 million employees. These companies comprise more
than a quarter of the total market capitalization of U.S. stock markets
and invest $190 billion annually in research and development--equal to
70 percent of U.S. private R&D spending. Our companies pay more than
$230 billion in dividends to shareholders and generate more than $470
billion in sales for small and medium-sized businesses annually.
Aviation is critically important to all members of Business
Roundtable. Today, civil aviation in the United States accounts for 5.4
percent of our GDP, contributes $1.5 trillion in total economic
activity each year, and supports 11.8 million jobs. Business
Roundtable's members include leaders of major U.S. aerospace companies,
but more broadly, every one of our members relies on air transportation
every day as customers of cargo and passenger airlines. For example, 30
to 40 percent of all daily airline passengers are making trips for
business purposes.
The CEOs of Business Roundtable are global leaders in their
respective industries, and they recognize the value of American
leadership in aviation. The United States was, of course, site of the
Wright Brothers' historic first powered flight in a heavier-than-air
vehicle. Commercial airlines developed in this nation, and so did air
traffic control; begun initially by a nonprofit, federally chartered
corporation, air traffic control was taken over by the Federal
Government during the Great Depression. Following World War II,
commercial and general aviation boomed in the United States. As the
20th century ended, our aviation system still set the standard as not
only the world's largest but also the world's safest and most
technologically advanced.
Sadly, our preeminent position has been lost and our future
leadership is in doubt. The U.S. air traffic system remains the world's
safest and the world's largest. But it is not the most technologically
advanced, nor the world's most cost-effective.
The Business Roundtable last year conducted an analysis that
superimposed Canadian rates for air traffic control services on U.S.
flight data, and preliminary results suggest that, in aggregate, the
Canadians are delivering services for lower cost than the FAA today.
Canada's cost advantage may result partly due to a less-complex
airspace than the United States'--and complexity drives cost--but one
would expect that the larger-scale U.S. operation would also create its
own efficiencies and lower costs.
Unfortunately, neither business leaders nor the flying public can
take the future health of U.S. aviation for granted. Challenges with
the FAA's provision of air traffic control services have existed for
decades, but are now becoming more acute. FAA has failed to keep its
equipment modernized for the entirety of its history, including during
times of budgetary plenty. Our national air traffic control system
relies on essentially the same technology--ground-based radar and voice
radio transmission--as it did in the 1960s. FAA is operating Enroute
Centers that are mostly over 50 years old. Almost all of the FAA's
surveillance technology is still analog. And the FAA trains controllers
now the same way it did more than 20 years ago.
Like many other stakeholders, we are concerned about the slow and
uncertain pace of the modernization effort represented by the Federal
Aviation Administration's NextGen program. Like you, we read the
numerous reports by the Government Accountability Office and the
Department of Transportation Inspector General documenting cost
overruns and late delivery of new systems. The most recent report, from
the National Academies, released at the beginning of this month was
particularly damning when it said:
``The original vision for NextGen is not what is being
implemented today.''
``This shift in focus has not been clear to all
stakeholders.''
``Airlines are not motivated to spend money on equipment and
training for NextGen.''
``Not all parts of the original vision will be achieved in
the foreseeable future.''
These reports identify underlying problems that have led
stakeholders to question whether we have the best model--not just for
delivering NextGen but also for the ongoing operation and management of
what used to be the world's most advanced air traffic control system.
The fact that the FAA has been consistently behind when it comes to
innovation isn't just an inconvenience--it has real costs for the users
of the airspace and the public at large.
Airlines and independent aviation all bear significant costs
because of less-than-optimal routings and excessive block times. From
the standpoint of airlines and other aircraft operators, reducing
delays will mean important savings in fuel and crew time, their two
largest operating costs. And with intelligent consolidation of air
traffic control facilities, enabled by 21st-century technology, the
unit cost of services will be reduced, yielding further cost savings
for aircraft operators. Retiring many obsolete facilities and ground-
based navigation aids will produce additional cost savings.
These lost benefits for airlines and aircraft operators translate
to unnecessary delays for shippers and travelers, including the huge
numbers who are traveling every day on business. Advanced technologies
and procedures would enable more planes to land and take off safely on
existing runways, reducing delays. Likewise, more direct flight routes
at the altitudes with the most favorable tailwinds will speed up
flights and also reduce delays. Last year, President Obama estimated
the potential reduction in airspace delays at 30 percent. Even if that
number is a little high, I was glad to hear the president acknowledge
the kinds of benefits a modernized system will provide.
Unnecessary time flying in the air also means adverse environmental
impacts. More direct routings and optimized flight paths will reduce
aviation fuel consumption and thereby cut CO2 emissions.
Shorter and more-precise landing paths (like those implemented in
Seattle) will reduce noise exposure around airports, which may make it
easier to add critically needed runway capacity around the country.
And, as I mentioned earlier, the FAA's failure to keep its systems
updated also means that the U.S. is no longer the global leader in
aviation. A modernized air traffic control system would advance
America's global commercial leadership by expanding export
opportunities. Overseas sale of technologies developed and deployed in
the United States would allow highly innovative U.S. aerospace
companies to expand their global market and increase domestic
employment.
In testimony last November before the House Transportation and
Infrastructure Committee, I said that funding is the most obvious
challenge facing the FAA. Last year's sequester served as a wake-up
call for aviation stakeholders, with its furloughs of controllers and
the near-shutdown of 149 contract towers. And the current sequester law
has seven more years to go. The FAA's current annual budget for
Facilities & Equipment is now $1 billion less than what it was
projected to be five years ago. Alarmingly, a senior FAA official
recently said the agency faces a $5 billion funding shortfall over the
next seven years. With regard to NextGen, the FAA and stakeholders are
currently engaging in triage, figuring out which few projects the
agency can afford to pursue in the current highly uncertain funding
environment.
FAA Administrator Michael Huerta, in a speech last year at the Aero
Club of Washington, said: ``There is simply no way the FAA can
implement NextGen, recapitalize our aging infrastructure, and continue
to provide our current level of services without making some serious
trade-offs.'' The current funding system clearly does not provide the
resources that are needed.
But the heart of the problem is not simply a lack of resources, but
the broken budgetary process itself. The provision of air traffic
control services is a technology-driven enterprise. The Federal
budgetary process prevents FAA from pursuing the kind of incremental
technology refreshment that is standard procedure in technology driven
enterprises.
For an example of how this ought to work, look at two member
companies of Business Roundtable: AT&T and Verizon. In the years we've
been talking about NextGen, both have gone through four generations of
cellular technology, from powering a basic flip phone to 4G streaming
video in today's modern iPhone.
What the FAA is trying to do is to fund a $20 billion capital
modernization effort out of annual and unpredictable cash flow. This
makes no business sense, as my CEO membership would tell you. Most
other transportation sectors issue long-term revenue bonds to finance
large capital modernization--including airports, pipelines, railroads,
and even bridges and interstate highways. But bonding is something the
FAA cannot do. Our Federal Government simply does not have a capital
budget.
To accommodate the budget process, FAA does its developments in
massive bundles. Infrequent updating leads to constant obsolescence and
higher costs. Despite excellent contractor performance, systems are
frequently out of date, even when they are newly delivered, because
their specifications were designed so far in advance of delivery.
Further, budgets and schedules are almost always exceeded.
This inadequate budgetary process also causes FAA management to
cater primarily to Congress and OMB as its customers, rather than to
the more appropriate airspace users, passengers, and shippers. As a
result, today's FAA tends to be quite slow in responding to the needs
of airspace users. Because of the slow development of procedures to
allow for more direct routing, flights continue to follow waypoints
located where bonfires guided aircraft in the early 20th century.
Finally, the combination of the air traffic control operator and
its regulator within the same government agency--as we have today--is
not beneficial to safety and results in a confusion of roles and
responsibilities, loss of transparency and accountability, and greater
frustration for users when they try to make the system work. It has
also created an organizational culture that resists innovation. As this
month's report by the National Academies observed:
``The FAA and the United States rightly pride themselves on a
devotion to safety and an excellent safety record to match. At
the same time, a conservative safety culture can affect how
quickly process and technological change can happen--a
challenge in an arena where technologies change rapidly. Such a
culture may inhibit the adoption of new technologies or
increased automation that could potentially result in net
improvements in both safety and efficiency. A strong safety
culture can make up for some limitations in an architecture.
For example, while it is a good thing for controllers and
pilots to be highly sensitive to close-calls, it would be
better if the architecture and design precluded those near-
misses from happening. Moreover, if the FAA is going to be held
accountable for an extremely conservative safety culture--which
has historically been the case--then it should be recognized
that such conservatism will understandably bias the agency away
from innovation. Thus, there are risks associated with a safety
culture as well, not least of which are opportunity costs due
to not deploying improved (and potentially even safer)
technology and procedures in the long run. In addition,
excessive care regarding safety can result in the accumulation
of technical debt--the deferral of significant refactoring and
infrastructure refresh.''
A few years ago, I convened an expert group to help Business
Roundtable study this issue, including former FAA and Transportation
Department officials and knowledgeable aviation policy advisers. These
experts with government and private-sector experience identified the
series of challenges that I've outlined here and principles that must
form the basis for overcoming them. The status quo is simply too costly
to continue. Any alternative should include:
Separation of the air traffic control operator from the
regulator to improve transparency and accountability, and
increase safety.
An organizational structure that accounts for multiple
objectives so that safety and access are valued along with cost
efficiency, and there is assurance against any value-leakage
outside of the operation.
Governance of air traffic control by a board that is
appointed by stakeholders (including users, employees and
government interests) with a fiduciary duty to the operation.
A revenue structure that enables air traffic control to be
fully self-supporting without government financial support and
completely free of the Federal budgetary process.
Financing capability to enable air traffic control to
finance its capital expenditures, accelerate its modernization
and level out its cash outlays.
Wage and benefit structures that protect employees, prevent
disruption of employees' reasonable career expectations, and
preserve a collaborative culture within air traffic control.
Other countries have charted a similar course of action.
Researchers have found that over the last two decades most other
Western countries have restructured the way air traffic control is
funded and governed--for example, in Australia, Canada, Germany, and
the United Kingdom. In these and many other cases, the governments have
decided that air traffic control is a high-tech service business that
can be funded directly by its aviation users, who become customers,
just as airlines are customers of airports. More than 50 countries have
separated their air traffic control systems from their transport
ministries, leading to arm's-length regulation of air safety--just like
that applied to airports, airlines, and all the other components of
aviation.
While the principles I've outlined are accepted in other countries,
they would be major changes for U.S. air traffic control. They
certainly require a full assessment of their feasibility for the U.S.
system. We have been holding discussions with the principal
stakeholders over the past year, working to answer these many
questions. As business leaders, it's particularly important to the
Business Roundtable that the business case for any new structure be
sound and well thought out.
Spinning off air traffic control from the rest of the FAA and
running it as a separate entity is not a particularly large or complex
transaction for corporate America. Tools and precedents exist for
managing the risks that come with any innovation. That doesn't mean,
however, that we don't need a thorough planning process just as any one
of the CEO members of Business Roundtable would use if they were
pursuing a restructuring of this sort.
In the end, I believe the greatest risk to our system is allowing
the status quo to continue or pursuing more half-measures and calling
them reform. We've been down that path. We cannot allow the fear of
change to prevent us from doing what is needed.
Instead, I hope that you, as the senators responsible for oversight
of FAA, will use the reauthorization process to put America on the path
to a modern air traffic control system and global leadership in
aviation. Now is not the time for timidity, or minor reforms. Now is
the time for decisive, bipartisan action to restore America's
leadership in aviation. Business Roundtable looks forward to working
with you to achieve these important goals.
The Chairman. Thank you, Governor Engler. Senator Dorgan?
STATEMENT OF HON. BYRON DORGAN,
SENIOR POLICY ADVISOR, ARENT FOX LLP
AND FORMER U.S. SENATOR FROM NORTH DAKOTA
Senator Dorgan. Mr. Chairman, thank you for inviting me
back to this committee. I served on this committee for 18
years, and no doubt badgered hundreds of witnesses, so maybe a
turn about is fair play.
For the past two years, I and former Transportation
Secretary Jim Burnley have co-chaired a project at the Eno
Center for Transportation looking at the subject of air traffic
control and the structure of air traffic control.
I was the Chairman of the Aviation Panel the last time we
worked on reauthorizing the FAA, and I pulled up a headline
from that moment where we finally succeeded, and it said
``After five years of debate, 23 short-term extensions, and a
partial shutdown, Congress approved the final version of the
FAA bill.''
My hope this time around is that your headline will be
shorter and your conclusions bolder for this reason: aviation
is one of the major arteries of the American economy, and the
fact is, the issue of effective air traffic control is
essential to that industry.
I think we have now come to an intersection where we have
to decide can we retain our leadership in developing the new
technology and the Next Generation air traffic control system,
can we retain our leadership with the current ATC structure. In
my judgment, we cannot.
A conclusion at the Eno Center for Transportation after 2
years of work with stakeholders from around the system was if
we want to retain America's leadership with the most advanced
technology, moving from ground-based radar to Next Generation
satellite guidance, which will be safer, faster, and more
efficient, if we want to retain that, we are going to have to
restructure the air traffic control function.
Let me mention just a couple of facts. Number one, there is
no question we have an impressive safety record in aviation in
this country, particularly commercial aviation, even though
there is still more to do.
I know the families of the Colgan crash victims are in this
room. I hope all of you get to know them, because over the
years, they have played a very important role in continuing
those safety improvement issues with the FAA.
Number two, the air traffic controllers do a terrific job
every day, steering 30,000 flights and two million people as
they fly across this country.
Number three, the people of the FAA work hard on these
issues, including air traffic control and NextGen, but they
necessarily work in the thick glue of bureaucracy, and frankly,
that is hard to do with these kinds of challenges.
Here is the key point. The key point is in order to create
a new modern air traffic control system, you have to have
stable funding. That is nearly impossible for the FAA at this
point. In a time of congressional spending restraint, they
cannot count on stable funding. In fact, they cannot even count
on level funding.
Take a look at the budget that just passed, in the
facilities and equipment account. It is going to be $355
million below that which was requested, and the lowest in 15
years. That is the F&E account at the FAA in the current
budget.
The fact is as much as we wish it would, the budget picture
is not going to change. We are going to see more and more
spending restraint. We are going to see the impact of
sequestration, the impact of more layoffs, the on again/off
again stop/start funding from continuing resolutions. That is
what the FAA is confronted with.
No one would or could build a major new technology project
with those kinds of challenges.
Here is the headline from last week in the Washington Post.
I know it causes heartache in the agency: ``FAA isn't
delivering what was promised in a $40 billion project.'' It
refers to the modernization of the ATC system. That is why
change is needed.
In our work at the Eno Center for Transportation, the
consensus of the stakeholders was that we need to restructure
to a government corporation or a non-profit organization that
has bonding capability, stable funding, and the ability to plan
and to control and finance the march to modernization.
We have now reached the tipping point that requires, in my
judgment, action by Congress. I am not the typical spokesperson
that would normally come to this table and suggest that be the
case. I am someone who normally would weigh in on the side of
having the agency do it.
In this case, there is not going to be stable funding to
move this country toward the leadership necessary in the
NextGen opportunity for air traffic control.
I understand this is not easy. I understand it is a big
lift, it has been discussed before, but it needs to be done
now. A number of other countries have done this very
successfully, and so can we.
Finally, Mr. Chairman, we know the history, December 17,
1903, Orville and Wilbur Wright made the first flight. We
learned to fly, then we flew the bonfires for guidance at
night, then we flew to lights pointing in the sky for guidance,
and then we flew to ground-based radar, and for 50 to 60 years,
we have not changed.
Now, we need to change. We need to do it quickly and
effectively, and in my judgment, the only way that is going to
happen is if we create some different structure, and I suggest
a government corporation or non-profit organization to
accomplish what all of us want to accomplish for this country.
One final point. I know the word ``privatization'' has been
used. I did not use it. There are other structural approaches
including, as I said, government corporations and non-profit
organizations that I think will solve the problem for this
country and certainly insist the government retain and be a
stakeholder in a new organization.
Mr. Chairman, again, thank you for the invite. It is really
a pleasure to be here and see all of you.
[The prepared statement of Senator Dorgan follows:]
Prepared Statement of Hon. Byron Dorgan, Senior Policy Advisor, Arent
Fox LLP and former U.S. Senator from North Dakota
Introduction
The nation's aviation system is part of the lifeblood of our
economy, yet the system is facing rising demand, limited airport
capacity, and aging navigation technology. The Federal Aviation
Administration (FAA) has developed the Next Generation Air
Transportation System (NextGen) in an effort to modernize the Nation's
air traffic control system. Once implemented, this system will continue
to perpetuate safety standards and promote a more efficient, state-of-
the-art satellite-based system. This system has the potential to safely
facilitate economic growth, increase mobility, and provide the United
States with the ability to keep pace with our international
competitors.
Recognizing the challenge of air traffic control modernization, the
Eno Center for Transportation brought together key stakeholders, former
policymakers, and academics into the Eno NextGen Working Group. I have
had the honor to co-chair this working group with Former U.S. Secretary
of Transportation Jim Burnley. This group gathered to discuss how to
best accelerate airspace modernization and to analyze the institutional
barriers that have contributed to the issues surrounding NextGen's
implementation. Our research detailed the history of air traffic
control in the United States and the attempts that have been made to
accelerate reformation. It also included an analysis of six different
countries that have successfully reformed the way their air traffic
control systems are governed and funded.
Based on the goal of reforming air traffic control provision in the
United States to effectively and efficiently implement NextGen and its
accompanying benefits, and the research that has been conducted for the
working group, we have proposed a set of guiding principles for air
traffic control reform. These principles are meant to be a starting
point for crafting legislative reform.
The Need for Reform
As has been widely discussed in Congressional hearings,\1\ by the
Government Accountability Office (GAO),\2\ and the Office of the
Inspector General (OIG),\3\ the NextGen program has experienced
unstable Federal funding, which has led to implementation issues and
increasing costs. These challenges have not only made the program more
expensive for U.S. taxpayers, but have also created costs for the
economy and compromised U.S. competitiveness.
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\1\ For example, the recent Options for FAA Air Traffic Control
Reform, an Hearing to the Subcommittee on Aviation of the
Transportation and Infrastructure Committee of the U.S. House of
Representatives on March 24, 2015.
\2\ For example, Air Traffic Control System: Selected Stakeholders'
Perspectives on Operations, Modernization, and Structure (GAO-14-770),
released on September 12, 2014.
\3\ For example, Status of FAA's Efforts to Operate and Modernize
the National Airspace System, released on November 18, 2014.
---------------------------------------------------------------------------
The FAA, like other Federal agencies, is subject to Federal
procurement rules, which create additional challenges when it comes to
managing large-scale projects such as NextGen. The inability of Federal
agencies to issue bonds or other forms of long-term financing further
exacerbates these challenges. Our study of the causes of these issues
has highlighted the potential drawbacks of the existing governance and
funding structures for delivering ATC services, suggesting that reform
could substantially accelerate and improve NextGen deployment.
These issues are not new. The FAA has consistently been slow to
implement modernization plans and update the numerous systems that
comprise U.S. ATC. This has catalyzed calls for the internal
reorganization of FAA multiple times and has prompted many proposals to
reform ATC governance and funding. Discussions of reform have been
ongoing since the early 1980s.\4\
---------------------------------------------------------------------------
\4\ For example, President Reagan's 1987 President's Commission on
Privatization looked at the issue of air traffic control governance.
---------------------------------------------------------------------------
In 1994, following vice-president Al Gore's National Partnership
for Reinventing Government, a very detailed proposal to create a
government corporation to provide ATC services in the United States was
put forward by then Secretary of Transportation Federico Pena, the Air
Traffic Control Corporation Study. The following year, Representative
Norman Mineta (D-Calif.) introduced a bill, HR 1441--United States Air
Traffic Service Corporation Act, on April 6, 1995, which aimed to
``provide for the transfer of operating responsibility for air traffic
services currently provided by the Federal Aviation Administration on
behalf of the United States to a separate corporate entity.'' This
proposed government corporation would have charged user fees to the
airlines (in the form of weight and distances charges), would have had
budget autonomy from Congress, would have had permission to issue
bonds, and would have been subjected to distinct procurement procedures
from the rest of the Federal Government. But, lacking support from the
airlines, general aviation, and many members of Congress, this bill
died in Committee. As it was in 1994, disagreement between stakeholders
has been a constant theme in all efforts to reform ATC provision in
this country.
Two years after introducing the bill to create a government
corporation to provide ATC services in the U.S., Norman Mineta led a
commission to study the issue. The conclusion of the ``Mineta
Commission'' was that the FAA had ``too many cooks'' (including
Congress, OMB, GAO, etc.) playing a role in ATC. The commission
proposed a performance-based organization capable of charging user fees
and issuing bonds.\5\ As a direct result of the Mineta's commission,
the Air Traffic Organization (ATO) was created as an arm of FAA in
2000. This new ATO took a step towards reforming governance, yet it
ignored the Commission's directive to reform ATC's funding structure.
---------------------------------------------------------------------------
\5\ National Civil Aviation Review Commission, Avoiding Aviation
Gridlock: A Consensus for Change, released on September 10, 1997.
---------------------------------------------------------------------------
The creation of the ATO did not solve most of the issues that have
been identified, including the need for stable funding. The recent
draft bill for USDOT funding for FY2016 is likely to increase
challenges for NextGen deployment. While FAA's budget was slightly
increased, the Facilities & Equipment (F&E) portion of the FAA budget -
FAA's capital account, which funds both maintenance of existing
infrastructure and modernization--was decreased by $100 million,
reaching a 15-year low of $2.5 billion.\6\ With a significant amount of
back maintenance needs on FAA's legacy infrastructure, NextGen
deployment will once again suffer if funding is cut. Within the current
budgetary environment, it is hard to envision a scenario where these
funding levels will have the potential for increase. Recently the FAA
completed the deployment of the new En Route Automation Modernization
(ERAM), a critical system that future NextGen developments will use.
While this is a crucial step in the implementation of NextGen
technology, it experienced cost overruns of $370 million. Of that $370
million, FAA Administrator Michael Huerta has noted that $40 million
can be attributed to the budget sequester.\7\ With more potential
sequesters looming in the horizon, passengers, carriers, and our
national economy cannot afford to wait.
---------------------------------------------------------------------------
\6\ House Appropriations Committee, Fiscal Year 2016
Transportation, Housing and Urban Development Bill, released on April
28, 2015.
\7\ Air Traffic Management (April 30, 2015). ERAM achieves its
ultimate milestone. Available at: http://www.airtrafficmanagement.net/
2015/04/eram-achieves-its-ultimate-milestone/
---------------------------------------------------------------------------
International Experiences
While the United States' ATC system is operated by the Federal
Government and financed through taxation, most other developed
countries have departed from a system provided directly from the
national government. In our research, we analyzed six peer countries.
Three of the countries (Australia, Germany, and New Zealand) have
created government corporations to provide ATC services. The other
three (Canada, France, and the UK) all have unique structures: an
independent non-profit user co-operative in Canada, a reformed
government agency in France, and a public-private partnership in the
United Kingdom. All six countries avoid relying on taxation to finance
their operations and are instead funded by weight and distance fees
charged to users of the airspace.
These nations also have separated their ATC operation from safety
regulation, which remains in governmental agencies. This separation
eliminates an inherent conflict of interest that exists today with the
FAA doing both jobs. The International Civil Aviation Organization
(ICAO), the UN agency responsible for aviation safety, since the early
2000s has recommended that member states proceed with the separation of
ATC provision and regulation.\8\ In addition, the European Union has
also mandated separation for all its 27 members.\9\
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\8\ International Civil Aviation Organization (2006). Document
9734--Safety Oversight Manual, Part A, 2nd edition.
\9\ European Parliament (2015). Fact Sheets on the European Union--
Air Transport: Single European Sky. Available at: http://
www.europarl.europa.eu/aboutparliament/en/displayFtu
.html?ftuId=FTU_5.6.9.html
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Not only is separation recommended by ICAO, but this rationale has
also been used before in the United States with the Atomic Energy
Commission (AEC). Until 1975, AEC performed research and development
(R&D) for the nuclear industry, and also regulated the safety of the
same industry. In order to eliminate this potential conflict of
interest, in 1975 these functions were split into two separate
entities: the Nuclear Regulatory Commission for safety regulation and
the Energy Research and Development Administration (merged into the
Department of Energy in 1977) for R&D.
In recent discussions here in the United States, there have been
concerns that non-governmental ATC provision could lead to increased
costs to the airspace users, poor service, or unsafe operations. The
experience of our peer countries demonstrates that commercialized
providers have the ability to keep costs in check, upgrade their
systems without public funds, and improve safety.\10\ Some key factors
that are essential to the success of these systems include reliable,
independent sources of revenue; independent, but accountable,
management; and direct stakeholder involvement.
---------------------------------------------------------------------------
\10\ Government Accountability Office (2005). Air Traffic Control:
Characteristics and Performance of Selected International Air
Navigation Service Providers and Lessons Learned from their
Commercialization (GAO-05-769); Oster, C. V. and Strong, J. S. (2007).
Managing the Skies: Public Policy, Organization and Financing of Air
Traffic Management. Ashgate.
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Principles for Air Traffic Control Reform
The only way to solve the challenges associated with NextGen
deployment is through transformational governance and funding reform at
the FAA. Based on our research, the members of the Eno NextGen Working
Group have agreed to a set of 10 Principles for Air Traffic Control,
which should be used as a starting point for crucial FAA
reauthorization discussions. The 10 principles are:
1. Promote growth and accommodate diversity in the national
airspace system
2. Ensure a coherent, stable, and predictable funding structure for
air traffic control
3. Establish a self-sustaining funding mechanism for air traffic
control
4. Enable an efficient procurement system for air traffic control
modernization
5. Enable bonding authority
6. Include aviation stakeholders in the governance of the air
traffic control provider
7. Enhance and improve the Federal Aviation Administration's role
as the safety regulator
8. Improve the certification processes at the Federal Aviation
Administration
9. Facilitate robust Research & Development for air traffic control
10. Create and carefully implement a plan to ensure a seamless
transition to a new system
A complete description of each principle is included for the
record. Also included in the record is a list of institutional and
individual members of the Eno NextGen Working Group.
The principles expressing the need for predictable and stable
funding, and the need for a self-sustaining funding mechanism, are
inspired by the need to ensure that the ATC provider is insulated from
political whims. This is extremely important if we wish to avoid what
happened in the 2013 government shutdown and the budget sequester. Air
traffic control is a 24/7 technological service, the backbone of the
aviation industry, and one of the most important industries in this
country. It is imprudent to let such a service be subject to political
and budgetary cycles. The current funding streams must be replaced by
direct payments to the ATC provider, allowing users to pay for the
services they receive.
Furthermore, bonding authority is essential for more efficient
investments in modernization efforts like NextGen. Trying to deploy
multi-billion, multi-decade investments in technology with a budget
that is appropriated year-by-year, like the FAA is subject to, is next
to impossible. With bonding, backed by the ATC provider's own stream
revenues, better capital management will be possible.
As for governance, principle number six highlights the need for
more stakeholder involvement in the system's governance. While the
Management Advisory Council (MAC) has an important role in aiding the
FAA, this should be taken a step further with stakeholders having a
direct role in the governance of the system. This involvement would
promote a balanced system that is more attentive to the stakeholders'
needs. This can provide a more effective way of prioritizing
investments, but it would not mean that the Federal Government would be
taken out of the picture. As the guarantor of the public interest, the
Federal Government must maintain a role in governance.
These principles are just an initial step to the creation of a
better, more efficient ATC system. Congress and aviation stakeholders
should take the opportunity of the momentum that has been created and
come up with solutions that will allow U.S. ATC to reclaim its title as
the gold standard of the world.
Conclusion
Congress has an opportunity during the upcoming FAA reauthorization
to do something bold and transformational that will allow ATC in our
country to enter into the 21st century. The time for small scale
attempts to reform the FAA is over. We need to do something big and
transformational. Following the numerous discussions that we had during
the work of the Eno NextGen Working Group, I have come to realize that
full-throttle reform is the only way to solve the issues that have been
identified throughout the decades. The logical conclusion of these
discussions and the principles that we have put forward is that ATC
provision should be spun off the FAA into a new independent entity.
This new independent entity, which should be a government corporation
or a non-profit organization that is fully outside the Federal
Government, needs to have budget independence, needs to be funded by
its users, and needs a governance structure that is responsive to the
industry stakeholders.
There has been some discussion about removing the entire FAA from
DOT or even the government; this is an unworkable idea. Even without
air traffic control, the FAA will have a very important role and
essential governmental role as the safety regulator of our Nation's
aviation system--this is a critical public role. It is inconceivable
that such a role could be handed over to an entity that is outside the
direct control of the government, even if it is a government
corporation. Moreover, this would not accomplish the critical
separation of the operator from the safety regulator, in line with ICAO
standards and the rest of the developed world.
We should also use this opportunity to remove the inherent conflict
of interest that exists in having the FAA both providing ATC and
regulating ATC safety. No other agency within USDOT both operates and
regulates a transportation service. For example, the Federal Railroad
Administration regulates railways and issues grants, but does not
manage train dispatching. The National Highway Traffic Safety
Administration regulates the safety of motor vehicles, but does not set
speed limits or control traffic lights. Separation allows each
organization to focus on their core mission and avoid potential
internal conflicts of interest. A new ATC organization could focus on
serving customers without having broader regulatory responsibilities,
and the FAA could focus on regulating ATC safety and the rest of the
aviation industry, ensuring that the United States airspace continues
to be the safest in the world. ICAO recommendations and our own
experience in this country are very clear that separation of safety
regulation from safety regulation is a worthy goal.
Some have raised the question of ``what problem'' we are trying to
solve. While it is true that the FAA has been making progress with
NextGen, this progress is still far too slow compared to what is
needed. The fact is that with the current budget and regulatory
environment, only so much can be done. Only governance and funding
reform, and the creation of a new independent entity to provide air
traffic control services, will allow the NextGen effort to be
significantly accelerated. After 30 years of attempted reforms, there
is now an opportunity to move forward and reform the U.S. ATC provision
into a system more ready to deal with the challenges that the increase
of air traffic in the next decades will bring.
Appendix
Eno Center for Transportation NextGen Working Group--Statement of
Principles for Air Traffic Control Reform
Principles for Air Traffic Control Reform
1. Promote growth and accommodate diversity in the national airspace
system
Access to the national airspace system is crucial for the economy
of the Nation as well as of many small communities around the country.
General and business aviation represent an important share of the
traffic in our airspace and make a vital contribution to the national
economy. Both domestic and international air carriers depend on an
efficient system, and government is also a critical user. Effective
representation of all airspace users in the governance structure of the
air traffic control provider is essential to ensure that stakeholders'
interests are safeguarded. Congress and the Federal Government should
also continue to play a substantial role in promoting the growth of the
entire aviation system to ensure that adequate capacity exists, delays
are reduced, and access is maximized.
2. Ensure a coherent, stable, and predictable funding structure for
air traffic control
The current funding mechanism for air traffic control provided by
annual appropriations is not an effective mechanism for a highly
technological and capital intensive service business. Air traffic
control should be removed from the Federal budget process and should
not be dependent on annual appropriations. This would insulate air
traffic control from events like the budget sequester and Federal
Government shutdown of 2013.
3. Establish a self-sustaining funding mechanism for air traffic
control
The current funding system, which is based on a mix of taxes and
general revenues, should be replaced, to the extent possible, with
direct payments to the air traffic control provider. This funding
method would create a self-sustaining system and would be in line with
international principles. It would also improve the link between the
services provided and the revenues coming in, providing an incentive
for efficiency. Additionally, allowing all sectors of aviation to be a
part of its governance will allow them to be more engaged in the
system's modernization.
4. Enable an efficient procurement system for air traffic control
modernization
Despite 1996 legislation to exempt the FAA from many Federal
procurement rules, today's FAA procurement system substantially mirrors
that of the rest of the Federal Government and remains inefficient.
These procurement rules and procedures are not effectively designed for
the highly technological ATC system, and hinder the system's
modernization. Air traffic control modernization must include
improvements to procurement processes.
5. Enable bonding authority
The air traffic control provider will need the ability to issue
debt, including bonding authority to aid in long term financing of
capital expenditures. The ability to issue bonds, backed by the user-
based revenues streams, will ensure better capital planning and will
help modernization efforts like NextGen to be more effectively managed
and implemented.
6. Include aviation stakeholders in the governance of the air traffic
control provider
Stakeholders must play a strong role in governance of the air
traffic control provider in order for it to be responsive to the needs
of its users and other aviation stakeholders. This involvement would
promote a system that is more attentive to the stakeholders' needs.
This could be a more effective way of prioritizing investments. The
Federal Government will have a role in the governance structure as a
guarantor of the public interest.
7. Enhance and improve the Federal Aviation Administration's role as
the safety regulator
The United States has the safest airspace system in the world. The
FAA should retain its role as the safety regulator of the airspace
system after reform to ensure that it will continue to be the safest in
the world. This will bring the FAA in line with the rest of the
administrations within the U.S. Department of Transportation, which
regulate safety but do not operate the services. In addition, existing
rules and procedures should be reviewed, streamlined, and improved,
including expediting safety regulatory procedures. Separation of
provision of air traffic control services from safety regulation will
also follow international recommendations, allowing each organization
(the FAA and the air traffic control provider) to focus on their core
responsibilities and avoid potential internal conflicts of interest.
8. Improve the certification processes at the Federal Aviation
Administration
A critical component of FAA's continuing role as government safety
regulator is the certification and approval processes of aviation
products, flight standards, and people. Effective and timely
certification processes are essential for the industry and the Nation's
economy, and delays in the approval processes can be extremely costly
and disruptive to the successful implementation of NextGen, third class
medical reform, updating the existing general aviation fleet with
modern equipment that will improve flight safety, among other concerns.
Moreover, the current processes are unable to keep pace with the rapid
advancements in technology and must be reformed, quickly, in order for
the national aviation system to continue to be the best and safest in
the world. The FAA culture, as well as the regulatory and certification
processes, especially in the area of general aviation, need to evolve
in order to better keep pace with changes in technology.
9. Facilitate robust Research & Development for air traffic control
The FAA, with the support of NASA, has sponsored laudable Research
& Development (R&D) to improve the safety and efficiency of our skies.
Like other areas within the agency, however, this work is constrained
by Federal budget and procurement procedures that delay projects and
increase their costs. R&D should be freed of such constraints.
10. Create and carefully implement a plan to ensure a seamless
transition to a new system
The transition to any new approach for financing and governance
must be thoughtfully and meticulously implemented. Every effort must be
made to avoid any adverse effects on the day-to-day functioning of the
air traffic system during, or subsequent to, the transition. An
important component is to provide as stable and secure a working
environment for the employees of the agency as possible, including the
continuity of the collective bargaining relationships and processes for
employees who currently are represented. The transition in the
financing should be done in a way that avoids any significant changes
in the financial burdens of the users of the system. Sufficient time
must be given to all stakeholders to prepare for the new operating
environment.
______
Disclaimer: While we succeeded in reaching a broad consensus on the
need for air traffic control reform, as is often the case with an
exercise like this, these principles, in whole or in part, may not
necessarily represent the views of all who participated.
Membership
Co-Chairs
Former Senator Byron Dorgan
Arent Fox LLP
Former Secretary of Transportation Jim Burnley
Venable LLP
Membership Organizations
Aerospace Industries Association
Alaska Airlines
Air Line Pilots Association
Aircraft Owners and Pilots Association
Airlines for America
American Airlines
Boeing
Business Roundtable
International Air Transport Association
jetBlue
L-3 Communications
National Air Traffic Controllers Association
National Business Aviation Association
Reason Foundation
U.S. Chamber of Commerce
U.S. Travel Association
Individuals
Jim Coyne, Cassidy & Associates
Steve Ditmeyer, Michigan State University
Jack Fearnsides, MJF Strategies LLC
Aaron Gellman, Former Director of Northwestern Univ. Transportation
Center
David Grizzle, Dazzle Partners LLC, Former COO, FAA's ATO
John Harman, Former Deputy Director, Office of Aviation Analysis, U.S.
DOT
Norman Mineta, Former Sec. of Commerce and Former Sec. of
Transportation
Eric Peterson, Transportation Policy Consultant
Dorothy Robyn, Former Special Assistant to the President for Economic
Policy
The Chairman. Thank you, Senator Dorgan. Nice to have you
back. We will now turn to Mr. Smisek.
STATEMENT OF JEFFERY A. SMISEK, CHAIRMAN, PRESIDENT AND CEO,
UNITED AIRLINES
Mr. Smisek. Thank you, Chairman Thune, Ranking Member
Nelson, and members of the Committee for the opportunity to be
here.
The reform of our Nation's air traffic control system is a
critical issue for the users of the national airspace, for our
passengers and employees, and for the many stakeholders across
the country who benefit from a healthy commercial aviation
system.
A4A, Airlines for America, for which I serve as Chairman,
has dedicated a tremendous amount of resources, time, and
attention to developing a rigorous, fact-based study of air
traffic control reform, including a global survey of the best
practices for operation of air navigation service providers.
All of our work points to one conclusion: the American Air
Traffic Control system needs complete transformation in order
to modernize to meet the demands of the future, and the time
for that transformation is now. We cannot continue with the
status quo.
Today, all users of the ATC system are beholden to a World
War II era radar-based system that, while world class in
safety, is inefficient and delay-ridden. For decades,
policymakers and stakeholders have almost unanimously
recognized the need for modernization.
A long string of reports from Presidentially-appointed
aviation commissions, the Department of Transportation
Inspector General, the Government Accountability Office, and
independent private sector experts have found the FAA's
progress delivering NextGen capabilities has not met
expectations, calling into serious question the agency's
ability to deliver on its mission under the existing funding
and governance structure.
The problem is not the leadership or the workforce of the
FAA. It is the funding and governance structure that we must
fix.
There are many countries around the world that have already
successfully transformed their own air traffic control systems.
A4A has done extensive benchmarking of the success of these
models.
Our analysis suggests the following six basic principles
for success of a transformed air navigation service provider:
one, separation of the ATC operations and the ATC safety
regulation functions. Two, a non-profit corporation operating
the ATC system with independent multi-stakeholder Board
governance, free from political influence over decisionmaking.
Three, a professional, effective management team of the ATC
provider incentivized to pursue efficiencies without the
numerous constraints imposed on government agencies. Four, a
fair, self-funding user fee model based on the cost of ATC
services, allowing for access to capital markets, and a steady
predictable, reliable stream of funding that is not subject to
governmental budgetary constraints.
Five, the ability to manage assets and capital investments
in a way that allows far greater speed to market of
technological modernization, and six, transparency in user
fees, so that users and their customers alike know what they
are paying, allowing users full ability to recover costs.
Under a transformed ATC system, the total of new user fees
for airlines to pay for the new air traffic entity plus any new
fee on airlines or their passengers to help fund the remaining
functions of the FAA should not exceed the total tax burden on
the airlines and their passengers today.
With independent governance, operation and funding of a
transformed ATC system, the FAA could then turn its full
attention to what it does best, safety, regulation, and
oversight. A transformed ATC system could continue to maintain
safety as the utmost priority while creating efficiencies,
delay reductions and environmental benefits from reduced fuel
burn.
The inefficiencies, delays and costs of the current ATC
system will only grow over time, so there is no better time to
transform the ATC system than now.
We are capable of rising to this challenge, as have many
other countries before us, if we conduct this transformation
methodically and thoughtfully while giving proper consideration
to transition issues and risk mitigation.
The result of this transformation would be a modernized
U.S. air navigation service provider that will better deliver
the benefits that the users of the system, our employees, our
passengers, and this great nation expect and deserve.
Thank you.
[The prepared statement of Mr. Smisek follows:]
Prepared Statement of Jeffery A. Smisek, Chairman, President and CEO,
United Airlines
Chairman Thune and Ranking Member Nelson, I appreciate the
opportunity to testify before the Committee today. I'm Jeff Smisek, and
I am Chairman, President and CEO of United Airlines. I am testifying
today as Chairman of the Board for our trade association, Airlines for
America (A4A).\1\
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\1\ A4A does not represent Delta Air Lines in this testimony.
---------------------------------------------------------------------------
As the Committee knows, the airline industry believes that
fundamental reform presents significant opportunities for improving our
air traffic system, providing real benefits to the users, air
travelers, employees, communities and businesses across America. We did
not come to this conclusion easily and we do not take the implications
and risks of fundamental reform lightly. We have dedicated a tremendous
amount of resources, time and attention to this topic, including a
global survey of best practices for operation of national air
navigation service providers. Our work leads us to the conclusion that
the American air traffic control system needs complete transformation
in order to modernize to meet the demands of the future, and the time
for that transformation is now.
Safety First
At the outset, I would like to make it clear that this discussion
takes place under the absolute premise that safety comes first. Under
any and all scenarios, first and foremost, the FAA must remain and
retain the role as a world-class safety regulator. Safety of operations
is the bedrock principle by which each and every person in our industry
lives, and transforming our ATC system will not change that in any
manner. In fact, ATC transformation would reinforce safety as the
primary mission and responsibility of the FAA, making it more of a
traditional regulator versus the current system where FAA is both the
operator and regulator of the air traffic services.
Why is ATC reform important to passengers and consumers?
For some context, A4A member carriers and their affiliates
transport more than 90 percent of all U.S. airline passenger and cargo
traffic. In 2014, the U.S. airline industry averaged more than 2
million passengers and nearly 50,000 tons of cargo carried on 27,000
flights per day, providing economic benefits to communities throughout
the United States. Today, all users of ATC are beholden to a World War
II-era, radar-based system that, while safe, is inefficient and delay-
ridden. As an example, when I joined the airline industry 20 years ago,
a flight between DCA and EWR was scheduled for under one hour. Today,
we must schedule that same flight for almost an hour and a half to
account for ATC delays--more than twice the actual flying time.
What is the problem we are trying to solve?
For decades, policymakers and stakeholders have almost unanimously
recognized the need to modernize our antiquated ATC system. There are
many countries around the world that have already successfully
transformed their own air traffic control systems. It's time for the
U.S. to do the same. To their credit, FAA leadership has been
attempting to modernize the ATC system for more than a decade, and we
believe that Administrator Huerta, Deputy Administrator Whitaker,
Assistant Administrator Bolton, and the teams they lead are working as
hard and effectively as possible within their budget and organizational
constraints to provide the safest air traffic system in the world.
Indeed, the leadership and action they and the dedicated workforce of
the FAA provided following the act of sabotage at the Aurora facility
last September are worthy of praise. However, a string of reports from
presidentially appointed aviation commissions, the Department of
Transportation Inspector General, the Government Accountability Office,
and independent private sector experts have found that the FAA's
progress delivering NextGen capabilities has not met expectations,
calling into serious question the agency's ability to deliver on its
mission under the existing funding and governance structure. This was
most recently emphasized in a National Research Council report that
indicated FAA should `reset expectations' for NextGen. The problem is
not the leadership or the workforce: it's the funding and governance
structure that we must fix.
Too often, politics and budget constraints end up being the major
influencers of how the system operates, which means all the users of
the system are beholden to decisions not necessarily in the best
interest of the system users. We believe an air traffic system that is
accountable to stakeholders would operate more efficiently and
effectively to the benefit of passengers and all users of the system.
What is the solution?
A4A has undertaken considerable research on various models of air
traffic organizations around the world. In particular, we have done a
thorough analysis to benchmark and assess the governance, financial and
operational performance of the U.S., Canadian and European ATC models
in order to make an informed comparison between our current system and
those systems engaging in best practices outside the United States. Our
evaluation reviewed the safety, predictability, efficiency, cost,
productivity, customer service and NextGen implementation performance
of each of the organizations.
Our benchmarking and rigorous fact-based assessment of the
governance, financial and operational performance of the U.S., Canadian
and European ATC models suggests some basic principles for the success
of a transformed air navigation service provider. There must be:
(1) Separation of the ATC operations and ATC safety regulation
functions;
(2) A non-profit corporation operating the ATC system, with
independent, multi-stakeholder board governance free from
political influence over decision-making;
(3) A professional, effective management team of the ATC provider,
incentivized to pursue efficiencies without the constraints
imposed on government agencies that hamper their ability to
manage more nimbly and effectively;
(4) A fair self-funding user fee model based on the cost of ATC
services, free from the start and stop budget constraints that
have resulted in sequester and furloughs of air traffic
controllers, allowing for access to capital markets and a
steady, predictable, reliable stream of funding that isn't
subject to governmental budgetary constraints;
(5) The ability to manage assets and capital investments in a way
that allows far greater speed to market of technological
modernization; and,
(6) Transparency in user fees so that users and their customers
alike know what they are paying, allowing users full ability to
recover costs.
Commercial airlines, who are the primary and disproportionate
funders of today's system, believe that the total of new user fees for
airlines to fund the new air traffic entity, plus any new fee on
airlines or their passengers to help fund the remaining functions of
the FAA, should not exceed the total tax burden on the airlines and
their passengers today.
These success factors lead to an effective operation because an
independent ATC entity can operate with stable and predictable funding
and governance certainty, subject to strong safety regulation and
oversight by the FAA, which could then solely focus on its core
function rather than playing the duel and conflicting roles of both
operator and regulator. An organization that is accountable to
stakeholders and users of the system will drive effective decision-
making and efficient operations in order to capture the full benefits
of the ATC system.
Further, an independent ATC system will be far more likely to adapt
quickly to keep pace with the constant evolution that is inherent in
our industry. In aviation, change happens at 500 miles per hour, and
many of the challenges, risks and opportunities we face tomorrow will
be different than those we face today. We need an ATC system that is
nimble, flexible, forward-looking and technologically advanced, with a
freedom and ability to change that the current system simply does not
have.
Our work to date shows that a non-profit governance structure would
deliver the greatest benefits for a transformed ATC system. This type
of entity would continue to maintain safety as the utmost priority,
while also creating significant efficiencies and improvements,
delivering greater value for all users of the system, our employees,
our passengers and the communities that depend on the services we
provide.
How do we transition?
All stakeholders recognize transitioning from a government
organization to an independent non-profit organization is a serious and
complex undertaking that needs to be done in a methodical and
thoughtful manner.
The inefficiencies, delays and costs of the current ATC system will
only grow over time, so there is no better time to transform the ATC
than now. As part of our on-going research, we are working on a
detailed transition plan and policy principles for many of the
unanswered questions that arise when you dig deeply into these issues.
To those who suggest change carries too much risk, we would reply
that the risk of doing nothing is higher. While our system is safe now,
we are moving in the wrong direction. We are at a crossroads, with an
opportunity to take advantage of the leadership of Congress and the
stakeholder community to come together and transform our Nation's ATC
system in a way that will ensure that our country retains our global
leadership. While there are indeed risks in making major changes, we
believe the risks and transition issues can be mitigated. We are
capable of rising to this challenge, as have many other countries
before us. It would be a mistake to accept the status quo, just because
progress will take effort.
It is easy to get buried in the complexities and tangential
questions that arise with the ATC reform debate. However, if you step
back and look at the concept, it is really quite simple. We believe the
air traffic service provider portion of the FAA should become a self-
funding organization, independent of governmental interference, turned
over to a non-profit entity governed and held accountable by a board of
stakeholders. We believe that ATC services would operate more
effectively and efficiently outside the control of government and the
funding unpredictability and politicized decisions that come with it.
With a predictable funding structure and direct operational
transparency and accountability to users of the system, the modernized
U.S. air navigation service provider would better benefit the users
of the system, the employees of the system and the passengers they
serve.
We look forward to working together with the Committee. Thank you.
The Chairman. Thank you, Mr. Smisek. Mr. Rinaldi?
STATEMENT OF PAUL M. RINALDI, PRESIDENT, NATIONAL AIR TRAFFIC
CONTROLLERS ASSOCIATION, AFL-CIO (NATCA)
Mr. Rinaldi. Mr. Chairman and Senators of the Committee,
thank you for the opportunity to testify in front of you today
at this important hearing to discuss the future of our aviation
system.
We all have a stake in the national airspace system, an
economic engine for this country that contributes $1.5 trillion
in gross domestic product and provides over 12 million American
jobs.
We invented aviation in this country. It is an American
tradition. Over the last 100 years, we have dreamed, innovated,
implemented the unbelievable in aviation. Currently, we run the
largest, safest, most efficient, most complex, most diverse
system in the world. Our system is incomparable, unequaled, and
unrivaled by any other country.
For example, the next largest airspace system to the United
States is Canada. They run roughly 12 million operations a
year. On average, the United States' airspace system runs over
132 million operations a year. The United States' airspace
system and the FAA is considered the gold standard in the world
aviation community.
Yet, the reality is in order to keep that honor, a change
is needed. Currently, we face many challenges in responding to
the given problems of an unstable, unpredictable funding
stream, including but not limited to the inability to finance
long term projects such as NextGen, the inability to grow the
national airspace system for new users, the UAV community and
commercial space, the inability to modernize our aging
infrastructure. Currently, our 20 en route centers throughout
the country are over 50 years old with no plan of replacing
them.
Currently, we are struggling to maintain our proper
resources and staffing our busiest air traffic control
facilities. Our certified air traffic controllers are at an
all-time low.
The upcoming FAA reauthorization bill must address the lack
of a predictable, stable funding stream for our continuous
hyper critical safety aviation operation.
We understand that addressing the stop and go funding
problems will lead to an examination of a potential structure
change for the FAA. We believe it is time for a structure
change. The current system is not dynamic enough to address the
needs of air traffic control operations in the future.
Any such change or reform must be carefully examined to
prevent the unintended consequences of negatively affecting the
safety and efficiency of our national airspace system. Every
stakeholder in the national airspace system should work
together to make sure the United States continues to be the
global leader in aviation.
Any reform must address the safety and efficiency of the
national airspace system. It must be mission driven. It must
have a process that provides a stable, predictable funding
system to adequately support air traffic control services,
staffing, hiring, training, long-term projects such as NextGen.
Any change must allow for continued growth in our aviation
system. Any change must be dynamic.
The aviation system must continue to provide all services
for all segments of the aviation community. Any change we make
must be precision like so that we do not interrupt the day to
day operation of the national airspace system.
Our national airspace system is an American treasure.
Aviation is uniquely an American tradition. We cannot continue
to short-change it. We are still currently recovering from the
sequestration cuts of 2013. Another round of cuts set to take
place this year will shrink our country's aviation footprint
forever.
We need to make appropriate changes to secure a stable
funding stream for aviation. We need to establish a proper
governance structure for our national airspace system, a
structure that is not laden with bureaucratic lines of
business. A structure that is not burdened or marred with
bureaucratic process.
We need a dynamic structure that is nimble. We need a
structure that will allow us to grow aviation in this country
and not shrink it. We need a structure that will allow us to
modernize our facilities, equipment, procedures, technology, in
a realistic timeframe.
We need a structure that will give us the competitive edge
to ensure our future leadership in the global aviation
community.
Mr. Chairman, I thank you for the opportunity to testify in
front of you today. I look forward to answering any of your
questions or any questions the Senators may have. Thank you.
[The prepared statement of Mr. Rinaldi follows:]
Prepared Statement of Paul M. Rinaldi, President, National Air Traffic
Controllers Association, AFL-CIO (NATCA)
Introduction
Chairman Thune, Senator Nelson, members of the Committee, thank you
for inviting me to testify before you today on the reauthorization of
the Federal Aviation Administration (FAA).
The National Air Traffic Controllers Association (NATCA) is the
exclusive representative of nearly 20,000 aviation safety
professionals, including nearly 14,000 air traffic controllers employed
by the FAA, the Department of Defense (DOD), and the private sector in
the FAA's Federal Contract Tower program. In addition, NATCA represents
FAA's Alaska flight service station air traffic control specialists,
engineers and architects, traffic management coordinators, Notice to
Airmen (NOTAM) service, flight procedures specialists, aircraft
certification professionals, agency operational support staff, aviation
technical systems specialists, automation specialists, drug abatement
employees, airports division, regional counsels, and personnel from
FAA's logistics, budget, finance, acquisitions, and information
technology divisions.
Air traffic controllers and other aviation safety professionals are
dedicated to ensuring that our National Airspace System (NAS) is the
safest and most efficient in the world. Every day, air traffic
controllers handle over two million passengers traveling within the
busiest and most complex airspace in the world, with roughly 5,000
planes in the sky at any given moment. Domestic airlines served an
estimated 756.3 million passengers in 2014. In order to maintain that
safety and efficiency, aviation safety professionals work to improve
safety procedures, modernize the NAS, and implement new technology. We
have professional controllers involved in nearly every FAA program
related to modernization and Next Generation Air Transportation System
(NextGen).
The NAS is an integral part of our national infrastructure and an
essential driver of our economy. Each and every day, millions of
individuals and businesses in the U.S. economy rely on the services
provided by our complex web of aviation routes. Aviation drives nearly
12 million jobs and contributes $1.5 trillion to the Nation's economy.
The FAA Needs a Stable, Predictable Funding Stream
For years the FAA has been faced with an unstable, unpredictable
funding stream, and each interruption has negatively affected all
aspects of the FAA. The FAA has had to spread its resources thinly
between fully staffing its 24/7 operation, modernizing the airspace,
and performing the daily maintenance required to sustain an aging
infrastructure. When sequestration cuts were implemented, the situation
became even more dire. The FAA was forced to furlough its employees,
including air traffic controllers, place preventative maintenance on
hold, and consider closing Federal and contract towers, curtailing air
traffic services in smaller markets. The cuts also prevented the FAA
from hiring new trainees to replace the certified controllers who
retired, adding stress to an already understaffed workforce.
Sequestration cuts did not affect the FAA's budget for Fiscal Years
(FY) 2014 and 2015, but the cuts will return in FY 2016.
The upcoming FAA Reauthorization bill must address the lack of a
predictable, stable funding stream to support a safety-focused 24/7
operational system. We understand that addressing these stop-and-go
funding problems may lead to an examination of potential structural
changes for the FAA, but we implore this committee not to merely
examine the structure of the FAA. Any change that fails to guarantee a
stable, predictable funding stream could create new unintended
consequences, without solving the true dilemma.
As members of the aviation community, we must be precise in
identifying current problems, and we must also work together to find
solutions that create a predictable funding stream while maintaining
the safety and efficiency of the system.
NATCA looks forward to working with Congress and other stakeholders
to determine a solution that provides a stable and predictable funding
stream while also protecting the air traffic control system and its
future growth. Details matter in this process. No system is like the
United States' National Airspace System, and no model used elsewhere in
the world is perfect--certainly not perfect for a system as large,
complicated, and diverse as ours. Any new model must be mission-driven
and must ensure robust, continued aviation sector growth throughout
every segment of our industry and country. We must protect and
strengthen the great national asset that is our air traffic control
system.
Existing Problems at the FAA
The lack of a stable, predicable funding stream has led to serious
problems at the FAA. We have all seen these issues, which have been
especially serious over the last five years. We believe that problems
for FAA are not caused by the failure of Congressional appropriators to
provide sufficient funding to the system, rather they result from a
broken process resulting in short-term funding bills, government
shutdowns, partial FAA shutdowns, threatened government-wide and FAA
specific shutdowns, sequestration, and 23 short-term authorization
extensions to name a few. The NAS is held hostage by this unpredictable
and unstable funding stream.
FAA operations and redundancy: The lack of a stable, predictable
funding stream means that the FAA has had to prioritize the basic
maintenance and repairs that ensure current operations over maintaining
safety redundancies and making improvements to the system. This is a
slippery slope because, when stressed, the existing system cannot
maintain its safety and efficiency without such redundancies and
continual improvements. The 2013 government shutdown forced the FAA to
halt important maintenance, and forced a fix-on-fail maintenance
policy. Additionally, FAA working groups were unable to meet or travel
during the shutdown, delaying implementation of new airspace and safety
procedures.
In the spring of 2013, the FAA made sequester cuts by delaying non-
critical repairs and the requisition of new replacement parts. The FAA
designated a list of 56 airports and critical facilities. Any facility
not on the list was subjected to a very strict requisition standard: a
requisition would be granted only in extremely critical situations with
a high potential to negatively affect safety or disrupt the expeditious
flow of air traffic, have a high public visibility, or have the
potential for creating a real and present danger to the flying public.
Even a grounded aircraft or an off-line facility without communications
ability were not necessarily considered sufficient justifications.
Staffing: The system has lost close to 1,000 air traffic
controllers (6.2 percent of the workforce) between May 2013 and today,
down to 13,902 from 14,793. This loss exacerbates an already tenuous
staffing situation, in which 3,025 of 13,902 controllers are eligible
to retire today. Of the 13,902 total controllers, 1,680 are still in
training, meaning they have varying levels of independence controlling
traffic. If the current situation continues unchecked, the NAS will see
an increased number of inadequately staffed and even critically staffed
facilities. Such facilities require controllers to work overtime to
adequately cover all needed positions. In some cases, those facilities
do not have the staffing, even with overtime, to open all of the
necessary positions. Any further staffing reductions will likely have a
detrimental and immediate effect on capacity, meaning fewer planes in
the sky and greater potential for delays.
For example, New York TRACON (N90) and Chicago TRACON (C90) present
a unique problem. New hires who become FAA training academy graduates
rarely, if ever, achieve full certification at these facilities, due to
the complexity of their respective airspaces. As of May 1, 2015, N90
had 148 Certified Professional Controllers (CPCs), compared to 160 in
2010. Today, 53 are eligible to retire, meaning roughly 36 percent of
N90s fully trained controllers could leave at any time. N90 has five
airspace areas, and as of May 1, 2015, 18 of the 37 CPCs (or 48
percent) who provide radar approach control services for Newark Airport
are eligible to retire. It would not be possible to safely maintain the
same number of operations per day into and out of Newark Airport if all
18 were to retire before anyone is trained to replace them.
Due to the critical staffing levels, the controllers work six-day
workweeks and are often held over for additional overtime. The
workforce suffers from significant fatigue problems due to extended
workdays and workweeks. The National Transportation Safety Board (NTSB)
identified this as one of its highest priority safety concerns.
Understaffing also hinders facilities throughout the country from
deploying NextGen programs, procedures, and equipment.
Hiring and training: Sequestration forced the FAA to cut its
Operations budget, resulting in furloughs for FAA employees. Those cuts
also led the FAA to institute a hiring freeze between March 2013 and
December 2013. The FAA training academy in Oklahoma City was closed for
most of 2013 as a result of sequestration, so the FAA has not been able
to keep up with the pace of attrition. Even if the FAA hired at its
maximum rate in 2015 and 2016, it will still not make up for the
attrition seen in 2013 through 2016, and will not adequately staff our
facilities in the near term without a higher priority placed on
training, and improvements in the placement and transfer processes.
There is an estimated 25 percent failure rate at the Academy, and
additional trainees fail once they are assigned to their facilities.
Moreover, the Academy graduates who are successful in becoming CPCs
take two to four years to progress through the on-the-job-training
requirements. The combined effects of these constraints result in a
shortage of fully certified air traffic controllers and negatively
affects the FAA's ability to train new hires, develop and implement
modern technology, and efficiently control traffic.
Once new hires graduate from the FAA Academy, the FAA's flawed and
inefficient employee placement and transfer process also presents
challenges. Many facilities are in desperate need of qualified
transfers, and many employees want to transfer to higher level
facilities that need additional staffing. Historically, the FAA has
placed air traffic control trainees from the Academy into higher level
facilities, which typically have a higher failure rate than the
nationwide average of 25 percent. This works against the FAA's efforts
to efficiently hire, train and retain new controllers. Fully certified
controllers should be encouraged to transfer to the most important and
critically staffed facilities in the NAS. Their path to do so should be
eased while new trainees backfill positions at lower activity
facilities.
Modernization delays: Air traffic controllers and NATCA are working
closely with the FAA to fully realize the benefits of NextGen
modernization projects. We have made significant strides recently,
including the complete implementation of En Route Automation
Modernization (ERAM), which became fully operational at the final air
route traffic control center at the end of March 2015. Terminal
Automation Modernization and Replacement (TAMR) and Standard Terminal
Automation Replacement System (STARS) equipment were successfully
implemented at multiple facilities throughout the country in 2014 (21
facilities are scheduled for installations in 2015, and 90 facilities
through 2018).
Last year, the FAA implemented 61 new procedures in the Houston
area and 77 in North Texas as part of the growing Optimization of
Airspace and Procedures in the Metroplex (OAPM) project. The System
Wide Information Management (SWIM) Visualization Tool (SVT) is a new
product that was installed last year at Southern California TRACON
(SCT). It provides surface situational awareness to controllers,
traffic management specialists, and frontline managers, and allows them
access to airport surface data that was previously unavailable outside
of a tower cab.
NextGen is already having beneficial effects on air travel in our
nation, yet we cannot overlook the difficulties that interruptions in
the funding stream have created for these modernization projects. Lack
of a stable funding stream makes planning for multi-year projects
almost impossible. As a result, we have seen significant delays and
inefficiencies in modernization. For example, ERAM, which was scheduled
to fully replace the old system in August 2014 at 20 FAA Air Route
Traffic Control Centers nationwide, was pushed back to March 2015 due
to the April 2013 furloughs. That delay cost more than $42 million.
Likewise, the sequester furloughs and government shutdown significantly
slowed the progress of the OAPM project at nine test sites across the
country. Final implementation at the Houston test site had been
scheduled for December 2013. Implementation and its associated benefits
were delayed until May 2014 due to the furloughs.
The FAA is making progress on NextGen, and has successfully reached
significant milestones, but the funding stream needs to be addressed to
prevent further time and financial overruns. We have made progress, but
all of our successes will be delayed and more expensive as long as the
funding stream remains unstable and unpredictable. As you know, stop-
and-start funding impedes the FAA's ability to properly staff
collaborative workgroups tasked with the design, testing, and
implementation of new technologies and procedures. These recent
successes are important, but we cannot forget that each of them faced
numerous setbacks due to uncertain funding. The NAS is a 24/7
operation, and the aviation safety professionals at the FAA must
continue to run that system while simultaneously working on research,
development, testing, and the implementation of technology
modernization.
Potential tower closures, reduced hours of operation, and loss of
towers: Funding shortages threaten services to rural and small
communities that benefit from the business that air service brings.
When sequestration cuts were initially announced, the FAA was prepared
to close towers and even released a list of over 230 towers under
consideration for closure. Ultimately the FAA was able to avoid tower
closures, but closures could once again become a necessity. General
aviation, military exercises, and flight school services at these
airports would be at risk, and we would see a reduction in services for
airlines, commercial interests, and private pilots who rely on towers
at smaller airports for air traffic services and for secondary services
like pilot training.
Sequestration budget caps or cuts could potentially lead to another
significant consequence. More than 100 of the Federal Contract Towers
(FCT) throughout the country could be closed. This would affect general
aviation and rural communities that depend on the services those towers
provide. While funding for the FCT program is currently moving through
the appropriations process, we are concerned that future sequestration
cuts could ultimately shut down many of the towers. Employees at FAA
facilities would see their workload increase dramatically because FAA
facilities would have to take over the services that many of the FCTs
currently provide. This would add stress just as those FAA facilities
face reduced staffing due to sequestration cuts and the resultant
furloughs. Contract towers also provide crucial support to our Nation's
military and private enterprises. For example, one of only two Apache
helicopter maintenance units in the country is located at Lone Star
Executive Airport in Texas.
Physical infrastructure: The FAA cannot keep up with replacing its
outdated infrastructure and technology at current budget levels. The
average age of facilities in the NAS is 50 years, and FAA officials
have testified that the agency already struggles with the maintenance
of existing infrastructure. The FAA recognizes that it cannot expect
all aging infrastructure to be replaced simultaneously, even though
many facilities were originally built at the same time.
The 2013 government shutdown disrupted the maintenance of NAS
infrastructure, at which point many projects were delayed due to the
furlough of FAA employees, including engineers, architects, and
aircraft certification and airport division employees. Safety-related
equipment modifications to aircraft, as well as engineering and testing
services were also threatened, negatively affecting maintenance to
infrastructure as well as the FAA's modernization efforts. With 70
percent of the technical workforce furloughed, important projects were
delayed at some of the Nation's busiest airports.
The air traffic control tower at Tampa International Airport (TPA)
provides an enlightening example. At a recent hearing of the
Transportation, Housing, and Urban Development (THUD) Subcommittee of
the U.S. House of Representatives Committee on Appropriations, Rep.
Jolly of Florida highlighted the current condition of NAS facilities
across the country. The Congressman noted that TPA is about to ``fall
over the cliff'' in terms of its expected lifespan. New, modern
equipment is unable to fit into the aging tower, and its condition is
declining rapidly. This creates obvious challenges for the FAA, as the
agency must choose between the pressure to modernize and the immediate
need to repair and maintain facilities such as TPA.
Broad Core Principles
A discussion on reform must take place in a well-reasoned and
rational manner. Rushing into any structural changes could lead to
unintended consequences. Change for the sake of change that does not
guarantee a stable, predictable funding stream does nothing more than
create a different bureaucracy. NATCA will oppose any overhaul that
creates a private, for-profit entity to oversee air traffic control
services. That would simply create a new funding problem in place of
the old one. Any reform must ultimately ensure the following:
1. Safety and efficiency must remain the top priorities;
2. Stable, predictable funding must adequately support air traffic
control services, staffing, hiring and training, long-term
modernization projects, preventative maintenance, and ongoing
modernization to the physical infrastructure;
3. Robust and continued growth of the aviation system is ensured;
and
4. A dynamic aviation system continues to provide services to all
segments of the aviation community, from commercial passenger
carriers and cargo haulers, to business jets, to general
aviation, from the major airports to those in rural America.
It is critical that the specifics of any reform are vetted among
all stakeholders, and NATCA will not commit to any concepts in a
vacuum. Not only do the principles of reform need to be sufficient to
meet the needs of the NAS, but so do the details of any overhaul. We
are concerned that the transition to a new system could cause
disruptions in service that could negatively affect aviation as an
economic engine. It is especially important that any transition is well
planned and thoughtfully designed in order to limit any disruptions--
there simply cannot be a disruption in services during a transition.
The transition period must also be sufficient. Change cannot be made by
flipping a switch. Given the National Airspace System's 24/7
activities, any transition, no matter how small, must be seamless and
deliberate. NATCA will support nothing less.
Proposed Models Being Discussed in Public Domain
Over the years, NATCA, other industry stakeholders, and this
Committee have observed that funding challenges have become the norm.
Year-to-year, the FAA has experienced continuous challenges and faced
significant problems because of a lack of a predictable funding stream.
As a result, stakeholders, think tanks, and others have been looking at
alternative funding and structural models that could address these
funding problems. Here are some of those alternatives, followed by a
brief description of each and a discussion regarding their advantages
and disadvantages.
Status Quo Model: In this model, the FAA would remain as is
with the same funding and structure. Governance would remain
within the U.S. Department of Transportation (DOT).
Enhanced Status Quo Model: In this model, governance would
remain within the U.S. Department of Transportation (DOT), but
changes would be needed to address the manner in which the FAA
is funded without changing it structurally.
Government Corporation or Independent Agency: This model
would pull the FAA, in whole or in part, out of the Department
of Transportation, and create a government corporation or
independent agency. The government corporation model would
require a Governing Board that includes stakeholders and
government officials. This model would leave air traffic
control functions within the government, but would remove them
from the DOT.
Not-For-Profit Model: This model would require a Governing
Board with stakeholders and government officials. An example of
this would be NavCanada, whose board has three directors
elected by the government of Canada. In this model, safety
oversight and regulatory functions would remain within the FAA.
Findings & Analysis
Below are some key points on the potential structural models that
have been discussed for the FAA, and the effects these changes would
have on air traffic control. NATCA will not endorse a particular system
without knowing all of the details and ensuring a seamless transition.
Status Quo Model
Simply restructuring the FAA should not be an option because it
does not solve the funding problems. The FAA has been restructured
numerous times, and with each restructuring we have seen increased
bureaucracy. Restructuring has created more overhead and non-operations
jobs, effectively increasing the time to get results. One example of
this is in the procurement process. The FAA is exempt from the normal
government procurement process, but has developed its own bureaucratic
process that mirrors the rest of government. Unfortunately, this
process is inappropriately slow and complicated for a system that needs
new technology as quickly as possible.
Enhanced Status Quo Model
For this model to succeed the FAA must have multi-year
appropriations and long-term authorization, budget flexibility,
mandatory funding for FAA employees, and no disruptions to operations,
modernization efforts, and other safety related services.
Government Corporation/Independent Agency Model
There is no profit motive in this model, and the national interest
would be preserved without risk. This model could be funded in a manner
similar to the Aviation Trust Fund, which would fund a system that
supports operations, training, and modernization, with the benefit of a
leaner bureaucracy and fewer obstacles to implement changes.
A significant benefit of this model is the potential for an
alternative funding process, meaning that politics would be less likely
to interfere with the safety and efficiency of operations. Several
additional methods could be utilized to generate revenue, such as
raising funds through public-private partnerships that use lease-backs
of facilities. Consolidation and realignment, when properly designed,
could save money, and technology could be updated more efficiently
without compromising the safety of the system. This model could also
encourage innovation from within the organization, as has happened in
other non-profit Air Navigation Service Providers (ANSPs).
One concern is that a different funding model could be a deterrent
to General Aviation (GA), which is sensitive to changes in services and
generally uses facilities that have lower traffic volume.
Not-for-Profit Model
The positive aspects of this model include it being single-mission
focused, allowing for a more streamlined procurement process, greater
flexibility for technology development and less bureaucracy than the
current FAA.
The cons include requiring a long transition period to create a
not-for-profit model. This model may also very difficult to apply to
our NAS because the U.S. system is so diverse and complex.
This model also poses risks regarding the protection of the greater
good. A not-for-profit model must still be cost-conscious and may be
forced to diminish services to rural areas because they do not offer
high returns. This would only be a problem for a model completely
separate from the government, however; any model that is maintained
within the government can be insulated from these types of concerns.
The NAS is a national asset that is essential to communities that
rely on air traffic services, and it benefits even those who do not
fly. There is a national interest in maintaining aviation growth, and
not only in those areas where profits can be made.
NATCA absolutely opposes any model that derives profit from air
traffic control services, and we will not support a model that allows
the operations to become a driver for profit. There are several reasons
why air traffic control services should not become profit-driven.
First, it could lead to compromising necessary operational redundancies
to increase profit margins. Cutting corners to save costs could
ultimately compromise safety. A profit-driven system would likely cut
services to rural communities because of the lack of returns for
shareholders. A profit-driven system might also be an impediment for
our General Aviation (GA) sector, which is very sensitive to changes in
services or increased costs.
In addition to the dangers of creating a profit motive, a for-
profit model would be logistically difficult to create. There would
inevitably be a lengthy transition period to turn the current FAA into
a for-profit entity, and the transfer of assets would be a complicated
process as well.
Other Air Navigation Services Providers (ANSPs)
As this discussion has progressed, many stakeholders have sought to
examine how other ANSPs are structured, and how well they deliver air
traffic control services.
NavCanada in Canada: This privately owned, not-for-profit
company established in 1996 controls the operations of the air
traffic control system in Canada. Its revenue source is user
fees. The advantage of this system is its single-mission focus
that prioritizes efficiency. However, NavCanada had a difficult
and lengthy transition period. While there may be benefits to
the Canadian model, NATCA is uncertain if that model is
scalable to the size, complexity, and diversity of our
airspace. For example, the U.S. controls 132 million flights
annually (2012), compared to 12 million in Canada in an area a
fraction of the size of our NAS. The U.S. has 21 centers,
compared to seven in Canada, and 315 towers compared to 42.
According to Airport Council International's Top 30 Busiest
Airports in the world (based on aircraft movements), the U.S.
currently has eight of the top 10 busiest airports in the
world, and 15 in the top 30. Canada has one: Toronto, which
comes in at number 16.
We are not just concerned about the scalability for the ANSP, but
also for the Civil Aviation Authority that would be left behind
to conduct the governmental safety and regulatory oversight of
the ANSP and the NAS as a whole. Additionally, a seamless
transition would be more complex in the U.S. due to the size of
our system compared to that of Canada.
NATS in the UK: This private, for-profit corporation
includes the government in a public-private partnership.
However, the profit motive remains. A December 2014 large-scale
failure caused delays and cancellations. Some have attributed
that incident to cost-cutting efforts that have delayed
upgrades. In addition, in the fall of 2014, NATS lost a bid to
provide air traffic services for Gatwick Airport in the UK.
Instead, the airport agreed to contract air traffic services to
the German ANSP (described below).
Deutsche Flugsicherung in Germany: In Germany, the
government controls air traffic services, which were
transferred to a state-owned corporation, called Deutsche
Flugsicherung (DFS), in 1993. The system is funded through user
fees, which are sufficient enough to cover operations and
modernization efforts. Likewise, DFS improved productivity and
operational efficiency through investments in facilities and
equipment. At the time of air traffic services' transfer to
DFS, Germany's Federal budget constrained efforts to modernize
the air traffic control infrastructure.
Conclusion
Many in Congress, as well as several key stakeholders, including
the FAA, agree that interruptions to the funding stream are detrimental
to the operations of the NAS. The status quo is unacceptable, and
something must be done to ensure continuity of funding.
NATCA believes the U.S. must have a mission-driven model. We cannot
lose sight of the fact that any new model will need to continue running
the safest, most efficient, most diverse, and most complex airspace in
the world. Safety and efficiency are our top priorities, and any
proposed changes cannot jeopardize them.
While considering possible reforms, we must protect and strengthen
this national asset; our National Airspace System is a treasure. We
must continue to create an environment that encourages the growth of
the aviation sector, allowing the integration of new users, new
innovation, and new technology, while continuing to maintain our global
leadership. There is much at stake. We must find the path that improves
the system without causing unintended consequences that set us back.
The U.S. has always led the world in aviation, and we must continue to
do so
NATCA appreciates the opportunity to appear before the Committee
and participate in this dialogue.
The Chairman. Thank you, Mr. Rinaldi. Mr. Bolen?
STATEMENT OF ED BOLEN, PRESIDENT AND CEO,
NATIONAL BUSINESS AVIATION ASSOCIATION
Mr. Bolen. Thank you, Mr. Chairman, members of the
Committee. General aviation is an important American industry.
It represents over $200 billion to our economy and it employs
over a million workers.
Business aviation in the United States fosters economic
development in small towns and rural communities. It helps
companies of all sizes be efficient and productive, and it
helps with our humanitarian efforts, whether it is responding
to forest fires, flooding, or getting transplant organs to
treatment.
NBAA is honored to be here today. We represent over 10,000
member companies, companies of all sizes, companies in all
types of industry. We also represent hospitals, universities,
and non-profits.
Eighty-five percent of NBAA's members are small and mid-
sized companies. They generally are operating out of small
towns and secondary markets. They are generally flying either
from or to an airport with no commercial service.
Business aviation is fundamental to the economy of small
towns and mid-sized communities in the United States.
Typical of our membership is Schweitzer Engineering out of
Pullman, Washington. Schweitzer is a high tech engineering
company located in a community with very little commercial
service. It is able to compete effectively in the international
market because it has access to business aviation. Mr.
Chairman, every member of this committee has a company like
Schweitzer in a community like Pullman.
Just as a matter of perspective, there are fewer than 500
communities in the United States with any type of scheduled
airline service. There are 5,000 communities in the United
States that rely on business aviation for economic support.
The FAA reauthorization bill has a lot to do with
communities like Pullman and companies like Schweitzer. Why do
I say that? Because the airspace above our heads belongs to the
American public. It does not belong to any one stakeholder or
any industry segment. Our Nation's air transportation system
serves and must continue to serve all Americans across this
vast country of ours.
The fundamental question of reauthorization is who is going
to ensure that our public airspace serves the public's benefit.
Will it be the public's duly elected officials or will it be
some combination of self interested parties.
For decades, suggestions have been made that Congress wash
its hands of the air traffic control system, give over to other
parties taxing authority and the authority to determine who can
access airports and airspace. This has been something that has
been pushed since long before NextGen was a concept, and long
before sequestration.
These interests have been wanting the sweeping authority to
determine who gets taxed what and who can fly where and when.
Mr. Chairman, the power to tax has been called the power to
destroy. Today, that authority appropriately resides with
elected officials, so, too, the power to ensure non-
discriminatory access to airports and airspace.
Congress should not advocate, relegate, delegate, or
outsource its authority over taxes and access. In fact, the
Congressional Research Service recently said to do so may well
be unconstitutional.
Currently, the United States has by all empirical measures
the largest, the safest, the most efficient, the most complex,
and the most diverse air transportation system in the world,
but the business aviation community is not content with the
status quo. No American should be.
Being the best today does not mean we will be the best
tomorrow. In fact, complacence is our enemy. That is why the
business aviation community has been active and outspoken in
its support for NextGen. In fact, no industry segment has done
more. Our members have invested in technology, and we urge
Congress to do the same.
Serious problems do exist with the NextGen program. To
date, programs have been delayed, implementation of operational
benefits has been slow, and we still have a lot of work to do
in terms of certifying technologies.
It is time for us to focus like a laser on those problems.
It is time for us to not be distracted from what we need to do.
We need to use this FAA reauthorization bill to make sure that
we are making NextGen a reality, to make sure we are improving
the certification and approval process, to make sure we are
protecting our Nation's system of airports, to make sure we are
certifying, implementing, and integrating in a safe way UAVs.
There is a lot of work to be done. NBAA and its member
companies look forward to working closely with you to do it.
Let's just never forget that the public airspace should serve
the public's benefit.
[The prepared statement of Mr. Bolen follows:]
Prepared Statement of Ed Bolen, President and CEO,
National Business Aviation Association
Chairman Thune, Ranking Member Nelson and members of this
committee, thank you for inviting me to testify here today. My name is
Ed Bolen, and I'm the President and CEO of the National Business
Aviation Association.
NBAA and its Members commend you for your continued focus on a
priority of national importance-reauthorization of the Federal Aviation
Administration.
As we know, the outcome of this debate will have implications for
all aviation segments, including the thousands of companies that rely
on a general aviation airplane to do business in small communities all
over this vast country of ours.
Business aviation is an important engine in our Nation's economy
and a vital link in our transportation system.
Business aviation fosters economic development in small towns and
rural communities. It helps businesses of all sizes to be efficient,
productive and competitive--no matter where they happen to be located.
And, business aviation assists in our Nation's humanitarian efforts.
Every day, business aviation transports patients to treatment centers,
reunites combat veterans with their families, and flies organs for
transplants.
NBAA is proud to represent more than 10,000 American members who
rely on the use of general aviation aircraft to meet some portion of
their transportation challenges.
Our members are businesses of all sizes, and also hospitals,
universities, and other non-profit entities. Eighty-five percent of our
members are small and mid-size businesses, most of which are located in
secondary and tertiary communities. They use a range of aircraft for
business purposes, including pistons, turboprops and business jets.
Most of these aircraft begin or end their flights at airports with no
scheduled airline service.
I think it's useful to provide four examples of our members, from
the four corners of America, to illustrate what business aviation looks
like.
Let me first point to Manitoba, a family-owned metals-recycling
company located in Lancaster, NY. The company's third-generation CEO,
Richard Shine, started using business aviation to help his company
survive when the local manufacturers that provided scrap metal to
Manitoba disappeared.
Richard put business aviation to use for his company. In a typical
day, he would fly out of Niagara Falls Airport to be in two or three
cities each day to meet with prospective metal suppliers.
Over the decades, Manitoba's reliance on the airplane hasn't
changed. Richard reports that, ``Today as much as ever, I rely on my
airplane, and my ability to reliably access several airports each week,
to get outside my region and generate the metals I need to stay in
business. If special interests are allowed to control my access to
airspace and airports, I'm in jeopardy of losing the business.''
A similar story to Richard's is that of entrepreneur Brad Pierce,
the President of Orlando-based Restaurant Equipment World, a family-
owned company founded by Brad's father.
Brad has said that his company's airplane has been instrumental in
expanding the growth of his business. He uses it week in and week out,
flying to visit customers throughout the Southeast, and as far away as
California, making stops all along the way.
For this kind of business model to work, it is absolutely essential
for Brad to have access to airspace and airports, at a reasonable cost.
``If our aviation system was turned over to special interests that
could control how much I pay to access the system, and when and where I
was allowed to fly, it would destroy my business,'' Brad has said. ``We
cannot let that happen.''
A third illustrative example of what business aviation looks like
can be found in the story of Dr. Michael Gregory, the chairman and
founder of a business called Apogee Physicians, an Arizona-based firm
that uses a business airplane to provide doctors to medically
underserved communities spanning four time zones. The towns served by
Apogee's doctors include Grants Pass, OR; Marion, IL; and Thomasville,
GA.
Dr. Gregory often calls his airplane ``a lifeline'' to the
communities where his doctors are located. ``But in order to be able to
get doctors to patients on a real-time basis, I must have reliable
access to airports and airspace,'' he adds. ``If our aviation system
were changed so that I couldn't access any town, at any time, I
wouldn't be able to quickly get my doctors to those who need their
life-saving treatments.''
A fourth demonstrative example of business aviation can be found in
Schweitzer Engineering Laboratories, an employee-owned business located
in Pullman, Washington. The company's founder, Dr. Ed Schweitzer, works
with a team of engineers to develop computer systems, power-grid
technologies and other leading-edge innovations. The company does
business all across the U.S., and in more than 100 countries around the
world.
Schweitzer could not compete in a global marketplace without
business aviation, because it is often the only way the company's
personnel can meet the real-time demands of servicing power grids and
other infrastructure.
Manitoba Recycling, Restaurant Equipment World, Apogee Medical
Physicians, Schweitzer Engineering, and countless other companies like
these are located in small and mid-size towns far away from the major
metropolitan areas. In those towns, such companies are vital to job
creation and economic activity.
In fact, studies have shown that general aviation contributes to
the creation of more than a million jobs in the U.S., and more than
$200 billion in economic activity each year.
The reason for this economic success story is largely due to the
ability of business aviation to access small community airports. The
airlines serve fewer than 500 airports in the U.S., but business
aviation can access about 5,000 airports.
Access to airports, and to the Nation's airspace, is what creates
all those jobs, generates all that economic activity, and helps make
America's aviation system work for all Americans.
During the FAA Reauthorization process, it is critical that
Congress keep in mind that the airspace above our heads belongs to the
American public. It doesn't belong to any private company, or group of
companies. It doesn't belong to any segment of the aviation industry,
or even the aviation industry itself. The airspace above our heads
belongs to the American public, and it should be operated for the
public's benefit.
The question on the table--perhaps the fundamental question in this
reauthorization debate--is who is going to ensure that our public
airspace is operated for the public's benefit?
Will it be the public's elected representatives or will it be some
combination of self-interested parties?
In the past, some of the parties pushing Congress for major changes
have wanted for themselves the sweeping authority to determine: (1) who
gets taxed, and in what amounts; and (2) who will have access to
airports and airspace, and who will get shut out.
John Marshall, the first Chief Justice of the Supreme Court, had it
right when he famously wrote that the ``power to tax is the power to
destroy.'' Today, that authority resides with the American public's
elected representatives. So, too, does the power to ensure non-
discriminatory access to airports and airspace.
Congress should not abdicate, relegate, delegate or outsource its
responsibility in the areas of aviation taxes and fees. Nor should it
abdicate or delegate its responsibility to ensure non-discriminatory
access to airports and airspace.
In fact, the Congressional Research Service recently wrote that
giving a non-profit, privatized air traffic control corporation the
authority to set user fees and establish air traffic flow controls may
well be unconstitutional.
Let's face it: It is difficult to see how a combination of self-
interested industry representatives would really exercise taxation and
access authority in a way that best serves the public, rather than
their best commercial self-interest.
During this reauthorization debate, let's not get distracted from
the hard work that needs to be done. Today, America has, by all
empirical measures, the largest, safest, most efficient, most complex
and most diverse air transportation system in the world.
But the business aviation community is not content with the status
quo. No American should be. Being the best today is no guarantee you
will be the best tomorrow. And having the world's strongest air traffic
system is in the best interest of all Americans. Complacency is our
enemy.
That is why business aviation has been an active and outspoken
champion of NextGen. No industry segment has done more than business
aviation to make NextGen a reality. We want and need the benefits of
increased capacity, enhanced safety and a reduced environmental
footprint. We are investing in NextGen equipment and we are asking
Congress to do the same.
We know challenges need to be addressed. There are NextGen programs
that are delayed, operational benefits that are slow to be implemented
and decommissioning of legacy equipment that has been deferred. We
desperately need to streamline our certification and approval process.
All of this increases funding pressures.
Let's get about the serious work of fixing these problems, and
making NextGen a reality, so that all Americans--including those in
small towns and rural communities--can continue to receive the benefit
of their public airspace.
Congress does not need to turn over its power to tax to do that.
With regard to taxes, it is important to note that while no industry
likes paying taxes, or wants to pay anymore taxes than necessary, the
general aviation community has always said that the fuel tax mechanism
is the perfect mechanism for our community to contribute funding for
our Nation's air transportation system.
The general aviation fuel taxes are easy to pay and difficult to
avoid. They require users to pay before they fly, not after the fact.
They are progressive in nature, and closely approximate one's use of
the system. They create a constant incentive to invest in fuel-
efficient technologies and fly fuel-efficient routes. Finally, they do
not require a bureaucracy of agents, collectors and auditors to
administer.
The authority over taxes and access to airspace and airports
belongs to Congress, and it is an authority that should not be
abdicated or delegated. Communities of all sizes in every corner of the
country are depending on you to retain your oversight authority in the
areas of taxes and access, to ensure that the public airspace benefits
the public.
Mr. Chairman, in closing, I'd like to provide our basic guiding
principles for FAA reauthorization, which we request the Committee
consider as it works to develop legislation. Those are as follows:
Make NextGen a reality. NextGen is our plan to retain our
world leadership position in air traffic management; the
question is, how do we make it a reality? That question is
central to the reauthorization process. Unfortunately, the
challenges are significant--NextGen is not simply a matter of
``flipping a switch,'' as some would have you believe. Make no
mistake about it: no one is content with the clarity, pace or
cost of the transition to NextGen to date--we need to do
better.
Keep Congressional control over taxes, fees and charges. For
the people who have to pay them, mandatory taxes, fees and
charges are all the same. Proposals may be put forward that
would effectively take authority to fund our aviation system
and put it in the hands of nonelected officials. A dialogue
about finding a new governance structure may be appropriate,
but the composition and scope of its authority matters.
Congress must retain authority over taxes, fees and charges.
This is not a responsibility that can be transferred, delegated
or outsourced.
No user fees. As the members of this subcommittee know, the
general aviation community, including business aviation, pays a
fuel tax to fund its use of the aviation system. This mechanism
is an unmatched proxy for system use, because the more often
you fly, and the longer distances you fly, the larger your
aircraft, and the more fuel you burn, the more taxes you pay.
The fuel tax is also highly efficient: paying at the pump means
full compliance, without a collection bureaucracy--a ``SKY-R-
S''--needed to administer fees or charges. The fuel tax also
covers all of the air traffic control services, including those
for flight safety, that are needed in a typical flight. We
don't want to promote a disincentive for people to use safety
services. Simply put, anything that could be done through a
user fee, the fuel tax can do better. For all these reasons and
more, Congress has repeatedly written to the current and
previous Administrations in opposition to per-flight user fees,
and should continue to oppose them.
Ensure predictable, affordable access to airspace and
airports. The inherent value of business aviation is the
ability of companies to fly where they need to, when they need
to. Things that impede our access to airports and airspace have
the potential to do great harm. Business aviation must have
continued access to our Nation's airports and airspace. As we
have learned in Australia and other parts of the world, this is
not something that can be taken for granted.
Protect the privacy of those in flight. The Automatic
Dependent Surveillance-Broadcast (ADS-B) technology, a
cornerstone of the FAA's satellite-based NextGen system, does
not currently include needed protections for operators' privacy
and security. While NBAA has long promoted the development of
ADS-B, we have consistently pointed out that, in transitioning
to satellite-based navigation and surveillance, we must ensure
that it makes accommodations for privacy.
When it comes to ADS-B, we continue to believe that people should
not have to surrender their privacy and security just because
they travel on a general aviation aircraft. This committee was
integral in protecting these rights previously, and we
respectfully request that these privacy protections be
addressed in the pending 2015 FAA Reauthorization bill as well.
Protect our airport system. Our national system of airports
was created to provide communities with access to a safe and
adequate public system. We must ensure that our system of
airports meets national objectives, including economic growth,
defense, emergency readiness, law enforcement, postal delivery
and other priorities.
Unfortunately, in certain regions of the country, attempts are
being made to close important airports, even when Federal
investments and assistance have been provided to ensure these
airports meet national economic and other priorities. We
support giving the Secretary of Transportation sufficient
discretion to allow an airport to remain open for purposes of
protecting or advancing civil aviation interests of the United
States, if standard conditions become unenforceable. Simply
put, we must continue supporting facilities, at the Federal
level, as part of a single, national aviation-transportation
system.
We strongly believe that airports should be good neighbors and
should work with communities to maintain a balance between the
needs of aviation, the environment and the surrounding
residences. However, over the years, attempts have been made to
create new restrictions and impediments for aviation users
through airport curfews and other local initiatives to restrict
access to airports. We must be vigilant in stopping ongoing
attempts from local interests to compromise the national nature
of our aviation system.
Improve the certification and approval process. The approval
process can be cumbersome, unnecessarily taking up time and
resources. The FAA should constantly look for ways to keep or
improve safety, while adopting more efficient, effective
business-like processes.
Ensure the safe introduction and integration of new aviation
technologies. NBAA would also like to take this opportunity to
commend the U.S. Department of Transportation (DOT) and FAA on
their recent release of a notice of proposed rulemaking toward
adopting a regulatory framework governing the commercial
operation of small, unmanned aircraft systems (s-UAS) weighing
less than 55 lbs.
The FAA has taken a good first step in releasing these initial
guidelines to provide a much-needed regulatory structure for
these operations. We urge the Committee to work closely with
the DOT, FAA and the UAS industry as they work to integrate UAS
into the national airspace system in a thoughtful, deliberative
process focused on ensuring the safety and security of all
aviation stakeholders.
Ensure continuity of government aviation services. Aviation
aircraft and parts cannot be produced, financed, bought or sold
without the written approval of the Federal Government. When
the FAA Registry Office was shuttered in the 2013 government
shutdown, it significantly impacted much of America's general
aviation industry, including thousands of businesses that use
general aviation aircraft for parts delivery, customer visits,
aircraft repairs, fuels sales, hanger construction and aircraft
brokerage activities.
We urge the Committee to include language in the pending FAA
reauthorization legislation, which would ensure that the important
aviation safety and security functions of the FAA Registry Office are
protected from any future government shutdowns.
I look forward to responding to any questions the Committee may
have. Thank you.
The Chairman. Thank you, Mr. Bolen. You are a very
efficient panel. Everybody came pretty close to the five minute
rule, even our former colleague managed to adhere pretty
closely to that.
[Laughter.]
The Chairman. I have a couple of quick questions for Mr.
Huerta a little bit off topic, but I need to ask him, because
over the weekend there were these media reports that indicated
a security researcher claim to have temporarily taken control
of an engine on a passenger aircraft by hacking into the
inflight entertainment system.
If true, this would certainly be a very disturbing
incident. What has been the FAA's response to this matter, and
do you feel the FAA is well equipped to analyze these types of
threats against the flight control systems on passenger
aircraft?
Mr. Huerta. First, with respect to the specific incident,
we are cooperating with the FBI in their investigation. They
are working on that.
As it relates to the larger question, cyber, this is
something that is an ever evolving threat, and something that
we are looking very carefully at and that we are taking very
seriously, not only in the operation of our system but also in
the manufacture of aircraft.
That means we are working closely with the manufacturers to
understand how the threat morphs, how it evolves, how it
changes, and how do we stay ahead of it, by having as we have
always had many layers of security and control over access to
critical systems within the aircraft.
I will say that I think cyber is and will continue to be a
very significant challenge not just in aviation but in any
technology based sector, and it is something that we have to
work cooperatively across government and industry to ensure
that we are staying ahead of.
The Chairman. That incident over the weekend is still being
investigated?
Mr. Huerta. Yes, sir.
The Chairman. There is nothing to report about that at this
time?
Mr. Huerta. That is correct.
The Chairman. There is a recent report by the National
Academies that noted it would require a significant effort for
the FAA to attract, develop, and retain the work force talent
to deal with cybersecurity challenges going forward.
When you talk about that issue and the agency's efforts,
how do you deal with the limitations the government faces in
competing against private sector employers in some of these
fields?
Mr. Huerta. Well, a factor we always need to consider is do
we offer a competitive job and do we offer competitive
compensation for that. For us, that is a combination of
ensuring that we are casting the broadest possible net, but I
think it is also important to point out that while we do
operate within the government environment, there is a
significant portion of our applicant pool and our work force
generally who is interested in coming to work for the FAA
because of their belief in the mission and their belief in
public service.
It is a very competitive environment that is out there. We
are never going to pay the top salaries that top technology
companies pay. Our focus is on how we can ensure that we have
an orderly process for promoting and retaining people and how
we sell the job itself.
The Chairman. This committee, of course, is very interested
and concerned with cybersecurity as it relates to ATC and
NextGen. We will continue, I am sure, to be in touch with you
on that subject.
I want to turn back to the subject at hand today. Mr.
Rinaldi, you spoke about how the status quo with regard to
funding is not an acceptable situation. Can you assess among
the options that have been put forward how some of those reform
options provide for more stable funding for the ATC system than
the current government model?
Mr. Rinaldi. Thank you, Mr. Chairman. We have been studying
probably for the last 18 months some of the other countries,
and when they broke off the air traffic control services from
the government entity, and some of them have done very well and
some are still struggling.
What we are looking at is to make sure that we have a
stable, predictable funding stream, and then if we are going to
change the structure, the one thing that we know for sure we do
not want is a system that is for profit. It would just put
another barrier, another hurdle in front of us to actually
provide the safest and most efficient system in the world.
The Chairman. There has been a lot of discussion in the
context of reform, about what is happening to the north of us
in Canada as a model for comparison. Understanding there would
be some reluctance to simply copy their model reform effort, I
am curious to know what aspects of the Canadian air traffic
control system your members find most appealing.
Mr. Rinaldi. I was up there last week visiting in Ottawa
and looking at their technical center. I think the unique thing
they do is they have a true collaboration from the position out
in developing their NextGen technology. They have the air
traffic controller, the engineer, and the manufacturer working
together from the conceptual stage all the way through to
training, implementation, and deployment within their
facilities.
What that does is save time and money, and they actually
are developing probably the best equipment out there, and they
are selling it around the world, and they are doing it in 30
months to a 3-year timeframe, when we have to look much longer
down the road because of our procurement process in this
country.
The Chairman. This will be for Governor Engler, Senator
Dorgan, and Mr. Smisek. In the context of an independent ATC
services provider, some of you have referenced a preference one
way or the other or at least suggested several different
models.
Can you speak to the differences between a Federal
corporation, a federally chartered non-profit corporation, and
what might be the pros and cons of each approach?
Mr. Engler. We convened a group of experts to look at this.
Their kind of consensus was that probably a non-profit
corporation outside the government allowed for maximizing your
shareholder participation, including some of the benefits Mr.
Rinaldi just spoke up, speeding it up.
One of the things that also would happen is the ability to
get that bonding authority. We really are talking about NextGen
as a capital project. If a Governor were doing this or Senator
Peters when he is back in Michigan, we would have bonded the
project and done it in a fairly short period of time, and then
you would be continuously improving.
The nimbleness of the corporation, in the entity, that
would seem to be--we have not endorsed a specific approach, but
I would say kind of the people we have consulted with tend to
rely on that non-profit corporation with the shareholder
management, if you will. We think that gets you the most bang
for your buck.
I also think over time it gets us back out on the
innovation leading edge where we are simply not today.
Senator Dorgan. Mr. Chairman, we have submitted to you a
fairly substantial document that the Eno Center for
Transportation, Jim Burnley and myself, and the other folks
that were involved produced. It describes a series of different
approaches with strengths and weaknesses of each, and also
describes in some detail what other countries have done.
I think what Governor Engler indicated is the most
important point, and that is the stability of funding for a
project of this type is essential. I served in the Congress 30
years. There is a lot I do not know, but I do know this, in a
time of spending restraint, in a time of sequestration, in a
time of multiple continuing resolutions and all the things that
are coming at us, there will not be stable funding for this
type of project in the future unless it comes through a bonding
capability and another type of organization.
It is important to note that I do not support something
that does not have the government as a stakeholder. I support
and believe that this project will not get done for the country
the way we want to see it getting done, to regain our
leadership, unless we decide to do it in a different structure.
To do that then allows us stable funding through bonding
capability and so on, with the input of all the key
stakeholders, including the government.
The Chairman. Mr. Smisek, do you have anything to add?
Mr. Smisek. Thank you, Mr. Chairman. Airlines for America
supports a non-profit corporation for a number of reasons.
First of all, a user fee structure, as Senator Dorgan and
Governor Engler have mentioned, would provide a stable stream
of funding that could be funded, so there could be rational
infrastructure investments made, and assurance of funding and
stability.
Second, this would be governed by a Board of Directors
comprised of stakeholders, representatives, for example, from
the Department of Defense, the U.S. Government, general
aviation, commercial air carriers, air cargo carriers, NATCA,
and union representatives, so the stakeholders would be present
and would govern, but they would have fiduciary duties to the
enterprise.
They would not be employees of the government or employees
of the airlines or employees of the unions, but rather would
have fiduciary duties dedicated to the mission and safety of
the air traffic control system.
Also, the efficiencies that would be driven from a non-
profit corporation, we have very good evidence of that from
Canada. That would provide funding as well for excellent and
stable and professional management.
You mentioned the ability, as Administrator Huerta
mentioned, to attract and retain an excellent work force,
including cybersecurity experts, which are quite important in
any enterprise, and that enterprise would also be free of the
political influences that so bedevils the FAA and its ability
to modernize today.
The Chairman. Thank you, Mr. Smisek. Senator Nelson
followed by Senator Wicker.
Senator Nelson. Thank you, Mr. Chairman. I want to follow
up on your introduction of the question of the cyber attack.
Part of what we are looking to do in this Next Generation is we
are going to do air traffic control off satellites. You could
be a lot more efficient. You can have awareness right from the
cockpit of the other airlines around. There is not only the
cost of transitioning from the ground-based radar, there is the
question of the backup of the ground-based radar.
What happens if there were a cyber attack on the GPS that
shut it down, Mr. Smisek, on the arrangement that you are
talking about, who would bear the cost of that back up of the
ground based radar, since that is the less efficient operation?
Mr. Smisek. Senator Nelson, I am certainly not an expert on
cybersecurity, but it is necessary in any enterprise, the
enterprise we are talking about or any enterprise, to have very
expert investments in cybersecurity.
It is a risk and no doubt a growing risk as we become the
Internet of all things. Certainly an attack on the GPS system
would not simply affect the air traffic control system, it
would affect the Department of Defense, it would affect
everything.
Senator Nelson. Right. In the private corporation, who
would bear that cost?
Mr. Smisek. If as a result of concerns that were
sufficiently material to the ability of someone to bring down
the GPS system, of which I certainly have no knowledge at all,
and if it were determined there would be a required back up,
then that would also be the responsibility of the non-profit
corporation, because it would be responsible for operating the
system, as would NavCanada or anyone else.
I am not actually familiar with whether Canada has retained
a back up radar system. Perhaps Mr. Rinaldi would know that.
Senator Nelson. You are saying the private corporation
would in fact retain the ground based radar as a backup system?
Mr. Smisek. I am not saying that, sir, because I do not
know whether that would be necessary based upon the robustness
of the technology itself.
Senator Nelson. That is one of the costs. Mr.
Administrator, why is DOD weighing in on this so heavily, that
they are concerned about this privatization? Can you speculate
how privatization would impact the relationship with DOD, and
would you be able to interact with a private entity or non-
profit corporation in the same way that you have existing
opportunities to interact with DOD?
Mr. Huerta. Senator Nelson, I can certainly speak about the
relationship and the working procedures we have with the
Department of Defense as they exist today. They are an
important partner in the provision of air traffic control
services, and they control certain airspace in the country, we
control certain airspace in the country, and we have a shared
responsibility for efficient and effective management of the
safety of the air traffic control system.
We often take advantage of the airspace they use
exclusively during peak travel periods to accommodate
additional traffic loads. We work collaboratively with them to
ensure they have access to airspace they need for their mission
requirements and for training.
Senator Nelson. I understand you work collaboratively with
them. Why do you think they are weighing in so vigorously?
Mr. Huerta. I cannot speak to why they are weighing in, but
I think what it ultimately depends on is what would be the
structure in an alternative model under which they would
interact with their partners in the air traffic system.
It would strike me that there would be a way to build
protocols, but it is entirely dependent on what structure would
be selected.
Senator Nelson. Mr. Bolen, why are the general aviation
business manufacturers so concerned about this? You represent
folks like Embraer, Gulfstream on the G-5, Cessna, et cetera.
Why are they so concerned about this?
Mr. Bolen. As I mentioned earlier, 85 percent of NBAA
members are small and mid-sized companies. They are flying into
and out of airports with little or no commercial airline
service. They are concerned about their access to airports and
airspace, and they are concerned about ensuring their access is
safe, it is predictable, and it is affordable.
I think one of the questions that came up earlier was about
financing the system, and what we heard is one of the plans for
the future is to have bonding authority, which is a euphuism
for borrowing.
The reality is that today, our current system generates
through taxes a largely, but not entirely self-sufficient,
system. We do that through a combination of user fees and taxes
plus a general fund contribution that then fully funds the FAA.
The question on the table is if we pull the general fund
contribution out, then we will have a situation where all of
those industry contributions do not equal the amount we have
today. Thus, we can either raise the taxes to get to that
amount, we can cut the system to get to the amount, or as you
have heard, we can go borrow the money. Borrowing money comes
at a cost, that has to be serviced, and prolonged borrowing
ends up creating an interest nightmare.
There are issues here that need to be addressed. What we
want to do is make sure that all the small towns, the rural
communities, the secondary and tertiary markets around the
United States, are able to have business aviation located in
their communities and being able to access the airports and
airspace in the major markets where those companies need to go
as well.
Senator Nelson. Thank you. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Nelson. Senator Wicker?
STATEMENT OF HON. ROGER F. WICKER,
U.S. SENATOR FROM MISSISSIPPI
Senator Wicker. Thank you. Senator Dorgan, let me just
begin. Is every witness here a part of this working group?
Senator Dorgan. No.
Senator Wicker. I think this is an excellent report, so
kudos to the authors. Would you do this for me, because in
reading through, I think at some point there needs to be a page
where the owners take ownership of this, and I do not see that.
We checked the website and found a number of people. Would you
provide that for the record? Would you do that, sir?
Senator Dorgan. I would be happy to do that.
[The information referred to follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Co-Chairs
Former Senator Byron Dorgan
Arent Fox LLP
Former Secretary of Transportation Jim Burnley
Venable LLP
Membership Organizations
Aerospace Industries Association
Alaska Airlines
Air Line Pilots Association
Aircraft Owners and Pilots Association
Airlines for America
American Airlines
Boeing
Business Roundtable
International Air Transport Association
National Air Traffic Controllers Association
Reason Foundation
U.S. Chamber of Commerce
U.S. Travel Association
Individuals
Jim Coyne, Cassidy & Associates
Steve Ditmeyer, Michigan State University
Jack Fearnsides, MJF Strategies LLC
Aaron Gellman, Former Director of Northwestern Univ. Transportation
Center
David Grizzle, Dazzle Partners LLC, Former COO, FAA's ATO
John Harman, Former Deputy Director, Office of Aviation Analysis, U.S.
DOT
Norman Mineta, Former Sec. of Commerce and Former Sec. of
Transportation
Eric Peterson, Transportation Policy Consultant
Dorothy Robyn, Former Special Assistant to the President for Economic
Policy
Senator Wicker. Mr. Bolen, are you part of this working
group?
Mr. Bolen. We were part of the working group but we did not
feel our concerns were being reflected, so we are no longer
part of that.
Senator Wicker. I think that is probably accurate to say.
There are three options that involve some major structural
change, 100 percent government-owned Federal corporation,
second, independent non-profit organization, and third, private
for-profit corporation.
The fourth option sort of basically tells Congress that we
ought to do our job, get the funding straight and make sure
that it is reliable and steady. The fourth option would reform
the system's funding stream while maintaining the system's
current governance structure.
It goes on to say that this option could alleviate
transition issues that are a concern with a completely new
governance structure.
Would it be fair to say that your organization is more in
tune with that fourth option?
Mr. Bolen. We have studied various structures around the
world. We have looked at Australia, New Zealand, England,
Canada. In none of these markets do we see a robust business
aviation community that is providing economic development in
small towns and rural communities.
We have seen serious access issues. In Australia, for
example, business aviation is not allowed access to airspace in
Melbourne or Sydney on an equal basis at all. We end up waiting
sometimes three, four, and five hours on the tarmac waiting to
get access.
I was on a panel recently with the head of the Irish Air
Traffic Control System, and he said you just have to
understand, you are not going to get equal access, that is just
part of the natural selection process.
As we looked at NATS in the United Kingdom, we saw that
after an economic downturn, that privatized group needed a
bail-out from the taxpayers.
When we looked at Canada, we saw they have instituted user
charges which are very problematic, while continuing fuel
taxes.
What we have seen as we have looked around is a lot of
fundamental problems with some of the different structures. We
want to make sure that in the United States, we are identifying
problems and we are finding targeted solutions to them. To
simply say we are going to pull air traffic out and we are
going to give an independent board borrowing authority leaves a
lot of concerns about our ability to safely, predictably, and
affordably access airspace and airports.
Senator Wicker. You are saying the United States is unique
in that we have the 5,000 communities that rely on business
aviation, as you mentioned in your prepared remarks, and access
will not be the same if we go to one of these three structural
changes? Is that part of your concern?
Mr. Bolen. Yes. Our study of the systems around the world
that have taken this action have raised serious access and
affordability concerns.
Senator Wicker. Senator Dorgan, it sounds like he has a
good point there.
Senator Dorgan. It depends on who is listening. As Ed Bolen
knows, I spoke on the floor of the Senate a number of times
about general aviation and its importance to this country. I
think it is very important.
The question, I think, before this committee is are we in
fact going to have the latest technology, Next Generation
system, built and completed in this country to allow us to fly
more safely, more efficiently. The answer in my judgment is
without a change in structure, we are not going to get there.
I understand there are lots of interests that are opposed
to this. I am going to give you a list of everyone who
participated, which were the best academicians and stakeholders
from around the country. You cannot reach everyone because
everyone has their own set of interests they bring to these
issues.
As I mentioned to you, this is a heavy lift, which I
understand. We did not put before you a pattern with all the
specifics for important reasons. We would not have gotten
agreement on a specific pattern with all the specifics in it.
Mark Twain was once asked if he would engage in a debate,
and he said oh, yes, if I can take the negative side. They said
we have not told you the subject. Oh, he said, the negative
side takes no preparation.
I understand this is controversial. I will make one point,
if I might. Mr. Huerta came to our organization as well. He was
not a participant, but we invited him. I have great respect for
him. I have and you have as well been through a lot of folks
that have run the FAA. I have great respect for him. That is
why we invited him to hear his vision as well.
All of us should want the same thing. The question is not
the endpoint. The question is what is the route to get to that
endpoint. There will not be stable funding in a time of
spending restraints for the next 10 years, which will probably
include sequester, probably include furloughs, and probably
include a budget as we saw this year that cuts $365 million out
of the facilities and equipment account of this organization
even as they are trying to climb this hill of modernization.
That does not work and will not work.
Senator Wicker. A stunning indictment which very well may
be correct. One quick point, Mr. Chairman. Mr. Huerta, several
weeks ago, I guess it was April 14--goodness, time flies. You
appeared before the full committee on a similar topic, FAA
reauthorization.
A number of us asked questions for the record, particularly
with regard to the Contract Tower Program. We are still
awaiting those details, and I look forward to receiving answers
to those QFRs, sooner rather than later.
Mr. Huerta. Absolutely, sir. I think we are actually trying
to schedule a staff briefing to go over the methodology that we
discussed at that hearing.
Senator Wicker. OK. If we could have squeezed those
questions in at the time, you could have answered them right on
the spot. Do your best and see if you can get those answers to
us. Thank you.
The Chairman. Thank you, Senator Wicker. Senator Peters
followed by Senator Manchin.
STATEMENT OF HON. GARY PETERS,
U.S. SENATOR FROM MICHIGAN
Senator Peters. Thank you, Mr. Chairman. Thank you to the
panel for your testimony today.
Governor Engler, it is good to see you. Governor Engler and
I served together in the state, he was the Governor and I was
the State Senator. I recall you coming before me when I was on
the finance committee then in testimony. Here we are again, in
just a different capacity. It is great to see you again.
I would like really to pick up briefly on Senator Wicker's
comment. It is interesting as I have heard the testimony from
the panelists here and concerns about funding and sequester,
budget, and that fourth option that he mentioned. It seems to
me ultimately it falls back on Congress, that we are not doing
our job here in providing the resources necessary to implement
NextGen and other types of reforms.
The proposals that are put before us to privatize are
because we are not doing our job here. Perhaps that is what our
focus needs to be, to do our job, making sure the FAA has the
resources necessary to continue to go forward.
Having said that, Mr. Smisek, I have a question for you. I
understand the second largest air carrier in the United States
is Delta Air Lines, which has a major presence in my state of
Michigan. It is a major hub for them, as well as a very large
employer in the state of Michigan.
They have declined to endorse the A4A position that you
have been advocating for today. Delta Air Lines suggests that
the current system can become more efficient and deliver
substantial benefits through improved collaboration efforts
between the FAA and aviation stakeholders.
Delta fears that separating the ATC system from the FAA
would lead to certain operational risks and pitfalls that they
outlined, such as organizational disruption, the creation of
additional structural separation, bureaucratic silos between
the ATC system and the FAA safety experts, unforeseen costs
that will accompany the transition to a new organization, and
the loss of expert personnel and institutional knowledge.
A long list of concerns that Delta Air Lines has expressed.
Could you please maybe comment on some of those concerns, and
do you agree that some of those risks are indeed ones we need
to consider here as a panel?
Mr. Smisek. I would be happy to, Senator. As you can
imagine, Airlines for America, like Congress, we do not always
get unanimity. However, on this issue, we do have unanimity
except for one member, and that member has expressed its
concerns.
I will say I think our colleagues at Delta have no evidence
that the FAA can become more efficient or can deliver effective
services compared to a non-profit enterprise. I think NavCanada
is a perfect example of that. NavCanada today has the best
technology probably in the world.
I think Mr. Rinaldi would agree with me. They have brought
down the costs of the system to the users by 30 percent. They
are a model of safety, and they are selling their technology to
third parties because they are so adept at working
collaboratively with the unions, working collaboratively with
experts, attracting and retaining experts. I would say that
lacks evidence.
In terms of risks of transition, of course there are risks
of transition. There are risks in anything large. As Senator
Dorgan has said, this is a heavy lift. This is something that
needs to be done.
What we know is what we have today does not work. We have
candidly little to no confidence that there will be a stream of
stable funding for modernization of the air traffic control
system or the ability of the FAA to attract and retain
qualified people to implement it or a change in how the FAA
operates with respect to stakeholders in terms of
collaboration.
I think this Nation should reach for greatness, and I think
this is an opportunity to do so. What we know is it does not
work, and I believe if we just keep doing the same thing we
have been doing for all these years and expect a different
result, we will get what we deserve.
Senator Peters. Administrator Huerta, under the Eno Center
proposal, ATC is spun off, as we have heard, potentially into a
new independent entity outside of government. However, the Eno
Center also says that ``The government must maintain a role in
governance of the system since the FAA is ultimately the
guarantor of the public interest.''
Administrator Huerta, it is the role of the FAA obviously
to put safety of the traveling public first. Are you concerned
this priority might be diminished if the FAA were to only play
a small part in a multi-stakeholder model of governance that
has been envisioned by some of the members?
Mr. Huerta. I would envision there would be a couple of
different roles. First and foremost, there is the question of
who oversees the safety of the air traffic system. Under our
current structure today, we have an independent safety
organization within our aviation safety structure that provides
safety oversight of the air traffic control system.
With respect to some of the other questions that have been
raised by the panel relating to access to the system or
ensuring the public interest, I think those are all questions
that would need to be carefully considered by this committee,
and would need to be reflected, should there be a change in the
governance model, in whatever structure is put in place to
ensure all those perspectives are reflected.
Senator Peters. Governor Engler?
Mr. Engler. I think it is very clear, certainly in the
expanded testimony I have submitted, that the FAA remains the
regulator. In fact, I think you get better regulation by
separating--right now we have an inherent conflict, they are
both the rulemaker and the regulator. They are judge and jury.
They make the rules and they assess their efficacy.
I think the separation actually allows them to do their job
very, very effectively as they do in a lot of areas. I think
there is a benefit in many respects to that, and I do not think
there has ever been a suggestion that somehow safety--we are
talking about the air traffic control system itself, the
operation of it, the vision for it, the leadership, all of that
has to come back.
The other thing the FAA can contribute, which I think Mr.
Smisek is better equipped to comment than I--we need a more
effective way for the FAA to modernize its own procedures. Now
they would be able to focus on that and get up to date on
things where it does help improve the way we fly, the way
airlines can manage operations.
In some cases, I think there are examples of literally
rules being months if not years behind, so the ability to have
a separation, division of labor, I think actually is one of
what I believe to be the benefits of this idea.
I would suggest also, as I think you have pointed out in
your question, it is moving to--somebody said government
corporation, we have suggested a non-profit corporation, but it
is far different than a private enterprise being set up, a
stock company, for example.
Senator Peters. Thank you.
STATEMENT OF HON. JOE MANCHIN,
U.S. SENATOR FROM WEST VIRGINIA
Senator Manchin. First, I want to thank all of you for your
attendance today. I think we need to look at the size of what
we are dealing with here. I have heard all of you, your
statements, and your thoughts and beliefs in what we should be
doing. I have heard basically we have the safest system in the
world, and I heard it does not work, so conflicting statements
coming from you all. It does not work, but it is the safest in
the world.
When you start looking at the size, let's look at Canada.
Canada has 42 towers and seven centers. France, 86 towers, five
centers. Germany, 16 towers, four centers. Mexico, 58 towers,
four centers. The United Kingdom, 16 towers and two centers.
The United States of America, 512 towers, 21 centers. They do
not even come close. You can put everybody in the world and
they do not come close to us.
How are we saying the system does not work and we are not
able to maintain a system that is the safest in the world, and
it is the most used in the world?
Let me give you my little state of West Virginia. They told
us if you deregulate, it is going to improve air service in
rural West Virginia. We were told that. I remember that back in
the 1970s and 1980s. Jennings Randolph was a pioneer at that
time. I think, Senator Dorgan, you remember Senator Randolph.
We have 122 airports in West Virginia, 86 of them are
little private strips here and there, 36 are public, only seven
have commercial flights, and only seven of them have towers.
Our ability to move people in West Virginia has been
tremendously diminished because of the relevance of what is
going on.
I am just looking at the situation of where we are supposed
to be improving a system by privatizing, and in some cases, I
have been all for privatization. I am also for public/private
partnerships.
We have contract towers, that still come under the purview,
I believe, of the FAA, but they are in a private stream, if you
will. That seems to have worked in West Virginia. Our towers
would have been eliminated. We would have only had two towers.
Five would have been gone.
I am looking at everything, how I am going to go home and
explain that we are really making the system better, and then
we start charging, if it was not for private aviation, if it
was not for the business aviation that is going on today, we
would be out of communication completely. Some of our little
towns would not have any industry whatsoever because they could
not go back and forth.
With that, I would just say, Senator Dorgan, if we take
Congress out of the equation and spin off the air traffic
control system to some non-governmental organization, how would
that speak for rural America?
Senator Dorgan. Senator, no one is suggesting that the
government not be a stakeholder in whatever is proposed. I do
not support privatization. I told you what I do support and
why.
I spent a lot of time on this committee holding up signs
talking about how you could fly twice as far for half the price
under deregulation. You are talking about a different subject.
That subject has nothing to do--you and I agree on that
subject, it has nothing to do with the question of how you move
airplanes from one part of the world to another, how to fly
from one airport to another, and whether we are going to
continue to use a World War II ground-based radar system or
whether we are going to move to a different type of system
using modern technology.
This is not a question of what is. It is a question of what
will be. There is no conflict by saying this is an unbelievably
safe system, there is no conflict in saying that, and also
observing that we are not moving as rapidly as some others are
and as rapidly as we need to move in order to embrace the new
technology and retain America's leadership in an area that is
very important.
I met with the Europeans and others on this subject because
the world is moving in this direction. The question is how fast
will we move and will we retain our leadership. In my judgment,
there will not be funding to do it in the public sector, and I
believe, therefore, we have to find a new structure, but not
one in which the government is not a stakeholder.
Senator Manchin. I believe sooner or later we are going to
have to get a budget that works for this country, based on
priorities and based on our values. We have not done that
because of the political toxicity of this place we call
``Washington.''
It has to change sooner or later or we are going to hit the
wall and we are going to have to get into it, and it cannot be
picking and choosing what side of the fence you are on.
The thing I would say is there have been reports, the
Congressional Research Service highlighted some potential
constitutional concerns of what we are talking about. One of my
biggest concerns is delegation of taxing authority to an
unelected, unaccountable Board of Directors that will have
unfettered authority to adjust user fees and levy new taxes.
One of the strongest arguments being made for privatizing
or incorporating our air traffic control system, is it would
allow it to be financially self-sustaining, free from the
political forces that often drive Federal appropriations.
I would just ask any of you here in the business arena, do
you think it is legal and appropriate for Congress to
relinquish our constitutional authority to levy taxes?
Mr. Smisek. If I could jump in, sir. I do not purport to be
an expert on constitutional law, but I believe it is very
difficult to judge the constitutionality of a structure that
does not exist and legislation that has not been drafted.
The user fee structure that we have been talking about is
designed to cover the costs of the system, and only the costs
of the system, and to have an appropriate reserve fund. For
example, if there were reductions in travel caused by an
economic----
Senator Manchin. I do not have a problem with that.
Mr. Smisek. In terms of the issues of general aviation, for
example, in Canada, and it could be done here, general aviation
is charging an annual fee sort of like the sticker you put on
your car, registration fee, a very simple process. There is no
intent to use the user fee structure to change the proportion
of funding the airlines today disproportionately pay, and the
airlines are certainly not proposing to change that, because we
see the vast--even though it would be philosophically the
appropriate thing to do, we see enormous efficiencies that
could be driven from a non-profit corporation with clear
stakeholders of interest involved, particularly the government,
the Department of Defense. Of course, we would have to have
that.
Senator Manchin. Mr. Bolen?
Mr. Bolen. The amount of money being generated today from
industry is less than what the FAA costs. It seems to me as we
go forward we are going to have to make decisions on whether we
are going to raise industry taxes, and you can call them user
fees, you can call them rates, you can call these charges, or
taxes, it does not matter, it is all the same thing--forced
payments from the industry to fund the system which have to go
up or the size of the system has to come down, or as has been
discussed, we can borrow the money. We can give bonding
authority.
I think if we are going to do that, we would need to know
pretty clearly what are we going to borrow, what are we going
to get for it, when is it going to be available, how are we
going to pay that back, and who is going to pay that back.
As I said before, the authority to tax was said by the
First Chief Justice of the Supreme Court to be the power to
destroy, and we are very concerned about that.
We have heard some of the press announcements that have
been made in the past about people who have suggested that, and
the goal of cost shifting has been part of that. It remains a
concern.
Senator Blunt [presiding]. The gentleman's time has
expired. Ms. Klobuchar followed by Mr. Schatz, Mr. Booker, and
Mr. Markey.
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. Thank you very much, Senator Blunt.
Thank you. Welcome back, Senator Dorgan. It is good to see you.
I actually was at the Canadian Embassy last night with the
premier of Ontario and talking about some of their funding, and
Senator Blunt and I have been in Canada talking about how they
have handled transportation projects.
I will be honest, our focus has been a bit more on highways
and bridges and how they have been able to have the private
sector finance those projects over the long haul, and have some
stake, that they are still publicly owned in the end.
Could you tell me, those of you who are experts on how this
works with a model with air traffic control, if it is the same
model, and how they do this in Canada with the FAA? Obviously,
there are concerns that some of my colleagues have expressed
about the effect this would have on smaller airports, on public
safety, and other things.
I wonder how NavCanada compares to what they have done with
their roads and bridges and some of that, which I found a
pretty interesting model to look at.
Mr. Rinaldi?
Mr. Rinaldi. Thank you, Senator. I will not call myself an
expert on this, but I have been researching with NavCanada,
along with the U.K. and the Australia system.
As far as what I know of the NavCanada system, they have no
really reduced services. That would be one of the things I
would be deeply concerned about. They moved out of Transport
Canada, which was their government structure in the early
1990s. They started to transition about 1994, and it took about
5 years to go through a full transition. It was a big
transition that they actually went through, and then stood up
their corporation of NavCanada. They established an user fee of
all the users in the system.
Senator Klobuchar. Someone else brought up the Delta
letter. They talked about a tax increase in the provision of
service, cost increases, airports look to make up for lost
airport and airway trust fund money. Again, this is a different
model, but in Canada. Any comments on that? Anyone?
Mr. Smisek. I could speak to the U.S. The amount of money
that is raised from the tax structure today pays for the entire
traffic control system, and contributes additional monies to
the operation of the FAA, and we would not propose that would
change.
I think the 15 year average of the general fund
contribution to the entire FAA today is around $3 billion, so
that with the user fees to run the system initially, there
would be certainty with the current level of taxation, a
portion of it replaced by user fees, a portion of it retained
by Congress. There would be money that would continue to be
contributed to the FAA, whether that would go into the AIP or
the general fund----
Senator Klobuchar. In this reformed system, would the users
be willing to pay more?
Mr. Smisek. I think certainly from the U.S. airline
industry, as you know, Senator, we are one of the most heavily
taxed industries today. We are taxed more than alcohol and
tobacco, which are sins, and we are not a sin.
We would suggest that perhaps taxation not be increased. I
believe over time, personally I believe over time, based on the
NavCanada model, that the user fees would actually go down
because of the efficiencies, and for example, in Canada, they
have gone down by 30 percent.
Mr. Bolen. Senator, I think from a business aviation
perspective, the business aviation community looks dramatically
different in Canada than it does in the United States. While
they have some large companies up there, they do not have a lot
of the small and mid-sized companies operating out of the small
and mid-sized communities that we do in the United States.
As Paul mentioned, they do have both user fees and a fuel
tax up there, so it is a double tax situation. It is also
fundamentally different because in addition to privatizing air
traffic control, they also have privatized airports, which have
their own associated costs. For a lot of different reasons, we
do not believe it is an apples to apples comparison.
Senator Klobuchar. How would smaller airports fare under
this model? I guess I would ask the same thing of Senator
Dorgan and Governor Engler, just because they are a little
familiar with those in their previous lives in their states.
Mr. Bolen. From my perspective, quickly, we are very
concerned about that access to those airports and airspace.
Today, I received a letter from the Fargo Jet Center, which
obviously has an awful lot of general aviation operations, they
are very concerned that we not copy that model.
What we hear from our members who operate in Canada is a
lot of concern about the way it works up there with regard to
paying the user fees as opposed to the fuel taxes. It is not
nearly as efficient. It creates a costly administrative burden,
and they think it has harmed business aviation.
Senator Klobuchar. Governor Engler and Senator Dorgan?
Mr. Engler. One of the arguments I would make perhaps goes
in the opposite direction, that today we have technology that
would allow for more remote airport access services to these
smaller airports that we cannot get fully deployed. We are
running behind on that. That would be a benefit.
As I look at this, do we like what we have and are we
confident we can make it a lot better if we stay the course,
and if we want to change, what would that entail. We are
getting into some of the debate about what might be in a bill,
but I think the questions that are being asked are able to be
responded to both by some of the work that the Eno Center has
done and other reports we have looked at.
Senator Klobuchar. Senator Dorgan?
Senator Dorgan. I think Mr. Bolen is concerned about the
uncertainty, and I understand that. My interest is not in
creating a system, and we have offered an approach here that
does not have a lot of specifics, we are simply describing why
we think we need a structure.
I have no interest in injuring business aviation, general
aviation, or small airports.
One of the principal issues here is every major airport in
this country has bonding authority, and in every one of your
communities, if you have a major airport, they are bonding for
investment and so on.
I think one of the significant issues here is to give a new
structure bonding capability to be able to build the system in
a robust way, and we have explicitly not described an user fee
or structure system beyond that, and I think Mr. Bolen--I fully
understand his point. I do not have any interest in seeing a
system that is going to injure general aviation, business
aviation, or small airports, or access to airports for that
matter.
Senator Klobuchar. Thank you.
Senator Blunt. Senator Markey followed by Senator
McCaskill.
STATEMENT OF HON. EDWARD MARKEY,
U.S. SENATOR FROM MASSACHUSETTS
Senator Markey. Thank you, Mr. Chairman, very much. It is
good to see the great Byron Dorgan back at Congress.
Last month, along with Ranking Member Nelson, Senators
Cantwell, Booker, Blumenthal, I sent a letter to the Department
of Transportation asking about airlines' ability to engage in
personalized pricing.
Personalized pricing is a practice that would allow an
airline to charge different prices to consumers that are trying
to buy the same seat on the same flight at the same time. The
difference in air fare would be based on personal information
that the airline has collected about the passenger.
I am, and the other members are deeply concerned that if
airlines are allowed to engage in personalized pricing, they
could discriminate amongst consumers, charging customers
different prices based on zip codes, income levels, marital
status, or other characteristics.
What if, for example, airlines using consumer zip code
information offered special fares to consumers who live in more
affluent zip codes to entice them to travel more frequently
while failing to provide these same discounts in lower income
areas?
Mr. Huerta, the FAA publicly refused last year to determine
whether price discrimination based on income level, marital
status, or trip purposes would constitute unreasonable
discrimination. I believe that practice is discrimination. What
can you tell the Committee today? Will the FAA revisit that
determination?
Mr. Huerta. First of all, Senator, to clarify, economic
regulation and oversight is an authority held in the Office of
the Secretary at DOT, not in the FAA. We can certainly get you
a response for the record.
Senator Markey. I think that is important for the
Committee.
[The following response was supplied to the Committee:]
On August 6, 2014, the U.S. Department of Transportation approved
the International Air Transport Association (IATA) Resolution 787. The
Department's approval did not include permission for airlines to engage
in personalized pricing, nor did it endorse or approve a business model
that would require consumers to divulge personal information in order
to shop for airfares. Rather, it was contingent on stringent privacy
protections, including a requirement that consumers' ability to shop
anonymously must not otherwise be undermined. Further, the order stated
that the implementation of any data standard that asks a passenger to
voluntarily supply personal information is subject to the airline's
privacy policy. Failure of an entity to follow its privacy policy for
the sharing and storing of personal information is a violation of the
statutory prohibition against unfair and deceptive practices and unfair
methods of competition.
Senator Markey. Mr. Smisek, your airline, would you
discriminate based upon income status or marital status or trip
purpose?
Mr. Smisek. Sir, if what you are describing is a new
distribution capability at IATA, which is a technological
advance for the ability of airlines to offer to third parties
additional services that the customers cannot get today, I do
not view that--not only do I not view it as discriminatory, I
view it as pro-consumer.
Senator Markey. What I am asking you is are you going to
use marital status----
Mr. Smisek. No, sir. We have no desire or intent of doing
anything like that. What the new distribution capability is to
do, for example, if you are a premiere member at United
Airlines buying through a third party site, today, if you
bought directly from us, directly on www.united.com, you would
be able to get an economy plus seat for free, but if you are
buying through a third party, we do not know your loyalty
status because of the technology in existence today, and we are
not able to offer that ability to upgrade for free, which
requires you to book through the third party and come back to
www.united.com and get your upgrade.
Senator Markey. All I am really trying to clarify is that
you will not be using income status or marital status, zip code
information in any way to make any of these----
Mr. Smisek. Senator, United Airlines has no desire to
discriminate against anyone.
Senator Markey. That is very helpful. Thank you, sir. We
have heard recent reports about cybersecurity threats that air
travelers face. One security researcher claimed to hack into
the airline's control systems through the entertainment system,
changing the direction of the plane.
I am concerned about recent claims that the Wi-Fi on planes
lacks basic security and that makes it easy for hackers to spy
on customers using the network.
Let me first ask about hacking into airplane controls. I
know Chairman Thune earlier asked Administrator Huerta about
the FAA's efforts, so let me turn to you again, Mr. Smisek.
What is American Airlines doing to prevent hacking into the
vital controls of your airlines?
Mr. Smisek. Sir, I am not sure what American Airlines is
doing, but I will tell you that United Airlines is--obviously,
any form of cybersecurity issue is of great concern to us, sir.
I will say we are cooperating with the FBI because of an
allegation with respect to one of our aircraft was involved. We
are unaware of whether or not this is possible. The original
equipment manufacturers, at least from what I understand, have
stated this is not possible today. However, I think what we
need is as an industry to take any threat seriously. There are
clear firewalls between a Wi-Fi system and any kind of control
of the airplane.
Senator Markey. Has United taken efforts to secure the
wireless----
Mr. Smisek. Absolutely, we have.
Senator Markey. Are your customers protected against data
breaches while they are using the United Wi-Fi system?
Mr. Smisek. We provide the most robust protections that we
can, sir, but I will tell you based upon data breaches of
corporations worldwide, allegations of the Chinese military
involvement, I do not think anybody can honestly----
Senator Markey. I am only talking about someone in the
plane at 30,000 feet using your Wi-Fi system. Are those
consumers on that plane protected against data hacking?
Mr. Smisek. We have protected them to the best of our
ability, sir, and we have robust protections particularly with
respect to the flight safety of the aircraft.
Senator Markey. And the data protection of the customers?
Mr. Smisek. Yes, sir; as best we can.
Senator Markey. Thank you.
The Chairman [presiding]. Thank you, Senator Markey.
Senator McCaskill?
STATEMENT OF HON. CLAIRE McCASKILL,
U.S. SENATOR FROM MISSOURI
Senator McCaskill. Thank you. It is not clear to me how
much of this is money and how much of this is management. Does
anybody want to put a percentage on which is which? Is 90
percent of this a lack of stable funding and 10 percent
management? What do you think, Governor Engler?
Mr. Engler. I will take a shot at it because I do not think
it is knowable, but going to the National Academies' report,
which I think is objective, and you know, smart people that
Congress mandated to look at this, they raised a lot of
management questions. Management is kind of strategic thought
leadership, where are we going, what is the architecture.
It is that kind of management of a process and the design,
and then money, I think there is no question. I would say it is
50/50.
Senator McCaskill. It is interesting. I do not know how we
ensure we get better management by just changing the structure.
Look at the U.S. Postal Service. Look at Amtrak. These are all
examples of things we have done that are structures where we
have tried to do something other than the traditional ``this is
an inherently government function and the government is going
to do it.''
Mr. Engler. I would say look at FedEx.
Senator McCaskill. Those are privatized for-profits. Are we
advocating going to for-profits?
Mr. Engler. No.
Senator McCaskill. If that is the case, my rural airports
are totally hosed.
Mr. Engler. No. We are not saying that, but I think the
private non-profit corporation in my mind, when I look at some
of the decisions that were made in other countries and how they
have approached it, to me, they offer the kind of flexibility.
Remember, the FAA is still a rule setter here. They are
still the boss, but now, in the hands of a private company--one
of the things on the funding side, Mr. Bolen said bonding, you
know, is a euphemism for borrowing, of course it is. The
markets today, you can borrow capital at almost no cost,
anybody would do this and just go build it. You get tremendous
savings by being able to make your investment now.
You could probably do the build out, I do not know, in
three years, would it be all done?
Senator McCaskill. Should we do this? I am listening to you
and I am hearing highways. We are all thinking about highways
right now.
Mr. Engler. I am with you, I did that as a Governor.
Senator McCaskill. We do not have a bill and the highway
funding runs out in about 10 minutes, we still do not have a
hearing or a bill on highway funding. Should we do this for our
highway system? Should we go to a not-for-profit organization
for our highway system? What about our waterways? What about
locks and dams? Should we go to a not-for-profit corporation
for that?
Mr. Engler. Some of the port authorities are actually maybe
analogous to that. Indiana did it on highways. Ohio has done
something similar. We have certainly done it on bridges in some
cases. The Mackinac Bridge is run by an authority, actually.
Senator McCaskill. It seems to me that if we could do
better on the funding part, if we would all acknowledge that in
fact bonding is debt, but we need to do it for our
infrastructure or we need to do something for our
infrastructure. We are short-changing our country in a dramatic
fashion when it comes to infrastructure, and that includes our
airways.
That is the majority of the problem. I am skeptical and I
know Senator Dorgan shares some of my skepticism because he was
in a front row seat as I have tried to be about turning over
inherently government functions to private corporations because
he did groundbreaking hearings on some of the abuses in Iraq
with the contracting we did for inherently government functions
that went badly awry and wasted billions of dollars.
I just do not think a new structure is the silver bullet. I
am open to this. I do not mean to sound like this is a terrible
idea, but it seems to me that what we are trying to do is put a
Band-Aid on a cancer which is the inability of Congress to step
up to the plate and do the mandated hard job of finding the
resources to fund infrastructure.
Mr. Engler. If you will indulge me for 10 seconds, I will
tell you, I got into this initially by looking at how it is
that we can explain to the Federal Government that there is a
better way to do capital budgeting, and I do not want to get us
off on that track.
I believe strongly there ought to be a capital budget at
the Federal level, but absent that, are there ways to think
about how you solve big critical infrastructure questions, and
this is a discrete one, and if we had funded this when we first
started talking NextGen, bonded for it and built it, it would
have been all done, we would have been using it.
We talked to the Administration about this when TARP was
being talked about. Hey, let's get this done, you could have it
done by the time you are running for re-election. That was not
an option they chose. The Secretary of Transportation and both
parties in the past have supported this, the Administration and
both parties have supported this. There is a lot of history
here.
I think this one lends itself, and I would like to see the
Committee seriously consider it and then validate a concept,
which I think you have astutely jumped ahead, and are there
other applications, you bet. I think there are a ton of them.
Senator McCaskill. It would become irrelevant.
Senator Dorgan. If I might just respond briefly, you asked
a question that is really important about the issue of
management versus funding. I will admit that I think there are
management issues and have been for some long time, and I have
been watching as Chair of the Aviation Subcommittee and other
venues what is happening for a long time.
I think were it not for the funding issue, I probably would
not be at this table with this message. I honestly think it is
naive to believe that the funding issue is going to change and
that somehow the Congress, who this year, by the way, is going
to cut $365 million from the facilities and equipment account
of Mr. Huerta.
It is unbelievable to me. That will probably be magnified
by another sequestration and maybe a couple of continuing
resolutions and who knows. You cannot build what we want to
build for this country and retain leadership opportunities in
this critical area of technology of air traffic control with
this approach.
That is why I have come to the conclusion that we need
restructuring of the type I described.
Senator McCaskill. Thank you.
The Chairman. Thank you, Senator McCaskill. Senator
Blumenthal has returned, so he is up next, followed by Senator
Daines.
STATEMENT OF HON. RICHARD BLUMENTHAL,
U.S. SENATOR FROM CONNECTICUT
Senator Blumenthal. Thanks, Mr. Chairman. Thanks for having
this series of excellent hearings and to all of you who are
before us today. The chairman mentioned earlier that you were a
very efficient panel, and you are also a very distinguished and
informative one, and I want to thank you for being here.
I was interested as a rider of Amtrak as well as a flier in
some of the reports last week in the wake of the Philadelphia
tragedy about potential price-gouging among airlines, and the
derailment obviously was a horrific event, and I know you join
me in expressing our sympathies to all the loved ones and all
who were affected.
I wonder, Mr. Smisek, as an executive for United Airlines,
can you confirm whether these reports are valid, whether they
have been exaggerated, if the FTC were to look at these fares,
what would they conclude?
I just want to mention that a $2,309 flight from D.C. to
LaGuardia would be an example of potential price gouging, and I
want to advise that I am not asking you because I am pointing
to United Airlines in any way or form as potentially one
responsible or accountable. I am just asking you as an informed
airline executive.
Mr. Smisek. Thank you. I would be happy to respond. Let me
express my condolences to the families and loved ones of those
killed in that terrible tragedy of Amtrak.
Absolutely not, sir, speaking for United Airlines, we would
never take advantage of an opportunity like that, if you viewed
it as an opportunity. No one would do that.
It is true that as people book closer into a flight, the
ticket prices tend to go up because that inventory, as you
know, evaporates every time a flight takes off without someone
in that seat. That inventory disappears. Therefore, that
inventory is priced more toward last minute business travelers
who tend to have a willingness to pay more because they are
traveling on business.
When you have a tragedy such as Amtrak, you have a sudden
rush of demand for the very few remaining seats in those high
inventory buckets; those prices are high, but we would never
raise prices in connection with a tragedy.
Senator Blumenthal. You would attribute any increase in
prices to just----
Mr. Smisek. Those are last minute fares in an open
inventory reserved for business travelers, for people booking
at the last minute. What we saw was certainly a surge in demand
for tickets, and the only available inventory was the last
minute business inventory.
Senator Blumenthal. Mr. Rinaldi, did you have a comment?
Mr. Rinaldi. On the ticketing? No.
Senator Blumenthal. I would join you in the strong feeling
that that kind of price gouging would be utterly reprehensible,
and if there is any indication, certainly I will call on the
FTC to investigate promptly, as perhaps this committee would
have a role as well.
Mr. Smisek. Sir, I would join you in that call.
Senator Blumenthal. Thank you. Speaking of that derailment
and the aftermath when rail transportation was stopped, I think
we saw in the reaction among passengers in rushing to the
airlines that the lack of adequate rail transportation has an
impact on the airlines. These systems are all interconnected.
The present air transportation system can become so congested
that it simply cannot serve all of the riders who are diverted
from rail.
I would ask the panel whether you have any observations on
the importance of rail in assuring adequate and efficient
airline transportation, simply in providing a necessary link
that relieves the congestion in the airlines.
Mr. Huerta. Senator, certainly from our standpoint as an
agency of the Transportation Department, we work very closely
with our colleagues across all of the modal agencies to ensure
that we have connections and linkages, and that the system is
being appropriately managed as a total system.
One of the things that we have been very focused on is how
do we link modes of transportation together, and a lot of that
as you well know is rail access to airports to ensure that
there is a seamless transportation network that spans many
modes of transportation, but clearly, there is a relationship.
Senator Blumenthal. Finally, I have one last question for
maybe Governor Engler and Senator Dorgan. The need for
investment in these systems seems so apparent, even obvious to
us, and we have a virtually full room here.
The public still does not seem to be mobilized, and this
Congress seems to be divided. Do you have some advice based on
your political wisdom and experience on how we do better to
raise awareness and generate support? Obviously, both of you
have long-standing experience.
Mr. Engler. Privatization is tough, but I do have one
observation, that it makes little sense to try to build
railroads in the desert in California when we have a Northeast
Corridor that we truly ought to make the premiere showcase
corridor for passenger rail and separate passenger rail from
freight rail on the Corridor, maybe bringing in some of the
ambitions in other parts of the country while we fix the
corridor that matters the most would be my thought on that.
I would also suggest the subsidization costs of different
modes, one of the things you heard from Mr. Smisek and I think
maybe everyone on the panel today, air has been pretty good
about paying its own way, and has been pretty heavily taxed.
That is not necessarily the case with rail and transportation,
while states have been willing to raise fuel taxes, we know
that form of tax is coming to an end at some point, and there
is a need for a solution.
I am hoping that we can get, Senator, into the broader
question of tax reform and buy ourselves maybe a few years
while we sort out how we are actually going to fund highways
and bridges and reconstruction in the country. That is a big
unmet need.
Senator Dorgan. You know, I do not know that I can offer
you much advice except to say we have painted ourselves into a
fiscal policy corner. We have a dozen years or more that we
have not paid for and we have so much--I chaired the
appropriations panel on energy and water, we had $60 billion of
authorized water projects, and $2 billion a year
appropriations. This stuff does not add up.
It is true in transportation. It is true in a wide range of
areas of infrastructure.
I just think we have to do better on fiscal policy and make
investments in the country if we are going to have the kind of
country we want in the future.
Senator Blumenthal. Thank you. I want to thank all of you
again, and Mr. Rinaldi, I want to thank the extraordinary work
by our air controllers across the country, most especially in
Connecticut. I met with a number of them earlier today. They
are often unappreciated and unclaimed heroes of our air
transportation system, so thank you for being here today.
Mr. Rinaldi. Highly trained, highly skilled professionals
and they love their job.
Senator Blumenthal. Thank you. Thanks, Mr. Chairman.
The Chairman. Thank you, Senator Blumenthal. Senator
Daines?
STATEMENT OF HON. STEVE DAINES,
U.S. SENATOR FROM MONTANA
Senator Daines. Thank you, Mr. Chairman. I have some
questions that relate to rural America. The Chairman represents
South Dakota. I have the privilege of representing the state of
Montana. For states like ours, connectivity is so important to
grow our economies.
Broadband connectivity has allowed us to build world class
technology companies now that are close to fly fishing streams
and mountain ranges, and it is the way to attract and retain
some of the best talent in the world, and frankly, to build
great companies.
The other part of connectivity is air service. It is a
requirement to build a world class company to have
accessibility to good air services.
For Administrator Huerta, as you continue to examine
potential air traffic control modernization reforms, I would
strongly encourage you to first focus on rural community
interests when considering any changes.
As we look at our states, not only do we have the ability
to grow great technology companies now because of the quality
of life, but also a lot of our energy deposits, our future
energy sources, are going to be in places that are a long way
away from urban areas. Certainly Senator Dorgan sees that in
North Dakota, and I see that in Montana and other places.
Programs like Essential Air Service, the Contract Tower
Program, and the Airport Improvement Program are critical to
rural states like Montana. In fact, the Montana airports are
very concerned. We are hearing that the proposed changes to air
traffic control will harm the AIP program specifically. I
encourage you to undertake consultation with all stakeholders.
What specific remedies, Administrator Huerta, can the FAA
provide to rural airports as it considers reforming the air
traffic control program?
Mr. Huerta. Senator, I think you have asked a very
important question. It is something that as we have this longer
term discussion of investment and structure that everyone
understand that the aviation system, and the grant program, and
the aviation structure of the United States has always been
about achieving twin objectives.
First, to have an efficient system that serves the largest
number of passengers, and second, to provide a level of access
to communities throughout the country.
In previous reauthorizations, that has always been a matter
of great debate, as you well know, between members of Congress
about how to achieve that balance.
That challenge and issue does not go away under any
structure, nor does any structure alone deal with what those
issues are. What you are raising is an important public policy
question of where we as a nation are going with respect to
ensuring a highly efficient system and the ability to invest in
modernization of that system while at the same time ensuring
some level of access.
That debate, I think, is foundational to what we need to be
looking at in a reauthorization, and we need to answer that
question before we can really answer the question of what is
the best structure that enables us to get there.
There are other questions as well in terms of how we
capitalize, how we pay for what we are looking for, and longer
term, how we ensure that we are keeping those twin objectives
in balance.
Senator Daines. Let me go to a similar issue. I was part of
building a great technology company in Montana, and we had a
great airport, the Bozeman Airport, the busiest airport in
Montana, in fact. I ran the Asia Pacific division of the
company from Bozeman, Montana. I am bouncing across the water
thanks to connectivity with airlines.
I want to step back and ask Mr. Smisek, as you look at
global systems, with a great airline like United Airlines, in
the air traffic control systems used by other countries, what
do you see from some of these countries, something we can learn
to apply best practices, improvements in our systems going
forward here that will make the U.S. system better?
I realize there are scalability questions, if we look at
North America and the United States' air space, but can you
share some comments that you might want to interject in the
record here of how we can make our system better based on what
other countries are doing?
Mr. Smisek. I would be happy to, Senator. Thank you. What
we are looking for in this opportunity is to provide
technological improvements that will improve throughput, reduce
the time that travelers sit on a runway waiting to take off,
reduce the incidences of circling airports waiting to land,
reduce congestion, reduce fuel burn.
We believe the technology is absolutely scalable. Let's use
NavCanada. I think NavCanada is one of the best in the world,
and I believe Mr. Rinaldi would agree they have the most
advanced technology, the most productive workforce, the
happiest air traffic controllers. I think those are all true
things.
[Laughter.]
Mr. Smisek. Even happier than yours and they are pretty
happy, and by the way, someone mentioned these were the unsung
heroes. We sing their praises daily because we deal with them
daily and they are very professional and expert.
Getting back to NavCanada, it is indeed smaller, but air
transport is handled by sector, and you know from your own
history, technology scales magnificently. I think there are
tremendous opportunities.
As we fly around the world, there are some systems that are
better than others. There are some foreign countries that
handle it well and others that do not. We are very focused on
not only maintaining where we are and where we are in safety
for sure, but improving the efficiency of this system because
this system--even though we are a global carrier, this system
disproportionately affects our operational reliability, our
customer satisfaction, our fuel burn.
If we get it right, and we have the opportunity to get it
right, we can have a huge step forward in the efficiency of the
system, in the value of the system to the United States, the
economy, and to consumers.
This is a tremendous opportunity for us, and this is the
system we focus on the most because this is where we actually
have not only a vast majority of our assets and our flights,
but also this is an opportunity for the United States of
America, where we are citizens, and United Airlines is a
citizen of the United States, to provide the best air traffic
control system in the world.
Senator Daines. I am out of time. I will say for the flying
public, go on something like Flight Aware and see all the
traffic in the air at any given time across the United States.
It is humbling. Grateful for what we have here. The number you
used, Mr. Rinaldi, 130 million?
Mr. Rinaldi. Yes, 132 million.
Senator Daines. These are impressive numbers, and it always
keeps us aware of the importance of the system today.
Mr. Rinaldi. Just one second to address your first
question, if I may. Status quo, we have a lot of talk about
rural America and the airports, I think status quo is one of
our biggest concerns for rural America and the airports.
If you look at what the FAA tried to do under sequester in
2013, they looked at 238 air traffic control towers, they shut
them down because they did not have funding. The majority of
those were contract towers, but also were FAA towers, the
majority of them are in rural America. That is one of our
biggest concerns, about status quo.
Senator Daines. Thank you for looking out for rural
America, I appreciate that.
The Chairman. I thank the Senator from Montana for looking
out for rural America. I think he and I would probably both
agree that at the end of this we would like to see more direct
flights to and from South Dakota and Montana. Is that right?
[Laughter.]
Senator Daines. Very much so, Mr. Chairman. I associate
myself with your comments.
The Chairman. I think we have run out of questioners. I do
appreciate very much the panel's great remarks today. Different
perspectives. This is really kind of the Senate's first foray
into this issue of reform, and obviously we have to figure out
a way as we move toward reauthorization of doing what is best.
I think we have the same goal in mind, and as was pointed
out, sometimes maybe slightly different perspectives about how
best to get there. I do think one of the things that was
raised, stability of funding, is an important one. I think that
is something in the current budgetary environment that we find
ourselves in today as increasingly challenging.
I think there is an openness to look at models that might
better cope with that issue as well as some of the other issues
that were raised today.
Thank you all very much, and the hearing record will stay
open for 2 weeks for members to submit questions, and if you
could respond in a timely way to those questions, it will be
most appreciated.
This hearing is adjourned.
[Whereupon, at 12 p.m., the hearing was adjourned.]
A P P E N D I X
Prepared Statement of Mike Perrone, National President,
Professional Aviation Safety Specialists
The Professional Aviation Safety Specialists, AFL-CIO (PASS)
represents approximately 11,000 Federal Aviation Administration (FAA)
employees in five separate bargaining units throughout the United
States and overseas. The largest PASS bargaining unit is comprised of
employees from the Air Traffic Organization (ATO). This bargaining unit
includes systems specialists from Technical Operations who install,
maintain, repair and certify the radar, navigation, communication and
environmental systems making up the air traffic control system in our
country; aeronautical information professionals in Mission Support
Services (MSS) who develop, maintain and support instrument flight
procedures and a variety of aviation products that enhance industry
performance and efficiency in the airspace and on the ground; and
Flight Inspection Services (FIS) pilots, mission specialists,
operations staff and aircraft maintenance employees who are responsible
for the airborne inspection of ground-and space-navigation systems to
ensure the integrity and safety of the instrument procedures, airways
and operational navigation systems that make up the National Airspace
System (NAS).
PASS appreciates the opportunity to present our views regarding
issues related to reform of the FAA. The following statement includes
PASS's position that a lack of a stable, consistent funding stream is a
significant issue currently facing the FAA; the importance of ensuring
the FAA remains a cohesive unit of Federal employees; and our concerns
with privatizing any portion of the air traffic control system that is
the world's standard.
Commercial aviation contributes more than $1.5 trillion to the U.S.
economy each year in addition to providing over 11 million jobs. As
Congress considers legislation to reauthorize the agency, addressing a
stable funding stream for the FAA should be a priority. In April 2013,
when sequestration took effect, impacts were felt throughout the NAS.
Flights across the country were delayed as a result of reduced
maintenance and loss of system redundancy; cutbacks in funding for
spare parts impacted the repair and maintenance of air traffic control
equipment; aviation safety inspectors were prevented from overseeing
commercial and general aviation industries; manufacturing inspectors
were not inspecting aviation mechanics, facilities, training programs
and equipment; and registration certificates were not issued for U.S.
civil aircraft and airmen. Furthermore, training was suspended at the
FAA Academy in Oklahoma City, forcing employees to fall behind on
training essential to performing their jobs to the best of their
ability. The FAA is just now recovering from the impacts of the 2013
sequestration.
While PASS recognizes that FAA funding must be addressed and that
this may involve some restructuring, we are concerned that any major
overhaul of the FAA that privatizes any functions or services either
through a for-profit or not-for-profit company has the potential to
negatively impact agency operations. Our country has the safest and
largest aviation system in the world and it defies logic to believe
that major changes to this intricate system will not at a minimum
present major challenges. With any structural changes, unintended
consequences and unforeseen circumstances are inevitable, which is a
gamble this country should be unwilling to take.
Another concern regarding privatization of air traffic control
services is whether it is legal. The Congressional Research Service
(CRS) released an analysis on April 10, 2015, specifically noting that
the establishment of a private, non-profit corporation to provide air
traffic control services may raise specific and consequential
constitutional issues.\1\ More definitively, the CRS concluded that
such a corporation may be constitutionally suspect because of potential
violations of the nondelegation doctrine, Fifth Amendment Due Process
issues and infringements on the executive power. Essentially, the
construction of a privatized model threatens to subject the structure
of the public's air traffic system to legal questioning and wrangling,
which could ultimately lead to its unraveling. This is not a risk worth
taking.
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\1\ Congressional Research Service, memorandum to the Honorable
Peter A. DeFazio, Ranking Member of the Committee on Transportation and
Infrastructure, ``Analysis of Constitutional Issues Arising from a
Proposal to Authorize a Federally Chartered Private Corporation to
Provide Air Traffic Control Services,'' April 10, 2015.
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In addition, progress in NAS modernization has been made over the
past several years and changing the structure at this point could
threaten that progress at a time when modernization is essential. While
proponents of privatization point to lack of progress with the Next
Generation Air Transportation System (NextGen) as a reason to privatize
the Air Traffic Organization (ATO), PASS points to the variety of
accomplishments and milestones successfully reached by the agency in
establishing a stable platform for full modernization. Advancements are
continuing in the following areas, among others:
Installation of new systems and equipment, including the En
Route Automation Modernization System (ERAM), which has been
implemented at all 20 en route centers.
Optimization of Airspace and Procedures in the Metroplex
(OAPM) to promote greater efficiency throughout the country in
Texas; Memphis; the Washington, D.C., region; New York/
Philadelphia and Boston; Central and Southern Florida; Southern
and Northern California; Chicago and Cleveland/Detroit;
Seattle; Denver; Las Vegas; and Phoenix.
Integration into the NAS of more than 14,000 Performance-
Based Navigation (PBN) procedures, including 713 Required
Navigation Performance (RNP) procedures.
Continued upgrading and standardizing of terminal automation
by transitioning to the Standard Terminal Automation
Replacement (STARS) platform at more than 150 Terminal Radar
Approach Control (TRACON) facilities throughout the country.
Advancing data and voice communications capabilities, with
Data Communications clearance trials currently taking place
with plans for deployment at 56 airports starting in 2016.
Continued work on the NAS Voice System, which will further
the advancement of voice communication capabilities and allows
the transfer of voice services from one facility to another.
Ongoing collaboration between the FAA and stakeholders as
well as operators to prioritize implementation of NextGen
initiatives and smooth the transition.
Ensuing that the men and women who perform this vital work remain
Federal employees is of fundamental importance in maintaining a safe
and efficient NAS. These employees include Technical Operations systems
specialists who install, maintain, repair and certify the complex
systems that make up the NAS. These Federal employees are extensively
and specifically trained on a variety of interconnected, specialized
systems and equipment in order to fulfill the responsibility of
protecting aviation safety. For example, system certification, the
process in which a certificated FAA systems specialist checks and tests
systems or equipment on a periodic basis in order to ensure that the
systems or equipment can be safely returned to service and not
negatively impact any aspect of the NAS, has been deemed inherently
governmental by the FAA.\2\ The FAA's certification process has been
successful for decades and is a key element in maintaining the safest
and most efficient air transportation system in the world. At more than
340 facilities nationwide with over 70,000 certifiable systems and
equipment, FAA systems specialists are the only individuals with the
clearance, authority, skill and expertise to perform this work to keep
the system safe.
---------------------------------------------------------------------------
\2\ Manager, General Law Branch, AGC-110, memorandum to Manager,
Maintenance Engineering Division, ASM-100, ``Contractor Certification
of Navigational Systems in National Airspace System (NAS),'' June 18,
1991.
---------------------------------------------------------------------------
PASS also points to last year's incident in Chicago as further
proof of the essential work of these Federal employees. Just over two
weeks after a fire was deliberately started by a contract employee
targeting vital aviation communications systems and equipment at the
Chicago Air Route Traffic Control Center, the facility reopened for
full operations thanks to the tireless efforts of FAA employees. On the
day of the incident, systems specialists and other safety professionals
at the FAA launched into action providing whatever assistance necessary
to address the full loss of communications at the Center. Across the
region, in Cleveland, Indianapolis, Kansas City and Minneapolis,
systems specialists quickly ensured backup systems responded and air
traffic remained safe. In the days that followed, in Chicago and other
locations, Federal employees went above and beyond to make sure the
aviation system remained safe and functional.
In addition, Flight Inspection Services (FIS) professionals and
aeronautical professionals in Mission Support Services (MSS) support
pilots, air traffic controllers and aviation planners through the
development and maintenance of all public instrument flight procedures
and airways. These responsibilities include developing, maintaining and
assuring the integrity and safety of flight procedures to support
NextGen advancement in the NAS. The development, implementation, flight
inspection and maintenance of flight procedures requires the proper
interpretation of a complex series of computations, measurements and
modeling standards, strict compliance with diverse criteria, extensive
coordination with multiple stakeholders, and the frequent adaptation of
procedures in a constantly evolving aviation environment. FAA
specialists oversee the NAS in order to make sure everything aligns
safely and is working efficiently, which should clearly remain a
function of the Federal Government. Thanks to these employees and other
safety professionals at the FAA, the United States enjoys the safest
air traffic control system in the world.
Proponents of privatization consistently point to models in other
countries as sources of inspiration for this country to emulate. PASS
warns against making such comparisons as no aviation system can compare
in size and scope to that which is operating in this country. These
models operate at a fraction of the size in terms of number of
travelers and overall size of their airspace, with the United States
surpassing any other country in terms of air traffic control operations
and management. There really is no comparing this country's aviation
system with any other aviation system in the world.
Finally, there are some proposals related to FAA reform that
include separating the Air Traffic Organization (ATO) from the other
lines of business within the FAA. This is a concerning proposition
since the ATO Safety Management System (SMS) is inextricably
intertwined with the agency's other lines of business. For example,
communication and sharing of information and resources within the
agency, including between the ATO and the Office of Aviation Safety
(AVS), are essential to allow the agency to seamlessly perform work
necessary to ensure safety every step of the way. It is likely that the
requirement that the FAA's safety office interact with a private
corporation concerning regulation of air traffic control will create
bureaucratic dysfunction, delays and unexpected costs. Furthermore,
proponents have not indicated how the remaining parts of the FAA would
be funded, and PASS is concerned that support and funding of the
remaining Federal agency could be placed at risk if the ATO is a
separate entity. The FAA must remain one cohesive unit in order to
allow all FAA employees to continue working together for the benefit of
the world's foremost aviation system.
The United States stands at the forefront of the aviation world.
Our country's air traffic control system is an important and extremely
valuable public asset that is critical to our Nation's economy. Today's
FAA employees are proud, dedicated and focused on the public good when
they perform their jobs. They have been rightfully classified by the
U.S. Department of Transportation as ``safety critical'' because the
duties they perform ``have a direct and immediate impact on public
health and safety, the protection of life and property. These positions
require the highest degree of trust and confidence.'' \3\ FAA
employees, as government employees, answer only to their customers,
their only stockholders: the American people.
---------------------------------------------------------------------------
\3\ Department of Transportation, ``DOT Order 3910.1D: Drug and
Alcohol-Free Departmental Workplace Program,'' Appendix A, p. A-1,
October 1, 2010.
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There is no debate that sequestration, operating under multiple
continuing resolutions, 23 FAA reauthorization extensions during the
last reauthorization cycle, and government shutdowns resulted in
negative impacts on the NAS that resonated nationwide. PASS asks that
members of Congress work together to consider funding alternatives that
provide a stable, long-term funding stream for the agency, including
allowing the FAA the flexibility to transfer funds among accounts as
needed, advanced appropriations or a multiyear budget cycle. Other
solutions may involve removing the FAA from the appropriations process.
With this, the funding mechanisms currently supporting the FAA would
likely require revisions to ensure an adequate funding stream.
PASS thanks the Committee for considering our views, and we look
forward to working with the Committee on the FAA reauthorization
legislation.
______
Prepared Statement of Thomas L. Hendricks, President and CEO,
National Air Transportation Association
Chairman Thune, Ranking Member Nelson, members of the Commerce
Committee, thank you for the opportunity to submit comments for the
record on the Committee's review of air traffic control reform. My name
is Thomas L. Hendricks and I serve as President and CEO of the National
Air Transportation Association (NATA).
NATA represents the interests of the general aviation business
community before the Congress as well as federal, state and local
government agencies. Representing nearly 2,300 aviation businesses,
NATA's member companies provide a broad range of services to general
aviation, the airlines and the military. Our members range in size from
large companies with international presence to smaller, single-location
operators that depend exclusively on general aviation for their
livelihood. Smaller companies account for the majority of NATA's
membership and most of our members have fewer than 40 employees and are
designated as small businesses by the U.S. Small Business
Administration.
We understand the major reauthorization issue the Committee must
address this year is whether and how we might alter the FAA's
organization and funding stream. This is certainly an appropriate
discussion to have in light of the recent sequesters, government
shutdown and criticisms of the FAA's modernization plans. As the
Committee looks at this very important issue, NATA shares many of the
core reauthorization principles outlined by FAA Administrator Huerta--
particularly the need to maintain our system's excellent safety record.
I have had the opportunity to captain passenger aircraft all over the
world and I can tell you that there is no air traffic control system in
the world that compares with ours, and certainly nowhere else in the
world that compares with the challenges of managing the airspace in the
U.S. northeast corridor. While we should support the injection of more
private sector practices into the FAA, it is important how we manage
any changes to the agency in order to maintain a stable, safe and
efficient system that protects access for all users of our system. We
should begin by determining whether the issues identified as needing
reform can be addressed within the current construct.
NATA believes the Committee should build on its excellent work
begun in the last reauthorization and continue to assist the agency
toward a more efficient operating structure. We believe it is possible
to develop and deploy cutting-edge technology within the government
structure and this is already occurring at the FAA. But, like other
stakeholders, we believe more remains to be done. As Administrator
Huerta has noted, the FAA must continue to foster a culture of
innovation and efficiency. So if the question is whether the agency can
efficiently deploy and certify cutting-edge technology, then let us
provide the agency with the flexibility it needs in order to make that
happen.
In a discussion I had with one of the leading proponents of an
alternative ATC structure, I identified another government agency that
develops and deploys cutting edge technologies. The response was a
horrified, ``The FAA could never manage programs that way, it can't
fire people!'' While somewhat humorous, it begs a larger question. Will
an alternative air traffic control structure really be able to operate
more efficiently? Compensation is the number one driver of air traffic
control costs and of the approximately 35,000 employees that would
presumably move to a new air traffic control organization, are they the
ones from where efficiencies will be derived? Or will it inadvertently
create a situation where costs will not in fact be controlled and the
travelling public saddled with new and ever increasing fees?
One of the benefits of the current authorization/appropriations
process is the agency's accountability to the taxpayer. I cannot think
of any government agency that does not want its money without strings
from Congress and I have never known an era where government spending
was not described as ``constrained.'' When pressed for what is not
being funded in modernization, the grudging response is that new
technology is being deployed and that is certainly something to which I
can personally attest as a user of the system. Of course, industry is
then told the central issue is not modernization funding today but in
the future while also being reminded that other aspects of the FAA
suffer as a result of budgetary tradeoffs. NATA believes that before
accepting this at face value, one must ask--is the agency doing
everything it can to operate at its most efficient? If not, what
additional authorities does it need to achieve that goal?
Certainly, the FAA, as well as other agencies of the Federal
Government that depend on discretionary funding, has been impacted by
the budget impasses between Congress and the Administration. Experience
tells us though that there is a limit to which discretionary spending
can be reduced. In fact, it was the inability to bring to the House
floor a transportation appropriation bill that resulted in the Ryan-
Murray budget deal that has provided us with stable FAA funding for the
past few Fiscal Years. A user-fee funded agency is not necessarily
exempt from sequestration. So again, should the Congress consider
changes to the current funding stream or instead provide the agency
with a clear, unambiguous exemption from the impacts of sequestration
and government shutdowns?
Further, we cannot underestimate the potential impact of separating
air traffic from the agency's safety functions. Administrator Huerta
recently observed that breaking down stovepipes means close interaction
between the operations and safety functions of FAA. Turning the FAA's
safety organization into a solely regulatory body, including overseeing
operational standards, creates potential unintended consequences that
might undermine many of the efficiencies that would come from a new air
traffic control structure.
Finally, we must discuss the potential risks to America's general
aviation community, including the investment and jobs created by the
members of NATA. Recently, eight general aviation associations,
including NATA, unveiled a new industry-wide study detailing the
economic contributions of general aviation to the Nation. That study,
conducted by PricewaterhouseCoopers, determined that general aviation
supports 1.1 million total jobs and supplies $219 billion in total
economic output in the United States.
Reform to the FAA's management structure and funding could put that
investment and those jobs at risk. We understand that our Nation's air
traffic control system was not built primarily with the general
aviation fleet in mind. While we do not challenge what drives the
construct of the system, it is certainly the one within which general
aviation must operate and requires us to be a voice at the table of any
discussion and not just a sole voice, but rather one that includes the
many segments of our industry.
Just as important is general aviation's contribution to the
system's operation. Clearly, general aviation is an incremental user of
a system built for other users. We cannot think of a more efficient
method for capturing general aviation's use of the system than the
current system of excise taxes. What we fear is what transpired in
Canada, the collection of new user fees while still being saddled with
old taxes--double taxation. And we cannot have it both ways, claiming
the current discretionary funding situation drives this debate while
not acknowledging how difficult it will be to pull those revenues out
of the current budget construct.
If we eventually conclude the challenges to the agency cannot be
addressed in its current construct, then we urge the Committee to be
very deliberate in what comes next. NATA cannot support any de facto
``leap of faith'' proposals that would put general aviation's fate in
the hands of undefined management structures or leave unresolved its
contribution to the system. We are particularly concerned by Business
Roundtable's corporatization proposal--what we view as a classic
example of logrolling. Entirely funded via user fees and controlled in
perpetuity by a board of industry insiders, general aviation would find
itself in constant peril and the travelling public paying ever
increasing fees.
Chairman Thune, Ranking Member Nelson, members of the Committee,
thank you for your consideration of our views. While maintaining the
status quo risks our Nation's supremacy in aviation, it is equally true
that radical change to the FAA's management structure and funding poses
equal risks, including to the safe and stable nature of the world's
best air traffic control system. We look forward to working with the
Committee and assisting the agency toward a more efficient operating
structure.
______
Response to Written Questions Submitted by Hon. John Thune to
Hon. Michael P. Huerta
Question 1. Administrator Huerta, the National Research Council's
recent report on NextGen recommended that expectations be reset for
NextGen along with a number of other recommended improvements. How is
FAA responding to this report? Do you agree with the findings?
Answer. The Next Generation Air Transportation System (NextGen) was
envisioned as a complex modernization effort that was necessary for the
Nation to maintain the safest and most efficient air transportation
system possible for generations to come, adaptable to growing demand by
increasing capacity and reducing delays. It is important to remember
that the NextGen vision examined by the National Research Council (NRC)
was a multi-agency view of the future including both operational and
research partners. As such, it included both near and mid-term
expectations as well longer term--stretch goals to serve as a basis for
advanced research. The FAA's commitment to that vision, as an
implementing agency, is found in the FAA's NextGen Plans and the Mid-
Term Concept we produced to which we are still substantially aligned.
The FAA's NextGen implementation objectives are delivering benefits
through improvements that include saving time and fuel, and reducing
emissions. The improvements deployed by NextGen to date have already
delivered nearly $1.6 billion in benefits by upgrading our
infrastructure, creating more efficient procedures, and delivering
advanced technologies. In addition, NextGen has made significant
progress in areas such as infrastructure, surveillance, navigation,
information, separation standards, and decision support tools.
The FAA is responding to this report by continuing to work closely
with industry to achieve high standards, remain nimble, and have
flexibility. We will also continue to work with our cross-government
partners on their implementations and research that extend and refine
the far-term expectations.
Question 2. As we consider potential air traffic control reforms,
we are examining a host of studies indicating safety and service have
not been negatively affected by separating air traffic control services
from direct government control in other countries. As part of a
possible transition in the U.S., what are some of the key issues you
believe should be addressed?
Answer. Congress' consideration of a new FAA governance structure
raises many important issues that would need to be addressed to best
ensure that the Nation's and public's interests would continue to be
served, and that the U.S. would retain its global leadership in
aviation, operating the world's safest, most diverse, most complex, and
most efficient aviation system.
Studies on the transition from one type of governance to another in
other nations indicate that it could take years to effectively and
totally separate air traffic control functions. This could prove even
more challenging in the U.S. given the size and complexity of our
aviation sector compared to other nations. Some of the complexity of a
transition would involve defining new processes, roles, and
responsibilities that may have not been included in establishing
legislation.
In evaluating whether to depart from the existing air traffic
control service model and what a new model would look like, while not
exhaustive, some of the issues that would need to be addressed include:
Funding issues including how the existing mix of taxes and
revenues would be divided between a new entity and the
remaining FAA; the transition to a user fee structure; the
charges that general aviation (GA) would pay; source and
structure of airport funding; and dealing with budget
instability and uncertainty for the residual FAA.
Safety oversight of a new entity and integration of new
entrants in the national airspace
Governance of the new entity and roles of stakeholders on
oversight boards, if any
Maintaining security and linkages with the Department of
Defense and Department of Homeland Security
Retaining a global leadership position in aviation
Ensuring good stewardship of the environment
Determining appropriate roles and responsibilities in the
development of NextGen
Assigning capital liabilities and assets between the FAA and
a new entity
Development of new processes (e.g., new air traffic route
development) that currently require coordination between air
traffic and regulatory functions
Determining the employee and labor protections associated
with a new entity
Establishing new offices for any functions that would be
required in both the FAA and the new entity (e.g., human
resources)
______
Response to Written Question Submitted by Hon. Roy Blunt to
Hon. Michael P. Huerta
Question. The FAA has indicated it has made great progress on
NextGen over the last several years. However, according to the National
Academy of Sciences report released on May 1, 2015 (very recently), it
identifies many areas where the FAA is not delivering the promised
benefits of NextGen to users of the air traffic system. Specifically,
the report states `the original vision for NextGen is not what is being
implemented today. Can you explain the large discrepancy between what
the FAA is publicly saying on NextGen compared to the National
Academies report?
Answer. The original NextGen vision, Concept of Operations for the
Next Generation Air Transportation System, was published in 2007. It is
important to remember that this NextGen vision examined by the NRC was
a multi-agency view of the future including both operational and
research partners. As such, it included both near and mid-term
expectations as well the longer term--stretch goals-to serve as a basis
for advanced research. The FAA's commitment to that vision, as an
implementing agency, has been found in the FAA's NextGen Plans and the
Mid-Term concept to which we are still substantially aligned.
Throughout this process, the FAA has engaged a broad cross section of
stakeholders to include airlines, airports, business aviation, general
aviation, other government agencies, and academia. We have engaged our
stakeholders in numerous workgroups and committees to collaborate on
high-priority, high-value improvements.
Some of our most recent collaboration with our stakeholders are:
NextGen Priorities Plan. A collaborative plan with the
NextGen Advisory Committee, delivered to Congress in October,
lays out milestones for delivering benefits in the one-to
three-year timeframe. This provides early-benefit, high-
readiness capabilities to airspace users. The priorities are
improvements in Performance Based Navigation, Data
Communications, surface and multiple runway operations. We have
completed 27 of 27 commitments so far. This builds on previous
collaborative efforts with the aviation industry.
Global Harmonization: The FAA has worked collaboratively
with partners worldwide to ensure that NextGen capabilities
won't stop at our borders. Interoperability and standards
setting have been a focus of NextGen planning and
implementation.
Interagency Planning: We work with other agencies, including
the Departments of Defense and Commerce, as well as the
National Aeronautics and Space Administration, through our
Interagency Planning Office (and before that, through the JPDO,
which established the original vision for NextGen). We work
with our cross-government partners on their implementations and
their research that extend and refine the far-term
expectations.
In some cases, we have decided to adjust our plans as the needs of
the airspace have evolved. In addition, flexibility has been necessary
because not all technologies and improvements mature at the same time.
Finally, a significant challenge has been funding. The cost
differential between what we designed NextGen to achieve and the
funding we actually received has been $3 billion since 2011. A
modernization with this many moving parts requires stable and
predictable funding, as well as a long-term plan with the flexibility
to make incremental updates to adjust to advances in technology and the
latest priorities of our industry.
______
Response to Written Questions Submitted by Hon. Deb Fischer to
Hon. Michael P. Huerta
Question 1. I have read the concerns expressed by the general
aviation community regarding ``commercialization'' or ``privatization''
of the air traffic control (ATC) system. Do you believe there is a way
for us to reform this system to ensure safety, efficiency, and
innovation, while protecting the concerns of general aviation?
Answer.
The general aviation (GA) sector in the United States has
breadth and scope unparalleled elsewhere in the world. It is
part of what makes the U.S. aviation sector so dynamic.
Certainly one set of the issues involved in separating the air
traffic organization (ATO) from the FAA involves the GA
community, such as how much GA contributes to funding a new
model, and the impact of an FAA structural change on services
to the GA community and access to airspace.
The Administration has not proposed governance changes to
air traffic control, and we are not in a position to endorse an
approach to resolve these issues. There may be a number of
approaches to consider in evaluating these issues ranging from
the composition of the new entity's board to Congress
legislatively setting a GA fee and service structure. However,
financial independence and viability for the new entity would
necessitate authority and flexibility to change fees and
services, so legislation would need to provide a compromise
that preserves GA interests as much as possible while ensuring
viability of the new entity. If Congress decides it wants FAA
to change how air traffic services are provided, then we will
need to work carefully with the GA community as well as other
stakeholders to design a system the continues to ensure safety,
efficiency, and innovation.
Question 2. As you know, reforms to the ATC system have been
considered by the FAA and Congress previously. In 2007, the FAA
released a cost allocation study that helped determine the factors that
drive the costs of providing air traffic control services and the
allocation of those costs to various users. This 2007 study was used to
support policy development for alternative ATC proposals. As we
consider reforms to the ATC system in the upcoming FAA reauthorization,
can you please commit to providing the Committee with an updated
version of the ATC cost allocation study?
Answer. Cost allocations are often quite complex and require policy
decisions. As such, any future study should be preceded by substantive
discussions with stakeholders. As the assumptions and choices
underlying various cost allocation methodologies are reflected in the
results, studies designed to reflect different choices would be needed
to inform the use of the studies' results. It would be premature to
pursue an updated study without input on key assumptions.
Question 3. Administrator Huerta, a recent report by the National
Research Council found that the FAA is not delivering what it promised
with regard to NextGen. Given the National Research Council's findings,
and the real benefits to aviation businesses and passengers from moving
to the NextGen system, do you agree that private-sector oriented
reforms to our ATC system would help to advance NextGen technology?
Answer.
Our ability to deploy NextGen technologies and capabilities
depends on sufficient funding and commitment from government
and service providers, and effective internal collaboration as
well as with industry to ensure milestones and goals are met,
implemented, and sustained.
There are a wide variety of air traffic management models in
different countries around the world ranging from government
owned to fully privatized. I am not aware of any clear data
that shows that one particular model is better than another to
achieve the necessary modernization of air traffic systems.
Running a Fortune-500-size complex enterprise, operating 24
hours a day while undertaking one of the largest, most
sophisticated infrastructure projects in the last few decades
in modernizing the national airspace system would prove
daunting whether in the private or public sector.
The success of NextGen deployment hinges on
interdependencies and relationships within the agency. NextGen
is more than installing technology in our air traffic
facilities and on aircraft--it involves the close participation
of our safety organization to ensure that the technology is
safe and that controllers and pilots know how to use it safely.
It requires training and equipage within the aviation sector.
Therefore, we believe that any decision about changes to
governance must take into account these issues.
______
Response to Written Question Submitted by Hon. Richard Blumenthal to
Hon. Michael P. Huerta
Question. I am a proud sponsor of S. 911, the Saracini Aviation
Safety Act of 2015, which would require airlines to install secondary
barriers on most commercial aircraft. These barriers would prevent
access to the flight deck of the aircraft. The legislation is named in
honor of Victor J. Saracini, a pilot killed when terrorists hijacked
United Flight 175 on September 11, 2001. The FAA has encouraged and
issued guidance on secondary barriers, but the FAA has not mandated
their installation. Does the FAA already have the authority to mandate
secondary barriers? If so, what prevents the FAA from requiring that
commercial airlines install physical secondary barriers, considering
the threats we face in aviation?
Answer. Yes, the FAA already has the legal authority necessary to
require secondary barriers. However, such a step would require a
rulemaking.
Since passenger-carrying aircraft already have reinforced cockpit
doors, a requirement put into place as a result of the September 11
attacks, it is unlikely that the benefit of mitigating the very small
remaining risk with a secondary cockpit door or other secondary barrier
would outweigh the high cost of requiring secondary barriers across the
commercial fleet.
______
Response to Written Questions Submitted by Hon. Brian Schatz to
Hon. Michael P. Huerta
Question 1. Last year, a radar facility in Aurora, Illinois was
knocked offline, exposing a serious vulnerability in our air traffic
operations. This outage led to the cancellation of nearly 2,000 flights
at a major international hub airport and delays across the country,
exposing a lack of redundancy in the system. The FAA must also be
prepared to deal with natural disasters. Since 1980, the U.S. has
experienced 151 severe weather disasters. In these situations, it is
vital that air traffic services are restored as quickly as possible to
support response and recovery efforts, as well as to resume commercial
flights. How does the FAA typically respond to man-made and natural
disaster events to ensure the continuity of air traffic operations?
What redundancies are built in place to ensure that the system
infrastructure is reliable in the event of an emergency?
Answer. Driven by lessons learned from real world incidents and
numerous exercises over the years, the FAA has developed and repeatedly
and successfully used a multi-layered approach to respond to and
rapidly recover from disasters, supporting the safety and efficiency of
the Nation's air traffic operations to the maximum extent practicable.
Operations Contingency Plans: The FAA has implemented a requirement
for all of its Air Traffic Control (ATC) facilities, including all
tower, Terminal Radar Approach Control (TRACON), and Air Route Traffic
Control Center (ARTCC) facilities to maintain Operations Contingency
Plans (OCP). These OCPs, which were executed during the September 2014
Chicago ARTCC/ZAU incident, are intended to focus actions to maintain
the continuity of affected air traffic services and operations to the
maximum extent practicable when the capabilities of a given facility
(or facilities) are at risk, degraded, or disrupted.
Communication and Collaborative Decision Making: The FAA utilizes
daily a robust traffic flow and communication capability that is
orchestrated at the national level at the agency's Air Traffic Control
System Command Center (ATCSCC), leveraging input from FAA facilities,
airlines and other aviation operators flying in airspace. This
capability enables the FAA to quickly coordinate and carry out traffic
management initiatives to optimize the flow of air traffic within the
NAS due to demand or external factors such as a man-made or natural
disaster.
Systems Resiliency: The ATO maintains a wide spanning national
infrastructure--to include facilities, air navigation services systems
and automation, and the supporting power and environmental equipment.
Throughout this infrastructure, the FAA has integrated various
resiliency design elements based on risk analyses. Where additional
redundancies are required, geographic diversity of systems are
implemented to provide backup or overlapping coverage.
Continuity and Disaster Response Exercises: The FAA regularly
participates in a broad spectrum of continuity and disaster response
exercises at the Federal, State, and local levels, in which the agency
validates and identifies gaps in its ability to sustain air traffic
operations in the NAS, as well as contribute to interagency efforts to
save lives, protect critical infrastructure, and safeguard property.
Question 1a. Does the FAA have a goal of how quickly it will
restore air traffic control services following such an event?
Answer. Following the September 2014 temporary loss of the Chicago
ARTCC/ZAU cited by Senator Schatz, the FAA established new aviation
system restoration targets of a) within 24 hours after a major
disruptive incident, recovering to 90 percent of normal full capacity
for the affected major airport; and b) within 96 hours after a major
disruptive incident, recovery to 90 percent of normal full capacity for
the affected en route airspace.
Question 1b. What challenges does the FAA face in adequately
preparing for catastrophic events? What steps need to be taken to
enhance system resiliency?
Answer. Following the September 24 ZAU incident, the agency
evaluated the basic resiliency of its air navigation services
infrastructure as part of the 90-day after-action review. While
recommendations have been made during the initial review, the FAA is
continuing this resiliency effort to more broadly quantify and address
possible resiliency improvements. The resiliency characteristics of the
FAA's current air navigation services regime ensure safe operations
following any given disruptive incident. However, the FAA's new system
recovery targets will necessitate resiliency improvements at key
facilities, which will, in turn, require future capital investments.
Any funding for further resiliency enhancements will be competing with
other capital expenditure needs.
Question 2. Currently, air traffic control operations are covered
by the Airport and Airway Trust Fund plus General Fund appropriations.
At a minimum, those federally appropriated funds would have to be
replaced under a privatized or corporatized model. It is not realistic
to assume that efficiency improvements alone would be enough to make up
for the loss of these funds, and funds raised through bonds would
result in debt that would eventually have to be serviced.
Answer. In the context of FAA reauthorization and the future
direction of the FAA, some members of the aviation community and of
Congress have discussed making governance changes at the agency.
Question 2a. If the air traffic control system is moved to a
separate, self-funding entity, what model would you propose to generate
sufficient funds to cover the cost of operations?
Answer. The Administration welcomes the opportunity to evaluate any
governance-related proposals and we look forward to having those
discussions with Congress and stakeholders.
Further, with respect to reauthorization, some of the major
challenges facing the FAA involve funding levels, funding stability,
and flexibility. We believe that any governance-related proposals would
need to address these issues while ensuring that our Nation continues
to maintain the safest and most efficient airspace system today and in
the future.
Question 2b. Would it lead to cuts to air traffic controller costs
(by reducing salaries, benefits, and pensions), raise user fees, or
both?
Answer. We believe that any FAA reauthorization, whether it
includes structural change or not, needs to address two key challenges
facing the agency:
Reauthorization should provide budget stability including a
greater ability to plan and commit resources over the long-
term. Budget stability will help ensure our strong
participation in the global aviation community and demonstrate
our commitment to aviation.
Reauthorization should allow for management flexibility for
making business decisions regarding the size, scope, and types
of air traffic management services and infrastructure.
______
Response to Written Questions Submitted by Hon. Cory Booker to
Hon. Michael P. Huerta
Question 1. I applaud FAA's work on moving forward multiple NextGen
technologies, including En Route Automation Modernization and Automatic
Dependent Surveillance-Broadcast. However, the FAA Inspector General
and industry stakeholders have been critical of delays and cost
overruns in the implementation of NextGen programs. Can you explain how
FAA has addressed these criticisms? How can the FAA foster innovation
in this area to move implementation forward faster?
Answer. Over the past few years, the FAA has put in place a
stronger, more efficient, and more effective leadership model for
continuous program improvement. Our efforts, which began with an
internal organizational realignment and the designation of a Chief
NextGen Officer, continue with incorporation of lessons learned to
improve program management processes and robust, proactive stakeholder
engagement.
NextGen's success has been characterized by four fundamental
approaches that will continue to guide our progress:
Executing programs to support the infrastructure of NextGen
Delivering capabilities to benefit users of the National
Airspace System (NAS)
Advancing collaboration with partners in the aviation
community
Examining work done and renewing goals to ensure the
initiative remains on the right track
We have in place a comprehensive, cross-agency portfolio approach
to program implementation that recognizes NextGen as an integrated
effort rather than a series of independent programs. This approach
provides a sound framework of milestones and governance driven
investment decisions aligned with NextGen strategy, monitors NextGen
development and deployment progress, and ensures collaboration and
coordination across FAA lines of business.
We have made improvements to the NAS Enterprise Architecture that
explicitly identify how and when decision points will impact the
delivery of NextGen products. Case-by-case analyses are also carried
out to fully understand the relative size, breadth and scope of impacts
across programs.
We have developed and refined criteria and processes for
identifying high-priority program decisions, which are documented in
the NAS Integrated Systems Engineering Framework (ISEF).
Collaborating with our aviation community stakeholders through
forums like the NextGen Advisory Committee (NAC) has improved
industry's understanding of the complexity involved in implementing
NextGen programs. Our recent work in developing the NextGen Priorities
Joint Implementation Plan has created an environment of mutual
understanding of respective challenges. The FAA collaborated with the
aviation industry through the NAC in response to a request from the
House of Representatives Committee on Transportation and
Infrastructure, Subcommittee on Aviation, to develop a plan to
implement a number of high-priority NextGen capabilities that will
provide significant near-term benefits to NAS users. The plan's
foundation was earlier NAC work, which recommended the FAA focus on
NextGen capabilities in four areas: Multiple Runway Operations,
Performance Based Navigation, Surface Operations and Data
Communications. Throughout 2014, FAA subject matter experts met with
aviation industry representatives to determine what the FAA is able to
accomplish over the next one to three years in the four focus areas and
what industry commitments are necessary for those activities to be
successful. These meetings enabled the FAA and industry to reach
agreement on all of the ``high priority, high readiness'' capabilities
that the NAC has recommended, with the FAA committing to specific site
implementation plans and industry ensuring operator preparedness in
order to take full advantage of NextGen benefits. Both the FAA and
industry are meeting their Plan commitments and continue close
collaboration to solve barriers to effective implementation. The FAA
has completed all the scheduled commitments due to date, three of which
were completed early.
Question 2. In your January 2015 FACT3 report, FAA concluded in the
New Jersey-New York area airspace that, ``while the ongoing airspace
redesign effort and NextGen enhancements will help to improve
efficiency and flexibility, FAA sees strong evidence that additional
runways may be the best long-term solution to meet future demand for
intercity travel to and from the NYC area.'' If new runway construction
at these airports is unlikely to commence in the near future, what else
can we do to address this untenable situation before 2030, if NextGen
and the airspace redesign are not solutions on their own?
Answer. There are many contributing factors to the flight delay
challenges in the NYC area: high demand, tightly coupled traffic flows,
complex airspace and limited capacity. As a result, there is no single
solution that will address the expanse of operational complexities in
the NYC area. Rather, a suite of solutions working in concert is
required, including deploying NextGen technologies, airspace redesign,
airport capacity enhancement, and slot management.
NextGen is delivering benefits and will continue to do so as new
technologies for both pilots and air traffic controllers are deployed
throughout the region. Improvements prior to 2030 include tools to de-
conflict and streamline traffic flows, improve predictability, and make
more efficient use of existing airport and airspace capacities.
Restructuring the New Jersey-New York area airspace will support
and maximize the benefits of NextGen improvements in the NYC area.
Airspace Redesign efforts in the New Jersey-New York area airspace have
already delivered benefits in efficiency, flexibility, and delay
reduction. The FAA suspended further implementation of the Airspace
Redesign in May 2013 due to funding constraints that limited the FAA's
ability to further integrate airspace to the extent envisioned. FAA
plans to tailor a solution that will best meet the unique operational
and safety needs in the NJ-NY area airspace, leveraging the successful
Metroplex model.
The January 2015 FACT3 (Future Airport Capacity Task) report notes
that taxiway and gate constraints can be common causes of delays and
inefficiencies. Improvements are in progress to address these issues in
the NYC area, including reconfiguration of the Central Terminal
Building at LGA, and the ongoing JFK runway construction is intended to
provide high-speed taxiways and accommodate larger aircraft. Although
more incremental than new runways, these improvements are achievable in
the nearer term and will help to make more efficient use of the
existing airfield. The FAA also continues to support more than a dozen
reliever airports as well as secondary commercial service airports in
the greater New York metropolitan area, including airports in both New
York and New Jersey.
Nevertheless, the number of runways at JFK, EWR, and LGA will
remain a limiting factor when accommodating long-term NYC area demand.
Additional runway capacity is needed, and for this reason the PANY&NJ
undertook a comprehensive System Capacity Study for the NY metropolitan
area. In the interim, passenger capacity is improving as airlines
increasingly use larger aircraft with more seats that are more fuel and
cost-effective in addition to needing fewer flights to accommodate the
same or growing number of passengers. However, if new or enhanced
runway capacity cannot be achieved, then the NYC airports may have to
continue to rely on techniques to address severe congestion-related
delays such as slot management currently in effect under temporary
Orders limiting operations at JFK, EWR, and LGA. The FAA recently
published a Notice of Proposed Rulemaking (public comment period closed
on May 8, 2015) intended to provide a longer-term and comprehensive
approach to slot management at these airports.
______
Response to Written Questions Submitted by Hon. Tom Udall to
Hon. Michael P. Huerta
Question 1. Flight paths and air traffic can be controversial
issues locally. While I believe that NextGen has value, I am concerned
about how it will impact local communities.
I strongly urge the FAA to make sure it is working with local
residents to keep them informed of changes to the air traffic control
system and the impact these may have on their communities. This is an
area where pre-emptive communication goes a long way.
What outreach activities with local communities does your agency
currently engage in for NextGen? Do you feel these are sufficient? Are
there any other efforts underway?
Answer. The FAA has been focused on the implementation of the
foundational programs that will enable full NextGen capabilities. For
example, we recently completed the ground infrastructure that supports
ADS-B and the replacement of the En Route and Terminal automation
systems that are the backbone of the air traffic control system. With
the foundational work nearing completion, we are transitioning to the
implementation of transformational tools and capabilities that will
provide the full benefit of NextGen.
From the perspective of local community impact, implementing the
NextGen foundational infrastructure such as the replacement of
automation systems like ERAM was transparent from a local community
perspective. However, as we continue to implement new procedures and
new technology, we fully recognize the need for stakeholder outreach
and local community engagement. For example, during Metroplex projects,
local communities are provided information on process and progress
during the various stages of each project.
During the first two phases (study and design) of each Metroplex
project, the leading FAA project teams communicate with airports and
stakeholders via monthly or quarterly meetings. These meetings inform
the stakeholders and allow them to communicate information to local
communities as necessary. During the third phase (evaluation), affected
communities are updated directly through environmental workshops,
during which local stakeholders are able to provide input. The public
response is gauged to determine the frequency and location of
additional workshops to meet community and project needs. In the
implementation phase, news stories announce related activity, and
during the final phase (post-implementation), benefits stories are
developed by the FAA. Based on recommendations from stakeholders
through the NextGen Advisory Council, the FAA is strengthening its
outreach and education activities by developing a formal outreach
process that engages airports and communities from the beginning of a
project.
Question 2. The Department of Defense has expressed concerns about
how a possible new air traffic organization entity would coordinate
services with DOD and ensure that national security remained a top
priority. New Mexico has two air force bases and a missile range. I am
concerned about the impact any reform could have on our local
operations. How do the FAA and DOD currently coordinate? How might that
interaction work best between two government agencies?
Answer. Under current authority, the FAA Administrator is
obligated, among other things, to consider the requirements of national
defense, regulate civil and military operations in the airspace, and
consult with the Secretary of Defense to establish areas in the
airspace determined necessary in the interest of national defense.
Over the years, an extensive, complex network was established for
civil/military coordination and cooperation, which facilitates problem
resolution at the appropriate level as required. The network operates
effectively through agreements and the exchange and interaction of
personnel.
The DOD is focused on ensuring that military services have
sufficient airspace to meet military, training, and test and evaluation
requirements for peacetime, contingency, and wartime operations.
Airspace designated for military purposes, when not required by the
DOD, is made available to the FAA for civil use. DOD cooperates with
the FAA for the effective and efficient management of the National
Airspace System.
______
Response to Written Questions Submitted by Hon. John Thune to
Hon. John Engler
Question 1. As you may know, a legal memorandum by the
Congressional Research Service was recently made public that outlined
certain constitutional concerns with separating the Air Traffic
Organization from the FAA. What is your assessment of the legal issues
that might arise from making a transition to a new governance
structure, and how might they be addressed?
Answer. The memo raised important concerns that should be addressed
in any enabling legislation. However, it appears the authors of the
memo were unclear on a central concept related to the creation of a
new, not-for-profit entity to operate the air traffic control system.
That is that the new ATC entity should be required perform air traffic
control services in accordance with performance standards and other
rules and regulations promulgated from time to time by the FAA. The new
entity would not set the regulations; it would apply the regulations
that are promulgated by the FAA just as airlines apply the regulations
of the FAA with respect to the use of electronic devices on board. The
new entity's conduct falls squarely within the ``ministerial''
exception to the private non-delegation doctrine.
Similarly, the new entity would not have enforcement power. When
there are infractions, the new entity would report the infraction to
the FAA, which would then decide if and how enforcement is undertaken.
Finally, as is a common practice with government-sanction
monopolies (like electric utilities), all of its fee assessments would
be appealable to the DOT or some other governmental entity.
Question 2. How might a new air traffic control organization
finance and acquire the billions of dollars of existing air traffic
control facilities, infrastructure, and equipment? Why would a new
model be better than the way the government currently finances such
facilities?
Answer. As far as transferring existing assets to the new entity,
the enabling legislation will need to determine whether the new entity
should pay a fee to acquire the assets and, if so, who should set that
fee. The Secretary of Transportation may be best positioned to make
such an assessment.
As for financing of future facilities, infrastructure and
equipment, the new entity would possess many advantages over the
current system.
Today, the Federal Government finances multi-year capital
investment programs through annual appropriations. This model is not
followed by most state governments nor by the private sector, and for
good reason. When massive programs, which are predicated on a
particular long-term funding expectation, collide with inconsistent and
unpredictable Federal appropriations, as illustrated by the recent
sequester, the result is a jagged mismatch of funding and program needs
in every single year and a constant acceleration and then dead-stop of
program implementation. And there is no room or budget authority to
buffer this mismatch with funds from the operating budget, which is
already overextended keeping obsolete systems operational. The FAA's
top priority will always be to maintain and operate the current system.
That is why systems being installed today incorporate technology
specified a decade ago, and these will already be outdated when NextGen
comes fully online, hopefully in 2025.
Under the proposed model, technology investments would be guided by
an organization that is committed to consistent, incremental technology
improvements. Technology development would be predictably financed--
because the entity would be able to issue bonds in the capital
markets--with assurance that all systems would be compatible and
incorporate proven state-of-the-art technology.
Question 3. How does a standalone, commercialized air traffic
control model address concerns about funding stability, continuity of
operations, and the confidence among users regarding prospects for
accelerating NextGen benefits in a way that cannot be achieved by more
reforms within the government?
Answer. As noted in my previous response, the current system is
unpredictable. The new funding system would be designed to be
inherently stable. It would be funded by user fees to cover operating
and financing costs, and capital expenditures would be funded through
bonds issued in the capital markets. This would enable new technology,
such as NextGen, to be more quickly built-out and delivered at a
predictable date.
Question 4. What are the implications of reform for smaller rural
airports, which may or may not have any commercial air service? Why is
reform beneficial for small and rural communities?
Answer. Under the current system, smaller and rural airports are
the first to see services cut when budgets are tight. For example,
under the recent sequestration, in March 2013 FAA proposed to close 149
contract towers which were providing air traffic control services to
smaller and rural airports. While Congress acted to avert the closures
in special legislation, the fact remains that in a tight budget, these
are the first services likely to be cut--not because they are
unimportant, but their closure is simply a quick way to generate cash.
Under a potential not-for-profit operator of the new system, as
discussed in the hearing, the new entity would have multiple bottom
lines defined in the enabling legislation. Profitability should not be
the only bottom line. One of those missions should be to maintain and
expand access to air traffic control services. This could be easily
achieved under the new model. A commitment to remote tower technology
(currently outside the budget capability of the FAA) and other
technical innovations would increase operational capacity, stimulate
economic development, and improve safety for smaller and rural airports
across the country.
The new proposed model is a boon for small communities.
Question 5. Approximately how long might the transition to a new
air traffic control model take? What are some of the lessons learned
from the transition experience in other countries around the world to
ensure smooth and seamless transition?
Answer. We expect a transition would need to be built into enabling
legislation that might last for two years, with distinct milestones to
be achieved during the transition period. The transition could be
handled largely the way a major corporation would handle the spin-off
of a major division. The most important aspect would be to identify the
new leadership and exactly which assets would transfer to the new
entity.
______
Response to Written Questions Submitted by Hon. Deb Fischer to
Hon. John Engler
Question 1. I have read the concerns expressed by the general
aviation community regarding ``commercialization'' or ``privatization''
of the air traffic control (ATC) system. Do you believe there is a way
for us to reform this system to ensure safety, efficiency, and
innovation, while protecting the concerns of general aviation?
Answer. Yes, and we would support doing so. Business Roundtable
does not support privatization of the system as that word is generally
understood. Specifically, the creation of a for-profit corporation to
run the system would be detrimental to users, particularly to the
general aviation sector. That is why the proposal under discussion is
to create a federally-chartered not-for-profit entity to operate the
system, with FAA continuing to regulate the system, ensuring safety.
This separation of operation and regulation into two separate entities
is now considered a best practice internationally for maintaining the
safety of air navigation systems. The enabling legislation for this
new, not-for-profit entity, should ensure that one of its core missions
is to maintain and expand access to air traffic control services--not
limit those services to those with the greatest ability to pay.
Further, we believe there are ways the legislation could ensure that
general aviation does not see a significant change in the overall
amount of financial support it is required to provide to maintain the
ATC system. Finally, general aviation should also be represented on the
board governing the new entity, ensuring that this mission is achieved,
and the board should be designed to ensure that no one user group--
including airlines--would be represented by a majority of the board.
Question 2. In your written testimony, you noted that the U.S. has
lost its global leadership in aviation because we are falling behind
when it comes to our air traffic control system and the technology we
use. Can you provide the committee with some examples of how technology
has advanced in private sector oriented ATC systems?
Answer. The Canadian system, the second-largest air traffic control
system in the world which is operated by a not-for-profit corporation,
NavCanada, provides the best example. Touch-screen automated route
tracking technology developed by NavCanada is now sold around the
world, while U.S. controllers are still printing paper strips inserted
in little plastic holders passed from controller to controller to keep
track of each plane in the sky. Also, NavCanada is a principal investor
and lead strategic partner in the Aireon satellite-based ADS-B
technology, which the FAA has not been able to afford to embrace.
NavCanada, like U.S. corporations that are technology-driven service
enterprises, value incremental technology improvement. Because of the
nature of the U.S. Federal procurement system, the FAA is stuck making
generational leaps every twenty to thirty years, and those leaps tend
to fall short of the mark.
______
Response to Written Questions Submitted by Hon. Bill Nelson to
Hon. John Engler
Question 1. How would a new entity ensure that there is continued
service to small communities and rural areas?
Answer. Under the current system, smaller and rural airports are
the first to see services cut when budgets are tight. For example,
under the recent sequestration, in March 2013 FAA proposed to close 149
contract towers which were providing air traffic control services to
smaller and rural airports. While Congress acted to avert the closures
in special legislation, the fact remains that in a tight budget, these
are the first services likely to be cut--not because they are
unimportant, but their closure is simply a quick way to generate cash.
Under a potential not-for-profit operator of the new system, as
discussed in the hearing, the new entity would have multiple bottom
lines defined in the enabling legislation. Profitability should not be
the only bottom line. One of those missions should be to maintain and
expand access to air traffic control services. This could be easily
achieved under the new model. A commitment to remote tower technology
(currently outside the budget capability of the FAA) and other
technical innovations would increase operational capacity, stimulate
economic development, and improve safety for smaller and rural airports
across the country.
The new proposed model is a boon for small communities.
Question 2. A recent report by Congressional Research Service (CRS)
indicated that the creation of a private non-profit corporation with
the ability to set user fees, appoint leaders, and control the national
airspace may be unconstitutional. How do you respond to those findings?
Answer. The memo raised important concerns that should be addressed
in any enabling legislation. However, it appears the authors of the
memo were unclear on a central concept related to the creation of a
new, not-for-profit entity to operate the air traffic control system.
That is that the new ATC entity would be required to perform air
traffic control services in accordance with performance standards and
other rules and regulations promulgated from time to time by the FAA.
The new entity would not set the regulations; it would apply the
regulations that are promulgated by the FAA just as airlines apply the
regulations of the FAA with respect to the use of electronic devices on
board. The new entity's conduct falls squarely within the
``ministerial'' exception to the private non-delegation doctrine.
Similarly, the new entity would not have enforcement power. When
there are infractions, the new entity would report the infraction to
the FAA, which would then decide if and how enforcement is undertaken.
Finally, as is a common practice with government-sanctioned
monopolies (like electric utilities), all of its fee assessments would
be appealable to the DOT or some other governmental entity.
Question 3. Congress is actively involved in exercising oversight
to ensure that the U.S. air traffic control system is the safest in the
world. What degree of oversight do you envision Congress exercising
under your proposal?
Answer. As noted in my response to the previous question, the FAA
would retain responsibility for insuring the safety of the airspace
and, as a government agency, be accountable to Congress. What is being
proposed is that a non-profit entity provide air traffic control
services, regulated by the FAA. This would meet international standards
for the separation of the operator from the regulator, eliminating the
conflict of interest inherent to the current government-run structure.
Question 4. What would be the role of Congress in setting user
fees? If there is no role for Congress, how can we be assured that the
Board will not assess fees in a manner that functionally limits access
to certain users or groups?
Answer. While the new non-profit entity would set user fees for air
traffic control services, there should be a mechanism in any enabling
legislation that would allow users to appeal to the Secretary of
Transportation or another appropriate government entity if the fees are
unreasonable. Further, Congress may find it appropriate to exempt
certain user groups--such as noncommercial general aviation--from
paying user fees.
Question 5. The national airspace is a national asset; will the
Board be obligated to ensure that all users continue to have access to
it?
Answer. As noted in my earlier responses, the new non-profit entity
would be responsible for providing air traffic control services,
regulated by the FAA. Any enabling legislation should make clear that
the new entity not be able to discriminate in its provision of services
based upon whether a given aircraft is a small private plane or a
Boeing 747 operated by a major airline.
Question 6. What is the amount of Federal funding that you believe
would be required to stand up a new air traffic control entity? At what
point would this new entity be self-sustaining? How long would Federal
funding for air traffic control be required and how much funding do you
anticipate would be required?
Answer. The new entity should set user fees so that it is self-
sustaining as soon as any congressionally mandated transition period is
complete.
Question 7. Congress was very concerned by proposed contract tower
closures in the wake of sequestration. We worked hard to ensure that
towers would remain open, in spite of funding challenges. Wouldn't a
new entity most likely consolidate towers (and, therefore, close
towers) to save costs?
Answer. No. Please see my response to your first question.
Question 8. Under your proposal, would the new entity be required
to buy air traffic control facilities and assets from the FAA? If so,
with what funds? Would it be responsible for disposing of properties
that are no longer needed and any remediation required to do so?
Answer. As far as transferring existing assets to the new entity,
the enabling legislation will need to determine whether the new entity
should pay a fee to acquire the assets and, if so, who should set that
fee. The Secretary of Transportation may be best positioned to make
such an assessment. If a purchase price is required, the new entity
will have more than adequate borrowing capacity at very attractive
rates for paying such purchase price.
Question 9. Does your proposal contemplate annual funding for
airport development grants? What amount do you anticipate being
available each year? Would that funding come from user fees or another
source of funding?
Answer. Enabling legislation would need to ensure that Airport
Improvement Grants remain funded at the current level. We believe this
can be achieved largely through continuing the Federal Government's
current average contribution from the general fund to FAA and AIP.
Question 9a. Would the new ATO entity, under your proposal, follow
Federal acquisition practices? If not, what acquisition practices would
be followed to ensure that there was fair and open competition?
Question 9b. Would there be a process for unsuccessful bidders to
protest contract awards? What forum would have jurisdiction over such
claims?
Question 9c. The FAA must comply with Presidential directives,
constitutional standards, public laws, and DOT Secretary Policy
Statements to promote, expand, and aggressively provide procurement
opportunities for small businesses, small businesses owned by socially
and economically disadvantaged individuals, women-owned small
businesses, and service-disabled veteran owned small businesses. Would
a private entity follow those same principles and adopt similar set-
asides to encourage small business development and contract awards to
businesses owned by women, service-disabled veterans, and socially and
economically-disadvantaged individuals? Would the new entity follow Buy
American preferences?
Answer. One of the greatest benefits of this proposal is to get the
air traffic control system out from under the current Federal
acquisition process, which is badly broken. The Canadian system, the
second-largest air traffic control system in the world which is
operated by a not-for-profit corporation, NavCanada, provides the best
example. Touch-screen automated route tracking technology developed by
NavCanada is now sold around the world, while U.S. controllers are
still printing paper strips inserted in little plastic holders passed
from controller to controller to keep track of each plane in the sky.
Also, NavCanada is a principal investor and lead strategic partner in
the Aireon satellite-based ADS-B technology, which the FAA has not been
able to afford to embrace. NavCanada, like U.S. corporations that are
technology-driven service enterprises, value incremental technology
improvement. Because of the nature of the U.S. Federal procurement
system, the FAA is stuck making generational leaps every twenty to
thirty years, and those leaps tend to fall short of the mark.
______
Response to Written Questions Submitted by Hon. Brain Schatz to
Hon. John Engler
Question 1. Currently, air traffic control operations are covered
by the Airport and Airway Trust Fund plus General Fund appropriations.
At a minimum, those federally appropriated funds would have to be
replaced under a privatized or corporatized model. It is not realistic
to assume that efficiency improvements alone would be enough to make up
for the loss of these funds, and funds raised through bonds would
result in debt that would eventually have to be serviced.
If the air traffic control system is moved to a separate, self-
funding entity, what model would you propose to generate sufficient
funds to cover the cost of operations?
Question 1a. Would it lead to cuts to air traffic controller costs
(by reducing salaries, benefits, and pensions), raise user fees, or
both?
Answer. The new non-profit entity would be funded by user fees to
cover operating and financing costs and capital expenditures would be
funded through bonds issued in the capital markets. This would enable
new technology, such as NextGen, to be more quickly built-out and
delivered at a predictable date. The Canadians are the best example of
another system that has followed this model. Efficiencies delivered
under this model have enabled them to better compensate employees and
deliver higher-tech services while reducing real user fees over time.
______
Response to Written Questions Submitted by Hon. John Thune to
Hon. Byron Dorgan
Question 1. Senator Dorgan, some argue that a significant air
traffic control reform effort is not necessary and that government-
focused changes are sufficient to improve the air traffic control
system. But more than 15 years ago, Congress made a substantial change
that gave the FAA broad relief from Federal personnel and procurement
rules. What are the major impediments that have prevented the FAA from
utilizing these authorities to achieve faster progress on NextGen's
programs?
Answer. What we found through our work with the Eno Center for
Transportation NextGen Working Group was that while the FAA was given
the authority to be exempt from Federal personnel and procurement
rules, in practice the FAA did not take advantage of this authority. A
GAO report from 2003 (``National Airspace System: Reauthorizing FAA
Provides Opportunities and Options to Address Challenges'') concluded
that this was both because the FAA improperly managed implementation,
and also because other government agencies with oversight roles acted
as a barrier to full implementation.
Question 2. As you may know, a legal memorandum by the
Congressional Research Service was recently made public that outlined
certain constitutional concerns with separating the Air Traffic
Organization from the FAA. What is your assessment of the legal issues
that might arise from making a transition to a new governance
structure, and how might they be addressed?
Answer. The CRS memorandum is based on the premise that the new
entity would be ``establishing air traffic control procedures, similar
to those currently existing in FAA Order JO7110.65V''. This would mean
that the new entity would be making the rules, while simultaneously
operating the system. This, however, is not what has been proposed.
What I, and stakeholders proposing bold reform, envision for a reform
air traffic control system, is that the new system will be comprised of
two entities. The first entity would be the new provider, which will
operate the system. The second entity would be the FAA, which will
regulate the operator from a safety standpoint. We do not want a system
where the new regulator creates its own rules. The rule-making process
is a governmental prerogative and should remain so.
It will always be necessary to ensure that any new governance
structure complies with all legal issues, and these should not be taken
lightly. But compliance can certainly be accomplished within a reformed
air traffic control structure, including the ones we have proposed.
Question 3. How might a new air traffic control organization
finance and acquire the billions of dollars of existing air traffic
control facilities, infrastructure, and equipment? Why would that model
be better than the way the government currently finances such
facilities?
Answer. This new organization would finance itself, similar to
airports. It would issue bonds that would be paid over time by the
revenues it would collect from its customers. This model would be a
significant improvement to the one currently in place. This new entity
would allow capital planning over several years, instead of the current
system where the FAA relies on annual appropriations from Congress that
may or may not come in time, and are unpredictable in times of fiscal
constraint. For example, FAA recently finished the deployment of a long
awaited new computer system, the En Route Automation Modernization
(ERAM), which replaced the 40-year old HOST system. ERAM was $370
million over budget, from which $40 million can be attributed to the
budget sequester. With proper capital planning, those costs overruns
due to budget uncertainty will be less likely to happen.
Additionally, this model would be better for at least one other
reason. The current model depends on annual Congressional
appropriations, which creates an incentive for the FAA to only request
funding for projects that are most likely to get funded, regardless of
their effectiveness in improving safety or efficiency. In a new model
like what we envision, where the stakeholders have a strong role in
governing the system, projects would be chosen not be chosen because
they are more likely to be funded by Congress, but because it would
they make sense to the national airspace system and its users to
implement those projects.
Question 4. How does a standalone, commercialized air traffic
control model address concerns about funding stability, continuity of
operations, and the confidence among users regarding prospects for
accelerating NextGen benefits in a way that cannot be achieved by more
reforms within the government?
Answer. As the Mineta Commission stated in 1997, the FAA has ``too
many cooks''--USDOT, White House, Congress, etc.--making accountability
and authority ``too diffused to run a 24 hour-a-day, high technology,
rapidly changing operating system for a major commercial industry''.
That is unlikely to change if air traffic control remains part of FAA.
By being a standalone entity, regardless if a government corporation or
a nonprofit organization model is selected, the air traffic control
provider will have the ability to focus on its core mission of
providing safe, efficient, and cost-effective, air traffic control to
commercial airlines, as well as business and general aviation, instead
of having to dedicate a significant portion of its resources to please
all these ``cooks''.
Question 5. Approximately how long might the transition to a new
air traffic control model take? What are some of the lessons learned
from the transition experience in other countries around the world to
ensure smooth and seamless transition?
Answer. How the transition takes place and how long it takes must
be negotiated between the different parties involved, including the new
provider, the FAA, and Congress. Three things that should be thoroughly
considered beforehand are 1) whether the FAA has a safety regulation
structure in place to effectively oversee the safety of the safety, 2)
how to transition from financing from the Airport and Airway Trust Fund
to user fees (in Canada, for example, user fees were imposed after two
years), and 3) how employees are moved from Federal workers to the new
entity.
Lessons from other countries show us that we need to ensure that
all relevant parties are involved in the transition process. Everyone
will have different expectations as to what the system should look like
after it is created. That is why the stakeholder involvement we propose
for the governance of the system is so important. By having users
governing the system, the transition can be made smoother.
For example, in the Eno NextGen Working Group Final Report we
discuss the case of Canada. In this case, the main transition issues
identified regarded the culture change required of the management cadre
inherited from government and in the high wage expectations of certain
labor groups. The first issue resulted from differences in the new
corporate culture at NAV CANADA, which as an independent company was
different from the government institution it replaced. Negotiated
retirements and layoffs, along with the ability for some employees to
return to the public sector, helped ameliorate this problem. As for the
demand for salary increases, this was a result of a number of years
without them under Transport Canada, the government agency that was
responsible for air traffic control, much like the FAA is today in the
United States. In fact, one of the reasons unions were in support of
the move to a non-profit model was because their salaries had been
frozen for a number of years. When NAV CANADA was created, unions began
demanding salary increases to make up for those years. The good
financial situation of NAV CANADA following its creation allowed for
deals to eventually be reached with the unions.
______
Response to Written Questions Submitted by Hon. Deb Fischer to
Hon. Byron Dorgan
Question 1. I have read the concerns expressed by the general
aviation community regarding ``commercialization'' or ``privatization''
of the air traffic control (ATC) system. Do you believe there is a way
for us to reform this system to ensure safety, efficiency, and
innovation, while protecting the concerns of general aviation?
Answer. Yes, I do believe that is possible. First of all, both the
Federal Government and general aviation will play a role in the
governance of the air traffic control provider, protecting the public
interest, namely of those communities where general aviation is
essential. As we envision a governance system where no single
stakeholder will have the majority, the presence of general aviation
and the Federal Government will help shape the development of the air
traffic control system going forward. The FAA and Congress could also
intervene, where necessary, by regulating the air traffic control
provider and mandating certain minimum requirements of operation that
it must comply with.
Moreover, an independent air traffic control provider would likely
be better suited to offer new technologies that would increase services
available to general aviation users. For example, the independent
Swedish air traffic control provider is already operating ``remote
towers,'' where a tower in an airport control traffic in more than one
airport, using high-definition cameras and other technologies to offer
these services remotely. The Irish and German systems have also
recently awarded contracts to implement remote towers in their
countries. This technology allows air traffic control services to be
offered where it would otherwise be uneconomical to offer them
(hundreds of airports around the Nation do not have any sort of air
traffic control built on site). The FAA is testing this technology in
Virginia in a pilot project, but many of these types of FAA pilot
projects never leave the prototype stage, either because the FAA lacks
the resources or the nimbleness to implement them. With an independent
provider, it is more likely that such innovations could be offered that
could ultimately expand services available to smaller and rural
communities.
Question 2. Senator, in your written testimony you compared the
FAA's ATC system to the Federal Railroad Administration, noting that
the FRA does not provide dispatching services for freight and passenger
trains, but has a core mission of focusing on safety. Could you explain
how, not only efficiency and innovation, but most importantly the
mission of safety might be compromised due to our current ATC system?
Answer. First of all, we have to thank the men and women at the FAA
that made the current national airspace system the safest in the world.
This is a tremendous achievement that should never be downplayed.
However, we should not rest on our laurels, we should make sure that we
are able to maintain and improve these amazing levels of safety going
forward.
One way in which other countries have done so is by separating the
provision of air traffic control from its safety regulation. This has
shown to improve accountability, eliminate conflicts of interest by
having the same entity regulating itself, allowing both the provider
and the safety regulator to focus on their core mission. In fact, ICAO,
the UN agency for international aviation, has, since the early 2000s,
recommended this functional separation as a way to improve safety
outcomes. A recent study commissioned by the FAA and produced by MITRE,
concluded that ``the separation of the [ATC provider] from the CAA
[Civil Aviation Authority] was reasonably successful'' and that ``MITRE
did not discover any views that the system prior to separation was
preferred.'' An increased focus on safety, from both regulator and the
ATC provider, was found to be one benefit that the separation provided.
By creating a standalone ATC provider, while retaining the FAA as the
safety regulator, we would be achieving this very important goal of
separating these two functions.
______
Response to Written Questions Submitted by Hon. Bill Nelson to
Hon. Byron Dorgan
Question 1. Would a non-governmental air traffic control provider
ensure that there is continued service and access to small communities
and rural areas?
Answer. Under all circumstances, any air traffic control structure
in the U.S. would need the Federal Government to play a role in the
governance of the air traffic control provider. The Federal Government
has and will continue to have a role as the guarantor of the public
interest. As such, such critical decisions as removing service from
certain communities would most likely have to be made with agreement of
the Federal Government. The FAA and Congress could also intervene,
where necessary, by regulating the air traffic control provider and
mandating certain minimum requirements of operation that it must comply
with.
Moreover, an independent air traffic control provider would likely
be better suited to offer new technologies that would increase service
in small communities. For example, the independent Swedish air traffic
control provider is already operating ``remote towers'', where a tower
in an airport control traffic in more than one airport, using high-
definition cameras and other technologies to offer these services
remotely. The Irish and Germany systems have also recently awarded
contracts to implement remote towers in their countries. This
technology allows air traffic control services to be offered where it
would otherwise be uneconomical to offer them (hundreds of airports
around the Nation do not have any sort of air traffic control built on
site). The FAA is testing this technology in Virginia in a pilot
project, but many of these types of FAA pilot projects never leave the
prototype stage, either because the FAA lacks the resources or the
nimbleness to implement them. With an independent provider, it is more
likely that such innovations could be offered that could ultimately
expand access to smaller and rural communities.
Question 2. The United States has historically treated the airspace
as a national asset, ensuring access to communities of all sizes and
all users. Do you believe the air space should continue to be treated
as a public resource? If so, how would you ensure that all users
continue to have equal access to the airspace if air navigation service
resources are no longer allocated by an impartial, governmental entity?
Answer. We have numerous types of ``public resources'' in this
country. Few, however, are managed and regulated by government
entities. Most essential public resources, such as water,
communications, or electricity, are managed and put into the market by
private entities. Governments regulate these providers to ensure access
to communities of all sizes and users. The national airspace is one of
the few public resources that is not only regulated by the government,
but also managed by government--with the very same entity both
regulating and managing operation. This is highly unusual in this
country and around the world.
A non-governmental national airspace provider would continue to be
regulated by the government to ensure access to airspace, which would
be guaranteed just as it is today; FAA would regulate airmen and
airplanes, and make the rules to say who can and cannot access the
airspace. It would also regulate the air traffic control provider, who
would have to provide the services for anyone that is certified to
access controlled airspace.
______
Response to Written Questions Submitted by Hon. Brian Schatz to
Hon. Byron Dorgan
Question 1. Currently, air traffic control operations are covered
by the Airport and Airway Trust Fund plus General Fund appropriations.
At a minimum, those federally appropriated funds would have to be
replaced under a privatized or corporatized model. It is not realistic
to assume that efficiency improvements alone would be enough to make up
for the loss of these funds, and funds raised through bonds would
result in debt that would eventually have to be serviced.
If the air traffic control system is moved to a separate, self-
funding entity, what model would you propose to generate sufficient
funds to cover the cost of operations?
Answer. The new provider would be able to fund itself by charging
airspace users, like airlines, directly. This would replace the current
system, where the users are not charged directly. Instead, the current
system is funded by indirect taxes (like the jet fuel tax) and by the
passengers, who pay the 7.5 percent ticket tax, among others. Some
Federal funds would still be required to enable the parts of FAA that
would remain in the Federal Government--everything except the air
traffic control system--to function. This would include, at a minimum,
all safety regulation as well as the Airport Improvement Program.
According to our working group's analysis of air traffic control
systems around the world, fees levied on airspace users by the new
provider would be sufficient to cover the costs of the system including
any debt necessary for future expansion and technology upgrades.
This move to direct payments would bring a number of benefits.
First, it would ensure that the air traffic control providers would
have a stable and predictable funding stream. Second, there will be a
connection between the cost of providing air traffic control and the
fees the airlines have to pay. For example, today four airplanes
carrying 200 people in total might pay as much (depending on the ticket
prices) to the system as one airplane carrying the same 200 people, but
naturally the cost to control four airplanes is much higher than
controlling a single one. By moving into a system where costs are
aligned with user fees, there is an incentive for efficiency, for both
the air traffic control provider and the airlines.
While Eno's working group has not proposed any specifics about the
user fees, including what amounts should be charged, we do not go into
this blindly, not is this an experiment. ICAO, the UN agency for
international aviation, has a set of guidelines for air traffic control
fees that all developed countries but the U.S. already follow (in fact,
the U.S. even has similar user fees in the case of overflights, i.e.,
flights that do not land or depart in the U.S., like a Toronto--Mexico
City flight, e.g). These guidelines state, for example, that any
charging scheme should be simple, transparent, and equitable among
airspace users. While ICAO principles must be adapted to the U.S.
situation and legislation, they offer a starting point for what they
should look like.
Question 1a. Would it lead to cuts to air traffic controller costs
(by reducing salaries, benefits, and pensions), raise user fees, or
both?
Answer. We cannot say with certainty what would happen to labor or
fees. With respect to labor, given increasing instability of
Congressional funding, there is no guarantee that salaries benefits or
pensions would not be reduced even if FAA remains under government
control. However, the experience in Canada has been that, in general,
the employees of the new non-profit provider have been satisfied with
the transition and are typically happier working there than they were
when they were government employees. Regarding fees, experiences in
other countries have shown us that the independent air traffic control
providers are better at improving efficiency, namely by adapting new
technologies faster than governmental entities, allowing fees to be
kept in check. In the case of Canada, for example, fees are today 5
percent lower than they were in 2004, while inflation increased by more
than 20 percent during the same period. Because the new entity is
governed directly by users of the system, they have a strong incentive
to keep fees in check and ensure that their employees happy.
______
Response to Written Questions Submitted by Hon. John Thune to
Jeffery A. Smisek
Question 1. How does a standalone, commercialized air traffic
control model address concerns about funding stability, continuity of
operations, and the confidence among users regarding prospects for
accelerating NextGen benefits in a way that cannot be achieved by more
reforms within the government?
Answer. Chairman Thune, Airlines for America (A4A) does not believe
the FAA has the best possible governance and funding structure to
deliver the most efficient and modern air traffic control (ATC) system
that the American consumers deserve. A government agency funded by
taxes and subject to the annual budget process comes with far too many
constraints and uncertainty to efficiently deliver ATC services and
particularly the NextGen advances that the system requires.
There is an abundant amount of independent and insightful
information on FAA's NextGen progress and efforts. In June 2014 the
Assistant Inspector General for Aviation Audits at the U.S. Department
of Transportation testified before the Commerce, Science and
Transportation Committee stating--
``Since the effort began almost a decade ago, we [DOT IG] have
reported on longstanding challenges and barriers that have
limited FAA's progress in delivering NextGen capabilities, such
as the Agency's inability to set realistic plans, budgets, and
expectations, and clearly identify benefits for stakeholders.''
In May 2015 the National Academies of Sciences, Engineering and
Medicine put out a congressionally mandated report on NextGen. A small
excerpt from that release is below--
``The original vision for the Next Generation Air
Transportation System is not what is being implemented today,
and the Federal Aviation Administration should ``reset
expectations'' for the program meant to modernize and transform
the national airspace, says a new congressionally mandated
report from the National Research Council.
NextGen, as the system is known, was designed to overhaul the
U.S. air transportation system through procedural and
technological improvements, including the use of newer
technologies such as precision satellite navigation systems and
a digital communications infrastructure, to increase capacity,
reduce delays, and improve safety. Instead, NextGen today is a
set of incremental changes that primarily emphasizes replacing
aging equipment and systems. Although progress has provided
some new capabilities and a foundation for further evolution,
not all parts of the original vision will be achieved in the
foreseeable future. The report says that FAA should realign
stakeholder expectations by qualifying the early vision in a
way that clearly articulates the new realities.''
Most recently, in August 2015, the U.S. Department of
Transportation's Office of Inspector General (IG) reported that delays
and cost overruns continue to plague the FAA's transition to NextGen.
Focusing on the FAA's deployment of automation tools to optimize
benefits of performance-based navigation (PBN) the IG report noted
that, ``FAA has not provided basic support to encourage its use, and
additional enhancements are still required to further optimize PBN.''
The IG also concluded that the FAA is still ``several years away'' from
deploying new controller technology to manage airport arrivals.
Recognizing the need to `reset expectations', A4A sought to
benchmark and do a fact-based assessment of the governance, financial
and operational performance of the U.S., Canadian and European ATC
models. A4A's analysis suggests some basic principles for success in
any Air Navigation Service Provider (ANSP). There must be:
(1) Separation of the ATC operations from ATC safety regulation, in
which a new, independent ANSP directs ATC operations and future
ATC investment decisions, and safety regulation is provided by
the Federal Government through a performance-based oversight
system;
(2) Independent, multi-stakeholder board governance free from
political influence over decision-making;
(3) A professional, effective management team of the ATC provider,
incentivized to pursue safety and efficiencies without the
constraints imposed on government agencies that hamper their
ability to manage more nimbly and effectively;
(4) A fair, self-funding user fee model based on the cost of ATC
services allowing for access to capital markets and a steady,
predictable and reliable stream of funding that is not subject
to governmental budgetary constraints such as those that have
recently resulted in sequester and furloughs of air traffic
controllers;
(5) The ability to manage assets and capital investments in a way
that enables far greater speed to market of technological
modernization; and
(6) Transparency in user fees so that users and their customers
alike know what they are paying, allowing users full ability to
recover costs.
These success factors would lead to an effective operation because
an independent ANSP would then operate with long-term funding and
governance certainty, subject of course to strong safety regulation and
oversight by the FAA. This new ANSP organization would be accountable
to stakeholders and users of the system, driving effective decision
making, long-term investments and efficient operations to capture the
full benefits of the ATC system. Based on our analysis and the
principles noted above, it is A4A's position that a nongovernmental,
nonprofit type governance structure for air traffic control--with the
FAA retaining the role of safety regulator--would deliver the greatest
benefits for a reformed ANSP because such a structure would continue to
put safety first, while driving value for all stakeholders, including
the traveling public.
Recent events have made clear that the current ATC system, while
safe, is not without its own operational vulnerabilities that can lead
to public failures. In late 2014, a fire set by a contract worker at
the Federal Chicago Air Route Traffic Control Center snarled flights in
the Midwest for an extended period of time. In August 2015, a glitch in
a software upgrade at an FAA facility in Leesburg, VA canceled and
delayed hundreds of flights throughout the Washington, D.C.
metropolitan region.
The risk of doing nothing is high and working within the existing
governmental system will not yield the necessary changes needed to
modernize the U.S. ATC system. We cannot afford the status quo of a
safe system that does not meet the ever growing and changing demands of
our diverse aviation system. By following the principles described
above we can achieve a U.S. ATC system that is both incredibly safe and
greatly more efficient.
Question 2. One goal of efforts to modernize the air traffic
control system has been to leverage technology to consolidate aging and
costly air traffic control facilities. What are some of the
efficiencies that you would expect a corporatized air navigation
service provider would be able to achieve with respect to facility
consolidation versus a government provider?
Answer. Predicting or forecasting specific changes to the system at
this time is nearly impossible. A4A proposes that there be a two-year
moratorium on significant changes to service levels after a new ANSP
assumes responsibility for ATC. The new ANSP will need to initially
work through transition issues and develop a day-to-day understanding
of all the assets.
In the longer-term, for any assets owned by the ANSP, the entity
should have the ability to dispose, replace or consolidate those assets
as appropriate to deliver more effective and efficient services without
politically driven restrictions. However, the FAA should retain safety
oversight to review the ANSP's safety assessment of any proposed
changes and should have the ability to intervene for safety reasons
only. There should also be a notice and comment process for any
facility closure or significant changes in service level, and facility
realignment should be undertaken through a data-driven process in
collaboration with the ANSP's labor unions.
Question 3. Among the international Air Navigation Service
Providers that you have examined, were any going through a
modernization effort similar to NextGen when they were separated from
the safety regulator? How, if at all, would a transition to a new air
traffic control governance model impact NextGen implementation?
Answer. A4A is advocating for an entirely new U.S. ANSP that takes
the best attributes of established international models and effectively
adapts them to create an ANSP that works for the complex U.S. system
and its unique operating environment.
Directly comparing this undertaking to another country's experience
creates an ``apples to oranges'' scenario. However, there are
international examples of complex airspace with a diverse set of users
where ATC reform has been successful, and the sector-based approach to
air traffic control, coupled with the use of modern technology, make
the business inherently scalable.
Please see answer to Question 1 for NextGen implementation
information.
______
Response to Written Questions Submitted by Hon. Deb Fischer to
Jeffery A. Smisek
Question 1. I have read the concerns expressed by the general
aviation community regarding ``commercialization'' or ``privatization''
of the air traffic control (ATC) system. Do you believe there is a way
for us to reform this system to ensure safety, efficiency, and
innovation, while protecting the concerns of general aviation?
Answer. Yes. It is the A4A position that a nongovernmental,
nonprofit governance structure for air traffic control--with the FAA
retaining the role of safety regulator--would deliver the greatest
benefits for a reformed ANSP because such a structure would continue to
put safety first, while driving value for all stakeholders, including
general aviation and the traveling public. A more modern and
efficiently run entity making decisions that benefit and are
accountable to the users of the system will benefit all stakeholders.
Question 2. As the CEO of a major airline, can you please provide
the committee with some examples of the challenges your company faces
due to the inability of our current ATC system to keep up with the
speed of innovation by private airlines? Can you also provide examples
of how business is enhanced by private sector-oriented ATC systems in
other nations?
Answer. From United's perspective, the best example I can give is
that when I started in the industry in the mid-1990s, a flight from
Reagan National to our hub in Newark was booked for 54 minutes. Now
that same flight is booked for 84 minutes to account for delays
resulting from our antiquated air ATC system. Airlines and our
customers have also recently been plagued by major failings of the
government-run ATC system. For example, in late 2014 a fire set by a
contract worker at the Federal Chicago Air Route Traffic Control Center
snarled flights in the Midwest for an extended period of time. In
August 2015, a glitch in a software upgrade at an FAA facility in
Leesburg, VA canceled and delayed hundreds of flights throughout the
Washington, DC metropolitan region.
It is the A4A position that a nongovernmental, nonprofit type
governance structure for air traffic control--with the FAA retaining
the role of safety regulator--would deliver the greatest benefits for a
reformed ANSP because such a structure would continue to put safety
first, while driving value for all stakeholders, including general
aviation and the traveling public. A more modern and efficiently run
entity making decisions that benefit and are accountable to the users
of the system will benefit all stakeholders.
______
Response to Written Questions Submitted by Hon. Bill Nelson to
Jeffery A. Smisek
Question 1. How would a non-governmental air traffic control
provider ensure that there is continued service and access to small
communities and rural areas?
Answer. United Airlines, like most carriers serves small
communities and rural areas. Passengers and revenue from these
communities help sustain our service networks, so we are committed to
seeing this service continue as part of transformational reform. Making
the air traffic control (ATC) system more efficient will make the
entire U.S. aviation system healthier. In turn, when the system is
healthy, airlines do well, and when airlines are doing well, we invest
in our people, products and new service. Fixing the system will
transform how we operate today. We believe that will be a plus for
smaller communities.
Question 2. The United States has historically treated the airspace
as a national asset, ensuring access to communities of all sizes and
all users. Do you believe the air space should continue to be treated
as a public resource? If so, how would you ensure that all users
continue to have equal access to the airspace if air navigation service
resources are no longer allocated by an impartial, governmental entity?
Answer. An ATC system that is responsive to the users of the system
is good for all stakeholders and most importantly the traveling public.
A primary advantage of ATC reform is the opportunity for the ATC
organization to provide services that are more focused and responsive
to the wide cross-section of system users. Specifically, any new air
navigation service provider should be run by a Board of Directors
nominated by entities that represent various stakeholders. A well-
functioning Board of Directors with consultation from all users is
critical to the success of any new ANSP.
Question 3. In your testimony on behalf of Airlines for America,
you indicate that the airline industry believes fundamental reform is
necessary. But your written statement specifically notes that Delta Air
Lines is not represented by your testimony. Further, Delta submitted
extensive comments for the record, outlining significant concerns about
the negative consequences that would result from wholesale removal of
Air Traffic Control from the FAA. Can you explain the significant
difference of opinion among our country's largest airlines?
Answer. The majority of A4A's members support transformational
reform.
Question 4. In the past, airlines have disagreed over the tax
structure applicable to the industry. Most notably, a major battle
erupted in the mid-1990s as legacy airlines sought to shift costs to
low cost carriers through tax changes. In the wake of the September 11
attacks, airlines disagreed about the amount and structure of the new
security fee imposed to fund the TSA and other security initiatives. A
new system of user fees is likely to be imposed if air traffic control
is privatized. How can we be assured the airlines will avoid the ugly
disagreements of the past?
Answer. The majority of A4A's members now support transformational
reform and recommend that the new ANSP's Board of Directors establish
fees under a charging structure that is consistent with well-
established international models and International Civil Aviation
Organization (ICAO) charging principles.
Question 5. The operations of cargo airlines differ substantially
from those of passenger airlines. They have different needs and impose
a different burden on the air traffic control system, largely because
most cargo airlines operate during nighttime hours. Likewise, cargo
airlines support the costs of the system with unique taxes on air
cargo. Do cargo airlines endorse the position to which you have
testified here today? Do they agree that fundamental change is
necessary--likely including a new system of user fees?
Answer. The majority of A4A's members support transformational
reform and recommend that the new ANSP's Board of Directors establish
fees under a charging structure that is consistent with well-
established international models and International Civil Aviation
Organization (ICAO) charging principles.
______
Response to Written Question Submitted by Hon. Richard Blumenthal to
Jeffery A. Smisek
Question. I am a proud sponsor of S. 911, the Saracini Aviation
Safety Act of 2015, which would require airlines to install secondary
barriers on most commercial aircraft. These barriers would prevent
access to the flight deck of the aircraft. The legislation is named in
honor of Victor J. Saracini, a pilot killed when terrorists hijacked
United Flight 175 on September 11, 2001. The FAA has encouraged and
issued guidance on secondary barriers, but the FAA has not mandated
their installation. What steps has United Airlines taken to install
secondary barriers? Would those efforts prevent the type of hijacking
we saw on United Flight 175?
Answer. We oppose Federal legislation to mandate secondary barriers
on commercial aircraft. The U.S. airline industry remains committed to
a multi-layered, dynamic and risk-based security system. Prior to the
installation of fortified cockpit doors after 9/11, United Airlines
voluntarily installed secondary barriers on some of our aircraft,
however United and the industry believe that the decision about whether
to install secondary barriers should be left to individual carriers.
Resources spent to provide additional security for our passengers and
crew should be dedicated based on areas of highest risk and in
accordance with a multi-layered, dynamic approach to security.
______
Response to Written Questions Submitted by Hon. Brian Schatz to
Jeffery A. Smisek
Question 1. Currently, air traffic control operations are covered
by the Airport and Airway Trust Fund plus General Fund appropriations.
At a minimum, those federally appropriated funds would have to be
replaced under a privatized or corporatized model. It is not realistic
to assume that efficiency improvements alone would be enough to make up
for the loss of these funds, and funds raised through bonds would
result in debt that would eventually have to be serviced.
If the air traffic control system is moved to a separate, self-
funding entity, what model would you propose to generate sufficient
funds to cover the cost of operations?
Answer. A4A recommends that the new ANSP's Board of Directors
establish fees under a charging structure that is consistent with well-
established international models and International Civil Aviation
Organization (ICAO) charging principles to pay for the operations of
the new ANSP.
Question 1a. Would it lead to cuts to air traffic controller costs
(by reducing salaries, benefits, and pensions), raise user fees, or
both?
Answer. Employees transferred to the new ANSP should be ``held
harmless'' financially in the transfer. Compensation and benefits,
including accumulated pension benefits, should remain the same and
carry over, intact, to the new organization. Existing labor union
representation and collective bargaining agreements should carry over
to the new ANSP, with an arbitration process to resolve modifications
necessary to account for the new ANSP being a commercial entity rather
than a government agency.
______
Response to Written Question Submitted by Hon. Cory Booker to
Jeffery A. Smisek
Question. Your written testimony advocates for transformational
reform of the air traffic control system and acknowledges that the
Congressional process to achieve transformational reform is complex
with lots of business risks. If Congress were to embrace some form of
transformational reform, how would this impact the regular air traveler
at Newark Liberty Airport, for instance? Will they notice a difference?
How long would it take?
Answer. An ATC system that is responsive to the users of the system
is good for all stakeholders and the traveling public especially those
traveling through large hub airports like Newark. We have the safest
ATC system in the world. We should also be striving to be the most
efficient and most modern. General agreement has existed for years that
we cannot continue to run the ATC system the same way as it has been
since the 1950s and expect different results. A string of reports from
presidentially appointed aviation commissions, the Department of
Transportation Inspector General, the Government Accountability Office
and independent private sector experts indicates that the FAA's ATC
modernization efforts have been plagued by significant cost overruns
and delays and call into question the ability of the FAA, under the
existing funding and governance structure, to deliver the results that
travelers, operators and the general public in the United States
require.
The best example I can give is that when I started in the industry
in the mid-1990s, a flight from Reagan National to Newark was booked
for 54 minutes. Now that same flight is booked for 84 minutes to
account for delays resulting from our antiquated air ATC system. A more
efficient system will benefit all travelers including those at large
hub airports like Newark.
We recommend a four year transition process that involves
stakeholders working with the USG to ensure a safe and efficient
transition, with the least disruption possible being the guiding
principle.
______
Response to Written Question Submitted by Hon. Deb Fischer to
Paul M. Rinaldi
Question. I have read the concerns expressed by the general
aviation community regarding ``commercialization'' or ``privatization''
of the air traffic control (ATC) system. Do you believe there is a way
for us to reform this system to ensure safety, efficiency, and
innovation, while protecting the concerns of general aviation?
Answer. Many foreign nations have successfully separated the
operation and regulation of their aviation system into an air
navigations service provider and a civil aviation administration
respectively. In September 2015, the DOT Inspector General did a report
comparing the systems in the Canada, United Kingdom, Germany, and
France. Report No. AV-2015-084. Citing a MITRE Study commissioned by
the FAA, dated October 2014, the DOT IG wrote, ``Studies we reviewed,
including a recent report commissioned by the FAA, indicated that
separating air navigation and safety/regulatory functions has not
impacted safety.'' The DOT IG noted that the United States has the
largest, most complex air transportation system in the world and has
the most operations and a larger general aviation community than any of
the foreign ANSPs. Any reform must preserve that size, complexity, and
diversity. General aviation can continue to thrive in a new system as
long as it ensures that there are no new financial barriers for non-
commercial flight and flight schools and by ensuring that we maintain
the current first come, first served model rather than a best equipped,
best served model.
______
Response to Written Question Submitted by Hon. Bill Nelson to
Paul M. Rinaldi
Question. At the hearing you seemed to express openness to
restructuring the current ATC system along the lines of the private,
not-for-profit, NavCanada model. After NavCanada split off from the
government agency Transport Canada, new air traffic control hires were
no longer provided the same benefits package that existing air traffic
controllers received, instead receiving a weaker pension. In the
aviation world, airlines have negotiated these so-called ``B Scales''
for a number of their employee unions, with fewer benefits provided for
new workers. Are NATCA members and leadership concerned that
privatizing the air traffic control will lead to the creation of a two
tiered benefit system for controllers?
Answer. NATCA is concerned about the possibility of reduced pay and
benefits in a reform plan that would take air traffic control
operations outside of the Federal Government. But, we are confident
that H.R. 4441 provides for very strong protections for employee
rights, pay, and benefits, as well as union rights to negotiate over
wages, hours, and other terms and conditions of employment, including
benefits. In order for NATCA to support any reform it must contain
protections for employees and collective bargaining. Ranking Member
DeFazio praised the labor code in the Chairman's bill as extremely
workforce friendly.
Specifically, H.R. 4441 provides that employees on the date of
transfer would have the option of retaining their Federal employee
retirement plan (either Civil Service Retirement System or Federal
Employee Retirement System, as currently applicable) and Federal
Employee Health Benefit Plan. The employer would be required to pay the
government's share to both programs and employees would receive credit
for service with the corporation toward their retirement calculation. A
new plan for the employer would be subject to negotiations and if NATCA
and the employer could not reach agreement it would be subject to
mediation and ultimately binding third-party arbitration, the same way
other subjects of bargaining would be resolved under the bill's
provisions. We are confident that under this system we would be able to
successfully negotiate fair pay and benefits for our membership, both
current and future.
Presently, Federal employees are subject to an A-scale, B-scale, C-
scale, and D-scale for the purposes of retirement, if you consider the
A-scale CSRS, B-scale FERS, C-scale FERS-RAE, and D-scale FERS-FRAE.
This does not include CSRS-offset or other even smaller pools of
retirement programs. When these plans changed there was no duty to
bargain nor binding arbitration; employees and their representatives
were not part of the process, yet each provided for higher employee
contributions and/or reduced benefits.
Under the Canadian system, the A-scale provides for a higher
pension calculation, but a significant employee contribution. While the
B-scale provides for a lower pension calculation, it also includes a
100 percent employer funded contribution, saving employees
approximately 9 percent that they had previously had to contribute to
their own retirement. It is definitely not a clear-cut case of reduced
benefits, if employees contribute that 9 percent to a personal
retirement-investment account, even though the pension calculation
itself is lower.
______
Response to Written Questions Submitted by Hon. Brian Schatz to
Paul M. Rinaldi
Question 1. As you mentioned in your testimony, increasing hiring
efforts this year and next year will not make up for the attrition in
the air traffic controller workforce since 2013, unless training and
placement processes are made a higher priority.
In the context of FAA reauthorization, what will be required to
ensure facilities are adequately staffed with people who have the
necessary levels of experience?
Answer. NATCA has consistently stated that the status quo is
unacceptable when it comes to funding and air traffic controller
staffing. There are many reasons that controller staffing has reached
crisis level and, as a result, NATCA believes that the FAA must take a
holistic, collaborative approach to resolve its critical staffing
issues. The first step is for Congress to pass an FAA Reauthorization
bill that provides for the kind of stable, predicable funding that is
necessary.
As for short-term staffing solutions, one option that NATCA
supports is the passage of H.R. 5292 (The Air Traffic Controller Hiring
Improvement Act of 2016), which would help ease some of the FAA's
hiring and staffing problems. NATCA supports a continuously open
vacancy announcement and preferential consideration for certified
controllers with at least 52 consecutive weeks of experience involving
the active separation of air traffic for the FAA, DOD, within the
Federal Contract Tower program, and H.R. 5292 provides an avenue for
such a program. NATCA also supports the reduction and/or removal of the
bureaucratic red tape that has plagued the FAA's hiring, placement, and
transfer processes for years.
In addition to these changes, NATCA supports Congress's adoption of
the FAA and NATCA's jointly-developed certified professional controller
(CPC) staffing target numbers as opposed to the FAA's flawed Controller
Workforce Plan (CWP) staffing numbers, which counts a brand new
developmental trainee as equal to a 20 year plus veteran CPC when
measuring facility staffing levels. In essence, the CWP is misleading
because it uses finance numbers rather than operations numbers for
assessing the FAA's current staffing situation by lumping together CPCs
with other controllers who are not yet fully certified. Adopting the
FAA and NATCA's jointly developed staffing numbers is critical to
ensure that each facility is staffed with controllers who have the
necessary levels of experience. Otherwise, it will appear as if the FAA
has fixed some of its staffing issues in certain critical facilities
when, in fact, the Agency merely flooded the facility with
developmental trainees fresh out of the Academy.
Question 2. Currently, air traffic control operations are covered
by the Airport and Airway Trust Fund plus General Fund appropriations.
At a minimum, those federally appropriated funds would have to be
replaced under a privatized or corporatized model. It is not realistic
to assume that efficiency improvements alone would be enough to make up
for the loss of these funds, and funds raised through bonds would
result in debt that would eventually have to be serviced.
a. If the air traffic control system is moved to a separate, self-
funding entity, what model would you propose to generate sufficient
funds to cover the cost of operations?
b. Would it lead to cuts to air traffic controller costs (by
reducing salaries, benefits, and pensions), raise user fees, or both?
Answer. NATCA has made clear that it does not support any one
particular reform model over another, but that any proposed FAA reform
model must accomplish the following four things: (1) ensure that
NATCA's bargaining unit employees are fully protected; (2) retain
safety and efficiency as top priorities; (3) provide for a stable and
predictable funding stream that adequately supports air traffic control
services, staffing, hiring and training, long-term modernization,
preventative maintenance, and ongoing modernization to infrastructure;
and (4) maintain a dynamic aviation system that continues to provide
services to all segments of the aviation community, from commercial
passenger carriers and cargo haulers to business jets and general
aviation, at all major airports and small airports in rural areas. In
its current form, House T&I Committee Chairman Bill Shuster's long-term
FAA Reauthorization legislation (AIRR Act) addresses these four primary
issues of concern. The International Civil Aviation Organization (ICAO)
weight and distance model that has been adopted in most nations would
provide the backbone for any funding scheme, however NATCA is agnostic
with regard to applying any particular rates or fees to the different
segments of the aviation community.
NATCA does not and would not support any solution to providing
stable predicable funding that would come at the expense of employee
salaries, benefits, or pensions. The AIRR Act preserves negotiated
agreements including pay and benefits, and provides that current
Federal employees who transfer to the corporation would be eligible to
remain in the Federal Employee Health Benefit Plan and the Civil
Service Retirement System or Federal Employee Retirement System, as
applicable. Employees newly hired by the corporation and transferring
employees who elect to do so, would participate in plans negotiated by
NATCA and provided to corporation employees. The protection of current
employees' benefits and the ability for NATCA to be involved in the
collective bargaining process to negotiate benefits for corporation
employees is critical to our support of any reform legislation.
______
Response to Written Question Submitted by Hon. Cory Booker to
Paul M. Rinaldi
Question. You reference in your written testimony that NavCanada
had a ``difficult and lengthy transition period.'' From an air traffic
controllers' perspective, what were the difficulties, how might these
be exacerbated by the complexity of the U.S. airspace, and how were
they overcome?
Answer. In October 2014, MITRE Corp. released a report summarizing
the governance, autonomy, structure, and funding of the Civil Aviation
Authority (CAA) in six countries and discussed any lessons learned from
their separation from the Air Navigation Service Provider (ANSP). The
study included the United Kingdom, Canada, New Zealand, Australia,
France, and Germany.
In the section regarding transition, the study found:
Three particular lessons learned and associated recommendations
were repeatedly expressed: operate the CAA and the ANSP as
functionally separate units for a few years prior to complete
separation, use that time to develop and review comprehensive
written regulations that will form the foundation for the
relationship between the CAA and the ANSP, and establish a
clear understanding as to the broader division of roles and
responsibilities between the CAA and the ANSP.
Each of these other nations is quite different than the U.S.
National Airspace System, in terms of size, density, complexity,
traffic diversity, and other factors, so none of the other nations'
transitions can be directly comparable. A successful transition will
require the appropriate amount of time for the regulatory FAA and the
new air traffic entity to establish appropriate boundaries and
procedures. When NATCA received a briefing by the MITRE report authors,
we learned that too short a transition period could actually lead to a
longer period of time before the new entity and the regulator are
successful.
NavCanada's transition was particularly difficult because it was
required to purchase the air navigation system from the government. To
do so, the newly formed corporation had to take on considerable debt.
Then, in the aftermath of the terrorist attacks of September 11, 2001,
it faced an immediate traffic and revenue decline of 10 percent
resulting in a C$145 million shortfall in 2002 and an anticipated
cumulative shortfall of C$360 from 2002-2005, making debt service
extremely difficult. NavCanada was forced to undergo financial
restructuring in order to generate cash flow to support operations and
required capital spending. The AIRR Act does not require the new ATC
Corporation to purchase the assets from the FAA, which would make the
transition significantly easier and prevent significant air traffic
downturns from immediately affecting the corporation's ability to be
successful.
______
Response to Written Question Submitted by Hon. Deb Fischer to
Ed Bolen
Question. I have read the concerns expressed by the general
aviation community regarding ``commercialization'' or ``privatization''
of the air traffic control (ATC) system. Do you believe there is a way
for us to reform this system to ensure safety, efficiency, and
innovation, while protecting the concerns of general aviation?
Answer. Our airspace belongs to the American public. It does not
belong to any private company, or group of companies. It doesn't belong
to any segment of the aviation industry, or even the aviation industry
itself. The airspace belongs to the American public, and it should be
operated for the public's benefit. We stand by our oral and written
testimonies given and submitted to the Committee on May 19, 2015.
______
Response to Written Questions Submitted by Hon. Brian Schatz to
Ed Bolen
Question 1. Currently, air traffic control operations are covered
by the Airport and Airway Trust Fund plus General Fund appropriations.
At a minimum, those federally appropriated funds would have to be
replaced under a privatized or corporatized model. It is not realistic
to assume that efficiency improvements alone would be enough to make up
for the loss of these funds, and funds raised through bonds would
result in debt that would eventually have to be serviced.
If the air traffic control system is moved to a separate, self-
funding entity, what model would you propose to generate sufficient
funds to cover the cost of operations?
Question 1a. Would it lead to cuts to air traffic controller costs
(by reducing salaries, benefits, and pensions), raise user fees, or
both?
Answer. As you said, in today's system, we have trust fund and
general fund monies that make up the FAA budget. If you restructure FAA
and move to a privatized or corporatized model, the general fund money
goes away. Users are then left with three options to fund the system:
cut costs; increase taxes, fees and charges for users; or borrow money
which will increase costs to users since the debt needs to be serviced.
Sequestration has shown us that cutting costs is difficult and can
affect service to small and rural communities. Increasing taxes, fees,
and charges or borrowing money increases costs for the users of the
system and no stakeholder has said they will pay more.
As a result, we believe costs will go up for the users and service
to small, rural and mid-sized communities throughout the country will
be cut and/or severely decreased.
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