Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Congressional research reportJan 29, 2015

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Issues in the Reauthorization of the

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Analyst in Transportation and Industry

January 29, 2015

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R43858

Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Summary

The funding authorization for the Federal Aviation Administration (FAA), included in the FAA

Modernization and Reform Act of 2012 (P.L. 112-95), expires on September 30, 2015. In addition

to setting spending levels, FAA authorization acts typically set policy on a wide range of issues

related to civil aviation. This report considers topics that are likely to arise as the 114th Congress

debates reauthorization.

Most FAA programs are financed through the Airport and Airway Trust Fund (AATF), sometimes

referred to as the Aviation Trust Fund. The financial health of the AATF, which is funded by a

variety of taxes and fees on air transportation, has been a growing concern. Although the trust

fund balance is projected to grow in the near term—as AATF revenue continues to rise and airport

capital needs are projected to decline—reductions in general fund appropriations to FAA have

increased the proportion of FAA funding that is derived from the trust fund. In addition, changes

in airline business practices pose a risk to the AATF revenue structure: trust fund revenue is

largely dependent on airlines’ ticket sales, and airlines’ increasing use of fees charged for options

that may once have been included in the base ticket price, such as checked bags and onboard

meals, has reduced the amount of money flowing into the fund.

Other major issues likely to arise during the reauthorization debate include the following:



Unmanned aerial vehicles. FAA has failed to issue rules for commercial and

government use of drone aircraft within the time directed by the 2012 law,

frustrating potential commercial operators. Meanwhile, large numbers of drones

have come into use, and there have been numerous reports of near-collisions

between drones and manned aircraft.

Air traffic control privatization. Many commissions over the years have

recommended moving responsibility for air traffic control from FAA, a

government agency, to either an independent government-owned corporation or a

private entity controlled by aviation stakeholders. Delays in implementing the

satellite-based NextGen air traffic control system have renewed interest in this

possibility.

Essential Airline Service (EAS). In 2012, Congress attempted to limit the

number of localities eligible to participate in this program to subsidize flights to

communities that would otherwise lose all commercial airline service, as well as

to limit the amount of subsidies per passenger. These efforts were largely

unsuccessful.

Airfare disclosure. The House of Representatives approved a bill in 2014 that

would reverse an FAA regulation requiring airlines and website operators to give

greater prominence to the final price, including fees and taxes, than to the “base

airfare” charged by the carrier. The Senate did not approve this legislation, but

the issue is likely to reappear in the context of FAA reauthorization.

This report does not attempt to be comprehensive. Many issues debated prior to passage of the

FAA Modernization and Reform Act of 2012 are not discussed unless further congressional

consideration appears probable. Additional issues, not discussed in this report, may arise as

Congress moves forward with reauthorization.

Congressional Research Service

Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Contents

Introduction ..................................................................................................................................... 1

Aviation Funding ............................................................................................................................. 1

FAA Funding Accounts ............................................................................................................. 2

Airport Financing ............................................................................................................................ 3

Evaluating Capital Needs .......................................................................................................... 4

Airport Improvement Program (AIP) ........................................................................................ 5

AIP Funding ........................................................................................................................ 6

Funding Distribution ........................................................................................................... 8

Entitlements (Formula Funds) ............................................................................................ 8

Discretionary Funds .......................................................................................................... 10

State Block Grant Program ................................................................................................ 11

The Federal Share of AIP Matching Funds ....................................................................... 12

Distribution of AIP Grants by Airport Size ....................................................................... 12

Grant Assurances .............................................................................................................. 13

Passenger Facility Charges...................................................................................................... 15

Airport Privatization ...................................................................................................................... 16

Types of Airport Privatization ................................................................................................. 17

The Interests at Stake .............................................................................................................. 18

The Airport Privatization Pilot Program (APPP) .......................................................................... 19

Participation in APPP .............................................................................................................. 20

Stewart International Airport ............................................................................................ 21

Luis Muñoz Marín International Airport .......................................................................... 21

Hendry County Airglades Airport ..................................................................................... 22

Chicago Midway Airport .................................................................................................. 22

Why Has the APPP Not Stimulated Privatization? ................................................................. 22

APPP Application Process ................................................................................................ 23

Regulatory Conditions and Obligations ............................................................................ 23

Adequate Access to Funding ............................................................................................. 24

Policy Issues Related to Privatization ............................................................................... 25

Aircraft Noise Issues ..................................................................................................................... 26

The Next Generation Air Transportation System (NextGen) ........................................................ 27

NextGen Evolution.................................................................................................................. 28

Elements and Funding ............................................................................................................. 29

Current Status .......................................................................................................................... 31

Aircraft Equipage .............................................................................................................. 31

Anticipated Benefits.......................................................................................................... 32

Policy Concerns ................................................................................................................ 33

FAA Organizational Issues ............................................................................................................ 34

Facility Consolidation ............................................................................................................. 34

The Federal Contract Tower (FCT) Program .......................................................................... 35

Technological Developments Affecting Potential Safety Impacts of Possible Future

Tower Closures or Facility Consolidations .......................................................................... 36

Facility Security ...................................................................................................................... 37

Air Traffic Control Privatization ............................................................................................. 37

Controller Selection and Hiring .............................................................................................. 38

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Aviation Safety Issues ................................................................................................................... 39

Airline Safety .......................................................................................................................... 39

Pilot Fatigue ............................................................................................................................ 40

Airline Pilot Qualifications and Pilot Supply .......................................................................... 40

Commercial Aircraft Tracking and Flight Data Recorders ..................................................... 41

Satellite Tracking .............................................................................................................. 41

Deployable Recorders ....................................................................................................... 42

Oversight of Maintenance and Repair Stations ....................................................................... 42

Safety and Reliability Issues ............................................................................................. 44

Regulatory Oversight ........................................................................................................ 45

The Role of Foreign Regulatory Agencies ........................................................................ 47

English Language Concerns ............................................................................................. 47

Drug and Alcohol Testing and Substance Abuse Programs .............................................. 48

Airport Surface Movement Safety .......................................................................................... 48

Integration of Unmanned Aircraft Operations ........................................................................ 49

Enforcement Authority...................................................................................................... 50

Oversight of Commercial Space Activities ............................................................................. 50

Aircraft and Parts Certification ............................................................................................... 51

Research and Development ........................................................................................................... 52

Airline Issues ................................................................................................................................. 54

Essential Air Service (EAS) .................................................................................................... 54

EAS Funding..................................................................................................................... 55

Subsidies ........................................................................................................................... 55

Small Community Air Service Development Program ................................................................. 55

Metropolitan Washington Airports Authority (MWAA)................................................................ 56

Airline Consumer Issues................................................................................................................ 58

Ongoing Airline Passenger Rights Issues................................................................................ 59

War Risk Insurance........................................................................................................................ 62

International Aviation Issues ......................................................................................................... 63

Customs and Immigration Preclearance Facilities .................................................................. 63

“Open Skies” Agreements ....................................................................................................... 63

Foreign Ownership in U.S. Carriers ........................................................................................ 65

Figures

Figure 1. FY2014 AIP Distribution: Entitlement and Discretionary Grants .................................. 11

Figure 2. FY2014 AIP Grant Distribution by Airport Type ........................................................... 13

Figure 3. Allocation of NextGen Funding, FY2013-FY2015 ....................................................... 30

Figure 4. Major Components of Airline Operating Costs ............................................................. 43

Figure 5. FAA Research Funding by Account ............................................................................... 53

Tables

Table 1. Aviation Taxes and Fees .................................................................................................... 1

Table 2. Reauthorization Funding Levels for FAA Accounts .......................................................... 3

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Table 3. Annual AIP Authorizations and Amounts Made Available for Grants, FY1992FY2013 ......................................................................................................................................... 7

Table 4. Distribution of PFC Approvals and AIP Grants by Project Type, FY2014...................... 16

Table 5. Full Airport Privatization Under the APPP vs. Outside the APPP ................................... 19

Table 6. Participation in the APPP................................................................................................. 20

Table 7. Funding for NextGen Programs....................................................................................... 29

Table 8. Regulatory Differences Between Domestic and Foreign Repair Stations ....................... 45

Contacts

Author Contact Information .......................................................................................................... 66

Congressional Research Service

Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Introduction

The funding authorization for the Federal Aviation Administration (FAA), included in the FAA

Modernization and Reform Act of 2012 (P.L. 112-95), expires on September 30, 2015. In addition

to setting spending levels, FAA authorization acts typically set policy on a wide range of issues

related to civil aviation. This report considers topics that are likely to arise as the 114th Congress

debates reauthorization. It does not attempt to be comprehensive. Many issues debated prior to

passage of the FAA Modernization and Reform Act of 2012 are not discussed unless further

congressional consideration appears probable. Additional issues, not discussed in this report, may

arise as Congress moves forward.

Aviation Funding

Most FAA programs are financed through the Airport and Airway Trust Fund (AATF), sometimes

referred to as the Aviation Trust Fund. The AATF was established in 1970 under the Airport and

Airway Development Act of 1970 (P.L. 91-258) to provide for expansion of the nation’s airports

and air traffic system. Since FY2009, the AATF has provided between 66.6% and 71.4% of FAA’s

total annual funding, with the remainder coming from general fund appropriations.1 Revenue

sources for the trust fund include passenger ticket taxes, segment fees, air cargo fees, and fuel

taxes paid by both commercial and general aviation aircraft (see Table 1).

Table 1. Aviation Taxes and Fees

(CY2014 rates)

Tax or Fee

Rate

Passenger Ticket Tax (on domestic ticket purchases and frequent flyer awards)

7.5%

Flight Segment Tax (domestic, indexed annually to Consumer Price Index)

$4.00

Cargo Waybill Tax

6.25%

Frequent Flyer Tax

7.5%

General Aviation Gasolinea

19.3 cents/gallon

General Aviation Jet Fuela (Kerosene)

21.8 cents/gallon

Commercial Jet Fuela (Kerosene)

4.3 cents/gallon

International Departure/Arrivals Tax (indexed annually to Consumer Price Index)

(prorated Alaska/Hawaii to/from mainland United States)

$17.70

(Alaska/Hawaii = $8.90)

Fractional Ownership Surtax on general aviation jet fuel

14.1 cents/gallon

Source: Federal Aviation Administration, Current Aviation Excise Tax Structure, updated January 2015.

a. Does not include 0.1 cents/gallon for the Leaking Underground Storage Tank (LUST) trust fund.

In addition to excise taxes deposited into the trust fund, FAA imposes air traffic service fees on

flights that transit U.S.-controlled airspace but do not take off from or land in the United States.

These overflight fees partially fund the Essential Air Service (EAS) program.2

Federal Aviation Administration, Airport and Airway Trust Fund (AATF) Fact Sheet, http://www.faa.gov/about/

office_org/headquarters_offices/apl/aatf/media/AATF_Fact_Sheet.pdf.

See CRS Report R41666, Essential Air Service (EAS): Frequently Asked Questions, by ( name redacted)

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

In 2013, the AATF had revenues of almost $12.9 billion and maintained a cash balance of more

than $13 billion. However, the uncommitted balance has declined considerably since 2001, when

it exceeded $7 billion. Following the onset of the global economic crisis in 2008, the AATF

uncommitted balanced dropped to $299 million at the end of FY2009, but has since rebounded; it

was estimated to be $1.3 billion at the end of FY2014.3 The trust fund balance is projected to

grow in the near term, as AATF revenue continues to rise and airport capital needs are projected

to decline over the next five years. In the longer term, however, the vitality of the AATF remains

a concern, as reductions in general fund appropriations to FAA have increased the proportion of

FAA funding that is derived from the trust fund.

Changes in airline business practices pose a risk to the AATF revenue structure. Trust fund

revenue is largely dependent on airlines’ ticket sales, and the spread of low-cost air carrier models

has held down ticket prices and therefore AATF receipts. In addition, airlines increasingly impose

fees for a variety of options and amenities, such as checked bags and onboard meals, rather than

including them in the base ticket price. Generally, fees not included in the base ticket price are not

subject to federal excise taxes. The U.S. Government Accountability Office (GAO) estimated that

the trust fund could have received $186 million in FY2009 from untaxed baggage fees alone, had

these fees been subject to the 7.5% excise tax.4

Airlines have long contended that general aviation operators, particularly corporate jets, should

provide a larger share of the revenues supporting the trust fund. General aviation interests dispute

this, arguing that the air traffic system mainly supports the airlines, and that nonairline users pay a

reasonable share given the relatively small incremental costs arising from their flights. Proposals

in 2012 to increase the general aviation jet fuel tax were not adopted. The Clinton, George W.

Bush, and Obama Administrations all proposed per-flight user charges; President Barack Obama

has proposed a $100-per-flight charge on commercial and general aviation jets and turboprops

that fly in controlled airspace each year since 2011. In the 110th Congress, the Senate voted to

impose a $25-per-flight fee on all commercial and general aviation flights (see S. 1300, 110th

Congress) as an additional revenue source for the AATF.5 None of those proposals has been

enacted into law.

FAA Funding Accounts

In recent years, FAA funding has totaled between $15 billion and $16 billion annually. FAA

funding is divided among four main accounts. Operations and Maintenance (O&M) makes up the

largest portion of the FAA budget, receiving slightly more than 60% of total FAA appropriations.

It is the only FAA account that is funded, in part, by general fund contributions. The O&M

account principally funds air traffic operations and aviation safety programs. The Airport

Improvement Program (AIP) provides federal grants-in-aid for projects such as new runways and

taxiways; runway lengthening, rehabilitation, and repair; and noise mitigation near airports. The

Facilities and Equipment (F&E) account provides funding for the acquisition and maintenance of

air traffic facilities and equipment, and for engineering, development, testing, and evaluation of

The uncommitted balance consists of funds that have not been expended or obligated through current or prior-year

activities, whereas the cash balance includes funds that have been obligated but not expended. See U.S. Government

Printing Office, Balances of Budget Authority: Budget of the U.S. Government (Fiscal Year 2014), available at

http://www.gpo.gov/fdsys/pkg/BUDGET-2014-BALANCES/pdf/BUDGET-2014-BALANCES.pdf.

U.S. Government Accountability Office, Commercial Aviation: Consumers Could Benefit from Better Information

about Airline-Imposed Fees and Refundability of Government-Imposed Taxes and Fees, GAO-10-785, July 2010.

Office of Management and Budget, Living Within Our Means and Investing in the Future: The President’s Plan for

Economic Growth and Deficit Reduction, September 2011, pp. 22-23.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

technologies related to the federal air traffic system. The Research, Engineering, and

Development account finances research on improving aviation safety and operational efficiency

and on reducing environmental impacts of aviation operations. Authorizations and appropriations

for these accounts are shown in Table 2.

Table 2. Reauthorization Funding Levels for FAA Accounts

($ in millions)

Account

FY2010

FY2011

FY2012

FY2013

FY2014

FY2015

Authorized Levels

—

9,653

9,539

9,596

9,653

Appropriated/Requested Amounts

9,350

9,533

9,653

9,148

9,651

9.741

Authorized Levels

—

3,350

Appropriated/Requested Amounts

3,515

3,350

3,343

3,480

3,350

Authorized Levels

—

2,731

2,715

2,730

Appropriated/Requested Amounts

2,936

2,736

2,731

2,588

2,600

Operations and Maintenance (O&M)

Airport Improvement Program (AIP)

Facilities and Equipment (F&E)

Research, Engineering, and Development

Authorized Levels

—

168

Appropriated/Requested Amounts

191

170

168

159

133

157

—

15,902

15,772

15,814

15,901

15,992

15,439

15,902

15,238

15,864

15,848

TOTALS

Authorized Levels

Appropriated/Requested Amounts

Source: CRS analysis of P.L. 112-95, P.L. 111-8 (FY2010 Appropriations), P.L. 112-10 (FY2011 Appropriations),

P.L. 112-55 (FY2012 Appropriations), P.L. 113-6 (FY2013 Appropriations), P.L. 113-76 (FY2014 Appropriations),

and P.L. 113-235 (FY2015 Appropriations).

Note: FY2014 amounts are reported post-sequester operating amounts.

Airport Financing6

The federal government supports the development of airport infrastructure in three different

ways. First, the AIP provides federal grants to airports for planning and development, mainly of

capital projects related to aircraft operations such as runways and taxiways. Second, Congress has

authorized airports to assess a local passenger facility charge (PFC) on each boarding passenger,

subject to specific federal approval. PFC revenues can be used for a broader range of projects

than AIP funds, including “landside” projects such as passenger terminals and ground access

improvements. Third, federal law grants investors preferential income tax treatment on interest

income from bonds issued by state and local governments for airport improvements (subject to

compliance with federal rules). Airports may also draw on state and local funds and on operating

revenues such as lease payments and landing fees.

For a more extensive discussion of airport financing issues, see CRS Report R43327, Financing Airport

Improvements, by (name redacted) and (name redacted)

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Different airports use different combinations of AIP funding, PFCs, tax-exempt bonds, state and

local grants, and airport revenues to finance particular projects. Small airports are more likely to

be dependent on AIP grants than large or medium-sized airports. Larger airports are much more

likely to issue tax-exempt bonds or finance capital projects with the proceeds of PFCs. Each of

these funding sources places various legislative, regulatory, or contractual constraints on airports

that use it. The availability and conditions of one source of funding may also influence the

availability and terms of other funding sources. In a 2007 study, GAO found that bonds financed

50% of airports’ capital spending, AIP 29%, PFCs 17%, state and local contributions 4%, and

airport revenue 4%.7

Evaluating Capital Needs

The assessment of airport capital needs is fundamental to determining the appropriate federal

support needed to foster a safe and efficient national airport system.8 The federal government’s

interest goes beyond capacity issues to include implementation of federal safety and noise

policies.

The U.S. passenger airline industry has seen a wave of bankruptcies and several major airline

mergers since 2000, including the merger of American Airlines and U.S. Airways in 2013.

Consolidation led to a reduction in the number of commercial flights between 2005 and 2009.

Since that year, the number of commercial flights has been fairly steady, but at a level 15% to

18% lower than in 2005, as carriers have consolidated operations and eliminated some duplicative

hubs and routes.9 Government data indicate that domestic airlines have shown considerable

capacity discipline; instead of adding flights, they have been flying fuller planes, with an average

load factor over 83% in the first 10 months of 2014.10 The reduced number of flights may ease the

pressure on airport and air traffic control facilities. On the other hand, airlines’ on-time

performance does not appear to have improved with industry consolidation, suggesting that

capacity issues continue to affect carrier performance in some geographic areas.11

Both FAA and the Airports Council International-North America (ACI-NA) have issued

projections of airports’ long-term financial needs. FAA estimated in its report that the national

system’s capital needs for FY2013-FY2017 will total $42.5 billion (an annual average of $8.5

billion). The ACI-NA capital needs survey resulted in an estimate of $71.3 billion over the same

years (an annual average of $14.3 billion).12 The main reason for the widely differing estimates

was disparate views on what kinds of airport projects to include.

U.S. Government Accountability Office, Airport Finance: Observations on Planned Airport Development Costs and

Funding Levels and the Administration’s Proposed Changes in the Airport Improvement Program, GAO-07-885, 2007,

p. 8.

49 U.S.C. §47103. See FAA, Report to Congress: National Plan of Integrated Airport System (NPIAS) 2013-2017,

http://www.faa.gov/airports/planning_capacity/npias/.

U.S. Government Accountability Office, Airline Competition, The Average Number of Competitors in Markets

Serving the Majority of Passengers Has Changed Little in Recent Years, but Stakeholders Voice Concerns about

Competition, GAO-14-515, June 2014, http://www.gao.gov/products/GAO-14-515.

U.S. Department of Transportation, Bureau of Transportation Statistics (BTS), “Load Factor—“passenger-miles as a

proportion of available seat-miles in percent (%),” http://www.transtats.bts.gov/Data_Elements.aspx?Data=5. Note:

data for 2014 not complete.

U.S. DOT, BTS, “On-Time Performance—Flight Delays at a Glance,” http://www.transtats.bts.gov/

HomeDrillChart.asp. Note: data for 2014 not complete.

Airports Council International, Airport Capital Development Needs: 2013-2017, http://www.aci-na.org/sites/default/

files/2013_capital_needs_survey_report.pdf.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

The FAA estimate was based on information taken from airport master plans and state system

plans, but FAA planners screened out planned projects not justified by aviation activity forecasts

or not eligible for AIP grants. Only designated airports were included in the FAA study. Implicit

in this methodology is that the planning has been carried through to the point where financing is

identified. The ACI-NA study casts a substantially wider net. It includes projects funded by PFCs,

bonds, or state or local funding; airport-funded air traffic control facilities; airport or

Transportation Security Administration (TSA)-funded security projects; “necessary” AIPineligible projects such as parking facilities, hangars, revenue portions of terminals, and offairport roads/transit facilities; and AIP-eligible projects for which AIP funding was not requested.

These additions cause the ACI-NA estimate of capital needs to be far higher than the FAA

estimate.

FAA has devoted particular attention to evaluating capital needs at the largest airports, which

handle the vast majority of commercial passenger boardings. The agency has undertaken three

studies to determine which improvements at major airports are most critical to increasing system

capacity. The most recent such study, called FACT3, was released in January 2015.13 FACT3

concluded that the nationwide air traffic system is more reliable and that congestion has been

reduced, due to the combined effects of structural change in the airline industry as well as the

addition of 18 new runways and 7 extended runways at the busiest hub airports since 2000.

FACT3 indicated that while NextGen is helping to manage delays caused by airport congestion,

new capacity and other solutions are still necessary to address traffic growth and reduce delays at

some of the largest and busiest airports. The study also projects interim airport capacity needs in

2020 and long-term needs in 2030 among the nation’s busiest airports. While it found that

capacity constraints across the aviation system may not be as dire as in previous analyses, even

with the latest improvements, several of the busiest airports would continue to be capacityconstrained in the near term, including all the New York City-area airports, Philadelphia

International Airport, and Hartsfield-Jackson Atlanta International Airport.14

Airport Improvement Program (AIP)

The AIP provides federal grants to airports for airport development and planning. Participants

range from very large publicly owned commercial airports to small general aviation airports that

may be privately owned but are available for public use.15 AIP funding is usually limited to

construction of improvements related to aircraft operations, such as runways and taxiways.

Commercial revenue-producing facilities are generally not eligible for AIP funding, nor are

operating costs.16 The structure of AIP funds distribution reflects congressional priorities and the

objectives of assuring airport safety and security, increasing airport capacity, reducing congestion,

helping fund noise and environmental mitigation costs, and financing small state and community

airports.

FACT3 is short for Future Airport Capacity Task, study 3. The previous reports are called FACT1 and FACT2.

FAA, FACT3: Airport Capacity Needs in the National Airspace System, January 2015, http://www.faa.gov/airports/

planning_capacity/media/FACT3-Airport-Capacity-Needs-in-the-NAS.pdf.

General aviation airports do not serve military (with a few Air National Guard exceptions) or scheduled commercial

service aircraft but typically do support one or more of the following: business/corporate, personal, instructional flying;

agricultural spraying; air ambulances; on-demand air taxies; charter aircraft.

For detailed guidance on allowable costs under the AIP, see Chapter 3 of the AIP Handbook, at http://www.faa.gov/

airports/resources/publications/orders/media/aip_5100_38c.pdf.

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The main financial advantage of the AIP to airports is that as a grant program, it can provide

funds for capital projects without the financial burden of debt financing, although airports are

required to provide a modest local match to the federal funds. Limitations on the use of AIP

grants include the range of projects that the AIP can fund and the requirement that recipients

adhere to all program regulations and grant assurances.

Federal law requires the Secretary of Transportation to publish a national plan for the

development of public-use airports in the United States. This appears as a biannual FAA

publication called the National Plan of Integrated Airport Systems (NPIAS).17 For an airport to

receive AIP funds, it must be listed in the NPIAS.

AIP Funding

The AIP program structure and authorizations are set in FAA authorization acts. AIP spending

authorized and the amounts made available for grants since FY1992 are illustrated in Table 3.

According to FAA, 3,355 of the 19,786 airports in the United States are listed in the NPIAS.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Table 3. Annual AIP Authorizations and Amounts Made Available for Grants,

FY1992-FY2013

($ millions)

Fiscal Year

Authorization

Grant Amounts Available

1992

$1,900

1993

$2,025

$1,800

1994

$2,970

$1,690

1995

$2,161

$1,450

1996

$2,214

$1,450

1997

$2,280

$1,460

1998

$2,347

$1,700

1999

$2,410

$1,950

2000

$2,475

$1,851

2001

$3,200

$3,140

2002

$3,300

$3,223

2003

$3,400

$3,295

2004

$3,400

$3,294

2005

$3,500

$3,384

2006

$3,600

$3,424

2007

$3,700

$3,402

2008

$3,675

$3,471

2009

$3,900

$3,385

2010

$3,515

$3,378

2011

$3,515

$3,378

2012

$3,350

$3,199

2013

$3,350

$3,192

2014

$3,350

$3,194

2015

$3,350

Sources: FAA, AIP Annual Report of Accomplishments, 2009, and data from FAA

Airports Branch. Amounts made available for grants do not include obligations used

for administration expenses, the Small Community Air Service Program, and some

research funding.

After trending upward from FY1982 to FY1992, grant funding approved in annual appropriations

declined through the mid-1990s as part of federal deficit reduction efforts, leaving large gaps

between authorized AIP spending levels and the amounts the program was actually allowed to

expend. This occurred despite provisions in place since 1976 designed to ensure that federal

capital spending for airports is fully funded at the authorized level (see Text Box, “Current AIP

Funding Guarantees”).

The Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR-21; P.L. 106181), enacted in 2000, provided major increases in the AIP’s authorization, starting in FY2001.

During FY2001-FY2006, the AIP was funded near its fully authorized levels. The amount

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

available for grants peaked at $3.47 billion in FY2008. From FY2008 through FY2011, when the

AIP was authorized by a series of authorization extension acts, appropriators set the program’s

annual obligation limitation at $3.515 billion.18 The FAA Modernization and Reform Act of 2012

authorized funding through FY2015 at an annual level of $3.35 billion.

Current AIP Funding Guarantees

Historically, FAA authorization acts have included provisions designed to compel appropriators to both fully expend

annual trust fund revenues and fully fund FAA’s capital programs: the AIP and Facilities and Equipment (F&E). 19

The current guarantee requires that total budget resources made available from the trust fund in any year (including

appropriations and obligation limitations) for the AIP, F&E, research and development, and the trust fund share of

FAA operations must be equal to the sum of 90% of the revenues for the year plus the amount calculated by

subtracting the amount made available from the trust fund from the actual revenues received, based on the data from

the fiscal year two years prior to the current fiscal year.

This guarantee is enforced by making it out of order in both the House and the Senate to consider any provision that

does not adhere to the guarantees. Point-of-order enforcement provisions have had limited success in the past. This

is largely because points of order may be waived by the Rules Committee in the House, and points of order are rarely

raised against conference reports in the Senate.

Funding Distribution

The distribution system for AIP grants is complex. It is based on a combination of formula grants

(also referred to as apportionments or entitlements) and discretionary funds.20 Each year, the

entitlements are first apportioned by formula to specific airports or types of airports. Once the

entitlements are satisfied, the remaining funds are defined as discretionary funds. Airports apply

for discretionary funds for projects in their airport master plans. Formula grants and discretionary

funds are not mutually exclusive, in the sense that airports receiving formula funds may also

apply for and receive discretionary funds. Grants are generally awarded directly to airports.

Entitlements (Formula Funds)

Entitlements are funds that are apportioned by formula to airports, and may generally be used for

any eligible airport improvement or planning project. These funds are divided into four

categories: primary airports, cargo service airports, general aviation airports, and Alaska

supplemental funds. Each category distributes AIP funds by a different formula.

Most airports have up to three years to use their apportionments. Nonhub commercial service

airports have up to four years. The formula distributions are contingent on an annual AIP

obligation limitation of $3.2 billion or more. If this threshold is not met in a particular fiscal year,

most formulas revert to prior authorized funding formulas.

Primary Airports. The apportionment for airports that board more than 10,000 passengers each

year is based on the number of boardings (also referred to as enplanements) during the prior

The obligation limitation or limitation on obligations is used to control annual AIP spending in place of an

appropriation. The obligation limitation is a limit on the total amount of AIP contract authority that can be obligated in

a single fiscal year. For practical purposes, the obligation limitation is analogous to an appropriation.

See CRS Report RL33654, Aviation Spending Guarantee Mechanisms, by (name redacted)

See U.S.C. 49 Chapter 471 and FAA, Airport Improvement Program Handbook, http://www.faa.gov/airports/

resources/publications/orders/media/aip_5100_38c.pdf.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

calendar year.21 The amount apportioned for each fiscal year is equal to double the amount that

would be received according to the following formulas:



$7.80 for each of the first 50,000 passenger boardings;

$5.20 for each of the next 50,000 passenger boardings;

$2.60 for each of the next 400,000 passenger boardings;

$0.65 for each of the next 500,000 passenger boardings; and

$0.50 for each passenger boarding in excess of 1 million.

The minimum allocation to any primary airport is $1 million. The maximum is $26 million.22

Cargo Service Airports. Some 3.5% of AIP funds subject to apportionment are apportioned to

airports served by all-cargo aircraft with a total annual landed weight of more than 100 million

pounds. The allocation formula is the proportion of the individual airport’s landed weight to the

total landed weight at all cargo service airports.23

General Aviation Airports. General aviation, reliever, and nonprimary commercial service

airports are apportioned 20% of AIP funds subject to apportionment. From this share, all airports,

excluding all nonreliever primary airports, receive the lesser of the following:



$150,000 or

one-fifth of the estimated five-year costs for airport development for each of

these airports as listed in the most recent NPIAS.

Any remaining funds are distributed according to a state-based population and area formula. FAA

makes the project decisions on the use of these funds in consultation with the states. Although

FAA has ultimate control, some states view these funds as an opportunity to address general

aviation needs from a statewide, rather than a local or national, perspective.24

Alaska Supplemental Funds. Funds are apportioned to airports in Alaska to assure that Alaskan

airports receive at least twice as much funding as they did under the Airport Development Aid

Program in 1980.25

Forgone Apportionments. Large and medium hub airports that collect a passenger facility

charge of $3 or less have their AIP formula entitlements reduced by an amount equal to 50% of

their projected PFC revenue for the fiscal year until they forgo or give back 50% of their AIP

formula grants. In the case of PFC above the $3 level, the percentage forgone is 75%. A special

small airport fund, which provides grants on a discretionary basis to airports smaller than medium

hub, gets 87.5% of these forgone funds. The discretionary fund gets the remaining 12.5%.

Passenger enplanements are the total number of passengers boarding aircraft, including originating passengers as

well as those changing aircraft.

In a year in which the amount made available is below $3.2 billion, the amounts apportioned to primary airports are

not doubled, the minimum apportionment returns to $650,000, and the maximum apportionment is $22 million.

In a year in which the amount made available is below $3.2 billion, not more than 8% of cargo service apportionment

may be apportioned to any one airport. Landed weight is the weight of the aircraft and its contents at landing.

In any year in which the amount made available under Section 48103 is less than $3.2 billion, the formula reverts

back to the amounts determined by the area and population formula set forth in Section 47114 (d) (1) and (2).

In any year in which the amount made available under Section 48103 is less than $3.2 billion, Alaska Supplemental

funds will be apportioned based on the way in which amounts were apportioned in the fiscal year ending September 30,

1980.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Discretionary Funds

The discretionary fund includes the money not distributed under the apportioned entitlements, as

well as the forgone PFC revenues that were not deposited into the small airport fund. AIP

discretionary funding for FY2014 was about 15% of total AIP funding. Discretionary grants are

approved by FAA based on project priority and other selection criteria. Figure 1 illustrates the

composition of both apportioned and discretionary grants, based on FY2014 data.

Despite its name, the discretionary fund is not allocated solely at FAA’s discretion. Allocations

are subject to the following three set-asides and certain other spending criteria:



Airport Noise Set-Asides. At least 35% of discretionary funds are set aside for

noise compatibility planning and for carrying out noise abatement and

compatibility programs.

Military Airport Program. At least 4% of discretionary funds are set aside for

conversion and dual use of up to 15 current and former military airports. The

program allows funding of some projects not normally eligible under the AIP.26

Grants for Reliever Airports. There is a set-aside of two-thirds of 1% of

discretionary funds for reliever airports in metropolitan areas suffering from

flight delays.27

The program is commonly referred to as MAP; see http://www.faa.gov/airports/aip/military_airport_program/.

Reliever airports are high-capacity general aviation airports meant to provide general aviation pilots with alternatives

to using congested hub airports. Reliever airports must have 100 or more based aircraft or 25,000 annual itinerant

operations. These airports average 230 based aircraft. In total, 28% of the general aviation fleet in the United States is

based at reliever airports.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Figure 1. FY2014 AIP Distribution: Entitlement and Discretionary Grants

Source: Data from FAA Airports Branch.

Notes: Carryover is also referred to as Protected Entitlement Funds. C/S/S/N = Capacity, Safety, Security, and

Noise Abatement. Amounts may not add to 100% due to rounding.

The Secretary of Transportation is also directed to see that 75% of the grants made from the

discretionary fund are used to preserve and enhance capacity, safety, and security at primary and

reliever airports, and also to carry out airport noise compatibility planning and programs at these

airports. From the remaining 25%, FAA is required to set aside $5 million for the testing and

evaluation of innovative aviation security systems.

Subject to these limitations and the three set-asides, the Secretary of Transportation, through

FAA, has discretion in distribution of grants from the remainder of the discretionary fund.28

State Block Grant Program29

Under this program, FAA provides funds directly to participating states for projects at airports

classified as other than primary airports. Each participating state receives a block grant made up

of the state’s apportionment (formula) funds and available discretionary funds. A block grant

program state is responsible for selecting and funding AIP projects at the small airports in the

state. In making the selections, the participating states are required to comply with federal

priorities. Each block grant state is responsible for project administration as well as most of the

inspection and oversight roles normally assumed by FAA. The states that currently participate in

For a description of FAA’s process for selecting projects, see 26th AIP Annual Report of Accomplishments,

http://www.faa.gov/airports/aip/grant_histories/media/26th_AIP_Annual_Report_of_Accomplishments.pdf.

49 U.S.C. §47128. For program requirements, see 14 C.F.R. Part 156.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

the state block grant program are Georgia, Illinois, Michigan, Missouri, New Hampshire, North

Carolina, Pennsylvania, Tennessee, Texas, and Wisconsin.

The Federal Share of AIP Matching Funds

For AIP projects, the federal government share differs depending on the type of airport.30 The

federal share, whether funded by formula or discretionary grants, is as follows:



75% for large and medium hub airports (80% for noise compatibility projects);

90% for other airports;

“not more than” 90% for airport projects in states participating in the state block

grant program;

70% for projects funded from the discretionary fund at airports receiving

exemptions under 49 U.S.C. Section 47134, the pilot program for private

ownership of airports;

airports reclassified as medium hubs due to increased passenger volumes may

retain eligibility for up to a 90% federal share for a two-year transition period;

certain economically distressed communities receiving subsidized air service

may be eligible for up to a 95% federal share of project costs.

This cost-share structure means that smaller airports pay a lower share of AIP-funded project

costs than larger airports. The airports themselves must raise the remaining share from other

sources.31

Distribution of AIP Grants by Airport Size

Although smaller airports’ individual grants are of much smaller dollar amounts than the grants

going to large and medium hub airports, the smaller airports are much more dependent on the AIP

to meet their capital needs. This is particularly the case for noncommercial airports, which

received over 30% of AIP grants distributed in FY2012. Figure 2 shows the share of AIP grants

awarded in FY2014, by value, broken out by airport type.

49 U.S.C. §47109.

Higher federal shares are available to airports in states with large amounts of federal land; see 49 U.S.C. §47109(b).

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Figure 2. FY2014 AIP Grant Distribution by Airport Type

Source: Data from FAA Airports Branch.

Grant Assurances

Airports’ grant applications are conditioned on assurances regarding future airport operations.

Examples of such assurances include making the airport available for public use on reasonable

conditions and without unjust economic discrimination (against all types, kinds, and classes of

aeronautical activities); charging air carriers making similar use of the airport substantially

comparable amounts; maintaining a current airport layout plan; making financial reports to FAA;

and expending airport revenue only on capital or operating costs at the airport.32 Within the AIP

context, assurances are a means of guaranteeing the implementation of federal policy.

Obligations derived from airports’ assurances extend beyond the formal closure of AIP grantsupported projects. Obligations related to the use, operation, and maintenance of an airport

remain in effect for the expected life of the improvement, up to 20 years. In the case of the

purchase of land with AIP funds, the federal obligations do not expire.33 Airports may request that

FAA release them from their AIP contractual obligations. Typically, as a condition of the release,

the airport sponsor must either reimburse the federal government for the AIP grants (in the case of

49 U.S.C. §47107. The layout plan must be approved by the Secretary of Transportation, as must any revision or

modification. This, in effect, means that any AIP project must be written into the airport’s plan. The nondiscrimination

provision protects a wide variety of users including, for example, nighttime users and cargo carriers.

Assurances that no carrier will receive exclusive rights, that airport revenue will be used at the airport, and that the

airport will comply with civil rights protections continue in perpetuity.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

land grants, the federal share of the fair market value of the land) or reinvest the amount in an

approved AIP project.34

Decisions about which airport expansion projects are most justified have implications for the

reauthorization of the AIP in 2015. Large runway projects can require long lead times—10 or

more years from concept to initial construction is not unusual. At large and medium hub airports,

runway projects are usually paid for, in part, by AIP funds. Therefore, some projects needed by

2025 may require AIP funding in earlier years. Because large and medium airports must forgo

either 50% or 75% of their AIP formula entitlement funds if they levy passenger facility charges

(see below), most federal funding for their runway projects will probably need to take the form of

AIP discretionary funds. If the AIP budget is constrained in the future, either under a

reauthorization bill or during the annual appropriations process, and the entitlement formulas

remain as they are, the discretionary portion of the AIP budget may be squeezed, limiting large

airports’ ability to draw on AIP funds for major capacity expansion projects.

There are several ways Congress might shift AIP funds if it wishes to give priority to enhancing

capacity at large and medium hub airports. One would be to eliminate the requirement that large

and medium hub airports that impose the maximum PFCs forgo 75% of their entitlement. This

change would give larger airports a greater share of entitlement funding, but at the cost of

depleting the discretionary small airport fund and reducing AIP grants to small airports.

Alternatively, changes in the statutory set-asides of discretionary funds could give FAA more

flexibility to use that money for capacity enhancement, but might reduce funding for noise

mitigation and other purposes.

Changes in the last several FAA authorization acts increased entitlements and broadened the

range of landside projects eligible for AIP grants. These changes generally benefitted airports

smaller than medium hub size. In particular, the increased amount of apportioned funds has

limited the availability of funds for discretionary grants, such as those for operational evolution

plan projects at major airports. Further changes giving airports increased flexibility in the use of

their entitlements might benefit smaller airports not served by commercial aviation, in line with

the national goal of having an “extensive” national airport system,35 but this use of funds might

conflict with the goal of reducing congestion at major commercial airports.

One way to reduce the amount of trust fund revenue needed for the AIP would be to allow large

and medium hub airports to opt out of the AIP and rely exclusively on PFCs to finance capital

projects. This would require raising or eliminating the federal cap on PFCs. These

“defederalized” airports could then be released from some or all of the AIP grant assurances

under which they now operate, such as land use requirements and airport revenue use

restrictions.36 If airports exit the program, AIP spending could be reduced or redirected to other

airports.

For a listing of the grant assurances, see http://www.faa.gov/airports/aip/grant_assurances/.

NPIAS, p. 4. The NPIAS includes the attribute that “the airport system be extensive, providing as many people as

possible with convenient access to air transportation, typically by having most commuters with no more than 20 miles

of travel to the nearest NPIAS airport.” Also see http://www.faa.gov/airports/planning-capacity/ga_study/.

This approach is backed by the American Association of Airport Executives, Eliminate Federal Cap on Local

Passenger Facility Charges, http://www.aaae.org/?e=showFile&l=GRSRWZ.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Passenger Facility Charges

In 1990, concerns that existing sources of funds for airport development would be insufficient to

meet national needs led to authorization of a new user charge, the passenger facility charge

(PFC). The PFC was seen as a complementary funding source to the AIP. The Aviation Safety and

Capacity Expansion Act of 199037 allowed the Secretary of Transportation to authorize public

agencies that control commercial airports to impose a fee on each paying passenger boarding an

aircraft at their airports. Initially, there was a $3 cap on each airport’s PFC and a $12 limit on the

total PFCs that a passenger could be charged per round trip.

The PFC is a state, local, or port authority fee, not a federally imposed tax deposited into the

Treasury.38 Because of the complementary relationship between the AIP and PFCs, PFC

provisions are generally folded into the sections of FAA reauthorization legislation dealing with

the AIP. The money raised from PFCs must be used to finance eligible airport-related projects.

Unlike AIP funds, PFC funds may be used to service debt incurred to carry out projects.39

Legislation in 2000 raised the PFC ceiling to $4.50, with an $18 limit on the total PFCs that a

passenger can be charged per round trip. To impose a PFC above $3, an airport has to show that

the funded projects will make significant improvements in air safety, increase competition, or

reduce congestion or noise impacts on communities, and that these projects could not be fully

funded by using the airport’s AIP formula funds or AIP discretionary grants. Large and medium

hub airports imposing PFCs above the $3 level forgo 75% of their AIP formula funds. PFCs at

large and medium hub airports may not be approved unless the airport has submitted a written

competition plan to FAA, which includes information about the availability of gates, leasing

arrangements, gate-use requirements, controls over airside and ground-side capacity, and

intentions to build gates that could be used as common facilities.

The FAA Modernization and Reform Act of 2012 included minor changes to the PFC program.

The act made permanent the pilot program that authorized nonhub small airports to impose PFCs.

The act also required GAO to study alternative means of collecting PFCs without including the

PFC in the ticket price.40

Unlike AIP grants, of which over 70% in FY2014 went to airside projects (runways, taxiways,

aprons, and safety-related projects), PFC revenues are heavily used for landside projects such as

terminals and transit systems on airport property, and for interest payments. Table 4 shows the

AIP grant awards and PFC approvals by project type in FY2014. Annual system-wide PFC

collections grew from $85.4 million in 1992 to $2.9 billion in 2014.41

P.L. 101-508, Omnibus Budget Reconciliation Act of 1990, Title IX.

Air carriers collect the PFCs for airports and are paid a small administrative fee.

49 U.S.C. §40117.

GAO identified three alternative means of collecting PFCs, but found that none of the alternative methods was better

than the existing collection method. See GAO-13-262R, Alternative Methods for Collecting Airport Passenger Facility

Charges, February 14, 2013, http://www.gao.gov/products/GAO-13-262R.

For PFC collections by year, see http://www.faa.gov/airports/pfc/monthly_reports/media/stats.pdf.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Table 4. Distribution of PFC Approvals and AIP Grants by Project Type, FY2014

Type of Project

Percentage of PFC

Percentage of AIP

Airside

13.7

72.9

Landside

30.2

11.0

Noise

0.5

3.8

Roads/Access

12.8

1.0

Interest on Bonds

42.8

—

Unclassified, State Block Grants, Misc.

—

11.3

Total

100.0

Source: FAA, Airports Branch.

The PFC statutory language lends itself to a broader interpretation of “capacity enhancing”

projects, and the implementing regulations are less constraining than those for AIP funds. Air

carriers, which historically have preferred funding to be dedicated to airside projects, must be

notified and provided with an opportunity for consultation about airports’ proposals to fund

projects with PFC revenues. They are generally less involved in the PFC project planning and

decision-making process than is the case with AIP projects. The difference in the pattern of

project types may also be influenced by the fact that larger airports, which collect most of the

PFC revenue, tend to have substantial landside infrastructure, whereas smaller airports that are

much more dependent on AIP funding have comparatively limited landside facilities.

The central legislative issue related to PFCs is whether to raise the $4.50 per enplaned passenger

ceiling or to eliminate the ceiling altogether. In general, airports argue for increasing or

eliminating the ceiling, whereas most air carriers and some passenger advocates oppose higher

limits on PFCs. A GAO study released in January 2015 modeled several scenarios of higher

PFCs, and found that raising the cap would significantly increase PFC collections available to

airports. However, the GAO report suggests that higher PFCs could also marginally slow

passenger growth, and therefore the growth in revenues to the Airport and Airway Trust Fund.42

The permissible uses of revenues are an ongoing point of contention. Airport operators, in

particular, would like more freedom to use PFC funds for off-airport projects, such as

transportation access projects, and want the process of obtaining FAA approval to be streamlined.

Carriers, on the other hand, often complain that airports use PFC funds to finance proposals of

dubious value, especially outside airport boundaries, instead of high-priority projects that offer

meaningful safety or capacity enhancements. The major air carriers are also unhappy with their

limited influence over project decisions, as airports are required only to consult with resident air

carriers instead of having to get their agreement on PFC-funded projects.

Airport Privatization43

Almost all commercial service airports in the United States are owned by local and state

governments, or by public entities such as airport authorities or multipurpose port authorities.44 In

Commercial Aviation: Raising Passenger Facility Charges Would Increase Airport Funding, but Other Effects Less

Certain, GAO-15-107, December 2014, http://www.gao.gov/products/GAO-15-107.

For more complete discussion of this subject, see CRS Report R43545, Airport Privatization: Issues and Options for

Congress, by (name redacted).

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

1996, Congress established the Airport Privatization Pilot Program (APPP)45 to explore the

prospect of privatizing publicly owned airports and using private capital to improve and develop

them. In addition to reducing demand for government funds, privatization has been promoted as a

way to make airports more efficient and financially viable.

Participation in the APPP has been limited. Two airports have completed the privatization

process, and one of them later reverted to public ownership. Owners of other airports considered

privatization, but eventually chose not to proceed. The lack of interest in privatization among

U.S. airports could be the result of (1) readily available financing sources for publicly owned

airports; (2) barriers or lack of incentives to privatize; (3) the potential implications for major

stakeholders; and (4) satisfaction with the status quo.

Privatization refers to the shifting of governmental functions, responsibilities, and sometimes

ownership, in whole or in part, to the private sector. With respect to airports, “privatization” can

take many forms up to and including the transfer of an entire airport to private operation and/or

ownership. In the United States, most cases of airport privatization fall into the category of

“partial privatization”; full privatization, either under or outside the APPP, has been rare.

Types of Airport Privatization

Airport privatization has taken four generic forms:



Service Contracts. Many U.S. airports outsource some noncore operations to

private firms that specialize in those functions. Examples of operations that are

frequently outsourced are cleaning and janitorial services, airport landscaping,

shuttle bus operations, and concessions in airport terminals. Outsourcing of

service contracts is probably the most common type of privatization among U.S.

airports.

Management Contracts. Some airports engage the management expertise of the

private sector by contracting out specific facilities or responsibilities such as

parking, terminal concessions, terminal operations, airfield signage, fuel farms,

and aircraft refueling. In a few cases, a private management company has been

awarded a contract to manage an entire airport for a specified term.

Developer Financing/Operation. A wide range of contracts has been used to

involve the private sector in providing financing, development, operation, and

maintenance services. This is also known as the Design-Build-Finance-OperateMaintain (DBFOM) model. Airport DBFOM examples include passenger

terminals (notably Terminal 5 at Chicago O’Hare International Airport and

Terminal 4 at New York John F. Kennedy International Airport), parking garages,

and rental car facilities.46

Long-Term Lease or Sale. Full privatization involves the sale or long-term lease

of an airport to a private owner or operator. Under a long-term lease or

concession agreement, the airport owner grants full management and

(...continued)

Commercial service airports are publicly owned airports that receive scheduled passenger service and board at least

2,500 passengers a year. Branson Airport in Branson, MO, is the only privately funded, privately developed, and

privately operated commercial passenger airport in the United States.

49 U.S.C. §47134; Section 149 of the Federal Aviation Reauthorization Act of 1996; P.L. 104-264.

Airport Cooperative Research Program (ACRP) Report 66, “Considering and Evaluating Airport Privatization,” p. 4.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

development control to the private operator in exchange for capital improvements

and other obligations such as an up-front payment and/or profit-sharing

arrangements. Under a full sale, ownership and full responsibility for operation,

capital improvements, and maintenance would be transferred to a private buyer.

Several airports in Europe have been privatized in this way, but there have been

no sales of commercial service airports in the United States.

The Interests at Stake

Airport privatization, especially in the case of long-term lease or sale, involves four major

stakeholders: airport owners, which in the United States are mostly local or regional governments

or public entities; air carriers; private investors; and the federal government. These stakeholders

ultimately decide whether a privatization deal goes forward, but they tend to have different

objectives and, in many cases, divergent interests. Airline passengers may experience the effect of

privatization via, for example, airport concession offerings, operational efficiency, and changes in

prices and fees, but passenger interests are usually not represented formally in discussions of

privatization.

Airport owners, who are usually local governments, might embrace privatization as a source of

revenue, but federal regulations generally require that lease or sale revenue from airport

privatization be used only for airport purposes (unless the majority of airlines agrees otherwise,

under the APPP). On the other hand, privatization involves surrendering control of an

economically important facility. Reducing or eliminating responsibilities of the public agency or

authority that owns the airport may lead to the loss of public-sector jobs. Hence a public-sector

owner may see few benefits from selling or leasing an airport to a private operator unless the

facility is losing money—and in that case, private investors might not find the airport an attractive

investment. The APPP encourages privatization by granting certain exemptions to public-sector

owners with regard to revenue diversion and other obligations.

Air carriers, including both scheduled passenger airlines and cargo airlines, would like to keep

their costs low. They also want to have some control over how airport revenues are used,

especially to ensure that the fees paid by themselves and their customers are used for airportrelated purposes. Their interest in low landing fees and low rents for ticket counters and other

facilities may be contrary to the interest of potential private operators in increasing revenue. At

the same time, however, air carriers have an interest in ensuring that the airports they use are well

maintained and carefully managed. They might have reason to support a proposed privatization if

they thought it would result in lower charges, better airport services, or increased efforts to

promote the airport.

Private investors and operators expect a financial return on their investments. They will be

looking above all at growth potential such as opportunities to bring additional flights to the

airport, to earn additional lease revenue by improving amenity offerings such as shopping and

dining for passengers, or to draw more freight traffic by offering lower fees or improved facilities.

If they attempt to increase profitability by raising landing fees or rents, that may bring them into

conflict with air carriers using the airport.

The federal government, represented by FAA, has been directed by Congress to engage private

capital in aviation infrastructure development and reduce reliance on federal grants and subsidies.

However, FAA also has statutory mandates to maintain the safety and integrity of the national air

transportation system and to enforce compliance with commitments, known as “grant

assurances,” that airports have made to obtain grants under the AIP. Thus FAA is likely to

carefully examine privatization proposals that might risk closures of runways or airports or

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

otherwise reduce aviation system capacity, or that appear to favor certain airport users over

others.

The divergent interests of stakeholders are a significant issue in privatization. Striking a balance

among these interests while facilitating privatization is one of the purposes of the APPP.

The Airport Privatization Pilot Program (APPP)

Section 149 of the Federal Aviation Reauthorization Act of 1996 (49 U.S.C. §47134; P.L. 104264) authorizes the FAA Administrator to exempt participating airports from all or part of the

requirements to use airport revenue for airport-related purposes, to repay federal grants, or to

return airport property acquired with federal assistance upon the lease or sale of the airport

deeded by the federal government.47 The law originally limited participation in the APPP to no

more than five airports. The FAA Modernization and Reform Act of 2012 (P.L. 112-95) increased

the number of airports that may participate from 5 to 10. Only one large hub commercial airport

may participate in the program, and that airport may only be leased, not sold. Only general

aviation airports can be sold under the APPP.

Table 5 provides a comparison of the requirements and regulations governing airport

privatization under and outside the APPP.

Table 5. Full Airport Privatization Under the APPP vs. Outside the APPP

Full Privatization Under APPP

Full Privatization Outside APPP

Eligible Airports

A maximum of 10 airports may participate,

among which only one may be a large hub

airport. One slot is reserved for a general

aviation airport. Commercial airports may

only be leased; general aviation airports

may be sold.

No restrictions on number or type of

airports.

Use of Sale/Lease

Proceeds

Airports can request U.S. Department of

Transportation (DOT) approval to use

sale/lease proceeds for nonairport

purposes. For commercial service airports,

this also requires consent of 65% of

airlines. For general aviation airports, this

requires consultation with owners of

aircraft based at the airport.

Sale/lease proceeds are considered airport

revenue, and must be used for airport

purposes.

Grant Repayment

DOT may grant exemptions from existing

repayment obligations. Airports must

abide by other grant assurance obligations.

DOT cannot grant exemptions from grant

assurance obligations or existing

repayment obligations.

AIP Formula Grants

Private operator is eligible for grants from

AIP formula funds, but at a lower federal

share.

Private operator may be eligible for grants

from AIP formula funds under certain

conditions such as when a privately owned

airport is used for public purpose as a

reliever or provides at least 2,500

passenger boardings a year.

For a primary airport, the use of airport revenue for airport-related purposes requires approval by 65% of the

scheduled air carriers serving the airport and by the scheduled and unscheduled air carriers representing 65% of the

total landed weight of all aircraft serving the airport in the preceding calendar year. For more information about the

APPP, see http://www.faa.gov/airports/airport_compliance/privatization/.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Full Privatization Under APPP

Full Privatization Outside APPP

Rates or Charges on

Airlines

Rates on airlines may not rise faster than

the inflation rate without consent of 65%

of airlines. Rate increases for general

aviation aircraft owners may not exceed

percentage rate increase for airlines.

Rates and charges must be reasonable and

not unjustly discriminatory, pursuant to

grant assurances.

Charges on Passengers

Private operator is authorized to impose,

collect, and use revenue from passenger

facility charges (PFCs).

Private operator is authorized to impose

charges on passengers (subject to

reasonableness and nondiscrimination

requirements of the grant assurances), but

not to impose, collect, or use PFCs.

Source: Federal Aviation Administration.

Participation in APPP

The APPP has had limited success in increasing the number of privately run airports. Since its

inception, 10 airports have applied to enter the APPP; two have completed the entire privatization

process. One of these later reverted to public ownership. Table 6 lists the APPP applicants and

their status.

Table 6. Participation in the APPP

(as of December 2014)

Status

Airport

Location

Application Results

Inactive

Brown Field Municipal Airport

San Diego, CA

Application withdrawn in 2001.

Inactive

Chicago Midway International

Airport

Chicago, IL

Application withdrawn in 2013.

Inactive

Gwinnett County Briscoe Field

Airport

Lawrenceville, GA

Application withdrawn in 2012.

Active*

Hendry County Airglades

Airport

Clewiston, FL

In August 2014, FAA approved

management contract between county and

private operator, pending submission of

final APPP application by the county.

Inactive

Louis Armstrong New Orleans

International Airport

New Orleans, LA

Application withdrawn in 2010.

Privatized*

Luis Muñoz Marín International

Airport

San Juan, Puerto

Rico

Preliminary approved in December 2009;

final application approved in February

2013. Privatized under long-term lease.

Inactive

New Orleans Lakefront Airport

New Orleans, LA

Application terminated in 2008.

Inactive

Niagara Falls International

Airport

Niagara Falls, NY

Application withdrawn in 2001.

Inactive

Rafael Hernandez Airport

Aguadilla, Puerto

Rico

Application withdrawn in 2001.

Inactive

Stewart International Airport

Newburgh, NY

Airport privatized in 2000 after FAA

approval; reverted to public operation in

2007.

Source: Federal Aviation Administration; U.S. Government Accountability Office, Airport Privatization, GAO-1542, November 2014.

Congressional Research Service

Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Notes: The rows marked with an asterisk represent the two active participants as of December 2014. FAA

terminated New Orleans Lakefront Airport’s application when the airport missed the deadline to submit

additional materials.

Stewart International Airport

In 2000, Stewart International Airport in Newburgh, NY, became the first commercial service

airport privatized under the APPP. National Express Group PLC, a U.K.-based transportation

company, made an initial $35 million up-front payment to the owner, the State of New York, for a

99-year lease, and agreed to pay the state 5% of the airport’s gross income on the lease’s 10th

anniversary or after 1.38 million passengers used the airport, whichever occurred first. National

Express Group also made $10 million in capital contribution during its operation of the airport.48

Unable to obtain airline approvals to use airport revenue for general purposes, the airport owner,

the State of New York, agreed to use the lease payments for airport purposes and to recoup past

subsidies for Stewart Airport and other state-owned airports in accordance with FAA’s revenue

use policy.49

National Express apparently was unsuccessful in increasing passenger traffic at Stewart;

according to FAA data, the airport registered 274,126 enplanements in 2000, the year National

Express assumed management, but only 156,638 six years later.50 The company’s attempt to make

the airport more attractive to passengers going to and from New York City by renaming it “New

York-Hudson Valley International Airport” was abandoned amid local opposition.51

In 2006, National Express decided to focus its U.S. efforts on school bus operations, and moved

to dispose of its lease on Stewart.52 The following year, the Port Authority of New York and New

Jersey purchased the remaining term of the lease for $78.5 million. Although National Express

never disclosed the profitability of its operation at Stewart, the Port Authority reported a $0.8

million loss in 2007, when it ran the airport for part of the year, and a $5.5 million loss in 2008,

its first full year of operation.53 This suggests that the operation may not have been profitable for

the private owner. However, National Express booked a profit of £16.2 million (approximately

$33 million at the time) on the sale to the Port Authority, suggesting that it earned a significant

return on its investment.54

Luis Muñoz Marín International Airport

Luis Muñoz Marín International Airport, a medium hub airport in San Juan, Puerto Rico, is the

only commercial service airport operating under private management after privatization under the

APPP. FAA approved the final privatization contract in February 2013.

Airport Cooperative Research Program (ACRP) Report 66, “Considering and Evaluating Airport Privatization,” pp.

43-44 and pp. 86-87. FAA, Report to Congress on the Status of the Airport Privatization Pilot Program, 49 U.S.C.

§47134, August 2004, p. 7.

New York Department of Transportation, “Governor Pataki Hands Stewart Airport Keys to National Express

(Orange County),” press release, March 31, 2000.

See http://www.faa.gov/airports/planning_capacity/passenger_allcargo_stats/passenger/.

See http://ulstercountyny.gov/sites/default/files/documents/143-06.pdf.

National Express Group, Interim Report 2006, p. 6.

Port Authority of New York and New Jersey, Annual Report 2007, p. 94, and Annual Report 2008, p. 90.

National Express Group, Annual Report and Accounts 2007, p. 66.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

The private operator, Aerostar Airport Holdings,55 paid $615 million in up-front proceeds to the

Puerto Rico Ports Authority, and is to pay a further $600 million from revenue sharing over the

40-year lease. Aerostar also agreed to a $1.2 billion capital plan including a $200 million terminal

reconfiguration within the first two years.

Hendry County Airglades Airport

The only airport currently seeking approval for privatization under the APPP is Hendry County

Airglades Airport in Clewiston, FL. This general aviation airport received preliminary approval

from FAA in October 2010. In August 2014, FAA approved a management contract between

Hendry County and Airglades International Airport LLC, pending Hendry County’s submission of

the final APPP application. Airglades International Airport LLC is controlled by owners of

adjacent sugar plantations who intend to build an additional runway and construct a perishable air

cargo complex, factories, warehouses, and housing on land near the airport.56

Chicago Midway Airport

The APPP slot reserved for a large hub commercial airport was once taken by Chicago Midway

Airport, but its privatization efforts never materialized. The City of Chicago received airline

approval to lease its city-owned Midway International Airport to private investors. On October 3,

2006, FAA authorized the city to select a private operator, negotiate an agreement, and submit a

final application under the pilot program.57 On October 8, 2008, the Chicago City Council agreed

to a $2.52 billion, 99-year lease with Midway Investment and Development Corporation

(MIDCo), a consortium led by Citigroup Inc., John Hancock Life Insurance Co., and a unit of

Vancouver (British Columbia) International Airport. The deal was delayed due to the inability of

the consortium to secure financing during the global economic crisis. The lease agreement was

terminated when the group missed the April 6, 2009, payment deadline. MIDCo had to pay a

$126 million penalty to the city.58

A renewed effort to lease Midway was abandoned in 2013 after one of the two bidding groups

dropped out. The city then announced that it would suspend plans to lease the airport. On

September 9, 2013, the City of Chicago withdrew its preliminary privatization application. This

opened up the APPP slot reserved for a large hub airport.

Why Has the APPP Not Stimulated Privatization?

Over its 18-year history, the APPP has not been successful in stimulating wide interest in airport

privatization. The program’s modest results appear to have several causes.

Aerostar Airport Holdings LLC is jointly owned by Aeropuerto de Cancún S.A. de C.V. and Highstar Capital.

Aeropuerto de Cancún S.A. de C.V. is a subsidiary of Grupo Aeroportuario del Sureste S.A.B. de C.V. of Mexico. It

operates the Cancún Airport. For more information on the lease, see FAA Docket 2009-1144, “Record of Decision for

the Participation of Luis Muñoz Marín International Airport, San Juan, Puerto Rico, in the Airport Privatization Pilot

Program,” February 25, 2013.

http://www.airgladesea.com/wp-content/uploads/2013/08/Display-Boards-Airglades-EA-Scoping-Meeting.pdf.

See FAA, “Fact Sheet: Chicago Midway Airport Pilot Privatization Program,” FAA News, April 2008.

Airport Cooperative Research Program (ACRP) Report 66, Considering and Evaluating Airport Privatization, p. 44.

Congressional Research Service

Issues in the Reauthorization of the Federal Aviation Administration (FAA)

APPP Application Process

Applying to privatize an airport under the APPP, as reported by FAA, makes the transfer from

public to private ownership too “time consuming” and presents risks that could cause a potential

deal to fail.59 The process may take years to complete. In the cases of Luis Muñoz Marín

International Airport and Hendry County Airglades Airport (see “Application Results” in Table

6), more than three years will have elapsed from preliminary application to final FAA approval,

and informal discussions with FAA may have consumed additional time prior to the filing of the

preliminary applications.

The application process begins with an airport filing a preliminary application for FAA approval,

upon which one of the 10 slots available under the APPP is reserved for that airport. The

preliminary application must include a summary of privatization objectives, a description of the

process and a timetable, current airport financial statements, and a copy of the airport owner’s

request for potential private operators to submit proposals. FAA has 30 days to review the

preliminary application.

Once an airport receives preliminary approval, it then may select a private operator from among

those offering proposals, negotiate an agreement, and submit a final application to FAA. There is

no timeline as to how quickly FAA must complete its review of the final application. After FAA

gives notice of its proposed approval of the final application and lease agreement in the Federal

review and prepares its Findings and Record of Decision (ROD), in which it addresses the public

comments and publishes the details of its decision.60

Regulatory Conditions and Obligations

Airport privatization under the APPP has a number of regulatory requirements. These

requirements may have lessened airport owners’ and/or investors’ interest in privatization. They

include the need for 65% of air carriers serving the airport61 to approve a lease or sale of the

airport; restrictions on increases in airport rates and charges that exceed the rate of increase of the

Consumer Price Index (CPI); and a requirement that a private operator comply with grant

assurances made by the previous public-sector operator to obtain AIP grants.62 In addition, after

privatization, the airport will be eligible for AIP formula grants to cover only 70% of the cost of

improvements, versus the normal 75%-90% federal share at publicly owned airports. This serves

as a disincentive to privatize an airport because it will receive less federal money after

privatization.

U.S. Department of Transportation, Federal Aviation Administration, Report to Congress on the Status of the Airport

Privatization Pilot Program, United States Code, Title 49, Section 47134, August 2004, p. 1; Matthew Hummer,

“Airport Privatization: A Plan to Help Fill a $50 Billion-Plus Investment Gap,” Bloomberg Government, December 20,

2011, p. 13.

For details of the APPP application procedures, see http://www.faa.gov/airports/resources/publications/

federal_register_notices/media/obligation_private97.pdf.

Approval must be granted both by 65% of the air carriers using the airport and by carriers collectively accounting for

65% of the landed weight during the previous year.

Examples of grant assurances include making the airport available for public use on reasonable conditions and

without unjust economic discrimination (against all types, kinds, and classes of aeronautical activities); charging air

carriers making similar use of the airport substantially comparable amounts; maintaining a current airport layout plan;

making financial reports to FAA; and expending airport revenue only on capital or operating costs at the airport. For a

listing of the AIP grant assurances, see http://www.faa.gov/airports/aip/grant_assurances/.

Congressional Research Service

Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Adequate Access to Funding

In surface transportation, a key purpose of privatization is to attract private capital to supplement

public spending that is insufficient to provide the desired level of construction and maintenance.63

In general, lack of resources has been a far less important issue for airport operators than for

highway and public transportation agencies.

Publicly owned airports have access to five major sources of funding. The AIP provides federal

grants to airports for planning and development, mainly of capital projects related to aircraft

operations, such as runways and taxiways.64 Local passenger facility charges of up to $4.50 per

boarding passenger, imposed pursuant to federal law, can generate revenue for a broad range of

projects including “landside” projects on airport property such as passenger terminals and ground

access improvements, and for interest payments. Tax-exempt bonds, often secured by airport

revenue, offer less costly financing than is generally available to private entities. Tenant leases,

landing fees, and other charges are important revenue sources at some airports. Many airports,

especially smaller ones, also benefit from state and local grants.65

These financing arrangements have important implications for airport privatization.



If a publicly owned airport were to be privatized outside the APPP, its private

operator may not be eligible to receive AIP formula funds and may have to draw

on its own resources to improve runways and taxiways. The operator would not

be entitled to issue bonds with federal tax-exempt status, and would therefore

have to pay higher interest rates on its bonds than a public-sector operator. On the

other hand, the private operator would have relative freedom to impose passenger

usage fees and to increase landing fees, rents, and other charges, so long as this

was not done in a discriminatory fashion.

An airport privatized under APPP would continue to have access to federal AIP

grants, although the private operator would have to provide a 30% match,

considerably more than the 10%-25% matches required of publicly owned

airports. The operator would not be entitled to issue bonds with federal taxexempt status, and would therefore have to pay higher interest rates on its bonds

than a public-sector operator. It could continue to collect passenger facility

charges, but could not impose charges higher than those authorized by federal

law. Its ability to raise fees paid by air carriers would be constrained.

These limitations are largely the consequence of federal laws. They may explain why airport

privatization has been less attractive in the United States than in Europe and Canada.

Several European countries and Canada have undertaken notable steps in airport privatization.

Two factors that have facilitated privatization in other countries do not exist in the United States.

First, many of the major airports that have been privatized in Europe and Canada were previously

owned by national governments, not by local or provincial governments, so the decision to

privatize did not need to be taken at multiple levels of government. Second, the tax-favored status

See CRS Report R43410, Highway and Public Transportation Infrastructure Provision Using Public-Private

Partnerships (P3s), by (name redacted).

For more discussion of the AIP and airport financing, see CRS Report R43327, Financing Airport Improvements, by

(name redacted) and (name redacted)

U.S. Government Accountability Office, Airport Finance: Observations on Planned Airport Development Costs and

Funding Levels and the Administration’s Proposed Changes in the Airport Improvement Program, GAO-07-885, 2007,

p. 8.

Congressional Research Service

Issues in the Reauthorization of the Federal Aviation Administration (FAA)

of debt issued by U.S. state and local governments has no analogue in most other countries, so the

shift from public to private ownership did not necessarily entail higher borrowing costs, as it

would in the United States.

Policy Issues Related to Privatization

Congress has been interested in airport privatization as a way to save money by making airports

less dependent on federal assistance while also, in the long run, increasing the nation’s aviation

capacity to meet growing demand for air travel. However, under current federal law, privatization

has struggled to achieve these goals.

Privatization outside the framework of the APPP is generally unattractive to both airport owners

and potential investors, as it is likely to result in higher financing costs and loss of federal AIP

grants, and will not provide the public-sector owner with revenues that can be used for other

purposes. Privatization within the framework of the APPP may generate minor reductions in

federal outlays due to the requirement for a privately run airport to match a larger share of federal

AIP grants, but it is not clear that privatization serves the interests of public-sector owners or air

carriers, except in cases where the airport is losing money or the owner can channel the proceeds

of privatization into capital projects at other airports. Private investors’ ability to earn money

from an airport privatized under the APPP is limited by restrictions on passenger facility charges

and limitations on increases in other airport fees.

Streamlining the APPP application and review process might make privatization somewhat more

attractive by reducing the risks arising from a long application period, such as changes in

economic and capital market conditions. However, significantly increasing interest in airport

privatization is likely to require structural change to the existing airport financing system. Options

might include the following:



Offering the same tax treatment to private and public airport infrastructure

bonds. This could be done by eliminating the current federal income tax

exemption of interest on bonds issued by public-sector airport owners or by

extending tax-exempt or tax-preferential treatment to airport infrastructure bonds

issued by private investors. Either change would eliminate a major disincentive

to shift airports from public to private ownership. On the other hand, removing

the tax exemption on public-sector airport bonds would raise airports’ financing

costs, while extending it to private-sector bonds could have consequences for

federal revenues.

Changing AIP requirements. Reducing the percentage match private operators

must provide to obtain AIP grants to the level of comparable public operators

would make privatization more attractive to private investors, but would increase

their share of federal funding.

Relaxing AIP grant assurances. If private investors were freed from some of

the requirements agreed to by the public owner in order to obtain AIP funding,

privatization might become more attractive to investors. However, some of the

changes that might be most attractive to investors, such as allowing the sale of

airport property, might interfere with the federal interest in maintaining aviation

system capacity and safety.

Liberalizing rules governing fees. Allowing privatized airports more flexibility

to impose passenger facility charges and to raise rents and landing fees would

make privatization more attractive to investors. However, this might increase

Congressional Research Service

Issues in the Reauthorization of the Federal Aviation Administration (FAA)



airline opposition to privatization and could lead to higher costs for passengers

and air cargo shippers.

Easing limits on the use of privatization revenue. Reducing the obstacles for

public-sector owners to use privatization revenue for nonairport purposes would

stimulate local and state government interest in privatization. On the other hand,

it could potentially lead to a lower level of investment in aviation infrastructure.

Aircraft Noise Issues

Noise from aircraft taking off and landing is an issue at many airports. Under the National

Environmental Policy Act (NEPA), FAA and airport operators are required to assess

environmental impacts, including noise impacts, associated with federally funded airport projects

and airspace redesigns. Noise has been a contentious issue in the redesign of airspace in the New

York City, New Jersey, and Philadelphia region. Similarly, noise concerns have been raised

regarding a number of airport expansion projects, including the completion of a new runway at

Chicago’s O’Hare International Airport in 2013.

The number of residents in the United States exposed to significant amounts of aircraft noise has

declined precipitously, from about 7 million in 1975 to an estimated 320,000 in 2012.66 Major

reductions in aircraft noise levels have been achieved over the past 30 years. Louder Stage 2

airliners over 75,000 pounds were phased out in the 1990s, and a provision in the FAA

Modernization and Reform Act of 2012 required that all jet airplanes, regardless of size, meet

quieter Stage 3 or Stage 4 noise standards by the end of 2015. Newly introduced aircraft types

must meet Stage 4 noise standards, and FAA plans to issue rules for even more stringent Stage 5

noise standards.67 Noise reductions have been achieved through quieter engine technologies,

greater use of lightweight aircraft materials, and advances in aerodynamics. FAA, in cooperation

with the National Aeronautics and Space Administration and industry, has invested in the research

and development of quiet aircraft technologies.

While reducing aircraft noise emissions has been highly successful and new aircraft are

significantly quieter than their predecessors, the volume of air traffic, particularly around major

airports, has increased over the past 30 years. Historically, Congress has addressed airport noise

concerns by setting aside 35% of discretionary funding under the AIP for noise mitigation and

abatement. Generally, these funds may be used only within the Day Night Average Sound Level

(DNL)68 65 decibel (dB) noise impact area around an airport. Proposals to grant FAA the

flexibility to fund noise mitigation projects in areas with lower DNL levels would enable it to

support additional abatement projects, but could divert resources from capacity and safety

projects. A related issue is whether to make the planning for noise-mitigating air traffic control

procedures at individual airports eligible for AIP funding.

https://www.faa.gov/about/office_org/headquarters_offices/apl/noise_emissions/airport_aircraft_noise_issues/.

https://www.faa.gov/about/office_org/headquarters_offices/apl/noise_emissions/airport_aircraft_noise_issues/levels/.

Day Night Average Sound Level (DNL) is the standard federal metric for determining cumulative exposure to noise.

DNL is the 24-hour average sound level in decibels (dB), with a 10-dB adjustment (penalty) added to each aircraft

operation occurring during nighttime hours (10 p.m. to 7 a.m.).

Congressional Research Service

Issues in the Reauthorization of the Federal Aviation Administration (FAA)

The Next Generation Air Transportation System

(NextGen)

NextGen refers to the Next Generation Air Transportation System, a large-scale modernization of

air traffic technologies and procedures intended to expand national airspace system capacity to

meet future demand. NextGen is a multiyear initiative to modernize and improve the efficiency of

the national airspace system, primarily by migrating to technologies and procedures using

satellite-based navigation and aircraft tracking. Initiated in legislation in 2003 (see P.L. 108-176),

the NextGen system targets full-scale implementation by 2025.

With regard to air traffic management, the goals of NextGen include



reduced air traffic separation;

flexible spacing and sequencing of aircraft, both in the air and on the ground;

increased utilization of airspace, airports, and runways, particularly those that are

currently underutilized;

improved and tailored weather forecasts; and

reductions in environmental impacts of noise and emissions.69

In 2003, Vision 100—Century of Aviation Reauthorization Act (P.L. 108-176) established an

interagency Joint Planning and Development Office (JPDO) within FAA to develop and

implement an integrated plan for the Next Generation Air Transportation System (NGATS, now

known as NextGen) capable of meeting the needs associated with projected air traffic demands in

2025. The act also established a senior policy committee to consult with industry stakeholders

and advise the Secretary of Transportation on goals and strategic objectives for transforming the

national airspace system to meet future needs and provide policy guidance to the JPDO.

In 2004, the JPDO released its first iteration of the Integration National Plan for NextGen. The

NextGen integrated plan, as envisioned, seeks to ensure that the NextGen system meets air

transportation safety, security, mobility, efficiency, and capacity needs by 2025. It contends that if

steps are not taken to alleviate air travel congestion through NextGen in concert with airport

capacity expansion, the annual cost to consumers related to air traffic delays and flight

cancellations could be as high as $20 billion by 2025.70

The FAA Modernization and Reform Act of 2012 refined and expanded several facets of NextGen

implementation. It established the position of Chief NextGen Officer within FAA, and

redesignated the JPDO director as Associate Administrator for NextGen Planning and

Development and Interagency Coordination. The act required the NextGen Senior Policy

Committee to submit annual progress reports to Congress. It also ordered a U.S. Department of

Transportation Office of Inspector General (DOT OIG) review of the Automated Dependent

Surveillance (ADS-B) ground system installation and deployment of ADS-B services, and a

National Research Council review of the enterprise architecture for NextGen. The act directed

FAA to accelerate the deployment of NextGen technologies and procedures at airports with

implementation schedules to complete the process by July 2015 at the nation’s busiest airports,

and by July 2016 at other airports. The legislation defined specific national airspace performance

U.S. Department of Transportation. Integrated National Plan for the Next Generation Air Transportation System,

December 12, 2004.

Ibid.

Congressional Research Service

Issues in the Reauthorization of the Federal Aviation Administration (FAA)

metrics that FAA must track. Other provisions required FAA to evaluate the role of airport

surveillance technologies in the implementation of NextGen airport surface operations

management; authorized the establishment of a NextGen research and development center of

excellence; and authorized public-private partnerships to leverage and maximize private-sector

capital for the purpose of equipping general aviation and commercial aircraft with NextGen

avionics. FAA is to report to Congress on its initiatives to encourage NextGen equipage,

including policies that give priority handling to ADS-B-equipped aircraft.

The Consolidated Appropriations Act of 2014 (P.L. 113-76) defunded the JPDO for FY2014 and

directed FAA to absorb the JPDO’s functions into its operations account under the NextGen and

operations planning activity. In May 2014, FAA moved the JPDO functions into a newly created

NextGen Interagency Planning Office.

NextGen Evolution

A report by the Ash Center for Democratic Governance and Innovation at Harvard University

described NextGen as “one of the most significant efforts of cross-boundary transformation ever

contemplated by the United States government and its industry partners.”71 The report observed

that the NextGen concept eliminates the historical delineation between air traffic control

infrastructure and aircraft navigation and communications devices by integrating certain elements

of the underlying infrastructure into cockpit instrumentation.72

The genesis of core NextGen technological concepts was the effort of the cargo airline industry to

develop low-cost collision avoidance and aircraft tracking technologies. In the 1990s, cargo

airlines were exempted from regulations requiring transport-category aircraft to be equipped with

traffic collision avoidance systems (TCAS). The cargo airlines’ initiatives to develop a low-cost

alternative to TCAS that could also provide airline fleet tracking capabilities using Global

Positioning System (GPS) technology led to the initial development of core NextGen cockpit

technologies.

In 1999, express cargo carrier UPS received accolades for its role in developing ADS-B

technology, now considered the backbone of the NextGen system. Its subsidiary, UPS Aviation

Technologies, played a major part in developing ADS-B avionics that were flight-tested by UPS

airplanes under FAA’s Ohio River Valley demonstration project, a component of its Safe Flight 21

research-and-development program in the 1990s. UPS Aviation Technologies was subsequently

acquired by Garmin Ltd. in 2003. Garmin has since positioned itself as a major supplier of GPS

navigation devices, ADS-B equipment, and advanced avionics, primarily for small to midsized

general aviation aircraft.

Also, in 1999, FAA initiated the Capstone Program in Alaska to explore the potential safety

benefits of GPS, ADS-B, advanced avionics, and flight information service broadcasts for general

aviation operations. The research program served as a test bed for technologies that came to form

the core of the NextGen initiative.

Extensive delays and numerous flight cancellations at commercial airports in summer of 2000 led

FAA, in collaboration with aviation industry partners, to closely examine the aviation system’s

future capacity needs and develop a systematic strategy for addressing those needs. In 2001, FAA

Stephen Goldsmith, Zachary Tumin, and Fred Messina, Assuring the Transition to the Next Generation Air

Transportation System: A New Strategy for Networked Governance, Ash Center for Democratic Governance and

Innovation, Harvard Kennedy School, March 2010, p. 3, http://www.ash.harvard.edu/extension/ash/docs/nextgen.pdf.

Ibid., p. 9.

Congressional Research Service

Issues in the Reauthorization of the Federal Aviation Administration (FAA)

created an Operational Evolution Plan (OEP, now known as the Operational Evolution

Partnership) to define airport infrastructure and technology needs to meet future capacity

requirements, with a particular focus on the nation’s busiest airports and airspace. The technology

solutions proposed in the OEP, including area navigation (RNAV) procedures, augmentation of

GPS signal accuracy through the Wide Area Augmentation System (WAAS), controller-pilot data

link technologies, and reduced vertical separation, came to be regarded as components of a more

comprehensive plan for expanding air traffic control system capacity. This was later reflected in

the NextGen initiative.

In some regards, NextGen is an evolutionary extension of FAA’s earlier initiatives to develop air

traffic management technologies to provide controllers and pilots with increased operating

flexibilities and fewer restrictions, thus allowing for more efficient routing of aircraft. In other

regards, it is transformative in its approach. Specifically, it differs significantly from past air

traffic modernization initiatives in that it is predicated on replacing radar-based tracking of

aircraft and ground-based navigational infrastructure with a system that relies on precision

navigation and aircraft tracking using the satellite-based GPS.

Elements and Funding

Funding for NextGen programs totals more than $1 billion annually. The funds primarily come

through FAA’s Facilities and Equipment (F&E) account (Table 7).

Table 7. Funding for NextGen Programs

($ in millions)

Account

FY2013

FY2014

FY2015

Operations and Maintenance (O&M)

Facilities and Equipment (F&E)

814

828

774

Research, Engineering, and Development (RE&D)

TOTALS

883

901

836

Source: U.S. Department of Transportation, Budget Estimates Fiscal Year 2015, Federal Aviation Administration.

Note: Columns may not sum to totals due to rounding.

Core components of the NextGen system include the following:



Automatic Dependent Surveillance-Broadcast (ADS-B). A system for

broadcasting and receiving aircraft identification, position, altitude, heading, and

speed data derived from onboard navigation systems such as a GPS receiver.

“ADS-B Out” functionality refers to a basic level of aircraft equipage that

transmits position data. “ADS-B In” incorporates aircraft reception of ADS-B

signals from other air traffic and/or uplinks of traffic, weather, and flight

information from ground stations. FAA funds support the installation, operation,

and maintenance of the ground network and associated infrastructure to receive

ADS-B transmissions and relay them to air traffic facilities and other aircraft.

Most aircraft will be required to have “ADS-B Out” capability by 2020.

System Wide Information Management (SWIM). A system being developed

for aviation system data sharing, consisting of a seamless infrastructure for data

exchange, similar to the web. As envisioned, SWIM will consist of an extensive,

scalable data network to share real-time operational information such as flight

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)



plans, flight trajectories, weather, airport conditions, and temporary airspace

restrictions across the entire airspace system.

Data Communications (DataComm). A digital voice and data network, similar

to current wireless telephone capabilities, to transmit instructions, advisories, and

other routine communications between aircraft and air traffic service providers.

Collaborative Air Traffic Management Technologies (CATMT). A suite of

technologies, including various automation and decision support tools, designed

to enhance existing aircraft flow management functions by exploiting other

NextGen technologies and capabilities such as SWIM.

National Airspace System Voice System (NVS). Upgraded digital voice

communications infrastructure that will replace existing analog equipment.

NextGen Weather. An integrated platform for providing a common weather

picture to air traffic controllers, air traffic managers, and system users.

Additionally, NextGen is dependent upon other ongoing modernization initiatives to upgrade

FAA facilities and equipment to make them NextGen-capable. Most significantly, completion of

the Enroute Modernization (ERAM) program, an upgrade to automated air traffic systems at

FAA’s en route centers, is considered by FAA and aviation experts as a necessary milestone

toward giving the centers that direct high-altitude traffic the necessary data-handling capabilities

to support NextGen.

Funding allocations for these various core NextGen components are presented in Figure 3.

Figure 3. Allocation of NextGen Funding, FY2013-FY2015

Other NextGen

Activities

32%

NextGen Weather

FAA Operations

and Maintenance

(O&M)

FAA Research

Engineering and

Development

(R,E&D)

National Airspace

System Voice

System (NVS)

Automatic

Dependent

Surveillance Broadcast (ADSB)

30%

System Wide

Information

Management

(SWIM)

Collaborative Air

Traffic

Management

Technologies

(CATMT)

Data

Communications

(DataComm)

16%

Source: CRS analysis of U.S. Department of Transportation Budget Estimates, Fiscal Year 2015,

Federal Aviation Administration.

Note: Does not include related funding for National Aeronautics and Space Administration and

National Oceanic and Atmospheric Administration for research and development and NextGen

Weather.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Current Status

The network of ADS-B ground receiver stations in the contiguous 48 states has largely been

deployed. FAA has implemented performance-based navigation (PBN) procedures including

departures, arrivals, and instrument approaches that improve airport access and operational

efficiency. A large majority of the air carrier fleet is equipped with PBN navigation equipment

allowing utilization of NextGen procedures such as area navigation (RNAV). A smaller but

growing percentage of the airline fleet is ADS-B equipped. In contrast, it is generally believed

that a comparatively small percentage of the general aviation fleet is equipped for NextGen,

although CRS has been unable to obtain detailed data regarding NextGen equipage.

Aircraft Equipage

One of the greatest challenges to FAA in implementation of NextGen is overcoming stakeholder

reluctance to adopt NextGen technologies. This reluctance is fueled in large part by perceived

uncertainties about the technical details and the potential benefits of particular technologies.

Users fear that early investments may not yield near-term benefits, and may prove costly if

technical specifications change as NextGen evolves.

In May 2010, FAA published a notice informing aircraft operators that most aircraft operating in

controlled airspace would be required to equip with approved ADS-B Out equipment by 2020.73

In adopting this rule, FAA rejected the no-action alternative, finding that the existing radar-based

aircraft system is becoming operationally obsolete and incapable of accommodating projected

increases in air traffic. FAA examined alternative technologies as well as exemptions for certain

classes of operators, but determined that a uniform equipment mandate was the only alternative

that could provide seamless surveillance capabilities to air traffic controllers and the most costeffective solution.

A cost-benefit analysis of the final rule identified benefits, including the dollar values of time and

fuel savings, carbon dioxide (CO2) emissions reductions, and increased system capacity, totaling

$6.8 billion to $8.5 billion over the period from 2009 through 2035. In comparison, the analysis

identified costs, including avionics equipage costs incurred by the industry and infrastructure

costs incurred by FAA, ranging from $3.3 billion to $7.0 billion over the same period. Of this,

equipage costs were estimated to fall between $2.5 billion and $6.2 billion, with a midpoint of

$4.4 billion.

The rulemaking process also examined impacts to small businesses operating aircraft. FAA found

that “small U.S. business operators may bear a disproportionate impact,” and noted that it would

be difficult for small operators to recover their compliance costs.74 It estimated that more than

1,500 small operators would incur costs greater than 1% of annual revenues, and, in addition,

more than 1,000 would incur costs greater than 2% of annual revenues. FAA estimated that costs

to general aviation (i.e., nonairline civil operators) would total $1.2 billion to $4.5 billion.

FAA has proposed a “best-equipped best-served” concept to encourage airlines and business jet

operators to invest in NextGen technologies. Under this concept, those that equip early with

NextGen capabilities would reap some of the benefits of those capabilities through, for example,

preferential treatment with respect to flight routing and arrival and departure queuing. In addition,

Federal Aviation Administration, “14 CFR Part 91, Automatic Dependent Surveillance-Broadcast (ADS-B) Out

Performance Requirements to Support Air Traffic Control (ATC) Service; Final Rule,” 75 Federal Register 3016030195, May 28, 2010.

Ibid., p. 30191.

Congressional Research Service

Issues in the Reauthorization of the Federal Aviation Administration (FAA)

ADS-B may provide some intrinsic benefits, particularly to small general aviation aircraft, by

providing pilots with robust traffic and weather data that may enhance safety. FAA plans to

promote these potential benefits, in conjunction with equipment mandates for ADS-B, to

encourage more users to adopt NextGen technologies in the near term. FAA has not adopted a

formal policy with regard to how it would implement best-equipped best-served practices,

indicating that practices may vary from region to region and from airport to airport.

Anticipated Benefits

In addition to the potential benefits specifically tied to ADS-B equipage, FAA anticipates that the

suite of NextGen technologies would provide substantial benefits to both commercial and general

aviation operators by improving efficiency and safety, and thereby reducing time, fuel burn, and

environmental impacts associated with aviation operations.

Benefits for Commercial Airlines

Under NextGen, commercial airlines are expected to benefit significantly from more direct

routing and reduced flight delays, which are expected to result in fuel savings. For commercial

operators, FAA has implemented a best-equipped best-served model, providing early adopters of

NextGen technologies with priority access to certain airports and flight routes. The benefit of

NextGen equipage can thus be realized through fuel cost savings, as well as indirect benefits that

may include improved customer satisfaction, reduced operational costs due to more efficient

operations, and environmental payoffs associated with reduced emissions and noise that could

potentially help better market the airline to increasingly environmentally conscious consumers.

Benefits for General Aviation

FAA argues that general aviation operators will also benefit from improved airspace and airport

access available to NextGen-equipped aircraft.

One element of improved system access for general aviation is procedures that utilize NextGen

technologies to increase navigational accuracy and provide procedures to improve access to

thousands of airports under a wider variety of weather conditions.

To meet the navigational accuracy, integrity, and availability requirements for civil aviation, FAA

developed a system for correcting errors in GPS signals over the entire National Airspace System

(NAS). It began working on the Wide Area Augmentation System (WAAS) in 1995. WAAS,

which was first activated in 2003 for use by general aviation aircraft, consists of ground reference

stations that compute GPS signal corrections. These signal corrections are continuously

transmitted to satellites which, in turn, broadcast them to WAAS-enabled GPS devices aboard

aircraft. Beginning in 2004, FAA began approving avionics systems and developing procedures

that allow aircraft to fly instrument approaches to airports using WAAS and GPS to provide both

lateral and vertical guidance.

WAAS enables general aircraft to access additional airports in poor weather conditions. FAA has

published more than 3,000 approach procedures that use this technology, and plans to publish

more than 5,000 in total by 2016. Depending on terrain considerations, these procedures allow

instrument-qualified pilots to descend to as low as 200 feet above the ground, in conditions as

poor as 1.5-mile visibility, before establishing visual contact with the runway. This can reduce

weather-related diversions and associated fuel costs for general aviation operators, and improve

accessibility and system capacity.

Congressional Research Service

Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Whereas the annual airport maintenance cost for a precision instrument landing system (ILS) that

provides similar capabilities is estimated at $85,000 annually, a WAAS approach can be

maintained for less than $3,000 every two years.75 With WAAS, there is no ground equipment to

maintain. The main costs to airports consist of the upkeep of runway lighting and markings

required for certification of the approach, and any costs incurred from working with local

planners to address possible impacts of newly constructed towers and buildings near the approach

path. While WAAS is not considered a core NextGen technology, it provides an enabling

capability for implementing precision NextGen airport approach procedures.

In addition to WAAS-enabled navigation equipment, ADS-B In functionality may provide

benefits to general operators that install equipment with this capability. FAA ADS-B ground

stations transmit Traffic Information Services-Broadcast (TIS-B) and Flight Information

Services-Broadcast (FIS-B). These broadcasts of air traffic, textual and graphical weather data,

and aeronautical information, such as temporary flight restrictions and other notices, are provided

free of charge to appropriately equipped aircraft with ADS-B In capability. This information is

anticipated to enhance safety by improving pilot situation awareness.

The FAA Modernization and Reform Act of 2012 established a general aviation equipage fund

through which private lenders were to make money available to general aviation operators to

install NextGen equipment. While the fund is still awaiting federal approvals to release money to

general aviation entities, the fund manager, NEXA Capital Partners, anticipates it will initially

make available $550 million in capital, including private equity from aerospace companies and

debt provided by private financial institutions. It expects to support about $1.3 billion in general

aviation equipage financing over the next 10 years. Funds will be made available to qualified

general aviation aircraft owners in the form of low-cost loans.

Policy Concerns

An overarching policy concern is FAA’s ability to manage the NextGen program and implement

technologies and procedures that would allow industry stakeholders to realize anticipated

operational benefits. For general aviation, delivery of promised safety improvements is an

important consideration in justifying large initial costs associated with equipping aircraft with

NextGen avionics. Interagency coordination and collaboration on NextGen initiatives remains a

significant policy concern, particularly given the current organizational changes shifting JPDO

functions to FAA’s newly created Interagency Planning Office.

Providing suitable funding mechanisms for both Next Gen infrastructure and industry equipage

remains a significant challenge in the current budgetary climate. Rough estimates indicate that the

total cost to develop NextGen infrastructure will be $14 billion to $22 billion. In addition, the cost

to upgrade the civilian aircraft fleet with NextGen avionics could be between $14 billion and $20

billion. The Aerospace Industry Association cites estimates by some industry experts that the cost

to equip aircraft may be significantly less than $12 billion, and could drop substantially once

manufacturers begin mass-producing NextGen equipment.76 However, others caution that costs

could run much higher, especially if schedules slip and timely decisions are not made regarding

technical specifications. The DOT OIG cautioned that some NextGen capabilities may not be

Aircraft Owners and Pilots Association, “Air Traffic Services Brief: Wide Area Augmentation System (WAAS),”

April 23, 2010, http://www.aopa.org/Advocacy/Air-Traffic-Services-,-a-,-Technology/Air-Traffic-Services-BriefWide-Area-Augmentation-System-WAAS.aspx.

Aerospace Industries Association, Civil Aviation Growth in the 21st Century: Meeting Capacity and Environmental

Challenges, September 2010.

Congressional Research Service

Issues in the Reauthorization of the Federal Aviation Administration (FAA)

implemented until 2035 or later, and the total cost to the government and airspace users could far

exceed the total projected cost estimate of $40 billion.77

Other policy concerns include achieving global harmonization regarding equipment and

procedural standards, particularly with ongoing air traffic management initiatives in Europe;

appropriately measuring progress and results stemming from NextGen initiatives; and identifying

reliable backup systems to supplement core NextGen technologies and provide adequate

safeguards and redundancies.

FAA Organizational Issues

Facility Consolidation

Consolidation of FAA air traffic facilities and functions is viewed as a means to control

operational costs, replace outdated facilities, and improve air traffic services. Consolidation

efforts to date have primarily focused on terminal radar approach control (TRACON) facilities.

TRACON consolidation has been ongoing for many years, but in the past has been limited to

nearby and overlapping terminal areas in major metropolitan areas such as New York/Northern

New Jersey, Washington/Baltimore, and Los Angeles/San Diego. More recently, FAA has sought

to decouple combined airport tower/approach control facilities and merge approach control

functions across larger geographical areas.

These consolidation projects have been coupled with airport control tower replacements.

Replacements for outdated combined tower/TRACON facilities are being designed to house

tower functions only, and TRACON components are being relocated to consolidated facilities that

may be at some distance from the airport. Remaining operations at low-activity towers that lose

their TRACON components are more likely to be outsourced under the federal contract tower

(FCT) program, an issue of particular concern to FAA labor unions. Currently, about half of all

airport control towers in the United States are operated under the FCT program.

Facility consolidation has been particularly controversial because FAA’s system-wide plan for

realignment and consolidation is still evolving. The plan calls for more comprehensive integration

of TRACONs and en route centers into large integrated facilities. The DOT OIG cautioned in

2012 that FAA is still in the early stages of planning for this comprehensive effort, and has not

made key decisions or developed metrics to assess these plans.78

FAA plans are politically sensitive, as consolidation initiatives could result in job losses in

specific congressional districts even if they do not result in an overall decrease in jobs for air

traffic controllers, systems specialists, and other supporting personnel. Rather, realignment and

consolidation coupled with airspace modernization under the NextGen system are anticipated to

change the nature of these job functions and consolidate them in fewer physical facilities.

Provisions in the FAA Modernization and Reform Act of 2012 (P.L. 112-95) required FAA to

develop a report providing a comprehensive list of its proposed recommendations for realignment

and consolidation of services and facilities. The report is to include a justification, projected cost

U.S. Department of Transportation, Office of Inspector General. Timely Actions Needed to Advance the Next

Generation Air Transportation System, AV-2010-068, June 16, 2010.

U.S. Department of Transportation, Office of Inspector General, Audit Report: The Success of FAA’s Long-Term

Plan for Air Traffic Facility Realignments and Consolidations Depends on Addressing Key Technical, Financial, and

Workforce Challenges, AV-2012-151, July 17, 2012.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

savings, and a timeline for each proposed action. FAA is required to subsequently provide

Congress with formal consolidation and realignment recommendations, along with public

comments received. Congress would then have the opportunity to, within 30 days, pass a joint

resolution formally disapproving any recommendation included in the FAA plan. If Congress

disapproves, FAA would not be able to implement that specific recommendation, although the

law is silent with respect to FAA’s recourse to subsequently propose alternative approaches. The

list has not yet been released.

The Federal Contract Tower (FCT) Program

Of U.S. airports with control towers, 252 (slightly less than half) are operated by private firms

and staffed with contract employees under the FCT program. Sixteen of the 252 contract towers

are funded under arrangements in which local governments or entities pay up to 20% of the costs.

Regardless of funding and operation, FAA maintains responsibility for the regulation and

oversight of operations and safety at all civil air traffic control towers in the United States.

Contract towers and contract controllers must be certified by FAA and must follow FAA

directives.79

The cost-share program is provided as an option to communities that wish to retain an operating

air traffic control tower after FAA determines that the costs to the federal government outweigh

the tower’s benefits related to safety and efficiency of flight operations. With the exception of

these 16 cost-share towers, towers in the FCT program are fully funded by FAA. In recent years,

the budget for the FCT program has been about $140 million annually, including approximately

$10 million for the federal share of cost-share towers.

The FCT program came into existence in 1982—initially as a pilot program at five airports—in

an effort to provide air traffic services at low-activity towers in the wake of the nationwide air

traffic controller strike and subsequent dismissal of striking FAA controllers. For the first 12

years, the program remained relatively small, growing to 27 towers by 1993. Nonetheless, it

gained the attention of Vice President Albert Gore’s National Performance Review—later known

as the National Partnership for Reinventing Government—which endorsed the program in 1993

and recommended its expansion.80 FAA developed a plan to close or contract out all low-activity

towers, and the number of contract towers grew to 160 by the end of FY1997.81

In FY1999, Congress first funded the cost-sharing program, allowing airports that would not

otherwise have met FAA’s threshold benefit-to-cost ratio to maintain contract tower operations

with nonfederal funds to supplement federal expenditures. Subsequently, Congress has limited the

local share to not more than 20% of a tower’s costs. Currently, 16 towers are funded through this

program at a cost of roughly $10 million annually. While this could expand program eligibility, it

could also have the effect of triggering tower closures in communities that are unwilling or

unable to contribute additional funding for tower operations.

In a 2012 audit, the DOT OIG concluded that the FCT program provided air traffic services to

low-activity airports at lower costs than FAA-staffed towers could. The audit found that on

average, contract towers required six fewer controllers and cost almost $1.5 million less annually

Federal Aviation Administration (FAA) Contract Tower (FCT) Program. Contract Services Branch (ATO-310).

Vice President Albert Gore’s National Performance Review, From Red Tape to Results: Creating a Government that

Works Better and Costs Less (Washington, DC: GPO, 1993), p. 150.

U.S. Department of Transportation, Office of Inspector General. Federal Contract Tower Program, Federal Aviation

Administration, AV-1998-047, May 18, 1998.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

than FAA-staffed towers at airports with comparable levels of flight activity.82 These savings

were achieved through lower staffing levels and lower controller pay at contract towers compared

to FAA towers. The audit found that contract towers had a lower rate of reported safety incidents

than comparable FAA towers. Also, a survey of aircraft operators, conducted as part of the audit,

found similar levels of satisfaction with the services provided by contract towers and FAA towers

handling similar numbers of aircraft.

In March 2013, provisions of the Budget Control Act of 2011 (P.L. 112-25) providing for

automatic reductions to most federal discretionary spending, referred to as sequestration, went

into effect. Among the cost-cutting measures proposed by FAA was the complete closure of up to

238 control towers at airports that have fewer than 150,000 flight operations or fewer than 10,000

commercial operations per year.83 Towers listed as candidates for closure included 195 run by

contractors under the FCT program and 43 staffed by FAA controllers. On March 22, 2013, FAA

announced it would close 149 FCT program towers over four weeks beginning April 7, 2013.

On May 1, 2013, following a week of FAA air traffic controller furloughs that contributed to

some isolated air traffic system delays, Congress enacted the Reducing Flight Delays Act of 2013

(P.L. 113-9). The act gave FAA authority to transfer up to $253 million to FAA operations using

available monies from unspent airport funds, which were not subject to sequestration, and from

other available sources within FAA.84 On May 2, 2013, a bipartisan group of 25 Senators

transmitted a letter to Secretary of Transportation Ray LaHood and FAA Administrator Michael

Huerta stating the following: “Congressional intent is clear: the FAA should prevent the slated

closure of 149 contract towers by fully funding the contract tower program.”85 The following

week, FAA canceled the planned closures. The FCT program has been fully funded since then,

and FAA has not moved forward with its tower closure plans.

Technological Developments Affecting Potential Safety Impacts

of Possible Future Tower Closures or Facility Consolidations

The potential safety impacts of long-term tower closures could be mitigated by technologies now

under development. These technologies fall into two broad categories: (1) in-cockpit situation

awareness technologies and (2) remote air traffic services.

In-cockpit situation awareness technologies include capabilities such as moving maps and cockpit

displays of traffic information. While commercial passenger aircraft are equipped with traffic

collision avoidance systems (TCAS), such systems are not affordable for typical general aviation

aircraft, which make up the majority of traffic at most small and mid-sized airports. The ADS-B

technology used in NextGen may provide a means for general aviation aircraft to be equipped

with situation awareness capability. FAA will require most aircraft to be equipped with ADS-B

capability to broadcast precise location information, a capability known as ADS-B Out, by 2020.

However, at present there is no mandate to equip aircraft with the capability to receive and

U.S. Department of Transportation, Office of Inspector General, Contract Towers Continue to Provide Cost-Effective

and Safe Air Traffic Services, But Improved Oversight of the Program Is Needed, AV-2013-009, November 5, 2012.

See Federal Aviation Administration, “FAA Planning for $600 million in 2013 Spending Cuts,” available at

http://www.faa.gov/news/updates/?newsId=71078.

For further discussion, see CRS Report R43065, Sequestration at the Federal Aviation Administration (FAA): Air

Traffic Controller Furloughs and Congressional Response, by (name redacted), (name redacted), and (name redacted)

Letter from the Honorable Richard Blumenthal, the Honorable Jerry Moran, and the Honorable Kelly Ayotte, United

States Senate et al. to the Honorable Ray LaHood, Secretary, U.S. Department of Transportation, and the Honorable

Michael Huerta, Administrator, Federal Aviation Administration, May 2, 2013.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

display information about other traffic, a capability known as ADS-B In. Greater participation

may be needed to obtain a comparable level of situation awareness and traffic avoidance in the air

terminal environment than is currently provided by manned air traffic control towers.

The services currently provided by airport towers could be offered from remote locations. Some

air traffic services are already provided in this way; for example, an aircraft on an instrument

approach to a nontowered airport can remain under the control of an en route or approach control

facility until it descends below radar coverage. Remote or virtual towers are seen as a potential

next step in air traffic facility consolidation, and could provide a comparatively low-cost

alternative to manned towers by using data from systems such as ADS-B and surface radar

capabilities. Pooling of resources at these consolidated facilities could potentially allow for

significantly reduced staffing compared to stand-alone towers currently in operation. However,

initial start-up costs may be high.

Facility Security

On September 26, 2014, an act of arson at FAA’s Chicago air traffic control center temporarily

shut down air traffic into Chicago’s two commercial airports and disrupted flights across much of

the country. The incident highlighted the potential physical security risks posed by contractors

and employees with access to facilities. It also illustrated the importance of redundancy, as

controllers working at other locations, not in the Chicago area, were able to return the system to

normal operation within a couple of days. The physical and cybersecurity measures in place at

FAA’s air traffic control facilities have been criticized in the past, most notably in a 2005 GAO

report.86

Air Traffic Control Privatization

For almost four decades, Congress has intermittently debated whether the public would be better

served if air traffic services currently provided by FAA were instead provided by an independent

entity. The many proposals and bills on this subject put forth over the years have distinguished

two main alternatives to continued operation of the air traffic control system by a federal agency:



corporatization, which, in this context, generally refers to establishing air traffic

services as a wholly owned government corporation or quasi-governmental

entity; and

privatization, which would entail creating some form of private ownership and

control of an air traffic services corporation.

Many other countries have moved their air traffic control operations into either private entities or

government-controlled corporations. In the United States, however, privatization proposals have

stumbled on two obstacles. One is funding. Most proposals have envisioned that the air traffic

control entity would be a self-sustaining organization that would cover its costs with fees charged

on aircraft using the system. User fees have been strongly opposed by general aviation interests,

and Congress has repeatedly refused to permit them. The other obstacle has been the proposed

organization’s borrowing costs. Although the ability to borrow in the financial markets to

modernize the air traffic system is often cited as an advantage of an independent entity, such an

U.S. Government Accountability Office, Information Security: Progress Made, but Federal Aviation Administration

Needs to Improve Controls over Air Traffic Control Systems, GAO-05-712, August 2005.

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

entity would face higher borrowing costs than the federal government, unless the federal

government’s full faith and credit were to back the entity’s debt obligations.

FAA has taken modest steps toward privatizing certain functions. Air traffic control operations at

252 airports without radar control are provided by private operators under the FCT program,

discussed above, and since 2006, FAA has contracted out the work performed at automated flight

service station facilities that provide preflight and in-flight weather briefings and flight planning

services, mostly to general aviation operators. FAA also has made increased use of design-buildmaintain contracts that make contractors, rather than FAA personnel, responsible for installing

and maintaining air traffic control equipment.87

Controller Selection and Hiring

Recent changes in FAA’s controller selection and hiring process have proven controversial, and

may be debated during reauthorization.

Historically, FAA has advertised job openings to specific categories of applicants, using separate

evaluation processes for each category. In February 2014, it switched to a single, nationwide

vacancy announcement with a uniform evaluation process that was open to all qualified U.S.

citizens between the ages of 18 and 31. FAA also changed its process for selecting among eligible

candidates in response to recommendations from two reports undertaken to examine barriers to

workplace diversity in the air traffic control hiring process.

These changes were substantial. While the new process retained legally required veterans

preferences, FAA otherwise evaluates all applicants—regardless of background, education, or

experience—using a single set of evaluation tools and assessment criteria. FAA required all prior

applicants who had not received tentative offers of employment prior to February 2014 to reapply,

including candidates who had already passed the Air Traffic Selection and Training Exam (ATSAT), a measure of skills and abilities important for air traffic control. Under earlier hiring

practices, qualified candidates achieving a specified score on the AT-SAT were chosen to

interview with a selection panel that would make provisional hiring decisions.

Under FAA’s new hiring process, a biographical assessment is administered as a first step to

assess applicants’ experience and aptitude for air traffic control. Research indicated that the

questionnaire, developed by FAA, is a valid predictor of air traffic controller job performance,

and is fair and unbiased with respect to gender and ethnicity. Under the February 2014 job

announcement, only applicants who scored above a specified level on the biographical

assessment and satisfied other job requirements were invited to complete the AT-SAT. Those

getting sufficiently high scores on the AT-SAT were given conditional offers of employment,

pending medical evaluations and background investigations. FAA received approximately 28,000

applications in response to the February 2014 announcement. About 2,200 applicants, or 8% of

the applicant pool, made it past the new biographical assessment, and roughly 1,600 received

conditional employment offers.

In addition to addressing workforce diversity concerns, FAA asserts that the biographical

assessment effectively identifies those applicants most likely to succeed in training and as fully

certified air traffic controllers. Moreover, FAA claims that the revised selection process

streamlined hiring and reduced related costs by more than $7 million. However, the new hiring

and selection process has raised concerns among the 36 colleges and universities that have

For more extensive discussion, see CRS Report R43844, Air Traffic Inc.: Considerations Regarding the

Corporatization of Air Traffic Control, by (name redacted).

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Issues in the Reauthorization of the Federal Aviation Administration (FAA)

developed curricula tailored to careers in air traffic control under an FAA program known as the

Air Traffic Collegiate Training Initiative (AT-CTI). Students and graduates of AT-CTI programs

applying in February 2014 were three times more likely to receive conditional offers than other

applicants. However, not all AT-CTI students were found eligible under the new selection

process, and some deemed eligible under prior job announcements did not receive sufficiently

high scores on the biographical assessment.

While AT-CTI schools do offer students a measurable advantage in the hiring process, historical

FAA data indicate that AT-CTI graduates have only a slightly higher success rate in completing

FAA training than other hires. These data do not necessarily suggest that the AT-CTI is not

valuable preparation for aspiring controllers. Rather, the findings may reflect the effectiveness of

FAA’s historical selection process in weeding out candidates unlikely to succeed, regardless of

source. FAA has indicated that it intends to continue the AT-CTI program, but may seek to work

with the schools to modify AT-CTI curricula.

Aviation Safety Issues

Airline Safety

In response to concerns over regional airline safety following the February 12, 2009, crash of a

Continental Connection flight from Newark, NJ, to Buffalo, NY, Congress enacted the Airline

Safety and Federal Aviation Administration Extension Act of 2010 (P.L. 111-216) on August 1,

2010. The act required FAA to make substantive regulatory changes addressing airline pilot

fatigue; airline pilot qualifications; FAA pilot records; airline flight crew and dispatcher training;

FAA oversight and surveillance of air carriers; pilot mentoring, professional development, and

leadership; and flight crewmember pairing and crew resource management techniques.

In response to these mandates, FAA issued rulemaking to significantly change flight time and

duty time limits and rest requirements for passenger airline flight crews in December 2011. The

new regulations, effective in January 2014, set duty limits based on time of day, number of flight

segments, and number of time zones crossed, and established a minimum 10-hour rest period

between duty periods, two hours more than currently required. FAA also requires air carriers to

implement fatigue risk management programs to aid airlines and flight crews in ensuring that

pilots are fit for duty.88 In addition, FAA has issued new requirements regarding qualification

standards for first officers, generally requiring that they meet the same certification minimum

training and experience requirements as airline captains.89 FAA has revised regulations regarding

airline training programs for flight crews and dispatchers, and air carrier safety management

systems to provide comprehensive, process-oriented programs for managing safety throughout an

airline organization. It also plans to require modifications to air carrier training programs to

address mentoring, leadership, and professional development of less experienced pilots, as

mandated in P.L. 111-216.90

Federal Aviation Administration, “Flightcrew Member Duty and Rest Requirements,” 77(2) Federal Register 330403, January 4, 2012; Federal Aviation Administration, “Flightcrew Member Duty and Rest Requirements;

Correction,” 77(95) Federal Register 28763, May 16, 2012.

Federal Aviation Administration, “Pilot Certification and Qualification Requirements for Air Carrier Operations;

Final Rule,” 78(135) Federal Register 42324-42380, July 15, 2013.

U.S. Department of Transportation, Report on DOT Significant Rulemakings, November 2013, http://www.dot.gov/

sites/dot.dev/files/docs/NOV%202013%20Internet%20Report.docx.

Congressional Research Service

Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Pilot Fatigue

The Airline Safety and Federal Aviation Administration Extension Act of 2010 (P.L. 111-216)

mandated changes to airline pilot flight time and rest requirements. Specifically, Section 212 of

the act required FAA to “issue regulations, based on the best available scientific information, to

specify limitations on the hours of flight and duty time allowed for pilots to address problems

relating to pilot fatigue.” It also required all airlines to submit fatigue risk management plans.

Section 216 of the act required FAA to issue rules to ensure that within three years of enactment,

all airline flight crewmembers have obtained an airline transportation pilot certificate. These

mandates were enacted amid concerns over regional air carrier operations following the February

12, 2009, crash of Colgan Air (Continental Connection) flight 3407 near Buffalo, NY.

In response, FAA published its final rule on Flightcrew Member Duty and Rest Requirements on

January 4, 2012.91 This added 14 C.F.R. Part 117, which prescribes passenger airline flight crew

flight time, duty time, and rest requirements based on crew size, time of day, time and distance

away from home base, and other factors. The regulation also requires airlines to implement a

fatigue risk management system. The rules went into effect on January 14, 2014. While these

regulations are mandatory for passenger airlines, complying with them is optional for all-cargo

carriers that operate under 14 C.F.R. Part 121. Pilot labor organizations have long argued for

uniform fatigue regulations under an umbrella “single level of safety” approach, although FAA

and the airline industry maintain that air cargo operations are sufficiently unique that separate

regulatory requirements are appropriate.

Airline Pilot Qualifications and Pilot Supply

The Airline Safety and Federal Aviation Administration Extension Act of 2010 required that FAA

amend regulations to require that pilots attain the airline transportation pilot rating prior to being

hired as airline first officers. Section 217 of the act required FAA to “conduct a rulemaking ... to

modify requirements for the issuance of an airline transport pilot certificate,” and specified that

“the total flight hours required by the Administrator … shall be at least 1,500 flight hours.” On

July 15, 2013, FAA issued a final rule on Pilot Certification and Qualification Requirements for

Air Carrier Operations.92 It required, effective August 1, 2013, that all pilots and first officers

operating under 14 C.F.R. Part 121 (air carrier revenue operations) hold an airline transportation

pilot certificate. It also required those serving as an air carrier pilot-in-command (captain) to have

at least 1,000 flight hours in air carrier operations.

Previously, pilots could be hired as airline first officers with a commercial pilot certification that

required a minimum of 250 hours total flight time. Some regional airlines and communities

served by regional carriers have complained that the change has limited the supply of qualified

first officers. The merit of these claims, however, has been disputed, particularly by pilot labor

organizations that contend that low wages make regional airline first officer jobs undesirable.93

FAA data indicate that the number of certificated airline transport pilots in the United States has

grown by more than 5% over the past decade. However, it remains unclear whether this growth

http://rgl.faa.gov/Regulatory_and_Guidance_Library/rgFinalRule.nsf/0/681787AC6E53DF238625797C005321DE?

OpenDocument.

https://www.federalregister.gov/articles/2013/07/15/2013-16849/pilot-certification-and-qualification-requirementsfor-air-carrier-operations.

See House Committee on Transportation and Infrastructure, 113th Congress, Hearing: Air Service to Small and Rural

Communities, April 30, 2014, http://transportation.house.gov/calendar/eventsingle.aspx?EventID=376943.

Congressional Research Service

Issues in the Reauthorization of the Federal Aviation Administration (FAA)

can keep pace with the demand of the aviation industry, and in particular the regional airlines.

GAO found mixed evidence regarding the supply of qualified pilots available to meet airline

needs, which it estimated to be 1,900 to 4,500 newly hired pilots annually over the next decade.94

GAO pointed out that pilots’ employment and earnings have decreased since 2000, suggesting

that demand for pilots does not exceed available supply. However, GAO observed that fewer

students are entering pilot training programs, and that opportunities overseas, in the military, or in

corporate aviation may steer pilots away from positions with lower-paying regional carriers.

Commercial Aircraft Tracking and Flight Data Recorders

Two 2014 incidents renewed concern about the deployment of tracking technologies aboard

passenger aircraft. The whereabouts of Malaysia Airlines Flight 370, which disappeared in March

2014, remained uncertain as of early 2015, and the crash site of Indonesia AirAsia Flight 8501,

which went down in the Java Sea on December 28, 2014, took several days to locate, despite the

widespread availability of tracking technologies using GPS. While most transoceanic airliners are

equipped with GPS, air traffic control continues to rely predominantly on ground-based radar to

track aircraft. Tracking of aircraft based on GPS position is envisioned under FAA’s NextGen

initiative, but this system is to rely on a network of ground-based receivers within the United

States, and, like the existing radar infrastructure, would be incapable of tracking aircraft beyond

the coverage area of the network.

Transoceanic flights, flights along polar routes, and flights passing over other remote areas

journey beyond the range of ground-based radars and tracking stations. During these portions of

flight, pilots use their radios to provide periodic position reports to air traffic facilities. Such

reports can also be entered manually or generated automatically by an onboard communication

system known as the Aircraft Communication Addressing and Reporting System (ACARS).

ACARS is a satellite-based radio frequency messaging system that provides global coverage.

While many planes flying transoceanic routes have ACARS, it is not required. Moreover, airlines

can configure ACARS communications differently, so some transmissions may not include

aircraft position data.

One possible option could be to utilize more frequent position reports or continuous streaming of

aircraft position information for flights over oceans and remote regions. The existing ACARS

system may be able to provide some of this capability. However, challenges associated with the

approach include possible bandwidth limitations of available satellite communications channels

and the costs of developing such a capability.

Satellite Tracking

In May 2014, Inmarsat, a global satellite communications provider that supports ACARS and

other aircraft communications links, began to offer, at no cost, global tracking of aircraft using

Automated Dependent Surveillance-Contract (ADS-C) signals relayed by appropriately equipped

aircraft. ADS-C broadcasts, however, are received at 15-minute intervals, compared to ADS-B,

which can update as frequently as once per second. Given the speed at which commercial

airliners travel, 15-minute updates may still leave considerable uncertainty regarding aircraft

location between updates or after transmissions cease.

U.S. Government Accountability Office, Aviation Workforce: Current and Future Availability of Airline Pilots,

GAO-14-232, February 2014, http://www.gao.gov/assets/670/661243.pdf.

Congressional Research Service

Issues in the Reauthorization of the Federal Aviation Administration (FAA)

Aireon, a joint venture by NAV CANADA, the air traffic control provider for Canadian airspace,

and Iridium Communications Inc. may offer another potential solution in a few years. The

proposed system endeavors to provide global air traffic surveillance using low-orbit

communications satellites to track aircraft. The company expects this capability to be available

worldwide by 2017, and NAV CANADA intends to use it to track flights in remote regions of

Canadian airspace. Once available, the service may be marketed to other air navigation service

providers, airlines, and aircraft operators to provide real-time global flight tracking. To use the

Aireon system, aircraft would need to be outfitted with ADS-B equipment, which transmits

aircraft position based primarily on GPS data.

In addition to aircraft position tracking, it may be possible to adapt ACARS, ADS-B, and other

aircraft communications links to transmit critical aircraft status information or other flight data

that could aid first responders in locating a downed aircraft and could assist investigators in

reconstructing an incident. This might be particularly helpful in a case such as that of Malaysia

Airlines Flight 370, in which searchers have so far been unable to locate the flight data recorder,

or “black box,” that contains information regarding the status of aircraft systems during the final

stages of the flight.

Deployable Recorders

Some U.S. military aircraft are equipped with deployable flight recorders that eject from the

aircraft prior to impact, facilitating the work of accident investigators. Legislation introduced in

the 108th (H.R. 2632), 109th (H.R. 3336), and 110th (H.R. 4336) Congresses sought to require

deployable recorders on commercial aircraft performing extended-range operations. Under these

proposals, the deployable recorder would have consisted of a single unit combining both cockpit

voice and flight data recording capabilities that was to be carried in addition to the existing fixed

recorders. The proposals would have required the U.S. Department of Transportation (DOT) to

reimburse carriers the cost of purchasing and installing the devices. None of these proposals was

enacted.

Oversight of Maintenance and Repair Stations95

In order to contain costs, U.S. air carriers increasingly are outsourcing aircraft maintenance,

repair, and overhaul (MRO), either domestically or to foreign countries.96 MRO includes four

major types of activities:97



Airframe Heavy Maintenance. A detailed inspection of the airframe and certain

components, including any applicable corrosion prevention programs and

comprehensive structural inspection and overhaul of the aircraft. Heavy

maintenance is comparatively labor-intensive.

Engine Repair and Overhaul. Off-wing repair and replacement of parts to

restore the engine to designed operational condition, following guidelines

established by the engine manufacturer. Typically, the engine is disassembled and

inspected; parts are repaired or replaced as necessary; and the engine is

For more extensive discussion of this subject, see CRS Report R42876, Offshoring of Airline Maintenance:

Implications for Domestic Jobs and Aviation Safety, by (name redacted) and (name redacted)

In this report, MRO (maintenance, repair, and overhaul) and maintenance are used synonymously.

Aeronautical Repair Station Association (ARSA), “Global MRO Market Economic Assessment,” August 21, 2009;

Infosys, “Tenets of MRO Strategy for Airlines,” December 2007.

Congressional Research Service

Issues in the Reauthorization of the Federal Aviation Administration (FAA)



reassembled and tested. Engine MRO requires considerable technological

sophistication.

Component MRO. Repair and overhaul of components that provide the basic

functionality for air flight, including aircraft control and navigation,

communications, cabin air conditioning, electrical power, and braking.

Line Maintenance. Light, regular maintenance checks carried out to ensure that

an aircraft is fit for flight. Line maintenance includes troubleshooting, defect

rectification, and overnight maintenance.

According to data reported to DOT, aircraft maintenance typically accounts for nearly 10% of

U.S. passenger airlines’ operating costs (see Figure 4). The 10 major U.S. passenger airlines

reported collective maintenance expenses of $10.2 billion in 2008 and $10.1 billion in 2009.98

Figure 4. Major Components of Airline Operating Costs

Other

14%

Fuel & Oil

23%

Passenger

Services

18%

Maintenance

Cost of

Operation

36%

Source: U.S. DOT Form 41 Airline Operational Cost Analysis Report, International Air Transport

Association (IATA), March 2011, p. 12.

Notes: This cost breakdown is based on FY2009 data reported by 10 major U.S. airlines (passenger

airlines with annual revenue over $1 billion). The total operating costs of these major airlines was

$107.5 billion in FY2009.

Prior to 2001, most U.S. airlines performed the majority of their aircraft maintenance work inhouse. The percentage of work outsourced, in terms of maintenance dollars, has increased from

approximately 20% in 1990 to over 44% in 2011, according to the Bureau of Transportation

Statistics (BTS). According to press reports, Northwest Airlines (before it was acquired by Delta),

United Airlines, Delta Airlines, and U.S. Airways (prior to its merger with American Airlines) all

eliminated their in-house heavy maintenance capabilities through bankruptcy restructurings.99

According to a consultancy attached to a major MRO provider,100 aircraft engine work that is

International Air Transport Association (IATA), U.S. DOT Form 41 Airline Operational Cost Analysis Report,

March 2011, p. 12. The 10 major reporting airlines, in alphabetic order, were Airtran Airways, Alaska Airlines,

American Airlines, Continental Airlines, Delta Airlines, Jet Blue Airways, Northwest Airlines, Southwest Airlines,

United Airlines, and U.S. Airways.

USA Today, “American Airlines to Outsource Some Tulsa Work,” October 10, 2011.

100

TeamSAI Consulting Services, “Outsourcing Trends in the USA,” Nov

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