Reauthorization of the Federal Aviation Administration (FAA): Background and Issues for Congress

Congressional research reportJan 29, 2007

Ask Donna

What actually matters in this document.

Text

£ȱȱȱȱȱ

ȱǻǼǱȱȱ

ȱ ȱȱȱ

ȱǰȱȱ

ȱȱȱ¢ȱ

¢ȱŘşǰȱŘŖŖŝȱ

ȱȱȱ

ŝȬśŝŖŖȱ

ǯǯȱ

řřŜşŞȱ

ȱȱȱ

Prepared for Members and Committees of Congress

ȱ£Ǳȱȱȱ ȱȱȱ

¢ȱ

Reauthorization of the Federal Aviation Administration (FAA) and other aviation programs is

likely to be a high priority in the 110th Congress. Funding authorizations for aviation programs, as

well as authorization of existing aviation tax structure that provides revenue for the aviation trust

fund, are set to expire at the end of FY2007. Congress may consider a variety of financing

options to maintain the ability of the aviation trust fund to provide a sufficient revenue stream for

ongoing operational costs and planned infrastructure improvements. One particularly

controversial alternative under consideration is a user fee system, which is supported by the

airlines but strongly opposed by many other system users.

Faced with growing operational costs and fiscal needs to support system expansion, airport

capital improvements, and modernization efforts, options to control costs within the FAA and the

Air Traffic Organization (ATO) may be a particular focus of reauthorization. Cost control options

generally revolve around two overarching strategies: consolidation of facilities and functions, and

competitive sourcing. Some have recommended that a formal process, similar to the military’s

Base Realignment and Closure (BRAC) process, be implemented to assess how the FAA could

best consolidate its functions to control costs and address future system needs. Besides

controlling costs, options to maintain and balance air traffic controller staffing levels are likely to

be of particular interest, as the FAA is facing a large wave of controller retirements over the next

five years. Options for improving and streamlining training, increasing productivity, better

balancing staffing needs, and perhaps consolidating air traffic facilities over the long-term may be

considered during reauthorization.

Congress may examine a variety of aviation safety issues during debate over FAA

reauthorization. Options for preventing runway overruns and for reducing the risk of runway

collisions may be of particular interest. The adequacy of FAA safety oversight has been a

continuing concern, and recent accidents may draw particular attention to oversight of contract

repair facilities, smaller passenger service operators, as well as air charter and air tour operators.

Other safety issues that may arise include longstanding concerns, such as mitigating the risks of

fuel tank explosions, addressing concerns over aging aircraft, and addressing the unique safety

issues affecting all-cargo operations. Issues regarding airliner cabin health and safety may also be

considered. Options to mitigate the spread of infectious diseases among aircraft occupants and the

safety-of-flight implications of cell phones and portable electronic devices may also be examined.

Growing interest in alternatives to petroleum fuel may generate some debate over alternative fuel

technologies for aircraft and airport ground vehicles, and growing international pressures to

regulate aircraft emissions may prompt debate on aviation’s environmental impacts.

Longstanding aircraft noise policies may also be examined to assess whether quiet aircraft

technologies and policy changes could further mitigate the community impacts of aircraft noise.

This report will be updated.

ȱȱȱ

ȱ£Ǳȱȱȱ ȱȱȱ

Overview ......................................................................................................................................... 1

FAA Budget and Finance Issues................................................................................................ 1

Airport Development and Finance Issues ................................................................................. 2

Cost Control Issues ................................................................................................................... 3

System Demand and Capacity Issues........................................................................................ 5

System Modernization Issues.................................................................................................... 6

Safety Issues.............................................................................................................................. 7

Airliner Cabin Issues................................................................................................................. 8

Energy, Environment, and Noise Issues.................................................................................... 9

International Civil Aviation Issues ............................................................................................ 9

FAA Budget and Financing Issues................................................................................................. 10

FAA Spending ......................................................................................................................... 10

Airport and Airway Trust Fund Issues .....................................................................................11

Aviation Trust Fund Revenue Adequacy ...........................................................................11

Tax and Fee Structural Issues............................................................................................ 14

The General Fund Share ................................................................................................... 16

Aviation Spending Guarantees.......................................................................................... 17

Airport Development and Finance ................................................................................................ 19

Airport Capital Needs Estimates ............................................................................................. 20

Airport Improvement Program (AIP)...................................................................................... 21

AIP Funding Distribution.................................................................................................. 22

Apportionment and Eligibility Changes ........................................................................... 23

Discretionary Fund Set-Asides ......................................................................................... 23

Minimum Discretionary Fund........................................................................................... 23

Grant Assurances .............................................................................................................. 24

Airport Noise Issues.......................................................................................................... 24

Federal Share .................................................................................................................... 24

Privatization ...................................................................................................................... 25

Partial Defederalization .................................................................................................... 25

Airport Security Project Eligibility................................................................................... 25

Very Light Jets (VLJs) and the Airbus A380: Impact on AIP ........................................... 25

Earmarking/ “Place Naming” ........................................................................................... 26

Passenger Facility Charge Issues ............................................................................................ 26

Airport Bonding Issues ........................................................................................................... 26

Options to Control Operational Costs at the FAA ......................................................................... 27

Consolidation of Facilities and Functions............................................................................... 27

Competitive Sourcing and Privatization of Functions ............................................................ 29

The Federal Contract Tower (FCT) Program.................................................................... 30

Automated Flight Service Station Contracts..................................................................... 32

Aeronautical Charting....................................................................................................... 33

FAA Telecommunications Infrastructure .......................................................................... 34

The Use of Designees ....................................................................................................... 35

Air Traffic Controller Staffing ................................................................................................ 36

FAA Labor Relations and Negotiations................................................................................... 38

Future Airport and Airspace Demand and Capacity Needs ........................................................... 41

Quantifying Delay and Mitigating Its Impacts........................................................................ 41

ȱȱȱ

ȱ£Ǳȱȱȱ ȱȱȱ

The Asymmetry of Capacity Straining Operations ................................................................. 43

Accommodating Future Airspace Users.................................................................................. 44

Very Light Jets .................................................................................................................. 44

Unmanned Aerial Vehicles................................................................................................ 46

Options for Maintaining Access and Controlling Demand at Capacity-Constrained

Airports ................................................................................................................................ 47

Non-price De-peaking Strategies and Incentives.............................................................. 49

Slots and Quotas ............................................................................................................... 50

Providing Air Service to Small Communities ......................................................................... 51

The Essential Air Service Program ................................................................................... 51

Small Community Air Service Development Program..................................................... 53

Fostering Investment and Development of the Next Generation Air Transportation

System (NGATS)........................................................................................................................ 53

NGATS Funding Requirements .............................................................................................. 53

Management of the NGATS Development Effort................................................................... 57

The Role of the Joint Planning and Development Office (JPDO) .......................................... 57

Technological Objectives and Core Technologies .................................................................. 60

The Present-Day Airspace System and Its Technologies .................................................. 61

Precision Navigation......................................................................................................... 62

Shared Situation Awareness and Distributed, Adaptive Decision Making.............................. 65

Phasing Out Legacy Systems .................................................................................................. 67

Wake Vortex Detection, Prediction, and Avoidance................................................................ 69

Improving Aviation Safety ............................................................................................................ 70

Preventing Runway Overrun Accidents .................................................................................. 71

Preventing Runway Incursions and Collisions........................................................................ 73

Improving Oversight Of Maintenance Facilities..................................................................... 76

Improving Oversight of Charter and Air Tour Operators........................................................ 78

Mitigating the Risk of Fuel Tank Explosions on Commercial Airliners ................................. 79

Addressing Aging Aircraft Issues............................................................................................ 81

Addressing the Safety of All-Cargo Operations...................................................................... 84

Aircraft Cabin Occupant Safety, Comfort, and Public Health....................................................... 87

Cabin Air Quality .................................................................................................................... 87

Preventing the Spread of Infectious Disease in the Aircraft Cabin......................................... 88

Cell Phones and Portable Electronic Devices ......................................................................... 89

Infant and Toddler Seats.......................................................................................................... 90

Energy and Environmental Considerations ................................................................................... 91

Alternative Fuels for Aircraft .................................................................................................. 92

Alternative Fuels for Airport Ground Service Vehicles .......................................................... 93

Air Pollution............................................................................................................................ 93

Ozone Nonattainment Areas ............................................................................................. 93

Aircraft and Climate Change ............................................................................................ 95

Mitigating Aircraft Noise Through Policy and Technology.................................................... 95

Aircraft Noise Reduction Technologies and Technology Policy ...................................... 96

Airport Noise Mitigation Policy ....................................................................................... 97

International Civil Aviation Issues .............................................................................................. 102

“Open Skies” Agreements..................................................................................................... 103

Foreign Ownership and Control............................................................................................ 103

Cabotage................................................................................................................................ 105

ȱȱȱ

ȱ£Ǳȱȱȱ ȱȱȱ

Figure 1. AIP Authorizations and Obligations ($ millions) ........................................................... 22

Figure 2. FAA Projections of Controller Attrition, Planned Hiring Rates, and Anticipated

Controller Staffing Levels .......................................................................................................... 37

Figure 3. Causes of Air Carrier Flight Delays (2003-2005) .......................................................... 42

Figure 4. Continuum of Government Involvement in Market-Based Strategies to

Alleviate Aviation Congestion.................................................................................................... 48

Figure 5. Preliminary Estimates of Increased F&E Funding Needs to Support NGATS

Development .............................................................................................................................. 55

Table 1. FAA Major Program Funding: AIR-21 and Vision 100: FY2001 - FY2006 ................... 10

Table 2. Airport And Airway Trust Fund: Revenue Flow and Balances, FY1997-FY2006 .......... 12

Table 3. Authorized, Appropriated Funding Levels and Analysis of Future Funding

Needs for FAA Programs ........................................................................................................... 56

¡ȱ

Appendix. Glossary of Key Aviation Technology Terms and Concepts...................................... 106

Author Contact Information ........................................................................................................ 108

CRS Aviation Policy Staff ........................................................................................................... 108

ȱȱȱ

ȱ£Ǳȱȱȱ ȱȱȱ

The pending debate over reauthorization of the Federal Aviation Administration (FAA) is likely to

be a high priority in the 110th Congress. Funding authorizations for aviation programs set forth in

Vision 100—the Century of Aviation Reauthorization Act (P.L. 108-176, hereafter referred to as

Vision 100), as well as authorization of the existing aviation tax structure that provides revenue

for the aviation trust fund, are set to expire at the end of FY2007. CRS has identified nine broad

categories of issues that Congress may address in the context of FAA reauthorization. These

include FAA budgeting and finance; airport development and finance; FAA cost control

measures; system-wide demand and capacity issues; modernization of national airspace system

(NAS) infrastructure; aviation safety; airliner cabin issues; energy, environment, and noise issues;

and international civil aviation issues.

ȱȱȱȱ ȱ

Authorization of the existing aviation tax structure that provides revenue for the aviation trust

fund will expire at the end of FY2007. While such tax authorizations have expired in the past, the

current deliberations over FAA funding are considered particularly critical. This, in part, is

because uncommitted balances in the airport and airways trust fund (AATF), commonly referred

to as the aviation trust fund, have declined in recent years, leaving a relatively small reserve to

pay for aviation programs in the event that tax collection authorities are allowed to expire. Also,

major initiatives to develop and deploy the Next Generation Air Transportation System (NGATS)

by 2025, initiated during the last reauthorization process, are reaching a stage where they will

require additional funding resources if these plans are to be realized. While no official projections

are yet available on the total cost for NGATS, early estimates indicate that it will require an

average of $200 million to $1 billion annually in facilities and equipment costs over the next

several years to keep NGATS development initiatives on track.

Congress may consider a variety of financing options to maintain the ability of the aviation trust

fund to provide a sufficient revenue stream for ongoing operational costs and planned

infrastructure improvements, in the near-term and to support the long-term NGATS development

efforts. In the course of this debate, Congress may consider the appropriate cost allocation

between aviation system users, the share of the cost burden to be borne by the aviation trust fund,

and the share to be derived from Treasury general funds (the so-called public interest

contribution).

The relative tax burden placed on various industry participants has been a source of controversy

for over 36 years, since the aviation trust fund was created. The airlines argue that they have been

paying a disproportionately larger share of the system costs compared to general aviation users

since the largest revenue sources for the aviation trust fund are derived from passenger ticket

taxes. The airlines claim that in their highly competitive industry, they must absorb some of the

tax-related costs in their fare pricing schemes. The airlines have identified general aviation2 users,

and business jet operators in particular, as a segment of the aviation economy that, in their

opinion, is not paying its fair share of the costs to maintain and improve the national airspace

See Appendix for a glossary of key aviation technology terms and concepts.

General aviation refers to all aviation activity except for commercial airline, all-cargo airline, and military operations.

ȱȱȱ

ŗȱ

ȱ£Ǳȱȱȱ ȱȱȱ

system (NAS). General aviation users argue, on the other hand, that the NAS has largely been

developed to support the airline industry, that the incremental costs to accommodate general

aviation users is not that large, and that existing fuel taxes are sufficient to compensate for their

impact on the system.

One alternative to the existing tax structure supported by the airlines is a fee-for-service system

that would be more of a direct user fee system than what is in place now. Some industry observers

claim that the FAA has been mulling the idea of a direct user fee structure to replace existing

aviation taxes and fees, and an administration proposal has reportedly been under review by the

Office of Management and Budget (OMB) for some time.3 While the details of the proposal are

unknown, speculation is that it will conform more closely to international standards that stipulate

user fees be computed as some function of the specific impact on air traffic facilities and services,

such as the commonly used fees based on aircraft weight and distance flown used by many

nations.

During the reauthorization debate, Congress may consider a variety of aviation trust fund revenue

alternatives that may include keeping the existing passenger ticket and fuel taxes largely or

completely intact, moving to a tax revenue scheme based solely on fuel taxes, adopting a user feebased system, or developing a hybrid scheme that consists of some combination of these

alternatives. One hybrid approach that has been discussed is to charge user fees for airlines and

operators of larger general aviation aircraft, while small general aviation users would continue to

contribute solely by means of a fuel tax, although these fuel tax rates and structure could differ

from what currently exists.

ȱȱȱȱ ȱ

The Airport Improvement Program (AIP) provides federal grants for airport development. Its

funding is derived from the airport and airways trust fund, and it is one of five major sources of

funding for airport development and improvement. Airports also fund capital projects using taxexempt bonds, passenger facility charges (PFCs; a local tax levied on each boarding passenger),

state and local grants, and airport revenue. The preeminent reauthorization issue for AIP is

whether its funding levels will be increased substantially, held steady/increased modestly, or

reduced. The outlook for AIP funding will be influenced by the resolution of the debate

concerning taxes and fees supporting the aviation trust fund as well as any decision concerning

the scope of the general fund share of the FAA budget. A failure to secure more revenue for the

FAA budget, in light of the recent decline in the uncommitted balance of the trust fund, could

constrain any attempts to increase the AIP budget.

During the reauthorization process, Congress may also examine a wide variety of other issues

pertaining to the AIP program including airport eligibility and apportionments among various

sizes of airports; discretionary funding levels and uses of discretionary grants; the scope of grant

assurances to protect federal interests in airport projects; funding levels set aside for noise-related

projects; the appropriate federal share of funding for airport projects at airports of various sizes;

possible expansion of or modification to the airport privatization pilot program; partial

defederalization of airport funding allowing airports to use PFCs instead of AIP as a primary or

sole source for project funds; limitations on the use of AIP funds for airport security projects; the

Paul Lowe, “Alphabet Groups Ready To Wage User-Fee Battle,” Aviation International News, The Convention News

Co., Inc., Midland Park, NJ, April, 2006.

ȱȱȱ

Řȱ

ȱ£Ǳȱȱȱ ȱȱȱ

possible impacts of accommodating new users classes such as very light jets (VLJs) and the

Airbus A380 super-jumbo jet on airport infrastructure needs and airport financing; and the use of

earmarks or “place naming” in legislation regarding airport infrastructure projects. In addition to

AIP funding and related issues, Congress may consider options to raise the cap on PFC levels to

provide additional funding availability outside of AIP, and options to make airport bonds more

attractive to investors, although some may argue the latter may be more appropriately addressed

through tax reform legislation rather than FAA reauthorization.

ȱȱ ȱ

Besides consideration of a revenue system for funding the aviation trust fund, controlling the

costs of operating and maintaining the existing national airspace system has been an ongoing

concern for the FAA and for congressional oversight. Cost control measures may be a particular

issue of interest during the FAA reauthorization debate as Congress grapples with the prospect of

escalating operational costs that must be balanced with the fiscal needs to support planned

infrastructure development, both over the near-term to fund ongoing and planned system

expansion and over the long-term to support the NGATS development.

Outsourcing has been seen as a viable alternative for controlling costs in some instances, such as

the FAA’s federal contract tower (FCT) program and the recently privatized automated flight

service stations (AFSSs). Expanded outsourcing of various FAA functions, such as further

expansion of the contract tower program and privatization of the FAA’s aeronautical charting

functions, are possible options that both the FAA and Congress may examine. Also, the FAA and

Congress may look to increase the use of designees4 to carry out certain aviation oversight

functions. However, some critics argue that these outsourcing options are likely to yield relatively

small cost savings in comparison to the overall FAA operations budget. Further, these options are

likely to be highly contentious and face strong opposition from labor organizations. Whether

these outsourcing measures potentially compromise safety in any way remains a specific point of

contention. While some have advocated large scale privatization of air traffic services—as has

been done in Canada, Australia, the United Kingdom, and parts of mainland Europe—this

approach would be highly complex to carry out, and this option has failed to garner much support

in Congress. The current administration has indicated previously that is has no plans to privatize

en route and terminal air traffic control facilities, but may opt to expand the contract tower

program.

Consolidation of facilities and functions has also been viewed as a possible way to control

operational costs at the FAA. The FAA is currently in the process of consolidating administration

and support functions in its regional service areas, and has plans to consolidate weather services

provided at en route centers. Also, under the privatized AFSS program, an extensive consolidation

of flight service facilities is currently in process. Some have proposed that the FAA implement a

systematic process, perhaps using something akin to the military’s Base Realignment and Closure

(BRAC) process, to address future consolidation plans for facilities and functions. Congress may

debate the merits of this proposal during the pending FAA reauthorization.

Designees are individuals that are neither government employees nor government contractors, that are authorized or

designated by the FAA to carry out regulatory functions. Examples include designated medical examiners that issue

medical certification, pilot examiners that issue pilot certificates and ratings, and manufacturing representatives that

certify the airworthiness of production aircraft.

ȱȱȱ

řȱ

ȱ£Ǳȱȱȱ ȱȱȱ

In the long term, under NGATS, consolidation of air traffic services and air traffic facilities may

be possible. With increased reliance on automation and by increasing the autonomy, flexibility,

and authority granted to individual flights operating in the national airspace system (NAS), the

ratio of air traffic controllers to aircraft operating in the system is likely to drop. In the near term,

this will likely be offset by the growth in air traffic operations, so that a modest increase in the

overall number of air traffic controllers is expected. In the long-term, however, the changing

nature of controller responsibilities and functions may result in a need for fewer controllers, and

may allow for considerable consolidation in air traffic control facilities across the United States.

The FAA has also expressed interest in consolidation of air traffic facilities as a possible means to

address ongoing staffing issues, particularly among en route centers, where there is a shortage of

fully qualified controllers to handle the most complex airspace sectors. The FAA believes that

facilities consolidation could help in its efforts to better match controller skills and levels of

experience with airspace complexity and provide controllers with better job advancement

opportunities while, at the same time, reducing infrastructure and relocation costs.

With regard to controlling operational costs, air traffic controller pay remains a contentious issue

as controller compensation and benefits make up a sizable proportion of the FAA’s operational

costs, comprising roughly 35% of total operating costs.5 Under a 1998 contract agreement

between the FAA and controllers, controller compensation and benefits grew about 64% in eight

years,6 outpacing the increase in labor costs for other FAA employees and federal workers.

During contract renegotiations in 2005 and 2006, the FAA looked to obtain sizable concessions

from controllers, but the two sides could not come to agreement. As called for in statute, the

impasse was referred to Congress. However, Congress did not act on the impasse submittal, thus

allowing the FAA to implement its final contract proposal, which became effective in September

2006. While the law giving the FAA authority to negotiate compensation and benefits in labor

contracts, a rarity in the government sector, was enacted largely for the purpose of improving the

FAA’s ability to attract and retain a high quality professional workforce, it has been criticized by

management for leading to escalating operating costs and by both management and labor for

straining relations between the two sides.

While the main objectives of the law, to improve the recruitment and retention of high quality

employees, is laudable, Congress may wish to examine whether options to improve the law are

available to control escalating operational costs and maintain more positive and constructive

management-labor relations within the FAA. With regard to labor negotiations, one legislative

option offered during the 109th Congress proposed to add an additional phase, requiring

management and labor to enter into binding arbitration, after the period of congressional review

that follows an impasse in the contract negotiation process.7 While Congress did not take up

formal debate on this proposal in the midst of the recent FAA/controller labor dispute, this

proposal may resurface during debate over FAA reauthorization. Other options to streamline the

labor negotiations process within FAA may also be considered in the context of FAA

reauthorization, as recent labor negotiations were rather disruptive and highly contentious.

Controller staffing is also likely to be a key focus in the reauthorization debate, as the FAA seeks

to effectively manage its controller workforce in preparation for an expected surge in retirements

CRS calculation based on FAA budget documents and statements regarding average air traffic controller workforce

compensation and benefits.

“Soaring Controller Pay Looms Large in Discussions on ATC.” Air Transport World Daily News, May 16, 2005.

See, e.g., see S. 2201 and H.R. 4755, which were introduced during the 109th Congress.

ȱȱȱ

Śȱ

ȱ£Ǳȱȱȱ ȱȱȱ

over the next several years. Some available options that Congress may consider include dedicated

funding authorizations marked for new controller hiring and training; authorization for new hires

from accredited collegiate air traffic programs to enter directly into on-the-job training; funding

authorization for initiatives to enhance controller training using advanced simulation

technologies; and consolidation of certain air traffic facilities and functions to provide for greater

flexibility in meeting staffing needs.

¢ȱȱȱ¢ȱ ȱ

The current FAA reauthorization cycle comes at a critical time with respect to addressing

increasing capacity needs at high-volume airports, in airspace around many major metropolitan

areas, and along certain highly congested routes. While recent stopgap measures implemented by

the FAA have served to stave off unacceptable congestion and delays thus far, long-term solutions

are likely needed in consideration of future air traffic growth projections. Many believe that

technology is needed to reduce low visibility aircraft spacing standards to those allowable in good

visibility in order to accommodate projected future growth at busy airports. However, some

experts caution that even with the implementation of these proposed options and the completion

of planned airport expansions across the country, certain very busy airports, including both major

commercial airports and busy general aviation reliever airports, may experience peak hour

demand levels that exceed airport capacity limitations.

Besides addressing expected capacity needs, a significant challenge facing Congress and the FAA

in the years ahead is accommodating new classes of airspace users in a manner that optimizes

safety and efficiency for all users. New users will consist of the very big, such as the Airbus A380 super-jumbo jet, as well as the very small, very light jets (VLJs). The most talked-about class

of new system users are the VLJs, which are expected to begin operations in small numbers in

2007 and are projected to experience rapid growth over the next ten years. VLJs are seen by some

as a possible solution to provide small communities improved access to the national air

transportation system. Therefore, their introduction may spur renewed public policy debate over

approaches to enhance air transportation in small communities. Also, because these VLJs will

share high altitude airspace and congested airspace around major metropolitan areas with

commercial passenger jets, their impact on system capacity and air traffic control workload is

likely to be of particular interest. Besides VLJs, the introduction of pilotless Unmanned Aerial

Vehicles (UAVs), or Unmanned Aerial Systems (UASs), also poses significant challenges to

maintaining safety and not impeding access to airspace for other users such as small general

aviation aircraft.

Due to persisting capacity limitations in certain locations, the FAA and Congress may be faced

with difficult choices regarding how best to maintain access and address demand in an equitable

manner at capacity constrained airports. Vision 100 provided the FAA with limited authority to

implement negotiated scheduling among air carriers at a few capacity-constrained airports on a

trial basis. This approach, along with other options such as peak-period pricing, slots, and quota

systems have all been examined as possible options. The FAA’s approach to addressing capacity

constraints at New York’s LaGuardia Airport is likely to be an issue of particular interest during

the debate over reauthorization as the statutorily imposed slot system for LaGuardia expired in

January 2007.

While capacity constraints are posing challenges at major metropolitan airports, several trends,

including the continuing loss of commercial air carrier service in rural America, are making the

essential air service (EAS) air carrier subsidy program more attractive to many rural

ȱȱȱ

śȱ

ȱ£Ǳȱȱȱ ȱȱȱ

communities. However, even with increased funding for this program in recent years, it is

becoming increasingly difficult for the EAS program to generate additional air service. Against

this backdrop the EAS program faces a number of issues that are likely to be addressed in

forthcoming reauthorization legislation. Primary among these is how to prioritize access to the

program so that EAS funds are used in the most efficient manner possible. It is likely, however,

that without a significant increase in funding, additional limitations on the use of EAS program

funding may have to be considered. In addition to the EAS program, the Small Community Air

Service Development (SCASD) Program was established to develop solutions for improving air

carrier service to communities that are experiencing insufficient access to the national air

transportation system. While an initial review of the program found mixed results, it has been

noted that it is still too early in the program’s history to fully assess its potential effectiveness.

¢ȱ£ȱ ȱ

Present initiatives to modernize air traffic facilities and services have been channeled into a

unified effort to develop the Next Generation Air Transportation System (NGATS) under a

provision in Vision 100. Vision 100 created the Joint Planning and Development Office (JPDO), a

multi-agency entity headed by the FAA and charged with the task of conceptualizing and

integrating the development of the NGATS. The DOT envisions NGATS as a system capable of

tripling effective system capacity by 2025. By some estimates, air traffic levels throughout the

United States could increase at that pace thereby necessitating these system enhancements. The

specifics of these efforts and future funding and management challenges facing the JPDO and the

FAA in carrying forth the plans to build the NGATS are likely to be a major focus during the

current FAA reauthorization process. A significant issue facing Congress during the upcoming

FAA reauthorization process is obtaining working estimates of what building the NGATS will

cost. CRS analysis of available preliminary cost estimates indicates that the total cost to build the

NGATS by 2025 is estimated to be between $69 billion and $76 billion, which is roughly $5

billion to $12 billion above baseline facilities and equipment (F&E) spending levels.

Another significant issue that may be addressed during the reauthorization process is how to best

manage the NGATS development effort. One major hurdle is that while the JPDO can set

objectives, goals, and strategies for the NGATS framework, the funding stream for carrying out

these plans will ultimately come from the budgets of the various agencies involved, primarily the

FAA and NASA. In recognition of this, Congress may examine options to align budget elements

of the various agencies involved within the NGATS framework. Another potential issue is the

appropriate scope of the JPDO’s efforts. While some consideration of various ancillary functions

and issues—such as security and environmental impacts—may improve the overall system design

for the NGATS, too much emphasis on these various issues could impede progress on the central

issue of improving the efficiency and capacity of the air traffic system.

Besides the scope of the JPDO’s efforts, another issue of interest is the JPDO’s approach. Some

observers contend that the JPDO has remained too focused on policy and establishing a paradigm

for collaboration among agencies and stakeholders, and it has not yet translated these general

objectives into a cohesive blueprint, with a high degree of engineering specification regarding

timelines and contingencies among the various component elements of the NGATS. One possible

option being discussed for streamlining NGATS system development is the use of an overarching

lead systems integration (LSI) contract for overseeing the NGATS project.

While many questions still remain regarding the management approach to developing NGATS,

there is a growing consensus among experts in the field regarding the technological objectives

ȱȱȱ

Ŝȱ

ȱ£Ǳȱȱȱ ȱȱȱ

and likely technologies that will comprise the core functionality of the NGATS system. The core

technologies needed to meet these objectives include (1) precision navigation capabilities to

pinpoint aircraft locations, project flight paths or flight trajectories, and predict future aircraft

positions with a high degree of accuracy; and (2) highly integrated information networks to

enable a shared situation awareness regarding traffic, weather, airport conditions, and other

factors affecting flights and provide tools to facilitate distributed, adaptive decision-making and

information-sharing about operational changes, such as flight path deviations and their potential

impacts on other system users. The investment strategy for these technologies that is adopted and

carried forth over the next three to five years is likely to have a lasting impact on both the endstate of NGATS and the path to reaching that end state.

In addition to deciding on a technology investment and deployment strategy for the NGATS, a

challenging and potentially contentious issue is the phasing out of existing facilities and

equipment for air traffic communications, navigation, and surveillance. Phasing out of existing

systems must be addressed carefully because, on the one hand, maintaining legacy systems while

deploying new technologies can be costly and resource intensive. On the other hand, phasing

these systems out too quickly could place an undue burden on system users to equip aircraft and

could pose safety concerns if adequate backups and redundancies are not in place. Congress may

express particular interest in the FAA’s efforts to assess how proposals envisioning new

navigation and surveillance technologies will address the issue of providing equivalent safety to

the current radar-based air traffic surveillance system. Congressional interest regarding the phaseout of legacy systems may also focus on how these plans may impact airspace system users,

particularly smaller operators who may face a greater challenge in equipping aircraft to keep pace

with the evolution from the existing national airspace system to NGATS compliant avionics and

aircraft systems.

While advances in precision navigation and information sharing show great promise for reducing

aircraft spacing in all weather conditions thereby increasing system capacity, wake turbulence

produced by large transport aircraft currently imposes practical limitations on aircraft spacing,

even under ideal weather conditions. Current air traffic procedures specify separation standards

for aircraft departing behind large and heavy jets to allow their wake vortices to dissipate. Some

view these standards as overly conservative and argue that accurate wake vortex prediction

capabilities could allow for decreased separation, thereby increasing airport capacity in many

weather conditions. Others argue that the limited capability of available technology and the

complexities of wake vortex propagation make it difficult to predict wake turbulence or to use

such predictions to significantly reduce arrival and departure spacing without compromising

safety. Vision 100 authorizes the expenditure of such sums as may be necessary for the

development and assessment of wake vortex advisory systems. Promising emerging technology

for wake turbulence detection may be able to increase effective landing capacity at airports,

perhaps by as much as 20%, but is still at a very early stage of research and development.

¢ȱ ȱ

Since the last reauthorization, major airlines have maintained an impressive safety record.

Congressional oversight of FAA safety initiatives and programs has not been a major focus of

Congress in several years, as concerns over aviation security since September 11, 2001 have been

a much more dominant issue. However, there are many aspects of safety where there is still room

for improvement in an industry that is, for the most part, very safe. One area of growing concern

is the safety of the airport environment. Recent runway overrun accidents have highlighted

ȱȱȱ

ŝȱ

ȱ£Ǳȱȱȱ ȱȱȱ

concern over the adequacy of runway safety areas and the level of attention the FAA has given to

mitigating the risk of catastrophic runway overrun accidents. Also with regard to runway safety,

the FAA has identified mitigating runway incursions, or potential ground collisions with

departing or landing aircraft, as one of its highest priorities. However, the FAA’s approach to

addressing this issue has been criticized by the National Transportation Safety Board (NTSB) and

other aviation safety advocates who maintain that improving pilot situation awareness of the

airport environment is a critical need for effectively mitigating runway incursions.

A long-running safety concern is the adequacy of the FAA’s oversight of air carrier operations and

maintenance. The growing trend of outsourcing maintenance to third party maintenance, repair,

and overhaul facilities has raised questions over the adequacy of these facilities’ compliance with

air carrier and FAA standards for work conditions and quality assurance. Particular concerns over

repair facilities that service commuter aircraft, and work performed on air carrier aircraft by small

repair shops that are not required to be certified by the FAA, are two particular issues where

Congress may consider options to enhance regulatory requirements and FAA oversight of these

maintenance activities.

Another continuing safety concern that Congress may again examine during this reauthorization

process is the continued airworthiness of aging aircraft, which was highlighted by the ongoing

investigation of a commuter seaplane built in 1947 that crashed while departing Miami for the

Bahamas on December 17, 2005. A particular issue of interest is the FAA’s approach to continued

airworthiness and safety monitoring of the fleet of small commuter aircraft and the aging general

aviation fleet, which are not covered under the aging aircraft inspections program established for

large airliners.

The 10-year anniversary of the crash of TWA flight 800 on July 17, 2006, has renewed interest in

measures being taken to mitigate the risk of fuel tank explosions on large transport-category

aircraft. While technological advances in fuel inerting systems have been made in recent years

and the FAA has proposed fuel tank flammability reduction requirements for new and existing

passenger airliners, critics have expressed frustration that steps to prevent another catastrophe

attributable to a fuel tank explosion are moving too slowly, in their opinion.8 Congress may

debate available alternatives to accelerate safety initiatives to reduce fuel tank flammability and,

perhaps, options to mitigate the financial impact of complying with proposed aircraft

modifications on air carriers.

ȱȱ ȱ

Issues related to passenger safety, comfort, and public health in aircraft cabins have often been of

interest in past FAA reauthorization processes, and may again generate considerable debate

during the current reauthorization cycle. One particular concern is the potential for spread of a

deadly infectious disease, such as a communicable strain of avian flu, among airline passengers.

The risk of such a threat was highlighted a few years ago when the deadly Sudden Acute

Respiratory Syndrome (SARS) virus caused widespread concern over the public health risks

posed by airline travel. Congress may debate whether more research is needed on methods to

prevent the spread of infectious diseases in the aircraft cabin, and how to effectively deploy

available methods to detect and mitigate the spread of disease among airline travelers. With

“10 Years After Flight 800, Just Hot Air,” Air Safety Week, 20(31), August 7, 2006.

ȱȱȱ

Şȱ

ȱ£Ǳȱȱȱ ȱȱȱ

regard to cabin occupant safety, Congress may once again consider whether infants and toddlers

under two years of age should be restrained in child seats on airline flights, or whether the current

practice of allowing “lap children” should be continued. The FAA recently rescinded its plans to

require child restraints for these children, as advocated by the NTSB, citing fears that families

would opt to instead travel by car—an arguably riskier mode of travel—if faced with the prospect

of paying for an additional ticket for their infant or toddler to fly. The NTSB maintains that the

failure to restrain all aircraft occupants is an unsafe practice, and the FAA’s cross-modal safety

comparisons detract from the central issue of whether such a practice should be allowed to

continue.

Also, with regard to issues of passenger comfort, safety, and convenience in the airliner cabin, the

use of cell phones and portable electronic devices (PEDs) has been an issue of growing interest.

Technological advances in wireless voice and data communications are far outpacing the FAA’s

ability to study the safety implications of using these radio frequency (RF) emitting devices on

board aircraft and make sound policy decisions regarding the in-flight use of these devices. While

vendors are pushing for approval of onboard systems to make cell phone and wireless Internet

access available in flight, researchers have expressed continuing concern that cell phones and

other PEDs may interfere with aircraft instrumentation. During the current reauthorization debate,

Congress may consider whether more focused research on this issue is needed to determine if,

and under what circumstances, these devices can be used in flight without any foreseeable safety

consequences.

¢ǰȱǰȱȱȱ ȱ

Issues related to energy and the environment may play a larger than usual role during the current

reauthorization debate. Energy and fuel issues in particular have been part of the larger public

policy debate in recent years, and may spur consideration of alternative fuels for aircraft and

airport vehicles. Growing concerns over global warming and environmental impacts may also

prompt debate over options for reducing aircraft emissions. Historically high fuel costs are

driving much of the current push for more efficient aircraft, which also can be cleaner and quieter.

However, Congress may debate available options to study alternative aircraft fuels, monitor

international approaches to mitigating aircraft emissions and noise, sponsor research on aircraft

emissions-reduction and quiet aircraft technologies, and provide incentives for manufacturers and

operators to develop and utilize aircraft technologies that reduce dependence on fossil fuels and

environmental impacts.

ȱȱȱ ȱ

Although not technically within the jurisdiction of the FAA, there are at least three major

international aviation issues, falling under the jurisdiction of the Department of Transportation

(DOT), that may arise as Congress considers FAA reauthorization legislation. First, there is the

potential that the “Open Skies” agreement with the European Union will remain unsigned and

unimplemented, which is a major concern for many U.S. airlines seeking greater flexibility to

operate flights in European markets. Second, is the closely related issue regarding DOT’s

rulemaking on foreign ownership and control of domestic carriers. Although the administrative

process has been completed, the DOT has not to date issued a final rule. The delay has been due

in part to strong congressional opposition that has taken the form both of introduced legislation

and attempts to prevent the final rule through appropriations riders. According to some

commentators, as comprehensive as the proposed agreement appears to be, there cannot be

ȱȱȱ

şȱ

ȱ£Ǳȱȱȱ ȱȱȱ

meaningful reform in the international aviation market until Congress repeals the so-called

“citizenship test,” which limits foreign ownership and control of U.S. air carriers. Finally, there is

the longstanding issue of cabotage, which is defined as the transportation of passengers or cargo

by foreign air carriers from one point in the United States to another and is, with a couple of

narrow exceptions, generally prohibited by U.S. law. A limited statutory exception to this

prohibition, allowing international carriers to carry certain cargo shipments between airports

within the United States and destinations in Alaska while en route to foreign destinations, was

included in Vision 100. In light of these various ongoing international aviation issues, the FAA

reauthorization process may provide Congress with a unique opportunity to legislate and play a

major role with respect to these developments in international civil aviation.

The following sections of this report provide an in-depth examination of the various issues that

may be considered during congressional debate over reauthorization of the FAA.

ȱȱȱȱ ȱ

ȱȱ

The aviation taxes and fees associated with funding the federal aviation system will expire at the

end of FY2007, as will most federal aviation programs. The FAA and others have expressed

concern that the existing funding system for aviation is inadequate to meet future needs. The FAA

receives the majority of its funding from receipts to the airport and airway trust fund (aviation

trust fund). It also receives an annual appropriation of Treasury general funds (GF) to pay for the

remainder of its activities. The trust fund pays for all of the FAA’s airport improvement program

(AIP), facilities and equipment (F&E) program, and research, engineering and development

(RE&D) program. It also pays for much of the FAA’s operations and maintenance (O&M)

program, which also receives general funds.

As can be seen in Table 1, annual appropriations for the AIP program roughly followed the

amounts authorized in the last two FAA reauthorization acts, AIR-21 (P.L. 106-181) and Vision

100, but appropriations for the other three programs have not. Funding for F&E tracked the

authorization through FY2004, but has since been significantly below the authorized amount.

Annual RE&D appropriations have been well below their authorized levels in each year. O&M

appropriations have been higher than the amounts authorized in two years, below in the other

four, but in only one instance, FY2003, did the program fail to grow on a year-over-year basis.

. FAA Major Program Funding: AIR-21 and Vision 100: FY2001 - FY2006

Table 1

($ in millions)

AIP (TF)

F&E (TF)

RE&D (TF)

authorized

oblimit

authorized

appropriations

authorized

appropriations

ȱȱȱ

FY2001

FY2002

FY2003

FY2004

FY2005

FY2006

3,200

3,193

2,657

2,651

237

187

3,300

3,475

2,914

3,021

249

245

3,400

3,378

2,981

2,942

—147

3,400

3,380

3,183

2,863

346

119

3,500

3,472

2,993

2,525

356

130

3,600

3,515

3,053

2,555

352

137

ŗŖȱ

ȱ£Ǳȱȱȱ ȱȱȱ

O&M (TF/GF)

Total (TF/GF)

authorized

appropriations

GF share

oblimit & appropriations

FY2001

FY2002

FY2003

FY2004

FY2005

FY2006

6,592

6,603

2,198

12,634

6,886

7,077

1,104

13,818

7,357

7,023

3,248

13,490

7,591

7,479

3,010

13,843

7,732

7,707

2,828

13,858

7,889

8,104

2,619

14,311

Authorization amounts from AIR-21 and Vision 100 (AIR-21 did not include an RE&D authorization

for FY2003). Appropriations information from FAA data.

Note: TF = aviation trust fund, GF = Treasury General Funds

Sources:

As is discussed throughout this report, there are many in the aviation industry, and also within the

FAA, who believe that significantly greater funding will be required in the years ahead for each

of the four major FAA programs. These requests come against the backdrop of three years of FAA

spending in which annual appropriations for the agency increased on a fairly modest basis.

ȱȱ ¢ȱȱȱ ȱ

The forthcoming reauthorization debate is likely to focus on three major issues related to the trust

fund. First is the question of whether the trust fund will provide sufficient revenue to meet the

growing needs of the FAA’s activities and programs. Second is the long standing issue of whether

the existing tax and fee system is the appropriate mechanism for producing trust fund revenues, or

whether an entirely new revenue collection mechanism should be adopted. And third is the

controversial issue of how much of FAA’s total funding should come from Treasury general funds

(GF).

ȱȱȱȱ¢ȱ

There is considerable discussion over the question of trust fund revenue adequacy for the years

ahead. Table 2 shows that total trust fund income rose dramatically in FY1998 following the last

major reauthorization of trust fund directed taxes and fees by the Taxpayers Relief Act of 1997

(P.L. 105-34). Income increased even further in FY1999, declined somewhat in FY2000, and

dropped precipitously after September 11th. As a result primarily, but not exclusively, of the post

September 11th drop in airline activity, the revenue stream did not exceed the FY2001 level until

FY2005, and was not expected to exceed the record FY1999 level until FY2006. Throughout this

period FAA spending has not been reduced to accommodate the trust fund’s reduced income

stream. Rather, FAA spending has continued apace, mostly by spending down the uncommitted

balance of the trust fund, which stood at over $7.3 billion at the end of FY2001 and is expected to

be down to around $1.2 billion by the end of FY2006.9

When the FAA began discussing reauthorization in 2005, the future of the aviation trust fund was

listed as a key item for consideration.10 The FAA contends that something needs to be done to

increase the trust fund income stream and to prevent further erosion in the uncommitted balance

of the fund. For a number of reasons detailed at its reauthorization website, the FAA sees little

The FY2006 Treasury estimate excludes interest payments to the trust fund which could significantly raise this

amount.

http://www.faa.gov/airports_airtraffic/trust_fund/media/Trust_Fund.pdf.

ȱȱȱ

ŗŗȱ

ȱ£Ǳȱȱȱ ȱȱȱ

prospect of a major increase in revenue from the trust fund’s existing tax and fee system. Instead,

as will be discussed subsequently, the FAA seeks a reexamination of the tax and fee system with

an eye toward a new system that more closely tracks actual aviation industry activity than the

current system and in the process ensures that the trust fund will receive adequate revenues to

finance future FAA aviation system needs.

The FAA position is supported by the Department of Treasury estimates that suggest that annual

revenue increases to the trust fund in the years ahead will be modest.11 Treasury forecasts that

annual increases in trust fund revenue will increase by $766 million in FY2007 to $11.6 billion.

Increases in future years will be between $710 million and $816 million annually, Treasury

projects, leaving the trust fund with total annual revenues of $14.7 billion in FY2011. As will be

discussed later in this report, in the section on Next Generation Air Transportation System

(NGATS) funding requirements, these levels of increase may be insufficient to fund the FAA’s

already identified needs for the NGATS and other ongoing air navigation program upgrades, as

well as expected increases in other necessary FAA program activities.

. Airport And Airway Trust Fund: Revenue Flow and Balances, FY1997-FY2006

Table 2

($ in millions)

Fiscal Year

Income

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006E

Ticket Tax

Flight Segment

Fee

Waybill Tax

Fuel Tax

Rural Airports

Tax

Frequent Flyer

Tax

International

Arrival/Depart.

Tax

Tax Refunds

Interest on

Balance

Offsetting

Collections

3,389

—

5,455

547

5,941

1,339

5,103

1,655

4,805

1,556

4,726

1,532

4,223

1,783

4,556

1,800

5,044

2,042

5,395

2,193

331

128

—

313

659

412

1,009

500

887

493

769

474

789

422

711

499

712

567

977

599

1,091

—

141

149

159

150

148

147

145

159

163

194

948

1,484

1,349

1,336

1,282

1,331

1,391

1,651

1,798

(35)

481

—

543

—

698

—

805

—

882

—

860

—

591

—

477

—

423

—

450

144

178

152

Total Trust

Fund (TF)

Income

$4,508

$8,696

$11,121

$10,688

$10,149

$10,069

$9,372

$9,687

$11,092

$11,921

Operations TF

Appropriations.

$1,700

$1,902

$4,112

$5,898

$4,405

$5,973

$3,775

$4,469

$4,879

$5,486

U.S. Department of the Treasury. Office of Tax Analysis. Airport and Airway Trust Fund: FY2007 Mid Session

Review. Current Law Baseline. Summer 2006.

ȱȱȱ

ŗŘȱ

ȱ£Ǳȱȱȱ ȱȱȱ

Fiscal Year

1997

Total Trust

($5,758) ($5,914) ($8,089) ($9,198) ($9,601) ($11,909) ($9,618) ($10,415) ($11,092) ($11,921)

Fund Cash

Outlays

End of Year

$6,422

(EOY) Balance

1998

$9,140

1999

$12,446

2000

$13,934

2001

$14,482

2002

$12,642

2003

$12,397

2004

2005

2006E

$11,669

$11,596

$10,857

Commitments

($5,088) ($4,801) ($5,080) ($6,860) ($7,167) ($7,855)

$1,354 $4,339 $7,366 $7,074 $7,315 $4,787

($8,499) ($9,222)

$3,898 $2,447

($9,493)

$2,103

($9,622)

$1,195

Total FAA

Appropriations

GF Share of FAA

Budget

GF Percent

$8,537

$9,052

$9,808

$10,043

$12,634

$13,818

$13,490

$13,843

$13,858

$14,311

3,241

3,351

1,474

2,198

1,104

3,248

3,010

2,828

2,619

38%

37%

15%

17%

24%

22%

20%

18%

Uncommitted

Balance EOY

General Fund

Share of FAA

Appropriations

Air Transport Association, see http://www.airlines.org/NR/rdonlyres/AD28984D-CF8D-4C37-96D32681BD89776D/0/trustfund.pdf for more detail concerning outlays. Also see Federal Aviation Administration

websites: http://www.faa.gov/aba/html_budget/2003.html and http://www.faa.gov/about/office_org/

headquarters_offices/aep/aatf/ for more trust fund information. Data for FY2006 income are estimates,

appropriations data are enacted. Appropriations data (including trust fund and general fund share data) provided

by FAA.

Sources:

An estimate produced by the Congressional Budget Office (CBO) appears somewhat more

positive about the future of the trust fund’s finances long-term.12 CBO expects that the annual

trust fund revenue stream will increase at a slightly higher rate than inflation and that the trust

fund, assuming FAA spending only increases at the rate of inflation, would have an uncommitted

balance of $4.3 billion in 2011 and an uncommitted balance of $18.6 billion in 2016. In the CBO

analysis “the trust fund can support about $19 billion in additional spending over baseline levels

(the 2006 funding level growing with inflation), provided that most of that spending occurs after

2010.”13 Whether this scenario provides adequate future funding, assuming significant increased

FAA investment needs in the years ahead, is likely to be a matter of considerable debate.

In line with the CBO estimate, a number of outside groups disagree with the Treasury and the

FAA’s assessment of future trust fund revenues as being insufficient to fund NGATS and other

initiatives. The Aircraft Owners and Pilots Association (AOPA), for example, has produced its

own revenue forecasts and predicts that the trust fund will have an adequate revenue stream well

into the future.14 Unlike the FAA view, AOPA and others sharing their perspective, believe that

rising airline fares and airline activity, increased income from fuel taxes, and cost reductions from

air traffic control (ATC) modernization will be sufficient to result in an unexpended trust fund

U.S. Congressional Budget Office. CBO Testimony. Financing Investment in the Air Traffic Control System,

Statement of Donald B. Marron, Acting Director, House Committee on Transportation and Infrastructure,

Subcommittee on Aviation, September 27, 2006.

Ibid., p.6.

http://www.aopa.org/whatsnew/la-userfees.html.

ȱȱȱ

ŗřȱ

ȱ£Ǳȱȱȱ ȱȱȱ

balance of over $4 billion by FY2011, with the possibility that the balance could be considerably

higher.

¡ȱȱȱȱ ȱ

The coming debate about how the FAA should be funded largely revolves around the concept of

user fees. There are a number of variations as to how a user fee is defined. A useful definition of a

user fee from a transportation perspective was provided in 1953 by the Department of Commerce,

Office of Transportation, and is still valid for today’s discussion:

... a user charge is defined as any charge made to beneficiaries or users of services and

facilities directly related to transportation and furnished in whole or in part by the Federal

Government. Such charge must be paid for use of such service or facility and shall be fixed

to recover part or all of the capital, operating, and maintenance costs of such service or

facility. The services shall not include cash subsidies, mortgage-aid, or tax-aid or certain

other activities not confined to transportation or involving transportation only incidentally.15

For aviation, most of the interest in user fees has been in recovering the costs associated with

industry use of the national air navigation system (airway system or air traffic control system).16

User fees can be direct (sometimes referred to as pay-for-use or pay-for-service), whereby an

aircraft or pilot is charged for a specific activity. Examples of direct charges include radio

contacts with ATC en-route centers, contacts with airport towers, and weight-distance charges of

the type levied frequently outside the United States (the weight of the aircraft multiplied by the

distance flown). The other type of user fee that can be levied is an indirect fee. Examples include

fuel taxes, aircraft registration fees, and gross revenue taxes. Indirect fees and charges are often

viewed by economists as proxies for user fees rather than as actual user fees. They are normally

viewed as imperfect in that the fee charged is often more poorly correlated to the service provided

than a direct fee would be. A common example is the existing airline passenger tax, where airline

passengers flying on the same aircraft are charged user fees based on the fare that they paid, even

though all are using exactly the same amount of airway resources. For a number of reasons,

indirect fees are the dominant type of fee in use in the U.S. aviation system today.

On May 21, 1970, President Nixon signed the Airport and Airway Development and Revenue

Acts of 1970 (P.L. 91-258; 1970 Act), which was the origin of the trust fund financing system still

in place today. The fee system created to provide revenue for the trust fund consisted of an airline

ticket tax, a freight/cargo waybill tax, an international departure tax (also applied to Alaska and

Hawaii), a per gallon tax on noncommercial (primarily GA) use of gasoline and jet fuel, and

finally, a graduated aircraft registration fee. Three and a half decades later, the same basic

framework of taxes and fees—with the deletion of the aircraft registration fee, and the addition of

a segment fee, an international arrivals tax, and a frequent flyer tax (which can be viewed as an

extension of the ticket tax)—remain the principal sources of income for the trust fund (see Table

2).

U.S. Department of Commerce, Office of Transportation, Charges for Private Use of Federally-Provided

Transportation Services and Facilities, A Staff Study of the Principles Involved in Federal User Charges, Washington,

D.C., July 1953, p. 9.

The terms airway system and air traffic control are often used interchangeably. In the context of this report the

airway system is broader, including air traffic control services, personnel, and equipment, as well as U.S. navigable

airspace and some other supporting activities of the FAA.

ȱȱȱ

ŗŚȱ

ȱ£Ǳȱȱȱ ȱȱȱ

In 2005, the FAA announced that it was beginning a detailed examination of how the agency was

funded and whether there could be a more appropriate funding mechanism. A key element of the

examination is the long-debated issue of whether the existing indirect system of taxation should

be replaced by direct charges for specific air navigation services. To some degree the FAA tipped

off the aviation industry as to the likely direction of its study when FAA Administrator Marion

Blakey remarked that using the existing ticket tax mechanism was a system that “might as well be

tied to the price of milk.”17 The FAA, however, has not yet made any public proposals for a new

funding mechanism and no such proposal is expected during the 109th Congress. Although the

elements of the FAA plan are still unknown in their totality, enough has been surmised for

aviation interest groups to begin actively supporting or opposing various potential elements of a

direct user fee system.

The concept of cost-allocation among system users and non-users permeates the discussion of

federal aviation user fees. It has been perhaps the most crucial single issue in the now six-decade

old discussion of how user fees should be charged and allocated. It is also a major focus of the

FAA’s ongoing examination of the existing user fee system and is expected to be a major

determinant of any new user fee proposal.

While the FAA continues its studies, aviation interest groups have in effect launched their own

preemptive strikes for and against a fee-for-service system of financing. The airline industry,

through the Air Transport Association (ATA), struck first, making its own proposal for a new

financing system in early March 2006.18 ATA’s so-called “Smartskies” proposal would be based

on charges for departures and flight duration that would apply to all aircraft regardless of size or

type of use. The exception in the ATA proposal is that piston-powered general aviation aircraft

should continue to pay only a fuel tax. By its own estimates, the ATA proposal, could shift an

estimated $2 billion of system costs to certain GA sector users, primarily corporate aircraft, which

the ATA believes currently underpay for their use of the ATC system.19 The ATA proposal goes

beyond just fee structure changes and suggests that the FAA’s air traffic organization (ATO)

become an autonomous part of the agency, with the ability to operate without the need for direct

congressional appropriations. Instead the fees collected from aviation system users, which would

still be deposited in the aviation trust fund. One final feature of the proposal would give the ATO

the authority to issue bonds for infrastructure improvements backed by expected future fee

collections.

On the same day that the ATA made its proposal, a group of GA-related interest groups released a

statement suggesting that the “airlines’ plan for improving the air transportation system is for

them to pay less and control more.”20 From the GA perspective, the ATA case that certain GA

users underpay for their use of the ATC system is incorrect for a number of reasons. The GA

contention is that the current structure of the ATC system was primarily created to support

commercial airline use and that they are not putting a significant additional burden on the ATC

system as a result of their flying activities. From the GA perspective fuel taxes remain the most

appropriate type of user fee, and the ATA’s proposal to reorganize the ATO outside of the

congressional appropriations process is viewed as undesirable public policy.

Wald, Matthew W. F.A.A. Seeks New Source of Revenue in User Fees. The New York Times. March 7, 2006. p.

A18.

Bond, David. “Fire when Ready,” Aviation Week & Space Technology, March 13, 2006, p. 47.

Ibid.

http://web.nbaa.org/public/news/200607eaa/GAUnitedAgainstUserFees.pdf.

ȱȱȱ

ŗśȱ

ȱ£Ǳȱȱȱ ȱȱȱ

The above discussion is a simplification of a very complex and contentious issue about who pays

and who should pay for FAA aviation services, that goes back over at least six decades. It should

be noted that the discussion of aviation user fees has been almost exclusively a conversation

between the federal government and aviation industry. For example, the views of the largest

group of current contributors to the aviation trust fund, airline passengers, are not well known.

Little non-government or non-interest group-funded research on the aviation user fee system has

been done and the lack of such outside research in itself might be a subject worthy of some

attention as part of the reauthorization debate.

£Ȧ£ȱ

Over the last two decades, part of the ATC debate has moved away from whether or not the

airways system should be operated as a public good and is instead often focused on how the

system could be operated more efficiently using business principles. Calls for ATC privatization

in the United States, and the fact that other nations have at least to some degree allowed their

airways systems to be privatized, would seem to indicate that the provision of airways services is

not something that must always be exclusively performed by government.

Corporatization, the concept that the FAA’s ATC services could be reorganized as a government

corporation within the FAA and/or independent from the FAA, was considered at length in the

1990s during the Clinton Administration. The idea was that an independent entity operated along

business principles, although not fully privatized, would be able to operate more efficiently and

make needed system improvements on a more timely basis. Although the effort had the support of

the Administration, and especially Vice President Gore, it ultimately failed to gain much

congressional support and was abandoned in favor of other personnel system and procurement

system reforms adopted in the latter half of the 1990s.21

Privatization, unlike corporatization, would most likely move the ATC organization outside of

government and require that the organization act like a private corporation in most respects. This

would include pricing (for example, setting fees) at levels designed to recoup operating costs and

to provide capital for needed investment. Privatization in some form has been adopted in Canada,

the United Kingdom, Australia, and New Zealand among other nations. Privatization has strong

proponents22 and attempts have been made to make it at least an option for consideration during

the upcoming reauthorization debate. It remains to be seen, however, whether the FAA or

Congress will consider the concept in earnest.

ȱ ȱȱȱ

Since the existing tax and fee structure was created in 1970 there has been general acceptance of

the concept that there is a public interest component to the operation of the national aviation

For a full discussion of the corporatization debate see CRS Report 94-371, Reorganization of the Federal Aviation

Administration: Safety and Efficiency Issues, by (name redacted), J. Glen Moore and Pamela Hairston (out of print;

available from (name redacted)).

Numerous reports in support of privatization have been produced over the last two decades. Two recent discussions

are: Robert W. Poole, Business Jets and ATC User Fees: Taking a Closer Look, The Reason Foundation. Policy Study

347. August 2006 (available at http://www.reason.org); and Clinton V. Oster, Reforming the Federal Aviation

Administration: Lessons from Canada and the United Kingdom, IBM Center for The Business of Government, 2006

(available at http://www.businessofgovernment.org).

ȱȱȱ

ŗŜȱ

ȱ£Ǳȱȱȱ ȱȱȱ

system. From the perspective of federal aviation policy, the public interest generally refers to that

portion of the cost of the FAA’s operation of the airway system that is appropriated from the

Treasury general fund for the FAA’s budget. This is the amount that is supposed to equate to what

the military and nonuser beneficiaries (also known as societal users) of the aviation system might

have contributed to the aviation trust fund through the payment of user fees, if they actually paid

these fees. This has been one of the most contentious elements of the aviation funding debate and

is likely to remain so in the year ahead. In sum, many aviation interest groups believe that the

federal general fund contribution to the FAA’s annual appropriation is too small to correspond to

the existing and potential military and other public benefits of the airways system. Conversely,

the FAA, OMB, and other government agencies, as well as congressional appropriations and

budget committees, usually believe the general fund contribution is too large.

The authors of the 1970 Act envisioned that the trust fund would primarily support FAA capital

programs. Although there are some who contend that the trust fund was intended “only” for

capital programs, several studies have suggested that this was not the case, and that the 1970 Act

allowed trust fund revenues to be spent for noncapital, mostly operations and maintenance

activities.23 Since President Nixon unsuccessfully sought to fund all FAA activities out of the trust

fund in the early 1970s, a tension has existed between those who seek to maximize use of the

trust fund for all aviation purposes and those who seek to have its funds directed only/primarily

toward capital activities. As Table 2 shows the general fund contribution to overall FAA

appropriations has varied over the last decade ranging from a low of 0% in FY2000 to a high of

38% in FY1998 and FY1999. In the most recent four year period, however, the general fund share

has been a more consistent 20% or so.

The issue of the general fund share is closely tied to the issue of spending guarantee provisions,

including penalty and cap provisions, which are an almost routine portion of FAA reauthorization

legislation. These provisions and their policy implications are discussed in the next section of this

report.

ȱȱ ȱ

As mentioned above, since the 1971 creation of the user-supported airport and airway trust fund

there has been disagreement over the appropriate use of the trust fund’s revenues. This led,

beginning in 1976, to the enactment of a series of legislative mechanisms designed to assure that

federal capital spending for U.S. airports and airways (i.e., AIP and F&E) would be funded at

their fully authorized levels. Supporters also hoped that these provisions would assure a

significant general fund share for the FAA budget. Such funding guarantee proposals have been

part of every FAA reauthorization debate since 1976.24

ȱȱȱ¢ȱȱ

From FY1977 through FY1990, the guarantees consisted of a variety of both “cap” and “penalty”

provisions which, by law, set a ceiling on the amount of aviation trust fund money that could be

U.S. Congressional Budget Office. The Status of the Airport and Airway Trust Fund. Washington, CBO, 1988. p. X,

1-7; and U.S. General Accounting Office, Whether the Airport and Airway Trust Fund Was Created Solely to Finance

Aviation “Infrastructure.” B-281779. Washington, GAO, 1999, 16 p.

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

ȱȱȱ

ŗŝȱ

ȱ£Ǳȱȱȱ ȱȱȱ

used to fund FAA operations, and a penalty that would reduce this ceiling by a formula linked to

the capital programs’ appropriations shortfall below their authorization for the fiscal year.

Although the cap and penalty (C&P) provisions had some apparent early success (FY1977FY1980), there was growing resistance to passing appropriations bills that adhered to the

penalties during the 1980s. The cap alone appears to have been even less often adhered to during

the mid-1990s, following the penalty’s elimination in 1990. Over time, however, certain

unintended consequences arose that continue to play a part in the debate over funding guarantee

mechanisms. For example, the C&P appeared to have a significant role in the growth of the

uncommitted balance in the trust fund (sometimes referred to as a surplus). Although the various

mechanisms may have succeeded in restricting spending from the aviation trust fund on

operations, they did not necessarily succeed in forcing full appropriation of authorized AIP and

F&E funding levels. Overall congressional support for adherence to the annual caps and penalties

during the appropriations process was not always sufficient to lead to their enforcement.25 In

addition, especially during the 1990s, within the context of the unified congressional budget,

some appropriations and budget committee Members were more concerned about the overall size

of the budget or deficit than with adhering to the spending guarantee mechanisms. Under the

unified congressional budget, the growing unexpended balance of the trust fund could be viewed

as, in effect, offsetting spending elsewhere in the budget or reducing the apparent size of the

budget deficit. This broader budget situation and related appropriations priorities trumped the

C&P mechanisms. Under the C&P (especially prior to the elimination of the penalty), the general

fund share remained, in most years, significantly higher than most estimates of the appropriate

public interest share. During FY1999 and FY2000, however, years when no spending guarantee

was authorized, the general fund share dropped to 15% and 0%, respectively.

ȱ Ǳȱȱȱȱȱȱ ȱ

In 2000, AIR21 included two new spending guarantees. One made it “out-of-order” in the House

or Senate to consider legislation that failed to use all aviation trust fund receipts and interest

annually. The second made it out-of-order to consider any bill that provided any funding for

RE&D or O&M if it failed to fully fund the FAA’s two capital programs, AIP and F&E, at their

authorized levels. As a penalty of sorts, any failure to fully fund F&E would lead to an increased

appropriation (“pop-up” budget authority) for AIP equal to the appropriations shortfall for F&E.

As was true under the C&P mechanism, the first years of the AIR21 guarantees, FY2001FY2003, appeared to have successfully assured that both AIP and F&E were funded at or very

near their authorized levels. However, as was true under the C&P mechanism, congressional

support for adherence declined during the following years. Adherence to the guarantees in the

annual appropriations bills during the last three years has been mixed. On the one hand, the

obligation limitations for AIP for FY2004-FY2006 have been very close to their authorized levels

for these years. On the other hand, F&E spending has been cut significantly in each of these years

(see Table 1). F&E’s annual appropriation fell below its authorization as follows: $320 million

for FY2004; $468 million for FY2005; and $498 million for FY2006. These F&E funding levels

were out of conformance with the guarantees and should have made the funding of the O&M and

RE&D components of FAA’s budget out of order during these years. It also should have led to

additional “pop-up” budget authority for the AIP equal to the annual underfunding of F&E.

An element of this softening of support was that the implementation of the NAS fell behind the schedule that was

assumed when F&E was being authorized.

ȱȱȱ

ŗŞȱ

ȱ£Ǳȱȱȱ ȱȱȱ

There are a number of reasons that the guarantee provisions have not been adhered to in recent

years. Specific to F&E spending, there has been the lack of confidence that Congress has had in

the ability of the FAA to oversee NAS modernization. The hesitance to fully fund F&E may have

more to do with this, than with specific resistance to adherence to the funding guarantees.

However, some other weaknesses in the current guarantee mechanism have manifested

themselves in recent years. Spending guarantees that are enforced by point-of-order actions only

work if the point-of-order is raised by a Member and if they have not been waived by rule. In the

House, recent annual appropriations bills have had all points-of-order waived by the Rules

Committee. Senators have also chosen not to raise points-of-order against violations of the AIP

and F&E funding guarantees.26 Points-of-order have not been allowed on appropriations bill

conference reports. Also the “pop-up” AIP budget authority, which some viewed as part of the

mechanism for preventing appropriators from spending any F&E shortfall for noncapital aviation

spending, can and has been rescinded. These rescissions allow appropriators to bring down the

nominal total cost of the Transportation/Treasury Appropriations bills in the next budget year. As

was true during the C&P era, the current spending guarantees can still be trumped by broader

budget policy goals (such as deficit reduction) or, at times, by the spending priorities of

appropriators.

ȱ ȱȱ

Aviation funding guarantees are expected to be considered in the FAA reauthorization debate

during the 110th Congress and could include keeping the current system, modifying the current

guarantees, resurrecting a mechanism analogous to the cap and penalty provisions, reconsidering

taking the trust fund “off-budget,” or erecting budgetary “fire walls” as was done for the highway

and transit programs in 1998. Some would argue that there should be no guarantees and that the

normal congressional budget process should be allowed to progress unfettered. The absence of a

large uncommitted trust fund balance could also have an impact on the support for new or

continued aviation spending guarantee mechanisms during FAA reauthorization in the 110th

Congress.

ȱȱȱȱ

The Airport Improvement Program (AIP), the source of federal airport grants, is one of five major

sources of funding for airport development and improvement. Airports also fund capital projects

using tax-exempt bonds, passenger facility charges (PFCs; a local tax levied on each boarding

passenger), state and local grants, and airport revenue.27 Different airports use different

combinations of these sources depending on the individual airport’s financial situation and the

type of project being considered. Small airports are more likely to be dependent on AIP grants

than large-or medium-sized airports. The larger airports are also much more likely to participate

in the tax-exempt bond market or finance capital development projects with the proceeds

In part, this may have been because, if a point of order were upheld, the entire AIP or F&E financing provision

would be stricken from the bill that Senate conferees would take to conference. This absence of a funding provision

could put the Senate conferees at a disadvantage in negotiating with House conferees over the contents of the bill to be

voted out of conference.

Airport revenues sources include airfield area fees/landing fees, terminal area concessions and rent, airline leases,

parking, etc. See CRS Report 98-579, Airport Finance: A Brief Overview, by (name redacted). PFCs are sometimes

referred to as a “head tax.”

ȱȱȱ

ŗşȱ

ȱ£Ǳȱȱȱ ȱȱȱ

generated from PFCs. Each of these funding sources places differing legislative, regulatory, or

contractual constraints on the airports that use them. The two financing sources for airports with

the most significant federal involvement are the AIP and the PFC programs.

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

participating in the AIP range from very large publicly-owned commercial primary airports to

small public use general aviation airports that may be privately-owned, but are available for

public use. AIP funding is usually limited to construction or improvements related to aircraft

operations, typically for planning and construction of projects such as runways, taxiways, aprons,

noise abatement, land purchase, and safety, emergency or snow removal equipment. Commercial

revenue producing portions of terminals (such as shop concessions or commercial maintenance

hangars), automobile parking garages, and off-airport road construction are examples of

improvements that generally are not eligible for AIP funding. Airports smaller than medium hub,

however, have broader eligibility on terminal projects under certain conditions.28 AIP money

cannot be used for an airport’s operational expenses.

The PFC is a local tax imposed, with federal approval, by an airport on each boarding passenger.

PFC funds can be used for a broader range of projects than AIP grants and are more likely to be

used for “ground side” projects such as passenger terminal and ground access improvements.

PFCs can also be used for bond repayments and in some cases to provide the local match for AIP

projects.

ȱȱȱȱ

Both the FAA in its 2005-2009 National Plan of Integrated Airport Systems (NPIAS) and the

Airports Council International/North America (ACI/NA) have releases estimates of U.S. airports’

capital needs for 2005-2009.

The NPIAS report was based on planned project information taken from airport master plans and

state system plans. FAA planners screened out projects that were not justified by aviation activity

forecasts or that were not eligible for AIP grants. The FAA limits its estimate to AIP eligible

projects at airports listed in the NPIAS. In the 2004 NPIAS report, the FAA has estimated that the

national system’s capital needs for 2005-2009 will total $39.55 billion (an annual average of

$7.91 billion).29

The Airport Council International / North America (ACI-NA) capital needs survey produced an

estimate of $71.5 billion for 2005-2009 (an annual average of $14.3 billion).30 ACI-NA concludes

that airports face an annual $3-4 billion shortfall every year through FY2009.31 The ACI-NA

study reflects the broader business view of major airport operators and casts a substantially

Primary commercial airports are categorized by the percentage of the total national passenger boardings

(enplanements) that occur at the individual airport during a year: large hub airports enplane at least 1% of the national

total; medium hub enplane at least 0.25% but less than 1%; small hub enplane 0.05% but less than 0.25% and nonhub

enplane more than 10,000 but less tan 0.05%. Large and medium hub airports accounted for almost 90% of all

enplanements in 2002.

U.S. Federal Aviation Administration, National Plan of Integrated Airport Systems: 2005-2009, pp. 41-47.

A fact sheet of the ACI-NA, 2005 Airport Capital Development Needs is available at

http://www.aci-na.org/docs/70_capitalneeds2005.pdf.

ACI-NA, ACI-NA 2005 Airport Capital Needs Survey v. FAA’s NPIAS. Washington, DC: ACI-NA, 17 p.

ȱȱȱ

ŘŖȱ

ȱ£Ǳȱȱȱ ȱȱȱ

broader net, including AIP ineligible or low AIP priority type projects which would normally be

funded by bonds, PFCs, airport revenues, or local funding; airport-funded air traffic control

facilities; airport or TSA-funded security projects, etc.32 Because the $14.3 billion is based on

“proposals” for airport development projects, some would argue that this figure is high reflecting

wants rather than needs and projects that would never be completed in any case.

The Air Transport Association (ATA) has not released an estimate in advance of the current

reauthorization debate but in the past their estimates of needs were limited almost exclusively to

AIP eligible projects at primary airports and tended to be lower than either the FAA or ACI/NA

estimates.33

In March 2004, FAA Administrator, Marion C. Blakey, stated that the agency’s goal was to

improve the overall capacity at the top 35 U.S. airports by 30% over a ten-year period. These

airports account for about 73% of commercial passenger boardings. The FAA’s Operational

Evolution Plan (OEP) is intended to increase the capacity and efficiency of the National Airspace

System (NAS) over a ten-year period to keep up with the expected growth in demand for air

travel and shipping. The plan focuses on “infrastructure—primarily new runways—and

technological and procedural initiatives at the top 35 airports.”34 An AIP focus on the OEP could

put substantial pressure on the availability of AIP discretionary funds.

ȱ ȱȱǻ Ǽȱ

The preeminent reauthorization issue for AIP is whether its funding levels will be increased

substantially, held steady/increased modestly, or reduced. As can be seen in Figure 1, AIP’s

funding underwent a major increase in FY2001 and has had a relatively small increase of $100

million each year since. The outlook for AIP funding will likely be influenced by the resolution of

the debate concerning the taxes and fees supporting the aviation trust fund as well as any decision

concerning the scope of the general fund share of the FAA budget. A failure to secure more

revenues for the FAA budget, in light of the recent decline in the uncommitted balance of the trust

fund, could constrain attempts to increase the AIP budget. A consensus in Congress to reduce the

federal budget deficit or hold the deficits to existing levels, as happened during the mid-1990s,

also could constrain any AIP budget increases.35 These broader budget issues could have

implications not only for the AIP program’s funding but also for its scope and formula and

discretionary funding distribution. Under such overall budget constraints, Congress could

consider changes ranging from the defederalization of some large airports to the reconsideration

of the scope of funding provided for smaller noncommercial service airports currently in the

NPIAS. Also, should AIP not be reauthorized by October 1, 2007, the program will go into

abeyance: projects already funded could continue, but no new projects could be begun.

ACI-NA, Executive Summary ACI-NA 2005 Airport Capital Development Needs, Washington, DC: ACI-NA, 2006, 3

See GAO, Airport Development Needs: Estimating Future Costs, “GAO/RECD-97-99,” Washington, GAO, 1997,

pp. 7-9.

FAA and Mitre, Capacity Needs in the National Airspace System. See also FAA. Operational Evolution Plan, 20052015: Executive Summary; Version 7.0, Washington, DC: FAA, 2005.

For a brief discussion of transportation policy within the broader fiscal environment, see U.S. General Accountability

Office, Fundamental Reexamination of Federal Transportation Programs and Policies Required: The Driving Force of

the Nation’s Long-Term Fiscal Challenges, Washington, DC: GAO, 2006, available at http://www.highways.org/

Mar06-speaker-slideshows/Hecker.ppt.

ȱȱȱ

Řŗȱ

ȱ£Ǳȱȱȱ ȱȱȱ

Figure 1. AIP Authorizations and Obligations ($ millions)

Source:

FAA, Fifteenth Annual AIP Report. FAA.

ȱȱȱ

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

(also referred to as apportionments) and discretionary funds.36 Each year, formula grants are

apportioned automatically to specific airports or types of airports (primary airports, cargo service

airports, states and insular areas, and Alaska airports). The funds are available during the year that

they are first apportioned and continue to be available for use for two years thereafter. The

remaining funds are apportioned to the discretionary fund. Airports sponsors apply for

discretionary funds to pay for planned airport capital development needs. In recent years,

however, significant amounts of discretionary funding have been earmarked by Congress.37 In

recent years AIP discretionary funds have ranged from roughly 25%-30% of the total annual AIP

funding distribution.38

Entitlement (formula) and discretionary small airport set-asides tend to be supported by smaller

airports and most airport advocates. The air carriers tend to be critical of entitlements and setaside funding, especially when it benefits the smaller noncommercial service airports and have

argued that “Congress must reconsider the vast array of set-asides and earmarks under the AIP

program, which have seriously undermined its utility in providing meaningful system capacity

See U.S.C. 49 Chapter 471 and U.S. Federal Aviation Administration, Airport Improvement Program Handbook.

Available at

http://www.faa.gov/airports_airtraffic/airports/resources/publications/orders/media/aip_5100_38c.pdf.

For an explanation of FAA’s policy for selecting discretionary projects see the 21st AIP Annual Report of

Accomplishments, pp. 25-27. Available at

http://www.faa.gov/airports_airtraffic/airports/aip/grant_histories/media/Annual_Report_2004.pdf.

Based on figures from the AIP Annual Reports of Accomplishments, for FY2001-FY2003 and FY2004. The

discretionary funding percentage for FY2001 was 30%, for FY2002 was 25%, for FY2003 was 25%, and for FY2004

was 27%.

ȱȱȱ

ŘŘȱ

ȱ£Ǳȱȱȱ ȱȱȱ

improvements.”39 Business and general aviation advocates take exception to this view and

counter that airports of all sizes are critical to the national airport system as a whole and that

reliever airports in particular are “a critical component of managing airline and general aviation

traffic in an urban environment.”40

ȱȱ¢ȱȱ

Apportioned funds (sometimes referred to as entitlements) were substantially increased in AIR-21

and the range of land-side projects that are eligible for AIP grants were increased somewhat in

both AIR-21 and Vision 100. Most of the eligibility changes benefitted airports smaller than

medium-hub.41 Although this trend could continue in the upcoming reauthorization debate, if the

budget environment is constrained project eligibility might need to be reconsidered. If the overall

authorization is reduced, the apportioned funds may have to be reduced to assure that sufficient

funds remain to fund discretionary grants (in particular for operational evolution plan projects).

The ACI-NA supports the maintenance of AIP funding for smaller airports and argues for giving

these airports increased flexibility in the use of their entitlements. The case can be made that, over

the years, the broadening of AIP eligibility at small airports has made it increasingly difficult to

identify the federal interest that has been met by such spending. As mentioned earlier, air carriers

are skeptical of the benefit to the national airport system of some proposals seeking to broaden

project eligibility.42

¢ȱȱȬȱ

The discretionary funds (which are the remainder funds after the apportionments are satisfied) are

subject to set-asides for noise mitigation, the Military Airports Program (MAP), reliever airports,

and the capacity/safety/security/noise set-aside. Any of these could be modified during

reauthorization. However, the greater the total of all the set-asides, the smaller the remaining

amounts that are truly unrestricted discretionary funds.

ȱ¢ȱȱ

U.S.C. 47115 requires that a minimum amount—$148 million plus any outstanding pre-January

1, 1997 letters of intent—remains available for the discretionary fund after all apportionments and

set-asides are satisfied. If less money remains, the apportionments are reduced pro rata to bring

the discretionary funding up to the required level. Because AIP has been funded since FY2001 at

historically high levels, the minimum discretionary fund provision has not been a factor in AIP

funding. If, however, AIP’s budget is reduced substantially or if the entitlements are increased

substantially, the appropriate minimum discretionary fund level may need to be reconsidered.

“Airlines Seek Reduction in AIP Funding for Small Airports,” The Weekly of Business Aviation, Nov. 7, 2005: 212.

Ibid.

Airports smaller than medium hub are airports that enplane less than 0.25% of the total national enplanements.

Altogether they account for just under 11% of the total national of enplanements (2005-2009 NPIAS, p. 5).

Recently the Air Transport Association (ATA), which represents the major air carriers, argued that the current AIP

entitlements and set-asides provides nearly one third of federal airport grants to airports that provide no commercial

service. The ATA argued that such expenditures would be more appropriately funded from general fund revenues than

from the airport and airway trust fund, which supports AIP.

ȱȱȱ

Řřȱ

ȱ£Ǳȱȱȱ ȱȱȱ

ȱȱ

Along with the acceptance of AIP funds come certain obligations (generally referred to as

assurances) that airports must agree to. These assurances include the obligation to maintain and

operate their facilities safely and efficiently, as well as more specific obligations such as not to

discriminate against any class of air system users43, to adhere to Davis-Bacon prevailing wage

requirements, and to use airport revenue solely for spending on airport operations and capital

costs. Proposals to alter the AIP grant assurances can be expected to arise during the

reauthorization debate. For example, the ACI/NA is seeking a bill that “simplifies airport grant

assurances including reforms that permit airports to use non aeronautical revenue sources to

attract new and competitive air service to their communities.” Supporters of maintaining the grant

assurances generally argue that they not only help establish and enforce federal policy priorities

but also insulate airports from local efforts to limit or shut down airport operations (for example,

because of noise concerns or for land development).

ȱȱ ȱ

Airport noise policy is linked to airport development because airport noise is a major factor in

local resistance to airport capacity projects. One issue is whether to again raise the AIP noise

compatibility set-aside (Vision 100 raised the set-aside to 35%).44 Funding eligibility issues could

also arise. One is whether the FAA should be granted the flexibility to use AIP funds for noise

mitigation projects that are outside the 65 decibel noise impact areas. Another issue is making the

planning for noise mitigating arrival and departure operational (air traffic control) procedures

eligible for AIP funding. In what was perhaps the most significant expansion of AIP noise funding

eligibility, Vision 100 authorized the FAA to make grants for land use compatibility planning and

projects around large and medium hub airports that have not submitted a part 150 noise

compatibility plan, as was previously required. The provision is limited to grants that are awarded

through FY2007. Congress may wish to review this provision and extend or modify it, or allow it

to lapse.

ȱȱ

Vision 100 raised the federal share from 90% to 95% for airports smaller than large and mediumhub and airports in states participating in the state block grant program,45 but included a sunset

clause that returns the federal share back to 90% after 2007. Should the federal or FAA budget be

constrained or held at current levels Congress may wish to consider adjusting the federal share.

The federal share for most projects at large and medium hub airports is 75%.

For example, against cargo or commuter aircraft, or night time flight operators.

For a more extensive discussion of noise issues see chapter “Energy and Environmental Considerations,” later in this

report.

Under the state block grant program participating states (Illinois, Missouri, North Carolina, Michigan, New Jersey,

Texas, Wisconsin, Pennsylvania, and Tennessee) administer the AIP funding of nonprimary commercial service,

reliever, and general aviation airports.

ȱȱȱ

ŘŚȱ

ȱ£Ǳȱȱȱ ȱȱȱ

£ȱ

The Airport Privatization Pilot Program authorizes the FAA to exempt up to five airports from

certain federal restrictions on the use of airport revenue. Participating airports may be exempted

from such requirements as repayment of federal grants. During the nine years since the

application procedures were published only one airport, Stewart International Airport in New

York, has obtained an approved exemption.46 Congress may wish to review the pilot program.

Although most U.S. airports are public entities, it is noteworthy that nearly all airport activities

are carried out by private firms working under contract arrangements for the airport owners. The

City of Chicago recently expressed interest in offering Midway Airport up for a long term lease.

It has not yet applied for a privatization exemption, however.

ȱ£ȱ

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

medium hub airports to opt out of the AIP program in favor of unrestricted or higher PFC

financing. This would, in the view of some airport executives, give them the flexibility they

would prefer to have in managing their airports. These airports would no longer be bound by all

of the grant assurances that are currently required of participants.

ȱ¢ȱȱ¢ȱ

Vision 100, included a provision that repealed the language of the Federal Aviation

Reauthorization Act of 1996 (P.L. 104-264) that permitted the use of AIP and PFC funds for

security related improvement of facilities and the purchase or deployment of equipment for

security purposes. Vision 100 did, however, allow for use of AIP formula funds for the

replacement of baggage conveyor systems, and the reconfiguration of terminal baggage areas,

necessary to install bulk explosive detection devices. Such use, however, has been specifically

prohibited each year by appropriators in the legislative language for Grants-in-Aid for Airports in

recent transportation appropriations acts. Despite this prohibition, some still view AIP as a

potential source of funding for certain security-related airport improvements in the future.

¢ȱȱ ȱǻ ǼȱȱȱȱřŞŖǱȱ ȱȱ ȱ

Some predictions of the rapid growth of a new type of aircraft, the very light jet (jets with a

takeoff weight less than 12,500 pounds that can land on a 3,000 foot runway), have, in turn led to

concerns that increased airport funding will be needed to accommodate them. Even if the

optimistic estimates of the speed of introduction of VLJs pan-out, given that VLJs have been

specifically designed to operate at most existing general aviation airports, existing airport

facilities should be able to handle the traffic. If, however, the advent of VLJs leads to increasing

demands for installing all weather capabilities at small airports or if insurers place requirements

on VLJ use, for example that VLJs only be used at airports with runways longer than 3,000 feet,

the demand for AIP funded improvements at small airports could increase over time. As

mentioned previously, small airports are more dependent on AIP funding for their capital projects

The lease for this privatized airport was recently put up for sale by its United Kingdom-based holder, National

Express Group (NEG), after seven years of a 99-year lease.

ȱȱȱ

Řśȱ

ȱ£Ǳȱȱȱ ȱȱȱ

than larger airports. The potential impact of VLJs across the entire national airspace system is

discussed further in the section on “Accommodating Future Airspace Users”.

More likely to have an impact on AIP funding in the short term is the Airbus super jumbo A380.

The GAO identified 18 U.S. airports making changes to accommodate the A380 at an estimated

cost of roughly $927 million. These airports identified AIP as the planned source for 50% of these

costs and PFCs for another 21%.47 Some policy makers have expressed opposition to using

federal funding for these A380-related projects.

ȦȱȃȱȄȱ

Historically, Congress has not earmarked AIP discretionary funding in the manner typical to

highway or transit appropriations where specific projects have specific dollar amounts designated

in the language of the appropriations bills or report. Since FY2001, dollar amounts and project

descriptions have usually been specified in the appropriations bill conference reports. One of the

issues related to the earmarking is the impact it has on the grant application process. Another is

the impact of the earmarking on the availability of limited discretionary funds for national

priorities such as the operation evolution plan (OEP).

ȱ¢ȱȱ ȱ

The PFC is a local tax imposed, with federal approval, by an airport on each boarding passenger.

The basic PFC issue is whether to raise the $4.50 per emplaned (i.e., boarding) passenger ceiling

or to eliminate the ceiling all together. Airports have long argued for elimination of the cap but

would also be pleased with an increase of some sort. Although PFC revenues can be used for a

broader range of projects than AIP, some airport advocates argue there is still room for more

flexibility in PFC eligibility requirements. For example, some would like more freedom to use

PFC funds on off-airport projects, such as transportation access projects. Airports would also like

the application process to be streamlined. Additionally they would also like to have the

competition plan requirement that is placed on large and medium hub airports that charge PFCs at

the $4.50 level eliminated. Air carriers and passenger advocates will probably oppose an increase

in the PFC. Airlines feel that the passenger taxes have become a large enough component of the

total ticket price that they constrain the airlines’ pricing ability.

ȱȱ ȱ

Historically, bonds have been a major source of funding for capital projects at primary airports.

Because most airports are owned by public authorities, they can seek funds in the tax-exempt

bond market. One change sought by ACI-NA would be to make tax exempt airport bond income

no longer subject to the alternative minimum tax (AMT). This would make airport bonds more

attractive to investors. On the negative side, the change would cost the U.S. Treasury money.

Some would argue it would make more sense to change the AMT as part of a tax bill rather than

as a specific exemption provided for income on airport bonds in an FAA reauthorization bill.

U.S. Government Accountability Office, Commercial Aviation: Costs and Major Factors Influencing Infrastructure

Changes at U.S. Airports to Accommodate the New A380 Aircraft, “ GAO-06-571” Washington, DC: GAO, 2006.

Available at

http://www.gao.gov/new.items/d06571.pdf.

ȱȱȱ

ŘŜȱ

ȱ£Ǳȱȱȱ ȱȱȱ

Recently there has been interest in using private activity bonds for airport development. Private

activity airport bonds could allow a private entity to enter the tax-exempt bond market to raise

funding for a capital project at a public use airport. Generally, it is envisioned as facilitating

public-private partnerships. As a possible precedent, the recently passed surface transportation

act, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: a Legacy for Users (P.L.

109-59; SAFETEA-LU), allowed for up to $15 billion in private facility bond funding for

highways or freight transfer facilities.48 The Congressional Budget Office (CBO), the Office of

Management and Budget (OMB) and the Treasury Department, however, have generally opposed

bonding as adding additional government borne costs to the airport improvement process.49

ȱȱȱȱȱȱȱȱ

Faced with rising operational costs and future funding needs for infrastructure enhancements and

system expansion, the FAA and Congress have made the identification of methods to reduce or

control operational costs a priority over the last few years. Besides general measures to conserve

resources, the FAA’s approaches to controlling operational costs mostly fall into two general

categories: (1) the consolidation of facilities and functions, and (2) the outsourcing or

privatization of certain operational components. Additional options for controlling costs may

involve shifting certain operational functions and costs onto private-sector users of the NAS and

leveraging private-sector capabilities through government-industry partnerships, or other costsaving arrangements.

ȱȱȱȱȱ

The FAA is currently in the process of consolidating administrative and support staff in its nine

functional service area offices for terminal and en route support services and technical operations

into three consolidated regional facilities, in Seattle, WA; Fort Worth, TX; and Atlanta, GA. The

FAA is also consolidating its flight services information area offices for the lower 48 states to a

single facility in Kansas City, MO. Flight service information for Alaska will continue to be

coordinated out of the Anchorage office. The FAA selected these sites for placing its consolidated

area offices primarily based on costs, but considered a variety of quality of life factors for

employees. The FAA estimates that it will save between $38 and $41 million between FY2006

and FY2015 by relocating about 315 employees to areas with lower costs of living and lower

locality pay rates.50 Further, by reducing facilities-related costs, the FAA anticipates that total

savings over next 10 years, from its overall consolidation of administrative and support functions,

will total between $360 and $460 million.51

For a description of the Federal Highway Administration program see:

http://www.fhwa.dot.gov/ppp/private_activity_bonds.htm.

CBO reiterated this position at recent (September 27, 2006) House Aviation Subcommittee hearings on Financing

Options for FAA and Redesign of the Air Transportation System. GAO also expressed the reasons for its concerns

about the costs of bonding. See GAO. National Airspace System Modernization: Observations on Potential Funding

Options for FAA and the Next Generation Airspace System. “GAO-06-1114T” Washington, GAO, 2006. p. 16-17.

Federal Aviation Administration, Air Traffic Organization (ATO) Service Area Office Location Study, October 2005.

Federal Aviation Administration, Air Traffic Organization Administrative & Staff Support Function Restructuring

(Undated).

ȱȱȱ

Řŝȱ

ȱ£Ǳȱȱȱ ȱȱȱ

As the ongoing personnel transitions are expected to be fully completed by December 2006, the

current service area consolidation plan is likely to be largely completed before Congress

considers FAA reauthorization legislation. Therefore, the issues that may arise are likely to center

on whether the FAA and the Air Traffic Organization’s (ATO’s) approach and implementation of

this consolidation effort can serve as an effective model for future plans of this kind. One option

Congress might consider is whether an analysis of the “lessons learned” from this consolidation

process, conducted by an auditing agency such as the Department of Transportation’s Office of

Inspector General (DOT OIG) or the Government Accountability Office (GAO), could identify

areas for improvement and establish a framework for conducting future consolidation efforts.

Effective models for consolidation may aid the FAA in considering future consolidation efforts,

such as consolidation of certain air traffic service functions, which are likely to be much more

complex and could be much broader in scope compared to consolidation efforts carried out thus

far. Consolidation of air traffic services has been identified by some as a potential means to adapt

to anticipated changes in the controller workforce resulting from large scale retirements of

experienced controllers as well as potential changes in controller job functions, and to address

staffing shortages, particularly at certain en route facilities.

Congress may also have a particular interest in the FAA’s future consolidation plans of this kind

because relocation of federal workers is likely to have impacts on regions and congressional

districts. Even if the size of the job losses in a particular location have a minimal impact on the

local economy, they can be viewed as a symbolic loss to a community in terms of losing federal

jobs, and the perception that the federal government viewed the particular locale less favorably

than other sites. Placing regions and districts in competition for consolidated federal facilities has

the potential of creating large political pressures that can complicate the location selection

process. Some observers have suggested that the military base realignment and closure (BRAC)

process is a well established model for conducting such assessments of proposed facility

consolidation, and have suggested that the FAA develop or adopt a similar approach for its future

assessments of consolidation proposals.52 During the upcoming reauthorization debate, Congress

may consider whether utilizing such a process could benefit the FAA as it continues to look

toward consolidation of facilities and functions as a means to control costs and adapt to

anticipated changes in air traffic services under NGATS, or whether such a requirement would

prove too burdensome and time consuming.

Because of the specific interest in how consolidation might apply to air traffic control facilities,

the FAA’s current efforts to consolidate weather support functions at air traffic control facilities

may be of particular interest. How this ongoing consolidation effort unfolds may provide insight

into how FAA might go about the much larger scale process of consolidating various air traffic

control facilities and functions. The FAA has been actively pursuing the consolidation of center

weather service units (CWSUs) that provide weather forecasting to en route air traffic control

facilities. Initial plans for consolidation called for centralizing weather support functions,

currently provided to the FAA by the National Weather Service (NWS), into a network of Joint

Aviation Weather Sites (JAWS), intended to provide continuous (24/7) weather support for all

FAA air traffic facilities, not just en route centers.53 Presently, the NWS is conducting prototype

Frank L. Frisbie, “Give NAS a BRAC,” 2nd National Airspace System Infrastructure Management Conference: NAS

Infrastructure in Transition, June 13, 2006, Washington, DC: The National Center of Excellence for Aviation

Operations Research (NEXTOR).

Dave Rodenhuis and Danny Sims, FAA ATO, Restructuring Plans for the CWSUs: A Vision for Improved Weather

Forecast Services, Federal Aviation Administration: Washington, DC (Undated).

ȱȱȱ

ŘŞȱ

ȱ£Ǳȱȱȱ ȱȱȱ

testing to demonstrate how it might provide the FAA with the remote service capabilities sought.

But, the plan is controversial, and it has been criticized by the National Air Traffic Controllers

Association (NATCA) who fear that air traffic controllers will lose critical on-site weather

support, and by representatives of NWS employees who fear that the consolidation plans will

result in lost jobs for NWS meteorologists, and possible wholesale competitive sourcing of air

traffic weather support functions.54 These entities have made their concerns known to various

Members of Congress, and the FAA’s plans are likely to come under considerable congressional

scrutiny. However, from the perspective of examining overarching issues for FAA

reauthorization, the current weather support service consolidation initiatives are likely to be of

further congressional interest to the extent that they can provide insights into the manner that

FAA might go about consolidation on a broader scale.

Again, because it appears that FAA’s consolidation efforts do not fit into any readily identifiable

overarching strategy, the proposal of adopting a BRAC-like process to develop a cohesive

strategy for consolidating facilities and functions may receive greater attention during the FAA

reauthorization process. Such a process may also serve to identify those functional elements

where competitive source selections may be an effective strategy for cost-saving.

ȱȱȱ£ȱȱȱ

While outsourcing, or competitive sourcing, of certain government functions has been a central

element of the President’s Management Agenda,55 the current administration has not promoted the

concept, advocated by some, of full privatization of air traffic services, as has been done in

Canada, Great Britain, Australia, and much of mainland Europe. Testifying before a

Congressional committee, FAA Administrator Marion Blakey asserted:

“The whole issue of privatization is an absolute red herring. [W]e are running, and very

proud to be running, a federal system of air traffic control. In my estimation, that is the way

it will stay. Certainly this Administration has no intention to privatize air traffic control or to

change the status of our controller workforce overall and the way we approach the system.”56

That said, the FAA has instead focused on identifying smaller scale services and programs that

are more easily converted to contract operations. One example is the Federal Contract Tower

(FCT) program, which has been in place for some time and has incrementally expanded over the

years. Under the FCT, airport towers are staffed by private controllers under contract to the FAA.

Another example, the recent outsourcing and ongoing consolidation of all automated flight

service stations (AFSSs) in the lower 48 states and Hawaii, was conducted as a single large-scale,

public-private sourcing competition, which was awarded to a private contractor in 2005. AFSS

facilities provide weather and flight planning information and assistance to pilots and mostly

support general aviation users. While some in Congress opposed this large-scale conversion of

federal jobs to the private sector, they were ultimately unsuccessful in getting legislation passed

to prevent the FAA from moving forward with the contracting of these AFSS positions.

Beth Dickey, “Turbulent Weather,” Government Executive, August 1, 2006, pp. 26-27.

See CRS Report RS21416, The President’s Management Agenda: A Brief Introduction, by (name redacted).

Transcript of Statement by Marion Blakey, Administrator, Federal Aviation Administration, in Committee on

Transportation and Infrastructure, U.S. House of Representatives. The Status of the Air Traffic Controller Workforce

(108-73), Hearing before the Subcommittee on Aviation of the Committee on Transportation and Infrastructure, House

of Representatives, 108th Cong., 2nd sess., June 15, 2004, p. 28.

ȱȱȱ

Řşȱ

ȱ£Ǳȱȱȱ ȱȱȱ

In general, most FAA positions, including air traffic controller positions, are considered

commercial and not inherently governmental in nature. These jobs could, therefore, be outsourced

at the FAA’s discretion following guidelines set forth in the Federal Activities Inventory Reform

Act of 1998 (FAIR) (P.L. 105-270) and OMB Circular A-76.57 Hence, specific initiatives to

outsource certain functions or programs within the FAA do not require additional authority, and

therefore typically are not central issues in the reauthorization debate. However, as in the case of

the debate over protecting air traffic functions from privatization during the Vision 100

reauthorization process and the introduction of legislation in the 109th Congress to prevent the

outsourcing of flight service station positions, Congress may opt to consider limitations on the

outsourcing of FAA functions. While the intent of outsourcing is to control escalating costs within

the FAA, outsourcing initiatives are always likely to be contentious because they involve

conversion of federal jobs to the private sector and large scale outsourcing efforts could impact

morale and productivity among federal workers.

Under current policy, the FAA continues to expand the federal contract tower program, and

consolidation of automated flight service station functions is underway under the private contract

awarded in 2005. While these initiatives are not likely to be the focus of debate during the

upcoming FAA reauthorization, they illustrate the FAA’s approach to competitive sourcing and

may provide a model for other FAA functional areas, such as aeronautical charting and operating

and maintaining the FAA’s telecommunications infrastructure, to streamline operations and

improve cost savings through competitive sourcing. Therefore, these ongoing outsourcing

programs are examined in further detail below.

ȱȱȱ ȱǻǼȱȱ

The FCT program awards FAA contracts for staffing certain airport control towers with private

contract controllers. During congressional debate over Vision 100 (P.L. 108-176), outsourcing of

air traffic services under the FAA’s Contract Tower Program became a highly contentious issue.

Concerns were raised that further expansion of the program could escalate to wide-scale

privatization of larger components of the air traffic system, such as en route and terminal area

facilities.58 These concerns were quelled by an Administration agreement to put any further

privatization of FAA functions on hold during FY2004. The FCT has continued to expand to

some degree since, and it currently encompasses about 45% of all federally funded towers in the

United States.

The FCT program came into existence in 1982—initially as a pilot program at five airports—in

an effort to provide continued air traffic services at low-activity towers in the wake of the

nationwide air traffic controller strike and subsequent dismissal of striking FAA air traffic

controllers. For the first twelve years, the program remained relatively small, growing to 27

towers by 1993. Nonetheless, the program gained the attention of the National Performance

Review (NPR)—an initiative spearheaded by then-Vice President Al Gore that later became

known as the National Partnership for Reinventing Government—which endorsed the program in

1993 as an effective means of reinventing government services and recommended its expansion.59

See CRS Report RL31024, The Federal Activities Inventory Reform Act and Circular A-76, by (name redacted).

FAA air traffic control is currently segmented into en route, terminal area, and airport tower control functions and

facilities. En route facilities are called centers and usually handle traffic in high-altitude airspace, while terminal area

facilities refer generally to approach control facilities that control arrivals and departures to and from major airports.

Vice President Albert Gore’s National Performance Review. “From Red Tape to Results: Creating a Government

(continued...)

ȱȱȱ

řŖȱ

ȱ£Ǳȱȱȱ ȱȱȱ

Beginning in 1994, the contract tower program rapidly expanded to 160 towers by the end of

FY1997.60

The FCT program was advocated by the NPR largely because of its perceived effectiveness as a

cost-saving initiative. These cost savings were quantified in a 2003 audit by the DOT OIG. The

audit compared operating costs at 12 contract towers to operating costs at comparable FAA-run

towers and found the average annual cost savings of the contract tower program to be about

$917,000 per tower.61 The DOT OIG determined that the cost savings under the contract tower

program are primarily due to lower staffing levels and lower salaries in comparison to similar

FAA-staffed facilities. The same analysis was conducted by the FAA in 1999 using FY1998 data,

when it was determined that the average annual cost savings of the contract tower program to be

$787,000 per tower. The DOT OIG attributed the increase in cost savings to increased costs

associated with the controller pay system that was implemented in FY1998.

While the National Air Traffic Controllers Association (NATCA) has continued to challenge the

FCT program on legal grounds, the program has continued to expand, and it now includes more

than 230 airport control towers. Beginning in 1999, Congress funded a cost-sharing program

allowing towers that would not otherwise meet the FAA’s cost-to-benefit criteria to remain

operational so long as needed funding above the determined cost/benefit level are provided by

non-federal sources. As of January 1, 2006, more than 30 airports were included in the contract

tower cost-sharing program.62

With regard to safety, repeated audits of operations at contract towers conducted by the DOT OIG

have indicated that these facilities provide a level of safety comparable to that of FAA-staffed

towers. NATCA has challenged these findings, claiming that contract towers have fewer

controllers, provide less training, and subject personnel to inadequate work conditions. NATCA

contends that these conditions result in a degradation in the level of safety and service that

controllers are able to provide.63 While the DOT OIG did conclude that contract towers are

staffed with fewer controllers, none of these other claims have been substantiated by DOT OIG

findings or any other independent assessment of contract towers to date.

In 1999, Congress mandated an FAA study to examine further expansion of the FCT program to

include FAA-run towers without radar capability. While FAA took a narrow view of this

requirement and identified only 41 airport towers without any radar capability whatsoever, a

subsequent review by the DOT OIG in 2000 identified an additional 30 airports for possible

inclusion that had limited radar monitoring capability and provided limited aircraft separation

services under instrument flight rules (IFR), but were, in its opinion, sufficiently similar to other

airport towers already in the FCT program.64 NATCA, however, raised significant objections to

(...continued)

that Works Better and Costs Less.” September 7, 1993. Government Printing Office: Washington, DC.

Office of Inspector General, U.S. Department of Transportation. Federal Contract Tower Program, Federal Aviation

Administration. Report Number AV-1998-047. May 18, 1998.

Office of Inspector General, U.S. Department of Transportation. Safety, Cost, and Operational Metrics of the

Federal Aviation Administration’s Visual Flight Rules Towers. Report Number AV-2003-057, September 4, 2003.

U.S. Contract Tower Association, 2005 U.S. Contract Tower Association Annual Report, Alexandria, VA. Undated.

National Air Traffic Controllers Association. FACT SHEET: FAA Reauthorization and the Contract Tower Program.

Undated.

Office of Inspector General, U.S. Department of Transportation. Contract Towers: Observations on FAA’s Study of

Expanding the Program. Report No. AV-2000-079, April 12, 2000.

ȱȱȱ

řŗȱ

ȱ£Ǳȱȱȱ ȱȱȱ

the proposal to further expand the contract tower during debate over reauthorization of the FAA

in 2003 in part because 11 of the 71 airports cited in DOT OIG’s report were among the 50

busiest towers in the United States.65

Primarily because the staffing levels and costs of federally-operated towers are significantly

greater than those of contractor-operated towers, the contract tower program has largely been

viewed as an effective means for funding the continued operation of certain towers that would

otherwise be cost prohibitive to operate as FAA-run facilities. Audits and reviews of the program

have not found any meaningful differences in the quality and safety of air traffic services

provided by contract and subcontracted towers under this program compared to FAA-run towers.

Ongoing issues for continuance and possible expansion of the contract tower program include

continued oversight of costs to ensure that the cost efficiencies that have made the program a

success are maintained or improved upon and determination of whether all relevant factors such

as the volume and complexity of operations are fully considered and evaluated in terms of safety,

efficiency, and cost savings when new towers are considered for inclusion in the program.

ȱȱȱȱȱ

In 2005, the FAA completed one of the largest public-private competitive source selection

processes ever conducted in the federal government, covering the functions of about 2,500 federal

positions at 58 automated flight service station (AFSS) facilities, in all states except Alaska.

These facilities provide pre-flight and in-flight weather briefings and flight planning services,

mostly to general aviation operators, but are not directly involved in air traffic separation

functions. Lockheed-Martin Corporation of Bethesda, MD won the source selection process and

was awarded a five-year contract with an additional five-year renewal option to manage and

operate AFSS facilities throughout the United States, except in Alaska. The FAA estimates that,

over the 10-year period, transitioning the AFSS facilities to Lockheed-Martin under a cost savings

plan that includes considerable consolidation of facilities, will save the government a total of $2.2

billion, which amounts to a 56% reduction in operating costs.66

Lockheed-Martin’s plan for consolidating the AFSS functions is underway and once completed

will reduce the number of facilities from 58 to 20 and will include three larger hub facilities that

will coordinate services for the western, central, and eastern sectors of the country. The sites will

be linked by modernized computing capabilities allowing access to local airport and airspace

conditions at all facilities, a weakness of the older system where local information was often only

available to the nearest flight service station.

While this consolidation will result in the elimination of a considerable number of AFSS

positions in the end state, the transition plan was designed to minimize impacts on displaced

federal employees. Each active AFSS specialist working for the FAA at the time of the transfer of

operations to Lockheed-Martin was guaranteed a job with Lockheed-Martin for at least three

years. Prior to the transition, the FAA used separation incentives to downsize staff in preparation

for the transition to minimize the need for involuntary separations.

National Air Traffic Controllers Association. FACT SHEET: FAA Reauthorization & the Contract Tower Program.

Federal Aviation Administration, A-76 Performance Decision Announcement, Text of Remarks by Dennis

DeGaetano, Vice President of Acquisition and Business Services, February 1, 2005.

ȱȱȱ

řŘȱ

ȱ£Ǳȱȱȱ ȱȱȱ

Despite these steps, the reorganization and shift to contracted operations had a notable impact on

those federal employees nearing retirement eligibility. Recognizing that some displaced AFSS

employees close to reaching retirement eligibility were significantly disadvantaged by the

transition to contract operations, Congress approved an amendment to the FY2006 Transportation

Appropriations Act (P.L. 109-115), allowing involuntarily separated AFSS employees that were

roughly within two years of retirement to work under the Lockheed-Martin contract as temporary

federal employees until they reach federal retirement eligibility, provided that they would do so

prior to October 4, 2007. This language was inserted after attempts to block the use of

appropriations to fund the outsourcing of flight service functions failed to gain sufficient support

in Congress.

In the context of the FAA reauthorization, Congress may examine the AFSS station competitive

source selection and transition processes to assess whether lessons learned from these experiences

could be applied to other agency consolidations and competitive sourcing initiatives. The DOT

OIG is currently conducting a full audit of the AFSS transition process to assess whether the FAA

has implemented effective plans and controls for transiting the flight stations to contract

operations, realizing anticipated cost savings, and ensuring that the operational needs of users

continue to be met. The results of this audit may be of particular interest to Congress in the

context of FAA reauthorization.

ȱȱ

While the FAA has not announced any additional plans to conduct competitive sourcing on the

scale of the AFSS competition, one FAA function that may be a likely candidate for future

competitive sourcing is the aeronautical charting function, which produces and distributes charts

and flight information publications in hardcopy and electronic formats for system users. The

aeronautical charting function is comparably small in scale however, consisting of about 220

positions, which is less than one-tenth the size of the AFSS function. The FAA assumed

responsibility for aeronautical charting from the National Ocean Service (NOS), a component of

the National Oceanic and Atmospheric Administration, in FY1999. Presently, the FAA’s National

Aeronautical Charting Office (NACO) publishes and distributes civil aeronautical charts and

flight information publications to both government and public users.

In recent years, the move toward digital geospatial data and geographic information systems

(GIS) has provided for easier consolidation and sharing of geospatial data used for, among other

things, creating the FAA’s aeronautical chart products. Most observers believe that NACO has

done well in keeping pace with these technological changes thus far. However, as aviation moves

more and more toward digital charts and flight information publications in the cockpit, NACO

may find itself taking on new roles of developing digital products to interface with new avionics

equipment and technology at all levels of aviation, rather than simply providing this information

in hard copy and digital renditions to end users. Among airlines and other commercial operators

already using digital flight information and chart products extensively, commercially provided

data—used in flight management systems, electronic flight bags, and so forth—accounts for a

large proportion of the disseminated data. Even with respect to hard copy charts and flight

information publications, NACO products for the most part already compete in the market with

products produced by commercial vendors, and have done so virtually since the government

began disseminating aeronautical charts more than70 years ago. Such direct competition between

government-provided and commercial vendor products is often considered a telltale sign of

whether a particular government function should be considered for possible competitive sourcing.

ȱȱȱ

řřȱ

ȱ£Ǳȱȱȱ ȱȱȱ

Outsourcing or competitive sourcing of NACO functions, however, raises safety and security

concerns for some. In particular, unions representing NACO employees and lawmakers from

Maryland—where NACO is principally located—have argued that because aviation charts are

essential for flight safety, national security, and compliance with FAA regulations, the NACO

function should be kept under direct control of the FAA.67 Advocates for keeping NACO as a

government run function also argue that because it is a highly efficient operation, it would be of

little benefit to privatize it. During hearings preceding the last FAA reauthorization, the Aircraft

Owners and Pilots Association (AOPA), another advocate for keeping NACO a federal function,

sought legislative language to have NACO positions reclassified as “inherently governmental.”

AOPA asserted that NACO provides pilots with essential sources of information for the safety of

flight, national defense, and compliance with FAA regulations, and therefore should not be

classified as commercial.68 Small general aviation users that typify AOPA’s membership may also

be concerned that if aeronautical charting functions were contracted out, they may be forced to

pay more for charts and other products to fully cover the costs associated with updating and

maintaining geospatial databases and creating and disseminating chart products. As previously

stated, Congress did not include legislation to protect any FAA functions from privatization or

competitive sourcing, including NACO functions, during that last reauthorization cycle.

Because NACO functions closely resemble aeronautical charting functions provided by at least

one commercial vendor, it may be difficult to make a strong case that such functions should

continue to be government-run. If Congress were to task the FAA with identifying functions that

are readily amenable to competitive sourcing competitions, NACO functions already have a

commercial corollary and therefore could be a prime candidate for inclusion. However, the small

size and relative efficiency of the NACO organization may render any attainable cost savings

from outsourcing relatively small, given that the total NACO budget is only about $50 million

annually.

ȱȱ ȱ

Whereas the NACO is a relatively small, compartmentalized function that could be relatively

easily scoped for a public-private competition, many other elements of the FAA are much more

complex to identify and parse out. Such may be the case with the FAA Telecommunications

Infrastructure (FTI), the backbone of the FAA’s intra-and inter-facility communications capability

to support air traffic services. According to recent GAO testimony, some experts have been

advocating full outsourcing of operations and maintenance functions for the FTI as a possible

cost-saving option.69

While the FTI program is still in developmental stages, it is expected to replace aging FAA

telecommunications equipment used for air traffic control mission support. The FAA’s stated

approach to engineering the FTI system will be consistent with a performance-based services

Amelia Gruber. “Lawmakers, Union Push To Keep Flight Mapping In Government,” Government Executive Daily

Briefing, September 2, 2003.

Statement of Phil Boyer, President, Aircraft Owners and Pilots Association, Before the Committee on Transportation

and Infrastructure, Aviation Subcommittee, U.S. House of Representatives, Concerning FAA Reauthorization, April 9,

2003.

U.S. Government Accountability Office, Statement of Gerald L. Dillingham, Ph.D., Director Physical Infrastructure

Issues, Testimony Before the Subcommittee on Transportation, Treasury, the Judiciary, Housing and Urban

Development, and Related Agencies, Committee on Appropriations, U.S. Senate Air Traffic Control: Status of the

Current Modernization Program and Planning for the Next Generation System, May 4, 2006, GAO-06-738T.

ȱȱȱ

řŚȱ

ȱ£Ǳȱȱȱ ȱȱȱ

contract under which FAA will neither own nor operate any of the network equipment or

software. However, scoping the program and meeting FAA user requirements for sustainment and

maintenance will likely require close collaboration between the FAA and the contractor team led

by Harris Corporation. Due to the size and complexity of the FTI, there is a substantial amount of

risk associated with both the development and the continued operations and support of FAA

operational telecommunications needs. Therefore, the FTI program will likely need to be

monitored closely, but if successful, might serve as a useful model for government contracts to

support FAA operations in the NGATS. Therefore, details of the FTI contract may be of particular

interest to Congress in the context of FAA reauthorization.

ȱȱȱȱ

Designees are individuals that are neither government employees nor government contractors,

that are authorized or designated by the FAA to carry out regulatory functions. Examples include

designated medical examiners that issue medical certification, pilot examiners that issue pilot

certificates and ratings, and manufacturing representatives that certify the airworthiness of

production aircraft. The use of designees has long been a part of the FAA’s cost control strategy.

Presently, FAA regulatory oversight functions are supplemented by more than 11,000 designees,

including about 4,800 conducting aircraft certification, about 1,500 involved in flight standards,

and almost 5,000 designated aviation medical examiners. While the use of designees is a longstanding policy at the FAA and it is widely considered an effective means for controlling

operational costs, it has been considered controversial in some cases. While the use of aviation

medical examiners that conduct medical exams on behalf of the FAA and check airman that

conduct pilot tests for certificates and ratings is less controversial, the use of designees in aircraft

design and manufacturing organizations and for oversight of airline operations and maintenance

has raised some concerns among aviation safety experts. Also, the GAO recently identified FAA’s

inconsistent monitoring and inadequate oversight of designees as significant weaknesses in these

programs.70

Although the use of designees provides an effective means to control costs, safety oversight

concerns may impose some limitations over the extent of using designees. To effectively utilize

designees as a cost control measure and address these safety oversight concerns, the FAA may

consider options to target designee use and give priority to qualified FAA retirees to perform

designee functions. For example, the FAA may seek to expand the use of designees at

manufacturer and airline facilities that have clearly demonstrated that they have effective safety

management programs in place. By increasing the use of designees among these operators and

facilities, the FAA may be able to better align its inspector workforce to concentrate more on

sectors of the aviation industry where more extensive safety concerns have been identified, such

as at contract repair stations and among smaller commercial operators. By using qualified former

FAA employees in designee roles, the FAA may be able to further improve the quality of its

designee workforce. Also, by increasing the number of federal annuitants with aviation

experience in the designee workforce, the FAA may be able to reduce concerns over designees

being mostly dependent on their salaries or compensation received from the companies or entities

that they are overseeing on behalf of the FAA.

U.S. Government Accountability Office, Aviation Safety: FAA Needs to Strengthen the Management of Its Designee

Programs, October 2004, GAO-05-40.

ȱȱȱ

řśȱ

ȱ£Ǳȱȱȱ ȱȱȱ

ȱȱȱȱ

Given the large wave of controllers becoming eligible for retirement and mandatory retirement

for most operational controllers at age 56, adequate controller staffing is likely to be a significant

issue in the debate over FAA reauthorization. Vision 100 required the FAA to develop a controller

workforce strategy to address the issue of the pending controller retirement wave, which is

largely attributable to large scale hiring conducted in the early 1980s to fill positions left vacant

by President Reagan’s firing of striking controllers in 1981. The FAA’s strategy for controller

staffing, issued in December 2004, relies primarily on an accelerated rate of hiring of controllers

through 2014 and achieving increased controller productivity through a variety of human resource

management initiatives.71

The FAA’s projections show a total of just over 11,000 active controllers—roughly 75% of the

2005 workforce—retiring or otherwise leaving the controller ranks between 2005 and 2014.

About 8,250 of these losses will specifically be due to retirements. During this period, the FAA

plans to hire 12,500 controllers to replace controller losses and meet future system needs.72

Historically, the FAA had filled controller positions once they became aware that a controller was

planning to leave, which meant that there was usually little lead-time to hire replacements. The

strategy for addressing the impending wave of controller retirements is intended to be more

proactive. It involves a planned surge in hiring in the near-term, compared to historic hiring

trends, to put controller trainees into the pipeline so that they can replace retiring controllers on a

more accelerated pace given that it takes, on average, a little over three years for a controller to

become fully certified. This initial surge in hiring is anticipated to be followed by a steady flow of

new hires to keep pace with attrition rates (see Figure 2).

Federal Aviation Administration, A Plan for the Future: The Federal Aviation Administration’s 10-year Strategy for

the Air Traffic Control Workforce, December 2004.

Ibid.

ȱȱȱ

řŜȱ

ȱ£Ǳȱȱȱ ȱȱȱ

Figure 2. FAA Projections of Controller Attrition, Planned Hiring Rates, and

Anticipated Controller Staffing Levels

2000

0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

16250 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 1800

0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

16000 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 1600

0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

15750 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1400

0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

15500 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 1200

0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

15250 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 1000

0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

15000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 800

0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

14750 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 600

0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

14500 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 400

0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

14250 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 200

0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

14000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Number of

Hires/Retirements

Total On-Board

16500

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Fiscal Year

00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00

Total On-Board

Losses

New Hires

CRS compilation of data presented in Federal Aviation Administration, A Plan for the Future: The

Federal Aviation Administration’s 10-year Strategy for the Air Traffic Control Workforce, December 2004.

Source:

The FAA is also taking steps to implement a provision in the law that allows high-quality

controllers to remain in their positions for up to five years beyond the usual mandatory retirement

age of 56.73 The FAA has also taken steps to improve controller selection and training in order to

reduce washout rates during training, streamline the training process, and develop a high quality

workforce to replace retiring controllers. Simulation technologies are also being developed and

deployed to improve and provide greater automation and assessment capabilities in the controller

training environment. The FAA is continuing to work with universities through the collegiate

training initiative (CTI) to recruit and provide baseline training to the future generation of

controllers. Despite these steps, Congress may debate whether controller staffing standards and

projected staffing levels provide an adequate level of safety, and whether funding and initiatives

to train and place high quality controllers will adequately meet projected staffing needs over the

next several years. Congress may also consider options to allow CTI program graduates to enter

directly into on-the-job training. This approach may streamline controller training and could

significantly cut the FAA’s training costs, but questions remain regarding whether the CTI

program by itself would provide sufficient screening of prospective controllers, or whether initial

training at the FAA Academy is also needed to identify and weed out trainees not well suited for

controller careers.74

See 5 U.S.C. §8335(a).

Committee on Transportation and Infrastructure, U.S. House of Representatives. The Status of the Air Traffic

Controller Workforce (108-73), Hearing before the Subcommittee on Aviation of the Committee on Transportation and

Infrastructure, House of Representatives, 108th Cong., 2nd sess., June 15, 2004.

ȱȱȱ

řŝȱ

ȱ£Ǳȱȱȱ ȱȱȱ

Beside hiring new controllers, the FAA strategy also consists of improving controller

productivity. The FAA expects to achieve a savings of 10% by 2010 through better management

of controller shifts, greater flexibility in shift staffing, better management and oversight of

overtime and sick leave usage, reducing productivity losses due to medical restrictions and workrelated disabilities, and reducing the amount of time controllers spend on paperwork, union

business, and attending workshops, meetings, and conferences.75 Progress on these initiatives may

be of particular interest during congressional debate over FAA reauthorization.

The FAA asserts that the current situation is characterized more by staffing imbalances across the

system, rather than a system-wide staffing shortage.76 The FAA is addressing facility imbalances

in its controller workforce strategy by restricting transfers that do not maintain balanced staffing

objectives, and by offering voluntary reassignments to better balance staff allocations, particularly

at those en route facilities that are understaffed.

A greater challenge in improving controller allocations and maintaining an appropriate staffing

balance is reducing the number of on-the-job training failures among developmental controllers at

en route centers, particularly those assigned to the most demanding facilities. Congress may

consider whether better screening tools during initial training—such as simulation training and

evaluations—can serve to better identify controller aptitude and assign to busy en route centers

only those developmental controllers considered most likely to be successful in on-the-job

training at these facilities. Such tools could help eliminate controller washout at busy en route

terminals that results in transfers to smaller, less demanding terminal airspace. Increased use of

emerging air traffic automation technologies may also help to improve staffing im

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.