FAA readies for tight FY2006

 - October 31, 2006, 10:24 AM

With the airlines arguing that they pay for more than 90 percent of the ATC system but don’t account for 90 percent of its use, and with the FAA confirming that budget cuts will hamper its certification work, there wasn’t a lot of good news at the FAA’s industry budget briefing for FY2006 last month in Washington.

According to Air Transport Association executive vice president and COO John Meenan, “There are an awful lot of operators out there who are driving the [ATC] costs and are paying very little.” He said the airlines are “looking at a system model that treats all system users fairly.”

But Steve Brown, NBAA senior v-p of operations, countered that the current system “was not designed and built for [general aviation].” He said the general aviation industry wants to see cost accounting data before any changes are made to the method of FAA funding.

Agency Expects Certification Delays

Meanwhile, Peggy Gilligan, FAA deputy associate administrator for aviation safety (formerly regulation and certification), confirmed that cuts in the budget for Fiscal Year 2005 (which ends September 30) have already forced the FAA to slash its regulation and certification workforce by 300 employees, the result of which is a slowdown and sequencing of certification that will continue into FY2006.

“We’ve already notified all of our bigger manufacturers and operators that we need to have some time to sequence work for new certifications,” she said. That includes new operators, operators adding substantial new service or manufacturers applying for a new product.

“We have informed them all that within 90 days of their application, we will notify them when we will be able to sequence their work based on the availability of resources,” said Gilligan. She added that the FAA hopes to ameliorate the situation by using more designees. Currently, 94 percent of the FAA’s AMEs are designees, 79 percent of its aircraft certification staff consists of designees and 82 percent of the flight standards workforce is composed of designees.

With more than 6,100 full-time employees, the office of air safety is the second largest workforce in the FAA after controllers. Its three missions are to set regulation and certification standards, certify compliance and oversee continued operational safety. The dilemma for the air safety branch during times of budget shortfalls is that its primary mission has to remain the oversight of operational safety. “If you are in the system, you already pose some potential risk and we must be able to continue our review to see that people meet standards,” Gilligan said.

The second focus is to make sure the standards are consistent with the level of safety the agency is seeking to accomplish or the level of risk management that it is putting in place. The third priority is the area of new certification.

“The dilemma for our customers is that new certification is their bread and butter,” Gilligan acknowledged. “It is getting their product to market. It is a key for them to continue to be effective, even for airlines. Changes that they need to make are very much in the nature of new certifications.”

She said the FAA needs to be focused on the oversight of its existing operation first and then manage its new business. Getting new products into the market may be essential to a business model, she conceded, “but unfortunately it is not always consistent with our safety responsibilities.”

The FAA’s aviation safety branch received $30 million less than it requested for FY2005, requiring a cutback in regulation and certification employees through attrition. And even though President Bush’s FY2006 budget proposal contains funding for 97 new positions for regulation and certification, the agency still finds itself with about 200 fewer employees than it had at the end of FY2004.

“Assuming some of this will continue to be supported through the congressional [budget] action,” said Gilligan, “we will use whatever additional positions we get to backfill any safety-critical positions that have gone unfilled in 2005, and only then will we be able to look at some of the additional staffing that was intended originally for enhanced oversight for repair stations, for opening an office in China to support extensive certification work that is moving to China and for the air traffic oversight organization.”

Air Traffic Management

Russell Chew, COO of the FAA’s Air Traffic Organization (ATO), noted that the FAA historically has had unusually high overhead costs, and ATC accounts for about 70 percent of those costs. If the Airport Improvement Program is removed from the total FAA budget, air traffic overhead accounts for 87 percent of the agency’s total costs. But he told the attendees that the ATO is taking action to reduce its overhead.

“Even though we lost 382 controllers last year,” said Chew, “we lost more than 1,300 people in the entire air traffic organization, much of it in the overhead part of the organization. And we took steps to continue that activity into this year,” he added.

Nevertheless, the FAA must hire new controllers because of what Chew described as “a once every 20- to 25-year cycle of retiring controllers,” this time the result of the post-1981 PATCO strike when the agency hired a record number of controllers. He said the retirements and necessary hiring “impose a great deal of stress” on the organization just when it and the industry are undergoing a massive restructuring.

“We have to look at this very carefully,” he said, “because if you think about it, the opportunity and the stress will not reappear for another 25 years. So the decisions we make on productivity…will be felt for a long time.” He added that the challenge for the agency is to become strategy-driven rather than budget-driven.

Infrastructure Investments

Chew further pointed out that with lower ticket prices and more small regional jets, the FAA gets fewer aviation trust fund dollars per flight. That puts additional pressure on agency funding at a time when much of the air traffic infrastructure is 20 to 30 years old. He estimated the cost of modernizing and replacing the facilities to be more than $32 billion.

“Now if I replace the whole thing, we still have a $32 billion infrastructure; if you replace it differently you have a different [$32 billion] infrastructure,” Chew said. “And it’s going to determine your future for a long time.” He said that investing in this decaying infrastructure presents an opportunity that comes only when most of the facilities are old.

“And so we stand on a new threshold of opportunity,” Chew said. “How do we want the infrastructure of the new air transportation system to look, and how much will it cost? That will depend on what our requirements are and on what we decide to invest in.”

He asserted that the FAA has to work smarter by reducing and simplifying the size and complexity of the infrastructure, using it to increase productivity as well as the safety and capacity of the system.

“There is a future out there,” said Chew. “This future can be bright if we make the right decisions and investments. I think the window of opportunity is here, but it’s going to close. We’ve got to get it right.”

Productivity Enhancements

Brown, who joined NBAA from the FAA, said he was representing the larger views of the general aviation community and not just the association’s views. He said general aviation is looking for opportunities to work with the government to find a more cost-efficient and productive operation that serves its customers and the country as effectively as possible.

Noting that very light jets (VLJs) are “a coming phenomenon” and nobody knows how big a factor they will be in the ATC system, he said, “We certainly hope that in this FY2006 budget year they are certified to become the attractive tool that everybody thinks they will be.”

Brown suggested that with RVSM recently “doubling the en route real estate” at the altitudes that VLJs, regional jets and other aircraft will fly in, there certainly is capacity to accommodate them.

In that regard, he said, one of the items that can dramatically improve en route capacity as well as productivity within the air traffic management system is pilot/controller datalink.

“One of the elements that we haven’t seen featured prominently one way or the other in this budget request is datalink and what its future will be,” Brown said. “And that’s a very large question within the general aviation community. We see it as something that has had a lot of investigation and research done, something that can dramatically improve productivity.”

With airline traffic expected to grow from about 700 million passengers a year to one billion by about 2015, Brown said that general aviation interests are also questioning when revenue will begin to flow strongly into the trust fund again so it will recover and the FAA will be on financially firmer ground. The FAA is now drawing about 89 percent of its operational funds from the trust fund, although that is not what it was created for.

He suggested this could be an opportunity for the FAA Administrator to get the entire aviation community to pull together for the modernization effort, “rather than a history that we’ve often had in our community of some people blocking and tackling any proposal that comes down the line.”

“In thinking about that, in creating that environment,” said Brown, “from our perspective it’s important to resolve and get over all of the controversy and the division associated with the idea of direct user fees, and instead design a strategy where we have customers supporting and pulling the agency into the future.”