Conference provides more questions than answers on funding for ATC modernization

 - December 6, 2006, 11:23 AM

While speakers at the Air Traffic Control Association’s annual convention in Washington in October discussed a wide range of ATC technologies, both current and future, several presentations touched on a common underlying theme: where will the money come from?

Funding, of course, has always been vital to ATC improvements, but only at the past few association conventions has it gained increasing attention among industry and government attendees. The old days of the 1980s and 1990s, when program funding appeared to be almost a given, are long gone and with them the FAA’s frequently delayed and often grossly over-budget major projects that regularly drew the ire of Congress.

Today, funding and cost control are key issues, and the FAA appears to have accepted that. In her opening address to the convention, FAA Administrator Marion Blakey reported that 97 percent of her agency’s FY2006 capital programs were on time and under budget. These included WAAS, to enhance GPS; ASDE-X, to reduce runway incursions; and ERAM, which she described as a system that “puts ATC’s current mainframe computer and its 30-year-old architecture in the rear-view mirror.”

For FY2007, she noted, ADS-B has a start-up budget of $80 million, but with follow-on nationwide implementation costs of “hundreds of millions.” And it is in the future that Blakey sees the major challenge, stating that “the FAA’s ability to fund the system of tomorrow is in serious jeopardy because we’re working under a financing system that harkens back to the days when Pan Am pilots were a big population.”

She added, “The current system is so unpredictable, rising and falling with ticket prices, it becomes impossible to get a handle on our tax revenues. That makes it difficult to plan for long-term capital investments.”

Does the System Need Fixing?
Needless to say, AOPA president Phil Boyer had a different view of the situation. In a discussion session later that day, he stated, “If we keep the same efficient and fair funding system we use today, and even if you assume that the FAA’s budget will grow faster than it has in the past, and that there is only a moderate increase in air travel, the Aviation Trust Fund will still have a surplus in 2010.” Boyer said, “There will be sufficient money to modernize ATC,” and stated that modernization will most likely lead to cost savings. “The system isn’t broken,” he said. “Stop trying to fix it.”

Jim Coon, the then-majority staff director of the House Aviation Subcommittee, had a different view. On the convention’s second day, Coon stated that Congress had two concerns about the multi-departmental Joint Planning and Development Office’s plans for the Next Generation Air Transportation System (NGATS).

First, he said, the goal of completing NGATS by 2025 is too late, based on what he described as “the massive growth in air travel,” with an estimated 27,000 new aircraft entering world airline fleets during the next 20 years. Second, he raised the questions about how much the system will cost and where that money will come from.

He noted that the FAA’s Air Traffic Organization estimated it will cost between $15 billion and $18 billion but stated that the FAA predicts a funding gap between its annual capital account and NGATS requirements of between $500 million and $1.2 billion per year over the next five years. This is because most of the FAA’s annual $2.5 billion capital account is spent on keeping the existing ATC system running. Consequently, the FAA might need, on average, an additional $1 billion annually to implement NGATS.

The Aviation Trust Fund is sometimes mentioned as a source, but its revenues are down significantly from the levels projected before 9/11, and with its uncommitted cash balance reduced from $7.3 billion at the end of FY2001 to about $1.9 billion at the end of FY2005. Coon said that leasing and bond issuance had been proposed as funding solutions for NGATS, but went no further into that topic.

On the other hand, he emphasized the importance of recognizing the cost of not moving forward with NGATS, citing the JPDO’s estimate that the cost to the U.S. economy of not proceeding could possibly exceed $400 billion between now and 2025. “We are clearly at a crossroads with respect to air traffic modernization,” he stated. “We can either modernize or we can invoke a demand-management system. In my opinion, the latter is not an option.”

The ATCA Convention preceded the November election, which has significantly changed the Congressional players in this saga. Perhaps prophetically, Coon remarked, “I am certain that all of these issues will be discussed during next year’s FAA reauthorization process.”