Chamber of Commerce makes the case for NextGen

Aviation International News » June 2011
May 24, 2011, 8:10 AM

While most of the presentations at the U.S. Chamber of Commerce’s annual Aviation Summit were NextGen-centric, chamber president and CEO Tom Donohue joined the chorus of defenders of the Block Aircraft Registration Request (Barr) program, telling a room full of aviation policy leaders that the FAA proposal to stiffen the qualifications for Barr “is an ill-advised populist movement” that “poses a security risk to the users of business aviation and there is no legitimate reason for it.”

He said the U.S. House of Representatives was told as much when the chamber weighed in on FAA reauthorization earlier this year, and the bill that the lower chamber eventually passed blocks the FAA from moving forward with the plan.

NextGen Benefits

Later, on other topics, in a one-on-one interview between NBAA president and CEO Ed Bolen and FAA Administrator Randy Babbitt, the latter asserted that one key ingredient to the success of the FAA’s work on the NextGen air traffic management system is congressional passage of new, long-term FAA reauthorization.

“The question we should be asking is not what it will cost to do this, but what it will cost not to do this,” Babbitt stressed. “If this were a business meeting for a board of directors, and I brought you a proposal that said we’ll invest $8 billion up front, but when the project is complete we’ll save $4 billion a year going forward, there would be approval for that proposal.”

Numerous speakers addressed the need for industry executives to make a business case for NextGen. Everyone agreed that incentives to hasten cockpit equipage are the long pole in the NextGen tent.

Former FAA Administrator Marion Blakey, who is now president and CEO of the Aerospace Industries Association, noted from her position as a panel moderator that 793 ADS-B stations will be operating by 2013, but it will be 2020 before on-board equipment would be required. She added that a lot of people are going to develop “a seven-year itch.”

Many airlines are wary of making up-front investments without knowing when payoffs will sustain a business case, particularly because the FAA has a less-than-stellar record managing past modernization projects.

But Babbitt gamely pointed out that several airlines are already saving millions of dollars and gallons of fuel by using GPS-based arrival procedures, and Delta Air Lines reports it is saving 60 gallons of fuel per flight by using optimized profile descents on approaches into Atlanta.

“Are you comfortable that the FAA has the right people, training, expertise and organizational structure to tackle the transformation?” Bolen asked the Administrator in their interview. “Yes, we have the talent, the people,” Babbitt replied. “We’re always looking at our [organizational] structure, but that said, this isn’t the FAA of the 1950s. We take input from the industry…We have aspirational goals and we’re nimble, so that as technology adapts, you can make adjustments and keep moving forward.”

Former FAA Air Traffic Organization COO Russell Chew, now with Nexa Capital Partners, told those at the summit that private investors would provide some of the initial funding for cockpit equipment under a $1.5 billion loan-guarantee fund. He said the airlines need to make a business case by lowering the cost of capital. “Nobody is going to borrow at 10, 11 or 12 percent in the hope something good will happen,” Chew explained.

When Blakey asked about the current political climate for NextGen, Chew said the federal government should allow aviation the same amount of stimulus that has already gone to railroads and maritime facilities. “Legislation is the key,” he said. “I think NextGen has the support of the [aviation] community at large.” He added that an advantage of loan guarantees is that they don’t score against the federal budget.

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