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Before the Subcommittee on Aviation, Committee on Transportation and 
Infrastructure, House of Representatives: 

United States Government Accountability Office: 


For Release on Delivery Expected at 2:00 p.m. EDT: 

October 28, 2009: 

Next Generation Air Transportation System: 

FAA Faces Challenges in Responding to Task Force Recommendations: 

Statement of Gerald L. Dillingham, Ph.D. 

Director, Physical Infrastructure Issues: 


GAO Highlights: 

Highlights of GAO-10-188T, a testimony before the Subcommittee on 
Aviation, Committee on Transportation and Infrastructure, House of 

Why GAO Did This Study: 

On September 9, 2009, the Next Generation Air Transportation System 
(NextGen) Midterm Implementation Task Force (Task Force) issued its 
final report and recommendations. The Task Force was to reach a 
consensus on the operational improvements to the air transportation 
system that should be implemented between now and 2018. Its 
recommendations call for the Federal Aviation Administration (FAA) to 
develop improvements that allow operators to take advantage of 
equipment that has been widely deployed or is available for 
installation in existing aircraft. FAA is now considering how to modify 
its existing plans and programs in response to the Task Force’s 
recommendations and must do so in a way that retains safety as the 
highest priority. 

This testimony highlights the NextGen challenges previously identified 
by GAO and others that affect FAA’s response to the Task Force’s 
recommendations. GAO groups these challenges into three areas: (1) 
directing resources and addressing environmental issues, (2) adjusting 
its culture and business practices, and (3) developing and implementing 
options to encourage airlines and general aviation to equip aircraft 
with new technologies. GAO’s testimony updates prior GAO work with 
interviews with agency officials and industry stakeholders and includes 
an analysis of the Task Force report. 

What GAO Found: 

Directing resources and addressing environmental issues. Allocating 
resources for advanced navigational procedures and airspace redesign 
requires FAA to balance benefits to operators against resource limits 
and other challenges to the timely implementation of NextGen. 
Procedures that allow more direct flights—versus those that overlay 
existing routes—and redesigned airspace in congested metropolitan areas 
can save operators time, fuel, and costs, and reduce congestion, 
delays, and emissions. However, FAA does not have the capacity to 
expedite progress towards its current procedure development targets. 
While FAA has begun to explore the use of the private sector to help 
develop procedures, issues related to public use of these procedures 
and oversight of developers remain. In addition, required environmental 
reviews can be lengthy, especially when planned changes in noise 
patterns create community concerns during reviews. Challenges to FAA 
include deciding whether to start in more or less complex metropolitan 
areas, and finding ways to expedite the environmental review process 
and proactively ameliorate community concerns. 

Changing FAA’s culture and business practices. According to 
stakeholders and Task Force members, and as GAO has previously 
reported, FAA faces cultural and organizational challenges in 
implementing NextGen capabilities. Whereas FAA’s culture and 
organization formerly supported the acquisition of individual air 
traffic control systems, FAA will now have to integrate and coordinate 
activities across multiple lines of business, as well as reprioritize 
some of its plans and programs, to implement near-term and midterm 
capabilities. FAA is currently analyzing what changes may be required 
to respond to the recommendations. Streamlining FAA’s certification, 
operational approval, and procedure design processes, as a prior task 
force recommended, will also be essential for timely implementation. 
And sustaining a high level of involvement and collaboration with 
stakeholders—including operators, air traffic controllers, and others—
will also be necessary to ensure progress. 

Developing and implementing options to encourage equipage. The Task 
Force focused on making better use of equipment that has already been 
widely deployed in aircraft, but as NextGen progresses, new equipment 
will have to be installed to implement future capabilities and FAA may 
have to offer incentives for operators to accelerate their installation 
of equipment that may not yield an immediate return on investment. 
While FAA could mandate equipage, mandates take time to implement and 
can impose costs, risks, and other disincentives on operators that 
discourage early investment in equipment. The Task Force identified 
several options to encourage equipage, including offering operational 
or financial benefits to early equippers. Challenges to implementing 
these options include defining how operational incentives would work in 
practice, designing financial incentives so as not to displace private 
investment that would otherwise occur, and targeting incentives where 
benefits are greatest. 

To view the full product, click on 
[hyperlink,]. For more 
information, contact Gerald L. Dillingham at (202) 512-2834 or 

[End of section] 

Mr. Chairman and Members of the Subcommittee: 

I appreciate the opportunity to testify before you today on efforts to 
transform the nation's current air traffic control (ATC) system to the 
Next Generation Air Transportation System (NextGen). Today's air 
transportation system is straining to meet current demands. Thus far in 
2009 more than one in five airline flights have been delayed or 
canceled. These problems have occurred even though air traffic has 
declined during the current recession, and they are expected to worsen 
as the economy recovers and air traffic increases. NextGen improvements 
include new integrated systems, procedures, aircraft performance 
capabilities, and supporting infrastructure needed for a performance- 
based air transportation system that uses satellite-based surveillance 
and navigation and network-centric operations. These improvements are 
intended to improve the efficiency and capacity of the air 
transportation system while maintaining its safety so that it can 
accommodate this anticipated future growth. NextGen improvements have 
been planned over a long horizon. The initial planning for NextGen 
focused on implementing improvements through 2025, but more recently 
the Federal Aviation Administration (FAA) has emphasized improvements 
that can be implemented in the midterm, defined as between 2012 and 
2018. Additionally, many stakeholders have concluded that more can and 
must be done in the near term--generally thought of as between now and 
2012--to address inefficiencies and delays in the system. In their 
view, it is time to take full advantage of existing technologies and 
capabilities rather than waiting for new systems to be deployed and for 
aircraft to be equipped with new technology. 

Recognizing the importance of near-term and midterm solutions, FAA 
requested that RTCA, Inc.--a private, not-for-profit corporation that 
develops consensus-based recommendations on communications, navigation, 
surveillance, and air traffic management system issues-- create a 
NextGen Midterm Implementation Task Force (referred to in this 
statement as the Task Force) to reach consensus within the aviation 
community on the operational improvements that can be implemented 
between now and 2018. The Task Force focused on maximizing benefits in 
the near term, and paid particular attention to aligning its 
recommendations with how aircraft operators decide to invest in 
aircraft equipment. On September 9, 2009, the Task Force issued its 
final report, which contained a list of recommendations to implement 
operational capabilities in five key areas--surface operations, runway 
access, congestion relief in metropolitan areas, cruise operations, and 
access to certain airspace--and two cross-cutting areas--data 
communication applications and integrated air traffic management. The 
Task Force also made four overarching recommendations to (1) work 
toward closer adherence to current separation standards (criteria for 
spacing between aircraft), (2) establish incentives that will ensure a 
return on investment for those wishing to install new technology and 
equipment on aircraft, (3) streamline the operational approval process 
that ensures the safety of equipment and the training of those that use 
the equipment in the national airspace system, and (4) follow up on and 
track recommendations to ensure their implementation. These 
recommendations represent a consensus view from industry on how to move 
forward with NextGen. The Task Force includes representation from the 
four major operating communities--airlines, business aviation, general 
aviation, and the military--as well as participation from controllers, 
airports, avionics and aircraft manufacturers, and other key 
stakeholders. FAA is now considering how it will modify its NextGen 
Implementation Plan in response to the Task Force's recommendations and 
do so in a way that retains safety as the highest priority. Our work 
over the last few months has identified a number of findings similar to 
those the Task Force reported.[Footnote 1] 

My testimony today highlights challenges previously identified by 
GAO[Footnote 2] and others that affect FAA's response to the Task 
Force's recommendations. We group these challenges into three areas: 
(1) directing resources and addressing environmental issues to ensure 
the timely implementation of capabilities, (2) adjusting FAA's culture 
and business practices to support the implementation of operational 
improvements, and (3) developing and implementing cost-effective 
options to encourage airlines and general aviation operators to equip 
their aircraft with NextGen technologies. My statement is based on 
recent related GAO reports and testimonies updated with more recent FAA 
data, our analysis of the Task Force report, and our discussions with 
selected senior FAA officials and aviation industry stakeholders, 
including airlines, general aviation stakeholders, avionics industry 
representatives, and the National Air Traffic Controller Association 
(NATCA). We discussed this testimony with FAA and received technical 
comments from RTCA, which we incorporated as appropriate. Our work was 
conducted in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the work to 
obtain sufficient, appropriate evidence to provide a reasonable basis 
for our findings and conclusions based on our audit objectives. We 
believe that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

FAA Faces Challenges in Directing Resources and Addressing 
Environmental Issues to Ensure Timely Implementation: 

Developing Navigation Procedures with Significant Benefits in a Timely 

Developing Area Navigation (RNAV) and Required Navigation Performance 
(RNP) procedures,[Footnote 3] often called performance-based navigation 
procedures,[Footnote 4] with significant benefits is one way to 
leverage existing technology in the near term and provide immediate 
benefits to industry, but developing these procedures expeditiously 
will be a challenge for FAA. According to the Task Force, developing 
RNAV and RNP procedures could be a key part of relieving current 
congestion and delays at major metropolitan airports. Benefits of RNAV 
and RNP can also include reduced fuel usage, reduced carbon emissions, 
reduced noise, shorter flights, fewer delays, less congestion, and 
improved safety. For example, Southwest Airlines demonstration flights 
show that RNP can reduce fuel burn and carbon dioxide emissions by as 
much as 6 percent per flight. In 2008, Alaska Airlines estimated that 
it used RNP procedures 12,308 times and saved 1.5 million gallons of 
fuel, thereby reducing carbon dioxide emissions by approximately 17,000 
metric tons and operating costs by $17 million. Even greater benefits 
can be realized when the procedures are part of a comprehensive 
airspace redesign that includes more efficient flight paths, and are 
not simply overlays of historical aircraft flight paths.[Footnote 5] 

Deriving benefits from RNAV and RNP technology depends less on 
equipping aircraft with the technology required to fly these 
procedures, than on developing procedures with significant benefits in 
a timely manner. MITRE Corporation,[Footnote 6] which collects and 
retains data on equipage levels for the existing fleet, estimates that 
for aircraft in commercial operations in 2009, equipage rates are more 
than 90 percent for RNAV, more than 60 percent for RNP, and more than 
40 percent for RNP equipment that allows for higher levels of 
precision. These figures indicate that the equipment necessary to take 
advantage of RNAV and RNP technology is already substantially deployed. 
However, comparatively few procedures have been developed for airlines 
to use the equipment. Since 2004 FAA has published 305 RNAV procedures, 
206 RNAV routes, and 192 RNP approaches, but much remains to be done 
(see table 1). FAA believes that it can annually develop about 50 RNAV 
and RNP procedures, 50 RNAV routes, and 50 RNP approaches. At this pace 
of development, a simple calculation suggests that it would require 
decades to complete the thousands of procedures currently targeted for 

Table 1: Estimate of the Number of Procedures Needed for Performance- 
Based Navigation in the National Airspace System: 

Procedure type: RNAV and RNP procedures (arrivals and departures); 
Estimated number of procedures completed (end of fiscal year 2009): 
Number of procedures targeted for development: 2,000 to 4,000. 

Procedure type: RNAV/RNP routes; 
Estimated number of procedures completed (end of fiscal year 2009): 
Number of procedures targeted for development: 800 to1,200. 

Procedure type: RNP approaches; 
Estimated number of procedures completed (end of fiscal year 2009): 
Number of procedures targeted for development: 1,000 to 2,000. 

Source: FAA. 

[End of table] 

The Task Force report suggests that FAA and industry create joint teams 
to focus on performance-based navigations issues at certain locations 
and to prioritize procedures for development at these locations. Such 
an effort would likely lead to changes in FAA's current development 
targets. Nonetheless, accelerating the development of procedures would 
require a shift in FAA's resources, or additional human resources and 
expertise. In addition to FAA, numerous companies have expertise and 
experience to develop procedures and are doing this work for air 
navigation service providers around the world. FAA recognizes the 
potential benefits of involving these private companies and has taken 
steps to use them more. FAA recently authorized one such company, 
Naverus, which has a long history of expertise in procedure 
development, to validate public and private flight procedures that the 
company has developed for the U.S. market. This authorization will 
allow the company to validate performance-based navigation flight 
procedures from beginning to end. While private sector development may 
be one way to accelerate procedure development, issues related to FAA's 
capacity to approve these procedures remain, according to some 
stakeholders. In addition, questions such as who can use the procedures 
and how oversight of third-party developers is to be provided must also 
be resolved. 

While FAA tracks the number of navigation procedures completed, 
stakeholders have told us that developing procedures with significant 
benefits is more important than developing a specific number of 
procedures. For example, according to Southwest Airlines, FAA has 
developed 69 RNP procedures for the routes it flies, 6 which they view 
as useful to the airline because of the resulting reduction in flight 
miles or emissions. Some stakeholders have suggested that FAA use other 
metrics that better capture benefits to industry from advanced 
procedures, such as fuel savings, time savings, or mileage savings, 
which could lead to more of a focus on the development of procedures 
that maximize these benefits. The Task Force report identified the 
establishment of performance metrics as an important part of following 
up on and tracking the implementation its recommendations, and we have 
ongoing work for this committee reviewing FAA's performance metrics 
related to this and other aspects of NextGen development. 

Completing Timely Environmental Reviews and Addressing Local Concerns: 

As FAA develops new procedures to make more efficient use of airspace 
in congested metropolitan areas, it will be challenged to complete the 
necessary environmental reviews quickly and address local concerns 
about the development of new procedures and airspace redesign. Anytime 
an airspace redesign or a new procedure changes the noise footprint 
around an airport, an environmental review is initiated under the 
National Environmental Policy Act (NEPA). Under NEPA, varying levels of 
environmental review must be completed depending on the extent to which 
FAA deems its actions to have a significant environmental impact. There 
are three possible levels: 

1. Categorical exclusion determination. Under a categorical exclusion, 
an undertaking may be excluded from a detailed environmental review if 
it meets certain criteria and a federal agency has previously 
determined that the undertaking will have no significant environmental 

2. Environmental assessment/finding of no significant impact (EA/ 
FONSI). A federal agency prepares a written environmental assessment 
(EA) to determine whether or not a federal undertaking would 
significantly affect the environment. If the answer is no, the agency 
issues a finding of no significant impact (FONSI). 

3. Environmental impact statement (EIS). If the agency determines while 
preparing the EA that the environmental consequences of a proposed 
federal undertaking may be significant, an EIS is prepared. An EIS is a 
more detailed evaluation of the proposed action and alternatives. 

The more extensive the analysis required, the longer the process can 
take. A full EIS can take several years to complete. EAs and 
categorical exclusions, by contrast, take less time and resources to 
complete. Because NEPA does not allow consideration of the net impact 
of an action such as the introduction of new procedures or broader 
airspace redesign--which may increase noise in some areas but increase 
capacity at an airport and reduce noise and emissions overall--these 
actions can often result in extensive and time-consuming reviews. FAA 
is exploring situations in which it might be more appropriate to use a 
categorical exclusion or an EA instead of an EIS. The 2009 FAA 
reauthorization legislation includes language that may expedite the 
environmental review process. For example, the legislative proposal 
would allow airport operators to use grant funds for environmental 
reviews of proposals to implement flight procedures. The proposal would 
also allow project sponsors to provide FAA with funds to hire 
additional staff as necessary to expedite completion of the 
environmental review necessary to implement flight procedures. 

Because airspace redesign and new procedures can change noise patterns, 
there is the potential for community concerns and legal challenges to 
the environmental review process, which can further delay efforts to 
use the airspace more efficiently. For example, redesign has been 
particularly controversial in the New York, New Jersey, and 
Philadelphia areas.[Footnote 7] It took nearly 7 years to complete the 
New York, New Jersey, and Philadelphia areas' airspace redesign, and 
despite an FAA Record of Decision in September 2007, the project still 
faces a number of legal challenges as well as challenges related to 
implementation complexities. These difficulties suggest that it may be 
desirable to begin redesign efforts in less complex metropolitan areas. 
How to prioritize airspace redesign efforts will be a key decision that 
FAA and stakeholders will need to make in the near future. Regardless 
of where FAA begins, if airspace design is to help reduce delays in 
congested airspace in the near term or midterm, the Task Force report 
concluded that FAA must begin the environmental review processes now. 

FAA Faces Challenges in Changing Its Culture and Business Practices in 
Order to Respond Effectively to the Task Force's Recommendations: 

Changing from an Organization and Culture Focused on System Acquisition 
to an Emphasis on Integration and Coordination: 

According to stakeholders and Task Force members, and as we have 
previously reported, FAA faces organizational and cultural challenges 
in implementing NextGen operational capabilities.[Footnote 8] FAA has 
traditionally developed and acquired new systems through its 
acquisition process. However, most NextGen technologies and 
capabilities, such as Automatic Dependent Surveillance Broadcast (ADS- 
B),[Footnote 9] rely on components in the aircraft, on the ground, and 
in space for their use. They also require controllers and pilots to be 
trained and flight procedures to be developed in order to maximize 
their benefits. Different offices within FAA--including its Aircraft 
Certification Service, Flight Standards Service, and Air Traffic 
Organization (ATO),[Footnote 10] among others--are responsible for 
ensuring the completion of all the activities required to maximize the 
use of a technology or capability. While FAA has recently made 
organizational changes to address integration issues, several 
stakeholders told us, and our previous and ongoing work suggests, that 
FAA's structure and culture continues to hamper its ability to ensure 
that all the actions necessary to maximize use of a technology or 
capability in the national airspace system are completed efficiently. 
For example, stakeholders identified coordination and integration as 
particular challenges to implementing operational capabilities in the 
surface operations area identified by the Task Force. Implementing 
capabilities in this area will require greater coordination among 
offices within ATO, airport operators, pilots, and controllers, among 

Reprioritizing or Changing Some Aspects of Plans and Programs to 
Implement the Task Force's Recommendations: 

While many of the operational improvements identified by the Task Force 
align with FAA's current plans, a senior FAA official indicated that in 
several instances, FAA may need to adjust its plans, budgets, and 
priorities as it decides how it will respond to the Task Force's 
recommendations. According to this senior FAA official, potential 
budgetary changes are already being identified, and a comprehensive 
analysis of what additional changes to existing plans would be 
necessary to respond to the recommendations is underway. Until this 
analysis is completed, it is difficult to know exactly what changes FAA 
would need to make to implement the Task Force's recommendations. In 
some cases, the Task Force's recommendations, if accepted and fully 
implemented, will require altering the course of initiatives that are 
already underway or programs that are being implemented. For example, a 
recommendation to expand surveillance of airspace around certain 
general aviation airports may require an increase in the scope of the 
current ADS-B program, which does not cover those areas. In addition, 
recommendations to expand information sharing to improve surface 
situational awareness and traffic management could affect the current 
plans for FAA programs such as System-Wide Information Management 
(SWIM),[Footnote 11] according to one stakeholder. Responding to the 
Task Force's recommendations will require a willingness to change and 
reprioritize current plans and programs. 

Streamlining Certification, Operational Approval, and Procedure Design 

Inefficiencies in FAA's certification,[Footnote 12] operational 
approval,[Footnote 13] and procedure design processes constitute 
another challenge to delivering near-term benefits to stakeholders, 
instilling confidence in FAA plans, and investing in new equipment. Our 
prior work has identified this issue and concluded that the time 
required to complete such activities will have to be balanced against 
the need to ensure reliability and safety of procedures and systems 
before they are used in the national airspace system.[Footnote 14] 
Stakeholders, including airlines and general aviation groups, including 
one that represents avionics manufacturers, as well as the Task Force, 
have said that these processes take too long and impose costs on 
industry that discourage the stakeholders from investing in NextGen 
aircraft equipment. For example, the President of GE Aviation Systems 
recently testified, and other stakeholders have told us, that the 
process of approving and deploying RNP navigation procedures remains 
extremely slow and that FAA's review and approval of a given original 
RNP design often takes years. A 1999 RTCA task force also identified a 
need to streamline the certification and operational approval processes 
and made a number of recommendations to FAA. According to a senior FAA 
official, while FAA has made progress in addressing many of these 
recommendations, it has yet to take action on others and some 
challenges remain. For example, the NextGen Task Force reports that FAA 
aircraft certification offices face resource issues and applicants for 
many required installation approvals wait about 6 months until FAA 
engineers are available to oversee their project. Other suggestions to 
streamline the equipment certification process include increasing 
staffing at FAA's certification offices to process applications and 
having NextGen-specific equipment certification processes that allow 
quicker approvals of equipment. 

Effectively Engaging Stakeholders: 

Another challenge for FAA will be to continue involving stakeholders--
-including industry and controllers, as well as others as appropriate-
-in implementation and key decisions related to the Task Force's 
recommendations. The Task Force recommends, and we agree, that FAA and 
industry establish institutional mechanisms to facilitate continued 
transparency and collaboration in planning and implementing actions to 
address the Task Force's recommendations, particularly as these actions 
lead to changes in the NextGen Implementation Plan. The Task Force 
recommended the creation of a NextGen Implementation Workgroup under 
the RTCA Air Traffic Management Advisory Committee (ATMAC). An FAA 
official indicated that several mechanisms, including a variety of 
advisory boards and working groups, currently exist and can also be 
used to improve collaboration among stakeholders. We have previously 
reported that the roles of these various groups have become somewhat 
unclear, even to stakeholders involved in them.[Footnote 15] FAA will 
need to work with industry and key stakeholders to come to agreement on 
how, where, and when stakeholders will be involved. Continued 
transparency and collaboration are key to developing industry's trust 
that FAA is making changes to implement NextGen. 

In addition, FAA will need to continue to work toward changing the 
nature of its relationship with controllers and the controllers' union 
to create more effective engagement and collaboration. In September 
2009, FAA and NATCA signed a new 3-year contract. FAA views the new 
contract as a framework for helping meet the challenges of implementing 
NextGen. NATCA states that the contract starts a process to discuss 
ways for getting NATCA representatives involved in all NextGen-related 
issues. One particular change that would affect the relationship 
between controllers and FAA, as well as facilitate NextGen's 
implementation, would be to modify the incentives that influence how 
controllers apply FAA's aircraft separation standards. More 
specifically, a change that encouraged controllers to decrease the 
separation between aircraft during landing or takeoff would improve 
system capacity and efficiency and was one of the Task Force's 
overarching recommendations. Currently, according to NATCA, controllers 
are encouraged to increase the separation between aircraft, because 
they are penalized if separation thresholds are crossed. Moreover, 
according to MITRE, controllers often separate aircraft by more than 
the prescribed minimum distances to address any uncertainty about the 
actual positions of aircraft as well as to reduce the likelihood of 
violating the required separation distances. NextGen technologies and 
procedures can provide controllers with more precise information about 
the locations of aircraft and allow for aircraft to operate closer to 
one another. Recent changes to the Operational Error program[Footnote 
16] and the Air Traffic Safety Action Program (ATSAP)[Footnote 17] 
program are aimed at establishing a nonpunitive safety reporting 
program and are a positive first step towards changing the culture and 
establishing a more collaborative relationship with controllers. 

FAA Faces Challenges to Provide Incentives to Accelerate New Equipage 
as NextGen Progresses: 

The Task Force's focus was on making better use of the equipment that 
has already been installed or is available for installation. However, 
as NextGen progresses and as the Task Force's recommendations are 
implemented, operators will need to acquire additional equipment to 
take full advantage of the benefits of NextGen. In some cases the 
federal government may deem financial or other incentives desirable to 
speed the deployment of new equipment. Appropriate incentives will 
depend on the technology and the potential for an adequate and timely 
return on investment. A discussion of options to accelerate equipage 
discussed in our prior work and identified by the Task Force 
follows.[Footnote 18] 

Mandating Equipage: 

The first option is mandating the installation of equipment. 
Traditionally, FAA mandates the equipage of aircraft for safety 
improvements and provides several years for operators to comply. 
According to academic researchers, among these mandated safety 
improvements are ground proximity warning sensors, extended ground 
proximity warning sensors, and traffic collision and avoidance 
systems.[Footnote 19] Mandates can be effective because they force 
operators to equip even when there may not be clear and timely benefits 
to operators that justify the cost of equipping. In the NextGen 
context, FAA has proposed a rule that mandates equipage with ADS-B 
Out[Footnote 20] for affected aircraft by 2020. However, operators may 
not equip until the deadline for compliance is near because the cost of 
early investment in new technologies is often high and the return on 
investment limited. This is particularly true for general aviation 
operators who typically do not fly enough to recoup a large investment 
in new aircraft equipment. According to a general aviation stakeholder, 
general aviation operators typically fly hundreds of flight hours a 
year, while scheduled airlines fly thousands a year. Our prior work has 
identified a variety of other disincentives to early 
investment.[Footnote 21] These disincentives include the possibility 
that a technology may not work as intended, may not provide any 
operational benefits until a certain percentage of all aircraft are 
equipped, or may become obsolete because a better technology is 
available. Other risks to early investors include potential changes in 
the proposed standards or requirements for the technology, later 
reductions in the price of technologies and installations, or the risk 
that FAA may not implement the requisite ground infrastructure and 
procedures to provide operators with benefits that would justify their 
costs to equip. Moreover, because equipage mandates are designed to 
cover a broad range of users in a single action, they may lead to 
objections and lobbying from users, such as general aviation operators, 
on whom significant costs are imposed. 

Making the Best Use of Equipment that Is Widely Deployed: 

A second option to accelerate equipage is to develop operational 
improvements that make use of equipment that is already widely deployed 
to produce benefits for operators to justify the costs of equipage. The 
Task Force's recommendations are geared toward this option. A large 
part of the fleet is equipped with technologies that operators cannot 
fully use until FAA has implemented operational improvements. If FAA 
can implement such improvements for operators that have this equipment, 
it could provide a return on investment for them and create a financial 
incentive for others to equip. But because FAA has not always taken the 
actions needed for operators to take full advantage of investments in 
equipage, such as for Controller Pilot Data Link 
Communications,[Footnote 22] some industry stakeholders question 
whether FAA will now follow through with the tasks required to allow 
operators to achieve the full benefit of their investment in a timely 
manner. Early success in implementing some of the Task Force's near- 
term recommendations will help build trust between FAA and operators 
that FAA will provide operational improvements that allow operators to 
take advantage of the required equipment and realize benefits. 

Providing Operational Incentives to Equip: 

A third option proposed by FAA and known as "best equipped, best 
served" requires that FAA ensure some form of operational benefit for 
operators that do equip, such as preferred airspace, routings, or 
runway access, which can save time or fuel. If early equippers get a 
clear competitive advantage, other operators may be encouraged to 
follow their example, providing further incentive for all operators to 
fully equip their fleets. An advantage of pursuing this option is that 
no federal financial incentives are required for equipage, so costs to 
the federal government are generally lower. However, designing such 
incentives and analyzing how they will work in practice is a major 
challenge and has only begun to move forward. For example, giving a 
better-equipped aircraft preference over lesser-equipped aircraft to 
land or depart may increase delays and holding patterns for the lesser- 
equipped aircraft, potentially increasing delays and fuel usage 
overall, and resulting in lower systemwide benefits. Furthermore, 
according to airline stakeholders, the best equipped, best served 
option will require controllers to accept procedures that they have 
expressed safety concerns about in the past. Mechanisms will also have 
to be created so that controllers know which aircraft are best 
equipped, and these mechanisms cannot adversely affect controller 
workload or safety. The Task Force's report does not address the 
practical implications of how a best equipped, best served option would 
work, but recommends that the option be explored in the context of 
specific operational capabilities and locations. 

Providing Financial Incentives: 

A fourth option is to provide financial incentives where operators do 
not have a clear and timely return on investment for equipping 
aircraft. Financial incentives can accelerate investment in equipment, 
which, in turn, can accelerate the operational and public benefits 
expected from implementing additional capabilities. According to the 
Commission on the Future of the United States Aerospace 
Industry,[Footnote 23] one argument for some form of federal financial 
assistance is that the total cost to the federal government of fully 
financing the communication, navigation, and other airborne equipment 
required for more efficient operations would be less than the costs to 
the economy of system delays and inefficiencies that new equipment 
would help address. In previous work, we concluded that the federal 
government's sharing of costs is most justifiable when there are 
adequate aggregate net benefits to be realized through equipage, but 
those who need to make the investments in the equipment do not accrue 
enough benefits themselves to justify their individual 
investments.[Footnote 24] 

Financial assistance can come in a variety of forms including grants, 
cost-sharing arrangements, loans, and tax incentives. As we have 
previously reported, prudent use of taxpayer dollars is always 
important; therefore, financial incentives should be applied carefully 
and in accordance with key principles.[Footnote 25] For example, 
mechanisms for financial assistance should be designed so as to 
effectively target parts of the fleet and geographical locations where 
benefits are deemed to be greatest, avoid unnecessarily equipping 
aircraft (e.g., those that are about to be retired), and not displace 
private investment that would otherwise occur. Furthermore, it is 
preferable that the mechanism used for federal financial assistance 
result in minimizing the use of government resources (e.g., some 
mechanisms may cost the government more to implement or place the 
government at greater risk than others). We also reported that, of the 
various forms of assistance available to the federal government, tax 
incentives have several disadvantages because (1) many scheduled 
airlines may not have any tax liability that tax credits could be used 
immediately to offset, (2) a tax credit would provide a more valuable 
subsidy for carriers that are currently profitable than for those that 
are not, and (3) using the tax system to provide a financial incentive 
can impose an administrative burden on the Internal Revenue Service. 

One financing option proposed by the Task Force to encourage the 
purchase of aircraft equipment is the use of equipage banks, which 
provide federal loans to operators to equip their aircraft. Recent 
legislation proposes that FAA establish a pilot program that would 
permit the agency to work with up to five states to establish ADS-B 
equipage banks for making loans to help facilitate aircraft equipage 
locally. The Task Force suggests that equipage banks could be used to 
provide funds for operators to equip with a NextGen technology when 
there may not be a benefit or return on investment for doing so. By 
providing for a variety of NextGen technologies, an equipage bank can 
avoid penalizing those who have already invested in a particular 
NextGen technology. The federal government has used a similar financing 
option in the past to fund other infrastructure projects including 
highway improvements. 

Thank you Mr. Chairman. This concludes my prepared statement. I would 
be pleased to answer any questions that you or Members of the 
Subcommittee may have at this time. 

GAO Contact and Staff Acknowledgments: 

For further information on this testimony, please contact Dr. Gerald L. 
Dillingham at (202) 512-2834 or Individuals making 
key contributions to this testimony include Andrew Von Ah (Assistant 
Director), Amy Abramowitz, Kieran McCarthy, Kevin Egan, Bess 
Eisenstadt, and Bert Japikse. 

[End of section] 


[1] This work is part of a comprehensive review and monitoring effort 
that GAO is undertaking for the House Transportation and Infrastructure 
Committee, House Science and Technology Committee, and Senate Commerce, 
Science, and Transportation Committee. The work includes a number of 
planned reviews related to the ongoing implementation of NextGen. 

[2] See GAO, Responses to Questions for the Record: March 18, 2009, 
Hearing on ATC Modernization: Near-Term Achievable Goals, [hyperlink,], (Washington, D.C.: May 
20, 2009); GAO, Next Generation Air Transportation System: Status of 
Transformation and Issues Associated with Midterm Implementation of 
Capabilities, [hyperlink,
479T] (Washington D.C.:, Mar. 18, 2009); and GAO, Next Generation Air 
Transportation System: Status of Systems Acquisition and the Transition 
to the Next Generation Air Transportation System, [hyperlink,] (Washington, D.C.: Sept. 
11, 2008). 

[3] RNAV enables aircraft to fly on any path within coverage of ground- 
or space-based navigation aids, permitting more access and flexibility 
for point-to-point operations. RNP, like RNAV, enables aircraft to fly 
on any path within coverage of ground-or space-based navigation aids, 
but also includes an onboard performance monitoring capability. RNP 
also enables closer en route spacing without intervention by air 
traffic control and permits more precise and consistent arrivals and 

[4] A flight procedure is the plan of operations that an aircraft must 
follow to depart or land in the vicinity of an airport. 

[5] FAA has produced overlay procedures at the request of industry. 
Overlay procedures can produce benefits by making those procedures more 
precise, but industry maintains that benefits of overlays have been 

[6] MITRE Corporation is a not-for-profit organization chartered to 
work in the public interest. MITRE manages four Federally Funded 
Research and Development Centers, including one for FAA. MITRE has its 
own independent research and development program that explores new 
technologies and new uses of technologies to solve problems in the near 
term and in the future. 

[7] See GAO: FAA Airspace Redesign: An Analysis of the New York/New 
Jersey/Philadelphia Project, [hyperlink,
bin/getrpt?GAO-08-786] (Washington, D.C.: July 31, 2008). 

[8] [hyperlink,]. 

[9] ADS-B is a satellite navigation system that is designed, along with 
other navigation technologies, to enable more precise control of 
aircraft during en route flight, approach, and descent. 

[10] FAA's Air Traffic Organization consists of 35,000 controllers, 
technicians, engineers, and support personnel responsible for moving 
air traffic safely and efficiently. 

[11] SWIM is an information management architecture for the national 
airspace system, acting as its "World Wide Web." SWIM will manage 
surveillance, weather, and flight data, as well as aeronautical and 
system status information, and will provide the information securely to 

[12] FAA's certification process ensures the safety of aircraft 
equipment entering the national airspace system. 

[13] FAA's operational approval process ensures, among other things, 
that pilots are trained in the use of new equipment and procedures, and 
technicians are trained in the maintenance of them before the equipment 
is used in the national airspace system. 

[14] [hyperlink,]. 

[15] [hyperlink,]. 

[16] FAA's Operational Error program will no longer include the names 
of controllers in reports sent to FAA headquarters on operational 
errors, which occur when the proper distance between aircraft is not 

[17] ATSAP allows controllers and other employees to report safety 
problems without fear of punishment unless the incident is deliberate 
or criminal in nature. ATSAP responded to our prior recommendation (GAO-
08-29) that FAA establish a nonpunitive voluntary safety reporting 
program for air traffic controllers. As of July 2009, ATSAP was being 
demonstrated at 187 facilities throughout the country. Nationwide 
implementation of the program is expected by the end of the 
demonstration phase at the end of 2009. 

[18] See [hyperlink,]. 

[19] Karen Marais and Annalisa L. Weigel, Massachusetts Institute of 
Technology, Encouraging and Ensuring Successful Technology Transition 
in Civil Aviation, 2007. 

[20] ADS-B has two components. ADS-B Out continuously transmits an 
aircraft's position, altitude, and direction to controllers on the 
ground and to other aircraft. ADS-B In enables another aircraft to 
receive the transmitted data, giving pilots with ADS-B In a complete 
picture of their aircraft in relation to other ADS-B equipped traffic. 
FAA is deploying the nationwide ground infrastructure needed to receive 
ADS-B information and integrate it with controller displays. FAA 
expects this ground network to be fully deployed in 2013. 

[21] [hyperlink,]. 

[22] Controller Pilot Data Link Communications was designed to allow 
pilots and controllers to transmit digital messages directly between an 
FAA ground automation system and suitably equipped aircraft. The system 
was meant to alleviate voice congestion problems and increase 
controller efficiency. While some operators installed the necessary 
equipment on their aircraft, FAA never fully implemented the program 
and those operators were unable to benefit fully from their investment. 

[23] In 2002, Congress mandated the Commission on the Future of the 
United States Aerospace Industry to produce a report that studied the 
health of the aerospace industry and identified actions that the United 
States needs to take to ensure its health in the future. 

[24] [hyperlink,]. 

[25] [hyperlink,]. 

[End of section] 

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