This is the accessible text file for GAO report number GAO-09-718R 
entitled 'Responses to Questions for the Record: March 18, 2009, 
Hearing on ATC Modernization: Near-Term Achievable Goals' which was 
released on May 21, 2009. 

This text file was formatted by the U.S. Government Accountability 
Office (GAO) to be accessible to users with visual impairments, as part 
of a longer term project to improve GAO products' accessibility. Every 
attempt has been made to maintain the structural and data integrity of 
the original printed product. Accessibility features, such as text 
descriptions of tables, consecutively numbered footnotes placed at the 
end of the file, and the text of agency comment letters, are provided 
but may not exactly duplicate the presentation or format of the printed 
version. The portable document format (PDF) file is an exact electronic 
replica of the printed version. We welcome your feedback. Please E-mail 
your comments regarding the contents or accessibility features of this 
document to 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately. 


United States Government Accountability Office: 
Washington, DC 20548: 

May 20, 2009: 

The Honorable Jerry Costello: 
The Honorable Thomas E. Petri: 
Ranking Member: 
Subcommittee on Aviation: 
Committee on Transportation and Infrastructure: 
House of Representatives: 

Subject: Responses to Questions for the Record: March 18, 2009, Hearing 
on ATC Modernization: Near-Term Achievable Goals: 

This letter responds to your request that we address questions 
submitted for the record related to the March 18, 2009, hearing 
entitled ATC Modernization: Near-Term Achievable Goals. Our attached 
responses to these questions are based on a review of literature on
avionics and equipage incentives, interviews with Federal Aviation 
Administration officials, interviews with stakeholders and developers 
of avionics with knowledge of the maturity and costs of avionics 
equipment, and our knowledge of the areas addressed by the questions. 

We conducted this work from April 2009 to May 2009 in accordance with 
generally accepted government auditing standards. Those standards 
require that we plan and perform the audit 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. 

We are sending copies of this letter to the Acting Administrator, 
Federal Aviation Administration. The report will also be available on 
GAO’s Web site at [hyperlink,]. 

If you have any questions or would like to discuss the responses, 
please contact me at (202) 512-2834 or 

Signed by: 

Gerald L. Dillingham, Ph.D.
Physical Infrastructure Issues: 


[End of section] 


March 18, 2009: 

Subcommittee on Aviation: 

Hearing on ATC Modernization and NextGen: Near-Term Achievable Goals: 

Questions for the Record: 


Dr. Gerald L. Dillingham: 
Director, Physical Infrastructure Issues: 
U.S. Government Accountability Office: 

Questions for the Record Submitted by Chairman Costello: 

1. Dr. Dillingham, in your written testimony you state that before 
midterm NextGen implementation can occur, the Federal Aviation 
Administration (FAA) must validate and certify technologies and issue 
rules for new procedures. Please detail the specific steps that must be 
taken for new avionics to be used aboard aircraft operating in the 
National Airspace System (NAS)? 

Response: In order for new avionics to be used aboard aircraft 
operating in the national airspace system (NAS), steps must be taken in 
three broad areas when the new equipment, such as Automatic Dependent 
Surveillance - Broadcast (ADS-B), is part of an air traffic control 
system that has both airborne and ground components: 

(1) Certification of airborne equipment.
(2) Ground system approval (that is linked to the airborne equipment).
(3) Procedure development. 

Certification of Airborne Equipment: 

Before airborne equipment can be used in the NAS, several steps must be 
completed to certify its use including the following: 

(1) Establish requirements for the airborne equipment and for its 
validation.[Footnote 1] 
(2) Certify or approve the airborne equipment’s design, production and 
(3) Certify the use of it (by pilots and controllers). This step is 
called “operational approval.” 

Establishing requirements and standards, which RTCA[Footnote 2] most 
often does, typically takes 1 to 5 years, because government, industry, 
and international stakeholders need to reach consensus and air traffic 
control systems are increasingly complex. RTCA is currently developing 
an updated equipment standard for ADS-B Out,[Footnote 3] the next step 
in ADS-B’s deployment, and expects to complete this phase by December 
2009. The requirements and standards typically form the basis for a 
Technical Standard Order (TSO),[Footnote 4] which FAA uses to grant 
design and production approval. TSOs make installation approval, which 
is the next step in the certification process and is needed before the 
equipment is placed in service, simpler and less costly.[Footnote 5] 
Design and production approval are the responsibility of FAA’s Aircraft 
Certification Service. Installation approval is granted the Aircraft 
Certification and Flight Standards Services. Lastly, FAA’s Flight 
Standards Service is responsible for giving operational approval, which 
requires that an applicant, such as an airline, demonstrate, among 
other things, that its pilots are trained to use the equipment and that 
its maintenance personnel are trained to maintain it. 

To meet the demands of NextGen, the entire process from the initial 
request (in most cases to RTCA) to set up a committee and produce a 
consensus standard, through the issuance of a TSO or aircraft 
certification and through operational approvals must be streamlined. 
RTCA is working on streamlining the production of the standards 
documents. The FAA must do the same for the process of developing and 
issuing the related TSO or aircraft certification and finally 
operational approval. 

Ground System Approval: 

The ground system that is linked to the airborne equipment must also be 
approved before the airborne equipment can be used in the NAS. This 
approval focuses on safety and is done in accordance with FAA contract 
documents and policies and procedures that are part of the agency’s 
acquisition management system. FAA’s Air Traffic Organization has the 
primary responsibility for the approval of ground systems. Before a
ground system can be used in the NAS, several steps must be completed, 
including the following: 

(1) Establish requirements for the ground system.
(2) Design and develop the system.
(3) Test and evaluate the system.
(4) Train personnel to operate and maintain the system.
(5) Ensure that the ground system works as intended when installed

FAA develops, owns, and operates most ground systems that provide air 
traffic services and air navigation services. However, FAA has 
contracted with a private firm to deploy the ground infrastructure 
needed nationwide to receive ADS-B Out information. FAA expects the ADS-
B ground system to be tested in 2010 and the ground network to be fully
deployed in 2013. 

Procedure Development: 

Even after the airborne equipment has been certified and the ground 
system approved, the capabilities of some airborne equipment cannot be 
fully used until more procedures are developed. Procedure design 
criteria are developed by the Flight Standards Service; the procedures 
themselves are developed by FAA’s Aviation System Standards within the
Air Traffic Organization. For example, these procedures include Area 
Navigation (RNAV)/Required Navigation Performance (RNP) procedures for 
arrivals and departures, RNAV procedures for routes, and RNP procedures 
for approaches, all of which rely on Global Positioning System (GPS) 
navigation as opposed to traditional ground navigation aids. Since 2004 
FAA has published more than 260 RNAV procedures, more than 135 RNAV 
routes, and 135 RNP approaches, but much remains to be done. FAA 
estimates that the following numbers of procedures remain to be 

Table 1: FAA’s Estimate of the Procedures Needed in the NAS for 
Performance–based Navigation: 

Procedure type: RNAV/RNP procedures (arrivals and departures); 
Development targets: 2,000-4,000. 

Procedure type: RNAV/RNP routes; 
Development targets: 800-1,200. 

Procedure type: RNP approaches; 
Development targets: 1,000-2,000. 

Source: FAA. 

[End of table] 

FAA believes that it can annually develop about 50 RNAV/RNP procedures, 
50 RNAV routes, and 50 RNP approaches. We and others have previously 
expressed concerns about the time and human resources required to 
develop procedures and have identified them as a significant risk to 
the timely and cost-effective implementation of NextGen. It is 
important to note that outside of FAA, numerous companies with 
expertise and experience to develop procedures exist and are doing this 
work for air navigation service providers around the world. In 
addition, some stakeholders have noted that procedure development needs 
to move beyond basic overlays of existing routes to incorporate more 
optimal flight paths, improved airport arrivals and departures in 
mountainous areas, and improved and efficient traffic flows. 
Furthermore, FAA must develop new standards for reduced separation 
between aircraft that take advantage of the latest technologies like 
ADS-B in order for NextGen to fully deliver on its promise of increased
capacity and efficiency. 

With multiple FAA offices responsible for each of the steps within the 
three broad areas described above, including the Aircraft Certification 
Service, Flight Standards Service, and Air Traffic Organization, 
coordination and integration is vital since delays in avionics 
certification, ground system approval, procedure development, or 
separation standard reduction, for example, could each prevent or delay 
full realization of NextGen benefits. 

2. Dr. Dillingham, the “NextGen Implementation Plan for 2009” lists 
avionics equipage items that the FAA is targeting for mid-term NextGen 
operations. Of the avionics listed, which are the most mature, and the 
most ready for immediate deployment and why? Please address each 
technology listed and provide an estimated cost. 

Response: The aircraft capabilities listed in FAA’s 2009 NextGen 
Implementation Plan that are most mature and ready for immediate 
deployment are those associated with performance-based navigation and 
approach capabilities, while most surveillance and information display 
capabilities and data communications capabilities listed in the plan 
are a little further behind. The costs of equipping planes with these 
capabilities are difficult to estimate precisely because the needs of 
each aircraft type will differ depending on the equipment that it 
already has and some of the needed equipment has yet to come to the 
market. Where estimates are available, we provide ranges of potential
costs provided by stakeholders. It is important to note that procedure 
development (including procedures for the use of closely spaced 
parallel runways), timely certification, airspace redesign, standards 
for reduced separation between aircraft, FAA automation, and pilot and 
controller training are necessary precursors to producing the benefits 
that could be provided by equipping aircraft with the latest 
technologies. In addition, construction of new airport infrastructure 
and timely deployment of technology and procedures to manage ground 
operations safely and efficiently will be important to take full 
advantage of an equipped aircraft fleet. 

Performance-Based Navigation and Approach Capabilities: 

Of the avionics capabilities listed in the NextGen Implementation Plan, 
performance-based navigation and approach capabilities—including Area 
Navigation (RNAV) and Required Navigation Performance (RNP), curved 
path capability (also known as RNPRF), RNP Authorization Required (RNP 
AR),[Footnote 6] Vertical Navigation (VNAV), and Localizer Performance 
with Vertical Guidance (LPV)—are the most mature and in some areas are
already in use. These capabilities allow for more efficient arrival and 
departure procedures, more repeatable and predictable trajectories, 
more routes, and enable the use of runways that cannot currently be 
used under certain conditions. The equipment (navigational systems and 
sensors) needed for aircraft to achieve these capabilities exists and 
is certified for installation on aircraft. 

The extent to which the existing fleet of aircraft is equipped with 
these capabilities and the cost to equip varies. FAA and MITRE 
[Footnote 7] estimate that nearly all air carriers have the capability 
to fly en route and terminal RNAV and RNP operations. To equip those 
aircraft used by air carriers that are not equipped, the cost is 
estimated at between $100,000 and $200,000 per aircraft. Fewer of the 
aircraft used by air carriers—MITRE estimates about one-third—are 
equipped with the navigational systems and sensors needed for more 
advanced and precise RNP capabilities—such as curved path capability 
and RNP AR. To equip for curved path capability, costs for air carriers 
are estimated at between $400,000 and $600,000 per aircraft, while the 
costs to equip for RNP AR capability are between $1 million and $2 
million per aircraft. All major air carriers currently have VNAV 
capability through a flight management system to fly a specified 
vertical profile. FAA also estimates that LPV, which provides 
vertically-guided approach service down to 200 feet using the Wide Area 
Augmentation System (WAAS), is available on more than 20,000 aircraft 
(out of over 200,000 aircraft), primarily within the general aviation 

Action from FAA is required for greater use of these capabilities 
within the NAS. As discussed earlier, thousands more RNAV and RNP 
procedures must be developed at individual airports for these 
capabilities to be used across the NAS. In addition, FAA has not yet 
begun to develop any navigational procedures for arrivals and 
departures that would allow aircraft to use curved path capability 
within the NAS. For RNP AR—for which some procedures have been 
developed with curved paths—additional training and certification of 
flight crews is also necessary for aircraft to fly those procedures. 
Furthermore, according to stakeholders, existing procedures are not 
used as much as they could be and operational approvals to use the 
existing procedures are needed. To more fully leverage the potential 
benefits of these capabilities, FAA must also engage in major airspace 
redesign around the more congested airports, which would require the
creation of new flight paths and thus may also require environmental 
approvals, which can take several years. The environmental constraints 
could be a major obstacle to achieving timely benefit from RNAV/RNP and 
could benefit from deliberate attention by the community to solve. 

Another approach capability listed in the NextGen Implementation Plan 
is the GNSS Landing System (GLS), but this capability is a little 
further behind the capabilities listed above in terms of its maturity. 
GLS is a positioning and landing system that integrates satellite and 
ground-based navigation information to provide the position information
required for precision approach and landing guidance. According to one 
stakeholder involved in the development of this technology, the ground-
based systems for GLS will be certified to basic precision approach 
standards this year.[Footnote 8] The cost of these ground-based 
systems, including the equipment and installation is estimated to 
average about $2.5 million. Several aircraft are equipped with the 
avionics needed to meet these standards. 

Surveillance and Information Display Capabilities: 

Among the surveillance and information display capabilities listed in 
the NextGen Implementation Plan are ADS-B Out, ADS-B In, and Electronic 
Flight Bag (EFB) integrated with ADS-B. These capabilities are not 
fully mature because standards are still under development, standards 
have just been finalized for them and the equipment is not yet widely 
available, or the capability is still under development and 
demonstration. In addition, the applications that will be supported by 
the ADS-B technology have not been fully defined. 

ADS-B Out enables an aircraft to transmit its position, velocity, and 
other information to air traffic control systems for surveillance 
purposes. With ADS-B Out, controllers will see radar-like displays with 
highly accurate traffic data derived from GPS satellites. RTCA plans to 
publish a revised standard (DO-260B) with specifications for ADS-B Out 
and FAA plans to publish a revised TSO that references this standard in 
December 2009. Manufacturers will then be able to produce the ADS-B 
transceiver and any associated onboard equipment based on the new 
standard. In addition, FAA issued a Notice of Proposed Rulemaking in 
October 2007 and plans to issue the Final Rule in April 2010. This rule 
would mandate that all aircraft be equipped with ADS-B Out by 2020. The
revised standard will be consistent with the FAA's requirements in this 
rule. Equipment does not yet exist relative to the revised standard and 
therefore costs for equipping aircraft to that standard are unknown. 
However, cost estimates to equip aircraft based on ADS-B Out equipment 
that meets the current standard range from $32,000 to $78,000 to 
upgrade current production aircraft, and up to $175,000 to retrofit 
aircraft that are out of production. Additionally, to fully implement 
ADS-B Out, FAA must continue to deploy ADS-B ground stations, which are 
scheduled for full deployment by 2013. 

ADS-B In enables aircraft to receive information transmitted by ADS-B 
Out from nearby aircraft, Traffic Information Services – Broadcast from 
the ground, and Flight Information Services – Broadcast. This 
information can then be viewed on a cockpit display. Aircraft equipped 
with ADS-B In and an associated cockpit display will be able to “see” 
each other, which, among a number of capabilities, will allow for 
greater situational awareness in the cockpit and enable the self-
spacing of aircraft, and also eventually allow for self-separation, 
which will increase capacity and decrease delays. RTCA has published 
standards for application related to situational awareness and spacing, 
but not for self-separation, which requires more stringent performance
requirements. Several applications have been developed for ADS-B In, 
but only a few are certified. 

EFBs provide electronic charts, manuals, and other applications to aid 
flight crews. Higher-capability EFBs can incorporate information from 
ADS-B transceivers to show the location of other aircraft in the air or 
on the airport surface, and moving map displays, enabling some ADS-B In 
applications. Although EFBs are ready for deployment on aircraft, 
stakeholders indicated that there is currently no clear business case 
for equipping with higher capability models, given the high cost to 
equip. Depending on whether the EFB is portable or fully installed and 
subject to airworthiness requirements and the type of aircraft (i.e., 
whether it is a retrofit of an out-of-production or in-production 
aircraft), costs can range from about $166,000 to $388,000 per 

Data Communications Capabilities: 

Initial data communications capabilities are mature and ready for 
deployment while more-advanced data communications capabilities are 
maturing, but are not ready for immediate, widespread deployment. 
[Footnote 9] Data communications enables flight crews to receive and 
reply to air traffic control clearances via electronic messages instead 
of voice messages as is done today, enabling controllers to safely 
handle more traffic. This improves air traffic controller productivity, 
and enhances efficiency, capacity and safety. Standards for VHF Digital 
Link Mode-2 (VDL-2) radios—which support data communication—and for 
data communications applications are mature. Certification of data 
communications equipment supporting initial Aeronautical 
Telecommunications Network applications (known as ATN Baseline 1) 
required for the European data link mandate is expected in 2010. While 
VDL-2 radios and Future Air Navigation System version 1/A+ (FANS-1/A+) 
application software are widely available now for aircraft in the 
current Boeing and Airbus fleets, most of today’s aircraft must upgrade 
their radios to VDL-2, and install data communications application 
software. To retro-fit aircraft, the cost is estimated to range between 
$55,000 to $190,000 per aircraft. For forward-fit on new aircraft, the 
range is $13,000 to $23,000 per aircraft. Additionally, FAA’s ground
communications network and ground automation systems are not yet 
capable of data communications operations outside of a couple of 
airports. Data communications for the en route environment will require 
updates to the En Route Automation Modernization system, the timing of 
which depends on how FAA sets priorities for the program. 

A later data communications model, ATN Baseline 2, is also listed in 
the NextGen Implementation Plan and is intended to build on the initial 
data communications system’s capabilities, providing widespread Flight 
Management System integration and advanced applications. These advanced 
applications are not yet defined well enough to be able to define 
standards and standards have not yet been developed. This should not
cause the FAA to postpone delivering interim capabilities over the 

3. Dr. Dillingham, if the FAA were to provide targeted incentives or 
subsidies for NextGen avionics equipage, which technologies hold the 
most immediate potential for accelerating NextGen benefits? 


Technologies with the Greatest Benefits (Capacity and Efficiency) over 
the Next 2 Years Stakeholders told us that the technologies with the 
greatest immediate potential (over the next 2 years) to accelerate the 
NextGen benefits of increased capacity and system efficiency are 
RNAV/RNP and limited ADS-B Out. 


As previously discussed, many aircraft are already equipped to use 
RNAV/RNP but accompanying arrival and departure procedures have not 
been fully developed at most airports. To illustrate that this 
technology is here and being used to generate fuel and time savings, 
one stakeholder reports that during a 12-month period, more than 8,000
RNP approaches at Brisbane, Australia, saved 34 Qantas 737-800 aircraft 
a total of 4,200 minutes of flying, 65,000 gallons of fuel, and 621 
metric tons of carbon dioxide emissions. Average delays at the airport 
were reduced by 30 seconds for each arriving aircraft, which benefit 
from the fact that the RNP approaches for the 737-800 aircraft are 
taking between 10 and 23 nautical miles off their approach path to the 
runway, compared with an existing visual approach. Since 2005, Alaska 
Airlines, an early RNP pioneer, has documented 5,300 flights that 
avoided diversions using RNP procedures. In 2008, avoiding these 
diversions saved $8 million. The United Parcel Service, relying on
Continuous Descent Arrivals which uses RNP, uses these procedures at 
Louisville, KY with reported savings of between 250 and 465 pounds of 
fuel (37-69 gallons) per arrival. 

ADS-B Out: 

Immediate benefits to operators from ADS-B Out are limited, but ADS-B 
Out is a key enabler of future benefits to be derived from ADS-B In and 
other NextGen technologies. Immediate benefits include increased 
capacity over limited nonradar areas such as the Gulf of Mexico, large 
portions of Alaska, or in airports beneath radar coverage. For areas
with no radar coverage, there is a business case for aircraft operators 
to equip with ADSB Out because separation between aircraft can be 
reduced. However, few areas in the United States, other than the areas 
mentioned above, are without radar coverage. In addition, FAA cites 
some safety improvements, and benefits associated with more efficient, 
fuel saving continuous descent approaches in its notice of proposed 
rulemaking on ADS-B Out. However, FAA has not committed to reducing 
aircraft separation. Deploying ADS-B infrastructure without tying it to 
reduced separation, merging, spacing, and other applications delivers 
little benefit, and thus there is very little incentive for aircraft 
operators to equip their fleets now. From a systemwide perspective and 
over the midterm and long-term, equipping with ADS-B Out also provides 
benefits to FAA in the form of reduced costs from decommissioning a 
large number of the secondary surveillance radars, and from more 
efficiency and precision in air traffic control surveillance 

Technologies with the Greatest Benefits over the Next 3 to 6 Years or 

Over the next 3 to 6 years or more, according to MITRE and others, 
additional technologies that hold significant potential for 
accelerating NextGen benefits include data communications and RNP-RF. 

Data Communications: 

According to MITRE and others, data communications will do the most to 
accelerate capacity benefits nationwide in the 4 to 6 year time frame. 
Data communications will help relieve congested or constrained en route 
airspace by increasing the effectiveness of air traffic control 
automation systems and increasing air traffic controller productivity. 
Coupled with the controller capability to reroute multiple aircraft 
around weather and datalink clearances to multiple aircraft, it has the 
benefit of increasing schedule reliability and reduce miles flown and 
fuel used, which are most important metrics for scheduled carriers. To 
realize these benefits, updates to automation systems, controller 
training, and new procedures will be required. 


According to MITRE, RNP-RF will provide benefits over the next 3 to 5 
years in congested, multi-airport metropolitan areas. Increasing the 
number of aircraft with this capability would allow airspace to be 
redesigned to expand and remove conflicts between arrival and departure 
flows for multiple airports in dense metropolitan areas. To realize 
these benefits, updates to airspace design, controller training, and 
procedures will be required. 

Besides increasing capacity over the near term, equipping aircraft with 
the avionics mentioned above will increase efficiency and fuel savings 
and build a foundation for later NextGen capabilities. 

4. Dr. Dillingham, some have suggested that if the government were to
subsidize aircraft equipage it might share costs with airspace 
operators to distribute risk between the government and users. What are 
GAO’s thoughts on this suggestion, and what would be the best way to 
structure such a cost sharing arrangement? 

Response: Traditionally, FAA mandates the equipage of aircraft and 
provides several years for operators to comply. For example, FAA has 
recently proposed a rule that mandates equipage with ADS-B Out by 2020. 
However, for a variety of reasons, operators do not equip until the 
mandate is near because they face a number of disincentives to invest 
early in new technologies. For example, a technology may not work as 
needed, 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. In addition, several stakeholders 
have indicated that potential early investors are concerned that FAA 
may not follow through with the requisite ground infrastructure, 
procedures, or separation standard reductions. Given all of these 
disincentives, several options exist to encourage operators to equip 
aircraft earlier than the mandate with the latest technologies. The 
federal government can (1) develop standards, procedures, processes,
and infrastructure fully enough to create a strong business case to 
purchase the aircraft equipment, (2) provide operational benefits to 
those that equip, a notion that FAA has endorsed, called “best-
equipped, best served”, and (3) provide financial incentives such
as sharing the cost of the equipment through subsidies or tax credits. 
Generally, a combination of these options may be needed to promote 
early equipage of a new technology. 

Given the range of potential options to address the equipage problem 
and the disincentives facing operators, Congress could consider a 
number of issues if it decides to establish a structure through which 
the government and airspace operators can share the cost and risk of 
equipping aircraft.[Footnote 10] First, a subsidy, whether it be a 
grant, investment tax credit, fuel tax reduction, or other mechanism, 
should be targeted and specific to airborne equipment that (1) is 
mature, but does not have a strong aircraft operator business case for 
immediate implementation, and (2) achieves capabilities that lead to 
real benefits in terms of increasing the capacity and efficiency of the 
NAS. It is in these cases that the federal government’s sharing of 
costs is most justifiable because 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. 

The second issue that must be considered is how to provide benefits to 
those that equip with the targeted avionics early—either with or 
without a subsidy. FAA has furthered the notion of “best equipped, best 
served” to encourage operators to equip. What this means in practical 
terms is that FAA must ensure that those that do equip receive some 
form of operational benefit, 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, further incentivizing all operators to fully 
equip their fleets. For some capabilities, a critical mass of users is 
needed before benefits can be realized. For example, enough aircraft 
must be equipped with ADS-B Out for FAA to effectively separate traffic 
and provide preferential airspace to those that are equipped, because 
in a mixed equipage environment, FAA must retain more conservative 
separation standards for less well-equipped aircraft. According to 
RTCA, data communications capabilities can lend themselves well to the “
best equipped, best served” concept. For example, currently when 
controllers are faced with unpredicted weather facing many aircraft, 
they effectively slow them all down in order to give the controller 
time to devise reroutes and communicate new clearances by voice for each
one. With data communications, the controller can uplink reroutes to 
all equipped aircraft without slowing them down, but slow down those 
aircraft that are not equipped in order to provide them with clearances 
one at a time by voice. Thus, those equipped would get a clear benefit 
in terms of reduced delay and better routes. 

Another issue to consider is that stakeholders may not have an 
incentive to equip early because FAA has not always followed through in 
the past to allow operators to take full advantage of investments in 
equipage. As a result, industry questions whether FAA will now follow 
through with the tasks required to provide these benefits. According to 
many stakeholders, operators are wary of investing in equipage when 
they cannot achieve the full benefit of this investment and recoup 
their investment until FAA has completed tasks such as developing 
RNAV/RNP procedures at major airports around the country, redesigning 
airspace, reducing separation standards, and deploying the necessary 
ground systems in a timely manner. To allay industry’s concerns, FAA 
could complete some of these activities so that operators can take 
better advantage capabilities they already have, such as RNAV/RNP. The 
majority of air carriers have aircraft that are equipped to take 
advantage of RNAV/RNP capabilities now, but until FAA completes its 
work, they cannot do so. In addition, FAA could implement its “best-
equipped, best served” notion to simultaneously provide incentives for 
users to equip and build trust in FAA to follow through on promises to 
provide benefits to early equippers. 

Finally, because prudent use of taxpayer dollars is always important, 
it is preferable that a minimum of government resources be used to 
reach the threshold number of equipped aircraft required to produce 
real, tangible benefits for those that equip. Any cost-sharing 
arrangement should be structured so as to avoid unnecessarily equipping 
aircraft (e.g., those that are about to be retired) or paying more of a 
subsidy to equip than would otherwise be necessary. One option that 
Congress could consider to achieve a minimum level of subsidy is to 
employ market incentives through a reverse auction. Under a reverse 
auction, aircraft operators would presumably be willing to bid down the 
level of subsidy to the point that the value still resulted in a 
positive business case for the installation of specified airborne 
equipment. Under the simplest form of such an auction, the subsidy 
starting value would be the full cost of aircraft equipment including
purchase, installation, and training. The auction would proceed with 
the subsidy dropping by a specified amount over a given time period 
until a targeted critical number of equippers remained. To reiterate, 
tangible benefits that “complete” the business case and provide a 
competitive advantage for aircraft operators who equip must accompany
the subsidies so that those operators that do not equip have an 
incentive over time to equip their aircraft in order to take advantage 
of the same benefits. The advantage of holding an auction for such 
support is that the government can have more assurance that it is 
paying the lowest price for achieving the desired benefits, because the 
auction is employing market forces and allowing individual airlines to 
make decisions in their own best interest. 

Questions for the Record Submitted by Ranking Member Petri: 

1. Investment tax credits have been mentioned as an incentive for early
equipage. Would this tax incentive, and its promise of competitive 
advantage, significantly encourage operators to invest in NextGen 
equipment? Are there any potential negatives to this plan? 

Response: Tax credits could encourage some operators to invest early in 
NextGen equipage, and some stakeholders suggest they be considered as 
the government examines different ways to provide incentives to equip. 
However, tax credits have several disadvantages when compared with 
alternative ways for the government to provide financial incentives for 
equipage. First, in light of the decline in passenger and cargo 
revenue, many commercial carriers may not have any tax liability that 
tax credits could be used immediately to offset. While tax credits can 
be carried forward over several years and used when a carrier returns 
to profitability and has tax liability, the ability to reduce future 
tax burdens may not provide a significant incentive to equip now unless 
the credit is particularly generous. Second, unless the credit can be 
transferred to firms that do have a current tax liability, a tax credit 
would provide a more valuable subsidy for carriers that are currently 
profitable than for those that are not. Other forms of subsidy—grants 
for example—would provide an investment incentive regardless of the 
current profitability of the carrier and therefore would not create 
larger incentives for some carriers than for others. Finally, using the 
tax system to provide a financial incentive can have administrative 
consequences for the Internal Revenue Service. 

2. Equipage is an important component of NextGen. Right now the economic
conditions and financial pressures on Canadian air carriers are similar 
to those on U.S. carriers. Yet, in Canada, carriers have said they 
would be responsible for equipage if NAV CANADA deployed the system. 
The financial pay back for those who do equip will be fuel and time 
savings due to more direct routing and optimum altitudes. Would this 
model work in the United States? If not, why not? 

Response: No, the Canadian model is not applicable to the U.S. 
situation for the following key reasons: 

(1) Canada is pursuing a voluntary equipage strategy to enable more 
efficient flight in areas without radar coverage—especially areas over 
Hudson Bay. Planes equipped with ADS-B Out will be able to fly with 
reduced separation, as is now required in areas without radar coverage. 
Therefore, there is a clear and substantial benefit to airlines that 
equip to fly in that particular airspace. Airlines are not equipping 
their entire fleets, just those aircraft that fly certain routes across 
Hudson Bay. United Airlines reviewed its international routes over 
Hudson Bay and decided to voluntarily equip its airplanes with ADS-B 
Out because of the potential cost savings. In the United States, while 
the Gulf of Mexico is similar to Hudson Bay, there is not much other 
significant non-radar space. 

(2) ADS-B Out is not being deployed in Canada where there is already 
radar coverage, as is being planned in the United States. Therefore, 
Canada is not requiring operators to voluntarily equip their aircraft, 
and ADS-B is not envisioned as replacing radar to the same degree as in 
the United States. Consequently, carriers that operate solely in areas 
covered by radar may not have an incentive to install ADS-B equipment. 

(3) The ADS-B Out technology that Canada is requiring for routes over 
Hudson Bay corresponds to the minimum standards and equipment for ADS-B 
today and limits potential future ADS-B In capabilities. In the United 
States, FAA is establishing internationally recognized ADS-B Out 
avionics equipage standards. These revised standards, which RTCA is 
developing, will enable higher-performance applications and services 
that will enhance the capacity, flexibility, and safety of the evolving 
airspace. Therefore, there are different concepts of future benefits
resulting from equipping a critical mass of aircraft with technology 
that meets the higher standard. Canada intends to require the 
internationally recognized standards once they are adopted by the 
United States and Europe. 

(4) Canada is not currently focused on a strategy of voluntary equipage 
for ADS-B In applications. According to NavCanada, the Canadian air 
traffic management authority, ADS-B In requirements, capabilities, and 
strategies for equipage have yet to be determined. In the United 
States, FAA has conceptualized a number of capabilities arising out of 
ADS-B In technologies and equipment that it eventually plans to 
incorporate in the NAS. 

[End of section] 


[1] Validation is the process through which a technology is shown to 
operate in a real-life environment with a desired level of confidence. 

[2] Organized in 1935 and once called the Radio Technical Commission 
for Aeronautics, RTCA is today known just by its acronym. RTCA is a 
private, not-for-profit corporation that develops consensus-based
performance standards for air traffic control systems. RTCA’s 
recommendations are the basis for a number of FAA’s policy, program, 
and regulatory decisions. 

[3] 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. FAA is 
proposing a rule that mandates ADS-B out equipage by 2020. Some 
stakeholders believe that this mandate is too far out and that 
incentives should be provided to encourage aircraft operators to
equip sooner. 

[4] A TSO is a minimum performance standard for specified materials, 
parts, and appliances for use on civil aircraft. 

[5] To receive installation approval, the applicant submits a 
certification plan and test plan to one of FAA’s aircraft certification 
offices for review and approval. In addition, the applicant conducts 
ground and flight tests under FAA’s supervision to ensure that the new 
equipment operates properly upon installation. 

[6] RNP AR is a category of RNP approach procedures that take advantage 
of specific equipment, aircrew qualifications, and operating procedures 
to allow for lower approach minimums. A required component of RNP AR 
approaches is the ability of the navigation system to monitor the 
navigation performance achieved and to identify to the flight crew 
whether or not the operational requirements are being met during the

[7] The 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. 

[8] A basic or “Category I” precision approach has a 200-foot 
ceiling/decision height and visibility of one-half mile. A Category II 
precision approach has a 100-foot ceiling/decision height and 
visibility of one-quarter mile. A Category III precision approach has 
even lower requirements. 

[9] Data communications (FANS-1/A+, ATN Baseline 1) is the basic data 
communications capability that will initially provide globally 
harmonized data link capabilities. Data communications (ATN Baseline 2) 
builds on initial capabilities and provides advanced applications. 

[10] Congress has sometimes authorized cost-sharing arrangements to 
provide incentives to industry to pursue advanced technology where 
there are perceived to be broad public benefits but there may not be an
established business case for such investment. Examples include tax 
incentives for the installation of alternative energy sources and the 
Department of Energy’s Advanced Technology Vehicles Manufacturing
Loan Program, which authorized up to $25 billion in grants and direct 
loans to automobile manufacturers for developing more fuel-efficient 

[End of section] 

GAO's Mission: 

The Government Accountability Office, the audit, evaluation and 
investigative arm of Congress, exists to support Congress in meeting 
its constitutional responsibilities and to help improve the performance 
and accountability of the federal government for the American people. 
GAO examines the use of public funds; evaluates federal programs and 
policies; and provides analyses, recommendations, and other assistance 
to help Congress make informed oversight, policy, and funding 
decisions. GAO's commitment to good government is reflected in its core 
values of accountability, integrity, and reliability. 

Obtaining Copies of GAO Reports and Testimony: 

The fastest and easiest way to obtain copies of GAO documents at no 
cost is through GAO's Web site [hyperlink,]. Each 
weekday, GAO posts newly released reports, testimony, and 
correspondence on its Web site. To have GAO e-mail you a list of newly 
posted products every afternoon, go to [hyperlink,] 
and select "E-mail Updates." 

Order by Phone: 

The price of each GAO publication reflects GAO’s actual cost of
production and distribution and depends on the number of pages in the
publication and whether the publication is printed in color or black and
white. Pricing and ordering information is posted on GAO’s Web site, 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or
TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card,
MasterCard, Visa, check, or money order. Call for additional 

To Report Fraud, Waste, and Abuse in Federal Programs: 


Web site: [hyperlink,]: 
Automated answering system: (800) 424-5454 or (202) 512-7470: 

Congressional Relations: 

Ralph Dawn, Managing Director, 
(202) 512-4400: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7125: 
Washington, D.C. 20548: 

Public Affairs: 

Chuck Young, Managing Director, 
(202) 512-4800: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7149: 
Washington, D.C. 20548: