UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION

2^ND^ ANNUAL FAA INTERNATIONAL AVIATION SAFETY FORUM

BREAKOUT SESSION PANEL B:

VISION FOR THE FUTURE OF

AIR TRAFFIC MANAGEMENT (ATM)

THURSDAY, OCTOBER 20, 2005

The session came to order at 2:30 p.m. in the Washingtonian Salon I of
the Westfields Marriott Conference Center, 14750 Conference Center
Drive, Chantilly, Virginia, Paul F. Foley, moderator, presiding.

PRESENT:

PAUL F. FOLEY President and Chief Executive Officer, MAIR Holdings, Inc.

CHARLES KEEGAN Vice President, Operations Planning Services, and
Director, JPDO, Federal Aviation Administration

K. RAMALINGAM Chairman, Airports Authority of India

KATSUYUKI NAKATSUBO Director, ATS Engineering Division, Japan Civil
Aviation Bureau

KAREN D. LEE Director of Operations, United Parcel Service

P-R-O-C-E-E-D-I-N-G-S

2:22 p.m.

Mr. Sabatini: So let me begin by saying that I just came from the room
where they\'re displaying ADS-B and RNP. It is wonderful.

So with that, good afternoon and welcome to a vision for the future of
air traffic management. This is an important topic. Demand is growing
and it is growing increasingly complex. The challenge: how to support
efficient and seamless global operations and how to do this more safely
than we do it today.

Here today to lead the discussion is Paul Foley who began his aviation
career with American Airlines and held a number of executive-level
airline positions. He is now president and chief executive officer of
MAIR Holdings, the parent of Mesaba Airlines and Big Sky.

Ladies and gentleman, Paul Foley.

MODERATOR FOLEY: Thanks, Nick, and welcome.

I\'m personally delighted and honored to be here today, particularly
because our success criteria involves nothing more than having a
pleasant conversation for roughly two hours. Anybody who has spent an
hour and a half waiting to take off at LaGuardia can appreciate the
importance of air traffic management.

As far as the structure of our conference this afternoon, we\'ve agreed
that we will be provocative and that\'s part of our success criteria.
That\'s fine with me. I\'m looking forward to being provocative up here.

Passenger traffic over the next five to 10 years will double and it\'s
likely that the number of departures may quadruple. We\'ve emerged from
air transportation for an elite few to mass transportation and there is
a compelling argument that we will move back into a period of personal
on-demand transportation for an elite few. So the challenge is, how do
we provide the infrastructure to support that traffic efficiently and
effectively, and safely.

What we will do is have each of our panelists go through a brief
introduction of the issues, as they see them; the panel was selected for
their experience and background, and describe the current situation from
the perspective of a vision and what does that vision look like five, 10
years from now. Think of how exciting it would have been if
transportation executives were able to get together back in the \'30s
from a railroad perspective and realize that they were in the
transportation business. And that\'s kind of how we\'ve approached this
particular assignment.

How will air traffic management look in the future and what are some of
the barriers from a domestic and from a global perspective that may
constrain that vision?

And then finally, how can we as leaders confront and remove those
barriers?

Some issues that may stimulate some discussion. How to deal with the new
operations, the UAVs and the ULVs. How to deal with potential
multi-modal solutions; highways, railroads, waterways and in addition to
your airports, and how to integrate that transportation network to
optimize efficiency and effectiveness across all modes. How to deal with
the tension between personal choice and cost to travel. How to deal with
global infrastructure issues such as selecting the right technology. How
do multinational solutions bear upon the problem. In preparing for this,
we had a conference call and many of our staff submitted questions to
us. And some of those questions dealt with the aircraft manufacturers
and how will the cockpits of our aircraft be configured across the
global network and how will aircraft lessors deal with it. What are some
of the other barriers such as financial, technological, geo-political
and environmental?

So with that brief introduction, let me turn it over to the panelists
and ask each of them sequentially to take five to 10 minutes and
introduce themselves to you and talk about their view of air transport
management, air traffic management.

PANELIST RAMALINGAM: Thank you, Mr. Paul.

As you said that the traffic is growing and it is going to grow in a
faster rate, and as predicted the Asia-Pacific region is going to grow
much faster than the other regions. I come from the Asia-Pacific region.
And, for example, my country, if you take the growth, it has been
phenomenal and I can give you some statistics of the aircraft movements,
which is in the last two years. The aircraft movements growth in
2004-2005, when compared with 2003-2004 is 19.9 percent international,
domestic is 9.7 percent and overall it is about 12 percent. And if you
take the passenger growth, that international is 16.7 percent,
international and domestic, 24 percent. And if you take the average of
the total, it is around 21.5 percent. If you take the cargo movements,
18.8 percent, and that is international. Domestic, 21.6. And then the
total is coming to 19.8. So there is going to be a tremendous growth of
air traffic.

And in my country I see that the middle class travelers are using the
airport, that is the air transport more frequently now and the airspace
in global events is considered to be a very vast abundant resource has
really become capacity-constrained with conflicting user requirements to
be dealt with.

We have civil commercial flights, military aviation, general aviation,
space research, hobby and adventure flying and then training, helicopter
flying. These have been constantly increasing and the airspace has been
getting congested day-by-day.

The user agencies, which are using the airspace, is increasing with the
increase in civil air traffic. So then there is a challenge for the air
traffic management as well as the airspace management because there is a
complex and conflicting use requirements and they have to be
accommodated adequately along with other commercial civil traffic. In
such complex and mixed type of uses we\'re ensuring the safety of the
aircraft and its occupants is becoming a highly complex and challenging
task for the ground-based ATM systems. So there is a need to going for a
new technology and that the new technology, which you are all aware that
we have to go in from the ground base technology to the satellite-base
technology that is CNS ATM which is the technology for the future. So
this technology has to be brought in and then it has ‑- it is a global
technology and we have to go use that technology in the future.

And another challenge, which we are facing, is the UAVs, which has been
mentioned by Mr. Paul. And then these UAVs are, you know, they are also
opening up challenge for the ATM system because they have us ‑- they
have to be accommodated within the air space. And UAVs, there is no
separate standards for the operation of UAVs. And what we have done in
the India, we have recently raised this issue in the regional meeting in
Bangkok and also add to the goal to what those standards and operating
procedures for the operation of the UAVs because these UAVs at present
we are accommodating are significant to the air space. So this is
another challenge, which we are facing, the operation of UAVs. But what
Mr. Paul mentioned, there is maybe this case of the other countries.

And another thing, which we are facing, is the entry of low-cost
carriers. And in my country, the number of low-cost carriers are
increasing. We had only three commercial airlines that is, National
Airlines, and the state one. Now suddenly it is becoming six and there
are a number of other airlines are in the queue and there is going to be
more and more aircraft operating in the airspace. Of course the
international airspace, international air movements are there, which is
all flying over Indian airspace and the Indian airspace is the biggest
one, which about 6 million square, you know, kilometers. And it is a
very vast space and we have a land space about 2.8 million square
kilometers and 3.2 oceanic area, 3 million square kilometers. So these
are ‑- of course, these are some of the challenges.

Now, to ensure safety and efficiency in such complex and conflicting
traffic environment and then we have to have an excess capacity plus the
demand in the airspace without discrimination.

And then there are other issues like environmental impact due to such
growing traffic and the emissions polluting the environment. Considering
this, we have what is the future, mission for the future ATM? If you see
the future of ATM, it does involve the global satellite base navigation
system, which enhances the goal of that base to enhance safety, increase
system capacity, optimize use of the airport to capacity. Then of course
ultimately to reduce delays. Then reduce the flight operating cost. Fuel
consumption has to be reduced. And then the more use of the airspace,
more flexibility, reduce operations. And then there is a need to have
dynamic flight planning, better coordination for optimal flights. And
then ultimately, there is a need to have the reduction of the air
traffic controller workload and increase productivity.

So these issues have to be looked into and then while we\'re looking at
the futuristic vision of ATM; that is, which will add in more safety,
security, environmental impact and noise abatement. That is again the
capacity of its demand, the efficiency of the ATM system. And of course,
there is a need to have airspace harmonization put in this place
satellite navigation. And then there is a need to have integrated
planning and implementation of the latest technology.

So these are the things, which I perceive as the future vision. But I
think ultimately the future vision of ATM should be that there should be
that there should be a field consideration and then there is need to
have flexi-track system and then the airlines may go in for a
user-preferred trajectory and then we have to look into ATM
harmonization. Ultimately, we have to go for global sky. So that the
airlines or the aircraft flying, it becomes more flexible and the
airspace is used optimally by the various user agencies.

And considering that we have what in our country is we are already
working out a national civil aviation policy and which will look ‑-
which will take all these aspects and we are in the process of working
out a national and civil aviation policy and it is ‑- we are in
consultation with all the stakeholders, various departments, the
defense, commerce and other departments and other stakeholders like the
airlines and other agencies. And that will definitely take care of all
these issues and we have also considering the flexible use of the
airspace; that is, there is need to have a better coordination between
the military and the civil, which is, in fact, in our country, it is
more number of military flights operating in the airspace. So we are
looking at that also.

So considering that there is a need to have the, you know, the
futuristic ATM system should have the capability to take on the
military, you know, aviation requirements.

And with all these things in mind or in consideration, there is a need
to work together. That is, we have to work together and there is no need
to have a global harmonization, that is, the ATM system should be
harmonized and the ‑- all the, you know, the ‑- cannot be done ‑-
planning cannot be done in isolation. And the political barriers should
not come in the way and we should look at it in the region as well as
the globally. And we should as the ATM system is a global system so we
should work together and achieve the ‑- ultimately the global sky so
that there is a seamless flow of air traffic from one part of the ‑- one
point to other point. That\'s what I foresee in my view.

MODERATOR FOLEY: Thank you very much. Well done.

Karen?

PANELIST LEE: Okay. Good afternoon. Karen Lee here from UPS and I think
I\'m the only operator and I prefer to think of myself as a customer on
the panel. Well, Paul, I guess you do too, but you\'re the facilitator.

And I\'d have to say in the interest of being provocative, perhaps a
little dissatisfied as a customer of the system, especially the way it
stands today and perhaps in our thinking about where we need to go for
the future.

There are a lot of different customers who need to use this system. It
just so happens we fly a lot of packages. And if you look at what we do,
we deliver two and a half billion packages a year; not all of them by
air, by any means, but each one of them has as least two customers
attached to that. So there is a chance to sour five billion people on
our business. So it is extremely critical to us that we solve some of
these problems that are facing us. And to that end, I really appreciate
the attention that the FAA, ATA and the global community is willing to
put on these problems.

Understanding the global impact; we heard about that this morning from
an economic standpoint, it ripples completely through everybody\'s
bottom line if we don\'t get this right. So, it\'s a great forum to be
talking about this.

I don\'t think it\'s any surprise whatsoever to say that the customers
or operators want affordable efficient access to the airspace and the
airports and they want it when they want it. And I don\'t want it when
you tell me that I can have it. I need it now or I need it tomorrow, or
whenever I need it. But I need it when I need it.

And so I think what the customers, the operators, are really struggling
with right now is not what we\'re going to look like in 15, 20, 25
years. I can\'t even think about that. I need to know what\'s happening
in the next five years. We have tremendous business urgencies facing us
that we don\'t think the airspace system of today is equipped to respond
to. And we heard a lot about flexibility this morning. There is no
flexibility in this system. There is no room to be flexible because
we\'re at capacity in so many different places; not only in the United
States, but time after time after time we\'re taking ATC delays out of
Peking. And if we can\'t get our planes off the ground out of Peking, we
can\'t make our connections through Anchorage, we can\'t connect through
the U.S. and then Europe takes a hit on their packages. So it truly is
global for us and we are feeling it all around the world. So we care
more about the next five to 10 years than we do what seems to be the 25
years. Because I\'m not sure that we can pin that down based on the
knowledge of what we have today. We can\'t say what does it need to look
like in 25 years because we don\'t know enough about 25 years from now.

And in addition to that, in 25 years we will have had plenty of time to
plan and implement and research and collaborate and all those wonderful
things that you need to do to create a vision, but that\'s 25 years from
now. And it becomes easier and easier to envision what that might look
like 25 years from now every day. But, right now what we need to
concentrate on is the near term.

We\'ve got thousands of airplanes out there flying with today\'s
technology on them; communication, navigation, surveillance, and we know
that those systems will not take us into the transformation stage. And
we know that we have to make the aircraft part of the architecture. Not
too often does that get said out loud in forums like this because I
believe that every time we come up against the issue of equipage, people
just turn and walk away because it costs money, there doesn\'t seem to
be a lot of money available out there, especially with the United States
carriers and given the economic state of where we\'re at. Plus, we\'ve
been burned in the past, both on the FAA side and on the operator\'s
side with an inability to implement an expensive technology. So we\'re
all shy of it, but honest to goodness, we have to do it.

So, what are we looking at? We are convinced that we have to move to a
performance-based airspace system. We believe that at the end of the day
it doesn\'t really matter what technology we put on the airplane. What
we need to describe is the functionality and allow the manufacturers
figure out the technology to meet the required functionality. If we can
do that, I believe that we can set the stage for our short term success
as well as then begin to understand where we\'re going for the longer
term.

We have to make that strategic move to a performance-based airspace
system and it does require an aircraft-centric navigation and
surveillance scheme and we also need to be able to do spacing. And I
hate to say it; it\'s provocative, but we have to be able to start
looking at doing separation from the aircraft as well, at least certain
levels of it.

We have to have air traffic management instead of air traffic control.
We\'ve got to change the way we look at that and the processes that we
use to support that. There is an underlying premise that supports the
strategy of an aircraft-centric or the aircraft is part of the
performance-based environment and it is that you can achieve large
improvements in assisted capacity, customer or user; whatever term you
want to use, customer flexibility and customer efficiency and that can
be enabled if you can share information about your flight intent,
traffic and the airspace environment. You can also achieve that with
collaborative decision-making, and I mean that between the aircraft and
the ATC environment, not between the AOC, over the telephone line
talking to the command center. That\'s a different kind of collaborative
decision-making. We\'ve got to involve the flight crew in the equation.
And we have to distribute decision making to the person that is the most
appropriate person to make that decision. Sometimes it\'s going to be
the flight crew, sometimes it\'s going to be air traffic and then
sometimes it\'s going to be a collaboration of those two.

Our aircraft are not equipped today to do that. And honestly, we can\'t
wait 25 years and we can\'t wait until we dot the \"I\'s, cross the
\"T\"s on what that vision is supposed to be looking like. We have got
to start today. And the good news is though, we don\'t have to wait
because we\'ve got some of the functionality described and laid out.
Now, what we need to do is take technology that is already certified,
already approved, already available to us and start using it in
different ways than we\'ve been using it.

Marion had mentioned this morning about RNP and the great benefit that
that\'s bringing every time we implement a new RNP approach. I\'m going
to tell you something; we\'re never going to achieve the potential that
RNP can give us until we look at the surveillance side of things simply
because the inaccuracy or lack of accuracy of the surveillance data that
the controllers are working with is not going to support a full
realization of the benefits of RNP. We have to fix the surveillance side
of things as well. That requires putting stuff on airplanes. We can
leverage what we have today and we can start that transformation today
and we can do it with very low risk, to speak back to the safety side of
things. That\'s what we\'re here to do. We can do it with very low risk
and we can start accruing large benefits. UPS is involved now in a
project that will allow us to do spacing tasks from the cockpit. We have
been teamed up or partnered with a small company that many of you have
your equipment on your airplanes called ACSS and they\'re developing an
advanced ADS-B application for us that will allow us to do a spacing
maneuver that will allow us to continuous descent arrivals with lower
fuel, lower emissions and less time, less distance flown coming into our
hub city. We expect huge savings from that.

And I\'ll give you one visual picture before I stop talking. We need to
put our airplanes together like they\'re beads on a string so that we
can ensure that they\'re never going to get too close, but they\'re
going to be close enough to be optimal. Beads on a string. And that\'s
what the project will help us do and we can talk more about that later
because I could start going on for two hours about CDAs merging and
spacing, so I\'ll stop with that.

But the question I have for the panel and anybody in the audience who
cares to comment is are we ready to take what we\'ve got today and go do
something with it, or are we just going to think about the next 15 to 20
years?

MODERATOR FOLEY: Thanks, Karen. Nice step in the provocative direction.
Appreciate it.

Kat?

PANELIST NAKATSUBO: My name is Nakatsubo. I am from Civil Aviation
Bureau of Japan. I am primarily working in the field of the CNS systems,
development, summarization and implementation.

Initially the ICAR process, the funds committee was established 20 years
ago and initial idea was to design the CNS ATM system for the 75 years
ahead. So 25 years, we have only five years to go. So it\'s very
difficult to foresee how we will have, what will be needed in the near
future.

So, my intention to accept, to step in this activity, this panel
activity is to see the opinions of the participants, especially how we
can define our future, our future requirement and the technologies,
available technologies, evolutions. It\'s very difficult task. In the
past we have difficult problems. Many standardization has stopped or
eluded or sometimes modified. Then the new technology emerged. Sometimes
new technology then be replaced by the much newer technologies. So I
don\'t know how we can really foresee 10 years ahead, 20 years ahead. So
I would agree with Karen Lee that we may not be able to easily see the
future.

But we must see the future because the CNS infrastructure to ATM
services. These infrastructure must be implemented prior to the
implementation of the services, so the services, prior to the services
we need infrastructure. For that we need to define the systems. So,
it\'s very difficult question.

Speaking of the Japanese situation, Mr. Ramalingam already mentioned
about Asia-Pacific region\'s situation. So I only touch upon the
Japanese situation. In Japan, from the past, thought of the total
transport planning has been discussed within the ministry. I\'ve also in
the past touched upon, but it\'s very difficult. We have very efficient
high-speed railway systems. It connects in the beginnings Tokyo and
Osaka; only 500 kilometers apart, about three hours. Nowadays, it\'s
connect these two points in two hours and 30 minutes.

During I\'m being involved in the sort of the total transportation
develop design, we talked about the competitiveness of the air transport
with railway transport. At that time, the three hour ‑- 300 kilometers
was so what they thought of the timing point, the railways is
competitive less than ‑- up to 300 kilometers or so and over 300
kilometers, the air transport is much stronger. But nowadays, railway
transport becomes much higher ‑- much ‑- achieves much higher speed, so
maybe the turning point might be slightly higher.

On the different routes, between Tskuba, one of the Japanese northern
city over around the 2 million population and between Tokyo, I think
that\'s the ‑- in between two cities there are more than a few flights
every hour with Jumbo flying. But our train system, every four minutes,
eight minutes, 12 train or 12 car or 16 car train maybe the capacity
would be two or three times higher than lot of Jumbos landing between
Tokyo and Osaka. So it\'s very difficult. But still, they are in the
sort of competition. It\'s very difficult to say from the administration
point of view and the define and guide because customers select by their
own choice, not the government\'s choice.

And speaking of the traffic management situations, we need to enhance
the capacity of our major airport, especially Haneda Tokyo Airport. We
have three runways at the airport. It now provides a little bit less
than 300,000 flights per year, departure and landing. So our plan is to
construct the fourth runway at Haneda. That would increase the capacity
to over 30 percent. But, only adding the capacity to airport is not
sufficient. As you can easily see, we need to enhance the capacity of
the airspace.

So we are working on the airspace design. Also improving our existing
ATFM flow management function to the ATM functions.

This October 1st officially our center, ATM center, was established. The
actual operation of the ATM center will start next February. Before
that, we will implement ‑- that is now ATFM functions and the
coordination for the airspace management, also the oceanic control will
be incorporated into the ATM center in Fukuoka about 1,000 kilometer
west of Tokyo. So that\'s the ATM center.

In the early stage it will be just an interim or initial ATM functions,
but we will implement additional functions to enhance the capacity to
accommodate the expected increase of traffic demand.

For supporting these ATM functions, that my difficult job. Which system
I need to select or I need to develop and I need to implement with
limited budget. I can\'t afford all the systems to be implemented at the
same time at the same place. I need to find the best mixture of the
systems, ground systems. That means ground systems, airborne systems and
the intermediate media. These need to be best combination of the system.
So the performance and the efficiency of ‑- oh, actually the budgetary
efficiency would be achieved.

So, that my wish. So hopefully through this today\'s discussion, I can
see some idea how I can foresee the future.

MODERATOR FOLEY: Very nicely done. Thank you.

Mr. Chuck?

PANELIST KEEGAN: Thanks, Paul. Thanks for the opportunity to be
controversial.

Good afternoon, everybody. My name\'s Charlie Keegan and I\'m the
vice-president for Air Traffic Operations Planning, as well as the
director of the Joint Program and Development Office, which is a
multi-agency group that\'s been put together to actually solve at least
the United States\' future with some eye on global harmonization as well
as the environment.

I would contend that we\'re extremely limited today, that the discussion
about the future should have taken place over the last several years,
that we\'ve sort of missed the ball and we\'re incredibly behind the
power curve. And as you see the acceleration in the amount of airplanes
actually flying, what\'s on the table that want to fly, whether they be
very light jets, UAVs, UASs or commercial space flights, we are so far
behind that it is not really possible to properly plan, that we are in a
very urgent situation that is going to drain the economic viability of
our future if we don\'t just sort of get on with it. And the selection
of technologies and the selection of who\'s going to do what has to be
done immediately, otherwise we\'re going to continue to fall farther and
farther behind.

In \'06, probably one of the most impacting airplanes in the world is
going to enter the market. This year it\'s the A380. Changes everything.
One of the few airplanes that will actually make money at today\'s oil
prices. And then on top of that, a very light jet. One\'s already
certified; another one on the table to be certified, that flies at 300
knots slower than that wanting the same airspace with just one-tenth the
people, or one-one-hundredth of the people on board. Tremendous change
entering the system and tremendous change needs to be done to the
system.

And I would also challenge us that it\'s not our job to actually predict
that future. It doesn\'t matter to me whether they fly or not fly. It\'s
our job to enable that future. It\'s the job particularly in the U.S.
Government and the Government agencies to make sure that there\'s an
economically viable future to be able to be had and we have to design
that in the system, and that starts today.

We already use regulatory authority to make sure you can\'t fly into
Chicago. We use regulatory authority to make sure you can\'t fly into
LaGuardia. But just as an example, if you do take a four-hour stoppage
of air traffic in Atlanta today, 160,000 people don\'t get to their
destination until at least the next day. So a small city doesn\'t move.
Do that a couple times in a row, I don\'t know what happens in 20 years,
and our goal is 300 percent increase in traffic. So three times that? A
medium-sized city doesn\'t make it to its destination the same day. I
don\'t know who travels that way any more.

So, from the future standpoint, I see us all going to the way of the
trains unless we solve the problem. And I think there\'s plenty of
opportunity on the table to actually meet the demand, actually meet our
expectations and exceed them.

So we address the problem sort of by getting back to basics. It\'s about
the airplane. There\'s no need for an air traffic control infrastructure
or anything unless there\'s more than one airplane flying at a time. So,
we go back to the airplane. They\'re incredibly intelligent objects. If
you work in computers or anything else, or in Karen\'s world, the
intelligence of the actual package intelligence of the object represents
the way you get it done. Intelligent objects in the way that you would
move an automation system is how you quickly move packets of information
around the system. These are packets of information that can quickly
move around the system and you handle them based on how smart they are.
The Airbus 380, a Boeing 787, all represent the most intelligent things
coming off the line today with very long life cycles. We have to
actually maximize what they can do today into the system today. We far
under-utilize the capabilities that exist on the airplane, as Karen has
demonstrated over and over to us. What\'s available on nearly
20-year-old 757, 767, we\'re not even scratching the surface of what
those airplanes can do. If we think about the business aviation market
and what a big, you know, high-end business jet can do, I don\'t think
we\'ll ever scratch the surface of what they\'re capable of actually
doing.

We need to use that and then we don\'t have to worry about what the
capabilities are, because you\'ve heard it over and over and you heard
it this morning. Required total system performance. How you\'re able to
perform is how we can manage the system. But very much like we do in our
automobiles, we do not let John Deere tractors and bicycles on highways.
And so we have to start to bring the culture to get over about if
you\'re capable of performing, you should not be held up with a John
Deere tractor in front of you. And we have to start to move that ball
along so that when you\'re equipped, you have access and when you\'re
not equipped, you have limited access. Doesn\'t mean you\'re excluded.
The romance of flight has to still exist. I\'m a true believer in that.
We have to allow that. But that doesn\'t mean that you have to have
access to Chicago when you want it. Don\'t have to do that.

So, as we move to that, I think we see that growth in the next five
years, but there\'s plenty to do. RNAV and RNP represent a great step
forward and we\'re beginning to utilize that. And over the next five
years, I think we\'ll see an explosion, how we bring that to bear on the
system. However, if you look at what we\'re doing today; to be
controversial, we\'re not exactly setting up the system in that design.
We\'re not taking the turning around of the Chicago Airport to use just
RNP, RNAV only. We\'re rebuilding the exact same infrastructure to use
the exact same procedures instead of saying no, this is going to be a
highly efficient airport. It\'s going to use RNP and RNAV. It\'s the
only way to get in. Not even under discussion. We\'re not putting these
things in places that could really, really use that capability. We\'re
putting it where we need that capability because the current
infrastructure can\'t support it. Well, it should be the way that we
actually design the system around, because that\'s the way the planes
are coming off the line.

So, the second tenet that we see after five years is we have to unleash
ourselves from the ground. We have sort of an archaic system that
defines boundaries. They\'re nearly immovable because of the way our
computer systems were designed back in the \'50s and the late-\'60s. And
in Europe, they have the same problem. They have boundaries that are
designed and held onto with great reverence that were designed in the
Middle Ages and those boundaries cause problems for us and the whole
system is designed around from the Middle Ages, from our Civil War,
that\'s the way we operate. We operate from a context that\'s hundreds
and hundreds of years predating the birth of flight. We have to kind of
get over that we have to be tied to the ground.

We have things in space that can help us. The airplanes don\'t need
anything. The airplanes themselves can fly and land right on the center
line without any help. We have to actually maximize the use of that.
We\'ve built a giant infrastructure that\'s incredibly expensive of
which we charge the public for and the same time nobody really needs it.
Very strange thinking, in my view. We need to unleash ourselves from
that. There are certain people that can use an infrastructure; that\'s
great. Maybe they should be the ones that pay for it.

So in the next 10 years you\'ll see an unleashing of the ground from
navigation systems that aren\'t stuck on the ground anymore.
Everybody\'s going to have a satellite. Surveillance. ADS-B unleashes us
from this 40-mile, 60-mile, 140-mile parameters of what you need to see.
We take the intelligence from the airplane and send it to the people
that can make decisions, whether they be other pilots, whether they be
air traffic controllers, whether they be dispatch, whether they\'re
search and rescue. We have accurate information to 21 feet. I\'d not
expect any World War II radar to beat that and that\'s what we\'re using
today. We have to unleash ourselves.

Communications. We utilize high-powered walkie-talkies right out of
Radio Shack. One end is stuck in the ground, one end that\'s stuck in
the airplane. You push it, you talk. If somebody else has another
walkie-talkie and pushes it, you can\'t hear them. How many people here
have a cell phone? Okay. Can find you anywhere at any time, except in
this room, unfortunately. But since we\'re not flying, that\'s probably
okay. But addressable communications is the way, whether it be data,
whether it be voice, whether you want to surf the web. How easy would it
be to take your Blackberry and stick in the front of an airplane. We can
do that today. We\'ve proven that technology over and over. Lufthansa
charges you \$29 and you can do it from the back of the airplane. But
you can\'t do it from the front of the airplane. Pretty simple stuff.

So I think the technology selections of the next 10 years represent
pretty easy choices. We don\'t have to pick the vendor. We don\'t have
to pick the things. We just have to agree on the standards and execute.
A level playing field globally for the market to be able to move ahead.
What better deal than that?

So then 20 years, the situation changes even better. Because what
hasn\'t happened is we\'ll pick all these technologies and we\'ll move
all these things forward and we won\'t have the organization, the
policies or the culture that allows us to do things. And so we have to
make the move from a forensic safety environment where we tear apart
everything to decide what happened to that risk-based safety culture
that represents that everything we\'re doing is safe and we understand
what those risks are, and we\'re dealing with them every single day, and
that we\'re not pushing things out that aren\'t supposed to be there.
And once that culture exists, we\'ll be able to do wonderful things.

In today\'s environment, ADS-B represents the ability to go from
five-mile separation to one mile, under our own rules. These are the
rules that are on the books. We\'re now willing to do that. That
represents a forensic culture. We have to understand that the technology
exists and 21-foot accuracy is better than what we\'ve got and we should
be able to reduce that separation today because that\'s the capability
that it has. So, we sort of have to move the culture over 20 years and
that will be probably our biggest challenge and the technology
selections will bring it along.

And, the rest of it all comes together I think in forums like this where
we can have the open discussion about what we\'re doing from Karen\'s
perspective, what we\'re not doing and then come to grips with that and
actually move forward.

MODERATOR FOLEY: Thank you very much. Now as they say on TV, let\'s go
to the phones. Questions from the audience? Microphone\'s back here if
anybody wants to ask a question.

(No audible response.)

MODERATOR FOLEY: Okay. We have a few questions that were turned in
writing. Let me walk through that and this is open for anyone who is
interested in responding. I\'ll try and do it without putting my glasses
on.

What about the interrelationship between lessors, manufacturers,
operators and regulators? With the overwhelming majority of air carrier
aircraft now leased by airlines, the real ability of an airline to
direct the installation of on-board air traffic management technology
upgrades has been ceded to the major leasing companies. These lessors
require interchangeable flight deck configurations that can be best used
to cross many potential operators since lessors often get the aircraft
returned before the end of their depreciated life. Therefore, what the
regulator may plan in airspace technology improvements is really going
to eventually be approved by the lessor or the operator.

Any comments?

PANELIST LEE: I\'ll comment. I think that\'s backwards. The equation is
backwards. The lessor is a business ‑- it\'s a business arrangement and
if the airline is the customer, you\'ve got to give the customer the
functionality they require to fly in the airspace that they\'re going to
fly in. So, I don\'t see the lessor driving anything. I see the airline
requirement driving it and if the lessor decides that they want to have
a standardized cockpit that\'s not going to allow the airline to fly in
this region, you\'re not going to lease the airplane.

MODERATOR FOLEY: Okay.

PANELIST KEEGAN: I\'ll take a quick shot at that as far as the regulator
side of that.

I think it\'s up to the regulator to actually identify the tenets of the
business case to represent what it takes, what the value is, to identify
a set of customers, airlines, the users of that system. Those customers
understand what the business case is and then they can deal, you know,
with the lessor of the airplane.

MODERATOR FOLEY: But you agree it should continue to remain optional?

PANELIST KEEGAN: I think there are choices. I don\'t think that
everything\'s optional. I think when the business case, particularly
from an economic growth point of view is clear, then we should be able
to regulate, as we\'re doing in regulating the prevention of airplanes,
we need to prevent inappropriate airplanes from entering airspace so
that we can maximize the movement of people and goods. It\'s that
simple.

MODERATOR FOLEY: Okay. Any other questions?

(No audible response.)

MODERATOR FOLEY: Here\'s an interesting one. Do you really believe
people will get on ‑-

PANELIST KEEGAN: We had one.

MODERATOR FOLEY: Oh, we had one?

PANELIST KEEGAN: We had one.

MODERATOR FOLEY: Go ahead.

PANELIST KEEGAN: We had one brave soul.

MODERATOR FOLEY: It\'s a shy group.

PARTICIPANT: As we move towards the future and trying to get everything
perfect in terms of transportation, the administrator today used the
words \"transportation infrastructure.\" So how are we going to ensure
that that infrastructure, the airports, when you arrive 20 minutes
early, you have to wait an hour for a gate, things like that, are we in
synchronization to make sure that the total system will be operating, or
any comments on that please?

PANELIST RAMALINGAM: Yes, I can. See there is a need to have
synchronization between the air traffic management and the airport
capacity.

If you make no new advance system of the air traffic management, if the
airport capacity doesn\'t increase, then it is not good match. This will
then mean delays. So what we have to look at it if the airport, the
capacity also have to be enhanced and then what we call is the airspace
capacity, the additional runways, or taxi tracks and even the parking
bays. That also has to be enhanced. And unless we both match; that is,
the air traffic management as well as the airport capacity, we will not
be able to achieve. So otherwise there will be delays, if the
infrastructure is not available, air traffic management will not be able
to relieve the delays. So both are required.

MODERATOR FOLEY: Anybody else want to take a shot at that?

PANELIST NAKATSUBO: I have the same view. Since the increase of the
airport capacity would be in the many number of flights. But at the same
time this means the people need to access to airport. So the automation
programs, the access programs are also being implemented like the
construction of the mass transit system to major airport, addition of
the new railway, addition of the more rail, etcetera, etcetera. Maybe
through the smaller airport the road construction as well as the
increasing the service of the bus company to the airport. These
combinations of ground infrastructure, aerodrome and ATM would be needed
if we are to provide better services.

PANELIST KEEGAN: I was just going to say one of the things that we\'re
doing in answer to that is to make sure we have a network enabled
operations, you know, desire that everything is networked together so
that the right information goes to the right people. So it is incredibly
frustrating to actually get on time into Atlanta and then have to wait
for the gate and so, I join you in that.

But, that\'s because the information infrastructure are not connected.
You know, the air traffic infrastructure information is not connected
to, you know, gate management decision making, so that network and being
able to sort of have Internet-like capability for all the decisions that
are available to all the people that want to have that information is
incredibly important.

MR. KAYDA: Mark Kayda with Airline Pilots Association.

Karen, you mentioned that we need to improve the equipment on the
aircraft except we have a slight dichotomy here. You\'ve got three
members of the panel sitting around you that have relatively advanced
and are making advancements in their air traffic control system. And
yet, today you can fly, you leave the United States, you go to Europe,
which is very advanced. You continue on within the same day and you\'re
into very underdeveloped countries with their air traffic control
system.

What do you see; for any other members of the panel, what do you see of
bringing the rest of the world up to the levels that you\'re at so that
we\'re not forced to have a very advanced equipment so that she can get
access into airports here in the United States, but at the same time
have to keep very less advance to get access into other countries?

PANELIST KEEGAN: Is he asking you?

MODERATOR FOLEY: Don\'t all speak at once.

PANELIST KEEGAN: Okay. I got it. Okay. I\'ll take a shot.

Certainly sovereignty issues play a huge game. I mean, a couple things.
One, interoperability has got to be key. I don\'t think that it\'s
reasonable to think that there are certain countries that actually move
to digital communication systems because they absolutely have no need
to, but part of the issue is that it\'s not the countries that are
underdeveloped. It really doesn\'t matter if you put it all in the
airplane. The airplanes aren\'t underdeveloped. The airplanes that are
flying in that airspace aren\'t underdeveloped; there are some, agreed.
However, a lot of that information is still available to well-equipped
airplanes. Particularly, you know, in the countries that are represented
here, planes are very well equipped. It wouldn\'t need to have the kind
of infrastructure we\'re talking about because the infrastructure is
available. The infrastructure is not tied to the ground. The
infrastructure is from the airplane and is from the sky. And in that
regard, you\'re carrying the infrastructure that provides for safe and
easy-flow environment with you always.

And so, many of the countries, you know, that we\'re working with,
that\'s what they believe and so there\'s a few pockets and a few holes
that represent ‑- you know, that may have some issues, but it may be our
responsibility to fill those gaps to make sure that it\'s carried
completely around the globe. So, because you\'re carrying it with you
now. It\'s not an issue of whether the country wants to build it. You
have it.

PANELIST RAMALINGAM: I just want to add, the airspace management, what
you said, that there\'s nothing to do with these underdeveloped or
developed and the aircraft is moving in the airspace, the equipment, the
airplane has to get the signal, the guidance, navigation surveillance,
that equipment is really cheap. For instance, for example, in my
country, we already implemented RVSM in the last year now, in 2003 now.
But, so, we have even in my ‑- you know, we are in the roots for the
more flexible use of the airspace and we are also in the process of
developing the SBAS system on our own, and the satellite-based
navigation system that is a project. Of course the WAAS next is the
EGNOS and Japanese and then fourth one is in the ‑- being developed as
SBAS system in India, which is called Gagon project. So, it is not that
the technology ‑- to have, you know, global technology. You have to keep
pace with the technology. You cannot be left behind. So that we ‑- the
air traffic management is seamless and even the automation of the air
traffic management and then going from air traffic control to air
traffic management and then the introduction of the ADS-B, which we are
already in the process of undergoing trials in my country. And even the
ADAC/PDLC, we already introduced in the Bay of Bengal, Arabian Sea and
other places. So we are keeping pace with the technology so that the air
travel becomes, you know, more ‑- it is ‑- you know, it meets the safety
requirements.

PANELIST LEE: I think when Charlie says that it travels with the
airplane, it can travel with the airplane. It doesn\'t today. And that
was my point, that we\'ve got airplanes that we\'re going to be flying
for the next ‑- at UPS, we\'re going to flying them for 40 years. You
know, we don\'t turn them over like the passenger carriers do. We don\'t
have a business need to do that. And the thing about it is, we have got
to put that capability that\'s inherent in the airplane and add a few
things to it and bundle them all together and there comes the ADS-B and
there comes RNP, which we already have on all of our aircraft; we\'re
100 percent capable of that, we\'re 100 percent ADS-B out, but we\'ve
got to provide displays. And the thing that we\'ve found was that the
CDTI down in the bucket right ahead of the thrust levers is too
expensive and you can\'t cost justify it, at least not with our business
model, let me just put it that way. You can\'t put enough applications
on that CDTI to make it pay for itself. Thereby, we\'re launching a real
close look at and very, very close to having an approved project
internally in UPS to do this on a Class 3 display, which you all think
of as a Class 3 EFB.

And when we add that and we bundle all those solutions or all those
applications together on the Class 3 EFB, all of a sudden you\'ve got a
business case because we can put our performance computer on there, we
can put our manuals on there, we can put our Jepp charts on there, we
can do our ADS-B applications on it. Then we can do the spacing tasks
that are required in low-density ‑- or higher-density airspace and we
can then look at moving to separation tasks in lower-density airspace;
thus, you have your traveling air traffic management system right on
your airplane.

Now, to the extent that you need a ground infrastructure to accommodate
that; by the way, an ADS-B ground infrastructure and the ability to
display it is pretty dang cheap compared to what the infrastructure of
today\'s radar world and that those displays cost, you\'ve got the
opportunity to put your surveillance information out there on kind of an
Internet-based look at life. So it\'s easy to distribute amongst all the
users, including the AOCs and it\'s just a beautiful world. It\'s real
hard to get bit by doing that too, because all of this stuff is
software-based and software upgrades are one heck of a lot cheaper and
more economical than changing out boxes, and we all know that. The big
cost is put in the box in the airplane, but once you get that, you can
change the functionality doing software upgrades, you\'re there.

So I think, you know, the transition starts with we put this stuff,
bundled together applications, on the Class 3 device while we\'re
waiting for Boeing and Airbus to kind of catch up ‑- excuse me, I don\'t
mean to slam anybody there, but you know, the 787 and the A380 are
coming and ADS-B is not even a standard piece of equipment on those two
planes. Now, there\'s something really wrong with that and I say shame
on us for letting that happen, but there it is.

So until they get it out there and they put on the displays as an
integral part of the cockpit, we got a Class 3 device we can use.
Certain things we won\'t be able to do with it, but there are many
things that we can unleash by doing that, and that\'s what we\'re going
to do. So we\'re going to have it with us.

PANELIST NAKATSUBO: A part of the concept of the ATM seamless or
transparent FIR boundaries that requires the terms to services needs to
be equivalent in different FIRs or adjacent FIRs. So the SBAS
technologies would offer that kind of this seamless transparent
services, maybe the communication as well through the communication
technologies.

But even implementing these satellite-based technologies, we can\'t all
get rid of ground infrastructures. We can\'t. At least we need some
monitoring stations, some ground networks connecting them and ground
uplink station, etcetera, etcetera. And also, the controllers need to
use something. That these needs, at least maintenance or at least to
keep the systems working. The important part is not implementation, but
the key to the systems going including its upgrade, I think.

MODERATOR FOLEY: Debbie, I thought I saw your hand up.

PARTICIPANT: You did. Thank you, Paul.

MODERATOR FOLEY: About time.

Everyone is in agreement about a satellite-based system. I think
everyone has also agreed to better utilizing the equipment that\'s on
the aircraft now. That\'s been a big issue with the regional carriers,
but certainly in the U.S. and some other regions we\'re facing a period
of just unprecedented financial challenges; not only fuel, but certainly
there are many other market challenges. And that poses a difficult
dilemma. I think it poses a dilemma for policy makers, both in the
United States and abroad. If we agree that equipage is going to be
necessary, how do we pay for it? Because if there isn\'t a commitment to
pay for it, then there\'s an inability to move forward and that really
stalls the FAA\'s ability to move forward and it stalls airlines like
UPS, for example, who also want to move forward.

But again, it poses some difficult choices and so these are questions
that are posed. Should a modernization program for a country include
consideration of assisting the airlines and other users financially in
equipping? What impact does that have on an airline like UPS that is
financially successful? And then, what are the long-term precedents
ramifications for taking such action?

PANELIST LEE: Who\'s first? Because I\'ve got an opinion.

PANELIST KEEGAN: Oh, good. So do I, but I\'m not sure I can say it, so
let me formulate that.

MODERATOR FOLEY: Very good question. Thank you.

PANELIST LEE: Can I go first?

MODERATOR FOLEY: Please go first.

PANELIST LEE: Okay.

MODERATOR FOLEY: Ladies first.

PANELIST LEE: Yes. My opinion is this, that if the surveillance
infrastructure needed a new radar, the FAA would go out and buy it,
right? And that would allow access to anybody who was going to go to
that place that had the radar. Well, if we\'re saying that the airplane
is part of the architecture, the FAA gets no benefit out of all of this
and/or ability to transform the services that they give us and transform
the levels of safety and the level of access they give us until they
equip with the architecture. And it just so happens the architecture\'s
on the airplane, so what is wrong with them paying for it.

And why, I don\'t really see that there\'s any difference between
whether it\'s a company who happens to have black ink today instead of a
company who has red ink, that those bottom lines make no darn difference
you know? If we\'re going to be flying in that airspace and we want
access and we\'re part of the architecture, we all should get the same
thing.

Now that all being said, there is a lot of political and bureaucratic
obstacles to that. You know, it\'s certainly not within our culture to
think about doing it that way, so I offer alternative thinking along the
lines of, you know, third party situations where a bank, UPS Capital
Corp. maybe steps up and says, \"Okay. We understand that there has to
be a different dynamic going on here. It can\'t be direct from the
Government to the operator. And so we\'re in the business of providing
low-interest loans to those of you who equip. And oh, by the way, you
pay us back when you get the benefits from it.\" Something along those
lines. None of those things really have to be done that way, but it does
talk to you about the power of, you know, creative thinking and
collaborative thinking because we\'re all in this together. It is truly
a partnership if we\'re going to get past these barriers that we got in
front of us and we cannot allow any one set of institutional thinking to
stop the rest of us. So we\'re all going to have to join hands and get
it down. It\'s just going to be as simple as that and it\'s going to
take some different kind of thinking.

MODERATOR FOLEY: Charlie?

PANELIST RAMALINGAM: Okay. Let me see if I can piece this a little bit
together. Obviously an incredibly and complex and the debate needs to
begin, and it\'s probably late for that, especially late for this
debate.

Some of the dynamics are that, okay, it\'s a very difficult environment
for some carriers and some operators, however, new airplanes are still
being sold so there is obviously some cash flow available that can
actually just come off the line with the right equipment. I mean,
that\'s sort of what we\'re asking and the time frame ought to be such
as that it just comes with the package, although it\'s not today. It\'s
like, you know, you got to order tires with your car now. I mean, let\'s
get this industry straight so that it isn\'t always about every nickel
and dime they can come off of extremely expensive airplanes.

The other part is what does help look like? And you know we have
assisted in some preliminary implementation in things like capstone in
Alaska for safety purposes and things like that. Europe is providing for
the first 200 aircraft that equip with ADS-B. You know, 200 airplanes
out of the amount of airplanes that fly in Europe is ‑- you know, I\'m
not sure what that means. You know, what is 200 airplanes here in the
U.S. of the first to equip? What can we do? Can we help with STCs? Can
we do those things? So I don\'t know what help looks like, but I do
think that that has to be sort of on the table because not everyone will
get help. Just in general, help means there will be help for some and
there won\'t be help for others.

I do think though that it is conscionable to actually have. If it\'s
good for the public and we\'re doing it for the public, then we have to
be able to do something about that, like pay for it, whether it\'s that
we define what the technology transfer is and we pay for that activity,
so it actually gets in the airplanes or not, I don\'t think that\'s out
of the question at all.

But I think, here\'s a sort of a bigger issue, and it sort of tails off
where Karen is. This is the place for innovation, you know, so in U.S.,
we\'re capitalists. I mean, we ought to be able to figure out how to
finance so that we can have an economic future. The innovation isn\'t
about the technology anymore. This industry pretty much, from an ATM
standpoint, has been all about technology innovation for the long haul
in trying to work that problem. Well, you know what? We sort of got that
problem solved except for the environmental impact issues. That we
haven\'t got figured out yet, but everything else, you know, we\'ve kind
of got locked down. We need innovation on how to make this cash flow
problem work. And there hasn\'t been a lot of policy thought in that
area. There hasn\'t been a lot of ‑- you know, we\'re coming up on our
reauthorization in \'07, so it\'s a very important piece to get on the
table. But it is a place where there has not been a lot of innovation
about how we want to do that job. And it\'s a really good time to figure
out how to sort of bankroll this issue. And it is not huge money in the
scheme of things. It is not huge money.

I\'ve kind of thrown out the number, you know, depending on who you
calculate the cost of an Airbus 380, you know, 10 of them gets you a
long way down the line about getting a new future. So, I mean, that
doesn\'t count for how other costs are actually integrated into that,
but I mean, list price and those kinds of things represent ‑- you get a
long way for 10 of them. You might get all the way for 20 of them.

So, I mean, it isn\'t huge for this industry as far as how much it would
cost. So, I just think that\'s where the innovation has to come from.
But I do think it is the responsibility, particularly of the national
governments that can afford it to be able to help this along.

MODERATOR FOLEY: Let me follow upon that with a couple observations.
Since 2001, the Government fees and taxes, the burden on the overall
system, which in our country is about \$100 billion in revenue, has
increased roughly from \$5 billion to \$15 billion. And I spend a good
portion of my day traveling throughout different cities in our system
talking to chambers of commerce and people who are desperately
frightened about losing air service.

And I would suggest that we, you know, rethink the paradigm on who the
user of the system is and who benefits from the system. And I think
today there are about 19 hubs in the country, and depending on which
analyst you talk to, that number is likely to drop substantially as the
consolidation process moves forward. And, when you talk to people that
live in a hub about the benefits of flying nonstop from point A to point
B versus connecting through another hub, I would suggest the vitality of
the economic infrastructure in that community is dramatically affected
by the availability of air transport. The housing values, the
employment. It\'s like a community competing to bring a new manufacturer
to their town. So I think as leaders in the industry, we need to be
thinking more about how benefits from the system and therefore who
should pay for the system and even during a time of war to challenge the
passengers who pay through an airline for aviation security seems to be
somewhat flawed in terms of public policy. So I just throw that out
there for, you know, provocative discussion.

PANELIST LEE: Well, to just tag on to what you said just a little bit,
Paul, here\'s a number for you to think about. At any given time
there\'s three percent of the gross domestic product is contained on a
UPS vehicle, whether it be an aircraft or a truck. So, the economic
impact is very definitely nationwide as far as our end of the business
is concerned and we need to be able to run on time and we need to be
able ‑- but the ‑- for different economic reasons, but we have a
tremendous impact on this country.

MODERATOR FOLEY: I don\'t know the answer to it, but I would guess that
if you add up all of the jobs in aircraft manufacturing and airlines and
the businesses that are dependent upon the airlines to travel, it will
add up to a much bigger number than three percent. And everybody, I
think, universally agrees that a healthy aviation industry is vital to a
healthy economy, but there probably isn\'t an industry that\'s more
broken right now than the airline industry. I have trouble reconciling
those two concepts.

PANELIST LEE: Yes.

PANELIST KEEGAN: Just to add to the discussion just a little bit, one of
the pieces that\'s missing from the who pays situation is the guarantees
by the service provider. So you know, the Federal Government, the FAA,
does not provide any guarantees to its level of service that it
provides, yet it is our charger into the system. You pay for a service
and you assume what you\'re going to get and in theory we just deliver
what we feel like on any given day. Performance doesn\'t impact the
bottom line. It doesn\'t impact the revenue. It doesn\'t impact the
cost. It may impact our cost, you know, in a bad way. But I think that
whoever the service provider is, regardless of country and regardless of
whether it\'s government or private, is they are ‑- most of the other
providers in the world, we have to come to grips with guaranteeing the
provision of what we\'re going to provide, that we\'re going to
guarantee certain access, we\'re going to guarantee certain performance
characteristics and we have to perform to that level in order to achieve
that sort of revenue, however that\'s calculated.

PANELIST RAMALINGAM: Yes, I agree with what he said because this is the
responsibility of the service provider to ensure the level of service.
To that extent that whatever the money has to be spent by the service
provider has to be invested because it helped build the infrastructure,
whether it is the airport infrastructure or the air navigation
infrastructure to provide the level of service to the users. Of
course, we will be charging the uses. But at the same time, it may not
be the same, you know, proportion what we are going to invest in the
provision of the airport infrastructure.

For example, when the low-cost carriers were introduced in my country,
we reduced the airport charges. In fact, up to 83 airplane we have made
new charges, no charges for the airport. Because to promote the ‑-

MODERATOR FOLEY: Well, how does the existing operator feel about that?

PANELIST RAMALINGAM: But we have to see, otherwise you cannot promote
the low-cost carriers. They have some ‑- they come and say that why you
have reduce the ATC. So it is the government. Ultimately the service
provider takes it and government decides it. So that we have to do.

MODERATOR FOLEY: Well, that sort of begs the question then, is the
government the best person to be the service provider in air traffic
management?

PANELIST RAMALINGAM: Yes. That\'s why today it is ‑- in my country it is
the government. It is a government company. The airport authority is a
government company. It\'s owned by the government, so government takes a
decision.

MODERATOR FOLEY: Is that the best place for it, or ‑-

PANELIST RAMALINGAM: Yes, so maybe ‑- because there are so many thinking
on that. It can be made very private-owned enterprise or it\'s a
public-owned enterprise. There are a lot of deviations to that. But
being a government, yes, it has some ‑- because it has no obligation and
it has to play a level playing field for both the airlines, also the ‑-
ultimately the traveling public. You cannot tax the traveling public.

PANELIST NAKATSUBO: Being in the government, it has some merit and
demerit I think. At least working as a government agency, we don\'t need
sort of the debt assurance. But working as a government, there are a lot
of many demerits such as labor relations or some kind of income level.
Anyway, the working of the government agency or working separately from
the government do not make ‑- in my opinion, do not make big difference.
But at least the working separately from the ‑- independently from the
government would make the chance of improving its efficiency in relation
to it being possible through the government process. At least the
government process, maybe FAA or the JCAB, maybe other government
agencies as well, the problem of budgetary authorization, etcetera,
etcetera. Those processes. Bills, etcetera, etcetera.

So, I\'m not pushing the JCAB itself to be privatized, but at least I ‑-
in the future are those kind of discussion ought to take place at every
government service providers.

MODERATOR FOLEY: Okay. Yes, sir?

PARTICIPANT: Okay. Thanks, Paul.

I guess, you know, picking up a little bit on what Debra said and
Charlie as it relates to the charges, anybody that\'s been to Russ
Chew\'s O&M one-on-one course on what\'s being paid now by the FAA just
to maintain this system knows that this huge amount of money to maintain
NDBs or VORs, which AOPA even came out in April of this year and said
that they surveyed their members and the members said go ahead, turn
them off. We don\'t need them. But yet, we\'re going to spend hundreds
of millions of dollars that could be used, as Charlie articulated, to
transition to this new technology putting it in the aircraft.

So, one of the most critical issues that has to be addressed in the
transition strategy. So, you know, who\'s turning what light off and
who\'s turning what light on and when, by whom, where and how is that
going to be articulated so, as users have said early and often, just let
us know the schedule and where and how much. And the point is, is we\'ve
got to reduce the cost to next to nothing for the users. And the way to
do that is to stop using old technology. So, that\'s my statement and
sort of question then to the panel.

MODERATOR FOLEY: Anybody want to comment?

PANELIST KEEGAN: Well, I sort of want to comment. I don\'t know what to
say, but I want to comment.

I think this is where all the advisory groups need to come to grips.
This is the one place that we need as much consensus as this industry
can generate and that\'s usually a very small fraction, unless it\'s
clearly safety-related. But the speed to transition costs and the speed
to go slow costs more. So, it sort of depends on your individual
business model and certainly the FAA and the ATO, you know, has its own
business model. I think it doesn\'t really matter where the service
provision is, whether it\'s government or industry. You have to have the
tenets of a businesslike environment to understand what your costs are
and how you proceed. And I think collectively we have to come to
consensus on how fast we want to make that.

Now, you know, the Agency will make a proposal on, you know, how quickly
we should do ADS-B and what the implications are, but it\'s in each
element that we have to have the entire enterprise figured out about
what it\'s going to cost everybody and that we can commit and execute.
But I think this is the work for this year to be able to understand how
quickly we can proceed, because some would ‑- UPS is in a great position
to go extremely quickly and others are not so in such a good position.
And what does that mean? And but this is the one place that we actually
need consensus.

MODERATOR FOLEY: Good point. Speed of transitions costs, but it costs
more go slow.

PANELIST KEEGAN: It\'s financing your house for 50 years over 15.

PANELIST LEE: So how are were going to decide that?

PANELIST KEEGAN: I think that\'s what we have advisory groups for. It\'s
forums like this that begin the debate, but certainly we have federal
advisory boards, we have an NGATS Institute that will wrestle this to ‑-
how we should formulate a framework of about how we would do that,
whether it\'s a separate advisory committee, I don\'t know.

PANELIST NAKATSUBO: Maybe the question is how organize we can organize
different views of the users. Some users would like to move forward
quickly and some users would like to keep the existing services. So, Mr.
Keegan mentioned that sort of the coordination schemes. And through,
only through such coordination scheme we can come to some conclusion.
Anyway, conclusion is the thing we want. Then, at certain time we need
to move, early or late. It\'s difficult to decide.

MODERATOR FOLEY: To the question back here? I think he\'ll turn the mike
on over here.

MR. MADDOX: Can you hear me? Can you hear me? Okay.

Good afternoon. My name is Eric Maddox. I\'m working for the Eurocontrol
Organization in Brussels on safety enhancement.

I\'d like to pick on the three bits of information, which I\'ve heard;
well a lot more, but three important ones. Which is, first of all, there
is draft technology solutions available today. Secondly, in order to
solve this problem, we have to solve it globally. And thirdly, we\'re
always too late to solve it because of traffic forecasts.

Now, I think we all know that because of the global situation we have to
follow sometimes lengthy certification processes, regulatory processes
and very often we have to come to international agreements. Now on many
occasions these international agreements take time. ICAO moves slowly
because of the very long rigorous consultation process with all the
member states. We in Europe in Eurocontrol move slowly because of that
same consultation process. You wouldn\'t believe how long it takes to
get to agreements on some small evolutionary changes such as 8.33
kilohertz channel spacing data link, etcetera. So I think the question
is also if you want to solve this globally, how can we, as an
international organization, international system with people, work
together faster and better to make it happen, because history shows that
we\'re not good at working fast with each other.

So, my question basically is I think the bottleneck is how can we
internationally make faster and better decisions? So that\'s the
question for the panel.

PANELIST RAMALINGAM: Yes, this is what I mentioned in my remarks, that
yes, we have to work together and that\'s to say internationally all the
users ‑- of course user is one side and the providers. Providers, the
air traffic service provider, they have to work together and then, you
know, the ‑- they should have more cooperation between the agencies;
that is, in the international corporations, so that they support each
other and then they move faster in stuff and all the certification
process you said. So that they could help each other and then certify
the equipment and then they implement the system and more efficiently so
that the transition can take place faster and that\'s what I feel, in my
opinion, that is the only way to achieve this. Otherwise, no other ‑- it
is the states; that is, the countries could come forward to work
together and then achieve these new technology, whatever the
implementation we have to do. Otherwise, we will not be able to achieve
it.

PANELIST KEEGAN: I\'ll take a shot at that one now, if I could.

To be controversial a little bit, I think industry holds the key. It is
not the governments that hold the key. The governments can decide what
really needs to happen. There are not that many industrial elements that
actually do the work that goes in the airplane or actually builds the
airplane. I mean, they fit on two hands. If you have to add a foot, you
can count them all. In the end, their agreement will drive what the
standards are and how they will be inter-operable.

When Galileo is launched, the frequency is already decided and the
protocols within the spectrum are decided. Use it. Decide. Who\'s the
best to decide? Probably those that are building it. Just don\'t overlay
the military code. This is not really hard from a policy perspective and
what needs to happen. But industry just needs to pick what standards
they want to work to create their own level playing field. You know, the
United States and the FAA are off and deciding what the technology
enablers will be. We\'re in very much agreement worldwide on what
they\'re going to be. If it\'s SatCom. If we use GBAS, or ground-based
satellite, then it\'s very easy to identify what the performance
parameters are and then industry has to get together to be able to
develop the standards. It\'s the way every successful element that\'s
introduced in society has worked, at least in recent history, from cell
phones to the Internet. Government has stepped aside and the industry
has kind of collaborated to bring that together. And so that\'s where I
see where we are.

MODERATOR FOLEY: I think one other comment may add some value. If the
countries, because of history, culture or trust aren\'t able to
collaborate, then I think industry and economic reality will take hold
and those countries will be left behind and they won\'t be able to
benefit from the economic stimulus that comes from air travel. That
might be one way to speed it up.

Was there another question back here?

MR. MOODY: My name is Michael Moody. I\'m chairman of the Independent
Pilot Association Safety Committee. And in disclosure, Karen\'s my boss.
Full disclosure, she doesn\'t know what question I\'m going to ask.

Except for a few comments during your opening remarks, most of the
discussion has focused on the air traffic management en route system,
moving airplanes from point A to point B. Would you agree that really
currently, domestically at least, although somewhat internationally, the
real choke points are the airports? And since we have problems that have
to be addressed in five years, as Karen said, what are we doing to
increase this capacity?

PANELIST KEEGAN: I\'ll take a shot at that. Right now, although we
understand there is a certain amount of choke point within, you know, at
the airport level, our real problem is in en route. Convective weather
is sort of the dominant factors from delays and our responsiveness is
sort of limited due to the congestion in route airspace, just by design,
the way that we handle it. The theory is that en route is quite large
and terminals are quite small. But if you look at the operating envelope
of where airplanes want to fly and then the route structures that are
available, that airspace is incredibly small. It\'s a few thousand feet.
It\'s very narrow and, you know, probably if we do math, we\'d probably
figure out that there\'s less of that airspace than there is terminal
airspace.

So, we have to address, at least in the near term, convective weather
and en route right now. And then we get into that we then build it back
into where we again have the problems at the runways. And there are a
few things that need to happen. One, it\'s part of the surveillance
picture. Right? Being able to reduce the separation standards, to be
able to run airplanes closer together, is incredibly important. But in
the trials that UPS has actually had at Louisville, you know, pilots
with eyes can actually run them closer together than controllers. Pilots
with electronics could run them closer than pilots with eyes probably,
which is our direction. I mean, utilizing what\'s in the airplane allows
us to run them closer and closer and closer.

From a next generation system perspective, we believe that the
intelligent object of the airplane actually can actually maximize the
use of the concrete itself. Today, regardless of runway length, you can
only have one airplane on the runway at a time, whether that\'s a 380 in
front of a Cessna 150 or not, I mean, that would be a dangerous
situation itself, but the knowledge that we have to gain is to be able
to maximize better that incredible amount of concrete that\'s already
there, you know, using that as a limiter just by an assumption, because
it\'s sort of a foolish assumption. I mean, most runways that exist
today, if we were to dig a ditch right down the middle of it and split
it in two, we can run twice as many airplanes at any airport than we can
today. Sort of a goofy premise.

PANELIST RAMALINGAM: I just want to add one more. See, there is a need
to also modernize the aviation metrology. It\'s not only the, you know,
if you modernize the ATM system, you will not really see the benefits if
you don\'t ‑- you know, modernize the aviation metrology. But however
the advancement you do it in ATM system, this has to be, you know, done
simultaneously. Then only you will get the benefits. So that aspect also
has to be linked up with the futuristic air traffic management. So we
have to look at the modernization of the aviation metrology.

MODERATOR FOLEY: Here\'s a written question from the audience. Question
for all panelists. Thinking outside the box, please respond to the
following statement. The future of air transportation commerce will not
involve air traffic control as we know it today.

PANELIST LEE: Correct.

MODERATOR FOLEY: I think it will involve air traffic control, perhaps
not as we know it today, but replacing the human element with some
technology.

PANELIST KEEGAN: I think certainly the role of the air traffic
controller changes, the role of the pilots change. I think in transition
we\'re going to have a real interesting set of methodologies that have
to be employed and will put a lot of strain on both automation and the
people. I think it\'s a huge concern risk area for us that we have to
watch. Particularly in the FAA\'s position of hiring a new batch of air
traffic controllers, that transition will fall on their shoulders, but I
would say at the end it will be very different than it is today.

PANELIST LEE: Well, we already see that when we did the continuous
descent/arrival trials last October, October 2004. And the workload at
Kansas City Center actually went up because we didn\'t have the merging
and spacing ADS-B application on the airplane. So they had to take
responsibility for getting us exactly sequenced, lined up and at about a
15-mile interval coming over the top of descent arrival fix. But once we
started down, the pilots flew the RNAV procedure and we did use the
ADS-B CDTI for situational awareness, although we didn\'t use it for a
spacing task. The controllers at the TRACON and their workload went way
down because they didn\'t need to talk to us. All they had to do, Indy
Center cleared us for the arrival procedure and we didn\'t talk to
anybody again until Louisville approach. Well the TRACON said hello.
Then they said goodbye to us as they turned us over to the tower and the
tower cleared us to land. It was pretty dramatic and they loved it
because they got time to sit back and watch was going on and anticipate
as opposed to just sit there and react. So we had a very, very positive
experience with it and we see that that is very definitely a role that
they will easily and want to adapt to, and given the right tool set.

MODERATOR FOLEY: Another question from the audience in terms of turning
up the heat on a little controversy here.

Since the days of the PATCO strike, ATC labor has been attempting to
regain its leadership role in the arena of ATM design, safety and
personnel management policy. Clearly today the FAA and NATCA are coming
to a crossroads in a number of thorny labor management relations issues.
And this is certainly a question to invite the audience to respond to as
well. But what can be done to improve relationship and insure labor
peace going forward as the downside of a breakdown in this relationship
will have drastic consequences for the airline industry?

Anybody from the audience care to respond?

(No audible response.)

PANELIST LEE: I know what I\'d do.

MODERATOR FOLEY: Pardon me?

PANELIST LEE: I know what I would do, but I\'m not in a position to do
it.

MODERATOR FOLEY: What would you do?

PANELIST LEE: I would very definitely, number one, get them involved,
which at a certain level they are involved. But I would also be willing
to think about doing things differently than we do them today, maybe
outside of their existing contract; I don\'t much about that either. But
from a, you know, conceptual point of view, if you want people to go
along with you, you invite them into the game and then you give them
protection from what they see as threatening to their jobs, at least for
a transition period of time. And that protection, I would think from
their perspective, would be protection of their jobs and their
livelihood and making sure that we\'re not going to wholesale go lay off
controllers and things like that because of productivity gains. But you
got to get inside their head and address whatever it is that\'s
threatening to them and invite them to walk along the way with you.

MODERATOR FOLEY: What if what\'s threatening to them is the fact that in
many cases the jobs will be transitioned to technology and how do you
protect against that fear if that\'s the reality? Or if the mark is
changing, as it is in many jobs within the aviation industry, at least
in this country, and having a market-based metric for the value of the
jobs, if the job value is coming down, that\'s likely to result in some
increased tension and some increased risk of disruption.

PANELIST KEEGAN: So I think we have to separate today, and the FAA is in
negotiation in several labor contracts, from the overall aspect of labor
within the environment of aviation. And because I think, you know,
day-to-day examples, we have examples of where there is difficulty in a
relationship and yet a huge positive. It was two days ago that Oakland
Center went operational with the Advanced Traffic Oceanic and Procedures
Program, which changes the role of the controller from very manual to a
highly-automated probe that allows them to reduce separation standards.
I mean, a huge victory for everyone about automating 21 million square
miles of airspace, you know, that wasn\'t possible without the work of
the air traffic controllers that were involved in the program and the
management structure that actually put that together. And so now we\'re
operational both in the Atlantic and the Pacific and so, I mean, every
day there is positives and there is negatives. So I think that, you
know, there is a job to be done and people are going to do that job.

For the future, I think the clarity has to be, and it\'s not just sort
of this black hole about change and automation, but it\'s job change,
not no job. And we don\'t have clarify of what that real job may be, but
so far all of our lives have been, as things have become automated,
we\'ve needed more people from our administrative staffs to everything
and all of a sudden you need more people doing different stuff.

So, I mean, we may not need a certain skill set, but you know, I don\'t
see that we actually need less people in aviation to actually pull it
off. If you look at how many people it takes to staff an unmanned aerial
vehicle, you know, two pilots would be a lot cheaper than all those
people running around. So, you know, it\'s just where they are in the
scheme of things, you know? So it\'s just kind of an interesting
scenario about what it takes.

MODERATOR FOLEY: That leads me to another question I had. Do you really
think passengers will get on an unmanned aerial vehicle?

PANELIST KEEGAN: Well, I went flying with my son at a radio-controlled
thing and he augured that thing in. I don\'t think I\'ll go if he\'s
flying it, that\'s for sure.

MODERATOR FOLEY: How many in the audience would get in a ‑-

PARTICIPANT: Yes, I would.

MODERATOR FOLEY: You would?

PARTICIPANT: But let me ask you something. Would you pay \$100 more for
a ticket, for example, to get an airplane with a pilot?

MODERATOR FOLEY: I think I would.

PANELIST KEEGAN: Today?

MODERATOR FOLEY: Would you?

PANELIST LEE: I\'m not getting on one that doesn\'t have a pilot. No,
no.

MODERATOR FOLEY: Ladies and gentlemen, this is your pilot. I\'m on the
ground and you\'re in the air.

PANELIST LEE: We\'ve had that paradigm talked about before. You know,
certain of our international partners have investigated this download or
down link of airborne parameters concept. You know, where the airplane
tells them whether they\'re in a bank or what heading we\'ve selected in
our mode control and things like that, you know. And I always thought to
myself that they just really wanted to be pilots and pilots need to be
in airplanes, not on the ground.

PANELIST NAKATSUBO: Even though the systems connecting airborne and the
ground components could be improved and doubling of effort could be
highly beneficial ones. But I prefer the systems might break down, so I
prefer paying maybe \$50, \$100. Yes, I\'d pay.

PANELIST KEEGAN: Huge culture change. Huge culture change, right? I
mean, how long ago would have not gotten in a metro car without a driver
and today that\'s sort of normal. I mean, Tampa runs that. I mean, I do
think we just have to ‑- we have a culture issue and every element of
our industry is going to change and we\'re all going to have to get used
to it. Some of us aren\'t as willing to get used to some other parts as
others.

PANELIST LEE: I always thought of myself as pretty adaptable, but
that\'s not ‑-

PANELIST KEEGAN: That\'s not one of them.

MODERATOR FOLEY: Question in the back of the room?

MR. BERGMAN: Thank you. Charlie Berman, Airline Pilots Association
International.

We\'ve heard some comment on the enabling technologies CDTI and ADS-B in
some discussion and pushing up the equipage there as kind of enablers, I
guess.

To Charlie, but to any of the members, how willing and how quickly would
you be ready to move toward a shared pilot separation responsibility?
And at the heart of my question is really do you believe that we\'ve
done adequate enough wake research to make sure that we can separate
various kinds of traffic, the regional jet, the very light jet and the
380? Kind of the background.

MODERATOR FOLEY: The wake turbulence question. Let\'s let the pilot take
that one first.

(No audible response.)

MODERATOR FOLEY: No?

PANELIST KEEGAN: Okay. Well actually, we do it today. See, that\'s the
crossroads that I can\'t seem to get out of my head is that we actually
have ‑-pilots are actually responsible for separation every day. You
know, Steve Brown, if you were to go flying today, he would take that
responsibility himself and go flying. Why that doesn\'t translate to
when all of a sudden you\'re in IMC with better capability to see other
airplanes, I\'m not sure yet. I think it\'s a culture issue. So how fast
can you move the culture. I think we\'re pretty darn fast because we\'ve
done a great deal of safety analysis under the current standards. So the
issue is not rather who\'s got responsibility is what the standards are.
So if we\'re going to reduce the standards from what we have, then
everybody had to be compliant with the same set of rules. And that\'s
where it gets mixed, because the idea is to reduce the rules if it\'s up
in the cockpit. And so if we reduce the rules, no, we need a lot more
research. I mean, the first airplane that would be certified with wake
will be the Airbus 380, so I mean, we\'re just really beginning that
activity to be able to understand, you know, what the levels that we\'re
going to actually work towards, the total system performance levels, and
how we understand them is much different.

And then we have a great number of technology that can actually see the
wake. We can be responsive. We can see deterioration. How we get that
information around so people can use it will be imperative to how close
we can actually fly towards one another.

I mean, I think we\'re here today. We have to get over whether we\'re
doing it by two eyes or by a CDTI that\'s quite capable as well. I mean,
I don\'t know how exactly we cross that bridge, but we keep showing it
around so we ought to be able to do it pretty soon if we wanted to.

MODERATOR FOLEY: Yes, sir.

PARTICIPANT: You said you wanted to get a little more provocative, but
as a pilot, it appears when I get into a terminal environment, ATC is
quite often trying to hurry me. \"Do you see that traffic in front of
you? Do you see that traffic in front of you?\" Well, set for visual
approach. But if I say, \"Yes, I see that airplane,\" visual on that
traffic. \"Oh, by the way, they\'re overtaking me.\" Part of the problem
with the terminal environment is that we don\'t have a system set up to
keep the airplanes apart. We have the technology. CDTI doesn\'t help,
but it still doesn\'t increase the amount of airplanes that come in
every day. And as long as we have a system to saturate putting the onus
on ATC and saying, \"Take a visual because I don\'t have separation for
you to make that turn onto final. And if you don\'t, the whole system is
going to fall through any second,\" it\'s not the answer. And that\'s
what we\'re doing today.

PANELIST LEE: I don\'t think a capacity ‑- there are kind of two
different sides to the coin. The example that you just gave is in an
airport that\'s saturated. What we see though in Louisville, we\'re
saturated, but what we see is because of the lack of the ability for the
pilots to cooperate and anticipate where they need to be, we end up with
instead of being able to use existing legal safe separation standards,
we end up with big gaps on final approach. So instead of having, you
know, three miles, which is approved and safe, we end up with five,
seven, nine. It just depends on, you know, what\'s going on. Because the
controllers are only as good as the data that we put in front of them
and the data that they\'ve got in front of them isn\'t very good today.
I mean, at least compared to what we know it can be.

So, the capacity side of it comes from the ability of the controllers
and the pilots to work together collaboratively to more consistently
work at legal and safe separation standards and get rid of the gaps. And
that\'s where the capacity increase comes from and the fuel savings come
from. And we\'ve demonstrated that with the CDTI-equipped airplanes in
Louisville because you guys with CDTIs behave in an anticipatory manner.
And what that has done is we\'ve cut four and half on the average, four
and a half fly miles out of the terminal area from 40 miles to the
runway and it\'s because of that. And it\'s just there. I mean, it\'s
not because we did anything different other than give you information.
Now we start doing something with that information. It\'s going to be
incredible, the capacity increases we get.

Now, it doesn\'t solve the other side of that equation.

PANELIST KEEGAN: If I could talk about that just a little bit. You raise
a really great tactical issue and it\'s one that actually exists today
because a controller can\'t see, pilot can\'t see. System knew probably
two hours in advance you were hosed, right? I mean, 40-trajectory
modeling is quite simplistic in today\'s computing environment. Two
airplanes. Slow one\'s in front. It\'s a problem. Could have told you
that without flying. And so one is, we can solve that problem by
increased spacing and be able to have everybody feel very smooth.

The question is, is that the way we want manage the system? And how we
respond in a manner. And it sort goes back to how the service providers
get paid, you know, potentially. Our businesslike response to how we get
paid is sort of an unqualified activity also in that, you know, who goes
first? Today it\'s first come, first serve. Slow person departs first,
slow person arrives first, regardless of whether that\'s the right
economic value for any airport or anything. I mean, we deal with it a
lot at Newark and Teterboro and the complex cities there. You know, you
get a Cirrus, you know, that wants to go in and the next thing you know
is a whole bunch of Continental arrivals want to go behind it and
there\'s a problem. Where, you know, the delay of airplane may be, you
know, a viable solution. And we have to come to grips as a community
about how we expect the business to run and then that should go along
with how the revenues run and that we guarantee and provide that service
in response to that.

But today, it\'s everybody\'s equal regardless and then you get caught
in that trap. But the system knows, and we can handle that, and we just
don\'t manage it that way. But we do have tools that represent that. We
do not distribute them and that\'s sort of what the next five years has
to represent, the infrastructure to distribute those systems that allow
that net-enabled operation to take place, because we knew. We didn\'t
tell the controller, but we knew.

PANELIST RAMALINGAM: Of course I can add one more to say this problem
could be solved by the flow ‑- air traffic flow management system. That
could be one of the solutions so that this type of ‑- you know, the ‑-
she said the saturation and the separation standards could be easily,
you know, worked out in the system.

MODERATOR FOLEY: Any more questions?

PARTICIPANT: I just have one comment, which is, is there any question
about whether or not the Government should have a role in terms of
determining the optimization of the system, whether it\'s something that
industry should be doing on its own?

I think if we take the example maybe of UPS and FedEx, what might be an
optimal solution for UPS may not necessarily be an optimal solution for
FedEx. So I think there\'s a public interest, an economic interest to
the country as a whole which requires that the Government play, at the
very least, a policy role in terms of the strategies and how
optimization might occur to ensure that the optimization is global in
the technical sense, not global in the international sense.

Another related topic to that I just want to mention is, no one would
conceive of the idea of taking the airlines back to the Government in
the U.S., the operations should be the responsibility of the Government.
Everyone would believe that that would result in a significant loss of
productivity and efficiency should that happen. So I don\'t think anyone
would contemplate it.

As we move ATM from the ground to the air, we\'re not contemplating
moving the Government from the ground to the air as part of that. We\'re
seeing that as being something that industry ‑- and again, I think this
is ‑- people are brought into this, that industry is taking on that
burden which leaves you wondering if industry can do such a good job in
the air, what is it about the job on the ground that makes the
Government direct operation essential?

I don\'t know if there\'s any comments you\'d like to offer, any members
of the panel, to offer on that. Thank you.

PANELIST KEEGAN: Well, I think it\'s very interesting the way you
approach the situation about what that is. I actually think that it is
‑- well, I\'ll go back to the 1930s. The 1930s, the job was in the air.
And so it gravitated to the ground and we\'re back to where the job can
be better done from the air and it\'s where the decision maker has to
be. The decision maker with all the information that can actually make
the right decision for the purposes of that flight, since it\'s sort of
all about the airplane, sits in front of that airplane. And maybe on a
UAV, it will be sitting behind a desk and then they can make that
decision, but it\'s, you know, pretty much right now the pilot is the
one that is able to have the most information and be able to make the
most timely decision on what takes place. And I think that\'s where we
want to move the decision-making capabilities to where the best decision
maker is, and right now that\'s the pilot.

And I think that\'s the movement that we talk about, but I think it\'s a
very interesting and worth some thought about, you know, what represents
moving the Government from the ground to the air is kind of interesting.
Just, you know, sort of an office at 60,000 feet in dirigible and
that\'s kind of the visual I have.

PANELIST LEE: I kind of think of it as a ‑- you know, we talk about
decision making in the air, but Charlie just said, is it pertains to
that particular flight and it\'s a pair-wise-type of decision making
that is allocated to the airplane. In other words, the aircraft that
you\'re supposed to be following, you make decisions about that. But in
terms of which one are you going to follow, that\'s not left up to us
because that problem is too complex for us to figure out in our head and
the rules of the road could never be written that would enable that type
of activity to take place. Thus, you do need a management umbrella on
the ground that\'s looking at that whole thing, but much of that
automated and it\'s not so much a human decision making process as it is
monitoring what the system is producing.

And the reason I say it that way is because next year we\'re going to be
managing our traffic from the time it taxis at its outstation gateways
to the time it lands in Louisville and we\'re going to manage it
actively all the way through departure until it lands at its gateway on
the outbound. And we\'re going to do that by using surface management
and SMART ‑- which we\'re not supposed to use acronyms, so it\'s a
sequencing tool for both AOC and the air traffic controllers. Now we\'re
going to have it; the controllers won\'t, because it\'s not certified
for them. But, we\'ll be using it in the AOC. So we\'re going to know
when our airplanes are in the air. We\'re going to know what order
they\'re coming in and then we\'re going to talk to the crews and say,
\"Okay. You\'re following one, two, three. You\'re following four, five,
six. And seven, eight, nine, you\'re following him. And we want you to
do it at ‑- tonight we need 100-second intervals. And the reason for the
100 seconds is because we have a wake turbulence condition at the field.
We have a head wind and we don\'t have any cross wind, so we\'re going
to need 100-second intervals to keep you safe from wake turbulence.\"
And we\'re going to allow those flights then to manage that spacing and
those time intervals all the way down to the ground.

Now, we\'re only going to be doing this with a handful of flights, I
might add. So don\'t everybody get all, you know, in a frenzy about
this. We\'re not going to do it with all of our inbound arrivals, but we
will do it with a selected few and we\'re going to work through that and
all of the pieces that it takes to do that.

Now, we all know that 100 seconds at altitude is about 13 to 15 miles
apart and 100 seconds on final approach is probably four and a half to
five miles to account for the differences in the speed. And the pilots
are perfectly positioned with the right information in the cockpit to
manage that spacing task. So, when we talk about allocating decision
making, we\'re going to allocate that part to them. We\'re going to
allocate the responsibility for separation right where it is today and
that\'s going to sit with the controller.

So, and that\'s how the whole thing begins and then what we do, we learn
our lessons and we grow and evolve, we get confidence in that part of it
and then we take it to the next level and the next and kind of go back
to what our friend from ALPA was saying, you know, when is that? Well,
it is when we\'re ready for it. But we have to make that first step. We
have to have that first time when we say this is where the transition
starts. And then once we have got that and we\'re going with it, you\'d
be surprised about the amount of momentum that that will pick up because
people\'s confidence will pick up and the knowledge will spread and
it\'s just a wonderful thing. It\'s the Internet in the air, I don\'t
know.

MODERATOR FOLEY: Well, we\'re approaching the end of the conference.
Five minutes? No more.

PANELIST RAMALINGAM: No more.

MODERATOR FOLEY: Thank you very much. Thank you, panel. Appreciate you
stimulating thoughts.

(Round of applause.)

(Whereupon, the session was concluded at 4:25 p.m.)