a

GAO

United States Government Accountability Office

GAO Panel

April 2005 NATIONAL AIRSPACE 

SYSTEM

Experts’ Views on 

Improving the U.S. 

Air Traffic Control 

Modernization 

Program

GAO-05-333SP
What Participants Said

United States Government Accountability Office

Why GAO Convened This 

Panel

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-333SP.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Gerald 

Dillingham at (202) 512-2834 or 

dillinghamg@gao.gov. 

Highlights of GAO-05-333SP

April 2005

NATIONAL AIRSPACE SYSTEM

Experts’ Views on Improving the U.S. Air 

Traffic Control Modernization Program 

Overall, the participants identified cultural, technical, and budgetary factors 

that, in their view, have affected the progress of ATC modernization. To address 

these factors, they proposed what one participant termed a “two-pronged” 

approach—simultaneously taking care of “the here and now” and building a 

“viable future” for the ATO. 

Cultural and Technical Factors Have Impeded ATC Modernization

According to participants, the key cultural factor impeding modernization has 

been resistance to change. Such resistance is a characteristic of FAA personnel 

at all levels, participants said, and management, in the experience of some, is 

more resistant than employees who may fear that new technologies will threaten 

their jobs. The key technical factor affecting modernization, participants said, 

has been a shortfall in the technical expertise needed to design, develop, or 

manage complex air traffic systems. Without the technical proficiency to “scrub” 

project proposals for potential problems early and to oversee the contractors 

who implement its modernization projects, they said, FAA has to rely on the 

contractors, whose interests differ from its own. 

Budgetary Factors Have Constrained ATC Modernization 

The most immediate budgetary constraint, participants said, is the multibilliondollar shortfall that FAA is projecting between available revenues and 

modernization needs over the next 4 years. Participants also identified features 

of the federal budget process as constraints, noting, for example, that the federal 

budget cycle is too long and inflexible to meet the needs of a dynamic ATC 

system that requires much more managerial freedom and short-term decision 

making. They further noted that the budget process is influenced by the political 

process, and that the funding for capital projects is sometimes spread out over 

so many years that technologies are out of date by the time they are deployed. 

Annual funding uncertainties discourage strategic and capital planning, they 

said, and the budget fails to show priorities and relationships among proposed 

investments. 

Short-term and Longer Term Changes Could Promote Success 

Participants suggested that the ATO could facilitate cultural transformation by 

creating a vision and strategy that would unite stakeholders and by assembling 

project teams with different skills and interests whose members could forge 

common organizational interests by working together to solve common 

technology development problems. To help offset technical inadequacies, the 

participants suggested that the ATO could consult an advisory board, identify 

and consider purchasing needed technologies that other countries have 

developed, and hire more skilled engineers to provide in-house expertise. To 

address budgetary constraints, participants suggested, among other short-term

steps, reducing spending to match revenues and developing strategies for 

presenting FAA’s budget request more clearly to Congress. Longer term 

suggestions included giving the ATO the predictable funding and decisionmaking authority it needs to carry out a “sensible” capital investment plan. 

In 1981, the Federal Aviation 

Administration (FAA) began a 

program to modernize the national 

airspace system and a primary 

component, the air traffic control 

(ATC) system. The ATC component 

of this program, which is designed 

to replace aging equipment and 

accommodate predicted growth in 

air traffic, has had difficulty for 

more than two decades in meeting 

cost, schedule, and performance 

targets. The performance-based Air 

Traffic Organization (ATO) was 

created in February 2004 to 

improve the management of the 

modernization effort. 

On October 7, 2004, GAO hosted a 

panel to discuss attempts to 

address the ATC modernization 

program’s persistent problems. 

Participants discussed the factors 

that they believed have affected 

FAA’s ability to acquire new ATC 

systems. Participants also 

identified steps that FAA’s ATO 

could take in the short term to 

address these factors, as well as 

longer term steps that could be 

taken to improve the 

modernization program’s chances 

of success and help the ATO 

achieve its mission. 

The participants included domestic 

and foreign aviation experts from 

industry, government, private think 

tanks, and academia. They are 

recognized for their expertise in 

aviation safety, economics, and 

engineering; transportation 

research and policy; and 

government and private-sector 

management. 
Page i GAO-05-333SP National Airspace System

Contents

Panel

National Airspace 

System: Experts’ Views 

on Improving the U.S. 

Air Traffic Control 

Modernization 

Program

1

Limitations and Qualifications 5

Results in Brief 6

Panelists Identified Cultural and Technical Factors That Have 

Affected ATC Modernization and Suggested Short-term Steps to 

Address Them 8

Panelists Said Funding Shortfall and Features of the Federal Budget 

Process Affect ATC Modernization and Suggested Short-term 

Steps to Address Them 16

Panelists Suggested Structural Changes to Improve the ATO’s 

Chances of Success over Time 28

Concluding Observations 34

Appendixes

Appendix I: GAO Panel Members 36

Appendix II: GAO Contact and Staff Acknowledgments 38

GAO Contact 38

Staff Acknowledgments 38

Related GAO Products 39

Cultural and Technical Factors 39

Budgetary Factors 40

Structural Issues 41
Contents

Page ii GAO-05-333SP National Airspace System

Abbreviations

AOV Air Traffic Safety Oversight Service

ATC air traffic control

ATO Air Traffic Organization

COO Chief Operating Officer

DOT/IG Department of Transportation’s Office of Inspector General 

FAA Federal Aviation Administration

JPDO Joint Planning and Development Office

NAS national airspace system

NEXCOM Next-Generation Air-to-Ground Communications System 

OEP Operational Evolution Plan

OMB Office of Management and Budget

RNAV area navigation

RNP required navigation performance

STARS Standard Terminal Automation Replacement System

URET User Request Evaluation Tool

WAAS Wide Area Augmentation System

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately.
Page 1 GAO-05-333SP National Airspace System

National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

In 1981, the Federal Aviation Administration (FAA) began what it initially 

envisioned as a 10-year modernization program to upgrade and replace the 

national airspace system’s (NAS) facilities and equipment to meet 

projected increases in traffic volumes, enhance the system’s margin of 

safety, and increase the efficiency of the air traffic control (ATC) system—a 

principal component of the NAS.1

 Through the ATC component of this 

modernization program, FAA planned to acquire a vast network of radar, 

navigation, communications, and information processing systems that 

would enhance aviation safety and accommodate predicted growth in air 

traffic in the NAS. However, the program has proved to be more 

challenging than anticipated, in terms of both technology and management, 

and FAA’s efforts to achieve desired improvements in performance have 

typically taken longer and cost more than anticipated. As a result, planned 

improvements in safety and capacity have been delayed, and the costs, 

both of maintaining existing technologies and of replacing outdated ATC 

systems and infrastructure, have grown.2

 FAA no longer sees its 

modernization program as a multiyear initiative with a defined end; rather, 

it now sees the program as an ongoing investment in technological 

advances designed to improve aviation safety and capacity. To date, FAA 

has spent $43.5 billion on NAS modernization,3

 and it expects to spend an 

additional $9.6 billion through 2009, primarily to upgrade and replace ATC 

facilities and equipment. Of the $43.5 billion spent thus far, about $25.1 

billion, or 58 percent, has gone to ATC upgrades and replacements, 

according to FAA.

1

The NAS is a complex network of interconnected systems that includes over 19,000 

airports, 750 ATC facilities, and about 45,000 pieces of equipment.

2

See GAO, Air Traffic Control: FAA’s Modernization Efforts--Past, Present, and Future, 

GAO-04-227T (Washington, D.C.: Oct. 30, 2003); National Airspace System: Current Efforts 

and Proposed Changes to Improve Performance of FAA’s Air Traffic Control System, 

GAO-03-542 (Washington, D.C.: May 30, 2003); and High-Risk Series: An Update, 

GAO-05-207 (Washington, D.C.: January 2005).

3

For purposes of this report, NAS modernization refers to ATC facilities, equipment, and 

related expenses.
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 2 GAO-05-333SP National Airspace System

To improve FAA’s management of the modernization program, Congress, in 

1995, gave the agency acquisition and human capital flexibilities, which 

FAA has largely implemented.4

 According to our most recent work, FAA 

has made important progress and improvements in its acquisition of major 

systems,5

 but the modernization program remains challenging and some 

problems have persisted. In 2000, Congress and the administration took 

further steps to improve the modernization program’s management. 

Through legislation and an executive order, they laid the foundation for a 

new, three-component structure, including an oversight body, called the Air 

Traffic Services Subcommittee;6

 a Chief Operating Officer; and the Air 

Traffic Organization (ATO), a performance-based organization to manage 

FAA’s ATC investments and operations.7

 In February 2004, FAA merged its 

Office of Air Traffic Services, Office of Research and Acquisitions, and Free 

Flight Program Office to create the ATO. The new organizational structure 

sought to break some of the existing “stovepipes” and bring together the 

key organizational units responsible for, among other things, ATC 

modernization. 

4

Fiscal Year 1996 Department of Transportation Appropriations Act, Public Law 104-50, 

Section 348.

5

See GAO, Air Traffic Control: FAA Needs to Ensure Better Coordination When Approving 

Air Traffic Control Systems, GAO-05-11 (Washington, D.C.: Nov. 17, 2004); Air Traffic 

Control: FAA’s Acquisition Management Has Improved, but Policies and Oversight Need 

Strengthening to Help Ensure Results, GAO-05-23 (Washington, D.C.: Nov. 12, 2004); 

Information Technology: FAA Has Many Investment Management Capabilities in Place, 

but More Oversight of Operational Systems Is Needed, GAO-04-822 (Washington, D.C.:

Aug. 20, 2004); Air Traffic Control: System Management Capabilities Improved, but More 

Can Be Done to Institutionalize Improvements, GAO-04-901 (Washington, D.C.: Aug. 20, 

2004); and GAO-05-207.

6

This body was created as a subcommittee of a larger, preexisting organization, the 

Management Advisory Council, which Congress had established in 2000 to oversee the 

administration, management, conduct, direction, and supervision of the ATC system. When 

Congress reauthorized FAA in December 2003, it eliminated the subcommittee’s oversight 

responsibilities, and the subcommittee is now purely advisory. According to FAA, the 

subcommittee can help the ATO achieve consensus on difficult issues and contribute 

business expertise.

7

Wendell H. Ford Aviation Investment and Reform Act for the 21st Century, Public Law

106-181, Section 303, April 5, 2000; Executive Order 13180, December 7, 2000. Under the 

executive order, part of the ATO’s purpose is to “develop methods to accelerate air traffic 

control modernization and to improve aviation safety related to air traffic control.”
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 3 GAO-05-333SP National Airspace System

The terrorist attacks of September 11, 2001, temporarily reduced airport 

congestion, but a number of factors—including a drop in air traffic in the 

years following the attacks, the economic slowdown, and an increase in 

businesses’ use of low-cost carriers—led to a significant decline in airline 

ticket tax receipts and in the Aviation Trust Fund, where the receipts are 

deposited.8

 Today, air traffic has rebounded to near pre-September 11 levels 

and congestion is increasing, but the Aviation Trust Fund balance appears 

to be smaller than expected. For fiscal year 2005, for example, FAA 

reduced its original estimate of this fund balance by nearly $3.5 billion, and 

the agency is reviewing its estimates for future years.

The House Committees on Government Reform and Transportation and 

Infrastructure asked us to conduct a comprehensive review of the NAS 

modernization program’s ATC modernization effort, the performance-based 

organizational initiatives resulting in the creation of the ATO, and the 

funding challenges that the changed budget situation poses for the 

modernization program. As part of our efforts to respond to the 

committees’ request, which we plan to address through two separate 

ongoing studies,9

 we convened a panel of international aviation experts and 

asked them the following questions: 

• What factors have affected the schedule, cost, and performance of FAA’s 

ATC modernization program, and what steps could the ATO take in the 

short term to address these factors? 

• How have federal budget constraints affected ATC modernization, and 

what steps could the ATO take in the short term to address these 

constraints? 

8

Congress appropriates funds for FAA’s budget from both the Aviation Trust Fund and the 

General Fund. According to FAA’s FY 2006 Budget in Brief, the Aviation Trust Fund 

accounted for $9.7 billion of FAA’s $14.1 billion budget for fiscal year 2004, and the General 

Fund accounted for the remainder.

9

These include a report on the status of individual ATC system acquisitions and a 

comprehensive report on the status of the complete NAS modernization program. In 

addition, in response to a request from the Senate Committee on Commerce, Science, and 

Transportation, we are currently obtaining information and plan to report on how other 

countries have commercialized their air traffic services, applying a performance-based 

approach. For this work, we asked the panelists to discuss any lessons that can be learned 

from commercializing air traffic services abroad. We plan to incorporate the panelists’ 

comments on this topic in the report that we expect to issue for the Senate committee.
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 4 GAO-05-333SP National Airspace System

• What steps could FAA take in the longer term to improve the 

modernization program’s chances of success and help the ATO achieve 

its mission? 

This report summarizes the panelists’ responses to these and related 

questions that arose during the panel discussions.

The panel consisted of foreign and domestic aviation experts from industry, 

government, private think tanks, and academia. Their fields of expertise 

included aviation safety, economics, and engineering; transportation 

research and policy; and government and private-sector management. 

Former FAA officials and current executives of the air traffic organizations 

in Canada and the United Kingdom10 were among the experts, as was the 

chairman of EUROCONTROL’s Performance Review Commission.11 In 

addition, the Chief Operating Officer (COO) of the ATO presented an initial 

briefing on the status of and plans for the ATO. He responded to questions 

but did not remain for the panel discussion. (See app. I for a list of the 

panelists.)

The panelists convened at the National Academies Keck Center in 

Washington, D.C., on October 7, 2004, after reviewing background 

materials and discussion questions that we provided in advance. The 

background materials included reports by GAO, the Department of 

Transportation’s Office of Inspector General (DOT/IG), FAA, and other 

government organizations; industry publications; studies supporting and 

opposing the corporatization of air traffic services; and a comparative 

Performance Review Commission report. 

As agreed with the panelists, the purpose of this panel was to engage in an 

open, not-for-attribution dialogue. However, information from the briefing 

by the ATO’s COO and the COO’s responses to the panelists’ follow-up 

questions are attributed to him because his presentation was critical to the 

panelists’ discussion. This material appears, together with relevant 

10The head of Germany’s air navigation services responsible for air traffic control, DFS 

(Deutsche Flugsicherung GmbH), provided written responses to our questions.

11EUROCONTROL is the European Organization for the Safety of Air Navigation. The 

Performance Review Commission, one of EUROCONTROL’s oversight bodies, was 

established to ensure effective management of European Air Traffic Management, through 

target-setting and the establishment of a transparent and independent performance review 

system.
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 5 GAO-05-333SP National Airspace System

information from some of our issued reports and work in progress, in the 

italicized text at the end of each major section of this report. (See Related 

GAO Products at the end of this report for a list, by topic, of reports, 

testimonies, and other products we have issued in recent years on topics 

related to those discussed by the panel.) Otherwise, this report summarizes 

the collective discussion by topic and does not necessarily represent the 

views of any individual panelist, GAO, or the National Academies. We did 

not verify the panelists’ statements, although we did ask the panelists, in 

some instances, to clarify certain details. See appendix II for GAO contacts 

and staff acknowledgments.

Limitations and 

Qualifications 

The discussion summarized in this report should be interpreted in the 

context of two key limitations and qualifications.

First, the panel was only an initial step in a possible long-term, evolving 

effort to develop and sustain discussion on ATC modernization. As such, it 

brought together generalists, rather than specialists, to address broad 

themes and consider how to organize a more comprehensive approach. 

Because our scope was limited, we could not include a large number of 

leading experts, institutions, and networks involved in specialized efforts. 

Furthermore, although many points of view were represented, the panel 

was not representative of all potential stakeholders. 

Second, even though we, in cooperation with the National Academies, 

conducted preliminary research and heard from national experts in their 

fields, a day’s conversation cannot represent the current practice in this 

vast arena. More thought, discussion, and research are needed to develop 

greater agreement on what we really know, what needs to be done, and 

how to do it. 

These two key limitations and qualifications provide contextual 

boundaries. Nevertheless, the panel provided a rich dialogue on ATC 

modernization, and the panelists developed strong messages in responding 

to each of the three questions. Those messages are highlighted below.
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 6 GAO-05-333SP National Airspace System

Results in Brief Overall, the panelists identified cultural, technical, and budgetary factors 

that they thought had affected the progress of the modernization program. 

To address these factors, the panelists proposed what one panelist termed 

a “two-pronged” approach—simultaneously taking care of “the here and 

now” and building a “viable future” for the ATO.12 Envisioning “parallel 

efforts,” the panelists identified multiple steps that the ATO could take in 

the short term within its existing legislative and organizational framework, 

as well as structural changes that could be made in the longer term to 

enhance the modernization program’s prospects for success.

According to panelists, the key cultural factor impeding modernization has 

been resistance to change. Such resistance is a characteristic of FAA 

personnel at all levels, panelists said, and management, in the experience 

of some panelists, is more resistant than employees who may fear that new 

technologies will threaten their jobs. Panelists noted that resistance to 

change is at odds with the financially stressed aviation industry’s need for 

new air traffic systems and procedures that will enhance capacity and 

efficiency and reduce costly delays. Panelists suggested that the ATO could 

facilitate cultural transformation by (1) creating a vision and strategy that 

would unite stakeholders and (2) assembling project teams with different 

skills and interests—engineers, finance officers, information technology 

experts, and controllers—whose members could work together to solve 

common technology development problems and, in so doing, forge 

common organizational interests. The key technical factor affecting 

modernization, panelists said, has been a shortfall in the technical 

expertise needed to design, develop, or manage complex air traffic 

systems. Without the technical proficiency to “scrub” project proposals for 

potential problems early and to oversee the contractors who implement its 

modernization projects, they said, FAA has to rely on the contractors, 

whose interests differ from its own. To help offset its technical 

inadequacies, the panelists suggested that the ATO could take steps such as 

consulting an advisory board, identify and consider purchasing needed 

technologies that other countries have developed, and hire more skilled 

engineers to provide in-house expertise.

According to the panelists, budget constraints have affected ATC 

modernization in several ways, and the ATO could take a number of steps 

12The panelists used the terms “FAA” and “ATO” interchangeably. Therefore, references to 

FAA should be considered references to the ATO in this context.
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 7 GAO-05-333SP National Airspace System

in the short term to address them. The most immediate budgetary 

constraint identified by the panel is the multibillion-dollar shortfall that 

FAA is projecting between available revenues and modernization needs 

over the next 4 years. One panelist predicted that this shortfall would have 

gradual rather than catastrophic effects and would manifest itself through a 

slow but sure increase in air traffic delays. The panelists also identified 

features of the federal budget process that they believe constrain 

modernization. They said, for example, that the federal budget cycle is too 

long and inflexible to meet the needs of a dynamic ATC system that 

requires much more managerial freedom and short-term decision making. 

In addition, they noted that the budget process is influenced by the political 

process, and that the funding for capital projects is sometimes spread out 

over so many years that technologies are out of date by the time they are 

deployed. Annual funding uncertainties discourage strategic and capital 

planning, they noted, and the budget fails to show priorities and 

relationships among proposed investments. To address these constraints, 

the panelists suggested various actions that the ATO could take in the short 

term, including accepting the budget process as it is and reducing spending 

to match revenues, developing strategies for presenting FAA’s budget 

request more clearly to Congress, implementing regulatory and procedural 

changes to allow the use of existing cost-saving technologies, contracting 

with the private sector to provide certain air traffic services, and obtaining 

information on other countries’ ATC technologies and on international 

technical standards. 

For the longer term, some panelists suggested structural changes, which 

would generally require legislation. The goal of these longer term initiatives 

would be to give the ATO the predictable funding and decision-making 

authority these panelists said it needs to carry out a “sensible” capital 

investment plan. The suggested initiatives included replacing taxes with 

user fees based on the cost of air traffic services, allowing the ATO to 

manage those fees, and giving the ATO borrowing and leasing authority. 

The panelists advocating these kinds of initiatives said the initiatives would 

help the ATO address the predicted funding shortfall and free it from the 

constraints of the federal budget process, as well as enable the ATO to pay 

for the technical expertise and the technologies it needs to deliver efficient, 

cost-effective service. In addition, these panelists said, removing the ATO’s 

funding from the appropriations process would establish a direct 

relationship between the ATO and its customers that could promote 

efficiencies and improve service. According to these panelists, customers 

would monitor the ATO’s spending to ensure that the ATO addressed their 

priorities, and the ATO would provide better service because it would try to 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 8 GAO-05-333SP National Airspace System

please the customers rather than the appropriators who now fund its 

activities. Restructuring the financing of the modernization program could 

streamline and strengthen the ATO’s management, they said. According to 

these panelists, this kind of financing arrangement would allow program 

managers to make decisions quickly, on the basis of business rather than 

political considerations, and could provide the ATO with the management 

tools needed to fully execute its mission. While not disagreeing with the 

potential benefits of the proposed structural changes, other panelists 

cautioned against investing too much effort in them, since, in the view of 

these other panelists, the changes were, for the most part, politically 

infeasible. Moreover, as one panelist noted, even if the structural changes 

were implemented, it would be important to consider what problems they 

were creating as well as what problems they were addressing. He 

suggested, for example, that a weight-based user fee might incentivize 

smaller planes and more planes, thereby having the unintended effect of 

increasing demands on the ATC system’s capacity. Finally, one panelist 

said, restructuring could resolve the conflict of interest inherent in FAA’s 

dual responsibility as the regulator and the operator of air traffic services.

Panelists Identified 

Cultural and Technical 

Factors That Have 

Affected ATC 

Modernization and 

Suggested Short-term 

Steps to Address Them 

The panelists attributed many of the ATC modernization program’s chronic 

problems to cultural and technical factors. In particular, they cited 

resistance to change at all levels within the agency and insufficient 

technical expertise as key factors impeding modernization. They identified 

multiple, currently available options for addressing these factors.

Panelists Cited Resistance 

to Change as a Key Cultural 

Factor Impeding 

Modernization 

Although the panelists did not explicitly define “culture,” they used the 

term generally to denote an environment in which multiple stakeholders 

with entrenched interests struggle to preserve their interests and to retain 

control or influence. They described FAA’s culture as resistant to change 

and identified resistance to change as a characteristic of FAA personnel at 

all levels. One panelist cited FAA’s ingrained preference for ground-based 

systems and for sticking with what has worked in the past rather than 

rocking the boat by trying out new technologies, especially since “the boss 

isn’t telling you to rock the boat.” A second panelist described FAA as “very, 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 9 GAO-05-333SP National Airspace System

very resistant” to having private organizations, rather than FAA, develop 

new procedures and systems for FAA to approve and institute. 

Several panelists saw resistance to change as a consequence of federal 

employment—of the security that comes from having a regular paycheck, 

cost-of-living pay increases, and protections against layoffs. A government 

organization is insulated from the economic pressures that the private 

sector faces, one of the panelists indicated. In his view, federal employees 

do not have the firsthand experience with layoffs and business failures to 

understand, as private aviation industry employees do, why improvements 

to the ATC system’s efficiency are needed to help revitalize the struggling 

aviation industry.

Other panelists emphasized the reluctance of management to change. 

According to a panelist with experience in restructuring a foreign air traffic 

organization, the senior and middle managers could not or would not 

adjust to the change and had to be let go within the first 2 years. The other 

employees also had difficulty adjusting and were still adjusting in some 

respects, he said, but getting management on the right page was the real 

challenge. Another panelist emphasized that cultural change starts at the 

top and questioned why the ATO’s new COO had, according to the 

panelist’s count, replaced only two top managers in the ATO and simply 

reassigned other managers. Still another panelist suggested that cultural 

change within the ATO alone would not be sufficient to ensure the ATO’s 

success, because so much of the ATO’s fate depends on other 

organizations, including FAA, DOT, the Office of Management and Budget 

(OMB), and Congress.
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 10 GAO-05-333SP National Airspace System

A number of panelists described the air traffic controllers’ union as also 

resistant to change. According to one panelist, for example, the union 

delayed the adoption of technologies such as the User Request Evaluation 

Tool (URET) because some controllers saw them as a threat to its 

membership.13 Another panelist cited the union’s long-term opposition to 

the implementation of a software program that tracks productivity—a key 

measure for a performance-based organization.14 The union is “very 

political,” several panelists asserted, and one panelist charged that it was 

“hindering the progress” of a performance-based organization. 

Resistance to change can be an issue outside FAA as well as within it, 

panelists noted. For example, one panelist questioned how much support 

the ATO was getting from DOT, OMB, and congressional committees for 

changing “some extremely entrenched political fiefdoms.” Another panelist 

said that he had found the congressional authorizing committees amenable 

to changes, but the appropriators liked things the way they were. 

Panelists Suggested Steps 

That the ATO Could Take in 

the Short Term to Address 

Cultural Impediments to 

Modernization 

According to some panelists, creating a common vision, bringing in a new 

management team, and employing strategies that bring disparate 

stakeholders together could immediately help the ATO address the cultural 

factors that have impeded modernization. The following are steps that 

panelists proposed to facilitate the ATO’s cultural transformation: 

• According to one panelist, the ATO needs to give people a vision and a 

clear plan, or strategy, that they can understand. People have to know 

13URET is a computer program that aids controllers in granting pilot’s requests to change 

their flight paths for more direct routes or for different altitudes and allows controllers to 

look 20 minutes into the future of a flight path. If a pilot wants a different route, the 

controller punches in the request and is immediately advised if the request is safe. 

Previously, the controller relied on paper flight strips and mental calculations. According to 

FAA, as a result of URET, pilots now receive more direct routes and the airlines are saving 

time and money.

14The National Air Traffic Controllers Association, the federal-sector labor union 

representing air traffic controllers, engineers, and other safety-related professionals, 

testified in June 2004 that “controller time on position,” a measure of time that tracks when 

controllers are working with the primary responsibility for an operational ATC position, 

tracks only a portion of the controller’s job functions and, therefore, is not an accurate 

measure. Testimony of Ruth E. Marlin, Executive Vice President, National Air Traffic 

Controllers Association Before the U.S. House of Representatives, Committee on 

Transportation and Infrastructure, Subcommittee on Aviation, Status of the Air Traffic 

Controller Workforce, June 15, 2004. 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 11 GAO-05-333SP National Airspace System

what is expected of them, how they fit into the strategy, and what the 

vision is for their organization. 

• In addition to having a vision, another panelist said, it is important for 

the ATO to tie that vision to the user constituency, not confine it to the 

agency. FAA cannot do everything alone from the inside, because 

airplanes and airports, for example, need to be equipped with the 

technologies that will help realize the vision. 

• Employing a team concept could help overcome resistance to the 

implementation of new technologies, according to another panelist. 

Putting engineers, finance people, controllers, and electronic 

technologists together, all on the same team, he said, could unite them 

as they moved through the stages of implementation. Therefore, when 

the time comes to field a technology, the focus would be on getting it up 

and running and operating safely—not, the panelist implied, on 

obstructing its implementation because it might threaten jobs. 

• A change in management’s approach could go a long way toward 

overcoming controllers’ and other employees’ resistance to change, one 

panelist noted. One foreign air traffic organization changed its whole 

approach to the unions and the staff, started talking to them as people, 

and began executing “participative working” programs, according to the 

panelist. Union representatives and managers take the same courses 

together and address issues of affordability together, he said, and, as a 

result, controllers’ pay has increased, costs have dropped, and 

productivity has risen. The key to these positive results, he said, is 

psychological change—managers have stopped seeing employees as a 

problem and have started to see them as part of the solution. 

• According to other panelists, however, people find it very difficult to 

change, and the only way to bring about a cultural transformation is to 

replace those who resist change, either by allowing them to retire or by 

hiring others to take their places. In the corporate world, one panelist 

observed, a new executive brings in a new management team to support 

a cultural turnaround. The new team is then loyal to the new executive. 

In the view of this panelist, the COO’s hiring of only two new managers 

and reassignment of other managers would not be sufficient to turn the 

ATO’s culture around. Another panelist further noted that an executive 

in the private sector replaced the top 200 people in his organization to 

achieve the transformation he was seeking. 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 12 GAO-05-333SP National Airspace System

Panelists Said FAA 

Personnel Lack Technical 

Expertise Needed to 

Develop Complex Systems 

and Oversee Contractors 

Effectively 

Technical as well as cultural factors have impeded ATC modernization, 

according to several of the panelists. In the words of one speaker, FAA does 

not have “the engineering technical capability to deal with an extremely 

complex, highly nonlinear adaptive system that's got technical safety risk 

as a key technical parameter.” According to another panelist, FAA does not 

apply rigorous systems engineering expertise early in nonadvocate 

technical reviews of project proposals to scrub them for potential issues. 

As a result, a number of FAA’s programs—including complex ones such as 

the Wide Area Augmentation System (WAAS), as well as more 

“straightforward” ones such as the Standard Terminal Automation 

Replacement System (STARS) and the Next-Generation Air-to-Ground 

Communications System (NEXCOM)15—had fundamental system 

engineering technical issues that were not identified early in the program. 

The risks were not mitigated, and the programs experienced significant 

cost growth and schedule increases. “The system engineering organization 

in FAA is nothing more than a process organization,” another panelist said. 

“The power resides with the program manager. It doesn’t matter what the 

systems engineering people do, their job is to keep doing plans and 

processes. They think that meetings are products.” 

FAA’s lack of systems engineering expertise is problematic not only when 

the agency reviews project proposals but also when it manages contracts, 

panelists observed. Although FAA personnel receive training in acquisition 

management, one panelist noted, they also need technical skills. If they 

simply learn how to carry out the acquisition process without really 

understanding the underlying technical interrelationships, they will fail, he 

said. In the words of another panelist, FAA may be able to hire smart 

contractors, but it needs personnel of its own who are smart enough to ask 

the right questions and smart enough to understand the answers. FAA lacks 

the technical expertise needed to design, develop, or manage complex air 

traffic systems, another panelist maintained, because the administration 

never allowed the agency to invest in highly qualified technical personnel. 

As a result, FAA is beholden to its contractors, who may or may not do a 

15WAAS is a navigation and landing system that uses global positioning system technology. 

According to FAA, WAAS is to improve safety by providing precision guidance to an aircraft 

in all phases of flight at thousands of airports and landing strips, including runways where 

there is no ground-based landing capability. STARS is a color computer display system used 

at FAA terminal radar control and Department of Defense facilities. NEXCOM will replace 

the existing analog ATC communications system with a digital system that has greater 

capabilities. 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 13 GAO-05-333SP National Airspace System

good job, but who certainly have a different motivation from FAA. As this 

panelist put it, FAA lacks a rudder, in a technical sense, for modernization. 

Panelists Suggested Steps 

That the ATO Could Take in 

the Short Term to Address 

Insufficient Technical 

Expertise

To help address its lack of technical expertise, panelists suggested, the ATO 

could obtain advice from an independent board or information from other 

countries on technologies that they have already adopted. The panelists 

proposed some immediate steps that the ATO could take to address this 

deficiency, including the following:

• A technical advisory board made up of system engineers could review 

proposals for FAA and demand the kinds of data and tests needed to 

scrub the proposals and identify any big roadblocks. 

• Hiring skilled engineers instead of relying on contractors might enable 

the ATO to develop systems more economically and efficiently, one 

panelist suggested. This panelist described how a foreign air traffic 

services organization develops new ATC systems in-house and seldom 

uses contractors. It now utilizes its engineers to build systems rather 

than manage contractors. As a result, he said, it is now developing the 

systems it needs faster and at less cost.

• Maximizing the use of commercial inputs was the recommendation of 

another panelist, who said that FAA needs to get out of the business of 

designing systems. According to him, most companies no longer 

develop their own large, complex systems; instead, they get other 

people to do that for them in the private sector. Another panelist also 

emphasized the availability of technical expertise in the private sector. 

However, according to a third panelist, commercial systems have a 

shorter economic service life than the systems that FAA designs. 

• The ATO could profitably take advantage of the experiences of other 

countries’ air traffic organizations, which are technically as good as FAA 

ever was or ever will be, one panelist said. He maintained that the ATO 

should institute “a fundamental requirement and a cultural expectation” 

that it will review existing technologies before it buys or tries to develop 

its own. With a multibillion-dollar budget for software and other 

information technology, he said, the ATO has ample opportunity to save 

money. 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 14 GAO-05-333SP National Airspace System

In his opening remarks and in responding to panelists’ questions, the 

ATO’s COO made a number of observations on FAA’s culture. He also 

noted that FAA plans to train or hire people with needed skills to address 

shortfalls in technical expertise. The following summarizes some of his 

key observations on FAA’s culture and provides additional information 

from previous GAO reports and work in progress on how FAA is 

addressing some of the cultural and technical factors panelists identified 

as affecting ATC modernization:

Recognizing that cultural factors can play a critical role in an 

organization’s success, the ATO has initiated organizational changes 

that are designed to create a foundation for cultural change and deliver 

benefits to customers efficiently. For example, the ATO

• established collaborative teams of technical experts and ATC system 

users;

• reorganized air traffic services and the research and acquisition 

organization along functional lines of business to bring stakeholders 

together and integrate goals, as well as reward cooperation by linking 

investments to operations; 

• reduced layers of management from 11 to 7 to help address the 

hierarchical nature of the organization; and

• conducted an organizationwide activity value analysis to determine 

the full range of activities that ATO headquarters is engaged in, the 

value customers place on those activities, and the potential for 

conducting any of those activities more effectively and efficiently.

Although FAA anticipates that cultural change will take a long time, it is 

giving high priority to changing its leadership model by linking top 

management more closely to operations in the field and replacing 

“command and control” with communication across organizational 

levels. According to an FAA consultant’s review of the agency’s internal 

communication needs,16communication within FAA is, in many ways, 

broken, but a good number of employees want to help fix it. Employees 

willingly participated in discussions and focus groups, the report said,

16“Communicating the Future within the Federal Aviation Administration,” Review of 

Findings from Summer 2004, Internal Research, August 13, 2004. 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 15 GAO-05-333SP National Airspace System

indicating a desire to improve the flow of information within the agency 

by sending a large number of detailed e-mails in response to a call for 

recommendations to improve internal communications.

In the past, according to the ATO’s COO, FAA’s management culture was 

“intensely hierarchical, risk averse,” and “reactionary.” But now, he 

said, FAA is attempting to foster “results-focused, proactive and 

innovative behavior.” Changing the agency’s leadership model is also 

designed, he said, to replace a “personality-driven culture” with a 

sustainable, stable, viable organization that can make rational decisions 

that transcend changes in political leadership.

The ATO is trying to better align FAA’s priorities and stakeholders’ 

interests by developing a strategy map that captures the outputs desired 

by the ATO’s owners and customers, along with the outputs that must be 

achieved. Called the Strategic Management Process, this effort borrows 

heavily from a private-sector model and uses the ATO’s strategic goals 

and objectives to drive investment decisions. According to FAA, the 

strategy map will enable owners and customers to clearly understand 

both the services that the ATO is providing and the effects of products in 

development on those services. As a result, FAA says, future budgetary 

conversations will revolve around the desired level of service, instead of 

focusing on a product, as past discussions typically did. According to 

FAA, the Strategic Management Process will ensure linkage between 

FAA’s operating and capital budgets. 

To become a “performance-based organization” and identify customer 

groups and their service needs, the ATO created “value-based” 

performance metrics; that is, it defined its performance in terms of 

customers’ needs and connected efforts to satisfy those needs with cost. 

Ultimately, the ATO wants to know how much every unit of output costs 

so that it can allocate and compare costs and measure productivity. 

Thus, each organizational unit and facility is developing applicable 

metrics for performance so that the ATO can compare costs, identify 

factors that affect costs, and use this information to improve 

performance. For example, each en route facility is determining its 

hourly cost to control flights. The ATO can then compare and analyze 

these costs to identify positive and negative factors affecting 

performance and productivity.

FAA is implementing its 10-year strategy for air traffic controllers, the 

Air Traffic Controller Workforce Plan, released in December 2004. This 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 16 GAO-05-333SP National Airspace System

plan is a response to a congressional mandate, based on a 

recommendation we made in 2002, that FAA develop a plan for 

addressing an impending wave of controller retirements and deal with 

productivity issues.

Panelists Said Funding 

Shortfall and Features 

of the Federal Budget 

Process Affect ATC 

Modernization and 

Suggested Short-term 

Steps to Address Them 

The panelists identified and discussed the impact of funding constraints 

and the federal budget process on ATC modernization. In their view, the 

most immediate issue is a critical shortage of funds to meet the current 

modernization program’s plans and users’ demands. Additionally, they said, 

the federal budget process is slow, inflexible, and influenced by the 

political process; annual appropriations are uncertain and discourage 

planning; and the budget fails to show investment priorities and 

relationships between FAA’s capital and operating budgets. The panelists 

suggested a number of steps that the ATO could currently take to address 

these challenges. 

With Funding Shortfall, 

Flight Delays May Gradually 

Increase, Panelists Said

Panelists viewed the ATO’s apparent fiscal shortfall—which one panelist 

said would amount to a 20 percent deficit in 4 years—as a severe challenge. 

In terms of operations, the panelist said, this deficit was more likely to have 

a gradual than an immediately catastrophic onset. He did not expect to see 

major system outages but predicted, instead, “a slow but sure increase in 

delays.” However, as another panelist said, if the ATO did not carefully 

analyze demand and determine how that demand could be served, the ATO 

would find itself facing what a third panelist referred to as a “perfect 

storm,” reiterating a term the ATO itself has used. 

Severe reductions in the funding for ATC modernization, if required to 

address the currently projected shortfall, could exacerbate what one 

panelist described as the government’s traditional underfunding of the ATC 

system’s capital requirements. According to this panelist, the government 

undercapitalizes any complex, rapidly evolving operational system, 

including the ATC system, and overestimates the economic service lives of 

information technology investments. Whereas the government typically 

assumes such investments will last for 15 years, he said, a 7-year estimate 

would be more reasonable. 

Although the ATO has said that its business plan, when completed, will 

provide policy makers with detailed information on the current funding 

shortfall, panelists expressed concerns about the political implications of 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 17 GAO-05-333SP National Airspace System

showing large deficits. They suggested, for example, that FAA and DOT 

officials might be unwilling to publicly release data that could raise 

questions about their management. 

Funding Air Traffic Services 

through the Budget Process 

Is Slow and Inflexible, Some 

Panelists Said

Several panelists maintained that the federal budget cycle is too long and 

inflexible to meet the needs of an ATC system. According to one panelist, it 

is “impossible” to run the U.S. ATC system within the classic federal 

structure. Such a “dramatic,” “dynamic” system requires “more managerial 

freedom, much more day-to-day, week-to-week, month-to-month decisionmaking,” he said. The federal budget process freezes plans for the system 

12 or 18 months in advance, but for an ATC system to succeed, “you’ve got 

to be 12 or 18 days ahead.” 

The budget procedure requiring that capital investments be funded out of 

annual appropriations means that major acquisitions generally take many 

years to implement and projects may continue to be implemented even 

after they have outlived their usefulness. Particularly when annual 

appropriations fall short, panelists noted, projects’ development and 

deployment may be delayed and their costs may increase with time. 

Furthermore, until the acquisitions are completed, the benefits of the new 

technologies are deferred, aging equipment may pose risks to users, and 

outdated software may require costly upgrades. By the time the 

acquisitions are fully deployed, panelists said, they may be out of date. 

Panelists Described the 

Effects of the Political 

Process on the Federal 

Budget 

Several panelists discussed the impact of the political process on the 

federal budget. According to one panelist, Members of Congress may base 

funding decisions on how jobs in their districts will be affected, rather than 

on how reasonable the business cases for actions may be. As evidence, he 

cited a Senate provision that prohibited FAA from closing its regional 

accounting departments and centralizing them to achieve cost efficiencies 

because the regional departments were big employers in congressional 

districts. Another panelist noted that political considerations may be more 

influential than broader issues. In his view, competition among 

appropriators for projects benefiting their constituents, regardless of the 

need for those projects, undermined need-based efforts to allocate scarce 

resources so that the NAS can serve as many people as possible. “I’ve been 

in too many of these meetings where we prioritize things,” he said. “And if 

your constituency doesn’t get something, I know you’re not going to 

support me.” Thus, Oklahoma, for example, may get the same ATC 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 18 GAO-05-333SP National Airspace System

technology as New York, despite resource constraints and major 

differences in air traffic demand. 

The political process influences budget decisions in the administration as 

well as in Congress, some panelists said. According to one panelist, 

Congress has generally supported FAA’s modernization program, but 

funding difficulties have ensued because the budget is consolidated and 

there are always pressures on it. Other panelists added that the ATO would 

have difficulty “deliver[ing] the bad news”—that is, publishing a business 

plan that projects deficit scenarios—unless revenue increases are 

forthcoming. According to this panelist, OMB would deny any requests for 

increased funding and would, instead, tell the ATO to find another way of 

doing business. 

Panelists Said Uncertain 

Annual Funding 

Discourages Effective 

Planning 

Panelists noted that funding from annual appropriations is uncertain, and 

that this uncertainty is incompatible with strategic and capital planning. 

The amount of money available for appropriation each year cannot be 

predetermined, one panelist said, and the size of the appropriation may 

vary from year to year. This uncertainty focuses attention on which 

technology will receive the funding (the inputs) rather than on what 

improvements in safety or capacity the technology is supposed to deliver 

(the outputs), he said. In debating whether this investment or that 

investment should receive funding, planners have lost sight of the big 

picture, he suggested, and the ATO has spent most of its capital investment 

dollars on sustaining and maintaining existing systems. Only about 14 

percent of its expenditures, he recalled, were for flight enhancement. “Who 

anywhere would have a capital investment plan that was predominantly 

about standing still?” he asked. 

Another panelist also considered the federal budget process incompatible 

with strategic planning. In his words, “it is absolutely a problem at FAA” 

that “budget drives strategy and strategy does not drive budget.” Although 

FAA is good at forecasting demand, he said, it does not evaluate “the 

anatomy of demand” and determine how that demand will be served. 

Panelists noted, for example, that the number of regional jets, low-fare 

airlines, and unmanned aerial vehicles are increasing, but FAA has not 

developed a business model or plans for managing the increased air traffic. 

Other panelists suggested that the federal budget process discourages 

realistic capital planning. FAA’s capital investment plan is “mired in 

predictable annual fits and starts subject to micromanagement by 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 19 GAO-05-333SP National Airspace System

Congress,” one panelist said, rather than integrated, organized, and 

periodically revised. Another panelist observed that FAA asks for more 

than it can get and then carries the difference over from year to year, 

creating “a bow wave” of unfunded requests for capital projects that it 

seldom reduces. Furthermore, as a third panelist pointed out, the budget 

process establishes incentives for unrealistic planning: Project managers 

first overpromise capabilities and underestimate costs to increase the 

chances that new projects will be accepted. Then, after projects are 

accepted, they overestimate costs because they assume their requests will 

be cut. Although managers could include options in their budget 

submissions to indicate what could be accomplished at different funding 

levels, they do not do so because they assume items identified as options 

will be cut. Finally, managers are reluctant to revise ongoing projects 

because they do not want to be seen as fickle. By contrast, another panelist 

said, a private company that operates under a board of directors and 

obtains revenue from customers does not have incentives to play budget 

games to get projects approved. “Your money is your own money,” he said. 

Some Panelists Believed 

That the Federal Budget 

Fails to Show Priorities and 

Relationships

Some panelists criticized the federal budget for failing to show priorities 

and relationships among proposed investments. In the budget, one panelist 

said, “everything is as important as everything else.” Another panelist 

observed that the budget sets no capital investment priorities. According to 

a third panelist, a line item budget tears apart a highly layered, 

interdependent system and does not reveal synergies between projects. 

Then, when the budget request goes to Congress, he said, “you have no 

opportunity to try to explain to anybody the interconnections of these 

programs.” As a result, when the appropriators decide not to fund a project, 

they may not understand how their decision will affect other projects. 

Several panelists discussed the “firewall” that federal budget procedures 

create between the FAA’s capital (Facilities and Equipment) and operating 

(Operations) accounts, noting that separating these two types of costs 

makes it difficult to recognize interactions between them.17 “You can’t 

make rational decisions if somebody is handing you those two separate 

pieces with a wall between them,” one panelist said. He added that the 

17The vast majority of funds for FAA’s ATC modernization program and operations comes 

from taxes on airline tickets that are deposited into the Aviation Trust Fund. Congress then 

appropriates the trust fund revenues for line items in FAA’s budget. Under federal budget 

procedures, funds are appropriated separately for capital projects and for operations. 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 20 GAO-05-333SP National Airspace System

firewall discourages analyses of life-cycle costs and may lead, in some 

instances, to investments in technologies that end up in a warehouse 

because the ATO cannot afford to operate them. Similarly, another panelist 

observed that the separation of capital and operating costs in FAA’s 

accounting system makes it difficult to see the implications of capital 

investment decisions for operating costs, even though “everything we put 

in the field winds up increasing the ops budget.” Furthermore, as another 

panelist noted, the firewall makes it difficult to see the relationship 

between software replacement (capital) and maintenance (operating) 

costs. Thus, decisions to postpone purchases of new or upgraded software 

may save capital investment costs, but rising maintenance requirements 

may increase operating costs. Eventually, he said, the maintenance costs 

may “far exceed” the replacement costs. 

Finally, other panelists said, the budget is not integrated to show what 

investments buy in terms of productivity, safety, or environmental benefits, 

and FAA’s capital budget fails to show the impact of investments on the 

country. This can lead to mismatches—that is, to funding projects that will 

provide limited benefits for users. 

Panelists Identified Shortterm Steps within the 

Budget Process and Other 

Steps That the ATO Could 

Take under Its Existing 

Authorities to Address 

Budget Constraints 

While recognizing the magnitude of the ATO’s projected funding shortfall 

over the next few years, the panelists identified a number of steps that the 

ATO could take to address its current financial situation. These steps 

included accepting the budget process as it is and reducing spending to 

match revenues, developing strategies for presenting the ATO’s budget 

request more clearly to Congress, implementing regulatory and procedural 

changes to allow the use of existing cost-saving technologies, contracting 

with the private sector to provide certain air traffic services, and obtaining 

information on other countries’ ATC technologies and on international 

technical standards. 

Short-term Steps within the 

Budget Process

Several panelists emphasized the importance of accepting the budget 

process as it is and of doing what can be done in today’s government 

system: 

• One panelist thought that the ATO should scope the modernization 

program so that it realistically reflects the resources that can be 

expected within the next 5 years and then put together and 

communicate a strategy and a vision to guide the agency’s 36,000 people. 

He called for the ATO to adjust its capital requirements to what can 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 21 GAO-05-333SP National Airspace System

realistically be funded and to review and cut its programs in light of the 

current budget constraints. 

• This panelist also recommended looking at longer term alternatives to 

annual appropriations that are available within the government and 

work well for other organizations, such as “working capital accounts 

and all kinds of industrial funding schemes.” 

• Another panelist encouraged the ATO to focus its capital investment on 

avoiding outages—that is, on replacing equipment that would otherwise 

fail. This panelist also said that FAA needs a customer-oriented business 

strategy and a business plan. 

• One panelist, who observed that operating costs account for about 

three-quarters of the ATO’s total costs,18 suggested that the upcoming 

wave of air traffic controller retirements19 would create “an opportunity 

to redistribute and even to trim the work force in some areas,” as well as 

reduce personnel costs by offering incentives for early retirement.

• Improving controllers’ productivity would be another way to save 

money, a fourth panelist said, but he characterized his suggestion as 

“touch[ing] the third rail of aviation politics.” 

• Another panelist emphasized the importance of starting to plan now to 

accommodate the airplanes that are being bought today to provide 

service for the next generation, which he variously estimated at 20, 30, 

or 40 years. 

Some panelists proposed strategies for the ATO to present its budget 

request more clearly to Congress:

18According to DOT/IG, salaries and benefits make up approximately 73 percent of FAA’s 

operating budget. See DOT/IG, Key Issues for the Federal Aviation Administration's 

FY 2005 Budget, CC-2004-038 (Washington, D.C.: Apr. 22, 2004).

19In 2002, we reported that almost one-half of FAA’s controller workforce (about 7,000 

controllers) would retire over the next 10 years and about 93 percent of controller 

supervisors would be eligible to retire by the end of 2011. See GAO, Federal Aviation 

Administration: Plan Still Needed to Meet Challenges to Effectively Managing Air Traffic 

Controller Workforce, GAO-04-887T (Washington, D.C.: June 15, 2004) and Air Traffic 

Control: FAA Needs to Better Prepare for Impending Wave of Controller Attrition,

GAO-02-591 (Washington, D.C.: June 14, 2002).
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 22 GAO-05-333SP National Airspace System

• For example, one panelist said that the ATO needed to understand the 

interconnections between ATC systems and break the big picture into 

nuggets so that it could clarify for the appropriators why they should not 

break apart the ATO’s capital investment plan and selectively fund only 

some components. 

• Another panelist maintained that the ATO could mitigate the effects of 

the firewall between its capital and operating budgets by modifying its 

budget submissions to show the future cost implications of current 

investment decisions.

Steps outside the Budget Process 

under Current Authorities

Several panelists identified options outside the budget process that the 

ATO could pursue under its current authorities. They said, for example, 

that the ATO could pursue procedural and regulatory changes that would 

take advantage of existing technologies to increase capacity, pilot test 

contracts with the private sector to provide certain air traffic services, and 

obtain information on technologies and procedures developed in other 

countries that could be used in the United States. 

Regulatory and Procedural Changes Could Allow the Use of 

Existing Technologies to Enhance Capacity and Efficiency

Several panelists discussed the potential benefits of a more widespread use 

of a concept called area navigation (RNAV), which allows operators of 

properly equipped aircraft to use onboard navigation capabilities to fly 

desired flight paths without requiring direct flight over ground-based 

navigation aids. This provides for more direct routing, avoiding suboptimal 

routes prescribed by conventional “highways in the sky” that are defined by 

point-to-point flying over ground-based navigation aids. The RNAV concept 

and a major new method for exploiting it, called required navigation 

performance (RNP), permit flight in any airspace as long as aircraft have 

been certified to meet the required accuracy level for navigation 

performance. RNAV and RNP hold promise for saving system users time 

and money—largely by reducing flight times and fuel consumption by 

allowing users to fly shorter routes or avoid bad weather. In addition, RNAV 

and RNP could potentially increase the capacity of the ATC system to 

handle air traffic by reducing the required distance (separation) between 

aircraft equipped with advanced navigation capabilities if the aircraft can 

safely operate closer to one another than FAA’s regulations currently allow.

According to some panelists, many aircraft have had the navigation 

capabilities to implement RNP for many years, but operators have not been 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 23 GAO-05-333SP National Airspace System

able to use these capabilities to their full potential in the United States 

because FAA has not approved procedures for its use. However, the airlines 

are “crying for” FAA to approve RNP, one of the panelists said, because 

aircraft equipped with RNP capabilities could then fly alternative rolling, 

moving routes to avoid weather delays. Service would improve for 

travelers, and the airlines would avoid the substantial costs of delays, he 

said. Implementing RNP could also eventually lower the ATO’s costs, 

another panelist said, since RNP does not require any ground equipment. 

RNP technologies have been installed on larger aircraft for so long that 

some aircraft equipped with the technologies have already been retired to 

the desert, one panelist said. In addition, pilots have been trained to use the 

technologies, and the technologies are already being used in some other 

countries, including Canada, where a private airline company (West Jet) 

developed implementation procedures in collaboration with the Canadian 

ATC regulatory agency and the Canadian air traffic management 

organization. 

As a first step toward obtaining FAA’s approval of procedures for using 

RNP, a panelist said, the ATO could make policy announcements to set a 

tone and direction. These announcements would enlist the user 

community’s support at little or no cost to the ATO, give the ATO an early 

success, and help tie customers to the ATO’s mission. However, he also 

cautioned, it would be important for FAA to implement RNP in a way that 

did not “disenfranchise” general aviation interests and regional carriers 

whose aircraft are not already equipped with RNP technologies. 

Two panelists expressed concerns about the government’s approach to 

regulating the use of onboard navigation equipment and the associated 

procedures needed to implement RNP. According to one of these panelists, 

FAA has “the wrong conceptual framework” for developing regulations to 

implement new procedures. Its current approach is disproportionate, he 

said, because it establishes the same safety standards for aircraft of all 

sizes. “We can’t keep treating airplanes that need 100 cubic miles of 

airspace the same from a cost and benefit point of view as airplanes that 

need a quarter cubic mile of airspace,” he said. In his view, FAA needs to 

revise its approach to assessing and balancing risks. He maintained that the 

role of regulatory management on the evolution of the ATC system has 

been underestimated and called for significant investment in understanding 

risk management. 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 24 GAO-05-333SP National Airspace System

The other panelist who expressed concerns about the government’s 

regulatory approach argued that navigational technology is evolving and 

shifting from ground-based to cockpit-based systems. He maintained that 

“you’ve got to get aircraft closer and closer together to be able to increase 

capacity,” and said that the government should allow the ATO to change its 

policies on aircraft separation to permit “the technology that exists on 

airplanes today to do the job.” He suggested that the private sector could 

assume the cost of capitalizing the equipment, but “the government’s got to 

allow that technology to be used, and it hasn’t.” 

Although one panelist emphasized the importance of conducting thorough 

technical evaluations of RNP to identify any roadblocks to its use, the 

panelists generally considered it a highly promising, low-cost option for the 

ATO to improve service. One panelist recommended that the ATO create 

incentives, such as the right to fly in preferred airspace, for users that equip 

their aircraft with RNP technologies, to lower the ATO’s costs.

Contracting with the Private Sector to Provide Certain Air Traffic 

Services Could Demonstrate Efficiencies and Potential Cost 

Savings

Throughout the panel, panelists discussed an initiative that FAA has 

already begun—determining whether a private contractor or the federal 

government can provide automated flight service station services more 

efficiently.20 OMB Circular A-76 directs federal agencies to (1) identify all 

activities performed by government personnel as either commercial or 

inherently governmental, (2) perform inherently governmental activities 

with government personnel, (3) use a competition to determine who should 

perform commercial activities, and (4) award a contract to the private 

sector if the outcome, or performance decision, of the competition is

20FAA formally announced in December 2003 that its flight service stations met the criteria 

for competitive sourcing, and that it would conduct a competition under OMB’s A-76 

guidelines for an improved way to provide flight service operations. On February 1, 2005, 

FAA announced the selection of a team headed by Lockheed Martin to provide services now 

offered by the agency’s network of 58 automated flight service stations across the United 

States. These services include weather briefing and flight planning services, which are used 

primarily by general aviation pilots. The total evaluated cost of the 5-year contract, with 5 

additional option years, is $1.9 billion and represents estimated savings of $2.2 billion over 

the next 10 years. 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 25 GAO-05-333SP National Airspace System

determined in its favor.21 The panelists, who generally assumed that the 

private sector could provide flight service station services and other air 

traffic services more efficiently than the government, suggested that if 

contracting for flight service station services proved to be effective, FAA 

could contract for other air traffic services, such as oceanic, night, en 

route, or airways facilities services. The A-76 process would then serve not 

only as a way of saving money but also as “a pilot program for how things 

could get done,” one panelist said. In the view of another panelist, ongoing 

government oversight would ensure the safety of contracted operations, 

and “staged outsourcing” of the NAS’s functions might build confidence in 

the private sector’s ability to provide air traffic services safely and 

efficiently. 

Obtaining Information on Other Countries’ ATC Technologies and 

on International Technical Standards Could Help the ATO Save 

Costs

Obtaining information on technologies and procedures that other countries 

have already developed could help the ATO control costs, as well as help 

compensate for its lack of technical expertise, panelists noted. “We should 

be using and sharing” the technologies that have already been invented, 

one panelist said. According to his organization, the air navigation service 

business worldwide spends $3 billion to $4 billion a year on writing code 

for air traffic management software, and “at least half of that” is writing 

code for “something that’s already been invented and...works just fine 

somewhere else.” 

Although this panelist’s organization formerly maintained, as FAA has 

done, that it could not adapt other countries’ systems to its own unique 

needs, it found, when faced with financial pressures, that it could buy 

technologies from other countries or enter into agreements with them and 

that it could do so at less cost than it could develop its own technologies. 

To facilitate information sharing and cost saving, the panelist suggested, 

benchmarks of the existing market would be useful, including information

21Under President Clinton, air traffic services were defined as “inherently governmental,” 

meaning that they could not be provided by the private sector. In June 2002, President Bush 

issued Executive Order 13264, which revised that definition and opened the way for FAA to 

contract with private companies for services on a test basis, as directed by OMB Circular

A-76. 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 26 GAO-05-333SP National Airspace System

on the systems that are already running in countries, their performance, 

and their cost.22 

Sharing information on technical standards with international 

organizations could also help the ATO avoid costly investments in 

technologies whose standards were incompatible with those of other 

countries. A shared vision is crucial for a globally based air traffic system, 

one panelist said. If every country or continent had its own technical 

standards—a North American switch, a European switch, a South 

American switch, and an Australian switch, for example—an international 

system could not function effectively.23

The following provides additional information from the ATO’s COO and 

from previous GAO reports and work in progress on how FAA is 

addressing some of the funding shortfalls and features of the federal 

budget process that panelists identified as affecting ATC modernization: 

The ATO’s COO believes that good financial management means linking 

FAA’s capital and operating budgets. Previously, FAA developed separate 

capital (Facilities and Equipment) and operating (Operations) budgets. 

But the ATO recognizes that capital expenditures directly affect 

operating costs over time, and therefore the two budgets must be 

developed together. Creating this linkage is important for the ATO to 

respond to concerns expressed by its owners and customers as well as to 

address internal issues, such as training, staffing, pay disparities, and 

infrastructure. Using the Strategic Management Process to drive budget 

decisions will help to ensure the establishment and maintenance of a 

linkage between the capital and operating budgets.

According to the ATO’s COO, it will be at least 2 years before the ATO has 

completed the basic management processes needed to use the new 

22EUROCONTROL has been collecting and reporting performance data from its members 

since 1998, and the International Air Transport Association is calling on the Civil Air 

Navigation Services Organization (CANSO) to develop performance benchmarks for its 

members. CANSO represents the interests of air navigation service providers (organizations 

that provide ATC services) and technology suppliers of goods and services to the industry 

worldwide.

23FAA has ceased funding the ground station component of one modernization program 

(NEXCOM), in part because it is reevaluating its approach for modernizing the air-to-ground 

communications. FAA will move forward with replacing older radios, which is the least 

complex element of the NEXCOM effort. 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 27 GAO-05-333SP National Airspace System

financial management systems it has been putting in place. As steps 

toward that goal, the ATO expects everyone to learn the difference between 

cost and cash flow and get a better handle on unit costs as better cost 

accounting data become available. To gain a more complete 

understanding of its costs, FAA is revising its cost accounting practices 

and changing from a cash flow to a total cost business model for the ATO, 

and the ATO is developing management training in cost accounting and 

budgeting. Moreover, FAA plans to finish putting a new cost accounting 

system in place by 2006 that will allow it to assign, track, and better 

control costs. 

In the fall of 2004, FAA updated its cost estimates in light of OMB’s 

revenue projections for the next 4 years and arrived at a cumulative 

shortfall for the period of $5 billion for the operating budget and $3.2 

billion for the capital budget. According to FAA, a business plan that the 

ATO was preparing at that time will show, when completed, how large a 

funding gap the ATO faces and how far it will have to go to address that 

gap. Whatever the exact size of the gap may be, FAA says that it is 

prepared to identify and eliminate redundancies in the NAS and to 

review its long-term ATC modernization priorities.

FAA has already taken some steps to control the costs of ATC 

modernization. For example, it has adopted the phased approach to 

implementing new ATC systems that it used under Free Flight Phase 1, 

called “build a little, test a little.” This approach relies on the early and 

ongoing investment of stakeholders, who review the progress of new 

projects regularly and identify critical omissions and “no go” items that 

would prevent a system from operating as intended. Reviews of three 

projects with cost, schedule, and performance issues that our reports had 

identified—the Local Area Augmentation System, Controller-Pilot Data 

Link Communications, and Next-Generation Air-to-Ground 

Communications System—led FAA to reduce the funding for them in 

FAA’s fiscal year 2005 budget request. The ATO says it plans to continue 

this phased approach to acquiring new systems. 

FAA developed a Roadmap for Performance-Based Navigation, which it 

published in July 2003, but the ATO is having difficulty finding the $10 

million in its operations budget that it needs to chart RNP procedures. 

Airspace redesign using RNAV is occurring in phases, and its 

implementation will depend on those owners and operators who have 

fully equipped aircraft and are sufficiently trained. To encourage 

progress, FAA is implementing procedures that provide benefits for those 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 28 GAO-05-333SP National Airspace System

customers that do equip. Now, during the first phase, FAA is 

implementing the redesign at very high altitudes. In January 2005, FAA 

doubled the airspace routes between 29,000 feet and 41,000 feet by 

spacing aircraft 1,000 feet apart instead of 2,000 feet. The procedure, 

invisible to passengers, is called Reduced Vertical Separation Minimum 

and is expected to save airlines $400 million in fuel costs during the first 

year. As technology allows, FAA says, more flight altitude levels will be 

added. Currently, FAA is implementing a number of improvements to 

airspace and procedures using RNP. In addition, according to FAA, five 

airports are developing RNP-based procedures in partnership with 

airlines that favor RNP. 

Panelists Suggested 

Structural Changes to 

Improve the ATO’s 

Chances of Success 

over Time

While recognizing that the ATO could make some progress in addressing its 

cultural, technical, and budgetary challenges under its current authorities, 

the panelists generally agreed that structural changes would increase the 

ATO’s chances of success. These changes, which would give the ATO a 

more predictable source of funding and greater decision-making authority, 

would generally require legislative action and take time to implement. To 

give the ATO a more predictable source of funding, panelists suggested that 

it be authorized to establish and manage user fees, rather than rely on 

appropriated tax receipts, and that it be allowed to issue revenue bonds 

backed by these fees. To give the ATO greater decision-making authority, 

panelists proposed restructuring it to streamline and strengthen its 

management and provide its managers with the tools needed to address its 

challenges. These changes would allow the ATO to implement a “sensible” 

capital investment program; hire the technical expertise it needs; achieve 

cost efficiencies; and offer better, more responsive service. Additionally, 

panelists said, restructuring could resolve the conflict of interest inherent 

in FAA’s dual responsibility as the regulator and the operator of air traffic 

services.
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 29 GAO-05-333SP National Airspace System

Some Panelists Considered 

the Steps Taken to Create a 

Performance-Based Air 

Traffic Organization 

Insufficient for Its Success

When Congress authorized the ATO’s creation and generally implemented 

the Mineta Commission’s24 organizational recommendations without 

implementing its funding recommendations, it produced an anomaly—that 

is, an organization charged with becoming performance-based but deprived 

of the means to transform itself, according to one panelist. Other panelists 

also portrayed the ATO as an organization that is charged with operating 

like a business but is not provided with the management tools available to a 

business. In their view, the ATO’s chances for success are limited because 

the COO is being asked to turn the organization around without being given 

the tools to do so. One panelist, who said he was skeptical about the ATO’s 

ability to act like a business when it is not really one, suggested that it was 

only at the margins that the creators of the ATO had replicated a business. 

According to him, the ATO is still largely a government organization and 

therefore remains subject to most governmental constraints. 

Panelists Said a User Fee 

System Would Give the ATO 

a More Predictable Source 

of Funding and Link Air 

Traffic Services with 

Demand

Replacing airline ticket taxes with a user fee and allowing the ATO, rather 

than Congress, to manage the collected fees is a step that many panelists 

considered essential for the ATO’s success. While recognizing that such a 

fee would be controversial, since the costs for most users would likely 

increase, the panelists maintained that it would produce a more 

predictable, reliable funding stream than the annual appropriations 

process. 

A user fee system would link air traffic services directly with demand, 

panelists pointed out. Under the annual appropriations process, they noted, 

Congress comes between the ATO and the airlines that use its services. The 

ATO lacks a direct link with the users because Congress appropriates the 

revenue from them—the airline ticket taxes that are deposited into the 

Aviation Trust Fund—and the ATO is required to spend the funds as 

Congress directs. Not having a direct financial link between the ATO and 

the users can create inefficiencies, panelists said: The users lack incentives 

to monitor the ATO’s spending and may not insist on cost control, while the 

ATO lacks incentives to consult the users and may invest in technologies 

that the users do not want. A user fee makes the ties between the funding 

source and the users “much more transparent,” according to one panelist, 

24The Mineta Commission, formally authorized as the National Civil Aviation Review 

Commission, recommended in 1997 that FAA’s air traffic system be restructured as a 

performance-based organization, subject to independent oversight, and be given leasing and 

borrowing authority.
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 30 GAO-05-333SP National Airspace System

and helps preclude spending for “gold-plated things that don't affect the 

true performance of the system and drive the costs up completely 

unnecessarily.” Without a direct connection to the users and their mission, 

another panelist said, “evolution takes very unintended and very 

undesirable paths over long periods of time.” As long as the customers are 

not directly paying the bills and providing the resources, still another 

panelist maintained, “it’s going to be very hard to bring about real change” 

and make the ATO “a customer-driven, customer-servicing organization. 

The ones who pay the bills are the ones you respond to and serve,” he 

concluded.

While panelists generally favored a user fee system, they cautioned care in 

proposing and implementing one. As one panelist said, the fee question, 

once raised, would be all-consuming and would require the expenditure of 

political capital. In his view, it was critical that the ATO wait to achieve 

some successes before seeking a user fee system. Another panelist called 

for figuring out “not only what problem we’re solving, but what problems 

we might be likely to create,” and noted that the government would have to 

consider what it was incentivizing through user fees. For example, if the fee 

was based on weight, he said, it might “incentivize even smaller planes and 

more planes,” thereby increasing demands on the ATC system’s capacity. 

Another issue that would have to be worked out, is how the common costs 

of air traffic services (e.g., the costs of activities in the ATC system 

operated by the Department of the Air Force) should be allocated—

whether users should pay only for the incremental costs of the services 

they use, as most users would argue, or whether some cross-subsidies 

should continue. Another panelist pointed out that implementing a user fee 

alone would not guarantee efficiency, because the air traffic services 

provider could simply raise the fee when costs increased and the users 

would have to pay, since the service is a monopoly. Some method of 

controlling costs would have to be built into the system, he said. 

Most panelists correctly assumed that legislation would be required to 

institute a user fee system. Specifically, a user fee system could be 

implemented in a government or a public-private type of air traffic services 

organization. However, one panelist cautioned, it would be “fatal” to 

implement the fee in any way that did not make the ATO financially 

independent of Congress. Once the airlines and general aviation users 

started to pay a fee to finance the ATO, then the ATO should be held 

accountable to them, he said, and “FAA should not be getting approval from 

government to spend its budget.”
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 31 GAO-05-333SP National Airspace System

Panelists Said Borrowing 

Authority Would Provide the 

Funding for Efficient 

Capital Investment 

Revenue bonding based on a new user fee stream would create an 

“alternative to capital starvation,” one panelist said. Even if the user fee 

stream initially produced no more revenue than the airlines are now paying 

in aviation-related taxes, he said, the ATO could reap a “transition 

dividend” during the first 5 or 10 years after the bonds are issued, limiting 

its annual outlays to the debt service on the bonds. To facilitate the airlines’ 

recovery, he suggested, the ATO could cut what the airlines pay and “still 

have a robust modernization program being financed by the revenue 

bonds.” He characterized this strategy as “money that’s lying on the 

sidewalk waiting to be picked up” and saw it as an opportunity to buy some 

new equipment in bulk and get it installed before it becomes obsolete. Such 

a “sensible” approach would not be possible with annual appropriations, he 

said.

Further Organizational 

Restructuring Could 

Streamline and Strengthen 

the ATO’s Management 

Panelists maintained that the ATO’s organizational placement, combined 

with its dependence on Congress for funding, limits the COO’s ability to 

make decisions and take actions. The COO is not a Chief Executive Officer, 

as one of the panelists observed. Instead, he reports to his “owners”—who 

include the FAA Administrator and the DOT Secretary, who in turn receive 

direction from the administration (the President and OMB Director) and 

Congress. 

Because the ATO is embedded so deeply in the executive branch, the COO 

has no means of communicating directly with the congressional 

committees that authorize and fund the ATO. Congress originally tried to 

address this issue when, as part of the legislation creating the COO 

position, it created the Air Traffic Services Subcommittee to oversee the 

ATO and report independently to Congress on the ATO’s performance.25 

However, the legislation did not authorize funds to support an independent 

staff for the subcommittee, and when the FAA Administrator requested 

funds, DOT denied the request, one panelist said, because the Deputy 

Secretary saw the subcommittee as performing a DOT function. Moreover, 

as another panelist noted, Congress eliminated the subcommittee’s

25As originally implemented, this committee, the Air Traffic Services Subcommittee, was 

similar to the board of public interest directors that the Mineta Commission recommended 

be established to oversee a performance-based air traffic services organization.
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 32 GAO-05-333SP National Airspace System

oversight authority,26 making the subcommittee purely advisory. 

Consequently, he said, there is no oversight group that is expected to 

provide constructive criticism of FAA, and FAA does not get “the kind of 

constructive advice that you might hope for.” According to a third panelist, 

Europe’s Performance Review Commission provides such constructive 

advice for EUROCONTROL, the European air traffic management 

organization. The commission serves as a panel of independent advisers 

and costs about $2.5 million a year, he said, and “it’s well worth the 

investment.” 

According to several panelists, the ATO’s COO lacks the management tools 

that would be available to a private-sector CEO. His ability to plan 

modernization projects, set program priorities, and implement new 

technologies is constrained because the FAA Administrator, DOT 

Secretary, and OMB Director can revise his budget request and Congress 

can make further changes in the ATO’s budget. In addition, the 20-year 

vision of the Joint Planning and Development Office (JPDO)27 is at odds 

with the ATO, according to one panelist, because it looks forward to the 

ATC system of 2025, rather than helping the ATO address its immediate 

funding needs. Other panelists observed that the controllers’ union 

influences management’s decisions. 

The COO lacks key financial data needed to determine, analyze, and 

manage the ATO’s costs. When he was “parachuted” into the ATO, as one 

panelist put it, he did not have the numbers he needed to know where the 

ATO stood because FAA did not maintain basic information on the costs 

and value of existing systems, reducing the ATO’s potential to be data 

driven. As a result, he spent most of his first year overseeing the 

implementation of a cost accounting system and collecting other key data.

Finally, the COO’s ability to manage the ATC workforce is limited. Civil 

service rules give the ATO’s employees powers and rights that they would 

not have in a private organization, and management’s ability to influence 

26Congress eliminated the subcommittee’s oversight responsibilities when it reauthorized 

FAA in December 2003. 

27This office coordinates an air transportation system planning initiative that involves the 

Departments of Transportation, Commerce, Defense, and Homeland Security; the National 

Aeronautics and Space Administration; and the Office of Science and Technology Policy and 

other experts from the public and private sectors. The office reports to a Senior Policy 

Committee chaired by the Secretary of Transportation.
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 33 GAO-05-333SP National Airspace System

their performance is constrained because their terms of employment and 

compensation are based largely on negotiated agreements rather than on 

performance. In addition, salary caps limit FAA’s ability to pay for technical 

expertise. 

Restructuring Could 

Resolve the Conflict of 

Interest Inherent in FAA’s 

Dual Role as the Regulator 

and the Operator of Air 

Traffic Services

As one panelist observed at the end of the panel, the ATO’s creation did not 

address the structural conflict of interest that exists because FAA is both 

the regulator and the operator of air traffic services. “We didn’t have arms 

length regulation of air traffic control in FAA,” he said, “and the ATO didn’t 

do anything to accomplish that.” Another panelist noted that when his 

country restructured its air traffic organization, it immediately eliminated 

the same structural conflict of interest, and “overnight” the regulator 

became more effective and the operator’s safety performance “significantly 

improved.” According to the first panelist, other countries that have 

reorganized their air traffic organizations have also instituted arms’ length 

regulation if they did not have it already. “We remain one of the few places 

that somehow thinks that self-regulation is a good idea, in spite of sort of 

overwhelming evidence in lots of arenas that it's not a very good idea,” he 

said. 

The following is additional information from the ATO’s COO and from 

previous GAO reports and work in progress that indicates how FAA is 

addressing some of the structural changes that panelists proposed to 

improve the ATO’s success over time: 

In addition to the business plan that the ATO is developing to guide and 

improve its operations and financial management, FAA has worked to 

develop three longer term planning documents. First, it has published its 

Flight Plan for 2005 through 2009, a multiyear strategic effort that sets a 

5-year course for FAA in the areas of safety, capacity, international 

leadership, and organizational excellence. Second, it has developed a 

rolling 10-year effort, called the Operational Evolution Plan (OEP), 

through which FAA plans to increase the capacity of the NAS by onethird. Finally, FAA is participating in a multiagency effort, sponsored by 

the JPDO, to develop a national plan for aviation in 2025 and beyond. 

Both the OEP and the JPDO’s plan are designed to meet the Flight Plan’s 

commitment to help the NAS flow smoothly and meet future needs. 

According to FAA, the Vice President of the Operations Planning Service 

Unit in the ATO is also the Director of the JPDO, helping to ensure 

integration of near-term and long-term planning.
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 34 GAO-05-333SP National Airspace System

According to the ATO’s COO, the restructuring of U.S. air traffic services 

that has taken place thus far, through the establishment of a performancebased air traffic organization, constitutes “the first building block” of the 

longer term effort to transform the aviation system envisioned in the 

JPDO’s 20-year plan. According to the COO, this vision of the U.S. 

aviation system will incorporate both technologies and processes. 

However, he acknowledged that the ATO has not yet connected this longterm vision with the financial and other challenges it currently faces. He 

said that his goal is to establish an organization that can execute the 

long-term vision and manage not only its finances but also its future—

an organization that can, in effect, ensure the viability of the long-term 

vision. Over time, he said, he plans to expand the OEP to include a 

strategy and the JPDO’s long-term vision, thereby “tie[ing] the vision to 

the viability of the future.” The OEP will then be “not just a set of 

projects,” but a project plan with a vision and a strategy that goes out 20 

years. But given the current budget constraints, he conceded, the path to 

that goal is not clear. 

In March 2004, FAA created the Air Traffic Safety Oversight Service

(AOV), under FAA’s Office of Aviation Safety. This step established 

separate reporting relationships for the ATO, which is responsible for 

managing the ATC system, and for the AOV, which is responsible for 

ensuring the safety of changes to air traffic standards and procedures. 

The establishment of the AOV responds directly to a recommendation by 

the 1997 National Civil Aviation Review Commission that safety 

oversight of FAA’s traffic function be provided by a separate part of the 

agency. Although both organizations remain within FAA, under the FAA 

Administrator, they are less closely joined than they were previously. 

Hence, this step is a positive move toward providing “arm’s length” 

safety oversight, although it does not go as far as placing the two 

organizations in separate federal agencies or removing one of the 

agencies from the federal government altogether. 

Concluding 

Observations

At our request, the panelists concluded the panel with their parting 

thoughts on the day’s discussion, including any advice they had for FAA or 

for Congress. Overall, the panelists were united in their desire for the ATO 

to succeed, but they generally agreed that its opportunities for success 

were constrained within a government system. For many, the steps taken 

thus far to create a performance-based organization were insufficient, in 

large part because the ATO lacks control over its revenues and funding 

priorities, and the ATO still had a long way to go to achieve its goals. 
National Airspace System: Experts’ Views on 

Improving the U.S. Air Traffic Control 

Modernization Program

Page 35 GAO-05-333SP National Airspace System

Some panelists stressed the importance of progressing by small steps 

within the existing system, at least for the time being. Such small steps 

might include obtaining good performance and cost information, scoping 

programs in accordance with current budget projections, contracting out 

some air traffic services, and obtaining outside expertise from systems 

engineers and other technical and management experts. It was critical, one 

panelist said, for the ATO to “have some small early practical successes” to 

enlist the political support of the user community and help tie the 

customers to the ATO’s mission.

Other panelists focused on the obstacles within the system that they 

believed would impede or prevent success. Among the obstacles they cited 

were the counterproductive incentives inherent in the budget process, the 

government’s refusal to allow new air traffic technologies to be used, and 

opposition to organizational and technological change. It was important, 

one panelist said, to overcome this opposition by describing “the difference 

between how things are and how they might be.” Descriptions of 

accomplishments elsewhere, together with actions to implement whatever 

safeguards and regulatory framework might be necessary, could perhaps 

make the argument for change “compelling,” he said.

Still other panelists looked to the future, calling for international technical 

benchmarks to promote efficient development, business models that take 

into account operational trends (e.g., the growing market share of regional 

jets and low-fare airlines) and incentives to help users overcome cost 

barriers to acquiring new technologies. As one panelist said, “we have to 

target the future mix of real operations that we’re really going to see, not 

build the world’s most perfect system from 1956.” 

Despite their reservations about the ATO’s potential for success as a 

government organization, the panelists generally agreed that stakeholders 

should not “allow the concept of privatization to be the enemy of moving 

forward with the ATO,” as one panelist said, or “sacrifice the good for the 

better” in the words of another. Instead, taking a two-pronged approach—

telling people “what’s to be done now to get results” and telling them “that 

they have an obligation to build for the future”—would be the best way, in 

the view of most panelists, for the ATO to meet its immediate and longer 

term challenges. 
Page 36 GAO-05-333SP National Airspace System

Appendix I

GAO Panel Members ApApenednxidexiIs

Clinton V. Oster, Jr. (Panel Moderator) 

Professor of Public and Environmental Affairs, School of Public and

Environmental Affairs, Indiana University 

Anthony J. Broderick 

Independent Consultant 

Former FAA Associate Administrator for Regulation and Certification 

Steven R. Bussolari 

Assistant Division Head, Tactical Systems Division 

Manager, Air Traffic Control System Group, Lincoln Laboratory, 

Massachusetts Institute of Technology

John W. Crichton 

President and CEO, NAV Canada 

George L. Donahue 

Director, The Center for Air Transportation Systems Research, George 

Mason University

Former FAA Associate Administrator for Research and Acquisition

John J. Fearnsides 

Professor of Public Policy, George Mason University 

Chief Strategist and Partner of MJF Strategies

Xavier Fron 

Head, Performance Review Commission, EUROCONTROL 

Richard Golaszweski 

Executive Vice President, Gellman Research Associates (GRA), Inc. 

Ian Hall 

Director of Operations, National Air Traffic Services, United Kingdom

Thomas Imrich 

Chief Pilot, Research, Boeing Commercial Aircraft 

Satish C. Mohleji 

Principal Engineer, Center for Advanced Aviation System Development, 

The MITRE Corp. 
Appendix I

GAO Panel Members

Page 37 GAO-05-333SP National Airspace System

Robert W. Poole, Jr. 

Director of Transportation Studies, Reason Foundation 

Michael Powderly 

President, Airspace Solutions 

John A. Sorensen 

Chief Executive Officer, Seagull Technology, Inc. 

James A. Wilding 

Former President and Chief Executive Officer, Metropolitan Washington 

Airports Authority 
Page 38 GAO-05-333SP National Airspace System

Appendix II

GAO Contact and Staff Acknowledgments ApendxiI

GAO Contact Gerald Dillingham, Ph.D., (202) 512-2834

Staff 

Acknowledgments

In addition to the individual named above, Elizabeth Eisenstadt, Brandon 

Haller, Bert Japikse, Maren McAvoy, Beverly Norwood, and Richard Scott 

made key contributions to this special product.
Page 39 GAO-05-333SP National Airspace System

Related GAO Products

Cultural and Technical 

Factors 

Air Traffic Control: FAA Needs to Ensure Better Coordination When 

Approving Air Traffic Control Systems. GAO-05-11. Washington, D.C.: 

November 17, 2004.

Air Traffic Control: FAA’s Acquisition Management Has Improved, but 

Policies and Oversight Need Strengthening to Help Ensure Results.

GAO-05-23. Washington, D.C.: November 12, 2004.

Air Traffic Control: System Management Capabilities Improved, but 

More Can Be Done to Institutionalize Improvements. GAO-04-901. 

Washington, D.C.: August 20, 2004.

Information Technology: FAA Has Many Investment Management 

Capabilities in Place, but More Oversight of Operational Systems Is 

Needed. GAO-04-822. Washington, D.C.: August 20, 2004.

Federal Aviation Administration: Plan Still Needed to Meet Challenges to 

Effectively Managing Air Traffic Controller Workforce. GAO-04-887T. 

Washington, D.C.: June 15, 2004.

Air Traffic Control: FAA’s Modernization Efforts--Past, Present, and 

Future. GAO-04-227T. Washington, D.C.: October 30, 2003.

National Airspace System: Current Efforts and Proposed Changes to 

Improve Performance of FAA’s Air Traffic Control System. GAO-03-542. 

Washington, D.C.: May 30, 2003.

Human Capital Management: FAA’s Reform Effort Requires a More 

Strategic Approach. GAO-03-156. Washington, D.C.: February 3, 2003.

National Airspace System: Better Cost Data Could Improve FAA’s 

Management of the Standard Terminal Automation Replacement System. 

GAO-03-343. Washington, D.C.: January 31, 2003.

National Airspace System: Status of FAA’s Standard Terminal 

Automation Replacement System. GAO-02-1071. Washington, D.C.: 

September 17, 2002.

National Airspace System: FAA’s Approach to Its New Communications 

System Appears Prudent, but Challenges Remain. GAO-02-710. 

Washington, D.C.: July 15, 2002.
Related GAO Products

Page 40 GAO-05-333SP National Airspace System

Air Traffic Control: FAA Needs to Better Prepare for Impending Wave of 

Controller Attrition. GAO-02-591. Washington, D.C.: June 14, 2002.

Air Traffic Control: Role of FAA’s Modernization Program in Reducing 

Delays and Congestion. GAO-01-725T. Washington, D.C.: May 10, 2001.

National Airspace System: Problems Plaguing the Wide Area 

Augmentation System and FAA’s Actions to Address Them.

GAO/T-RCED-00-229. Washington, D.C.: June 29, 2000.

Aviation Acquisition: A Comprehensive Strategy Is Needed for Cultural 

Change at FAA. GAO/RCED-96-159. Washington, D.C.: August 22, 1996.

Budgetary Factors FAA Budget Policies and Practices. GAO-04-841R. Washington, D.C.: 

July 2, 2004.

Air Traffic Control: FAA’s Modernization Efforts--Past, Present, and 

Future. GAO-04-227T. Washington, D.C.: October 30, 2003.

National Airspace System: Current Efforts and Proposed Changes to 

Improve Performance of FAA’s Air Traffic Control System. GAO-03-542. 

Washington, D.C.: May 30, 2003.

National Airspace System: Reauthorizing FAA Provides Opportunities 

and Options to Address Challenges. GAO-03-473T. Washington, D.C.: 

February 12, 2003.

National Airspace System: Better Cost Data Could Improve FAA’s 

Management of the Standard Terminal Automation Replacement System. 

GAO-03-343. Washington, D.C.: January 31, 2003.

National Airspace System: FAA’s Approach to Its New Communications 

System Appears Prudent, but Challenges Remain. GAO-02-710. 

Washington, D.C.: July 15, 2002.

National Airspace System: Free Flight Tools Show Promise, but 

Implementation Challenges Remain. GAO-01-932. Washington, D.C.: 

August 31, 2001.
Related GAO Products

Page 41 GAO-05-333SP National Airspace System

Structural Issues Federal Aviation Administration: Challenges for Transforming Into a 

High-Performing Organization. GAO-04-770T. Washington, D.C.: May 18, 

2004.

National Airspace System: Current Efforts and Proposed Changes to 

Improve Performance of FAA’s Air Traffic Control System. GAO-03-542. 

Washington, D.C.: May 30, 2003.

(540095)
GAO’s Mission The Government Accountability Office, the audit, evaluation and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and policies; 

and provides analyses, recommendations, and other assistance to help 

Congress make informed oversight, policy, and funding decisions. GAO’s 

commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

Obtaining Copies of 

GAO Reports and 

Testimony

The fastest and easiest way to obtain copies of GAO documents at no cost 

is through GAO’s Web site (www.gao.gov). Each weekday, GAO posts 

newly released reports, testimony, and correspondence on its Web site. To 

have GAO e-mail you a list of newly posted products every afternoon, go to 

www.gao.gov and select “Subscribe to Updates.”

Order by Mail or Phone The first copy of each printed report is free. Additional copies are $2 each. 

A check or money order should be made out to the Superintendent of 

Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 

more copies mailed to a single address are discounted 25 percent. Orders 

should be sent to:

U.S. Government Accountability Office

441 G Street NW, Room LM

Washington, D.C. 20548

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Contact:

Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Congressional 

Relations

Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400

U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Washington, D.C. 20548

Public Affairs Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548