FEDERAL AVIATION ADMINISTRATION

REAUTHORIZATION

(110–17)

HEARING

BEFORE THE

SUBCOMMITTEE ON 

AVIATION

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

MARCH 14, 21, 22, 28, 2007

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FEDERAL AVIATION ADMINISTRATION REAUTHORIZATION

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REAUTHORIZATION

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FEDERAL AVIATION ADMINISTRATION

REAUTHORIZATION

(110–17)

HEARING

BEFORE THE

SUBCOMMITTEE ON 

AVIATION

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

MARCH 14, 21, 22, and 28, 2007

Printed for the use of the 

Committee on Transportation and Infrastructure

(

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

JUANITA MILLENDER-MCDONALD,

California

ELIJAH E. CUMMINGS, Maryland 

ELLEN O. TAUSCHER, California 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

JULIA CARSON, Indiana 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

BRIAN HIGGINS, New York 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

DORIS O. MATSUI, California 

NICK LAMPSON, Texas 

ZACHARY T. SPACE, Ohio 

MAZIE K. HIRONO, Hawaii 

BRUCE L. BRALEY, Iowa 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ACURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

JERRY MCNERNEY, California 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

WAYNE T. GILCHREST, Maryland 

VERNON J. EHLERS, Michigan 

STEVEN C. LATOURETTE, Ohio 

RICHARD H. BAKER, Louisiana 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

ROBIN HAYES, North Carolina 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

LYNN A WESTMORELAND, Georgia 

CHARLES W. BOUSTANY, JR., Louisiana 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

THELMA D. DRAKE, Virginia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

(II)

SUBCOMMITTEE ON AVIATION

JERRY F. COSTELLO, Illinois, Chairman

BOB FILNER, California 

LEONARD L. BOSWELL, Iowa 

RICK LARSEN, Washington 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

DANIEL LIPINSKI, Illinois 

NICK LAMPSON, Texas 

ZACHARY T. SPACE, Ohio 

BRUCE L. BRALEY, Iowa 

HARRY E. MITCHELL, Arizona 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

JUANITA MILLENDER-MCDONALD,

California

ELLEN O. TAUSCHER, California 

TIM HOLDEN, Pennsylvania 

MICHAEL E. CAPUANO, Massachusetts 

DORIS O. MATSUI, California 

MAZIE K. HIRONO, Hawaii 

JAMES L. OBERSTAR, Minnesota 

(Ex Officio) 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

VERNON J. EHLERS, Michigan 

STEVEN C. LATOURETTE, Ohio 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

ROBIN HAYES, North Carolina 

SAM GRAVES, Missouri 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

LYNN A WESTMORELAND, Georgia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

JOHN L. MICA, Florida 

(Ex Officio) 

(III)

(V)

CONTENTS Page

Summary of Subject Matter .................................................................................... ix

Proceedings of:

March 14, 2007 ..................................................................................................... 1

March 21, 2007 ..................................................................................................... 120

March 22, 2007 ..................................................................................................... 340

March 28, 2007 ..................................................................................................... 744

THE ADMINISTRATION’S FAA REAUTHORIZATION PROPOSAL 

MARCH 14, 2007

TESTIMONY

Blakey, Hon. Marion C., Administrator, Federal Aviation Administration, 

U.S. Department of Transportation .................................................................... 8

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Carnahan, Hon. Russ, of Missouri ......................................................................... 37

Costello, Hon. Jerry F., of Illinois .......................................................................... 39

Johnson, Hon. Eddie Bernice, of Texas .................................................................. 42

Larsen, Hon. Rick, of Washington .......................................................................... 47

Mica, Hon. John L., of Florida ................................................................................ 48

Mitchell, Hon. Harry E., of Arizona ....................................................................... 53

Oberstar, Hon. James L., of Minnesota ................................................................. 59

Petri, Hon. Thomas E., of Wisconsin ..................................................................... 63

Rahall, Hon. Nick J., of West Virginia .................................................................. 67

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Blakey, Marion C. .................................................................................................... 69

SUBMISSIONS FOR THE RECORD 

Blakey, Hon. Marion C., Administrator, Federal Aviation Administration, 

U.S. Department of Transportation, ‘‘Making the NextGen Vision a Reality,’’ 2006 Progress Report to the Next Generation Air Transportation 

System Integrated Plan ....................................................................................... 84

Federal Aviation Administration, response to questions from Rep. Sestak 

and Rep. Andrews ................................................................................................ 110

ADDITIONS TO THE RECORD 

American Federation of State, County and Municipal Employees, written 

statement .............................................................................................................. 117

FAA’s FINANCING PROPOSAL 

MARCH 21, 2007

TESTIMONY

Alterman, Stephen A., President, Cargo Airline Association ............................... 158

Barrow, Hon. John, a Representative in Congress from the State of Georgia ... 00

Bolen, Ed, President and CEO, National Business Aviation Association ........... 158

Boyer, Phil, President, Aircraft Owners and Pilots Association .......................... 158

Page

VI

Cohen, Roger, President, Regional Airline Association ........................................ 158

Dillingham, Dr. Gerald, Director, Physical Infrastructure Issues, U.S. Government Accountability Office .................................................................................. 129

Elwell, Daniel K., Assistant Administrator, Aviation Policy, Planning and 

Environment, Federal Aviation Administration ................................................ 129

Faberman, Edward P., Executive Director, Air Carrier Association of America .......................................................................................................................... 158

May, James C., President and CEO, Air Transport Association of America ...... 158

Scovel, III, Hon. Calvin L., Inspector General, U.S. Department of Transportation ..................................................................................................................... 129

Tiahrt, Hon. Todd, a Representative in Congress from the State of Kansas ..... 122

Zuccaro, Matthew, President, Helicopter Association International ................... 158

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Barrow, Hon. John, of Georgia ............................................................................... 185

Costello, Hon. Jerry F., of Illinois .......................................................................... 196

Matsui, Hon. Doris O., of California ...................................................................... 199

Mitchell, Hon. Harry E., of Arizona ....................................................................... 200

Oberstar, Hon. James L., of Minnesota ................................................................. 207

Petri, Hon. Thomas E., of Wisconsin ..................................................................... 211

Salazar, Hon. John T., of Colorado ........................................................................ 215

Tiahrt, Hon. Todd, of Kansas ................................................................................. 217

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Alterman, Stephen A. .............................................................................................. 224

Bolen, Ed .................................................................................................................. 231

Boyer, Phil ................................................................................................................ 244

Cohen, Roger ............................................................................................................ 253

Dillingham, Gerald L. ............................................................................................. 259

Faberman, Edward P. ............................................................................................. 287

May, James C. .......................................................................................................... 297

Scovel, Calvin L. ...................................................................................................... 315

Zuccaro, Matthew .................................................................................................... 335

SUBMISSIONS FOR THE RECORD 

Dillingham, Dr. Gerald, Director, Physical Infrastructure Issues, U.S. Government Accountability Office, reponse to questions from Rep. Costello ............. 283

FAA OPERATIONAL AND SAFETY PROGRAMS 

MARCH 22, 2007

TESTIMONY

Baker, Steve, President, FAA Managers Association ........................................... 382

Brantley, Tom, President, Professional Airways Systems Specialists (AFLCIO) ....................................................................................................................... 343

Dillingham, Dr. Gerald, Director, Physical Infrastructure Issues, U.S. Government Accountability Office .................................................................................. 382

Forrey, Pat, President, National Air Traffic Controllers Association ................. 343

Friend, Patricia, International President, Association of Flight AttendantsCWA ...................................................................................................................... 371

Kroeppel, Warren, General Manager of Laguardia Airport, The Port Authority 

of New York and New Jersey .............................................................................. 382

McVenes, Captain Terry, Executive Air Safety Chairman, Air Line Pilots 

Association ............................................................................................................ 371

Renninger, James B., Director, Aviation Center of Excellence, Florida Community College of Jacksonville ............................................................................ 382

Roach, Jr., Robert, General Vice President, International Association of Machinists .................................................................................................................. 371

Sliwa, Steve, CEO and President, The Insitu Group, Inc. ................................... 382

Waters, Tom, President, American Federation of State, County and Municipal 

Employees (AFSCME) Local 3290 ...................................................................... 343

Page

VII

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Costello, Hon. Jerry F., of Illinois .......................................................................... 395

LoBiondo, Hon. Frank A., of New Jersey .............................................................. 397

Matsui, Hon. Doris O., of California ...................................................................... 400

Mitchell, Hon. Harry E., of Arizona ....................................................................... 402

Oberstar, Hon. James L., of Minnesota ................................................................. 406

Petri, Hon. Thomas E., of Wisconsin ..................................................................... 409

Rahall, Hon. Nick J., of West Virginia .................................................................. 411

Salazar, Hon. John T., of Colorado ........................................................................ 412

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Baker, Steve ............................................................................................................. 414

Brantley, Tom .......................................................................................................... 421

Dillingham, Gerald L. ............................................................................................. 435

Forrey, Patrick ......................................................................................................... 465

Friend, Patricia A. ................................................................................................... 497

Kroeppel, Warren D. ................................................................................................ 523

McVenes, Captain Terry ......................................................................................... 544

Renninger, James B. ............................................................................................... 687

Roach, Robert Jr. ..................................................................................................... 693

Sliwa, Steven M. ...................................................................................................... 704

Waters, J. Tom ......................................................................................................... 712

SUBMISSIONS FOR THE RECORD 

Forrey, Pat, President, National Air Traffic Controllers Association, letters 

to Rep. Mica .......................................................................................................... 492

McVenes, Captain Terry, Executive Air Safety Chairman, Air Line Pilots 

Association:

‘‘The Current State of the Cargo Industry—an Alpha Perspective’’ ................ 568

‘‘Concept of Safety Management System Embraced by Many Countries’’ ....... 599

‘‘Background and Fundamentals of the Safety Management System (SMS) 

for Aviation Operations’’ .................................................................................. 604

ADDITIONS TO THE RECORD 

Association of Air Medical Services, written statement ....................................... 717

Air Transport Association of America, Inc., written statement ........................... 724

FAA’s AIRPORT IMPROVEMENT PROGRAM 

MARCH 28, 2007

TESTIMONY

Barclay, Charles, President, American Association of Airport Executives ......... 747

Bennett, James E., President and CEO, Metropolitan Washington Airports 

Authority ............................................................................................................... 781

Bogan, Robert L., Deputy Director, Morristown Municipal Airport, on behalf 

of The Sound Initiative ........................................................................................ 798

Clark, John, Executive Director, Jacksonville Aviation Authority ...................... 781

Dillingham, Dr. Gerald, Director, Physical Infrastructure Issues, U.S. Government Accountability Office .................................................................................. 747

Fernandez, Hon. Nuria I., Commissioner of Aviation, City of Chicago .............. 781

Healy, Hon. James D., County Board Member, DuPage County, Il, on behalf 

of National Association of Counties .................................................................... 798

Kimmel, Douglas, Airport Manager, Williamson County Regional Airport ....... 781

LeTellier, Gary W., Airport Manager, Southwest Oregon Regional Airport ...... 781

Piccolo, Frederick J., President and Chief Executive Officer, Sarasota Manatee Airport Authority ......................................................................................... 781

Principato, Greg, President, Airports Council International-North America ..... 747

Ramsdell, Karen, Airport Director, Santa Barbara Municipal Airport ............... 781

Roberts, Elaine, A.A.E., President and CEO, Columbus Regional Airport Authority ................................................................................................................... 781

Page

VIII

Shaffer, D. Kirk, Associate Administrator for Airports, Federal Aviation Administration .......................................................................................................... 747

Vallin, Travis, Director, Division of Aeronautics, Colorado Department of 

Transportation, on behalf of The National Association of State Aviation 

Officials ................................................................................................................. 798

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Cohen, Hon. Steve, of Tennessee ............................................................................ 807

Costello, Hon. Jerry F., of Illinois .......................................................................... 808

Frelingkhuysen, Hon. Rodney P., of New Jersey .................................................. 810

Johnson, Hon. Eddie Bernice, of Texas .................................................................. 812

Kagen, M.D., Hon. Steve, of Wisconsin .................................................................. 816

Matsui, Hon. Doris O., of California ...................................................................... 817

Mitchell, Hon. Harry E., of Arizona ....................................................................... 818

Oberstar, Hon. James L., of Minnesota ................................................................. 826

Salazar, Hon. John T., of Colorado ........................................................................ 830

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Barclay, Charles M. ................................................................................................. 832

Bennett, James E. ................................................................................................... 853

Bogan, Robert L. ...................................................................................................... 859

Clark, John ............................................................................................................... 868

Dillingham, Gerald L. ............................................................................................. 876

Fernandez, Nuria I. ................................................................................................. 903

Healy, James D. ....................................................................................................... 907

Kimmel, Douglas S. ................................................................................................. 912

LeTellier, Gary W. ................................................................................................... 923

Principato, Greg ....................................................................................................... 928

Ramsdell, Karen S. .................................................................................................. 940

Roberts, Elaine ......................................................................................................... 947

Shaffer, D. Kirk ....................................................................................................... 954

Vallin, Travis L. ....................................................................................................... 968

ADDITIONS TO THE RECORD 

American Road and Transportation Builders Association, written statement ... 977

Arlene J. Mulder, Mayor, Arlington Heights, Illinois, written statement .......... 981

Illinois Department of Transportation, Division of Aeronautics, Susan R. 

Shea, Director, letter to Rep. Mica ..................................................................... 985

American Council of Engineering Companies, Airport Consultants Council, 

American Road & Transportation Builders Association, American Institute 

of Architects, and American Society of Civil Engineers, joint letter to Rep. 

Oberstar and Rep. Costello ................................................................................. 988

American Society of Civil Engineers, written statement ..................................... 991

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(1)

HEARING ON THE ADMINISTRATION’S FEDERAL AVIATION ADMINISTRATION REAUTHORIZATION PROPOSAL 

Wednesday, March 14, 2007

HOUSE OF REPRESENTATIVES,

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE,

SUBCOMMITTEE ON AVIATION

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 

2167, Rayburn House Office Building, the Honorable Jerry F. 

Costello [Chairman of the Subcommittee] presiding. 

Mr. COSTELLO. The Subcommittee will come to order. 

The Subcommittee is meeting today to hear testimony on the 

President’s fiscal year 2008, actually, the Federal Aviation Reauthorization Proposal submitted by the Administration and by the 

Administrator.

I would ask all Members, staff and everyone in the room to turn 

off their electronic devices or to put them on vibrate. 

I will give an opening statement and call on the Ranking Member, Mr. Petri, to give his opening statement as well. 

I welcome everyone to our first of a number of hearings on the 

FAA Reauthorization. In particular, I would like to welcome the 

FAA Administrator, Administrator Blakey, here today to present 

the Administration’s FAA Reauthorization Proposal to the Subcommittee.

Following this hearing, the Subcommittee will give detailed consideration to specific aspects of the FAA reauthorization proposal 

in upcoming hearings in the month of March. On March 21st, we 

will examine the FAA’s financing proposal. March 22nd, we will examine the FAA’s Operational and Safety Programs, and March 

28th, the FAA’s Airport Improvement Program. The Subcommittee 

will look at the Essential Air Service Program and small community air service issues in a hearing in the month of April. 

On February 14th, the FAA submitted its reauthorization proposal to the Congress. The FAA’s proposal includes a new financing 

plan to transform the FAA’s current excise tax financing system to 

a hybrid cost-based user fee system as well as major changes to the 

Airport Improvement Program. In addition, the reauthorization 

proposal includes provisions on the environment, airport congestion, war risk insurance as well as other items affecting the aviation community. 

At the outset, I would like to make a few observations about the 

FAA’s reauthorization proposal. 

2

As I noted in our hearing on February 14th, when we received 

the President’s budget proposal, the FAA’s new proposal would hypothetically yield approximately $600 million less in fiscal year 

2008 than maintaining the current tax structure and over $900 

million less from fiscal year 2009 to fiscal year 2012. This is partially because the FAA’s estimated cost requirements for its major 

capital programs are actually lower than what they were four years 

ago.

For example, the FAA’s estimated total requirement for facilities 

and equipment in this new three year proposal is approximately 

$380 million less than what it requested for the first three years 

of its last reauthorization proposal, the Centennial of Flight Aviation Authorization Act. This is despite the fact that the FAA has 

cited the need to finance a major new air traffic control modernization initiative as reason for reforming the current tax structure. 

At the same time, I have major reservations about implementing 

a user fee for which there does not appear to be a hard ceiling and 

for which FAA would have broad authority to raise fees to match 

whatever costs were incurred. Air traffic control modernization is 

a technologically intensive and financially high risk endeavor. In 

the past, the FAA has incurred major cost overruns in its modernization program. While the FAA believes that its user fee system would be more transparent, I am concerned that the airline 

passengers and the other air space users could end up paying hidden costs for future problems and delays with the FAA’s modernization program. 

Therefore, it is imperative that the FAA give Congress a 

straightforward assessment of its cost requirements for the Next 

Generation system and for Congress to consider whether to authorize its request. 

In terms of capacity, airport runways may provide an even greater benefit than the air traffic modernization and, in fact, the FAA’s 

operational evolution plan states that new runways and runway extensions provide the most significant capacity increases. However, 

the FAA has requested approximately $1.5 billion less for the AIP, 

the Airport Improvement Program, in its new three year proposal 

than what it requested for the first three years of its last reauthorization proposal. Given the fact that the FAA acknowledges that 

the airport capital requirements have increased, I believe that this 

funding request is extremely shortsighted. 

The FAA’s proposal to increase the cap on Passenger Facilities 

Charges, the PFCs, from $4.50 to $6.00 is worthy of consideration. 

The PFC cap has not been raised since 2000, and inflation and construction cost increases have eroded the PFC’s values. However, I 

have some concerns with expanding the eligibility for PFC projects. 

Expanding PFC eligibility and the proposed cuts to the AIP could 

result in moving funding away from capacity-enhancing air side 

projects.

The FAA has also proposed to restructure the Non-Primary Entitlement Program into a tiered system of apportioning AIP entitlements so that the larger general aviation airports get more funding. The FAA believes that its proposal would meet the demands 

of emerging markets, such as very light jets, air taxis and fractional ownership which land primarily at general aviation airports. 

3

We need to examine this proposal carefully to determine the impacts on these smaller general aviation airports. 

I welcome and look forward to hearing the testimony of the Administrator, Administrator Blakey, this morning. 

I will call on the Ranking Member of the Committee, but before 

I do, I would ask unanimous consent to allow two weeks for all 

Members to revise and extend their remarks and to permit the submission of additional statements and materials by Members and 

witnesses.

Hearing no objection, so ordered. 

At this time, I would recognize the Ranking Member of the Committee, Mr. Petri, for any opening statement or remarks that he 

may have. 

Mr. PETRI. Thank you very much, Mr. Chairman. 

I would like to join you in welcoming the Administrator of the 

Federal Aviation Administration, Marion Blakey, to the witness 

stand and, at that same time, thank her for the years of strong 

leadership that she has provided to the organization. 

I have some not too extensive remarks that I would like to include in the record. 

I will just say that many of the concerns that you expressed, I 

think are shared by all Members of the Committee about certain 

aspects of this program, but the important thing is that we get on 

about the business of reauthorizing these programs so that we can 

facilitate the deployment of Next Gen. It is absolutely essential to 

accommodate the needed growth in aviation services. If we don’t 

modernize and expand the capacity of the system, it will start constraining our economy and will have lots of ripple effects. 

Plus, getting this system deployed will help provide a renewal of 

leadership for the world aviation community, for American aviation 

interests and a platform for them to compete around the world, and 

that is important as well. 

This is very important business, and I am hoping that while 

there will be differences, that at the end of the day, we can agree 

on the importance of the task at hand and find reasonable accommodation for these differences so as to get the main job done. 

With that, I yield back. 

Mr. COSTELLO. I thank the Ranking Member and at this time 

would recognize the Ranking Member of the Full Committee for 

any opening statement or comments that he may have. Mr. Mica 

is recognized. 

Mr. MICA. Thank you, Mr. Costello, and I want to thank you for 

convening this hearing this morning. 

This is a very important topic. We are about six months and a 

few days away from the September expiration of our current authorization. Really, the basic fundamental question of the authorization process for FAA is how we fund the new system. Now I 

know I am beginning to sound like the lone stranger supporting 

the Administration’s proposal, but I think people are going to have 

to sober up and see that we are not going to be able to fund what 

the Ranking Member of the Subcommittee said, Next Generation 

air traffic control system, without a method to fairly finance it. 

The Administration has proposed a hybrid system. It involves 

several areas of raising revenue, some from general aviation, some 

4

from user fees, some from the current tax that we have on passenger tickets. It is going to take all of the above plus the Administration’s proposed increasing of the PFCs, which I also support in 

giving airports additional flexibility to utilize those funds. 

I don’t have one of the pictures here, but all you have got to do 

is look at the traffic in the air today, the air traffic in the day, and 

we have returned to congested skies. General aviation isn’t going 

to be able to move the new generation of ultra light jets. They 

might just as well keep those parked in other general aviation if 

we don’t find a way to fund this system and improve its operations 

because there will be total gridlock and total meltdown. 

So it is a very serious subject. We have got to stop playing the 

games, get behind some meat and potato proposals to fund this. 

The other thing too that the Administration has proposed and I 

have recommended, a lot of games are being played with FAA and 

trying to modernize it. I have great concern with the departure of 

Russell Chew, our COO, who brought some of the bureaucracy 

under control. He instituted a businesslike structure and plan for 

FAA which has been partially implemented. We have seen the difficulty in consolidating, modernizing, replacing human to human 

activity with high tech and data to data operations. But the BRAClike provision that I recommend, that has been included by the Administration, I strongly advocate because we have got to do a better 

job both with technology and with funding this critical system to 

our future. 

With that, those comments, I thank you for this very important 

beginning of finding a way to make all that happen. 

Mr. COSTELLO. Thank you. 

The Chair recognizes Mr. DeFazio. 

The Chair recognizes Mr. Lampson for an opening statement. 

Mr. LAMPSON. Thank you, Mr. Chairman. 

I will submit my comments for the record but make just a very 

short statement to thank you and the Ranking Members for conducting this hearing and for Administrator Blakey to come over. 

We are anxious to hear her comments. 

Aviation is one of the most important modes of transportation in 

the United States, and it is also an issue of great importance in 

my district in Houston where we have some serious issues regarding capacity. It is always important to be able to sit down and hear 

from key witnesses with regard to the Administration’s proposal for 

the FAA reauthorization. 

I look forward to hearing from Administrator Blakey concerning 

the new cost-based user fees that will be used to fund some FAA 

services as well as the discrepancy of congestion fees among major 

airports using the same facilities and air space in many instances. 

I am anxious to hear about the crisis facing the FAA with regard 

to the retiring air traffic controllers. It is my understanding that 

FAA estimates that over 70 percent of its controller workforce will 

be eligible to retire in 10 years. It is vitally important that we have 

as many well qualified controllers as possible ready to replace 

these retiring workers so that in no way is the safety of passengers 

compromised.

Again, I look forward to hearing from the speakers, and I thank 

you, Mr. Chairman, for calling this meeting. 

5

Mr. COSTELLO. Thank you. 

The Chair recognizes Mr. Ehlers for an opening statement or remarks.

Mr. EHLERS. Thank you, Mr. Chairman. I appreciate this, and I 

appreciate the hearing. 

I want to begin by publicly apologizing to the Administrator. At 

the last hearing we had, there was considerable frustration and 

anger among Members of the Committee about the huge increase 

in the gas tax. As everyone in the Congress knows, if we try to 

raise the gas tax on automobiles by one cent, there is an incredible 

reaction from the public, and the huge increase in the gas tax that 

was being discussed triggered a strong reaction. I see Mr. Boswell 

smiling. I think he was part of the reaction. 

I was impolite enough to say that that proposal was dead on arrival. I apologize to the Administrator for implying somehow that 

everything she said was dead on arrival. It was only the tripling 

of the gas tax. 

I do appreciate your work and the incredible amount of effort it 

takes to try to run the FAA and modernize it. 

In terms of what is on the table today, I think the NextGen air 

traffic control system is the key factor in increasing safety and decreasing costs in the future, and I will be watching that very closely in the next few years because I have great interest in it. 

Also, I am very interested in how ADS-B is going to impact on 

the air traffic control system. Will it, in fact, improve the situation, 

reduce costs of air traffic control or not? So I am eager to see what 

the developments are on that, what the long term plans are and 

what the timeframe is. 

With that, and we have others who want to make comments, so 

I will yield back the remainder of my time, Mr. Chairman. 

Mr. COSTELLO. I thank the gentleman. 

The Chair recognizes, for an opening statement or comments, the 

gentlelady from California, Ms. Matsui. 

Ms. MATSUI. Thank you, Mr. Chairman. Thank you and Ranking 

Member Petri for holding this important hearing and to Administrator Blakey for providing testimony. 

It is the duty of this Committee to craft the best possible policy 

for the future of the Nation’s aviation system. Air travel is more 

important than ever to America’s commerce and our way of life. 

In and around my district, I have a large commercial airport and 

the reliever report. I fly back and forth to Sacramento and to D.C. 

a lot, and so I am personally very dependent on the system. 

It is clear that our aviation system faces tremendous challenges. 

We have an aging infrastructure that needs to be modernized, and 

we need to expand capacity to meet future demand. So we have to 

look at this situation strategically in the near, medium, and long 

term.

I know there are many different objections voiced about this proposal. For example, the airports have been very clear that they 

think the increase to a $6.00 PFC is not sufficient to meet their infrastructure demands. In Sacramento, we are constructing a new 

terminal, so this is something that really affects my constituents. 

In general, there is going to be a lot of debate about how we allocate the burden of maintaining, modernizing and expanding the 

6

aviation system. It is this Committee’s job to make sure the allocation is fair and that it yields sufficient resources to support future 

demands. This is certainly not an easy task, but it is essential for 

the long term success of the Nation’s aviation system and for its 

economy.

I appreciate the thought and effort that Administrator Blakey 

and her colleagues have put into this reauthorization proposal and 

look forward to working with all of you as we continue this debate 

this month. Thank you very much. 

Mr. COSTELLO. The Chair recognizes Mr. Salazar for an opening 

statement or comments. 

Mr. SALAZAR. Thank you, Mr. Chairman. 

Administrator Blakey, thank you so much for being here today. 

I think I speak for most of my colleagues on the Committee when 

I say I look forward to working with you and your staff in the coming months on this very important issue. I appreciate that we will 

be having several hearings on various aspects of the Administration’s FAA reauthorization proposal. 

As I have indicated before, I am concerned about the specific 

issue of user fees. I am still concerned, and I associate my remarks 

with Mr. Mica’s remarks about the meat and potatoes way of funding this reauthorization and the NGATS. I am still unconvinced 

that the current system of aviation excise taxes, which has provided a stable and ample trust fund, needs to be changed so drastically, and I am very concerned about its impact on general aviation.

We keep hearing about the cost of modernization and NGATS. 

While we agree that updating our aviation industry will require a 

substantial amount of money, CBO has already indicated that both 

the modernization and NGATS can be accomplished under the existing FAA financial structure. 

In the coming weeks and months, we will be focusing on the 

aviation needs of rural communities. Often times, these small communities get overlooked and sidelined, and I want to ensure that 

the Administration’s proposal adequately addresses the needs of 

such communities. 

I believe that we are working toward the same goal, to ensure 

that the United States continues to have the safest and most efficient transportation system in the world, and the purpose of these 

hearings is to decide how to best get there. 

I look forward to your testimony today, Ms. Blakey, and I am 

confident that we will address the issues I raised. 

Thank you, Mr. Chairman, and I yield back. 

Mr. COSTELLO. I thank the gentleman. 

Mr. Boswell is recognized for an opening statement or brief remarks.

Mr. BOSWELL. Thank you, Mr. Chairman, and I appreciate again 

your having this continuing dialogue. 

I guess I would join Mr. Ehlers, Ms. Blakey, in saying that I 

said, yes, almost internally as he said what he did the other day. 

I wasn’t quite ready to use DOA, but we have got to talk. We have 

to talk. 

I would say this: You have got your job to do. We respect your 

job, and you have to perceive it as you see it, and we respect that. 

7

However, we do too, and I think you respect that. I believe that for 

the moment at least. You just nodded. I thank you. So we will endeavor to respect your position and talk as you see it, and hopefully 

you will appreciate our responsibility to do oversight and to stand 

strongly for that which we believe and seek your willingness to 

work with us for solutions. 

I am not into games. I don’t think any of us are. We must engage 

in solutions. 

Of course, you know that many of us advocate for general aviation. We are not making any secret about that and for many reasons. Yes, we use it. We greatly appreciate the impact of general 

aviation on the National economy, jobs, manufacturing, moving 

people, moving people with tight schedules, moving priority goods, 

et cetera, et cetera, et cetera. I personally believe that GA is at the 

table and willing to pay their or our part through current resources.

Let us see if we can’t find a solution. It is not we, they, you, us. 

It is a solution. That is what we need. I think you have got the 

wherewithal to come a little further than you have come so far, so 

we will just have to work on it together. But stand your ground. 

We will stand ours. But at the end of the day, if we have just argued and no solution, what have we accomplished? 

General aviation is at the table. I hope you are talking to them 

and talking to them openly, and I seek that very much. 

Thank you, Mr. Chairman. Let us carry on. 

Mr. COSTELLO. I thank the gentleman. 

The Chair recognizes Mr. Hayes for an opening statement or 

brief remarks. 

Mr. HAYES. Thank you, Mr. Chairman. 

Welcome, Ms. Blakey. 

I would like to reflect what Chairman Boswell—he is Chairman 

on the Agriculture Committee—has already said, just briefly. This 

is a terrible imposition on a segment of the marketplace which will 

have incredible impact on that industry. We are all friends here. 

I would like to follow up on what I said in an earlier hearing. 

I would like to have some way to sit down with some of the potential providers of air traffic control upgrades and look and see what 

they are saying. 

But as I look, and you all have some wonderful numbers. There 

are some number crunchers out there that can give you numbers 

that will dazzle you, but they just don’t, I think, accurately reflect. 

I am not that well prepared. We will talk about it in questions 

later, to go over that, but when you look at the percentage increase, 

the guy flying a 747, it is an 18 percent cut for a guy flying a Bonanza. It is a 275 percent increase. 

Again, we welcome the debate and welcome your interest and activity and commitment to the job, but let us keep all the doors and 

dialogues open going forward so that we don’t lose a vital and dynamic part of the U.S economy which is suppliers and everything 

else that are providing. We don’t want the impact of the luxury tax 

that took place a few years ago. The airlines are critically important. We have given them billions of dollars in subsidies. Let us 

just be careful going forward that we don’t do the wrong thing. 

Again, thanks for being here. 

8

Thanks, Mr. Chairman, for having the hearing. 

Mr. COSTELLO. I thank the gentleman. 

The Chair recognizes the gentleman from Wisconsin, Mr. Kagen, 

for an opening statement or brief remarks. 

Mr. KAGEN. Thank you, Mr. Chairman. I am very pleased to be 

here today, and I want to thank Administrator Blakey for being 

here and joining us as well. 

I would also like to thank Chairman Costello, Chairman Oberstar, Ranking Member Mica and my good friend and colleague from 

Wisconsin, Tom Petri, because by working together, these hearings 

on FAA will help us to reauthorize something that will be proud 

for everyone to stand by. 

I believe that everyone here today will agree that by examining 

and understanding all the complexities surrounding this issue, we 

will ensure that the future trust fund will be successful, and it is 

immensely important to us all. 

As our Nation’s infrastructure continues to grow and to expand, 

the need to address the problems associated with such growth become apparent. Nowhere is this clearer than in our aviation infrastructure and operations. With the numbers of air passengers increasing every year, delays growing longer, not just for passengers 

but for everyone in this room and Members of this Congress, the 

air traffic congestion is increasing. Fuel prices are rising, and the 

air personnel shortages are obvious to everyone. They are becoming 

a reality. 

I believe we must look at this as a real opportunity, a unique opportunity to create a better and more efficient technologically advanced system that will serve our citizens with the best service 

possible. I am particularly interested in hearing Administrator 

Blakey’s thoughts on the Small Community Air Service Development Program which could greatly benefit my constituents in 

northeast Wisconsin and bring in economic development to our 

area.

During this hearing, it is my hope that we can start to work towards putting together reauthorization legislation that will successfully address the financial, the developmental and modernization demands to design an aviation system that will serve all of its 

users.

Thank you, Mr. Chairman. I yield back. 

Mr. COSTELLO. I thank the gentleman. 

At this time, the Chair recognizes the Administrator of the FAA, 

Administrator Blakey, for her statement, and we welcome you here 

today.

I want to let the Members know that we had a long conversation 

yesterday and talked about some of the issues that we will be addressing here today. 

Administrator Blakey? 

TESTIMONY OF THE HONORABLE MARION C. BLAKEY, ADMINISTRATOR, FEDERAL AVIATION ADMINISTRATION, U.S. DEPARTMENT OF TRANSPORTATION 

Ms. BLAKEY. Good morning, Chairman Costello. It is a pleasure 

to appear before you and Congressman Petri and all the Members 

9

of this dedicated Subcommittee. I appreciate your focus on FAA’s 

move toward financial reform. 

In my view, the future of this system and this bill are inextricably linked. As plainly as I can say it, without the funding provided for the Next Generation financed through the Next Generation Financing Reform Act of 2007, there will be no NextGen system in time to prevent gridlock in the skies. Without the program 

flexibility, financial stability and beneficial budget treatment that 

this bill brings, our plan for the Next Generation air transportation 

system is likely to limp along far behind the traffic. 

The act provides for financing through fuel taxes and user fees. 

Significantly, the user fees will be treated as offsetting collections 

that ensure that aviation revenues are used for aviation purposes. 

The act allows for borrowing authority, an important tool in any financial tool box. 

Without a firm foundation of financial stability, the year to year 

uncertainties of budgets and revenues will neutralize the impact of 

our having a long term plan. Instead, NextGen will be the solution 

to a problem that we anticipated and studied but failed to really 

address, a legacy of starts and stops, very much too little too late. 

It is my firm belief that our status quo financing structure cannot 

deliver the NextGen system we need when and where we need it. 

Remember, this is a system that uses the latest satellite technology to expand capacity, reduce delays, lower unit cost, provide 

major environmental benefits and substantially improve safety. 

Satellite technology has revolutionized everything in America, from 

cars on the highway to GPS embedded in our toddlers’ sneakers. 

Isn’t it time that we brought it into aviation? 

Make no mistake, NextGen is not about pie in the sky. We have 

a clear vision and a plan to execute it. Both were developed in partnership with stakeholders from across the spectrum of aviation, 

from pilots and airlines to the GA community at every level to mechanics to Wall Street and beyond. They agree. We agree. NextGen 

will get us where aviation needs to go. But we do need to act quickly if we hope to avoid the aviation system resembling the L.A. freeway on a hot Friday afternoon. 

A cost-based system, such as we advocate, will be much more 

transparent and accountable for the FAA, the passengers and the 

users, and significantly, it will give Congress more insight into our 

costs, helping you conduct much more detailed and effective oversight.

Yes, changing our financing structure is hard. I acknowledge 

that. But if we fail to create a direct link between FAA costs and 

revenues, if we just circle the runway, waiting for the weather to 

clear, aviation users across the spectrum will suffer. To put it mildly, and I think many of you noted this here today, the system is 

in trouble. While it is the safest system in the world, it is grossly 

inefficient and everyone who flies it, knows it. It is built on a series 

of fixed way points from the days of flying the mail in the twenties 

and thirties. We have squeezed every ounce of capacity out of the 

current air traffic system. 

Even so, in the future, congestion will rule the day. The undeniable fact is that we face a billion passengers by 2015. An ever increasing number of very light business jets is going to be fueling 

10

that. Traffic levels will double, perhaps in some areas, even triple 

in the not too far distant future. We have to plan for this. 

I am here today to say that the band-aid solutions of the past 

will not be enough. We can’t keep trying to scale up an air traffic 

control system that is based largely on 1960s technology. We need 

to take bold action, and with taxes and user fees expiring in September, we have to get it right this first time. We really have to 

take action now. The next six months are pivotal. If we let this 

once in a lifetime opportunity pass, we will begin to watch world 

leadership slip through America’s grasp, in aviation. 

The challenges I just described aren’t limited to our air space. 

The problems of crowded skies and airports are worldwide. Europe 

is already moving ahead with Sesar, their version of NextGen, and 

they have got the funding to do it. 

My assessment, the rest of the world already knows how critical 

this is, but they aren’t waiting around for the United States. They 

like our help and leadership, but they also know how to do it. We 

may have been the birthplace of aviation, but success at Kitty 

Hawk is not going to be enough to keep us out front now. Someone 

else’s technologies and someone else’s standards will pave the way 

if we don’t. 

While the rest of the world has their action plan in high gear, 

we risk getting bogged down in a debate over who is going to pick 

up the tab. Truth be told, right now, the passenger in the middle 

seat is footing the lion’s share of the bill for operating the system. 

The folks back home, buying airline tickets, pay 95 percent of the 

cost, but they are imposing only 73 percent of the requirements. 

That is not right. 

Imagine a restaurant that required you to pick up the tab for the 

people sitting at the next table. It is not as far fetched as it sounds 

because it is what happens in our skies every day. A seat on a commercial jet liner is the most heavily taxed spot in all of aviation. 

General aviation represents 16 percent of the cost to operate the 

system, yet it currently only pays 3 percent. Everyday passengers 

shouldn’t have to pick up the tab for a CEO flying across the Country in a private jet. 

This year represents a rare opportunity to leave an important 

legacy for our children, but to successfully develop that NextGen 

system, we need a revenue stream that is tied to the actual cost 

of our operations. We need a revenue stream that is reliable and 

equitable where all users pay their fair share. The hybrid financing 

scheme that we have put on the table last month is balanced, it 

is fair and it delivers on all these counts. We can indeed alter the 

future of aviation by creating a NextGen system that keeps America, number one. 

If we fail to act on the NextGen financing reform, we will be 

headed overseas to ask world leaders of aviation to help us catch 

up.

Thank you very much. 

Mr. COSTELLO. I thank you. 

I have a few questions, and then I will reserve some time and 

come back and have a few more later. 

I wonder, Administrator Blakey, concerning the user fee proposal 

by the Administration, I think there is a lot of questions and confuVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
11

sion as to how this system would operate. So I wonder if you would 

take the time to walk us through from an administrative standpoint, how the fees would be assessed, how they would be collected, 

how the system would work. 

Ms. BLAKEY. Certainly. As you all may have observed from looking at our proposal, the taxes and fees expire in September of this 

year. We would take fiscal year 2008 to continue the current system of taxes and fees while we put together the administrative apparatus that is necessary to then begin setting the new system, 

turning the new system on for 2009. 

What you would expect is this: The GA community continues to 

pay exactly as they do today. This has been their preference. So 

when we talk about increasing a fuel tax, it was their preference 

that they pay at the pump through a fuel tax, and that will continue just as it does now. 

For those who will be paying user fees, and this is largely commercial aviation, they will be paying as they pay all of their other 

bills. For the most part, these are significant companies. They pay 

vouchers just like everyone else. There are only about 500 of them 

that we expect to be issuing on a monthly basis. So it is not a particularly complicated system. Remember that we charge overflight 

fees right now on a monthly basis to air carriers all over the world. 

We do it efficiently and well and no complaints. 

But I would expect under the new system, that what we will do 

is put out a request for proposals and find out who can most efficiently do the billing, and we will issue a contract so it will not be 

an increase in bureaucracy for the FAA. Those fees, the charges for 

those fees would begin going out after the services are rendered, 

and we would expect payment within two months of when the service was rendered. 

Mr. COSTELLO. You know you have heard from Members of the 

Subcommittee concerning how user fees would impact general aviation for the recreational person or for the person who does not fly 

commercially or does not charter. How do you see the user fees impacting that type of person or that sector of the people who will be 

affected by the user fees? 

Ms. BLAKEY. I don’t see them affected at all. That is one of the 

great myths in all of this. There was a great fear on the part of 

general aviation pilots that they would suddenly be charged user 

fees, and for two years, there were magazine articles and in the 

press, there were questions about how a user fee would affect general aviation. 

The only circumstance in which the recreation flyer would pay 

any form of fee, and this is something that is discretionary under 

our proposal. All of this has not been determined that it will actually occur this way, but it would be if the recreational flyer decided 

to fly into one of the 30 most congested airports in the Country. 

There, we would expect that we would be charging a terminal fee. 

But let me give you an example of what we are talking about in 

fees because, again, I think this is something that is looming much 

larger than is in any way, shape or form likely. If you are talking, 

for example, about a small plane like a Cessna 182 flying into a 

large hub, the fee for landing there would be $3.86 if you use the 

kind of weight measure that is used around the world. Let me reVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
12

peat that, $3.86. Now whoever flew that plane is going to pay a lot 

more than that to park in the parking garage. But I can go up. A Beech Bonanza would pay $5.07. Now, is this 

an onerous fee to fly into the most congested airports in America? 

Even going into the jets, a Cessna Citation, now here, we are over $10 million in aircraft so presumably there is some wherewithal there, but you are talking $15.93. Again, I don’t think we 

have got a parking garage in Washington where you are going to 

be able to park for 24 hours for that. 

So I ask you, does this look to you like this is an onerous burden? 

I think when people look at the actual facts, they will realize that 

general aviation, 99 percent of the time, the recreational flyers pay 

no user fees, and if they should want to fly into O’Hare, those are 

the kinds of fees we are talking about. 

Mr. COSTELLO. I have several other questions, but I will go to 

other Members now and come back later to ask my questions. 

At this time, the Chair recognizes the Ranking Member. 

Mr. PETRI. I think many of the Members will have questions. 

I wonder if you could outline for us, the best you can, the projected cost, additional cost of what is expected to be deployed of the 

new system during the reauthorization period before us. Do you 

have an idea of what we are talking about, what we are going to 

be buying during those five years and what it would cost? 

Ms. BLAKEY. Absolutely, absolutely. In fact, I think we have a 

very detailed plan for the NextGen system for the next five years. 

You will look in the out years in the budget, and you will see there 

that the Administration is proposing a total of $4.6 billion additional over five years for deployment of next year. Now that is very 

significantly for ADS-B which I have heard a number of the pilots 

here already speak about. 

ADS-B is the backbone of the new system. It is an absolutely 

critical technology that is becoming deployed worldwide. We are 

not the only Country moving toward it. It is because it provides 

great precision in terms of surveillance, knowing exactly where aircraft are, and giving pilots and controllers the same picture on a 

screen of where they are in relation to all the traffic around. It updates every second versus the best of our radar, the very best, is 

every six seconds. So you can see the potential in that kind of precision as you go down the road for all sorts of efficiencies and safety that is involved. 

We will put a lot of money into ADS-B during that period. We 

also will be putting money into what is called SWIM, and this is 

essentially the internet for aviation. This is the ability to move 

data and to provide from a number of key databases for both security, defense as well as critical information for us, a network of information that can be called on. 

There are a number of other demonstration programs in there as 

well. Data link, the concept that you do not want to continue to 

rely solely on voice communication, one controller talking to one 

pilot, but rather use data as we do in every other form of life, 

email, if you will, to communicate so that you can do so much, 

much more efficiently. 

There is tremendous safety in all of this as well. One of the big 

errors that you have in aviation now is what are called hear back, 

13

read back errors, when a pilot does not hear correctly what the controller said or vice versa. The precision of data, having it right 

there in front of you in black and white, is huge. 

So that is the kind of investment. That is what we are looking 

for over the next five years. As we move into the out years, there 

are spikes. Some of the investments get higher because, as you 

would appreciate, when you are moving into full deployment on all 

of this, it gets to be increased in the years, in the early teens, if 

you will. Then as you go down toward 2025, the investments begin 

to decline. We are projecting for infrastructure for the entire 

NextGen, a range of between $15 to $22 billion out to 2025. 

Mr. PETRI. Could you describe at all the impact of a delay in the 

reauthorization on this? Would it be possible to begin contracting 

and deploying this system? You are already probably studying and 

doing some pieces of it even as we speak. 

Are there ways we could, if the reauthorization should, heaven 

forbid, be delayed for some reason, accommodate the needed financing and steps that would be required to nonetheless begin with this 

new system? 

Ms. BLAKEY. One of the most important aspects of the new system is it provides certainty. It provides predictability, stability in 

the financing, so that all who are out there contracting, bidding 

and providing, know what to count on. That has been one of the 

most enormous problems in the FAA’s capital investments up until 

this point, the ups and downs in the funding streams that have 

often put contracts at risks, have sometimes caused them to stop, 

change course. As that went on, they were prolonged. The costs 

went up, and on it went. 

We don’t want to see that happen with this. The stakes are too 

high to get in front of the congestion, and frankly the costs will go 

up if we do it that way. 

Now if we miss the 30th of September as a date, what is likely 

to happen? I can’t tell you. We only have two months left in the 

trust fund to operate the FAA. We are having to let a major ADSB contract this summer. We have all of these airport projects that 

you all referenced that are critical to stay on track. If the Congress 

lets the taxes and fees lapse, there will be no money for any of 

that.

If, on the other hand, Congress decides to do what was done with 

the Highway Bill, and I know a number of the Members of this 

Committee remember the agony that you all went through on that, 

that is a series of short term extensions. That doesn’t work in aviation. These projects are too big. Once you start saying, well, we are 

going to authorize for two months, three months, construction on 

runways doesn’t work that way. People can’t operate without having the knowledge that they are going to be able to get through a 

construction season and through a critical phase of a project. 

We have dollar figures, and they are pretty staggering, and I 

would be happy to provide the Committee, based on the scenario 

that might be likely. So if you all would like to discuss it further, 

if you think that is becoming a likelihood, but I would certainly beg 

you, please, do not miss the deadline. This is very critical. 

Mr. COSTELLO. The Chair recognizes Mr. DeFazio. 

Mr. DEFAZIO. Thank you, Mr. Chairman. 

14

Madam Administrator, great to see you here again. You received 

such a warm reception last time. I bet you were looking forward 

to coming back. You are doing a great job of defending the indefensible so far, but I do have a few questions. 

Since this is a supposed to be cost-based system, there is a certain percentage contributed by the general fund which I have always felt was inadequate. As I look at the Administration’s projections, you apparently project you will continue at approximately 

that percentage into the future or that amount of contribution 

which would become a smaller percentage into the future, is that 

correct?

Ms. BLAKEY. It is about 19 percent. 

Mr. DEFAZIO. Right, but I think the numbers for the general 

fund are fairly stable and we are expecting costs to increase, so it 

would become a smaller percent. 

Ms. BLAKEY. That is probably true. 

Mr. DEFAZIO. But then I look at another portion that really puzzles me about your user fee. Now that is paid for by taxpayers in 

the United States, correct? 

Ms. BLAKEY. And let me know one thing about the general fund. 

As you see for the first time, what we are doing is putting certain 

kinds of costs that the general fund should cover, categories of 

costs, which we think is a good and fair thing to do because we see 

them either supporting the smallest of GA in a way that GA cannot 

support for their safety functions, that we believe it is appropriate. 

Mr. DEFAZIO. No, and I saw that, and those things are all eminently justifiable. I would say that given the role aviation plays in 

our National economy, that you could easily justify a larger contribution, but we won’t debate that here. That is probably not your 

choice to make with this Administration. 

Here is a concern since this is supposed to assess the costs where 

they lie. We have an international arrival and departure tax. A 

very large proportion of people arriving and departing are foreign 

citizens. Foreign citizens do not pay taxes in the United States. 

Yet, you are proposing to reduce their contribution by 60 percent 

which would be about $1.1 billion in 2008 and up to $1.6 billion 

in 2012. Yet, at the same time, we are levying taxes on the people 

of the United States and asking them to contribute to aviation, but 

now we are saying foreigners should contribute less. I am curious 

why we would walk away from $1.1 billion up to $1.6 billion in 

part paid for by foreign travelers. 

Ms. BLAKEY. Well, as you can appreciate, there are several ways 

that people pay under this system. We felt a hybrid system was the 

most flexible way to accommodate people. They will pay user fees, 

and that is where that money is made up. 

Mr. DEFAZIO. No, these are not fees paid by airlines. These are 

paid by individual citizens of other nations when they arrive or depart the United States. I know the industry likes to think that 

every fee paid by everybody is paid by them. It isn’t. It is paid by 

people who arrive on their planes, and they are now going to contribute $1.6 billion less toward the system in 2012. 

Since we are trying to do something which is impossible, and 

that is assess where the costs lay, I am just puzzled because I 

doubt that any foreign country is going to dramatically drop their 

15

arrival and departure tax. It is a big source of revenue for a lot of 

countries, but the U.S. would unilaterally drop ours. It just seems 

to me a very puzzling thing, and I am not certain why we are doing 

that.

Let me go to another conjecture we make. I did have the 

misfortunate of studying economics as a young man. You reach a 

certain point where you have to add capacity at a margin, but before that margin, you don’t have to add capacity. 

In your statement, where you talk about two identical aircraft 

flying from Boston to Miami, you are saying one is full of passengers and the other is half full, and then you are talking about 

that or you talk about flying two planes and how that adds cost. 

If someone flew two planes, that adds cost to the system. Well, actually it doesn’t. The air traffic controller is there. It may add to 

their workload, but until you reach the point where you have to 

add another air traffic controller, they aren’t increasing cost to the 

system because the air traffic controller is there. 

That is part of what underlays your supposition here which is 

that there isn’t an underlying cost to the system to be maintained, 

that actually every increment counts. Now we are going to move 

to this extraordinary billing system, and I just have got to say, how 

much do you expect this billing system is going to cost? How much 

per unit? 

There is going to be, I can’t remember in here how many billable 

activities. It was many millions of billable activities on an annual 

basis. How much do we expect the overhead is going to be for the 

private entity which is going to administer the billing system? 

Ms. BLAKEY. It is tiny. 

Mr. DEFAZIO. It is tiny? It will be tiny? I mean if you look at the 

insurance industry in America, their overhead is 26 to 28 percent. 

Medicare’s is 2 to 3 percent. 

You are saying, well, we are going to put this out to the private 

sector. We are going to bid this out. We are going to outsource it. 

It will be so much more efficient. Well, if they follow the insurance 

model, we will actually lose a quarter of what we are raising to 

costs for those folks. If we follow the Medicare model, the Government model, we would lose 2 to 3 percent. 

Ms. BLAKEY. I assume what you are talking about is the entire 

administrative cost of running those programs. If it is costing our 

insurance system $27, 27 percent to issue a bill, that accounts for 

a lot of what is wrong with our insurance system. I can guarantee 

you in aviation, that is not the case. 

Mr. DEFAZIO. No, their overhead, but the point is have you done 

an analysis? 

I mean, first off, I think the billing system is going to be impossible, and it is going to be a mess. Secondly, have you done a study 

to show that it can be done cheaper by the private sector or is that 

just an ideological assumption by this Administration who wants to 

outsource everything? 

Ms. BLAKEY. There is no ideology in this. It is a question of efficiency. I do not have any preference where it is done. 

Mr. DEFAZIO. Have you assessed then? Have you run two models? Here is the Government model; here is the private sector 

16

model. Have you gone out to some private sector folks and say, 

what would you bid for this? 

Ms. BLAKEY. Yes, we are doing that now. 

Mr. DEFAZIO. And you compared to the public sector? 

Ms. BLAKEY. We are doing that now. 

Mr. DEFAZIO. Okay. 

Ms. BLAKEY. I will be happy to show you the study as soon as 

it is done. We have undertaken that. 

Mr. DEFAZIO. Right, okay. 

Ms. BLAKEY. Believe me, whatever is the most efficient. But you 

have to remember, we are already billing right now for our overflight fees, and it is minuscule. This is the assumption that somehow it costs a lot of money to put an invoice. 

Mr. DEFAZIO. But how many million operations is that per year 

versus what you are going to bill under the new system? 

Ms. BLAKEY. You know I can get some calculations. 

Mr. DEFAZIO. Right. 

Ms. BLAKEY. But the top 110 companies that are involved in 

commercial aviation are going to be paying 87 percent of this. You 

can’t tell me it is that difficult to bill that. 

Mr. DEFAZIO. But still, it is millions of operations, Madam Secretary.

My time is expired, Mr. Chairman. Thank you, Mr. Chairman. 

Mr. COSTELLO. You are quite welcome. 

The Chair recognizes Mr. Mica. 

Mr. MICA. Thank you, Mr. Costello. 

I just got some interesting news. It says the U.K. has signaled 

that it is likely to approve the Open Skies Aviation Pact between 

the E.U. and the United States which to me is very good news, 

something I have worked for. There are some special interests that 

have tried to keep this from happening, who unfortunately maybe 

thwarted. For the interest of the Members of the Committee, if you 

don’t have international service now, its biggest promise is to bring 

into our world, 27 countries all at once, both for expansion of aviation and passenger service. The consumer will benefit. So I think 

it holds some great promises. 

Now one of the things that might stand in our way is even the 

capacity to deal with this new tremendous increase in air traffic on 

both sides of the Atlantic. Wouldn’t you agree that, first, this is a 

very positive step, but secondly, if we are going to play in this global market, see jobs increase and aviation expand on both sides of 

the Atlantic, that we would have to have a system to deal with 

that?

Ms. BLAKEY. Absolutely, absolutely, and the skies around JFK as 

well as Heathrow are going to have to have the advantage of these 

new technologies which Britain has committed to. 

Mr. MICA. Right. A little bit was talked about who pays for this 

system, and I have spent some time looking at the European system, the Canadian system. It is my understanding that those are 

pretty much paid for by the users. There is not much of a general 

federal contribution in any of those instances. Is that your knowledge?

Ms. BLAKEY. Yes, as a general matter. 

17

Mr. MICA. Right now, it is about 19 or 20 percent that the average citizen pays, and I think what you are proposing is a little bit 

fairer. I would like to see the whole thing paid by the users, not 

some poor guy in Iowa or North Carolina or Hawaii who never gets 

on an airplane and doesn’t have the benefit of a $15 million jet 

with maybe six seats or a $750 plane ticket. But he, right now, is 

underwriting, to the tune of 20 percent, the system and the services, is that correct? 

Ms. BLAKEY. That is correct. 

Mr. MICA. Okay. It does cost us about $14 billion, and we take about $2 billion out of the general treasury, is that the ballpark? 

Ms. BLAKEY. Yes. 

Mr. MICA. You have tried to put together a fair system so everybody pays based on use. That is your basic criteria. 

Ms. BLAKEY. Equity was one. 

Mr. MICA. I see you have advocated some increases for general 

aviation based on, I guess it is their fuel tax, 21 and 19 going to 

54—I am sorry—56.4. Your calculations determine that that is 

based on their actual cost to operate in the system. 

Ms. BLAKEY. It is. The way this works is this, that when we look 

at general aviation across the board. This includes high end as well 

as the recreational flyer. They impose about 16 percent of the cost 

on the system. We then took a look at what we thought very legitimately the general fund could support. 

Congressman Mica, I hear your concern on that, but our position 

was that the general fund could pick up a number of costs that 

benefit GA like the flight service stations, which are an important 

measure of safety there, and low activity towers where the towers 

really don’t have a cost benefit but they are important again to the 

GA community. So we took those off, and that dropped then the 

percentage down to about 11 percent of the costs that have to be 

covered.

Out of that 11 percent, the way the weight of the fuel tax will 

go is the GA community is only picking up 1 percent for the recreational flyer. The 10 percent is picked up by the turbine pilot, by 

the turbine aircraft, which is, of course, for the most part, your 

business aircraft, your high end GA. 

Mr. MICA. Okay. One final question, my time is about to expire, 

but I made this radar screen up for you. This is a mock-up. It is 

a Mica radar screen. Each of these dots indicate either a commercial jet, a general aviation jet or general aviation aircraft. Now, of 

course, a lot of general aviation doesn’t get into this range of this 

radar screen. Maybe some flying lower, whatever, close to the 

ground. But for the most part, what is the difference in your cost 

of service and can you identify or can you tell me which is which 

of my dots? 

Ms. BLAKEY. Well, not at this distance, and I am squinting. 

[Laughter.]

Mr. MICA. They are all the same. These are perfectly round symmetrical dots, all equal. 

Ms. BLAKEY. Yes, yes. We can pull up N numbers, and we know 

exactly who each one of those dots would be if it were a real radar 

screen, and the cost to provide air traffic control is essentially the 

same to all the dots. 

18

Mr. MICA. Thank you. You have answered my questions. 

Just for the record, I didn’t have time. You mentioned flight service stations, and you know the problem we have had with consolidation. At some point, you might want to talk to folks about that 

and the BRAC provision. 

Thank you. 

Mr. COSTELLO. The Chair recognizes the gentleman from Missouri, Mr. Carnahan. 

Mr. CARNAHAN. Thank you, Mr. Chairman, and thank you, Ranking Member, for this ambitious schedule to get through this authorization.

To Administrator Blakey, thank you for being back and for your 

work on this proposal. I consider this a starting point, but there 

is obviously a lot of concern about many of the provisions in this 

proposal.

I want to express my concern particularly about the general aviation fees. My State, while it has several urban hubs, we have a lot 

of rural area in between. General aviation is vital to those individual recreational flyers as well as small business. So I think it 

has got to be addressed in a more fair and even way. 

You mentioned the CEOs flying the corporate jets. That is certainly one segment of general aviation, but I think we have a whole 

lot of other folks flying the smaller planes. We have got to be careful on the burden we put on them. 

I also want to follow up on the prior questioning about the privatization of the billing system that has been proposed. I understand you are doing a study about that. I, too, would very much 

like to see that comparison. To be frank, the Administration does 

not have a very good track record on privatization in general. So 

I have that concern. 

In particular, I would like to ask would the privatization proposals that you are discussing allow these billing operations to be 

outsourced, say, to India or somewhere outside the United States? 

Ms. BLAKEY. Well, I will tell you. We have looked at the issue 

of how you send the bills out and get the receipts in as a purely 

administrative function, a very small one, which we don’t come to 

this with the conviction that it should be private or public or some 

in between organization. I think our view was we would like to just 

do it with the best, most efficient system through good analysis, 

and we are using an outside accounting firm and their expertise to 

look at this, to tell us what might make the most sense. But we 

don’t have conviction that it has to be private any more than we 

do that it needs to be public or one of the non-profit organizations 

that serve aviation. For example, a lot of this is done outside the 

United States by the International Air Transport Association which 

is a non-profit. 

So we don’t know. I certainly don’t have, and if Congress has 

some views that there should be certain kinds of parameters or 

constraints on that. I think our intent would be to consult with the 

stakeholder community and you all, look at the best method to do 

it and see. 

No one has taken any great interest to this point in how we collect the fees from foreign airlines, which we do on a monthly basis, 

19

but there may be some things to learn there. It is going very efficiently, and it is being run in house. We are doing that ourselves. 

Mr. CARNAHAN. Thank you. I am going to jump on to another 

question.

The other thing I would like to touch on before my time is up, 

we talked at the prior hearing about my concern with the high rate 

of retirement among active controllers and their treatment. I want 

to ask you to address the issue. Under the NextGen proposal that 

was released, it details a need to hire 15,000 new controllers over 

the next 10 years while simultaneously FAA is actively planning 

the NextGen system which will rely heavily on satellite and network-based air traffic control. How does your plan to hire these 

new controllers mesh with the need to move to increasingly more 

technology-driven systems and do you anticipate that air traffic 

controller positions will be eliminated through this process? 

Ms. BLAKEY. No, I will tell you. The two plans mesh very closely 

because obviously when you are planning 10 years out as we are 

with our controller hiring plan, you want to take advantage of all 

of the NextGen systems that will be coming into place. Remember 

that we have known that this group of controllers was going to be 

retiring at approximately the rate they are for the last 20 years. 

It was a group of people that were hired at one point 20 years ago 

following the PATCO strike, and they must retire by age 56. 

So this is something we have long planned for, and the plan we 

have is really moving along with great precision and working well. 

We are bringing in new controllers. We have got our academy 

classes filled. We are committed this year to hiring 1,386 controllers which exactly meets our end of the year totals for traffic. 

The 15,000 that you mentioned for the 10 years out, we are not 

seeing a need to diminish the need for controllers. In fact, as you 

see, we are increasing the number of controllers because there will 

be more traffic. We see that more traffic means they will be able 

to take advantage of this new technology which will make their 

monitoring and managing traffic and looking at anomalies and 

working on the issues of traffic flow. So it will change their jobs. 

Frankly, their jobs will be less stressful. 

I would love to share with you a study that was just done by 

MITRE, looking at the application of NextGen technologies in a 

simulation with controllers doing the traffic that we are anticipating in 2014 without it and then what their workload is like if 

they have the advantage of this technology. It is like night and day, 

and they will have a tremendous advantage and a great deal more 

information, a lot more automation and the ability, as I say, to 

manage a broader range of traffic without that constant pressure 

of talking to every single aircraft. It is, frankly, a great improvement in the job and a big boost for safety. 

Mr. CARNAHAN. Thank you. I would be very interested in seeing 

that.

Ms. BLAKEY. But there will be more controllers, not less controllers.

Mr. CARNAHAN. I would be very interested in seeing the study. 

Thank you. 

Ms. BLAKEY. Sure. 

Mr. COSTELLO. I thank the gentleman. 

20

The Chair recognizes Mr. LaTourette. 

Mr. LATOURETTE. Thank you very much, Mr. Chairman. 

Administrator, welcome. I have just a couple of observations. 

Picking up on what Mr. Mica was mentioning earlier with more 

and more governments going to cost-based user fee systems, I think 

that you and your team should be commended for putting forward 

the proposal that you have. Even though we may not agree on all 

the pieces, I think it is important that we have this dialogue. 

I also want to commend you and your team for the cost allocation 

study, and I think it does give us a clear picture of who has been 

bearing the bulk of the costs of who has been using the system. No 

matter what the outcome of this tax-based system versus user fee 

discussion that we are going to be having over the next couple of 

months, I do find the information that you put together to be valuable.

There are some pieces of the proposal, though, that cause me 

some concerns. While I don’t expect you to have all the answers 

today, maybe you could tell me what the thought process was. 

First, congestion fees, I get congestion fees. I think that is an important piece of the plan, but I am wondering why they are assessed by airport. It seems to me that it doesn’t matter whether 

you are a big plane or little plane if you are going to New York, 

Chicago or San Francisco, I think you should pay a congestion fee. 

But why do we pick one airport in New York, for instance, when 

others are served by the same TRACON? 

Following some of the answers you have given to people already 

on this and Mr. Mica’s radar screen which I really couldn’t see 

from where I was seated, what does it matter if that dot is going 

to the airport at White Plains versus JFK or LaGuardia? Why is 

the congestion fee based by airport as opposed to TRACON? 

Ms. BLAKEY. Well, of course, there is a certain amount of history 

in this that goes back to existing legislation. Our current statutes 

actually allow for congestion fees by airport under certain very restrictive circumstances. So it is, in a way, an elaboration on that. 

There is also, in terms of the specific airport that I believe you 

are referring to and that is LaGuardia, a history here that shows 

that there really is no way that we currently area aware of to expand the footprint of LaGuardia and bring in more aircraft. When 

the cap was lifted—as you know, that was back in 2000—it was a 

fire sale on everyone rushing in there. Really, not only LaGuardia 

gridlocked, but it really put the whole system into vast delays. 

So the issue of how do you best allot the capacity at LaGuardia 

has been a subject of long debate. The proposal that we have does 

give the port authority the ability to step into this. But at the same 

time, we are looking at incentivizing GA to land at other airports 

through this because if you put a congestion fee on LaGuardia, if 

you are GA and you can use another airport anywhere such as 

Teterboro, there are incentives for that for start. We hope that it 

will have those effects. 

We would be very happy to come up, though, and talk to you, 

Congressman LaTourette, at some length about this because there 

have been a number of theories about it. As you know, this bill also 

allows for auction-based allocations, et cetera of the existing slots. 

So there is a lot to it, to be honest with you. 

21

Mr. LATOURETTE. I get that. I would appreciate a visit, I think, 

because what I am having trouble getting my head around if we 

are moving to a system where you are going to pay for how much 

of the system you use, it seems to me that the user that lands at 

Teterboro is using the same business in the system as the guy that 

lands at LaGuardia, but I understand what you say about slots at 

LaGuardia. Maybe we can have a conversation about that. 

The other thing that concerns me is the PFCs. I think all the airports would love to see the increased PFCs that you have outlined 

in your proposal. What seems to be missing, though, at least from 

my first review, is input from the users of the airports in terms of 

having the ability to have a PFC project altering discussion with 

the people that run the airport. I am wondering if you see it the 

same way and whether that is intentional or you think that we 

should have the users and the commercial airlines and the people 

that actually use the airport have more say as to how these PFC 

charges are going to be used at those airports. 

Ms. BLAKEY. Let me understand. By users, do you mean the passengers, the groups in the community that are using the terminal 

and facility? 

Mr. LATOURETTE. As well as the commercial air carriers. 

Ms. BLAKEY. You know I think the best run airports in this 

Country do that and do it well, and if they don’t, it is to their peril 

because they often encounter real community resistance. So I think 

that is a very smart thing to do. 

The proposal is intended to encourage real collaboration and dialogue between the airlines, the user community, et cetera. Now 

whether we have completely covered that as well as we should, I 

would be happy to look at that again because I am very much behind the spirit of what you are saying, although we also want to 

take some of the Federal restrictions and the Federal requirements 

to be a little less heavy-handed with all of this because as we 

watch PFCs over the years, for the most part, the requests have 

been very reasonable, without opposition. All the filings and paperwork, we probably could do a good bit less of that and still have 

a very good system. 

Mr. LATOURETTE. Thank you very much. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. The Chair recognizes Mr. Hall for any questions 

he may have. 

Mr. HALL. Thank you, Mr. Chairman. 

Thank you, Administrator. Thank you for coming back again. It 

is good to see you again. 

I want to say I am happy to see the continuous descent approach 

at the end of the lovely packet that you had prepared for us. I am 

wondering how far out. Is that going to extend the descent out to 

an earlier point from what it is currently for most flights? 

Obviously, if you are rolling downhill in your car, you are using 

less fuel, and it is the same principle. Could it be a matter of extending that out to the greatest safe distance from the airport? 

Ms. BLAKEY. Yes. I mean the concept behind CDA is that you 

have a glide path that you set up as the most efficient, and it does 

start higher. So it may be further out, of course, but it also would 

be higher. One of the things that we are observing on the airports 

22

where CDA is being used, such as in Louisville, is that you have 

a 30 percent reduction in noise below 6,000 feet which is great for 

the communities there as well as a 34 percent reduction in emissions because of the less fuel burned. But the glide path looks more 

like this kind of slide, if you will, going in. 

Mr. HALL. Right, that is good news. Thank you. 

I wanted to ask about the President’s proposal to move from excise taxes to fees, one that, well, may put even more budgetary constraints, from what I see, on the FAA operations. All airports could 

use more funding, but I am particularly concerned about small and 

growing airports that are already scrapping for capital improvement funding. At its height, your proposal for AIP just cracks the $3 billion mark and only provides $8.7 billion overall. I was wondering how 

this proposal can fund capital improvements to small and mid sized 

airports like those in my district if it provides almost $2 billion less 

over the next three years than it did over the last three years. 

Ms. BLAKEY. I think you really have to look at the proposal as 

a whole, the programmatic changes, the changes we are suggesting 

in allocations as well as the dollar figures because it was our view 

that the very large airports do very well in generating their own 

funding through bonding sources and through PFCs. If we give 

them the authority to raise the PFC to $6.00, we can take them 

off our discretionary funding which then frees up a lot of money for 

the smaller airports. 

We also felt that all small airports are not created equal, and the 

way we have been treating them up until recently in this category 

of the smaller GA airports is everyone gets $150,000 regardless of 

need and regardless of size. Your Teterboro and your tiniest GA 

were getting the same thing. That doesn’t make sense either. So we 

have created a four tier system, so that you can pump more money 

and keep significant projects at those airports going, whereas at 

the smaller ones, you have less. 

Frankly, at the very small ones, we have taken them off of that 

minimal funding, and they need to come in to us for specific safety 

projects which then we can fund from discretionary funds. One of 

the problems about the way we were funding the smallest is they 

were getting a little bit of money, but it wouldn’t cover the cost of 

a project which maybe they have a project once every six to ten 

years, but then they want it funded then. So it is important for us 

to be able to give them what they need when they need it, and I 

think that is the other structure we are looking at. 

But PFCs, frankly, enable that AIP money to go a lot further. 

Mr. HALL. Thank you. 

Another question, you mentioned a couple times in answers to 

other Members’ questions about different studies, one on, for instance, the effect on NextGen on controllers’ work conditions and 

stress level. You said you would love to share that study with us. 

There was another question back here, I believe from Mr. 

Carnahan on another topic, and you said you had another study 

that you would love to share with us. I was wondering if you could 

share both of those studies with us, please. 

Ms. BLAKEY. I would be happy to. 

Mr. HALL. Before we have to take action on this. 

23

Ms. BLAKEY. I would be delighted. 

Mr. HALL. Has a contract request for proposals for the system 

been sent out? I see that the contract is to be awarded this summer 

which isn’t that far away. So I was just wondering what the timeframe was and who we expect to be applying for it. 

Ms. BLAKEY. We now know. We have gone through a whole process, as Government procurement requires, in issuing the requirements and having the bidders come in and offer their initial proposals. Now we are at the stage of having three major consortia 

which represent a number of companies in each case, who are proposing their solution and their proposed contract to us, and we are 

evaluating those at this point. We will expect in July to make the 

selection.

One of the things that I think is significant here is these are performance-based contracts. What we are doing is putting out the requirements that must be met and looking to them for the kinds of 

innovation, cost efficiencies, added value that they may be able to 

bring when you apply real creativity and the experience of companies, many of whom candidly have worked in the defense sector 

and other sectors. So they bring a lot to this in terms of the thinking of how to get the most out of the Government dollar in providing this service. 

I am looking forward to those evaluations, and we expect it to 

be complete in July. 

Mr. HALL. Mr. Chairman, my time is expired, but I just wanted 

to remark that I, for one, could use more specifics. There are a lot 

of generalities in here and a lot of acronyms. 

We heard it was a satellite-based system the last time around. 

Now it appears that we are using the existing GPS satellite system, and we are not going to be launching any new satellites specifically for NextGen, is that the case? 

Ms. BLAKEY. Well, I will tell you. 

Mr. HALL. Those kinds of technical things are missing. 

Ms. BLAKEY. Sure. 

Mr. HALL. I feel they are missing from the information that I 

have seen so far, and I would like to have a little bit more depth 

in terms of the physical and scientific nature of the program. 

Ms. BLAKEY. I would be delighted. One just small comment on 

that, yes, we are relying on the U.S. GPS system which there is 

a plan to update and increase its capacity very significantly that 

the Air Force has, and we have a role to play in that as well. So 

we would be happy to discuss that with you. 

I believe it is this Thursday, and I am looking back at staff, that 

we have a briefing planned on NextGen up here for Members and 

staff. What time? We will get the details. It is Thursday, and we 

would love for you all to take advantage of it. 

I will tell you, in fact, we really want to give you all a chance 

to touch and feel this whole thing because you can. I mean this is 

reality. We are bringing up the ADS-B equipment and displays of 

how it works and all of that. So if you possibly can come by and 

see it, I think you would find it very interesting. 

Mr. COSTELLO. The Chair recognizes Mr. Ehlers. 

Mr. EHLERS. Thank you, Mr. Chairman. 

24

Just to follow up on your previous comment, I encourage all 

Members to participate. I look forward to that. I hope, as you go 

through this project, we could have those regular sessions here. I 

recall last year we hadn’t heard anything, so I requested a presentation and your staff came up and gave a very good, a very technical presentation, and I found that extremely helpful. Hopefully, 

we will have many more in the future, and I hope other Members 

will participate. 

Relating to that question, although your financing here is, of 

course, based on your expected cost, how well do you think you 

have pinned this down? 

There has been a history, not so much under your administration 

but under previous ones, where we had major changes coming 

along, and the cost estimates were far lower than the actual cost. 

Are you comfortable with the cost projections for the systems that 

you are proposing? 

Ms. BLAKEY. Yes, in fact, I am very confident of them. One of the 

things that we have worked the hardest on is to bring our capital 

programs in line with the way you monitor programs, best practices across business and Government. Last year, our major capital 

programs ended on schedule and on budget, 97 percent. Right now, 

we are 100 percent on schedule and on budget, and we intend to 

keep it that way. This is doable. It requires discipline. 

I can tell you that we are working very hard, and at this point, 

I have no reason to think that rigor that we are applying there will 

dissipate. But it also depends, I will tell you candidly. We have to 

have stable funding for the capital investments. Otherwise when 

you start shortchanging them and pulling back on those contracts, 

then the costs go up and the schedule lags. 

The operating costs for the FAA, again, I think are very predictable. As you know, we have very detailed plans. It does mean we 

have to control our labor costs. Labor are the single largest cost by 

far, almost 75 percent of our operating costs. So we have to stay 

on track in having reasonable, sustainable operating costs from the 

standpoint of our personnel. I simply stress that because in the 

past, that has been a wild card. 

Mr. EHLERS. Yes, I understand that. I am more worried about 

the NextGen system. Whenever you have research going on and 

you haven’t finalized, it is very easy for costs to occur. 

Ms. BLAKEY. That is right. 

Mr. EHLERS. Let me also just try to clarify something on your 

proposal for fees. One thing that I think is very good, you break 

out the AIP, RE&D and EAS costs and apply them equally across 

the spectrum of planes, and I think that is a step forward. 

On the proposal for the air traffic control costs, the general aviation jet fuel is the same per gallon as the aviation gasoline, the piston engine gasoline, the 100LL. That is where I worry about equity 

because just to take my own example, and I don’t mind paying for 

it. We have to pay to maintain the system. 

I am flying. I am taking lessons, flying out of a small airport, no 

tower. I go off and practice. I fly across country, et cetera, no use 

of the air traffic control system. That is typical of most general 

aviation flyers. I think it is very important to encourage that because with a reduction of the number of pilots in the Armed Forces, 

25

I think general aviation is going to be the feedstock for the pilots 

of the airlines of the future. 

I wonder how you can justify the 56.4 cent increase in aviation 

fuel across the board for general aviation when a good share of general aviation does not use the air traffic control system. I recognize 

many do, but there are a lot of, particularly the new recreational 

pilots of light sport airplanes do not make use of air traffic control 

and, to my knowledge, don’t plan to make use of it. How can you 

achieve greater equity there, recognizing those pilots who fly regularly on business purposes and use air traffic control and those who 

are simply recreational pilots who tend not to make any use of air 

traffic control? 

I would appreciate your response to that. 

Ms. BLAKEY. Well, I think what we are seeing is this, that there 

is a dramatic difference in the recreational flyer, usually, who is 

flying as you are suggesting, in terms of the amount of fuel they 

use. In other words, you are talking about very light planes. You 

are not usually talking about a lot of hours flown. I realize some 

people commute back and forth to their district, and that does add 

up to a lot of hours over time. But when you look at the GA community, the recreational flyers on the whole, they are flying the 

planes, and many of these planes, remember, are shared among a 

number of people and are flown on average about 100 hours a year. 

When you start looking at the cost over a year of that kind of flying of our proposal, we are talking about around $500. I guess 

you could debate as to whether that is affordable or not, but when 

we look at it as a percentage of the overall operating costs of owning and operating a plane, it is still less than 5 percent of the overall costs. 

I realize no one wants to pay additional taxes. I mean that is a 

given. I don’t either. But it is small, and we were very conscious 

of the fact that because fuel usage is relatively little for small piston planes, the actual hit on the wallet is so monumental. Those 

would be my thoughts about it. 

Mr. EHLERS. It is bigger than you might think but also you are 

charging for service that they don’t use. 

Ms. BLAKEY. Could I mention one thing about service they don’t 

use, though, because I appreciate that? We, of course, do encourage 

everyone to file with our flight service stations. We certainly also 

remember that we do a lot of monitoring of planes up there, even 

if they are flying a VFR, and we certainly provide help and support 

if there become problems in the system. So all of that is there right 

now.

But what we also think is that GA pilots are going to be moving 

increasingly to the WAAS approaches, to use of GPS and ultimately to the use of ADS-B. Let me remind you that ADS-B for the 

general aviation pilot, and these are small pilots in Alaska, has reduced the accident rate in Alaska between 40 and 50 percent. Now 

how much is one’s life worth? That is huge. 

The ability to see aircraft around you, to have those sorts of services in the cockpit, we believe that the GA community is going to 

want to take advantage of that soon and well, and that definitely 

means you are a part of the system and you are using the services. 

We are going to be encouraging that, but the way you are going 

26

to be paying is still on what I consider and just laid out is a pretty 

modest basis. 

Those are the big, big advantages, the overall safety and the capacity benefits, because Congressman Ehlers when you decide that 

you do want to fly into Teterboro or you want to fly into a more 

congested airport, you will be able to get in because you will be 

equipped and we will be providing the service. I don’t think GA 

wants to be closed out of a lot of the air space because they truly 

are marginal in every way. 

Mr. EHLERS. I doubt if the FAA will ever want me to fly into 

Teterboro.

[Laughter.]

Mr. EHLERS. I yield back. 

Mr. COSTELLO. The Chair recognizes Mr. Lipinski. 

Mr. LIPINSKI. Thank you, Mr. Chairman. 

It is always good to see you, Administrator Blakey. 

A couple questions, starting first with the concerns over the air 

traffic controllers and the talk about maybe a 70 percent reduction 

of air traffic controllers because of a 70 percent turnover, that is. 

How does this reauthorization address that situation in needing to 

hire more air traffic controllers in the future to take care of the 

turnover to make sure we have safe skies? 

Ms. BLAKEY. Well, it provides us a stable, predictable revenue 

stream that guarantees that we will not have difficulties knowing 

that we have operating costs covered. It is a cost-based system. So 

the cost of our controller, their salaries, benefits and all the equipment they rely on is built into the costs. That is a big advantage. 

The 70 percent turnover between now and 2015, we are expecting that. We have been planning for it because it is built into the 

age they were when they were hired and when they retire. 

Mr. LIPINSKI. The funding will be there to replace air traffic controllers then? 

Ms. BLAKEY. On this system, it will be. 

Mr. LIPINSKI. Another issue, in the proposal, you want to increase, expand the program for airport privatization from the current 5 up to 15. A question more specifically on what impact privatization is because so much Federal funding goes for airport capital 

improvements right now, airports that are privatized, would they 

still be eligible for AIP funding? Would the Federal Government be 

funding the private airports? 

There still would be Federal money going into these privately 

run, for profits of whomever has the lease on them, those airports 

then.

Ms. BLAKEY. For the benefit of the flying community and all of 

that, yes. 

Mr. LIPINSKI. I am sure that is something that we will be talking 

about more in the future on that. 

One other issue I wanted to ask you about, the proposal to expand the PFC eligibility to encompass any airport capital projects 

that are eligible to be funded with airport revenue. I am just wondering what types of projects that you cannot right now use AIP 

funding for, could an airport use that for under this proposal? How 

does it expand? 

27

Ms. BLAKEY. The caveat we have is it could be used for a variety 

of things as long as they are anti-competitive, meaning putting one 

carrier that serves that airport at a disadvantage versus another. 

But it would allow for improvements in the terminals. It would 

allow for new hangars. It would allow for improvements on the fuel 

farms as well as building new fuel farms. All of those kinds of 

things are areas where the airport would be able to use funding, 

we think, very legitimately and on a broader basis. 

Those would be just thoughts and examples. I could probably go 

on, as they say. 

Mr. LIPINSKI. All right, I yield back the balance of my time. 

Thank you very much. 

Mr. COSTELLO. The Chair recognizes Mr. Hayes. 

Mr. HAYES. Thank you, Mr. Chairman. 

Ms. Blakey, I am going to change gears just a minute and give 

you a chance to catch your breath. Thank you for speaking up 

about age 65 for pilots, moving the age limit up. We are working 

here on H.R. 1125 to help you implement that. With ICAO standards now being 65, we would love to see that implemented, a tremendous cost savings to the Government by keeping those pilots 

active to 65. Any suggestions you may have—you don’t have to do 

that today—would be very helpful. 

Again, thank you for being here. As I have listened around the 

room to the comments today, there seems to be a general lack of 

support for the overall plan. Mr. Mica seems to have been sipping 

the Kool-Aid a little bit, but we are going to try to get him some 

antidote.

Just listening, and this is very, very important, and you have 

handled the issue and the process with dignity and professionalism. There just seems to be a huge emphasis on, at this 

point, a very costly solution, and that is appropriate, but it seems 

to me we need to back up a little bit and spend a little bit more 

time on the problem. We have got a solution that has been massaged with all these numbers. 

You used an example, and my friend, Leonard, is in the $5 category. If I understand the process correctly, he comes from Iowa to 

Dulles in a Commanche, and you said he is only going to pay $5.00 

in this new system, but the way I do the math, by the time he gets 

home, the new fees are going to cost $285, not just the $5 fee. It 

already is going to cost him $80 to land at Dulles anyway, not 

counting the ramp fee. It is just a tremendously disproportionate 

share.

I look at some of the figures. Airline traffic and competition have 

done incredible things for commerce and the industry. Airlines are 

carrying more and more people to more and more places, and that 

is a good thing. The guy in the middle seat, that is typically me 

on a Friday afternoon, can fly to Los Angeles to the East Cost for 

$300. You talk about the unusual value. That is an incredible 

value, and the airlines are doing a good job competing among 

themselves. That is where the money is coming from. 

The system we have got is not that bad. Again, let us focus some 

more on the problem, make sure to define it going forward. As I 

said earlier, 16 percent decrease for the 747 from Tokyo to Los Angeles and 271 percent—I am being a little bit loose with the 

28

math—for Leonard and I to come from Iowa and back in the 

Commanche.

Again, it doesn’t solve the problem, but it does force people out 

of the market. General aviation is a guy in Norwood, North Carolina, making tires. He is a guy in Iowa or wherever, making other 

components that are important. 

GPS, pilots now, I got Sam. Sam is a stick and rudder guy. That 

is the way everybody used to train. Now we have got systems operators. The cost of GPS to the pilot and other technological aids has 

gone down dramatically, so I think that kind of savings is available.

Just to kind of wrap up and not have the red light, as we go forward, again I welcome the dialogue and hopefully again we will 

make sure that this part of the aviation industry, we call it general 

aviation.

But a corporate CEO, and they seem to be bearing the brunt of 

the criticism here, it is a cost item to them. They know how much 

it costs. The airplane has an initial cost which a lot of these figures 

are based on, but it doesn’t figure in depreciation expense, bottom 

line to them. So I don’t think the system can compare whatever the 

start-up cost is simply on its face. It is what they are going to use. 

If they stop buying those aircraft, whatever the level may be, we 

have hurt the economy overall. 

Do you think that general aviation is potentially going to be 

harmed by this if we don’t do our job of making sure that we allocate costs accurately and properly? 

Ms. BLAKEY. No, I don’t. 

Mr. HAYES. Okay. 

Ms. BLAKEY. I would not have proposed it if we did. You have 

to remember that general aviation manufacturing is on an enormous boom, 35 percent increase in terms of sales and deliveries 

this year. That is huge. 

Again, the costs to the little guy are very small, but when you 

look at where we are seeing a huge increase in traffic and real cost 

to the system, it is in congested air space. It is at congested airports. It is up and down the East Coast. It is when folks want to 

fly in their jets down to the Super Bowl, and they all want to be 

there in front of the 320 with a full load. 

Those are real costs and real problems in this system. This is not 

a question of a solution looking for a problem. That problem is 

there.

What I would suggest is because all of you have the vast majority of your constituents are the guy in 22B, the guy who is flying 

coach. Right now, he is paying more than 22 percent more than he 

needs to for the cost of our air traffic control system and all the 

infrastructure. We are asking for basic equity here. That is important. It really isn’t fair to say, oh, well, the airlines are able to offer 

some cheaper fares these days, so let us don’t worry about the fact 

that the passenger is paying too much of the bill. 

You know this is a 10 year bill. This is the time to try to get it 

right. We do believe that it is certainly possible for everyone to step 

up to the requirements here and to try to be both fair and then put 

in place a system that is stable and we can all count on it. 

29

Now, Congressman Hayes, I have said at the outset and all the 

way through, I don’t pretend we have a perfect bill. I didn’t say we 

got it all right. As I listen to the comments, both here and otherwise, people have specific things they don’t like. I do understand 

that. But it is not that people are rejecting the bill out of hand, and 

may I suggest it is the only proposal out there. Change is hard, and 

people always find something at the beginning that they don’t want 

to support, that they don’t like, but let us be fair and give it a fair 

shake because the principles behind this, I think, deserve real attention.

Mr. HAYES. Absolutely, thank you very much. 

Mr. COSTELLO. I thank the gentleman. 

We are going to have some recorded votes very shortly, so I 

would ask you, if you would, to stay within the allotted time and 

to be as brief as possible and ask the Administrator to be as brief 

as possible with her answers. 

At this time, the Chair recognizes the gentlelady from Texas, Ms. 

Johnson.

Ms. JOHNSON. Thank you, Mr. Chairman. 

My questions have been answered, so I pass. 

Mr. COSTELLO. I thank the gentlelady. 

The Chair recognizes Ms. Fallin. 

Ms. FALLIN. Thank you, Mr. Chairman. 

Thank you once again for coming to our Committee. We have 

been seeing a lot of you. We appreciate all your explanation of the 

different issues. 

I was listening as you were talking about the reauthorization 

and the funding coming forth, and you talked about the ups and 

downs and the contracting and not having the stability and the 

funding and the people involved in the system needing to know 

about timing of the funding itself and about projects and short 

term extensions and the different contracts and that they don’t 

work well and it is not good for those who are receiving the contracts, not knowing the timing of things. So I had a question for 

you.

As you know, in Oklahoma City, we have the FAA Mike 

Monroney Center which trains the controllers, and we have had a 

lot of discussion about the controllers who are retiring and the 

need to get new controllers online, air traffic controllers. It is my 

understanding that in Oklahoma on our contract with the Mike 

Monroney Center, that the University of Oklahoma has a contract 

with the FAA training center and has had that since 1981 to help 

train the air traffic controllers. Since that time, they have trained 

over 25,000 air traffic controllers at that facility. 

They had a five year contract which expired January 31st of 

2006. So it is way past due on its expiration which is 14 months 

ago. Since that time, they have been getting short term extensions, 

a six month extension, a two month extension, a one month extension, and now it is all set to expire on July 31st of 2007 which is 

coming up in a couple of months. 

In listening to you talking about how hard it is with the ups and 

downs of the contracting and the extensions and no stability within 

the system and then also the discussion we have had about the air 

30

traffic controllers and how important it is that we bring more online and have them trained because of the retirement age. 

Can you give me any advice on what you think might happen 

with the training that is currently going on at different facilities 

and what we can expect with the contracts of those? Maybe you are 

telling us that it is going to be affected by the reauthorization bill. 

Ms. BLAKEY. Congresswoman Fallin, I will tell you this. I will 

start by saying I will get back to you with the specifics on that contract. What you are describing sounds correct, but I don’t have the 

latest on it. 

I can tell you broadly that what we have been trying to do is to 

improve training. We do a great job in Oklahoma City, and we are 

very proud of it. But like everything else, as time goes on, we want 

to begin using more simulators. We want to use more simulators 

in our facilities that are right there for controllers to use. We also 

want to take advantage of a number of the colleges and universities around the Country that would like to join our CTI program. 

As you know, those graduates are very successful, and when they 

get to the academy, they can expedite their training at the academy because they are very good and well trained and often come 

with college degrees. All of that has gone to the idea of developing 

a plan for our training for the next 10 years, and that is one of the 

reasons why we have not committed to a long term contract because we are trying to incorporate all those factors. 

I am very proud to say that if you look at the controller staffing 

plan, we just issued about a week ago, you will see that the 

amount of time it takes to fully train and certify a controller is diminishing. It used to be three to five years. Now for en route, we 

are able to get it down to right at three, a little less, and we are 

also decreasing the amount of time it take to fully train and certify 

a terminal controller. So it shows that these approaches and new 

technologies are all paying off. 

Ms. FALLIN. Mr. Chairman, if I may just finish, what I am hearing back from my folks at home is that when they have a two 

month extension or shorter periods of time, that it is hard to keep 

the workforce. It is hard to keep the people who are involved in the 

system, and they get frustrated, and they leave which hurts the 

quality of the system, of the training that we are delivering because they never know from one month to the next, if it is still 

going to be there. So people leave and come and go, and it is hard 

to keep that consistency of quality of service of the training. 

Ms. BLAKEY. Let me look into it. I know we have a full pipeline 

of enrollees at the academy for all our classes, so we certainly want 

it stable. 

Ms. FALLIN. Thank you so much. 

Ms. BLAKEY. Sure, I would be happy to. 

Mr. COSTELLO. The Chair recognizes Mr. Boswell. 

Mr. BOSWELL. Thank you, Mr. Chairman. 

In the interest of time, I have two or three things. I will just try 

to be brief on those. 

Ms. Blakey, I am concerned, back to what Mr. DeFazio said, that 

we all, all Americans participate in the safety and the economy and 

everything else of aviation. So I am curious why you propose reducing the general fund when we all benefit. 

31

Secondly, would you clarify the effect of the new funding on Part 

135 On Demand Air Charter Industry? 

Currently, they have to get a refund from the IRS. Will they pay 

70 and get refund at 56.4? Will that be the way it works? 

If this should move forward—if this should move forward and the 

trust fund, what would be your consideration of using the method 

that 135 operators pay strictly through the general aviation fuel 

tax? Would you comment on that? 

Lastly, have you given much thought, you probably have, about 

the envisage or factor of the equipment costs that will be faced by 

general aviation to a lot of people like myself and Mr. Hayes and 

Mr. Graves and others, the impact on the industry that will have? 

Could you address those, please? 

Ms. BLAKEY. I hope I have kept up with all of it. The general 

fund contribution, I certainly agree that there is great public good 

in the aviation system for the broad taxpayer. We have retained 

the general fund contribution at about where it has been for the 

last several years, so we have not diminished it. We have kept it 

stable.

I think the long term problem is one that this Congress has recognized and been a party to as well as this Administration, and 

that is that there are huge competing interests for the discretionary part of the budget—health care, education, et cetera. As 

time has gone on, that has squeezed the ability of taxpayers to 

fund more of aviation. That is just the reality, but it has certainly 

proven true historically, and it is pretty hard to see that changing 

under current budget circumstances with the pressures on the Federal budget. 

Referring to your question about Part 135, I believe what you are 

referring to is the question of when they are flying paying passengers and therefore would be required to reimburse because they 

would be charged differently under those circumstances. I would 

like to get you a written answer on that because it is a little technical, and I do need to give you the precision on that, if I might. 

Mr. BOSWELL. Okay, I appreciate that. 

Ms. BLAKEY. I can do that. 

Did that cover it or did I miss one? 

Mr. BOSWELL. Yes, the safety factor, I think is something that 

Mr. DeFazio was talking about. In the sense that I would guess 

that I can think of more than a few people that would probably 

avoid using the system and try to figure out how they could do 

some alternative to get to where they want to go without paying 

the fees. I am concerned about the safety factor which I know you 

are very concerned about. We all are. Do you have some reasonable 

assurance that that won’t be compromised? 

Ms. BLAKEY. Well, again, this gets back to what was an earlier 

assumption that is not true of our bill. There are no fees that general aviation is going to paying. There is no ability to say, you 

know, I don’t want to pay a fee, because there is no fee. Flight service stations, which are the primary way that we help general aviation—weather, filing flight plans, all of that—are free. They are 

funded by the general fund. 

The only way that general aviation is paying a fee is if they fly 

into of 30 of the most congested airports which, for the most part, 

32

is your corporate high end aviation, not your recreational flyer flying into O’Hare. 

Mr. BOSWELL. I understand. Because of time, Mr. Ehlers, oh, he 

is gone. If he goes into Teterboro, I want him to take Mr. Hayes 

with him. I don’t even want to go. So, okay, thank you very much. 

Mr. COSTELLO. I thank the gentleman. 

The Chair recognizes Mr. Poe. 

Mr. POE. Thank you, Mr. Chairman. 

I have a couple of questions, of course. The area I represent is 

the Houston area. The Intercontinental Airport is real close, and 

then I have Beaumont Airport. 

My questions basically are about the air traffic controllers. I 

meet with those guys a lot, and one thing that concerns me is that 

they all seem like they could qualify to be AARP members or senior 

members in AARP. I am concerned about our workforce and replenishing them with what I think are very qualified individuals at this 

time.

Consolidation of TRACON facilities, specifically, the Beaumont 

facility being consolidated probably with Intercontinental Airport, 

a simple question, will that mean the loss of air traffic controller 

jobs?

Ms. BLAKEY. All right, on the consolidation of Beaumont with the 

Houston TRACON, it certainly will not anticipate loss of jobs. One 

of the things that we are trying to do is to have the best possible 

technology. I will have to get back with you on specifics, but I believe that Houston uses the STARS system. Am I correct about 

that?

Mr. POE. Yes, ma’am. 

Ms. BLAKEY. Of course, STARS offers tremendous advantages in 

terms of its precision and reliability, 16 different sensors and radars, and that is what then becomes available to Beaumont by 

doing that. The anticipation is that you get better technology. That 

is the key thing. We have been, so far, able to accommodate these 

consolidations without much disruption to the workforce or diminishment in numbers of people. Again, traffic is going up down 

there.

Mr. POE. Well, that is really my question. Will the consolidation, 

whether it is in Beaumont, in Houston or other parts of the Country, will that mean a general overall loss of air traffic controller 

jobs or will they stay the same or will they increase? 

Ms. BLAKEY. As a general matter, it does not impact air traffic 

controller jobs, but let me look at the specifics there, and then I 

can get back to you and tell you with greater precision. I don’t honestly remember what kind of timeframe it is on and all of the specifics that are involved. 

But what we find as a broad matter is, because traffic is increasing, there are good jobs for all of these controllers. It may not be 

exactly the same job they were doing five years ago, but there are 

good jobs. I mean after all, we are hiring at a fast pace, so we certainly are not trying to, in any way, diminish controllers and the 

jobs they have right now. 

Mr. POE. The second question has to do with the $5 billion loan 

part of the proposal. What is that money going to be used for? 

33

Ms. BLAKEY. It is a good question. It is in the second half of the 

10 year period of the bill, and it is borrowing authority for some 

of these capital investments that, like any major capital program, 

often involve big investment spikes. Rather than trying to pay for 

them in a one year basis on a cash and carry basis, it allows the 

ability to smooth out that capital cost and yet get the benefits of 

these programs up front, the technology sooner than you would if 

you had to pay for it every year. 

I mean no one pays for any capital investment in the private sector and in our personal lives, obviously, pay for your house all up 

front. Corporations don’t. We believe we need that tool here as 

well, and the spikes are coming in the second five years. 

Mr. POE. Will there any input from Congress on how that money 

is going to be spent? 

Ms. BLAKEY. Absolutely, you all will have to approve all of those 

programs with all of the money that is attached. 

Mr. POE. Overall, in your opinion, what position or policy or manner in which that $5 billion is going to be spent? I mean just give me some ideas. I mean $5 billion here, $5 billion 

there. To Congress, it doesn’t mean much, it seems, but it is a lot 

of money, and I am just asking you where you think generally that 

money is going, if you could be specific. 

Ms. BLAKEY. Well, I think it will be going to some of the big investment costs that we see out there. Some of the things that we 

need to do go to the ability to network all of these systems. When 

I was talking about SWIM, there is another system also that goes 

to being able to hook up all of our security and surveillance, et 

cetera. That can be quite expensive. ADS-B, in the out years, gets 

to be quite expensive. And so, those are some of the things that we 

would anticipate putting the $5 billion against if we need to. 

Now, if we don’t need to, that is another call, and that is certainly something that we would be discussing with the Congress 

well up front as well as with the stakeholder community well up 

front. Does it make sense to go fast and therefore need to incur 

that kind of borrowing or can we do it on a more gradual basis so 

you need to borrow? 

Mr. POE. That would be three, okay. Just to follow-up, I look forward to an answer to my earlier question about the consolidation 

specifically with Beaumont and Intercontinental Airport, what that 

will mean on air traffic controllers’ positions. Thank you. 

Ms. BLAKEY. I am sorry, I didn’t know the specifics. I will get 

them for you. 

Mr. COSTELLO. I thank the gentleman. 

At this time, the Chair recognizes the distinguished Chairman of 

the Full Committee, Mr. Oberstar. 

Mr. OBERSTAR. Thank you, Mr. Chairman. 

These are very, very important hearings, the launch hearings as 

we being our process of reauthorization of FAA for the next three 

years. It is evident how important these hearings are, given the 

number of Members who have turned out for the hearing this 

morning and the questions asked. 

Madam Administrator, you have immersed yourself in this subject matter, and I applaud you for that. You have mastered the 

issues, and you speak from a fount of knowledge and from the 

34

heart and not from prepared statements, prepared guidance. That 

is refreshing as we hold these hearings. 

I see that the bells have rung for a vote. 

I have very serious reservations about the overall proposal from 

the funding aspect of the overall proposal. It will be a major shift 

in policy from the ticket tax user fee approach to some other sort 

of fee that I used to call a cash register in the sky. As you leave 

from one airport, you pay a fee. You are handed off, you pay a fee. 

You go some place else, you pay another fee. 

You have 13 safety and certification activities from which to collect fees. Better, not you, I don’t mean to personalize this. The FAA 

proposal has 13 safety and certification activities for which fees, 

but yet there is no evidence of a cost accounting procedure in place 

for it. 

Many of the questions that I have are the New York-New Jersey 

airport operations and the proposal to allow the Port Authority to 

use ‘‘market-based mechanisms to control congestion.’’ How are 

they going to do that? 

I have had this discussion over 20 years with the congested airports and, at various times, it was suggested spreading out operations over the period of the day. Instead of having the three major 

banks, now it is four major banks. Now it is getting to be five. Airlines, on the one hand, offer a more economical ticket price to travelers to fly somewhere between 9:00 a.m. and noon or somewhere 

between noon and 4:00 or after 9:00 at night. Can airports offer 

lower landing fees to encourage airport use at those times? Is that 

what you have in mind? 

Ms. BLAKEY. Well, I will tell you. You know this is complex, and 

there are a number of ways of doing it. Part of it, of course, is you 

determine in doing it, how elastic is the demand because I think 

that is a big part of the question. It could be done that way. Yes, 

you are right. There are several different approaches in terms of 

how to do it. Auctions are another way. So there is some very creative, innovative thinking about this. 

But since this is something that we would work with the Port 

Authority of New York and New Jersey on what they thought 

would be most effective there. I would say that this is something 

that still is very to be determined. This is carving new ground, and 

I understand that it hasn’t been easy to come up with these approaches.

Mr. OBERSTAR. Not really carving out new ground because if you 

remember a few years ago, before you were Administrator, we had 

very serious congestion problems at airports all across the Country. 

Aviation was exploding in growth until September 11th. We did a 

look at Dallas Fort Worth. They had 57 departures at 7:00 a.m. 

Well, the airlines know 57 aircraft can’t take off at the same time. 

They are deluding their passengers, and the FAA was part of the 

delusion. We pointed this out in the course of Committee hearings. 

That doesn’t make sense. Do something. 

Eventually, FAA, airports, airlines, all got together and figured 

out how we can spread those operations out over a period of time. 

In the end, it comes down the passengers. If they said, we want 

to leave at 7:00 a.m. because we have to get to our business meetVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00060 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
35

ing or so and so, and they are not willing to travel at some other 

time. So they are paying that premium. 

What thinking has gone into, either on the airport side or the 

FAA side, making a significant enough incentive to air travelers 

and to airlines that they will move from those big bank periods of 

the day and relieve congestion? 

Ms. BLAKEY. Well, I will tell you. We spent the better part of two 

years, looking at these kinds of models and the way this could 

work. We actually did some mock auctions, et cetera. All of this 

was theoretical. We were looking at this to see how it could work, 

et cetera. I would be delighted to have us come up and brief you 

on that because I think that there was some interesting results 

from this. Several of the airlines did participate in this, so you had 

some real world results. 

The one thing, though, that I would point to that is specific in 

our bill and is very real world is we have some language in the bill 

that is complementary to an NPRM that is now out on the streets, 

focusing specifically on LaGuardia. So within the port authority’s 

domain on LaGuardia as an airport, we have an NPRM there to 

deal with the question of the current cap on slots and how this 

should be allocated. I would be delighted to have us come up and 

talk with you specifically about that because I think that does need 

attention.

Mr. OBERSTAR. I would be very delighted to have that conversation with Mr. Costello and our colleagues on the Republican side 

as we are all in this together. If there are some lessons to be 

learned, maybe they can also be applied to Heathrow in conjunction with our current U.S.-E.U. negotiations. 

Second, very quickly, the FAA proposal would raise the Passenger Facility Charge to $6.00. Do you have any limitations on 

that increase or on the incremental increase? 

I am not trying to trap you. What I am getting at, and I think 

you know my feelings on the subject, is 23 percent over the past 

17 years. Isn’t it? Yes, since I was Chair and we authorized the 

PFC. It was 1990, in this room, Sam Skinner was Secretary. 

Ms. BLAKEY. Right. 

Mr. OBERSTAR. Twenty-three percent has gone into airside capacity improvements only. That is a disappointment to me. Now there 

are a great many airport terminal needs that have been addressed 

with the PFC, but I don’t think passengers ought to be paying additional an Passenger Facility Charge if it is just going to go to 

help the airport create more malls where they can go and shop because schedules are so bad and they have got so much free time 

between flights that they can spend millions of dollars at airport 

shopping malls. 

If there is going to be an increase, and that is by no means decided, in a PFC, then I want to see some movement in the direction 

of making sure that the original purpose was to create capacity on 

the air side of airports and help airports do a few other things such 

as make transportation in the airport vicinity on airport grounds 

more compatible with operations. Just a quick comment and then 

I will have to close. 

36

Ms. BLAKEY. Certainly, capacity enhancements have been enormous. We think they have been very successful, but we would like 

to work with you on any concerns you might have about the issue. 

Mr. OBERSTAR. Aren’t you troubled by only 23 percent of the 

money going into capacity? 

Ms. BLAKEY. I think that enhancing the financial independence 

and stability of these airports is what a lot of these other improvements are. Hangars, the fuel farms, getting into terminal improvements, all that make the airport more stable, independent and successful.

Mr. OBERSTAR. That is right. That is a good hedge answer. 

Thank you. 

Mr. COSTELLO. That concludes our hearing. 

I thank the Administrator for being here. We look forward to seeing you again in the coming weeks as we get into specific areas of 

the reauthorization. 

The Subcommittee stands adjourned. 

[Whereupon, at 12:07 p.m., the Subcommittee was adjourned.]

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HEARING ON THE FEDERAL AVIATION 

ADMINISTRATION’S FINANCING PROPOSAL 

Wednesday, March 21, 2007

HOUSE OF REPRESENTATIVES

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE,

SUBCOMMITTEE ON AVIATION,

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 

2167, Rayburn House Office Building, the Honorable Jerry F. 

Costello [Chairman of the Subcommittee] presiding. 

Mr. COSTELLO. The Subcommittee will come to order. 

The Chair would ask that all Members, staff, and everyone in the 

room turn off their electronic devices or turn them on vibrate. 

The Subcommittee is meeting today to hear testimony on the 

Federal Aviation Administration’s financing proposal. We have a 

long list of witnesses. We have two Members, a Member panel that 

will testify and then 10 other witnesses, and apparently someone 

with a hammer around here. 

[Laughter.]

Mr. COSTELLO. I guess Jimmy Miller is working on that. 

I will have an opening statement and will recognize the Ranking 

Member, Mr. Petri, for an opening statement, and we would encourage, because of the number of witnesses that we have, that 

other Members submit their opening statements for the record. 

But before I give my opening statement, I want to recognize two 

of our colleagues who will be appearing here this morning to 

present testimony to the Subcommittee, both the Honorable Todd 

Tiahrt from the 4th District of Kansas, and the Honorable John 

Barrow from the 12th District of Georgia. 

And at this time we will take your statements. We will waive the 

normal questioning of witnesses. We have extended that courtesy 

to Members in the past. We will extend it to you because we understand that your schedules will not permit you to be here very long 

this morning. 

So at this time I would recognize our colleague, the Honorable 

John Barrow, for his opening statement and any remarks he would 

like to make. 

TESTIMONY OF THE HONORABLE JOHN BARROW, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA 

Mr. BARROW. Thank you, Mr. Chairman. I appreciate your consideration this morning. 

Mr. Chairman, it is an honor to appear before this Subcommittee 

to discuss my concerns about the FAA reauthorization bill, especially the FAA’s proposed funding mechanisms. 

Mr. Chairman, I represent Savannah, Georgia, which is home to 

Savannah International Airport and Gulfstream Aerospace Corporation. That means that this bill is especially important to a lot 

of folks that I represent. 

121

Gulfstream employs more than 5,000 people at their Savannah facility. Their annual payroll at this place is $360 million. And in 

the district alone they spend another $80 million a year with suppliers in support of their vendor operations. As a result, the impact 

of the FAA reauthorization bill in my district is huge. 

I strongly endorse the necessity to modernize our air traffic control system. However, the President’s proposal fails to address the 

critical need for a comprehensive plan for modernization. I urge the 

Subcommittee to insist that the FAA present a modernization plan, 

including timetables, milestones, and its estimated cost, before they 

initiate a debate on funding. 

As with many of my colleagues in Congress, I don’t agree with 

the Administration’s attempt to link user fees to modernization of 

the Nation’s air traffic control system. The system needs to be modernized no matter how we pay for it, and we can modernize it using 

the existing tax and oversight structure. But we need to organize 

a comprehensive plan first. 

The Administration proposes to dismantle the current funding 

mechanism and tax structure that has built the safest, most efficient air traffic control system in the world. In contrast to the current system of aviation excise taxes set by Congress, user fees 

would be set annually by the FAA without congressional approval. 

Given the monopoly power of the FAA as the sole provider of air 

traffic services in the United States, and given the FAA’s poor 

track record of fielding new technology to modernize the air traffic 

control system, we can’t afford to put all of our right to make cost 

control decisions, all of our power to tax, and all of our power to 

spend on the FAA. We can’t afford to put all of our government 

eggs in one FAA basket. 

Giving the FAA the right to set user fees is a blank check and 

it would totally remove congressional oversight from the funding 

and governance of our Nation’s air traffic control system. Now that 

we are trying to expand oversight is not the time to give it all 

away. User fees would require the FAA establish some sort of IRS 

organization to administer a system which would be much more inefficient than the current system. 

In addition to user fees, the proposal raises general aviation fuel 

taxes by over 200 percent. That is nearly a 50 percent per gallon 

increase in fuel taxes and will have a huge adverse impact on the 

general aviation industry just as it is recovering from the economic 

downturn caused by the last recession and 9/11. 

I think there are areas where the FAA should be independent of 

Congress. For example, I strongly support the FAA’s independence 

in the area of safety oversight of designees and certified organizations such as repair stations and manufacturing facilities. But this 

argues for the current system, because safety oversight is an inherently governmental function and should not be paid for on a payfor-service basis. If we are going to protect safety oversight as an 

inherently governmental function, we should reject user fees for the 

certification of new aviation products and technologies as a way to 

pay for it. 

Once again, thank you very much for letting us appear before 

you this morning and thank you for your consideration in accommodating our schedules, and I yield back the balance of my time. 

122

Mr. COSTELLO. I thank you, Congressman Barrow, for your testimony here today, and we not only receive your testimony, but you 

and I have had conversations concerning this issue as well, and I 

appreciate that. 

Let me now call on our friend from Kansas, the Honorable Todd 

Tiahrt.

TESTIMONY OF THE HONORABLE TODD TIAHRT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF KANSAS 

Mr. TIAHRT. Thank you, Mr. Chairman. I have a written testimony that I would like unanimous consent to submit for the record. 

Mr. COSTELLO. Without objection. 

Mr. TIAHRT. Today I hope to convince you that general aviation 

is a vital part of our economy, that it is necessary for the future 

growth of our economy, that general aviation is extremely vulnerable to Federal policy, and that the FAA’s proposal is a plan to fail 

according to the FAA itself. It will raise less revenue than the current system of fuel taxes and contributions to the General Fund, 

and it will set up, as Congressman Barrow said, an IRS within the 

FAA; and as a result of that, less people will fly and their current 

projections will have even less revenue. On top of all of that, their 

plan will give us less congressional oversight. 

I represent the air capital of the world, the 4th District of Kansas. It is the home of Cessna, Hawker Beechcraft, Bombardier, 

which builds LearJets; Boeing; Spirit AeroSystems, which used to 

be Boeing Commercial; EADS Engineering; civil design shops; suppliers; contractors; maintenance facilities; and a world-class research facility called the National Institute of Aviation Research at 

Wichita State University. 

Kansas companies deliver over 50 percent of all general aviation 

aircraft. These companies provide 32,000 well paying jobs in my 

district alone. In 2006, the three largest Kansas-based general 

manufacturers—Bombardier LearJet, Cessna, and Raytheon—manufactured over 1700 airplanes at a value of $5.8 billion. Forty percent of them went overseas in exports. 

So it is a national importance that general aviation brings to us. 

Not only my district, but each one of the congressional districts 

throughout the Congress, all 435 districts, have either direct manufacturing jobs, fix-based operations, suppliers, subcontractors, or 

maintenance. In Congressman Barrow’s instance, he has a huge 

manufacturing facility with over 5,000 jobs. Aviation is linked to a 

total of $142 billion of payroll alone in our economy and affects 

more than 600,000 jobs nationwide. But more important than that, 

employers across the United States depend on general aviation just 

to get their job done, especially in rural areas. 

But I want to explain to you why general aviation is so vulnerable to Federal policy. It is a delicate industry in some senses . Let 

me give you an example. In 1994, my predecessor, Dan Glickman, 

worked very hard to get the general aviation revitalization act 

passed. In South Central Kansas, it created 4,000 jobs. But, yet, 

following September 11th, 2001, when our economy took a $2 trillion hit, Wichita lost 25,000 jobs. 

Then there was the luxury tax back in 1991. Beechcraft alone 

lost 39 airplane sales in the first quarter when the tax went into 

123

effect. They lost 500 jobs that were planned at that time. That 

doesn’t account for what happened at Learjet or what happened at 

Cessna as well. 

More recently, accelerated depreciation was what turned around 

general aviation. When we allowed companies to write off twothirds of the cost of a new airplane in the first year or purchase, 

that revitalized again general aviation, and those 25,000 people 

who were laid off are back at work and now there are backlogs. 

Finally, if you look at certification the FAA is supposed to be 

doing, they have not put the number of certifiers in place, and, as 

a result of that, we can’t get new products on the market, even as 

small as safety parts, safety issues, because they are not certified. 

So here we have, once again, an industry that is so vulnerable to 

Federal policy held at a standstill, not being able to get new parts 

on the market or new safety issues in practice. 

Now I want to move on to the Next Generation Air Transfer System, because it does not require user fees. The former Secretary of 

Transportation, Norm Mineta, one of his last comments, he said he 

did not want the Department of Transportation to be a choke point 

for economic activity. And I am sure you would all agree with that 

as well. Unfortunately, this current proposal is going to be a choke 

point.

There is a chart that is going to be shown later today that shows 

that the average daily use of an airline, a commercial jet, is about 

3800 hours per year. A commercial jet flies about 3800 hours per 

year. A general aircraft flies less than one-tenth of that, about 370 

hours per year. Yet, what is happening is that they are trying to 

shift the burden from commercial airlines to general aircraft. 

I want to make sure that the United States is fully supporting 

an air traffic controller system. That is the plan. But to do it on 

the backs of general aviation is not a good part of that plan. It is 

difficult to see, and false to make the assumption, that the problem 

with having an airplane that carries 300 passengers has the same 

type of needs as an airplane that carries 3 passengers. 

We have heard a blip is a blip is a blip. It is really not a blip, 

there is much more to it. In fact, if you look at following September 

11th, 2001, there was absolutely no layoffs at Reagan National Airport, even after general aviation was completely closed out of that 

market. We didn’t lay off any air traffic controllers. So to say that 

air traffic control should be paid for on the backs of general aviation I think is a misnomer and doesn’t accurately represent what 

the costs of air traffic control area. In fact, if you look at where the 

big costs are for air traffic controllers, they are in hub areas, where 

you have a lot of commercial traffic. 

I see that my time is up. Let me just summarize by telling you 

that this plan will generate less revenue. This plan will give less 

government oversight. This plan will have a crushing effect on the 

economy and it will certainly damage the general aviation manufacturing, the maintenance, the suppliers, the fixed base operations, and our future economy because of the rolling impact that 

it will have throughout the economy. So it is my suggestion that 

we do not have user fees, and if I can make it any clearer, I will 

try to do so in the future. 

[Laughter.]

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Mr. TIAHRT. Thank you for your time. 

Mr. COSTELLO. Well, Congressman Tiahrt, we appreciate your 

testimony as well, and you, Mr. Barrow. I think you have made 

your points very clear to us, and at this time, as I said, we will 

waive the questioning. We know you have other commitments, so 

we thank you for being here. 

At this time, the Chair will give an opening statement and then 

recognize Mr. Petri for his opening statement, and then ask other 

Members to submit their statements in the record. 

I welcome everyone to the second of our hearings on the FAA reauthorization. This hearing focuses on the FAA’s financing proposal. Tomorrow the Subcommittee will give consideration to the 

FAA’s operational and safety programs. 

On February 14, the FAA submitted its reauthorization proposal 

to the Congress. The FAA’s proposal includes a new financing plan 

to transform the FAA’s current excise tax financing system to a hybrid cost-based user fee system. The FAA has cited the need to finance a major new air traffic control modernization initiative, the 

Next Generation Air Transportation System, as a primary reason 

for reforming the current tax structure. 

After a review of the FAA’s proposal, I do not believe that the 

FAA has made a strong case for its proposed changes. Last September I said that, based on the CBO projections, the current tax 

and financing system could probably support the requirements of 

the next generation system. Today you will hear from the GAO and 

they will testify that, in fact, the FAA’s current tax and financing 

structure has kept up with the demand for many years and can 

provide funding to cover the development and implementation of 

the NextGen system. 

In addition, at the February 14th hearing, I noted that, based on 

the Administration’s own cost assumptions and data, the FAA’s 

proposal would hypothetically yield approximately $600 million less 

in fiscal year 2008 than maintaining the current tax structure and 

over $900 million less from fiscal year 2009 through fiscal year 

2012.

I want to repeat that so everyone understands that the FAA’s 

current proposal would generate $600 million less in fiscal year 

2008 than maintaining the current system and $900 million less 

than the current system in fiscal year 2009 through fiscal year 

2012.

The GAO will testify today that the FAA has not taken in to account changes in demand that could happen with an increased fuel 

tax, and this could result in even less revenue collected by the fuel 

tax than anticipated. 

While the FAA states that we need an entirely new funding system to cover the capital costs of the Next Generation system, the 

FAA’s estimated cost requirements for its major capital programs 

are actually lower than what they were four years ago. 

The FAA’s estimated total requirements for facilities and equipment, and the airport improvement program in its new three-year 

proposal are approximately $380 million and $1.5 billion less, respectively, than the FAA requested for the first three years of its 

last reauthorization proposal, the Centennial of Flight Aviation Authorization Act. In my opinion, this new proposal’s lower funding 

125

levels for capacity enhancing capital programs further weakens the 

FAA’s argument that a radical financing reform is necessary. 

But, more importantly, I believe that the FAA’s proposal is bad 

for consumers, namely, airline passengers and other airspace users. 

The FAA believes that its proposal will make it operate like a business. I disagree. The truth is the FAA will never be able to compare itself to a business. Most businesses have competition to spur 

efficiency. The FAA has no competition. As I noted in February, 

airline passengers and airspace users either get their services from 

the FAA or they stay on the ground. 

I don’t believe it is in the public’s interest to give the agency almost unilateral authority to raise its fee rate to match whatever 

costs are incurred. I believe that linking a new user fee rate to the 

air traffic control modernization program, in particular, could result incentives for the program to be carried out efficiently. The 

pressure for efficiency will be much less if the FAA can require airline passengers and system users to bear the burden of cost overruns or delays. 

While the FAA argues that airline passengers will pay less under 

its proposal, I believe that they in fact ultimately could pay more, 

and they may wind up paying much more if user fee rates grow unchecked and airlines pass those costs onto their customers. 

The Department of Transportation Inspector General has reported that the FAA’s major acquisitions have experienced billions 

of dollars, and we have heard this in hearings before—they have 

experienced billions of dollars in cost growth and years of scheduled delays directly traceable to overly ambitious plans, complex 

software development, changing requirements, and poor contract 

management. The GAO has listed the ATC modernization as a 

high-risk program for the last 12 years. 

It is true, as the FAA Administrator testified before this Subcommittee, that the FAA has met its acquisition costs and schedule 

performance targets. At least 80 percent of its acquisitions have 

been on schedule and within 10 percent of the budget. However, at 

least some of the FAA’s recent success is due to the re-baselining 

of certain modernization programs. 

When an acquisition is restructured in this manner, its historical 

cost overruns may not be fully reflected in the FAA’s performance 

measures. The Inspector General of the DOT has noted that the 

FAA’s Next Generation effort will, without question, be a high-risk 

endeavor and that there is considerable potential for cost-growth, 

schedule delays, and performance shortfalls, particularly with regard to new software intensive automation systems. The FAA 

should not be able to pass such potential cost growth directly onto 

consumers through its fee rate without congressional oversight or 

approval.

In addition, I believe that there are some very significant unknowns in this proposal that have not been addressed. For example, the FAA has not fully explained the potential administrative 

costs associated with tracking and billing 14 million flights a year. 

When I specifically asked the Administrator about administrative 

costs, they have not developed a plan to determine what the administrative costs would be. 

126

What we do know, as the Administrator indicated here last week, 

that, in fact, time is not on our side. I believe that these factors 

argue strongly in favor of working within the current tax and financing structure. 

With that, I would like to welcome our witnesses here today and 

to recognize our Ranking Member, Mr. Petri, for an opening statement or any remarks he would like to make. 

Mr. PETRI. Thank you, Mr. Chairman. I join in welcoming our 

witnesses today and appreciate the effort that went into the statements that will be made a part of the record, as well as the summaries they will be presenting orally to the panel. 

As you are all aware, we are in the midst of a very busy month 

here on this Subcommittee, and today’s hearing will address a fundamental question: how we finance the FAA and, most importantly, 

the modernization of our air traffic control system. We are pleased 

to have all the panelists here to share their thoughts on the Administration’s financing proposal. There is obviously a lively debate 

on the financing issue and, where there are disagreements, it is 

going to be our job to try to find the path forward and some kind 

of consensus. 

In order for the United States to maintain its historical role as 

a leader in the global aviation industry, we must be certain to advance our modernization efforts. Other countries around the world 

are making great strides in that regard. The EU plans to have a 

constellation of its own satellite-based navigation system, known as 

Galileo, completed by 2010. The Russians are advancing their own 

program, GLONASS. Elsewhere in the aviation industry, China expects to be manufacturing its own regional aircraft by 2008 and is 

striving to produce a wide bodied aircraft by 2020. 

For a century, the U.S. has led the aviation industry and our industry is, as we have heard from several witnesses earlier, crucial 

to our economy, and we can’t afford to fall behind. Whichever financing mechanism is put into place, we must be sure that it can 

support the costs of modernizing the system. 

So again I would like to thank all the witnesses for participating 

in this important hearing, and I look forward to your testimony. 

Mr. COSTELLO. The Chair, at this time, would recognize the distinguished Chairman of the Full Committee, Chairman Oberstar, 

for any opening statement or remarks he would like to make. 

Mr. OBERSTAR. Thank you, Mr. Chairman, and thank you for 

your opening statement, which is comprehensive, deals with all the 

policy issues that we need to address in the course of this authorization process, and shows your grasp of the subject matter and understanding of its significance. 

I want to thank Mr. Petri for his comments and his participation, 

his diligence in taking control of aviation issues, moving from surface transportation in the past Congress. Welcome to the great exciting world of aviation. 

I want to thank our two colleagues who testified earlier, Mr. Barrow and Mr. Tiahrt. I was not in the room, I was meeting in the 

waiting room with other folks, but I heard their testimony and it 

shows the level of interest among our colleagues in the House on 

the reauthorization. And I know there is a great deal of skepticism 

on both sides of the aisle about this financing scheme. While we 

127

will be receptive, we are going to listen to views in the course of 

this hearing and several subsequent hearings that we will have, 

my intention is to give it a decent burial. 

I have been through this reauthorization process for a little over 

22 years. When FAA was emerging from the air traffic control of 

the 1960s, from which it had just emerged from the air traffic control of the 1930s, with radio beacons, preceded by lighthouses, preceded by bon fires, it was evident that we needed a robust management, robust technology system to manage the growing air traffic. 

The air traffic growth accelerated in the aftermath of deregulation—it was voted in this committee room—and in the early 1980s, 

with industry, with the airlines and with the manufacturers—particularly at that time it was IBM—began design of the advanced 

automation system, which is a very comprehensive approach of 

modernizing air traffic in all of its aspects. 

FAA had been criticized for moving too slowly, moving too fast; 

of being overly ambitious, not thinking far enough ahead. You can’t 

be all of those things. You can’t be wrong on all those accounts. I 

remember very distinctly 1986, 1987 people said, we just buy it off 

the shelf. We have got plenty of technology, just go and buy it. 

You don’t go buy these things off the shelf at Radio Shack, for 

heaven sakes. You are designing a totally new system. This is not 

data retrieval; you are not querying the Library of Congress for information, you are dealing with aircraft moving at 10 miles a 

minute, 7 miles in air, no curb to pull over, look under the hood 

and figure out what is going on. It has to be real-time. It has to 

be designed with a robust platform for adaptation off into the future.

And, yes, FAA did sort of over-promise and over-propose in developing the AAS that became the display system replacement, the 

DSR, but they went from 300,000 lines of computer code to 

1,300,000 lines of computer code. They went from a system being 

down 10 to 12 hours a year to one that would be down 5 to 10 minutes a year. And now we need to evolve that system. It is not a 

matter of taking today’s cell phone, throwing it out and buying a 

new one. You are building on a robust platform to move and evolve 

ever into the future into a system in which air traffic controllers, 

en route controllers, tower controllers, TRACON controllers, are 

managers of a system and thinking ahead looking ahead to where 

traffic is going to be five and ten minutes from now, not just to 

where they are at the moment. That is going to take robust investment.

This plan, submitted to us by the green eye shade budgeteers at 

OMB, does not move in that direction; it provides, as the Chairman 

said—and I hope everyone paid attention to it—less money, $900 

million less money, $1,500,000,000 less money than we know; and 

unfairly distributes the cost around the system. 

We encountered such a scheme in 1993, then proposed by Vice 

President Al Gore, in which he proposed to have sort of a semiprivatized air traffic system with the airlines in charge. We weren’t 

going to allow the fox in charge of the chicken coop, and we are 

not going to allow it today either. Get ready, we are going to do 

something good for aviation. We are going to make good decisions 

for the future of aviation in this Country. But we are not going to 

128

do it half-baked. We are going to make a continued robust investment that embraces all of aviation: airlines; domestic; international; general aviation, meaning corporate jets and private aircraft.

We need to deal with the North Atlantic system, the North Atlantic aviation for which the United States has responsibility over 

3 million square miles of the Atlantic airspace. The oceanic guidance system has not been completed yet. That has been in the 

works for 10 years. That is a $30 billion market. We have to do 

better and move faster. We are responsible for 18 million square 

miles of the Pacific airspace. That is a $25 billion market growing 

at 9 percent a year. We have to have a robust system in place to 

manage that air traffic so that we don’t have an aircraft, as we did 

with KAL 007, because it strayed out of control, out of recognition 

of our radar system. 

Those are the big challenges ahead of us, not nickel-and-diming 

the system to death, as this proposal would do. 

Excuse my enthusiasm, Mr. Chairman, colleagues, but I have 

been here a long while and have seen a lot of this happen. I am 

determined, under your leadership, Mr. Petri’s participation, and 

all the Members of this Committee and the aviation community, we 

are going to do right by aviation. Thank you. 

Mr. COSTELLO. I thank the distinguished Chairman for his remarks.

Before we go to our first panel, I would note to all Subcommittee 

Members that we have two panels remaining, this panel and another. We have a total of 10 witnesses, so I would ask Members to 

consider submitting their opening statements in the record. 

And at this time I would ask unanimous consent to allow two 

weeks for all Members to revise and extend their remarks and to 

permit the submission of additional statements and materials by 

Members and witnesses. Without objection, so ordered. 

Let me recognize, at this time, Members of the first panel that 

are here this morning. We welcome you and we appreciate your 

being here to present your testimony and also to answer questions 

of Members of the Subcommittee. 

First, I would recognize Mr. Daniel Elwell, the Assistant Administrator for Aviation Policy, Planning and Environment for the 

FAA; Dr. Gerald Dillingham, who has testified before this Subcommittee many times, who is the Director of Physical Infrastructure Issues with the GAO; The Honorable Calvin Scovel, who has 

testified here just in the last few weeks, who is the Inspector General for the U.S. Department of Transportation. 

At this time I would recognize Mr. Elwell for your opening statement.

129

TESTIMONY OF DANIEL K. ELWELL, ASSISTANT ADMINISTRATOR, AVIATION POLICY, PLANNING AND ENVIRONMENT, 

FEDERAL AVIATION ADMINISTRATION; DR. GERALD 

DILLINGHAM, DIRECTOR, PHYSICAL INFRASTRUCTURE 

ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; AND 

THE HONORABLE CALVIN L. SCOVEL, III, INSPECTOR GENERAL, U.S. DEPARTMENT OF TRANSPORTATION 

Mr. ELWELL. Chairman Costello, Chairman Oberstar, Congressman Petri, Members of this Subcommittee, thank you for putting 

the spotlight this morning on the state of aviation’s finances. While 

this is my first appearance at a Congressional hearing and it is an 

honor to be here, I recognize that I have been invited primarily to 

listen to the views of others, including my fellow panelists, the 

DOT Inspector General, and the GAO. Their views and the views 

of other witnesses here today are vital to the current debate over 

our legislation. 

You know, I have spent close to two decades in one cockpit or another. I have flown military aircraft all around the world and I 

have had the pleasure of flying lawmakers home to their districts. 

No matter who or what I have transported, the point is to get there 

safely and on time. Nobody wants to be late. 

Yet, without the funding provided by our legislation, there will 

be no NextGen system in time to prevent gridlock in the skies. 

Without the program flexibility, financial stability, and beneficial 

budget treatment that our bill brings, our plans to use satellite 

technology to control air traffic will likely just limp along while 

congestion races ahead. We have to plan for the future now. 

In the meantime, the FAA is making headway in reducing delays 

on a variety of fronts. For example, in just the last year alone, we 

have added new runways at five of our busiest airports. They include Atlanta Hartsfield, Boston Logan, and St. Louis Lambert. Together, those runways will account for thousands and thousands of 

additional takeoffs and landings. But pouring concrete, while important, isn’t the only answer. We have got to get started on 

NextGen now. Our bill will help put the infrastructure together 

piece by piece. 

NextGen is an enormous undertaking, and it is not going to drop 

into place just like that. It is going to take time and money to 

make this system of tomorrow a reality. Everyone has a stake in 

this endeavor, so, naturally, we feel everyone should help make it 

come about. It is all about fairness and balance. 

Yet, if you look at how the Trust Fund is structured today and 

who is paying what, you will find that it is mostly one-sided, and 

we at the FAA don’t think that is fair. At least week’s hearing, it 

became clear that this issue of balance is very important to this 

Subcommittee. We agree. And we believe that our proposal strikes 

the balance that has been missing in aviation financing for the last 

three decades. Our measure stands on two principles: first, the revenue that we collect should tie directly to the costs of providing the 

services; second, everyone who uses our services should pay their 

fair share. These principles come straight out of Business 101. 

At last week’s hearing, also, several Members talked about the 

importance of equity in funding FAA. Frankly, without implementing these concepts, equity will not exist. It certainly doesn’t 

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exist today. Administrator Blakey has talked about how the current funding system treats the guy flying on a commercial flight in 

seat 22B, the passenger in the middle seat on a crowded flight at 

the end of a long day. We all know him. You represent him. You 

have been him. We have all been him. Right now, that guy is subsidizing the corporate CEO flying in the company jet and, yes, the 

general aviation pilot flying his Cessna as well. He is the most 

over-taxed individual in the system. 

The Administrator has compared this to sitting in a restaurant 

and being asked to pay for the meal of the party at the next table. 

It doesn’t make sense in a restaurant and it shouldn’t make sense 

in aviation. That is because commercial aviation foots 95 percent 

of the bill, even though they use 73 percent of our services. General 

aviation, on the other hand, uses 16 percent but pays just 3 percent 

into the Trust Fund. This inequity becomes all the more glaring as 

our airspace braces for one billion passengers in 2015. 

Year after year, passenger numbers in general aviation activity 

are rising at a record-setting pace. Last year we had 741 million 

travelers. Tops so far, but it won’t be that way for long. We also 

set another record in 2006: delays. More than 490,000 flights didn’t 

take off or land on time. From the looks of things so far, 2007 isn’t 

shaping up any better. 

It doesn’t have to be like this. Under our reform proposal, we will 

be able to implement our NextGen transformation efforts a lot faster than under the current system. To get there we need everyone, 

commercial and GA operators, to pay for the costs that they impose 

on the system. 

I appreciate that change is hard and the known is comfortable, 

but this concept of paying for what you use isn’t a new one. I think 

it is even harder to justify an exception for aviation when you realize how much our Nation depends on flying. The next six months 

are pivotal. With the current financing structure expiring in September, we have to get this right the first time. 

Once again, I appreciate the Subcommittee bringing this situation to everyone’s attention, and I look forward to a fair hearing 

on our proposal. Thank you for inviting me to participate today. I 

look forward to answering your questions. 

Mr. COSTELLO. Thank you. 

Dr. Dillingham, the Chair recognizes you at this time for your 

testimony.

Mr. DILLINGHAM. Thank you, Mr. Chairman, Mr. Petri, Mr. 

Oberstar, Mr. Duncan. This morning I will be discussing GAO’s 

analysis of changes to FAA’s funding and budget structure that are 

contained in the Administration’s reauthorization proposal. 

Before I talk about those changes, I want to briefly discuss the 

ability of FAA’s current funding system to provide enough revenues 

for FAA’s activities, including the Next Generation Air Transportation System. 

As you know, FAA is currently funded through a series of excise 

taxes and a contribution from the General Fund. This funding 

structure, with some changes to the excise taxes and the level of 

General Fund contribution, has successfully funded the FAA budget, a budget that has consistently trended upward. 

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The Congressional Budget Office recently projected that the revenues that could be obtained through the current funding structure 

would increase substantially over the next 10 years. Given certain 

assumptions, including no change in the excise tax rate, CBO estimates that through 2016 the Aviation Trust Fund could support 

about $19 billion in additional spending. 

If Congress thinks that additional revenues are needed to fund 

NextGen, or for other reasons, Congress can also make additional 

revenues available under the current funding structure by increasing the excise tax rates or by increasing the General Fund contribution, or both. 

Our bottom line is that the current funding system is able to provide enough revenues to support FAA’s activities, including the 

early development of NextGen. However, the concerns that have 

been voiced about the equity and efficiency of the current system 

would not be addressed. In addition, keeping the current funding 

system would not address the Administration’s desire to link FAA’s 

revenues closer to its costs. 

Now I would like to turn to the Administration’s proposal. 

Our analysis shows that some of the proposed changes to the current funding system may create a better alignment of FAA revenues and costs, and this alignment could address the concerns 

about revenue adequacy, equity, and efficiency that have been 

raised about the current system. However, the ability of the Administration’s proposal to address these concerns is critically dependent on two considerations: first, how reasonably does FAA’s 

cost allocation system allocate cost to users and, second, how closely does the proposed funding structure adhere to the principle of 

cost-based funding. 

In the first instance, the key component of the proposed funding 

system is FAA’s cost allocation report. That report was only recently made public and we have had only a short time to review 

it. So although we can’t definitively answer the question about the 

reasonableness of the proposed allocation, our preliminary analysis 

raised some concerns that we think require further study. We currently have a detailed study of FAA’s cost allocation methodology 

underway for this Subcommittee. 

With regard to adherence to the principles of cost-based funding, 

we have also identified some concerns in this area, such as the policy decision not to apply a congestion charge to all users of terminal airspace near busy airports. These types of policy decisions 

on pricing may be appropriate in some instances, but they do not 

necessarily adhere to the principle of cost-based funding. 

Let me now turn to the Administration’s proposed changes to 

FAA’s budget structure, which are designed to align FAA budget 

accounts with its lines of business. On one hand, such an alignment could allow for greater transparency and provide a better link 

between cost and revenues. For example, the new ATO account, 

which would fund operations, maintenance, and upgrades to the 

National Airspace System, could better enable FAA to charge for 

direct usage and modernization of the system. On the other hand, 

some FAA activities, such as those related to safety, may not be 

easy to divide into discreet categories. As a result, it may be difficult to allocate their costs between aviation users that benefit diVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00157 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
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rectly from a safe air traffic control system and the public that receives general safety benefits. 

Mr. Chairman, in the final analysis, the Administration has introduced a complex proposal for funding FAA, and we believe that 

it deserves thoughtful consideration. However, adopting this proposal is not necessary to provide more money to FAA, but it does 

address some of the concerns that FAA and other stakeholders 

have raised with the current funding system. 

We also think that a more detailed analysis is called for to determine whether FAA’s cost allocation methodology can support a fair 

and efficiency-driven cost-based funding structure for FAA. Members of the Subcommittee, a timely reauthorization of the current 

excise tax is critical even if Congress chooses to continue its consideration of the Administration’s proposal or other alternatives for 

funding FAA beyond this year. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. Thank you, Dr. Dillingham. 

Mr. Scovel? 

Mr. SCOVEL. Chairman Costello, Ranking Member Petri, Members of the Subcommittee, I appreciate the opportunity to be here 

today to discuss FAA’s financing proposal. 

I would like to make five points today regarding FAA financing 

and FAA’s proposal. 

First, there are important reasons to consider alternative mechanisms to finance the FAA that have been well documented in previous reports and commissions on reforming FAA. While airspace 

users pay for the system, the current financing mechanism bears 

little relationship to the services they actually use, and whether 

they use them at busy or slack times. And concerns have been 

raised about whether the current system is fair, equitable, or flexible enough to meet FAA’s evolving needs. However, it is important 

to note that FAA’s current financing mechanism could support both 

FAA’s ongoing efforts and the potential cost of developing the next 

generation air traffic control system (NextGen), now pegged at $4.6 

billion between fiscal year 2008 and fiscal year 2012. This assumes 

revenue projections materialize. 

Second, at the request of this Subcommittee, we examined the 

use of the National Airspace System and who contributes to its 

congestion. Our bottom line conclusion is that there are no marginal users. Specifically, general aviation activity accounts for a not 

insignificant amount of FAA’s workload. Therefore, it is appropriate to consider this activity if the allocation of costs among users 

of the NAS is going to be included as part of any effort to move 

to a new financing system. 

Third, FAA’s cost accounting system provides the underlying 

data upon which user fees would be based. As we noted in testimony before this Subcommittee in February, FAA’s cost accounting 

system can support the user fees currently envisioned by FAA. 

Some adjustments to the cost accounting system may be required, 

depending upon structure of the fees ultimately decided upon. In 

addition, FAA’s method for allocating costs among user groups, 

which underlies what each group would pay under FAA’s proposal, 

is reasonable. FAA’s goal was to allocate costs in a manner that 

was simple, transparent, and repeatable. Further, FAA’s cost alloVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00158 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
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cation method reflects tradeoffs and assumptions made by the 

agency. For example, FAA determined that the NAS was built to 

meet the needs of large air carriers. This resulted in fewer costs 

being allocated to general aviation and some air carriers using medium activity airports than other possible methods. Congress will 

have to decide if it wants to make similar tradeoffs. 

Fourth, FAA’s cost recovery proposal does not completely link 

costs and fees and, therefore, is not fully consistent with its stated 

rationale for moving to user fees. For example, FAA chose not to 

recover either the cost of towers at airports that board less than 

100,000 passengers annually or flight service stations from general 

aviation operators. Instead, these costs will be recovered through 

the General Fund. Nonetheless, there is more of a link between 

costs and fees under this proposal than currently exists. 

Fifth, how best to finance FAA is a policy call for Congress. Nevertheless, a number of issues need to be addressed. FAA must continue to take steps to control costs regardless of whether it is funded in the future by excise taxes or user fees. We also think greater 

clarity is needed with respect to how FAA will manage and execute 

NextGen initiatives, particularly given past experiences with cost 

growth and schedule slips. In addition, FAA’s proposed borrowing 

authority presents serious risks unless it is accompanied by strong 

controls.

Finally, FAA’s proposal provides one year for the new board to 

be appointed and reach agreement on a fee structure and fee levels, 

and for FAA to implement a billing system. This timetable is ambitious even if FAA employs a contractor for the billing process. 

In sum, FAA is at a critical juncture with regard to how it is financed. Decisions should be made with an eye on FAA’s projected 

workload and funding requirements. Excise taxes are one funding 

mechanism that could provide sufficient resources to support FAA’s 

needs, but fall short in other regards. User fees are another alternative that are not without controversy, particularly regarding how 

costs are allocated among users. 

Mr. Chairman, that concludes my remarks. I would be happy to 

answer any questions you or other Members of the Subcommittee 

may have. 

Mr. COSTELLO. Mr. Scovel, thank you. 

We, I am told, are going to have votes here pretty soon, but let 

me just say to the Subcommittee Members that, when votes are 

called for, we will go to the floor, take a short recess only to allow 

time for votes, and then we will come back immediately after the 

last vote and continue the hearing. 

I have a comment, Mr. Elwell, concerning the FAA Administrator’s statement to the Subcommittee last week and the issue of 

time, that time is not on our side; and I agree with the Administrator. She stated very clearly that we have to do a reauthorization 

this year and time is not on our side. 

But I want to note, and I think it is worth noting, that one of 

the reasons why time is not on our side is that the FAA did not 

produce its reauthorization plan until February the 14th of this 

year. We asked continually last year when the FAA proposal would 

be coming out. There was an indication early on that there would 

be a radical proposal to change the current tax structure and the 

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way to collect revenue to finance and fund the system, including 

the modernization program. There was an indication that we would 

get the plan somewhere around last summer, and then it was September, and then it was by the end of the year, and then it finally 

came in on February the 14th. 

So, you know, I just want to say that we now are dealing with 

hearings concerning the reauthorization proposal that we just received 30 days ago, and you are proposing a radical change to the 

system. A Member on the minority side declared the user fee proposal dead on arrival and you heard the Chairman of the Full 

Committee say today that he wants to give it a proper burial. I 

want to tell you that if in fact this was a serious proposal, it should 

have been delivered to the Congress on time, and to the American 

public and the users of this system, so that they could understand 

the ramifications, as opposed to delivering it to us and expecting 

us, in a very short period of time, to radically change the system. 

Now, I don’t expect a response from you, but I do want to make 

that point for the record. 

Dr. Dillingham, in your statement you indicate, and I will quote: 

‘‘The current funding structure has supported FAA as FAA’s budget has grown, and it can continue to do so to fund planned modernization. Excise tax revenues are forecasted to increase if the 

current taxes are reauthorized without change and thus could support additional spending.’’ Then you go on to say that, ‘‘If necessary, Congress can obtain more revenue by increasing the excise 

tax rates or the General Fund contribution to the FAA’s budget,’’ 

and it goes on and on. 

I want to ask you two questions and ask you to give a very short 

response, if possible. 

I asked the Administrator, when she was here, concerning the 

FAA’s proposed budget, the Administration’s budget, if, after we reviewed it, it was apparent to us that the new proposal would generate $600 million less than the current tax structure in fiscal year 

2008 and $900 million less in fiscal year 2009 through 2012. And 

I asked her if she would dispute those figures, and she said that 

she could not really dispute those figures. 

In your review, I ask you to comment. Is there any question that 

the new proposal that the FAA is proposing, the user fee system, 

is there any question that it would not generate less in fiscal year 

2008 than the current system? 

Mr. DILLINGHAM. According to the work that we have done to 

date, Mr. Chairman, that is correct, there is no evidence. 

Mr. COSTELLO. So it is very clear that, if we enacted the proposed 

plan by the FAA, we would generate $600 million less the first 

year—those are my figures—and $900 million less from 2009 to fiscal year 2012. 

Let me ask you, in your testimony you indicate that the FAA has 

not taken into account—and I mentioned this in my opening statement—what could happen if in fact the new scheme is enacted into 

law with an increase in fuel tax, which could result in less revenue 

collected by the fuel tax than anticipated, and I wonder if you 

might elaborate on that. 

Mr. DILLINGHAM. Yes, sir. We talked to FAA about this and FAA 

indicated that they did not take this into account because their 

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rough calculation said that the fuel costs were less than 5 percent 

of the cost of operating the aircraft. We pointed out that, you know, 

without actually doing that analysis, you really can’t say to what 

extent less fuel will be purchased. If less fuel is purchased, then 

less revenues would come in, and that may mean the need to raise 

the taxes higher or find the funds from someplace else to pay for 

AIP.

Mr. COSTELLO. Let me ask you about the rationale. As I indicated in my opening statement and I think the FAA has made pretty clear that, in part, the reason that they want to go to this new 

system is to finance the new modernization program. Your office 

has done extensive review of FAA acquisitions and the experience 

that the FAA has had in the past, spending billions of dollars and 

having what I would call cost overruns or costs that were not anticipated by the FAA, schedule delays, overambitious plans, complex software development, and so on, and two years ago your office 

reported that 11 of the 16 major projects it reviewed experienced 

total cost growth of about $5.6 billion. 

So I guess my question to you, and I made clear where I am coming from and where I am going to, but I want to ask you in these 

experience cost growths of 11 of 16 programs of $5.6 billion over 

what the FAA anticipated, historically speaking, has the FAA had 

problems with the ATC modernization efforts because Congress did 

not provide enough money or was not generous enough in providing 

funding, or what were the reasons why they had a $5.6 billion cost 

growth in the 11 of the 16 programs? 

Mr. DILLINGHAM. Mr. Chairman, there are many reasons why 

FAA has had cost overruns in the past. As you suggested, we have 

had the ATC modernization program on our high-risk list for about 

15 years now. Among the reasons were also cited earlier in terms 

of overestimating or underestimating the complexity of the acquisition particularly with regard to software requirements creep, that 

is, once the program is set, someone or for some reason they will 

change what is required; lack of stakeholder input in some cases; 

lack of having the air traffic controllers as a part of the design and 

development. We also mentioned the fact that sometimes FAA’s 

plans for money to acquire a system was not met by congressional 

appropriations and such, but that was a much smaller element 

than the other miscalculations. 

Mr. COSTELLO. Mr. Scovel, since it was your report, I would ask 

you to comment as well. 

Mr. SCOVEL. Thank you, Mr. Chairman. We stand by our assessment from 2005. It is clear that the transition to NextGen was 

then and continues to be an extraordinarily high-risk effort. As Dr. 

Dillingham has pointed out, it has been on the GAO’s high-risk list 

for a number of years; it has been listed as a top management challenge by my office for our department for several years now as 

well.

Your summary in your opening statement, Mr. Chairman, captures our concerns with development of NextGen: overly ambitious 

plans, complex software development, shifting requirements, and 

we would add to that poor contract management, and we would 

point to the STARS program as Exhibit A in that regard. 

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Underlying all of this in terms of not only the interest of this 

Committee in terms of the financing proposal is the need, when assessing NextGen progress, of not only the cost to the agency, which 

will be very substantial in terms of many billions of dollars in order 

to implement NextGen, but also the need for industry to design 

and install the avionics that will be required in order to interface 

properly with NextGen programs. My understanding is that recent 

estimates of the cost to industry have also been in the range of $14 

billion to perhaps as much as $20 billion as well over the development cycle of our NextGen programs. 

What I am getting at, sir, is the need to integrate not only the 

agency’s plans, but also the industry’s needs in order to fully be 

able to exploit the potential of NextGen. 

Mr. COSTELLO. Thank you. As I indicated, I do have a number 

of other questions. I will come back, hopefully we will have a second opportunity. But let me say that that is exactly one of the reasons why I am concerned with this user fee system, where the 

agency would have the ability, regardless of what the cost growth 

is for future gen, that if they underestimated the cost, if there was 

mismanagement, all they would have to do is generate the revenue 

to match the cost with very little oversight or control by the Congress. That is one of many issues that concerns me with implementing this user fee system. 

The Chair at this time recognizes the Ranking Member, Mr. 

Petri, for any questions. 

Mr. PETRI. Thank you very much, Mr. Chairman. 

Mr. Elwell, you may have detected a slight note of skepticism 

about some of the Administration’s financing proposals. I wonder 

if you could just respond to what you have heard in the context of 

a question, which is how is the Administration’s bill is a better way 

to fund NextGen than the current system? 

Mr. ELWELL. I think the primary reason we believe it is a better 

way is because, under our proposal, the budget treatment allows us 

to examine exactly where our costs are and capital expenditures, 

and set fees to recover exactly what we plan to spend when we intend to spend it. The offsetting collection treatment that is written 

into the bill allows those funds that we collect through user fees 

not to compete with other discretionary needs outside of the Administration and all us and you the transparency to follow the 

money, if you will, from the point at which we allocate the cost, set 

the fee, recover the funds, and then spend it for what we are collecting it for. 

Typically, under the current system, with the financing of the 

FAA having absolutely no relation either to our current costs or 

proposed capital expenditures, we believe this is a far more transparent and direct link between costs and expenditures. 

Mr. PETRI. Let me ask Dr. Dillingham. It is pretty clear that 

there have to be assumptions in order to allocate costs, and I just 

wonder if, doctor, you think the basis for the Administration’s cost 

recovery system—based on your preliminary investigation, are the 

methods that the FAA used in the development of its cost allocation methodology reasonable? Do you have any comments on it? 

Mr. DILLINGHAM. Mr. Petri, if you were to compare the methods 

and approaches that FAA used with either Federal standards for 

137

setting up cost allocation system or ICAO standards, we would conclude that they are in fact reasonable. What happens after that is 

within those broad parameters of generally accepted standards or 

ICAO standards, there is a lot of flexibility and, therefore, within 

those parameters FAA has made some policy decisions and some 

assumptions that have turned out to have some pretty powerful implications in terms of cost recovery. But, yes, the short answer is 

it was a reasonable process. 

Mr. PETRI. Dr. Scovel, what is your view of the FAA’s method for 

allocating costs among the different users? 

Mr. SCOVEL. Mr. Petri, I would concur with Dr. Dillingham that 

FAA’s proposal, and specifically its cost allocation methodology, is 

indeed reasonable. As he pointed out, there have been certain policy decisions, what I referred to in my opening statement as tradeoffs made by FAA, specifically in its adoption of general aviation’s 

contention that the NAS has been developed primarily to support 

the needs of the large air carriers. That resulted in an allocation 

decision by FAA that, frankly, works to the advantage of general 

aviation.

You mentioned cost recovery, as well, in your statement to Dr. 

Dillingham. FAA has made certain decisions in its cost recovery 

methodology as well that appear to favor to some degree general 

aviation. Those are policy decisions, of course, by the FAA and reviewable by you on the Committee and the rest of Congress. I am 

not offering my recommendation in favor of them or any other policy alternative, but I am merely pointing them out for your consideration.

Mr. PETRI. Let me just turn to one other subject briefly. I think 

there is some proposal for some $5 billion borrowing authority. 

Could you discuss that? Is that a desirable thing? Should it be done 

sooner, the timing of it? Should Congress have greater oversight it? 

Could you just put that in context for us? 

Mr. SCOVEL. Yes, sir, I will try to do that. To be up front, I suppose I should say that we are skeptical currently as to the need for 

that $5 billion borrowing authority. As I understand the proposal, 

FAA suggests that it would need to borrow and would request authority to borrow up to $5 billion beginning in 2013, with all sums 

borrowed to be repaid by 2017. The primary basis for our skepticism at this point is the uncertain nature of the purpose for that 

borrowing.

Given FAA’s track record when it comes to acquisition management, we would like to see very strong controls placed over that. 

The need and the ability to execute with that money program development and implementation within the time frame stated is an 

important concern of ours. We think that the short time frame between 2013 and 2017, which strikes us as unusual because, clearly, 

I think what FAA intends to do is to use that money to fund the 

development and implementation, institution of programs that will 

have far-ranging effects, far more long-lasting effects than 2017. 

So, in effect, they are borrowing money on the short-term, having 

to pay it back almost immediately without being able to see the 

long-range payoff and benefit. Those are our concerns. 

Mr. COSTELLO. I thank the Ranking Member. 

138

The Chair recognizes the gentleman from New York, Mr. Hall, 

under the five minute rule. 

Mr. HALL. Thank you, Mr. Chairman and our Ranking Member, 

and thank you to our witnesses on the panel. 

Just an observation. As the passenger in 22B myself a number 

of times, I would believe that I am and many of the traveling public, who I talk to as I frequently fly with them, when they are sitting waiting on a late flight, either late departure or late arrival 

or waiting for a gate to open up, the common opinion out there is 

not that what we need to do is build some pie-in-the-sky ill-defined 

$4.6 billion satellite-based system, but what we need is more gates, 

more runways, more air traffic controllers, and other similar things 

that cost less money and could be provided now. But that is just 

a comment. 

I wanted to follow up on the question about borrowing starting 

with Mr. Elwell. What does the FAA anticipate will happen during 

this 2013 to 2017 time frame that requires the borrowing authority?

Mr. ELWELL. The plan for the purchase and development of 

NextGen has within the second five-year period—with 2008 to 2012 

being the first five years—the second five-year period we anticipate 

cost spikes that under our proposal would require us to set user 

fees higher in one year than another. So having the ability to borrow for those expenditures gives some stability to the contracting 

of those expenditures and also leavens, if you will, the fees that we 

would charge going forward for the payment of those capital expenditures.

Mr. HALL. Okay, so the decision was made by the Administration 

philosophically that rather than charge a realistic user fee or tax, 

if you will, or something that pays as you go, that there is more 

anticipated borrowing and debt. That is a preferable course for financing this program, am I correct in that? 

Mr. ELWELL. I think I would characterize it more as giving us 

the ability, when the large spikes come, to make the users pay an 

even user fee over five years as opposed to something that varies 

widely from year to year. 

Mr. HALL. Okay. I will take that answer and ask Dr. Dillingham 

what your thoughts are on the proposal for $5 billion of borrowing 

authority in that time frame. 

Mr. DILLINGHAM. I think we have some of the same concerns 

that the Inspector General voiced in terms of the short payback 

and the borrowing authority, and not knowing exactly what it is 

going to be used for; and it is not a lot of borrowing authority at 

that. We also, though, I think, are sort of gratified that there has 

been a move from the earlier proposal of going to the capital markets, but now FAA is moving towards borrowing it from the Treasury, which is certainly cheaper. But even so, we have a concern 

about any kind of situation that sort of commits future resources 

given the way the overall fiscal state of the Government is. 

Mr. HALL. Right. Borrowing from a Treasury that is in record 

debt is a questionable proposition in my opinion. 

Here is another topic, the President’s proposal to move from excise taxes to fees and financing his dramatic shift. The proposal for 

AIP just cracks the $3 billion market height and only provides $8.7 

139

billion overall. How can this proposal fund capital improvements at 

small and mid-sized airports such as Stewart Airport or Westchester in my district, if it provides almost $2 billion less over the 

next three years than it did over the last three years? I am just 

curious how a funding proposal that actually produces less money 

is going to allow improvements at small and mid-sized airports. 

I guess first that would be to Mr. Elwell. 

Mr. ELWELL. Of course, next week this Committee will have a 

full hearing on airports, so I don’t want to try to get too far out 

of my area of responsibility, but what I will say, though, is that the 

proposals that we have in our bill that modify the current formulas 

we believe—and you will hear this next week in much fuller detail, 

but the formula changes puts the AIP money where it is most 

needed. The increase in the PFC proposal, the relaxation of some 

of the more unnecessary requirements that were placed on airports 

in capital spending, combined with the new proposal that would 

have no entitlement money going to those airports which have 

demonstrated self-sufficiency frees up entitlement money for the 

airports that need it most. 

Mr. HALL. Thank you very much. 

Thank you, Mr. Chairman. I yield back. 

Mr. COSTELLO. I thank you. 

The Chair, at this time, recognizes under the five minute rule 

Mr. Hayes. 

Mr. HAYES. Thank you, Mr. Chairman, and thanks to all the witnesses for being here today. As I have listened very carefully, I find 

myself in agreement with both Chairman Costello and Oberstar 

about what is going on, and I have just a couple observations before questions. 

Our focus needs to be on making the system better. It is working 

pretty darn well. We don’t need to get our sledge hammer out, 

which is this very costly system, to drive a carpet tack. I mean, 

that has come across time and time again. It would seem the FAA 

is gulping the airline Kool-Aid, as opposed to my friend, Mr. Mica, 

we talk about sipping 3800 hours a year. 

Mr. Elwell, you and I have talked about this at grave length. 

Emphasis needs to be far greater on next generation aircraft, not 

next generation cost system, which we just can’t seem to get our 

arms around. Again, it is a problem looking for a solution that does 

not yet exist. I mean, I think in personal terms of what could be 

done with STARS and SIDS and existing equipment that everybody 

has now to provide the kinds of increased capabilities that we will 

not necessarily get with this huge expensive system. So please 

focus on those ideas going forward as well. 

It is kind of like Earl Blumenauer. If you brought him in here 

and said, Mr. Blumenauer, your bi-caucus is not paying your fair 

share for highways. That is what is kind of being said here for general aviation. And it was talked about over and over again how 

many jobs, how much revenue, how much commerce. The general 

aviation industry provides a tremendous resource for this Country, 

and also exporting aircraft. We just can’t afford to come in here 

and kill that whole process. 

140

Tort reform needs to be—some frivolous lawsuits and what that 

is doing to the industry. That is a good focus of attention. Getting 

the airline pilot age issue solved in equitable fashion. 

A quick question, Mr. Elwell. September 30th, if I understand 

correctly, the present tax system expires. It is going to be difficult 

to get something passed in that short amount of time. Wouldn’t it 

be a good idea to go ahead and extend those as we continue this 

discussion?

Mr. ELWELL. Well, the history of extensions—many on this Committee remember vividly the highway bill. The history of extensions 

has proven that it wrecks havoc on especially capital programs at 

the airport level. It is very, very difficult to get starts on extensions 

that sometimes are just months at a time. Even a one-year extension could present difficulties with capital spending. 

Our bill, remember, sir, proposes that the user fee regime not be 

put into place until fiscal year 2009, and any contemplation of getting the bill passed this year, having that year grace period to have 

everything set and ready to go. 

Mr. HAYES. Well, again, my point is we have got a system that 

both of these other gentlemen have said is working, and if we go 

the other way we are going to decrease our revenue, so I think we 

can hear well enough to know that a six-month extension or we 

need to come up with a realistic extension to make a system that 

is working continue to function. In the meantime, 3 percent of the 

airports are causing the congestion, but we are focusing all our attention on there. There are a number of specific fixes—and you and 

I could go on for days about what they might be—that could be 

used immediately and really address those problems, again, without opening up this huge can of worms that has got us all concerned.

I think the questions that have been asked or are in our material 

have pretty well gone over. It boils down to this: the system works, 

it has got plenty of revenue; you have got a new system we don’t 

understand that is going to cut revenue. Let’s get on down the road 

and fix the problems that we have got. 

Again, we thank you for coming, but I have been talking to—we 

are going to get all our pilots together; Mr. Salazar, I see, is here 

and Mr. Ehlers—the equipment manufacturers, talking to our pilots, and also talking to air traffic controllers, and begin to look at 

some things that we can do right now that won’t cost money to 

speak of and solve some of the problems. But, again, thank you all 

for wrestling with this. 

And I thank the Chairman and the Chairman of the Full Committee and all our Members for being so conscientious and interested in this. 

Mr. COSTELLO. The Chair recognizes the gentleman from Colorado, Mr. Salazar. 

Mr. SALAZAR. Thank you, Mr. Chairman. 

First of all, let me thank the witnesses for being here today and 

testifying.

In September 2006 there was a hearing where CBO testified and 

I think Dr. Dillingham’s testimony was almost identical to what 

was said. In general, basically, the CBO testified that the modVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00166 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
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ernization of NGATS could be accomplished under the existing 

FAA financing structure. 

In Colorado today, for example, the Colorado Department of 

Transportation tells us that the sale of general aviation fuel is 

down 23 percent across the State. I am sure it is probably the same 

in other States as well. The airport managers tell us that this is 

tied directly to the price of fuel. Nine out of 10 AOPA members 

have told us that if the tax on aviation gasoline is increased by 

even 50 cents a gallon, that they will reduce their purchase and 

they will curtail their flying. 

Your proposal, Mr. Elwell, actually basically stated that you will 

raise aviation taxes by 355 percent. Now, you tell us that you have 

not taken into account that formula and I have some severe concerns about what is going to happen to general aviation. Right now, 

I have concerns that your plan is basically not well thought out. 

So I would like your comments on that. 

I would also like Dr. Dillingham to make his recommendation, or 

I don’t know if he can. Could you basically recommend or would 

you recommend that maybe FAA should wait and extend or wait 

for one year before we put such a risky proposal on the table? 

Mr. Elwell, would you start, please? 

Mr. ELWELL. When we laid out the proposal and went through 

the cost allocation and came up with an assignment of cost to the 

different users, we found that there is 3 percent input into the 

Trust Fund from general aviation in total, and, yet, as Mr. Scovel 

has just said, the allocation showed that GA has 16 percent of the 

burden on our system. 

When we looked at how to set the fees and how the recovery 

process would work, we set a system that would recover 11 percent, 

which, of course, is less than the 16 percent of the burden that GA 

has. Of that 11 percent, 1 percent of the recovery from GA would 

come from I think the portion of GA you are talking about, 1 percent would come from the piston operator. 

And when we looked at the fuel tax rate that would be needed 

to get there, and then we looked at the overall operating cost of a 

GA airplane owner, we found that it raised their operating rate to 

less than 5 percent and did not consider that to be substantial 

enough to warrant looking into the effect that that would have 

since, within the past five years, the price of fuel for GA operators 

had doubled and overall—now, I am not familiar with the Colorado 

statistics, sir, that you cited, but overall we saw that that translated to about a 2 percent decrease in activity. 

So the answer to the question is we looked at it and, as a percentage of operating cost, didn’t think that it was going to have as 

big an impact. And it not only went along with the cost allocation 

and the recovery of the system, we took almost two years to develop with very substantial interaction with the stakeholders, we 

just figured that it was and is the fairest way to do it. 

Mr. SALAZAR. Dr. Dillingham. 

Mr. DILLINGHAM. Mr. Salazar, I think what we said in our testimony is that we have certain concerns both with regard to the cost 

allocation as well as the cost recovery that FAA has put forward. 

I think the Chairman spoke this morning about the fact that the 

proposal has only been out there for a relatively short time, and 

142

we think that it is sort of like the devil is in the details. And this 

Committee has asked us to look at those details and, though we 

don’t make recommendations in this area, we say we need to put 

on the table that we do have some relatively serious concerns about 

the whole makeup of it. I mean, we talked about some of the assumptions that were involved in it. For example, one of the fundamental assumptions is this category of aircraft. They used two categories of aircraft when in fact they could have used many other 

categories of aircraft. And so, you know, I guess the bottom line for 

us is that we do have some serious concerns and we again just caution that we go forward with reauthorizing the excise taxes so we 

don’t have that lapse again. 

Mr. SALAZAR. Thank you. I yield back. 

Mr. COSTELLO. The Chair recognizes the gentleman from Tennessee, Mr. Duncan. 

Mr. DUNCAN. Well, thank you very much, Mr. Chairman. You 

know, this is my 19th year on this Subcommittee and I have sat 

through quite a few FAA reauthorizations in that time. You mentioned a few minutes ago Mr. Ehlers’ statement—and certainly he 

is one of our most respected Members—when he said at the first 

hearing that this Administration was dead on—he used those 

words that we hear so often, dead on arrival, and maybe some 

parts of it are and maybe there are some parts that we could take 

a look at. 

But, you know, in all those reauthorizations we have worked out 

some pretty tough issues. Mr. Hayes mentioned the lawsuit a 

minute ago. Chairman Oberstar will remember when we worked 

out the general aviation liability reform and took an industry that 

was just about dead and brought it back to life. Some said we 

couldn’t work that out. 

I think one thing that we haven’t really taken into consideration 

too much—we talk about general aviation like it is all one thing, 

it is all the same, and it is not all the same. There are a lot of differences within general aviation. By the same token, there are a 

lot of differences—we talk about commercial aviation like it is all 

one entity, and it is not. There are a lot of differences between the 

different airlines and between cargo and passenger and several 

other things. 

Mr. Coble asked me, during my six years as Chairman, who was 

my ranking Member, and I told him Mr. Lipinski. And no chairman and ranking Member, I don’t think, could have gotten along 

any better than Mr. Lipinski and I did, but I told him, I said, the 

main difference was I liked to hold hearings because I felt like I 

learned something at every hearing, and his was the Chicago way; 

I don’t think he wanted us to hold any hearings, I think he wanted 

us to work out everything just between me and him and our office. 

[Laughter.]

Mr. DUNCAN. But, you know, there comes a time for both. We can 

all learn a lot from these hearings, but I don’t think you can really 

work out a lot of these tough issues in a group this big. What I 

am going to suggest is simple, and after we hold these hearings, 

you couldn’t find two fairer people than Chairman Costello and Mr. 

Petri. We certainly can’t find anybody who knows more about aviaVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00168 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
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tion in this Congress than Chairman Oberstar. I know, Mr. Mica, 

this is his top concern. 

I know Administrator Blakey said, when she testified a few days 

ago, that she had held meetings with all the different parties before they did the proposal, Mr. Elwell. Well, now that we have got 

the proposal out there, now is when we need to start having some 

of these meetings. 

Dr. Dillingham is not tied in, I don’t think, to either side. He said 

he can’t make recommendations, but he sure can give us some good 

information.

But I think there is some common ground that we can reach to 

work out most of these things, and we are going to have to make 

some changes because we have got all this growth that people are 

talking about, all these passengers that are going to be hitting us. 

Mr. Hayes mentioned that 3 percent of the airports are causing 

most of the problem. We need to take a serious look at that. 

The witnesses all said what was reasonable, and there is nothing 

unreasonable about anything that has been proposed except you 

have got to take into consideration what is politically feasible at 

the same time, and sometimes there are a lot of differences. 

So I just thought I would make those comments, and I have some 

suggestions that I am willing to make to Chairman Costello and 

Mr. Petri at an appropriate time, when we get down to the nittygritty, which I think we will before too long. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. I thank the gentleman from Tennessee. 

At this time the Chair recognizes the gentleman from Washington State, Mr. Larsen. 

Mr. LARSEN. Thank you, Mr. Chairman. 

Dr. Dillingham, you said the devil is in the details. I agree with 

you. And if that is the case, there is a lot of devil in this proposal. 

There are a lot of questions unanswered going through this, so I 

have got a few questions. 

I want to go back to borrowing authority a little bit. Mr. Elwell, 

you talked about the borrowing authority, the $5 billion borrowing 

authority and the need for that because you anticipated cost spikes 

in the future. Can you provide any detail of the activities of the 

borrowing authority, specific details that the borrowing authority 

would finance and what specifically are the cost spikes that you are 

referring to that you anticipate from 2013 to 2017? 

Mr. ELWELL. I don’t have with specificity in the second five 

years.

Mr. LARSEN. If you don’t, then how can you talk about anticipated cost spikes? 

Mr. ELWELL. We have it, sir, I don’t have the JPDO stats with 

me.

Mr. LARSEN. Okay. 

Mr. ELWELL. I would be happy to provide you plenty of detail for 

the five years. And, of course, as the Administrator has testified, 

for the first five years we can enumerate the $4.6 billion that our 

proposal would raise and exactly what it is spent on, but, yes, we 

will certainly get that to you. 

Mr. LARSEN. Can you talk to us about the borrowing authority 

and whether or not you are creating a separate account to manage 

144

that money, and to what extent either FAA will have oversight 

over the spending of that or Congress will have oversight over the 

spending of those specific dollars being borrowed? 

Mr. ELWELL. Yes, sir. The oversight is the same as it is today. 

It would be subject to annual appropriations as it is today. This 

Committee’s oversight in the reauthorization process and, of 

course, in the interim, whenever this Committee sees fit to hold 

hearings or to examine our accounts. In fact, I think the oversight 

of this Committee on the spending, both on the borrowing side and 

in the setting of the user fees, which would incorporate this service 

to the debt, I think the oversight is going to be enhanced because 

of the transparency of both how we are raising the money and exactly where we are spending it. 

The cost allocation study that we propose to do annually would 

have 600 separate lines of cost that are as transparent as can be, 

and one of those lines, if borrowing—and, again, remember the borrowing is permissive—if the borrowing were to take place, it would 

be borrowed against one of those lines, completely to be transparent and examined. The funds would have to be appropriated, 

but they would also have to be sort of first-in-line, if you will, and 

paid back by an adjustment to the user fees. 

But, in answer to your question, a separate account is not contemplated, it would be built into the fees. 

Mr. LARSEN. You said the borrowing is permissive. It may be allowed under the authority if we end up allowing it, but my guess 

is if we allow it, it will get borrowed, honestly, probably to its fullest amount. 

Dr. Dillingham, do you want to provide any answer to any question I asked about the borrowing authority? Do you have other concerns about it, or thoughts? 

Mr. DILLINGHAM. No, sir. I think we expressed all of our concerns 

about the shortness of the duration and what it is actually going 

to be spent for and whether the Federal Government can in fact 

stand that, you know, should we need it. 

Mr. LARSEN. Okay. 

Mr. Scovel? 

Mr. SCOVEL. Right. I guess when Mr. Elwell said that the justification for the anticipated spike is uncertain at this time 

underlies our term—and I used the word skepticism in describing 

our need for borrowing for the period 2013 through 2017. NGATS 

funding needs are fairly—and I emphasize fairly—well defined between now and 2012. Beyond that point, my staff finds the funding 

requirements rather murky. 

Mr. LARSEN. Well, you mentioned that for industry alone it 

might be from $14 billion to $20 billion, which might sound small, 

but it is a lot of zeroes behind that. It is $6 billion difference. It 

is $14 billion or it is 48 percent more than that. So it does seem 

murky. And then going through some of the other numbers in the 

NGATS proposal as well, I am a little confused about whether or 

not the total cost of the program is $15 billion to $22 billion or if 

it is $15 billion to $22 billion plus the $14 billion to $20 billion that 

you outline. Have you got any thought on that? 

Mr. SCOVEL. My understanding is that the agency’s needs will be 

in the range of $15 billion to $20 billion; industry’s needs, as well, 

145

$14 billion to $20 billion, perhaps $15 billion to $22 billion. I have 

seen both ranges. So roughly comparable between the agency’s 

needs for modernization and the industry’s funding needs in order 

to accommodate. 

Mr. LARSEN. Thank you. I have may have a second round of 

questions.

Thank you, Mr. Chairman. 

Mr. COSTELLO. I thank the gentleman. 

At this time the Chair recognizes the gentleman from North 

Carolina, Mr. Coble. 

Mr. COBLE. Thank you, Mr. Chairman. 

Gentlemen, good to have you all with us. You have been 

bombarded with many questions, but I don’t think this one has 

been put to you. 

Mr. Elwell, how have you taken the importance of general aviation into account in drafting your proposed bill? 

Mr. ELWELL. I think the importance of general aviation is recognized throughout the bill, sir, and most of that consideration I 

think you will find in the policy decisions we make in recovery. 

Much has been said about the increase in the fuel tax that this bill 

proposes, and that is a necessary step to take if you are going to 

get fairness in the system, if you are going to get to a point where 

the users of the system pay for their use of the system. 

But as is done in many user fee systems throughout the world, 

we took—and this has been pointed out by my colleagues on the 

panel already several times, that when decisions could be made on 

a policy basis for the recovery of the funds—of course, I want to 

emphasize again that the allocation of cost is an accounting process, but the recovery of those costs through the setting of fees is 

where policy can interject, and it is in that area that I think we 

recognize the importance of GA. 

If you look at the bill, we propose that low-activity towers, about 

286 of them throughout the Country, be funded by the General 

Fund. We also propose that flight service stations—flight service 

stations is service that we did an A-76 on flight service stations 

some years ago to tremendous savings to the FAA, but those flight 

service stations are used predominantly by general aviation pilots. 

The cost of that service, flight service stations, we also put on the 

General Fund as good for general aviation population. 

Mr. COBLE. Thank you, Mr. Elwell. 

This will apply to either of the three of you. How does the FAA 

user fee system affect regional service? Either of you three. 

Mr. ELWELL. We don’t believe that our proposal will adversely affect regional service at all. 

Mr. SCOVEL. Mr. Coble, we anticipate that there will be some effect, although small, in that while there won’t be tower fees, for instance, for regional jets landing at the small airports that Mr. 

Elwell mentioned, when those small regional jets take off and land, 

for instance, at a larger hub airport, there may well be user fees 

incurred there. Of course, there will be increased gas taxes, some 

of which may be passed on to customers. 

Now, there may be some potential for offset, I should note in fairness, as well, because if reduced costs to the larger airlines are indeed passed on to passengers, some of those passengers, in transVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00171 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
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ferring from a regional airline segment to a larger carrier leg of 

their trip., may find that those costs offset each other, but it is an 

if, and you can apply your own experience as to how often cost savings are passed on to customers. 

Mr. COBLE. Thank you. 

Dr. Dillingham, do you want to weigh in on that? 

Mr. DILLINGHAM. Mr. Coble, we had the same kind of findings, 

at least preliminarily, that the IG has just related to you. 

Mr. COBLE. I thank you, gentlemen. 

Yield back, Mr. Chairman. 

Mr. COSTELLO. I thank the gentleman. 

At this time the Chair recognizes the Chairman of the Full Committee, Chairman Oberstar. 

Mr. OBERSTAR. Thank you, Mr. Chairman. 

I greatly appreciate the contributions. Dr. Dillingham, you have 

always served the interest of aviation and the public interest exceedingly well with your measured and balanced, thoughtful observations and inquiries into aviation, and other issues that we deal 

with.

Mr. Scovel, I welcome you to the Committee and to a long line 

of distinguished service by the Inspector General of DOT. We are 

grateful for your contribution. 

Mr. Elwell, we welcomed you for the hearing without a statement 

previously submitted to the Committee because you are really 

going to backing up what Ms. Blakey said last week. And one of 

the things that she said is that the Trust Fund balance cannot support a lapse in funding and that the Fund did lapse 10 years ago 

because of a disagreement over reauthorization. That is not true. 

That was just a complete mixup, in fact, a failure in the reauthorization of a series of taxes that the new majority was engaging in, 

and in the process the airline ticket tax lapsed. It lapsed for a long 

time. And airline ticket prices didn’t go down by 10 percent, they 

largely stayed the same. Don’t rewrite history. 

Your governance proposal lists all those who will have input, including foreign carriers. Why foreign carriers? 

Mr. ELWELL. The air transportation system advisory board is not 

proposed to have a foreign carrier. 

Mr. OBERSTAR. No, no. You have proposal and then a setting of 

fees listing all those who will have a contribution and have a voice 

in it, including foreign carriers. Why? 

Mr. ELWELL. In the consultation process, Mr. Chairman, we do—

not on the advisory board, but in the consultation process, we do 

list foreign carriers because they will be charged user fees. 

Mr. OBERSTAR. I am not aware the Russians consulted with our 

carriers when imposing fees on the Polar routes. The Chinese don’t 

consult our carriers when imposing their fees. The Europeans don’t 

include our carriers in setting their fees. This is a misguided proposition.

You also include on the proposed board a representative of the 

Department of Defense. But then you, later on in the cost-based 

user fee explanation provision, state the military would not pay 

these fees. So a non-payer is going to have a voice on the board. 

Why?

147

Mr. ELWELL. Well, there are a number of non-payers who have 

a voice on the board. 

Mr. OBERSTAR. But why the military? 

Mr. ELWELL. The military uses our services; we use the military’s 

services and——

Mr. OBERSTAR. I know that. But you are going to exempt them 

fees but give them a voice on the board. 

Mr. ELWELL. That is correct. 

Mr. OBERSTAR. And have you abandoned the weight component 

of the formula? 

Mr. ELWELL. No, we have——

Mr. OBERSTAR. You are sticking with that? 

Mr. ELWELL. The Administrator——

Mr. OBERSTAR. Why don’t you use wide bodies instead of weight? 

That would be a little more credible. I don’t want to help you with 

your proposal, but if you had said wide body aircraft instead of 

weight of aircraft, it would at least have a relationship to aviation 

considerations, such as wake turbulence and a distance needed en 

route, en trail between aircraft. 

Mr. ELWELL. I am sorry, was that a question? 

Mr. OBERSTAR. No, it is a statement you can respond to. 

Mr. ELWELL. I think there is not a fine line to draw between 

weight. I mean, to say that you would introduce weight in the terminal area for 300,000 pounds, but not for 290,000. So our formulas are progressive with regard to weight. And while we do believe that weight plays a factor in the terminal area with regard 

to cost, the primary decision with regard to weight was on the policy matters I talked about earlier, the policy decisions for ability to 

pay and fairness. 

Mr. OBERSTAR. Well, it is reasonable for airports to relate landing fees to weight because they do exert pressure on the runway 

and the taxiway and the parking apron, but they are not exerting 

a pressure on the air. The block is the same for a 747 as a 787—

which will be entering in service, we hope—a 777 or the A-380. 

Same block. Doesn’t have anything to do with weight in the air, but 

does have a lot to do with wake turbulence. Your proposal would 

be somewhat more credible—somewhat more credible—if that were 

included.

It was said well earlier, this proposition is not well thought 

through. There is a big rush to move from the splendid work that 

Russ Chew did in allocating costs in the system to then taking that 

cost allocation and applying it to cost recovery or to financing of 

the system. 

Now, tell me, how is this proposition for a fund going to work, 

the borrowing authority? How is it going to be capitalized? Are you 

going to appropriate $5 billion and then FAA is going to borrow 

against it, or how is this going to work? 

Mr. ELWELL. Mr. Chairman, the language allows for borrowing 

up to $5 billion in the five-year period, the latter five years of the 

bill. Conceivably, that could be $5 billion in the first year or——

Mr. OBERSTAR. Will FAA go to the Treasury to borrow it? 

Mr. ELWELL. Yes, sir. 

Mr. OBERSTAR. To the money markets to borrow it? 

Mr. ELWELL. Treasury, sir. 

148

Mr. OBERSTAR. To Treasury. And will that be borrowing at current market rates, Treasury notes? 

Mr. ELWELL. It would be at the Treasury rates, sir. I am not——

Mr. OBERSTAR. Treasury rates. So it would be repaid to the 

Treasury at roughly 6 percent or so, whatever that rates happen 

to be at the time? 

Mr. ELWELL. Sounds reasonable. 

Mr. OBERSTAR. But not at the overnight rate that the Fed 

charges to banks. 

Mr. ELWELL. I——

Mr. OBERSTAR. You don’t know. 

Mr. ELWELL. I am not qualified to answer that, sir. 

Mr. OBERSTAR. A lot of stuff for us to work our way through. 

What is the borrowing authority for? Why do you need that? 

Mr. ELWELL. Well, the implementation of NextGen is going to 

have some capital expenditures in the latter five years, things like 

the software systems that the controllers and the traffic flow managers use; the civil aviation requirements for position, timing and 

augmentation; GPS constellation enhancements——

Mr. OBERSTAR. So you are going to borrow in the Treasury 

against these systems as they develop or as you are investing or 

as you are contracting with the private sector to build these systems for FAA, or what? 

Mr. ELWELL. I think basically all the above, sir. It is to have stable funding on the front end of the contract——

Mr. OBERSTAR. Is that going to be repaid, then, from the fees you 

propose to charge to aviation? 

Mr. ELWELL. Yes, sir. 

Mr. OBERSTAR. Oh my goodness. That will take about three years 

to establish, given the way government systems work. By that 

time, we might just as well write the death knell for aviation. I just 

think this is a very dangerous scheme, dangerous to the future of 

aviation.

I would point out, although FAA and some DOT and some Administration spokesmen say funding is not secure, Congress has 

rarely failed to appropriate the amount of funds requested, and I 

think we can well count on a sustainable funding. We may have 

to increase the dollar amount going in to the ticket tax, but I think 

these schemes that come up to us in this proposal are risky; they 

will unbalance our system. For example, you propose to generate 

revenues from the oceanic system. Is that limited to our 3 million 

square miles of transatlantic airspace? 

Mr. ELWELL. It is limited to the airspace we control, yes, sir. 

Mr. OBERSTAR. And to the 18 million square miles we control in 

the Pacific airspace? 

Mr. ELWELL. Yes, sir. 

Mr. OBERSTAR. And what about the Polar system that we are 

using? We cooperate with the Canadian Air Traffic Control System 

in managing Polar systems. So there won’t be a fee for that? 

Mr. ELWELL. If the Canadians are controlling it, no. 

Mr. OBERSTAR. No. Okay. 

Well, I am unpersuaded, unpersuaded at all. I have been through 

these schemes for 25 years and I think you are off on the wrong 

track.

149

Thank you, Mr. Chairman. 

Mr. COSTELLO. I thank the Chairman. 

The Chair at this time recognizes the gentleman from Florida, 

Mr. Buchanan. 

Mr. BUCHANAN. Thank you, Mr. Chairman, and I want to thank 

the Committee. 

Back to general aviation. I want to get your thoughts or if it has 

been considered. My son is a pilot, and I am looking at a lot of 

these people who fly piston planes, and I am concerned about general aviation. One of the things you don’t talk about in here is what 

the cost of the fuel is for these various entities. I know that—and 

this is just an estimate, because I didn’t check it, but probably commercial is paying $2.00 to $2.50 a gallon. I am guessing. Navgas 

and jet fuel for people that maybe—net jets maybe pays $3.50 a 

gallon, estimate. But the guy that is flying a piston plane or a 

small turbine jet is probably paying $4.50 for jet fuel and $5.00 for 

Navgas.

So when you add 50 cents to that, the guy that is flying the 

small piston, you know, recreational flier, they are not millionaires, 

and you go from $5.00 to $5.50 a gallon, it is like in the car business when you are used to driving a large sports utility, it hits 

$3.00 a gallon. I think it can be a huge psychological factor, if nothing else, and that is one of my biggest concerns. 

You look at your fee increase, but you really don’t talk about 

what everybody is paying for their fuel, and I think it is a big factor, because we are close to $5.00 or maybe over $5.00; you add 50 

cents, $5.50, $6.00 a gallon, I think it becomes a big issue. 

I guess I wanted to ask all the witnesses your thoughts on that, 

if you gave it any consideration, because at the end of the day, like 

they have said numerous times, if we are going to drive a lot of 

people out of this industry, as well as the FBOs, some of them, 

then what have we really done in terms of increasing revenues? So 

I would like to—and I am kind of for sharing the burden, but I 

want to make sure, at the end of the day, there is enough gallons 

being bought that it makes sense, your 50 cents increase a gallon. 

Mr. Elwell? 

Mr. ELWELL. Thank you, sir. Again, when you look at the current 

burden, the current taxes, 19.3 cents and 21.8 for avgas and jet 

fuel, respectively. That represents about 1.5 percent of the total operating cost of those respective aircraft. The raising of the gas tax 

brings it up to still be under 5 percent. And as I said earlier, when 

the price of gas—which, by the way, is the proxy, but it is somewhat unrelated to the tax; the tax is the way in which the user will 

pay for their cost burden on the system. But when the price of fuel 

went up post-9/11, in the past five years, by almost doubling, we 

did not see a significant diminution of general aviation activity that 

we could peg to that, to the rising fuel. 

So I think it is important to look at this rise in the fuel tax in 

relation to total operating cost. For instance, for a piston user, on 

average, I think it is about $2.00 to $4.00 per hour, and on the 

numbers that general aviation survey provides for the average recreational pilot, we are talking about anywhere from $400 to $500 

additional a year to operate a piston aircraft, single-engine piston 

aircraft. So these are, in our estimation, not huge numbers, not deVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00175 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
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bilitating numbers. And certainly when you look at how we propose 

to recover their burden on our system, 11 percent versus the 16 

percent, I think we have made a lot of accommodation for GA everywhere we could. 

Mr. BUCHANAN. I talk to a lot of piston operators and a lot of 

them are concerned. I think by taking this up to $5.50, $6.00 a gallon, because I think that is where the reality is going to be, and 

if we add some other kind of increase, that is what I am hearing 

is the sentiment in Florida, and we have a lot of GA people there 

that are flying. 

Doctor, you want to comment on that, any thoughts? 

Mr. DILLINGHAM. Yes, Mr. Buchanan. We mentioned earlier that, 

as far as we could determine, FAA had not taken into account this 

issue of price elasticity: at what point does it become too expensive 

for certain aviation participants to fly. We don’t know if it will 

make a difference, but there are statistical techniques that could 

be applied to in fact see if it made a difference. And, in fact, because a decision was made to divide the aviation community into 

piston and turbine, and not further divide it, it sort of set the stage 

for all things that followed in terms of cost recovery. 

It is also the case that, as Mr. Elwell has said, certain policy decisions were made in terms of cost recovery, and as I am sure you 

are aware, around the world other policy decisions are made with 

regard to how to recover costs from GA operators, and in many 

cases it is a nominal fee. Of course, their GA is much smaller than 

ours, but it is still a policy decision that is made. 

Mr. SCOVEL. Mr. Buchanan, if I may. 

Mr. BUCHANAN. Yes. 

Mr. SCOVEL. Thank you. I don’t have before me figures regarding 

the price per gallon for Avgas or jet fuel, for instance; however, I 

will say that our research shows that while the percentage increase 

in fuel taxes for general aviation amounts to, by our calculation, 

334 percent—and that is an eye-popping number, to be sure—our 

research further shows that the cost typically to the small piston 

aircraft user amounts to about $8.00 and change per flight hour; 

a larger amount, to be sure, for the user of a larger business jet, 

but in terms of the small recreational user we are looking, by our 

calculations, at about $8.00 per flight hour increase. 

Mr. BUCHANAN. Yes. Some friends that I have got that used to 

fly twin King Airs are going down to single engine turbo props. 

They are looking at efficiency areas. They are still flying a bunch, 

but they are flying in planes that are more efficient per hour, operating cost. 

So I just would ask you to take that into account when you are 

looking at this, where navgas—because they said 410,000 is part 

of the organization. There must be a million. I don’t know what the 

total number is, but there are a lot of folks out there, and I can 

tell you, the other business I am in is the car business, and there 

is some psychological barriers that affect certain areas, where they 

will take that big sports utility and get something else. They liked 

it, but not that much. 

Thank you. 

Mr. COSTELLO. I thank the gentleman from Florida. 

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The Chair recognizes at this time the gentleman from Michigan, 

Dr. Ehlers. 

Mr. EHLERS. Thank you, Mr. Chairman. I think we sort of beat 

the gas tax to death, although I am sure we have a lot more work 

to do on it. Let me shift gears a bit. 

Perhaps it is my science background that makes me interested 

in this, but in the 13 years on this Subcommittee I have noticed 

a considerable number of cost overruns every time we have a new 

generation of equipment. So my questions are, first of all, for Mr. 

Dillingham, and we will go on from there. 

The first question is how certain are you that the cost figures are 

accurately calculated and based on reasonable assumptions about 

developing the NextGen system? Secondly, the assumption has 

been that a good deal of the research effort would come from 

NASA, whereas NASA is shifting money, appears to be shifting 

money away from their aeronautics part and into the space area 

and the research. Will NASA be able to, as part of JPDO, really 

contribute substantially to this? And, if so, does that have to be 

paid for out of the increased fees or is that going to come out of 

NASA’s research budget? 

So most of those questions are relating to the progress of the 

whole JPDO and developing the NextGen system. So you are the 

independent observer here. I would appreciate your comments. 

Mr. DILLINGHAM. Let me take on the last question first, with regard to the research and development efforts that were, early on, 

sort of slated for NASA. As you have just spoken about, their budget has been reduced significantly, and their focus has also been 

changed as well. It is an ongoing problem that has to be worked 

out from FAA’s perspective in terms of how much is it going to cost 

to do the necessary research and development that needs to proceed some of the NextGen systems. This research is needed for regulation development, it is needed for demonstrations. All of these 

things need to be taken care of now, before the systems are acquired.

FAA has asked for certain amounts of money in this year’s budget to start to close where NASA used to be; however, it is not clear 

to us that that is enough money. Their own REDAC committee has 

said that, because FAA’s RE&D budget and its capabilities have 

been reduced so much, that it might take several years before that 

could be built up and several hundreds of millions of dollars as well 

to build that up. So it is an issue that has not been resolved. 

Your first question was about whether the cost figures were correct. I think it is an estimate at this point in time. To give FAA 

credit, clearly, they are working in a unity fashion with industry 

and developers as well to come up with cost figures, but, again, it 

is just an estimate and estimates have been made before. FAA has 

in fact done better keeping on budget and on cost recently, but still, 

as I said earlier this morning, we maintain the ATC modernization 

on our high-risk list because it is in fact high-risk both for cost 

overruns and schedule breaches. 

Mr. EHLERS. Let me just ask Mr. Elwell and Mr. Scovel to comment as well. 

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Mr. Elwell? Just on the last part, about your confidence level on 

the cost estimates for the research and development of the 

NextGen system. 

Mr. ELWELL. We have a high confidence in the RE&D. Our concern, of course, is in being able to spend the money we need in the 

process, in the iterative process that Mr. Dillingham mentioned, 

which is a big part of our proposal, is the laying out of what is required to build NextGen and to be able to collect the fees necessary 

to spend the money where we need to spend it, which we at times 

have difficulty doing under the current system. But I think the estimates are realistic. As was pointed out, $14 billion to $22 billion 

through 2025 represents—or $15 billion to $22 billion, I am sorry, 

on our side represents sort of the going forward with NextGen. 

There are a lot of variables that are hard to pin down in the latter 

years, but the JPDO and the organizational evolution partnership 

with industry is going to be very helpful in getting that narrowed 

as we go forward. 

Mr. EHLERS. Mr. Scovel, any final words? 

Mr. SCOVEL. Yes. Thank you, Mr. Ehlers. As I noted before, the 

price tag of $4.6 billion for NextGen for the period 2008 through 

2012 is the current price tag. To be sure, it needs refinement. Beyond 2012, as I mentioned before, we see a very uncertain future 

regarding the level of funding required for NextGen. 

With regard to NASA, NASA has already told us they intend to 

spend less. You have noted that they are turning their research 

more to space instead of aeronautics. We reported in our report in 

February concerning JPDO that NASA intends, as well, to turn its 

focus more to basic research and less to the applied science and information technology that may be of most benefit to NextGen efforts.

If FAA intends to look to NASA exclusively for its research—and 

I know that is not the exclusive focus, but largely to NASA—then 

we think that is a wildcard, given NASA’s stated funding intentions.

No question, lots of development ahead. Refinement needs to be 

accomplished both by FAA and industry. Beyond 2012 it is an uncertain picture for us. 

Mr. EHLERS. Thank you very much. 

Mr. COSTELLO. I thank the gentleman. 

Let me mention to both the witnesses and those in the audience 

that you will notice a number of empty chairs over here. The leadership has called a caucus, so most of our Members are in caucus, 

and I am certain that Mr. Larsen probably just returned from 

there, and others will shortly. 

Let me go to a second round. 

Have you had a chance, Ms. Fallin, to ask? Well, let me recognize 

you at this time to ask questions or any statement you would like 

to make. 

Ms. FALLIN. Thank you, Mr. Chairman. I appreciate the time, 

and I appreciate all of you being so patient to sit here for so long 

and answer all of our questions. I know that all of you are very 

committed to what you do and believe in the different positions 

that you are taking. 

153

I do find it interesting that, from sitting up here, it appears that 

the FAA and the DOT seem to have a difference of opinion as to 

how this is going to work, and the FAA’s proposed financing methods for the Next Generation and how FAA will meet its goals in 

raising enough revenue for the next system. 

I hear one person say, and I think it was you, Dr. Dillingham, that the new system would generate $600 million less—is that a 

true figure?—$600 million less under the new system than what we 

currently get today. That is correct? 

Mr. DILLINGHAM. Yes, that is correct. 

Ms. FALLIN. Okay. And, Mr. Elwell, I have great respect for the 

FAA and love the FAA, and I have respect for what you are trying 

to do to update technology and take care of all the increased passenger needs and flight delays, and all the different things that we 

need to deal with. I also believe that we should have a culture of 

continuous improvement in government in whatever we are doing. 

But I was curious about how many years have we had the current 

fee structure? How many years have we had that system in place, 

the one that you are proposing to leave? 

Mr. ELWELL. Since 1970, I believe, when the Airport and Airway 

Trust Fund was developed. 

Ms. FALLIN. Because I remember you saying that everyone 

should pay their fair share and that we should link revenue to 

costs. So I guess my curiosity was if we have had it that long, has 

it always been a problem, considering what your goals are, to link 

revenue to costs and for everybody to pay their fair share? 

Mr. ELWELL. Well, it has been a growing problem, ma’am, since 

deregulation in 1979, because when—actually, when it was developed, the excise tax system was meant and designed by Congress 

to be a cost fee for services and it was—I am going to use the term 

‘‘alignable’’ because we were a regulated industry. The FAA regulated the industry, could set the price of tickets, and could therefore drive the generation of revenue. 

Since deregulation, that has not been the case. In fact, we did 

bring a slide, and I don’t know if it is cued up, but it would show 

you, as a function of departures over time, aircraft departures, 

through about 2006, the revenue generated, even though departures and, therefore, ostensibly revenue and the number of passengers flying seems to be steady, the revenue generation is really 

all over the place. And, unfortunately, the spikes—if it comes up—

that you will see in the revenue, unfortunately, those spikes on either the high or low side rarely correspond with a same spike in 

the spending needs, and that is the problem, is that we have never 

been fully aligned on the spending side, and this proposal would do 

that.

Ms. FALLIN. Okay. 

Mr. ELWELL. We didn’t get the slide, I am sorry. 

Ms. FALLIN. Thank you, Mr. Chairman. If I could continue on for 

just a moment. 

Dr. Dillingham stated that with the present fee structure and the 

growth in the FAA revenue, that he predicted it would generate 

around $19 billion in revenue? 

Mr. DILLINGHAM. Yes, ma’am. We were quoting the Congressional Budget Office analysis. 

154

Ms. FALLIN. And that with that type of growth and revenue, that 

the FAA would be able to pay for the NextGen system, is that true? 

Mr. DILLINGHAM. That is correct. 

Ms. FALLIN. But although it would not meet your goal of having 

more revenue-to-cost basis, but it would meet your goal of transforming the system to meet the passenger increase, the time 

delays, the increased traffic in certain airports, that you would be 

able to develop the system with current revenues in place as they 

are now. 

Mr. ELWELL. As the Administrator said, it is conceivable, but on 

a much different schedule, we would anticipate, because of the difficulty in getting, under the current system, as the Trust Fund is 

filled, being able to spend the money you need on facilities and 

equipment when you need it. Our proposal, through the user fee 

proposal, forecasts a billion more dedicated F&E by 2012 than even 

the last year’s budget, the 2007 budget that goes through 2012 

without the user fee proposal. 

So while it is possible, as the Administrator said, to get it done, 

we don’t believe that it could be done near as efficiently or expeditiously as our proposal, which is designed to generate the funds we 

need to invest in the system when we need it. 

Ms. FALLIN. Thank you, Mr. Chairman. I yield back my time. 

Mr. COSTELLO. I thank the gentlelady from Oklahoma. 

We are going to a second round of questioning, and I am told any 

minute we will get called for a vote. 

Dr. Dillingham, I mentioned in my opening statement and I 

made a comment as well about the fact that the Administrator has 

said that they recently have 100 percent record on major capital 

projects on time and within budget. Frankly, I want to ask you, you 

have looked at this. Is that because certain modernization programs have been re-baselined, for instance, like STARS, in order 

to, frankly, hide some of the growth in cost? I would like your comments.

Mr. DILLINGHAM. Mr. Chairman, we are still looking at that 

issue for you and the Subcommittee. It is true that FAA has announced that for the last three years they have had their major 

systems acquisitions on time and on budget in terms of the 80 percent in terms of time and the 10 percent in terms of budget. It is 

also true that some of those systems have been re-baselined, and 

that re-baselining can lessen the transparency of knowing what the 

original baselines were. 

Our discussions so far with OMB indicate that under certain circumstances re-baselining is permissible and that information is 

communicated to OMB. Our question now is to what extent is that 

information communicated to the Congress and to the American 

public in terms of full disclosure, and we are still working on that 

and hope to have a report for you soon. 

Mr. COSTELLO. That is a very diplomatic way to put it, lessen the 

transparency. And I realize that OMB, under certain circumstances, will say it is permissible, but it seems to me that it 

is a pretty difficult way for us to go back and assess the true costs. 

Mr. Scovel, I wonder if you might comment as well. 

Mr. SCOVEL. Yes, thank you, Mr. Chairman. We would concur in 

Dr. Dillingham’s assessment of, as he and you put it, the lack of 

155

transparency, perhaps, in assessing the true cost and schedule requirements of some programs that have been re-baselined. It is important to note that a re-baselined program is simply a snapshot 

in time of cost and schedule requirements. We would hope that any 

program, if you have re-baselined it recently enough, you could hit 

your cost and schedule goals. 

We would further note that some of the performance targets that 

have been identified for the programs that have been re-baselined 

are simply, if you will, hardware delivery items, rather than performance capability based, and so they may not represent, in our 

view, a true picture of the progress a program may be making to 

full completion and readiness, as opposed to some intermediate 

steps that are less helpful to the Committee and to the public in 

assessing how FAA is executing a given program. 

Mr. COSTELLO. Thank you. 

Dr. Dillingham, I guess it was a few years ago the Committee 

asked you to take a look at how some other countries were funding 

their air traffic control system, and, as I recall, your team did look 

at some other countries and came back, and I think that some of 

those countries the general aviation community there assessed a 

smaller fee than what the FAA is proposing here in the reauthorization. I wonder if you might tell us the findings, in other words, 

what some of the other countries are doing relative to general aviation versus what the FAA is proposing in their reauthorization. 

Mr. DILLINGHAM. Yes, Mr. Chairman. We did undertake that 

study and looked at five countries around the world, including 

some European states, Canada and Australia, and basically what 

we found is that, with regard to GA—keeping in mind that the U.S. 

GA population is many, many times larger than anyplace else in 

the world, but accommodations were made for the general aviation 

community in that in some cases they were charged a nominal fee 

based on either the number of flights that they took in a given fiscal year or they were just charged a nominal fee, period, without 

regard to the number of flights. For example, in Canada, they 

charge about $70 a year as an annual fee. That has been recently 

increased and also added a congestion charge when they go into a 

busy airport; and in Australia they do it by the number of flights 

they do in a fiscal year. 

So, again, it is the issue of cost allocation versus cost recovery, 

and that policy decision about how to recover costs from GA differs 

from what we are proposing here. 

Mr. COSTELLO. So the other countries that you looked at, they 

are not attempting to do cost recovery as the FAA is proposing 

here?

Mr. DILLINGHAM. That is correct, sir. 

Mr. COSTELLO. Okay. Let me ask you what the implications are 

of basing the cost recovery only on cost allocation, as opposed to 

principles, for instance, of the ability to pay. What are the implications, if in fact this system is implemented, strictly based on cost 

recovery?

Mr. DILLINGHAM. I think one of the principal implications is 

something that has been mentioned many, many times this morning, that is, to what extent will this act as a damper on the general 

aviation industry in terms of the number of general aviation fliers, 

156

as well as the general aviation manufacturing industry. It is an unknown, but clearly a possibility exists. 

Mr. COSTELLO. Mr. Scovel, in your testimony you talk about the 

challenge that the FAA faces in a billing system within available 

time frames, and I wonder if you would elaborate on that. 

Mr. SCOVEL. Yes, thank you, Mr. Chairman. If I could use a couple examples. The STARS program, which I know is well familiar 

to this Committee, involves a program that started off to provide 

for terminal modernization at 170 sites nationwide, for a cost of 

about $940 million. As the program developed, FAA found that it 

had funding and installation problems. It was forced to reassess 

the program. Ultimately, when the cost appeared to approach $2 

billion, the program was cut to install that modernization equipment at 50 more sites. Ultimately, that in fact was reduced to 47, 

and the cost now is well in excess of $1 billion for a much smaller 

and less capable system. 

That doesn’t also include the cost of Common ARTS, which was 

the controlling system then in place and which STARS was intended to replace. That system had to be updated and modernized 

at a number of other locations in order to provide those locations 

with the capability needed, when in fact those locations had been 

anticipated to receive STARS but ultimately were denied that capability.

FTI is another example, sir, which my office has studied. This is 

the FAA’s telecommunication initiative. It has been re-baselined. 

Its cost and schedule time lines have been extended. Our current 

assessment shows that FTI is still on a problem track; it has FAA’s 

full attention, however, but the schedule has been extended. The 

importance of FTI as a platform for NextGen accommodation can’t 

be overstated. We are carefully watching FTI and we have a current assessment of FAA’s remedial actions in progress.[The witness 

added the following subsequent to the hearing: As we note in our 

testimony, FAA’s proposal provides 1 year for the new board to be 

appointed and reach agreement on a fee structure and fee levels, 

and for FAA to implement a billing system based on the fee structure. This is ambitious even if FAA employs a contractor. FAA has 

a study underway to examine how a billing system could be setup, but we have not reviewed it. We think just getting the board 

up and running will be more time-consuming than FAA’s proposal 

suggests.]

Mr. COSTELLO. I thank you. 

At this time, the Chair recognizes the gentleman from Washington State, Mr. Larsen. 

Mr. LARSEN. Thank you, Mr. Chairman. Just a few questions 

here before I think we are getting called to vote, having to do with 

the fee collection process. I don’t know if those questions have been 

asked yet, but I hope not. 

Mr. Elwell, the FAA’s proposal will provide the FAA with the authority to terminate, reduce or withhold non-emergency services if 

a user fails to pay user fees. If you could distinguish and provide 

examples of what would be emergency services and what would be 

non-emergency services? 

Mr. ELWELL. Sir, I don’t think that I am really qualified to enumerate that. There is a hearing tomorrow, an ops and safety hearVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00182 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
157

ing that is, Nick Sabatini and his shop will be eminently qualified 

to answer that. 

Mr. LARSEN. Okay. Can you answer the question, if a user believes there is an error and they are billed for a service they did 

not actually receive, what sort of appeal process does the FAA envision having? 

Mr. ELWELL. The appeal process I believe is in the language of 

the bill. I do not have the tenets of that memorized. Again, I feel 

like I am not answering any of your questions. I apologize. I would 

be happy to get that for you. 

Mr. LARSEN. I feel that way, too. 

[Laughter.]

Mr. ELWELL. I am sorry, sir. But there is built in language on 

the appeal process. And we anticipate that, especially in the early 

stages, to be part of the growing pains of a brand new system. But 

there is an appeal process built in. 

Mr. LARSEN. We have asked Dr. Dillingham this question, I 

think, but I would like to ask you this question. Has the FAA analyzed the long-term effects of the user fee proposal on the growth 

of various aviation users, such as air taxis or business or general 

aviation? Have you looked at that and are you taking that into account, the results of those forecasts into account? 

Mr. ELWELL. Again, as I said before, clearly the most dramatic 

change in payment is the GA community, because they were the 

most dramatic difference in what they are currently paying versus 

the costs they impose. While we didn’t do a structured or detailed 

analysis of the effects that this would have going forward, we did 

feel an examination of what the tax means as a percent of operating costs that it was not as substantial as the recent doubling of 

the cost of gas over the past five years, which as I said before, did 

not demonstrate a significant reduction in activity. 

So I am not sure what you mean by long-term. But we don’t have 

a study, per se. 

Mr. LARSEN. I asked a question earlier of Mr. Scovel about the 

estimate of the cost of the program, an FAA cost versus an industry cost to implement Next Generation. I think the numbers I saw 

were $15 billion to $22 billion, again a very wide range. on the 

FAA’s side, then a $14 billion to $20 billion range for industry costs 

for implementation. Are those the numbers you are operating 

under?

Mr. ELWELL. Yes, sir, those are the estimates. Which I would 

point out are actually very closely in line with the estimates the 

Europeans are giving for SESAR. 

Mr. LARSEN. I personally don’t have too much of a problem with 

the idea of Next Generation. The name is not all that descriptive, 

but the concepts behind it, satellite based and so on. But in other 

committees that I sit on, we have a problem with some other 

projects. It comes down to Robert Frost’s poem, a line from his 

poem that a man’s reach should exceed his grasp, or what’s a heaven for. It seems in a lot of these programs, our reach never quite 

gets to the grasp. That has been the concern that we have seen in 

some other major spending programs in other committees that I sit 

on, major spending programs in this Committee and other Subcommittees we sit on. It drives me to extreme caution, as well, 

158

when I see the long-term, the 25 years of build-out, 18 to 25 years 

of build-out and the cost of this program. Is the technology mature 

to do this? Will it be mature by the time we expect it to be implemented? The financing plan seems to be questionable as well. At 

least we have a lot of questions about the financing plan as well. I just don’t want this to turn into, I don’t want to turn a $25 bil- lion venture into a $25 billion adventure. 

Mr. COSTELLO. I thank the gentleman. I thank our witnesses on 

the first panel for their testimony today. We appreciate your testimony and your attempts to answer the questions that we have 

posed to you. 

We will ask the second panel to come forward so we can begin 

the testimony of the second panel. Again, thank you, gentlemen. 

While the second panel is coming forward, let me make some introductions of the witnesses on our second panel. Mr. Edward 

Faberman, who is the Executive Director of the Air Carrier Association of America; Mr. Phil Boyer, the President of the Aircraft 

Owners and Pilots Association; Mr. Jim May, President and CEO 

of the Air Transport Association of America; Mr. Stephen 

Alterman, President, Cargo Airline Association; Mr. Matthew 

Zuccaro, President of the Helicopter Association International; Mr. 

Ed Bolen, President and CEO of the National Business Aviation 

Association; and Mr. Roger Cohen, President of the Regional Airline Association. 

Obviously this is a large panel. As I mentioned, we have a caucus 

going on on the Democratic side. We are about to start some votes, 

I am told, in the next 15 to 30 minutes. So I would ask our witnesses to summarize their statements and to adhere to the five 

minute rule, if they would. I would recognize Mr. Faberman for his 

statement at this time. 

TESTIMONY OF EDWARD P. FABERMAN, EXECUTIVE DIRECTOR, AIR CARRIER ASSOCIATION OF AMERICA; PHIL BOYER, 

PRESIDENT, AIRCRAFT OWNERS And PILOTS ASSOCIATION; 

JAMES C. MAY, PRESIDENT AND CEO, AIR TRANSPORT ASSOCIATION OF AMERICA; STEPHEN A. ALTERMAN, PRESIDENT, 

CARGO AIRLINE ASSOCIATION; MATTHEW ZUCCARO, PRESIDENT, HELICOPTER ASSOCIATION INTERNATIONAL; ED 

BOLEN, PRESIDENT AND CEO, NATIONAL BUSINESS AVIATION ASSOCIATION; ROGER COHEN, PRESIDENT, REGIONAL 

AIRLINE ASSOCIATION 

Mr. FABERMAN. Thank you and good afternoon. 

I am glad to be here today to talk about the future of the Nation’s aviation system and propose funding mechanisms to support 

that system. I am the Executive Director of the Air Carriers Association, that continues to try to bring affordable air fares to American travelers around the Country. 

The Administration’s financing proposal addresses a very important issue, but also raises a number of significant questions, including funding requirements should be fairly assessed to all operators 

in the system and to the general fund; congestion charges must not 

be allowed to further block access and competition; passenger facility charges should not automatically increase as those charges disproportionately impact lower fares; distribution of access at capacVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00184 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
159

ity-constrained airports like LaGuardia should promote competition 

and must not further limit competition; and the Air Transportation 

Safety Advisory Board must include a representative of low-cost 

carriers.

It is essential that we create a first-rate system that makes flying easier and safer. At the same time, we must continue the 

dream of deregulation. This Committee has played an active role 

in improving the Nation’s aviation system and in opening the doors 

to competition and travel options for consumers. 

We support setting modernization as a priority. It is essential 

that the Nation’s air traffic system be upgraded to meet growing 

demand and ensure the smooth operation of the system, while promoting maximum travel opportunities. We must also understand 

that we are not operating in an environment where costs are stable. Rather, costs, including fuel, security and facility expenses, 

continue to increase. Additionally, the cost for small airlines is 

higher at many airports because they do not have dedicated facilities and often struggle to get the facilities they need to operate. 

The Department has taken steps to open skies around the world. 

We want to see those skies now opened in this Country. 

Let me just comment on a few of the issues that have been 

raised this morning. We urge Congress to consider all possible costcutting measures and to take appropriate steps to enure that all 

stakeholders fairly participate in funding the system. The costs associated with these efforts cannot be borne by air carriers alone. 

Since the Nation’s air traffic system is a national system that benefits travelers, communities, manufacturers, the entire travel and 

tourism industry and business expansion, general fund contributions must be at least maintained at existing levels. 

The proposal allows the FAA to increase fees on its own initiative 

with very little oversight. Therefore, we cannot endorse that approach. Congestion fees must apply to all operators who use the 

Nation’s largest and most congested airports. The cost-based congestion charge in the proposal has no restrictions and seems limitless. Any congestion charge the FAA decides to issue should be imposed on those carriers actually causing the congestion. We don’t 

believe it is appropriate to charge a small carrier or any operator 

with a small number of flights at a particular airport the same 

charges as those operating hundreds of flights. 

Low-cost carriers are already blocked from many airports and 

their operations are severely restricted in others. If congestion 

charges are imposed on carriers with only a few operations, it may 

close the door to access completely. As to general aviation costs, we 

are not proposing that they be significantly increased for less congested airports or that aircraft at small, uncongested airports 

should face any new charges. 

Rather, at congested or closed airports, general aviation aircraft 

should pay fees identical to those paid by carriers operating fullsize aircraft. The same applies for fees for regional jets. For example, a regional jet flying between LaGuardia and National Airport 

should not pay 20 percent less of what a larger aircraft pays when 

that regional jet blocks others from operating at those airports. 

Currently, regional jets, VLJs and general aviation at congested 

airports contribute equally to congestion but pay a great deal less. 

160

PFCs cannot be analyzed in a vacuum because they are not the 

only fees or costs the airlines must absorb. Even though a small 

PFC increase might improve airport facilities, increasing PFCs as 

proposed by some parties would impact the ability to provide the 

low fares necessary to generate system growth. It could also have 

a real impact on travel, because many people will travel more frequently when lower fares are available. 

Congestion pricing, we believe we should consider it and look at 

it. However, there are too many questions out there as to whether 

it will promote, destroy or completely close opportunities for growth 

by all sectors of the industry. I also want to note that it is important that the Air Transportation System Advisory Board include 

representatives of all in the industry, including low-cost carriers. 

We applaud the Committee for holding these hearings and we 

are very anxious to work with the Committee and the Administration to craft a bill that will effectively serve the airline industry 

and consumers. Our dream is to create a high-tech, safe and secure 

system that maximizes consumer choices and ensures that low 

fares are available to all. The concerns noted above, as well as 

those outlined by the Members of this Committee, and other parties, must be thoroughly discussed and significant revisions must 

be made before this proposal becomes a reality. This is only step 

one.

Thank you. 

Mr. COSTELLO. Thank you. The Chair recognizes Mr. Boyer. 

Mr. BOYER. Mr. Chairman, thank you. 

As you know, I am President of the Aircraft Owners and Pilots 

Association, probably the first user group to sit here at the table. 

We have talked a lot about the effect of this bill on the general 

aviation community. 

I represent 410,000 of those pilots. That is more than two-third 

of the Nation’s pilots and aircraft owners. And they use their 

planes, in the main, like you use a personal automobile, for business, personal travel. We are talking the average type plan, a single engine, piston airplane. 

The Chairman mentioned his number of years on this Committee. I have sat on this side of the table for about six years shy 

of the number of years you have, Chairman Oberstar. I have never 

seen such a distortion at a reauthorization hearing in all my years 

as this one here. We are manufacturing a crisis, a crisis about a 

Next Generation system, a crisis about funding. Where is the crisis? I would ask you to look at that very closely. 

But let me go on record. Status quo, to our organization, to our 

pilots, to our Members, is not an option. We don’t want to just 

renew what we had exactly. But if we could get user fees off the 

table we could begin a dialogue on many of the things all of us here 

and the panel before me, and others you have heard from agree on. 

Next Generation system and all kinds of other things, including, 

perhaps, the kind of excise taxes that are paid. Because as you 

know, Mr. Chairman, we have addressed those before. We have 

raised them, we have changed the configuration, et cetera. All 

those things are possible. 

In business we always ask, what problem are we trying to solve? 

I would say there are various answers from whoever you ask that 

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question of. The Administration, we haven’t talked about it yet. 

But they want to cut back on the general taxpayer fund contribution to the system. The airlines, in spite of the huge Government 

bailout that they have been given in the last few years, wants to 

cut back on the taxes that their passengers, not the airlines themselves, but their passengers pay to ride the system. And the FAA, 

unfortunately, it wants to get out from under the Government, the 

Congressional control that has served that agency very well for 

many, many years. 

The Next Generation Air Transportation System, for heaven’s 

sake, what a name to give to something. Obviously it is trying to 

sell you this crisis. Oh, we have got to do this now, we have got 

to do it to get things ready. But they have not determined the 

needs yet. They have no shopping list yet. It has not been priced 

out. Sitting next to me, my counterpart, is Mr. May. We agree on 

a lot more than you might think we might agree about on this proposal. But the one thing I think we agree on is we do need a Next 

Generation system. He and I co-chair the industry institute that 

handles the JPDO decision-making, the input. 

At this moment, neither one of us, I would maintain, could spell 

out the technologies that are going to be burdens to his operators 

and my operators, the price of those technologies, nor could we put 

a price on what the ground base and the FAA has to pay. 

My concern, and once again, getting user fees off the table, is get 

them out of here, and then we can get on with the dialogue. It is 

the camel’s nose under the tent. Wherever you look in the world, 

remember, Jim would claim and the FAA would claim, well, these 

are primarily for the airlines. We say once they start at one segment of aviation, there is what I would call the trickle-down effect. 

Eventually, it gets all the way to the small operator flying VFR. 

In this proposal, there are a lot of catch phrases and carefully 

worded sentences: GA will pay primarily through the fuel tax. Primarily. There is congestion pricing in this bill, user fees for using 

the large air space considerations that we call Class B. A lot of certification charges, also. 

How would that affect users? Well, you asked questions of the 

last panel about the foreign models. I got an e-mail from an old 

friend from Australia just last week. When I was Chairman of the 

CAA, their civil aeronautics authority, I accepted the government’s 

assurance that the user pays would put pressure on to reduce 

costs. The assurance was wrong. We now have user pays, general 

aviation is almost destroyed and there has been no real pressure 

on the bureaucracy to reduce costs. 

The commercialization of their equivalent of FAA and their 

equivalent of our air traffic organization has been a disaster for GA 

in Australia. I believe we will have the same happen in the United 

States if it goes ahead. And this was from somebody who tried to 

sell me on user fees 10 years ago. It is pretty plain and simple, 

when you look at the figures from their own government, a 28 percent decline in general aviation. 

Congressional oversight, we have talked about it, another catch 

phrase, offsetting collections. Look that up carefully. It is one appropriation that then goes outside of Congress’ control. You have 

served us very, very well. I do not know that we will be as well 

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served by an Air Transportation Advisory Board. Once again, Mr. 

May, to my left here, even agrees, as I have heard his recent statements after seeing the proposal, that it doesn’t give the airlines 

enough input into how the money will be spent. 

The huge gas tax increase, my gosh, I can’t tell you how painful 

that will be, and I don’t have to, because the Members have probably been writing you and telling you exactly what they think. 

From 19.4 cents to 70.1 cents? We should have been having these 

hearings every year and slowly graduating that tax. I have never 

heard of an increase that huge at one particular time. 

Then you heard it from Dan Elwell, the Administrator, who says 

less than 5 percent of the cost of operating a plane, it is not a burden on pilots. Well, all you have to do is read some of those letters. 

Here is what one of our Members say. I am not going to belabor 

this tax increase, but let’s look how it falls graphically, 3.4 four 

times for piston aircraft, 3.33 times for jet aircraft. 

But what about the other side of the coin? The legacy airlines, 

a huge savings, and the low-cost airlines, a savings also. Here is 

the table, but you know, the numbers that we had—I am sorry we 

spent the money, we used a consultant. And he came up with almost the same numbers you heard from this first panel. We are a 

billion dollars off, but what is that among friends. And that is, 

plenty of money here for the operations. Let’s not forget that general fund contribution. Let’s remember that the Administration 

would like to lower it to 18 percent and then even lower. 

Here are the general fund contributions of various other things 

that benefit the general public. And as you can see, aviation right 

now is the lowest. 

You have heard it on airports, all I want to do is once again repeat, let’s get user fees off the table and as Mr. Duncan said, we 

can then have the dialogue we have been having about how to get 

a meaningful reauthorization. Thank you. 

Mr. COSTELLO. The Chair thanks the gentleman and recognizes 

Mr. May. 

Let me mention that there is a vote going on on the Floor, a series of votes. We will leave from here to go vote. My understanding 

is we will have about 45 minutes to an hour. We have four or five 

votes on the Floor with a motion to recommit. 

So I would announce that the Chair would put everyone on notice that we will be back here in one hour or after the last vote. 

Mr. OBERSTAR. Mr. Chairman, I can’t help noticing Mr. Boyer’s 

comment that he and Mr. May are close on—I will be worried if 

you get any closer. 

[Laughter.]

Mr. COSTELLO. The Chair recognizes Mr. May. 

Mr. MAY. Thank you, Mr. Chairman, and thank you, Chairman 

Oberstar, for your observation as well. 

I am pleased to be here today on behalf of more than half a million passenger and cargo airline employees, three-quarters of a billion passengers who fly every year and the millions who ship goods 

daily to all parts of the world. You have an extensive written statement, I will truncate my oral statement and just hit a quick summary.

163

I think there is a need to modernize the air traffic control system 

and implement NextGen. As Phil has indicated, he and I agree on 

that point. At some point along the way, this Committee has to 

make a determination on the funding structure of that particular 

system. I would remind you that in 1970 when it was first established by Congress, it was done on the basis of user pays and costbased financing. So I think we have to find a way to balance that 

cost recovery opportunity that goes on. 

Today’s system is shortchanging our future, and I am referring 

to the air traffic control system. It uses 1950s architecture that is 

ground-based, finite, point to point routings, inefficiencies. I don’t 

think it has the ability to be scaled for new growth. And new 

growth is exactly what we are going to have. In 1970, when that 

Trust Fund was created, there were about 2,500 commercial airliners in the system of all sizes. At the time, there were about 

1,800 corporate aircraft using that system. 

Today, the numbers are 8,000 for our friends on the commercial 

side and 17,000 and growing, 18,000 corporate aircraft. I am referring now specifically to turbine, high-performance aircraft. The 

FAA projects, and I think they are accurate, that we are going to 

go from three-quarters of a billion to a billion passengers a year enplaned by 2015. Today there are about 45,000 IFR operations managed by our air traffic controllers and the FAA every single day, 

45,000. That is going to jump to 62,000 in the next 10 years. 

On top of that, we are going to have another 10,000 VLJs come 

into the system over that period of time. You will see a snapshot 

of some of the traffic taken from just a couple of days ago. 

The point I am trying to make is that there is huge demand 

growing, the system we have cannot be scaled to accommodate that 

demand. The consequence of all of that is going to be delay. We 

have had some very significant weather-related delays this winter. 

We are going to have more significant weather delays in convective 

weather in the summer. We have projections from a man I think 

most admire, Russ Chew, indicating that we are looking at some 

62 percent over 2004 levels of delay coming over the next 10 years, 

if we don’t do something to change this system. 

I don’t disagree, actually, with Phil that we don’t have a good 

game plan going forward as to what that system ought to look like. 

I do think that we are looking at somewhere in the range of $15 

billion to $20 billion to put a new system together. I do think there 

is an imperative that we get that done and that we have an appropriate funding mechanism for making that happen. The consequences are particularly severe. 

Now, the good news is, we have these systems going in around 

the world. There are a lot of countries, unfortunately, that are 

ahead of the United States in establishing Next Generation systems: GPS, satellite-driven, using technologies like ADS-B where 

you transfer the intelligence of the system to the cockpit of the aircraft. But that takes me to the second part, which means, we have 

an avionics change coming, and I think those numbers are reasonably accurate that have been quoted this morning about the cost 

to airlines being somewhere between $18 billion and $20 billion for 

equipage.

164

So I think that lost in the maelstrom of debate over the issue of 

user fees, i.e., cost recovery as opposed to cost allocation, is the fact 

that we have to find a way to pay for this system. I have advocated 

that it needs to be a four-part funding system. I think one part of 

it is some kind of a tax on the users of the system, whether it is 

an excise tax or whether it is a repeat of what we have today. 

But it has to be a balanced formula, because today airlines are 

paying 94 percent of all the dollars that are going into the Trust 

Fund. And you may choose to excoriate the idea of a user fee. But 

I certainly hope you won’t choose to excoriate the reality that we 

are paying the vast majority of the dollars into that system today 

and from an equity basis that needs to be rebalanced. I think the 

best way to rebalance it, regardless of the recovery mechanisms, is 

to do it in accordance with the use or the demand that is being 

placed on that system. Only fairness. 

Mr. COSTELLO. I thank the gentleman, and we will announce 

that the Subcommittee will recess until 1:45 or until after the last 

vote, which I am told should take most of the hour. 

[Recess.]

Mr. COSTELLO. The Subcommittee hearing will resume. We had 

obviously more votes than anyone anticipated, and it took longer 

than anyone anticipated. 

But I will say that Chairman, the former Chairman of the Subcommittee, Jimmy Duncan, just reminded me on my way over, I 

said, I have witnesses that have been waiting for a long time, and 

he said, well, tell them not to feel too bad, I had six or seven CEOs 

of airlines waiting one day and we had 24 votes in a row and we 

had to cancel and bring them back the next day. Fortunately we 

did not have to do that. 

Let me move on the next witness and recognize the President of 

the Cargo Airline Association, Stephen Alterman. 

Mr. ALTERMAN. Thanks, Mr. Chairman. My name is Steve 

Alterman and I am President of the Cargo Airline Association. 

Although we are an integral part of the air transportation community, the cargo segment is unique. In order to serve our worldwide customers and to provide them with time definite services, a 

large percentage of our flights are during the night-time hours, 

thus enabling us to offer expedited delivery throughout the world. 

We are also one of the fastest-growing segments of the commercial 

aviation marketplace, with growth rates of 3.1 percent domestically 

and over 6 percent internationally expected over the next decade. 

In order to provide the service that our shippers in the world 

economy demand, we are dependent on a modern air traffic system. 

We simply cannot afford to continue to manage traffic with technology that was designed in the first instance to fight World War 

II. We must build a system using the technology and procedures 

necessary to address the shortfalls and capacity that will certainly 

occur. The modernization of our system must therefore be the 

major priority in the ongoing FAA reauthorization effort. 

And modernization of the system is critical for reasons other 

than simply addressing future capacity. Operational procedures 

using satellite-based technology will yield more efficient operations 

resulting in less noise and less fuel burn, thereby reducing aircraft 

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looked. Nor can the potential safety enhancements that will result 

with the provision of better and more timely information to both 

pilots and controllers. 

Finally, it is crucially important that these steps to modernize be 

taken now. We cannot simply wait any longer. Capacity will overwhelm us. 

With respect to the FAA financing proposal, it was issue don 

February 14th, 2007 and dealt primarily with the financing element of the system. Unfortunately from the cargo airline perspective, it actually created more questions than it provided answers. 

While the FAA has made significant strides in the past few 

months, especially in the area of the decision to use ADS-B technology, we still do not know the details of the Next Generation 

plan, and until the details of this plan are known, it is difficult to 

assess the funding required. Yet the FAA proposal focuses primarily on the funding element. 

Before moving to completely overhaul the system that has provided the basis for the FAA financing for decades, it is necessarily 

to more completely analyze the requirements of the system and 

how those requirements impact the resources necessary. In our 

opinion, the questions that must be asked and answered are: what 

is the precise nature and associated cost of the Next Generation 

system; what are the cost savings the FAA will realize from implementing the modernized system; will the current system provide 

the funding that is necessary; what are the costs and benefits to 

the user community; and should this system be purchased or perhaps leased to allow flexibility by the agency. 

Even if it is determined after this analysis that the current excise tax system must be completely overhauled, we cannot support 

the plan envisioned by the FAA proposal where the FAA is given 

virtually unfettered authority to set the level and structure of fees 

at will with little or no Congressional oversight and no provisions 

for judicial review. Such authority would clearly eliminate any incentive for the FAA to cut costs or restrain future cost increases 

since feels could always be raised to cover unnecessary agency 

spending.

But even more importantly, it appears that the user fee system 

envisioned by the FAA proposal will require a complicated and 

costly bureaucracy simply to assess and collect the fees. In an era 

of limited resources, care should be taken to ensure that to the 

maximum extent possible the funds generated are actually spent to 

improve the system. The added cost of establishing and maintaining a bureaucracy juts to assess and collect the fees simply can’t 

be justified. 

But whatever the eventual structure of the finance, we urge the 

following principles and considerations should be paramount. First, 

the U.S. aviation system is a national asset that benefits all citizens and drives the Nation’s economy. The general fund contribution should reflect that fact. Historically it has been in excess of 20 

percent and we urge that it not go down from there. 

Second, whatever funding mechanism is ultimately decided upon, 

Congress should ensure that industry funding obligations are fairly 

allocated. As a basic principle, no industry segment should be 

forced to subsidize any other industry segment. From our perspecVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00191 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
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tive in the all cargo industry, where under the current system, we 

pay a 6.25 percent airway bill tax plus a 4.3 cent per gallon fuel 

tax, studies indicate that our industry segment pays somewhat 

more than 100 percent of our system use. This is before taking into 

account that we fly mostly at night. 

While we don’t expect any relief for that portion of the system 

that exceeds 100 percent, neither should we be expected to pay 

more than our current share in order to make up for the shortfall 

in other industry segments. This result can be accomplished by 

simply retaining the current funding mechanism for the air transportation of cargo or by ensuring that any new system does not impact our industry adversely. 

Finally, I will wrap up, we strongly believe that Congress should 

support the funding necessary for continued research and development. It is today’s research and development that provides tomorrow’s products for the NextGen system. We can’t overlook the R&D 

segment.

Thank you very much. I will be happy to answer any questions. 

Mr. COSTELLO. We thank you very much. 

Mr. Zuccaro? 

Mr. ZUCCARO. Good morning, Mr. Chairman. Thank you for the 

opportunity to provide comments. 

Rather than repeat the facts and figures and information you 

have probably heard already, I would like to focus on the uniqueness of the helicopter industry and its environment. HAI is a notfor-profit professional trade association of over 2,600 members, inclusive of 1,400 companies and organizations. Unlike many other 

trade associations, operations conducted by HAI members are not 

limited to one type of specific flying or one purpose. HAI members 

operate helicopters across a wide spectrum of uses, such as on-demand charter, commercial utility, corporate, law enforcement, 

emergency service, agriculture, as well as news gathering and private use. It is my sincere belief that the proposed FAA funding program, if enacted, will have an extremely detrimental economic impact on HAI members and will in fact constrain or eliminate some 

of these operations. 

The current FAA funding methodology can meet the future operational and developmental needs of the FAA inclusive of the 

NextGen initiative, which HAI actively supports and promotes. 

This is generally not in dispute. 

Almost all segments of the aviation community appear to be 

unanimous in their strong opposition to the Administration’s funding proposal, the notable exception being the airlines. How can one 

support a proposed funding program that significantly reduces the 

cost to a high use entity such as the airlines and they place the 

highest demands on the system and then dramatically increase the 

cost to other segments of the industry, such as the helicopter community, whose utilization of the system is generally incidental with 

little or no impact. 

All of this being done with the stated need to fund NextGen as 

the stated purpose, whose very makeup, technology, benefits and 

costs are not even yet known. The icing on the cake is the fact that 

the actual revenue to the FAA under the proposed funding program 

will be reduced by $600 million in the first year alone. 

167

Consider this: currently some HAI members that are seeking initial FAA certification as commercial operators who are requesting 

similar FAA services are being advised that they can expect a wait 

of 18 months to 2 years for an initial appointment with an FAA 

representative. If this is the level of service under the current funding program, one can only imagine what it would be if the FAA reduces its annual income by $600 million. 

It is important to note that the majority of HAI members are 

small businessmen and women who operate in excess of 5,100 helicopters and fly more than 2.6 million hours per year. The vast majority of these operations are actually conducted at private heliports and facilities in remote locations without utilizing the services of FAA air traffic control or the need to operate to and from 

airports. In fact, the very nature and capability of a helicopter, in 

conjunction with the prime benefit of direct, point to point transportation, actually eliminates the operational need and desire to 

operate to and from airports. This has been further enhanced by 

such industry initiatives as privately funded point in space, off-airport instrument approaches. 

Historically, the helicopter industry has had to finance its own 

infrastructure with no Federal funding or support, inclusive of offairport operation and maintenance bases, heliports, communications networks, and instrument approach procedures. This is due 

to the fact that the missions performed, operational altitudes, and 

locations of helicopter operations are normally outside the reach of 

the FAA ATC service area and the airport infrastructure. Some examples of this are the offshore operations in the Gulf of Mexico 

where over 650 helicopters support oil exploration and production, 

where helicopters have spent untold millions of dollars providing 

their own infrastructure, since they cannot talk to or be seen by 

the FAA air traffic control system. Similar situations can be found 

in hospital-based EMS helicopters that operate in remote rural 

areas where they accomplish their life-savings missions, utility helicopters which provide services on behalf of the greater good, such 

as firefighting, aerial application, logging, power line installation 

and maintenance. Also corporate operators serving the off-airport 

needs of the business community. 

I hope you will agree that the helicopter community places the 

least demand on the air traffic control system and the airport system. In fact, the helicopter community is actually assisting the 

FAA in solving the problems of airport and air space congestion 

and the lack of capacity. We do that by removing from the system 

those passengers and those flights that would otherwise be flown 

in airplanes to airports and diverting them to off-airport, non-ATC 

environments. Utilizing advanced technology, helicopters have been 

able to provide off-airport city center to city center transportation, 

thereby further creating new capacity at congested airports. When 

one considers this situation, maybe some thought should be given 

to the FAA compensating the helicopter community for services 

rendered.

HAI and its members are supportive of the NextGen initiative, 

and when requested to support such initiatives, the helicopter community has already stepped up to the plate. Last year, HAI and its 

members formed a partnership with the FAA via an ADS-B memoVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00193 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
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randum of agreement, which facilitated the installation of ADS-B 

technology in conjunction with enhanced weather reporting and 

communications in the Gulf of Mexico. 

As part of their commitment to assist the FAA in the first phase 

of implementing ADS-B into the national airspace system, HAI 

members are providing in-kind service valued in excess of $100 

million to the project. This includes no-cost helicopter transportation for the FAA staff and related project personnel to the platforms in the Gulf of Mexico where the equipment will be installed. 

These flights are currently taking place as I speak. No-cost space 

for the equipment on the platforms and our commitment to equip 

with the proper avionics. 

It is most interesting to note that although the helicopter industry is the only industry providing in-kind service and partnered 

with the FAA in this initiative, other airspace users, such as the 

airlines, will also reap the benefits of the new ADS-B system in the 

Gulf of Mexico once it is installed. 

With the above in mind, it would seem appropriate that the helicopter community should be the one segment of the aviation community that has the least economic impact on it. To do otherwise 

would be like charging a farm tractor that only leaves the farm 

once a month to travel on a public road a short distance to go to 

another farm the same highway tax as a long-haul tractor trailer. 

The current funding system has been tested and proven. From a 

conceptual point, as a thought, the majority of the funds collected 

from helicopter operators should not be assigned to runway and 

airport development. Instead, these funds should be considered in 

the utilization of funding a nationwide system of heliprots for the 

helicopter industry. 

The current funding system, as I mentioned, is not yet broken. 

I think we should leave it in place. To replace it with something 

that has no logic, is widely opposed, will increase overall costs and 

has unknown results in terms of efficiency, fairness and productivity, would be counterproductive. 

I also would mention as a closing remark that helicopters should 

be considered as a separate aircraft category and not put in the 

same category as any airplane category that is currently being considered.

With that, HAI and its members stand ready to work with you, 

the Committee, the FAA and the stakeholders to come up with an 

equitable funding system that will provide a safe, appropriate, efficient operating environment for all segments of the aviation community. Thank you for the opportunity to make these comments. 

Mr. COSTELLO. Mr. Zuccaro, thank you very much. 

The Chair recognizes Mr. Ed Bolen, the President and CEO of 

the National Business Aviation Association. 

Mr. BOLEN. Thank you, Mr. Chairman. It is an honor to be here 

representing the National Business Aviation Association today. 

As you know, and the others on this Committee know, business 

aviation is actually an FAA-defined term. Business aviation is the 

use of any general aviation aircraft, piston or turbine, for a business purpose. A number of piston operators, over 50 percent, according to AOPA, use their single-engine pistons for business purVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00194 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
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poses; twin-engine pistons and turboprops are used almost exclusively for that. 

So when you really look at the general aviation aircraft fleet 

being used for a business purpose, we have a slide, I don’t know 

if we will be able to get that up or not. But it basically shows that 

the fleet is primarily 85 percent piston twins, turboprops and entry 

level turbofans. The kinds of companies that use these airplanes 

are as you would expect, small and mid-size companies primarily, 

again 85 percent of our membership. A typical member would be 

Richard Schein, a second generation owner of a recycling company 

in upstate New York that uses a twin engine Mitsubishi MU2 to 

go about expanding their work. 

Mr. Chairman, we all are here today to ostensibly talk about 

modernization. But for those of us who were here 10 years ago, 

there is a strong sense of deja vu. After all, it was the last time 

that we had a user fee debate that the Nation’s biggest airlines 

proposed a user fee formula that would have shifted $600 million 

of their costs onto what they assumed was their competitor. 

But more importantly, it would have, as one senior executive 

CEO said at the time, given the airlines exclusive control over the 

ATC system. We want to make sure that does not happen today. 

The FAA has proposed what they call a Next Generation financing system. And the FAA has done a lot of talking about the need 

to modernize. Our concern as we look at the bill is that when it 

comes to Next Generation, FAA is talking the talk but they are not 

walking the walk. This bill that they have put forward, as you 

know, cuts FAA funding by $600 million. It caps the general fund 

contribution below today’s levels and takes it down in the future. 

It diverts money that could be used for modernization, the towers, 

runway expansions, new technologies, and uses it to create a bureaucracy. It allows the FAA to go into debt, and it fails to provide 

a modernization time line and cost schedule. 

Now, Mr. Chairman, the general aviation community believes 

strongly in the need to modernize the system, because expanding 

capacity is necessary for our very survival. Every time there is congested airspace or congested airports, it is general aviation that 

gets squeezed out. You know this from Illinois, where we saw Chicago Midway, it was a great general aviation airport, then started 

attracting commercial service and we were pushed to secondary 

and tertiary airports. We have seen that repeated in Fort Lauderdale, San Jose, Manchester, New Hampshire. So expanding the capacity of the system is fundamental to our survival. 

Now, when we look at how to do that, we think it is pretty 

straightforward and there are no easy answers. If someone wants 

to lose weight, they basically have three choices: they can eat less, 

exercise more or do a combination of those two. When we look at 

additional funding for the Next Generation system, we think that 

the FAA can try to look for cuts in non-essential, non-safety programs. They can look for an increase in the general fund contribution. We can increase taxes on aviation users across the board. We 

can do some combination of those. 

But what the FAA has proposed is some radical scheme that 

moves us to user fees. I want to echo the comments of those who 

have preceded me in saying, let’s get that idea off the table, so that 

170

collectively we as a community can work with you to make the 

hard choices necessary to put us on the path toward continued 

modernization of our air transportation system. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. We thank you, Mr. Bolen. 

Our last witness for this panel is Mr. Roger Cohen, the President 

of the Regional Airline Association. 

Mr. COHEN. Thank you, Mr. Chairman, Members. I am Roger 

Cohen.

For the past three months, I have had the honor of being President of the Regional Airline Association. I would like to just limit 

my remarks to those things that you have not heard yet. 

Without much fanfare and under the radar screen, America has 

come to depend on regional airlines. Last year, we flew 158 million 

passengers. That is almost one out of every four passengers in the 

United States. We are about 40 percent of the commercial fleet and 

nearly 50 percent of the total departures every day. 

Just yesterday, I saw the figures that post-9/11, our member airlines, in a very difficult environment, have added 18,000 jobs, 

18,000 full-time jobs. Our network partners have been forced to 

eliminate 87,000 jobs, about 23 percent of the total work force. 

Most importantly, our regional airlines serve some 650 communities across this Country. Here is the telling point: 442 of those, 

70 percent, are served exclusively by regional airlines. In other 

words, if it were not for regional carriers, those 442 communities 

would have no scheduled airline service. 

Preserving this network of safe, convenient, and affordable regional airlines service is at the heart of RAA’s views on the financing proposal. It is our number one priority. I wanted to clarify and 

answer to a question that was asked before, how this proposal 

would impact the regional airlines. I must tell you, we believe that 

the legislation before you would make air travel less convenient 

and less affordable for millions of Americans, particularly those 

who live in those 442 communities whose service is exclusively provided by regional airlines. 

Everything else you have heard today, we echo many of the comments you have heard about modernization and working collectively with the other stakeholders toward the Next Generation system. There obviously is no disagreement on that. 

But finally, at the end of a long day, but it is not an afterthought, I just want to share with you one last thing. I was a very 

young public relations representative working for TWA covering 

the hearings in Congress when Congress deregulated the airlines. 

Congress made a pledge to communities across this Country that 

they would not be abandoned, that because of their size, they 

would not lose all access to the national transportation network. 

The Essential Air Service program was created as part of that. 

Every Congress since then has maintained that pledge. We would 

hope and trust that you continue to recognize that pledge that was 

made to date, 140 of those communities across the Country. 

With that, thank you very much, Mr. Chairman. 

Mr. COSTELLO. We thank you, Mr. Cohen. 

Mr. Boyer, you indicated in your testimony that nine out of ten 

of your members would reduce or curtail their flying if the fuel tax 

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is raised to 70 cents. Can you tell us how you arrived that at figure, nine out of ten? 

Mr. BOYER. Actually about a year ago, once again, like you, we 

were waiting for a long time for this proposal. So it was supposed 

to be out last spring, and we decided when we started to hear of 

a dramatic fuel tax increase possibly being in it, we commissioned 

a study in conjunction with NBAA. We actually segmented the turbine and piston powered airplanes. We did a sliding scale that 

went from 25 cents, not knowing what it would be, all the way up 

to $1. Then we asked questions on, reduce your flying, curtail flying altogether. In the NBAA example, we said, disband your corporate fleet, et cetera. 

Our numbers came out actually 88 percent would reduce or curtail their flying. Now, I am picking the largest of the numbers. The 

curtail was down at about the 27, 28 percent category. So it was 

a survey done of very statistically valid size sample of our membership. Once again, in anticipation of a proposal that came out about 

a year later. 

Mr. COSTELLO. I understand also that you are doing some type 

of an analysis right now to take a look at similar charges that are 

imposed on boats and motor vehicles. I would just request that 

once the analysis is done that you make it available to our Committee, if you would. 

Mr. BOYER. We very definitely will. It should be completed within about a week and a half or two weeks. It will address the certification fees that are in for getting a license, buying a plane and licensing it, and the charges that are in the bill that we didn’t talk 

about today. But they are minuscule compared to what we are talking about at this panel. 

Mr. COSTELLO. Thank you. 

Mr. May, you talked about a commitment and that you would 

like to see a robust general fund contribution. As I have said many 

times to I think everyone here testifying today, I just wonder what 

your definition, what percentage should that robust contribution 

from the general fund be? 

Mr. MAY. Mr. Chairman, I think it is probably north of 20 percent. But I think the question that needs to be answered first is, 

how much money are we looking to raise? What is the formula for 

trying to raise that money? Are you going to have some sort of a 

contribution by people who use the system? Are you going to have 

bonding? If you are going to have bonding, it has to be obviously 

under a lot better circumstances than are proposed in the Administration’s bill. 

I happen to think that innovative financing is a very worthwhile 

idea if done right, because there are some huge capital expenditures that are foreseen by the FAA. We are spending $2 billion a 

year, today, right now, on maintaining this antiquated system. 

How much savings are you going to generate out of that? 

Then when you get down to that fourth leg of the equation, how 

much do you then need for general fund? And what are the policy 

considerations that attach to that? 

Mr. COSTELLO. The next question that I would ask is, from the 

FAA’s proposal for the user fees, it makes me a little nervous and 

concerned that the FAA would have almost unilateral authority to 

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raise fees. Given their track record, and it has been demonstrated, 

you heard from the earlier panel, both the IG and the GAO, I have 

concerns that if human nature is if you have a system where you 

can just spend whatever you decide to spend and then generate the 

revenue to match what you are spending, there is not an incentive 

for efficiency. 

I just wonder if you have concerns about the FAA’s ability to, 

under their proposal, to be able to generate revenue as their expenses go up? 

Mr. MAY. Mr. Chairman, STARS, ERAM, WASS, FTI, $6 billion 

in overruns. We absolutely have those concerns. We have had the 

blank check conversation, if you will, with a number of people in 

the Administration and Members of Congress up here. We have 

looked, philosophically. We are paying 94 percent of the bill right 

now. I would like to readjust that down the road, and I would hope 

we would find some support for equity among users in the system. 

But at the end of the day, I am still going to be paying the lion’s 

share of the bill. It is in my absolute best interest to assure that 

we are not giving anybody, FAA or anybody else, a blank check to 

do what they need to do. That is why I happen to think that governance is a critically important subject also. 

Mr. COSTELLO. Last question about privatization. You have indicated in your testimony and other conversations that you do not 

necessarily support privatizing the air traffic control system. Is 

that an accurate statement? 

Mr. MAY. That is an accurate statement. 

Mr. COSTELLO. Do you support some type of, if not privatization, 

a system similar to the Canadian system? 

Mr. MAY. No, sir, I do not. What I have tried to suggest to people 

is, look, this is a difficult subject to talk about. But we have this 

massive job in front of us. There are a whole lot of people that have 

a tendency to try and indicate how they would like that job to be 

done, even though they are not part of the process, necessarily. 

The FAA has about 5 percent discretionary opportunity with its 

AIP money. I think we both know what a major part of the reason 

for that is. Every time the FAA tries to shut down or consolidate 

operations, boom, a lot of our friends up here object to that. Seriously. Phil did a heroic job on flight service stations, trying to get 

them to go to a different status. It was not an easy task, even 

though it was the right thing to do. 

So I think there needs to be some level of independent thought 

and governance created, however that happens. I am not advocating corporatization, privatization. But I think there needs to be 

some level of independent authority that says, here is what we 

need to do and we need to make the right decisions and we need 

to think through. Because the FAA by itself has not done a really 

spectacular job. 

Mr. COSTELLO. Thank you. 

Mr. Alterman, you indicate in your testimony that the FAA’s proposal would require a complicated and costly bureaucracy. Do you 

want to just give a brief follow-up and explanation? 

Mr. ALTERMAN. Yes, under the proposal, it looks to us, anyway, 

that it would be not really very simple to figure out who owes what 

and how to collect that money. An analogy I have made before is 

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that we all get solicitation letters from charitable organizations 

asking for money. One of the first questions I ask is, does all the 

money I contribute go to the intended recipient, or am I going to 

be giving money to pay somebody’s salary and have 20 percent or 

more in administration fees. 

It is the same thing here. There are not unlimited funds. Believe 

me, they are not unlimited funds. So the money we do raise should 

go to the modernization effort and not to fund another bureaucracy 

at the agency. 

Mr. COSTELLO. And as it stands today, we still do not know what 

it would cost to administer the collection of these fees, how the system would operate and what the costs would be. When the Administrator was here, she indicated that it would be contracted out. 

But there were not costs associated with contracting out. 

I thank you. 

Mr. Zuccaro, you indicated that helicopters could help with, and 

currently help with the congestion at some of our airports. As you 

have seen and reviewed the FAA’s proposal, would helicopters receive any kind of incentives for easing the problems with congestion at our airports? 

Mr. ZUCCARO. Not that we noted in the proposal. Right now 

there are a number of elements. That is why I indicated what I 

said, if we are talking in terms of fairness and equitability, the 

money that is contributed by the helicopter operators through 

whatever system, some thoughts should seriously be given to develop that system that will allow that methodology of city center 

to city center to further develop. 

We would require FAA funding or governmental assistance in developing that heliport network. Also the network of instrument approaches that would be off-airport, that would not require us to 

take up a slot, even in IFR weather. We currently do that now. It 

is privately funded. The heliports are privately funded. The approaches are privately funded. We are doing everything we can to 

draw more traffic into off-airport locations. With new technologies, 

such as the civil tilt-rotor, with the potential to carry up to 70 passengers, city center to city center, that is a significant off-take from 

the airport infrastructure and the IFR infrastructure. 

But we really don’t see any recognition of the helicopter industry 

in any of this. We are kind of lost in there. And we are placed in 

a category with piston airplanes. We do not operate, as I think I 

clearly indicated, like any airplane. Our needs are different, our requirements are different. But the good news is, our capabilities to 

help in the system off-airport are much different than airplanes. 

So now, we are not being addressed at all. that is what is frustrating, quite frankly. 

Mr. COSTELLO. Mr. Bolen, you have pointed out that there has 

never been an FAA modernization plan or program that has failed 

for the lack of support from the Congress or lack of funding from 

the Congress. You also point out that we may be going down a slippery slope here as far as reducing Congressional authority and 

oversight by implementing a user fee system. I happen to believe 

that both of those statements are correct. But I would ask you to 

elaborate.

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Mr. BOLEN. I think they are fairly straightforward. When you 

look at the number of programs, and my friend, Jim May, just announced a few of them, the thing that Congress showed throughout 

all of those programs is a strong commitment to Congress to funding them unless and until the FAA determined they couldn’t use 

those funds effectively. 

The FAA has tried to say that the reason they can’t modernize 

is because Congress has not been providing stable and predictable 

funding. That simply is not true. Even if you look at their request 

this past year for the NextGen programs, and there are two Next 

Generation programs in the current budget, one is ADS-B and the 

other is the system-wide information management system. The Administration asked for a collective amount of $50 million for those. 

Congress provided $80 million. 

Congress is consistently supportive of capacity enhancement programs. They have not been the problem. They have provided 

strong, necessary oversight. They have made the FAA accountable, 

and that has made them better program managers. We don’t want 

to see that go away. 

Mr. COSTELLO. I thank you. 

At this time the Chair would recognize the Ranking Member, Mr. 

Petri.

Mr. PETRI. Thank you very much, Mr. Chairman. I just have one 

or two, maybe three or four questions, but not too many, I hope. 

Mr. Boyer, I apologize for having missed part of your testimony. 

But the full statement is in the record. You represent probably a 

majority of the pilots in the United States who are licensed. And 

so you have to take a pretty broad position. I don’t know if you 

would be willing to address this question or not, but you heard my 

colleague, Mr. Duncan, talking about difference in charges for people who actually use the system as opposed to don’t fundamentally 

use the system. We have a lot of people who are crop dusters or 

who are very much recreational pilots, going around but not really 

having their flights within the air traffic control system. 

Do you have any suggestions as to how we could differentiate between elements of the general aviation community, or do you think 

one size fits all so far as the fuel tax assessment actually makes 

sense?

Mr. BOYER. Once again, I think if we can get the most onerous 

part of this bill out of the discussion, the user fee part, I think this 

is excellent discussion material. We have had long thoughts and actually suggested to the FAA in the two-year period they were putting this together some various categories. I don’t mean to sound 

as if I have created this answer for your question, but the market 

is changing. Now, once again, you have a district that sees the 

most recreational side of general aviation, once a year at the 

world’s greatest air adventure in Oshkosh. But all flying is not like 

that. Even that event, which is primarily people who fly what I 

would call below the radar screen, do have to use a control tower 

at that event. It is boosted up. 

We are going to a system that more and more requires air traffic 

services, whether you just be a pleasure flyer. The security restrictions in aviation, the more control, the various classes of air space, 

the temporary flight restrictions, the use of a transponder and now 

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subsequent devices that will be used in NextGen all require operating. So it will be very hard to operate in the future as we did 

yesterday, as Mr. Graves, who came in, does with his Piper Cub 

in the middle of Missouri. But it will be very difficult to do that 

as we move forward. 

So we are going to have take that into account. But it is something we would welcome the opportunity, already have put some 

ideas on the table to begin to figure out, okay, what segment uses 

more, uses less. It is still not going to be the science that the FAA 

would claim they already have down, and that our panel number 

one indicated may be right, may not be right. I think we are all 

going to have to work together on that. 

Mr. PETRI. Mr. May, I think you pointed out that in the opinion 

of your organization, the existing system of paying could stand 

some improvement. Could you give examples of inequities and inefficiencies in the current system of funding the air traffic control 

system?

Mr. MAY. Mr. Petri, I think the cost allocation exercise by the 

FAA does as good a job of that as anything. If you take a look at 

where the FAA is expending its resources and energy, we account 

and commercial airlines account for probably somewhere in the 

range of 68 to 70 percent of operations in the system. We are paying for 94 percent of all the dollars that are going into the Trust 

Fund. That is a direct allocation number. 

So what we have suggested is, if you want to focus in on that 

cost allocation, if you want to look at the other high performance 

users of the system, and as I explained to my friend, Mr. Boyer, 

back in April of 2005, I have no interest in going after the piston 

aviation GA crowd. But if you look at the high performance turbine 

operations, the net jets, the charters, the privately owned, the corporately owned aircraft that are in the same airspace that demand 

the same system, FAA tells us 98 percent of them fly IFR, then I 

think it is a matter of fairness and equity that if they are using 

16 percent of the system, which they are, and they are paying for 

6 percent, that that number needs to be adjusted. I think this Congress and this Committee, along with the Ways and Means Committee, will have the task of doing that. I think it is a matter of 

equity.

Mr. PETRI. Thank you. 

Just one last question, if I could, of Mr. Bolen. Could you give 

us any sort of brief overview of what you feel can be accomplished 

in the next three to five years so far as improving the air traffic 

control system? 

Mr. BOLEN. First of all, I think we ought to make sure we understand just how far we have come in the past couple of years. The 

foundation clearly of going forward according to the FAA, the Joint 

Planning and Development Office and everyone else associated 

with NextGen is the automatic dependent surveillance broadcast 

technology. That is a technology that the general aviation community pushed to have a pilot program in Alaska. The cargo carriers 

have done that in the Ohio Valley. We feel that that technology is 

clearly at the forefront of the modernization effort. 

176

We have some questions related to certification and implementation that need to be ironed out. But that is clearly something that 

we can do. 

Another example of the transformation that is already underway 

is reduced vertical separation minimum. Two years ago, we effectively doubled the amount of capacity in our en route air space because of significant investments that were made primarily by the 

general aviation community but also by the commercial airlines in 

altimetry that allowed us to go from 2,000 foot spacing to 1,000 

foot. When we continue to look forward, ADS-B is clearly at the 

foundation. The System-Wide Information Management program, 

or SWIM, is part of that. Then we need to be about Phase 2 of the 

ERAM program. Those technologies are really at the heart of the 

next system. And when you look at what we think the cost of that 

is, either the industry groups, the Joint Planning and Development 

Offices, all of industry, the cost of modernizing the system for 

NextGen is somewhere around $300 million to $1 billion per year. 

To put that in perspective, that is about 3 to 8 percent of the 

FAA’s funding. It is an amount of money that we can all get our 

arms around and we should be able to find a way to make happen. 

Mr. COSTELLO. I thank the Ranking Member. 

The Chair will recognize the gentleman from Illinois, Mr. Lipinski.

Mr. LIPINSKI. Thank you, Mr. Chairman. 

As we start out on looking at the FAA reauthorization and specifically, the funding here, I only have one question. But this question, a very broad one. Just to get a sense from all of you, because 

I have heard a lot of and I have read in your testimony a lot of 

ideas about what is wrong with the Administration’s proposal. Not 

that I am here defending the proposal. But I would like to hear, 

probably starting with Mr. May, what you would see as the general 

outlines of what you think would be the most fair and the best way 

to fund. Where should the funding come from, how exactly? Because there is a lot of, understandably, problems that all of you 

have in different parts of the Administration’s proposal. But what 

do you think should be done? 

Mr. MAY. I will answer that as two questions. The biggest concern we have with the proposal staying strictly with the finance 

side of the proposal, is the subject that your colleague Chairman 

Costello brought up a minute ago. It has to do with cost and the 

lack of cost controls. It has the potential to become a wide open 

funding mechanism, blank check, whatever term you want to use. 

That is probably the single biggest concern I have with this. 

What I would like to see going forward is a funding system that 

allocates revenue into that system in some fashion that is tied to 

the use of that system. I understand that——

Mr. LIPINSKI. How do you——

Mr. MAY. I understand that the term user fee is nuclear in this 

Committee, that you will be fighting with one another to have the 

honor of playing taps at the funeral. But there has to be some 

mechanism where you can allocate costs, a cost allocated revenue 

system that can suggest that if I, representing the commercial airlines business, United Airlines, right on down the line, am using 

177

roughly 68 or 70 percent of the overall cost of the ATO, then I 

ought not to have to pay into the system more than what I use. 

Mr. LIPINSKI. Let me focus down my question then on use and 

how use is defined. Because that is another question that is certainly out there for all kinds of different suggestions on this one. 

Mr. Bolen, you had something? 

Mr. BOLEN. I was just going to follow up on that. You are absolutely right. How you define use is fundamental to this debate on 

one’s fair share. What the big commercial airlines have been promoting for a number of years here in the United States is something that they have been promoting internationally for decades. 

And that is that you look at all airplanes the same, whether they 

have 3 passengers, 30 passengers or 300. 

That idea of looking at all airplanes the same has been rejected 

by every country around the world. It has been rejected by the 

International Civil Aviation organization. We keep hearing about 

the privatized places like Canada and Australia. Even Canada 

says, it should be noted that from a cost of service perspective, the 

majority of the infrastructure and operating costs of the system are 

driven by commercial air carriers operating large transport aircraft. You see, everywhere in the world, they see the fallacy that 

all airplanes are the same. They understand that the system costs 

are driven by commercial carriers and their large aircraft operating 

in a hub and spoke model. We understood this when we created it 

in 1970, that the system was built by and for the commercial airlines. And we have repeated understanding that every time the financing has been extended, including the last time in 1997, when 

changes were made to the formula, but they weren’t made to the 

concept.

Mr. LIPINSKI. If I can come back to, I want to let Mr. May conclude here, because this isn’t meant to be any kind of statement 

on the definition of use that you use. I want to see if anyone else 

has any comments on that definition, then I will let Mr. May. 

Mr. BOYER. Well, I hate to let Mr. May have the last word, but 

I think the key, and your question is an excellent one about how 

do we define use. How and when do you use the system drives 

costs. Not a lot of airliners are taking off at midnight or at 11:00 

p.m., and that is a place where even Mr. Alterman in his written 

testimony said, we primarily use the system during a period that 

not a lot of airlines use it. 

There are a lot of scheduling, and you have heard this, when you 

look at the airline schedules, all departures in the morning and 

late in the afternoon and sometimes during the middle of the day 

you can shoot a cannon off through those airports. What about the 

airlines that decide they are going to abandon a hub, that the FAA 

has put a huge infrastructure in the terminal radar environment, 

in the runway environment, Nashville is a good example, St. Louis 

is a good example. It is how and when you use the system, not just 

counting it. 

And the last one is, in the news this week was the landing of the 

380 here in the United States, at a couple of our airports. The Airbus 380 cost the Los Angeles Airport, using in many cases Federal 

funds, $60 million to upgrade. At JFK, it is $150 million. So these 

are costs in the system that the FAA is not picking up when they 

178

call a blip is a blip or this was the cost of flying IFR. There is quite 

a difference between when you use the system, how you use the 

system and what you need from the system, like Category 3 approaches, which are not used by business aviation or general aviation, sophisticated approach lighting systems, et cetera. It is an excellent question. 

Mr. LIPINSKI. If the Chairman will allow us to hear from Mr. 

May.

Mr. MAY. I think this is a discussion, Congressman, that can 

probably take most of the afternoon back and forth with a lot of 

different views. I would suggest to you that what the FAA has suggested as a measure is the distance flown in the system as a variable. Because what we are talking about is use of airspace, fundamentally, how much time do you spend in the system, how far 

do you travel in that system, and then some fixed component. I 

have a problem with the way the FAA did it in this particular piece 

of legislation, but a fixed component that relates to the number of 

operations or the use of terminals. I think you can adjust, as Mr. 

Boyer has indicated, by time of day, et cetera. 

What I am trying to get at fundamentally is that if the FAA has 

a cost allocation approach and the IG sat here this morning and 

said it was sound, GAO sat here this morning and said it was 

sound, if you got an accepted cost allocation study, then you ought 

to apportion the cost of the ATO in some fashion back to people 

who are using that system. You can call it whatever you choose. 

I don’t want to lead to corporatization or privatization. But I think 

there is an equity issue involved that says, if we are paying for 94 

percent of all the costs of the ATO and we are only using by Price 

Waterhouse generated measurements that have been reinforced by 

the IG and the GAO, if we are only using 68 percent, then we 

ought to find a way to rebalance that equation. 

Mr. LIPINSKI. Thank you. I know this discussion will continue. 

Mr. COSTELLO. The Chair recognizes the gentleman from Kansas, 

Mr. Moran. 

Mr. MORAN. Mr. Chairman, thank you very much. 

Mr. Cohen, as I walked in you were talking about regional airlines. Kansas of course is a State in which regional airlines are awfully important. 

I am interested in your just reminding me that, what components of FAA reauthorization should I and others who care about 

regional airlines and smaller airports be most concerned about? 

What issues do you want to raise? And is there something in the 

Administration’s proposal that is particularly troublesome to the 

regional airlines? 

Mr. COHEN. Mr. Chairman, Mr. Moran, yes, there is quite a bit 

that is troubling in the Administration’s proposal. And I would just 

point, a couple of weeks ago, the FAA gave everybody in this room 

an illustration of various scenarios under which the new system 

would change, how you would pay, what you would pay today as 

opposed to what you pay tomorrow. The one that struck me as the 

representative of the regional airlines is that a CRJ from Minneapolis-St. Paul to Minot, North Dakota would have to pay 36 percent more under the FAA’s proposal. And the next example they 

179

gave was that a 747 from Tokyo to Los Angeles would pay 16 percent less. 

I think that that same kind of calculus can be used virtually 

around the Country at all of those communities, a number of them 

in the middle of the Country, in Kansas, as you know, a number 

of places. It is interesting that you mentioned Kansas, because I 

had the pleasure of working for both Mr. May at the Air Transport 

Association and Mr. Boyer at the Aircraft Owners and Pilots Association. When I would work for AOPA and I would go out to try 

and talk to a number of mayors and city councilmen and State legislators about the value of their general aviation airport, what they 

have told me repeatedly over the last few years was the kind of 

great service that they were getting to multiple hubs from their 

commercial airport because of the regional aircraft that are serving 

them now. For example, right now in Wichita, you can go to Chicago, you can go to St. Louis, you can go to Denver. And there are 

multiple choices, much better, more frequent service than there 

had been previously. 

So that is probably a long answer, but the question was asked 

earlier, and I don’t know if you were in the room, by Mr. Coble, 

who asked the FAA how their proposal would impact regional aircraft. He said, I believe, I don’t want to mischaracterize what he 

said, that it wouldn’t harm them. And that is just patently not 

true.

Mr. MORAN. I know that this Subcommittee is going to have a 

hearing on essential air service, or at least the topic of essential 

air service is scheduled for April. I would invite you to visit with 

me and make certain that we are well informed of any issues that 

we need to pursue in regard to essential air service. Kansas is another State that is very much dependent upon that program. 

Mr. Bolen or Mr. May or both of you, during the last FAA reauthorization, GAO found that the major cost drivers of the air traffic 

control system was the hub and spoke system. I know Mr. Bolen 

just talked about that. Is that still true today? I guess I just heard 

you say that what we started with a long time ago was, I think Mr. 

Boyer was saying this, that what we started with a long time ago 

was the hub and spoke system. The system was designed based 

upon that plan. And my guess is that not a lot has changed in regard to hub and spoke. Is that true? 

Mr. BOLEN. I think over the past 10 years, since this particular 

Committee did a deep dive into FAA funding and actually modified 

the taxes to reflect what was the current environment, what we 

have seen over that time is that commercial operations have grown 

faster than general aviation operations, including general aviation 

turbine operations. And that in addition to them growing, they 

have grown in hub operations specifically. 

That is why, and we have articulated a number of concerns with 

the FAA’s cost allocation study. But it is hard for us to understand 

how it can be so radically different from what they did in 1997, 

since it was understood that hub operations drove costs then, there 

are more hub operations now, the relative activity between commercial and general aviation shows more growth on the commercial 

side.

180

And yet because they have gotten away from what is known as 

the first, best approach to accost allocation and the second best approach to cost allocation, and come up with their own customized 

system, they have come up with a cost allocation that shows general aviation owing much more this time around than the last time. 

So that is really our concern, is it seems to be at odds with good 

economic principles and with what we know has happened in the 

market over the past 10 years. 

Mr. MORAN. When you describe what has happened, and my time 

is expiring, but are the projections the same for general aviation 

and commercial, as we look into the future, the same kind of increasing use? 

Mr. BOLEN. I think there is a variable out there that has been 

discussed that no one really seems to know. And that is the impact 

of very light jets on the market. There are some who have suggested that will facilitate a new business model known as the air 

taxi market. And if that is successful, that could eventually change 

some traffic patterns. We don’t really know. Jack Pelton, who you 

know is the President, Chairman and CEO of Cessna, which since 

1927 has built half of all general aviation airplanes in the world, 

believes that there are maybe 500 very light jets that will be delivered between now and four years from today. We heard earlier, 

someone used a 10,000 figure. Difficult to know what those numbers are. 

I think the important thing is that the number of general aviation airplanes has grown significantly since 1970, the mix of hours 

flown between commercial and general aviation has if anything become more dominated by commercial. The fundamental reason for 

that, and it was stated earlier in the hearing, is that a commercial 

airplane flies about 3,800 hours per year. A general aviation turbine airplane flies about 370 hours per year. In other words, for 

every commercial airplane, they are flying about 10 times as many 

hours as general aviation. We expect that to hold true with the 

very light jets as well. 

Mr. MORAN. Thank you, Mr. Chairman. 

Mr. COSTELLO. I thank you. 

Mr. Bolen, just a quick question. You heard me, I think earlier, 

ask Dr. Dillingham about looking at other countries. I would ask 

you, in your capacity of looking at other countries, do any countries 

that you know of assess fees according to those who use the system? In other words, we talked about many other countries that for 

general aviation they assess one fee that is much lower, so it is not 

based on just how often you use the system. 

Mr. BOLEN. Almost universally around the world, rates and 

charges are based on aircraft weight and aircraft distance. In some 

companies, if an aircraft gets below a certain weight, they will go 

to a registration type fee. So there are two different ways that are 

universally done. What we have said is in the United States, we 

have a very good proxy for aircraft weight and distance flown. That 

is called the fuel tax. We are able to pay that without an administrative burden on either the Government or industry. It is an ultraefficient way to do it and we think it should be continued. 

Mr. COSTELLO. Thank you. 

The Chair recognizes the gentleman from Missouri, Mr. Graves. 

181

Mr. GRAVES. Thank you, Mr. Chairman, I appreciate it. I have 

been here and there all day long today and I apologize for missing 

a good part of the hearing today. As you are well aware, I am very 

interested in this subject. 

But I do have a couple of questions. One, the statement was 

made earlier today by Mr. Dillingham with GAO, he stated that 

cost overruns, when implemented in a new system by FAA in the 

past, the cost overruns were the cause of a number of reasons, including the lack of stakeholder input. My question is, how many of 

your organizations were included in that process as they were talking about this new air traffic control system and obviously, the 

stakeholders, as he put it, there are people who are going to be 

paying for it. 

Mr. BOLEN. Well, Congressman, I would simply say, from an 

NBAA perspective, we have attended a number of briefings where 

the FAA has told us what they are going to do or how they are 

going to do it. We have always submitted comments and requested 

additional meetings to follow up with them. To date, those have not 

been, in most cases, answered. In the few cases where they have 

been answered, the requests have been denied. 

Mr. ALTERMAN. One thing I can say for the FAA, as Mr. Bolen 

indicated earlier, the cornerstone of the Next Generation surveillance system will be a technology called ADS-B. We started working on ADS-B about 11 years ago when we started to look for an 

alternative to a radar-based collision avoidance system. I think we 

were before our time, because we never got that done, and we have 

a traditional TCAS in our aircraft. 

What we discovered was that the technology involved, ADS-B, 

had a whole host of other options to help the system. And we have 

been working cooperatively with the FAA Safe Flight 21 office to 

help develop those, as has the general aviation community in Alaska, with the Project Capstone that they had up there. But I think 

the implementation of ADS-B technology reduced the accident rate 

by approximately 42 percent, or something around that number. 

So not with respect to whatever proposal they have now, but over 

the past decade, I have to say that the agency has worked cooperative with industry on specific projects that will help the NextGen 

system.

Mr. BOYER. The one thing I can tell you, using Steve’s ADS-B 

analogy, which we have been involved in, as you know in Alaska 

for almost over a decade, I think the FAA lacks some organization 

right now. The Committee should be aware that ADS-B is the one 

technology of NextGen that everybody seems to be talking about. 

But on a fast track, because they are set up in silos for program 

offices, they are fast tracking a rulemaking procedure that will 

begin in September, they hope to have it out in September, just to 

say, hey, we have this new technology out. And there are still a significant number of unanswered questions. We have been scrambling in our organization for three weeks, meeting with various 

vendors, with the FAA and with others. 

So the FAA is set up in a way in which it is not integrated over 

all paths. ADS-B could be a data link of the future, ADS-B has to 

be integrated with collision avoidance systems in the planes that 

182

fly in the Class Bravo airspace. These things are not being looked 

at.

So this will probably cause a delay and an overrun unless we get 

stakeholders even more involved in asking these questions up 

front.

Mr. ZUCCARO. I can put a little different perspective on it from 

our standpoint, from the helicopter industry. We are involved heavily in the ADS-B initiative. As I pointed out previously, we had a 

situation in the Gulf of Mexico where for over 40 years, you had 

650 helicopters operating on a daily basis, moving tens of thousands of people on and off platforms. You had no ability to talk to 

the FAA, nor could they see you. The operators had to create their 

own infrastructure. 

Last year, we were able to negotiate with the FAA as a partnership the installation of ADS-B into the Gulf of Mexico. That is a 

complete turnaround from the past history of the operating environment in the Gulf. The burden economically had been historically 

on the operators completely to build their own systems, because 

there was no national airspace system extended out over the Gulf 

in the altitudes that they operated in. 

We have stepped up to the plate in working with the FAA by contributing $100 million in in-kind services. We are committed to 

the technology. But the unique aspect of this is the advantage of 

ADS-B to the helicopter community is off-airport environment, outside that normal environment. It is an area such as this where we 

have nothing. We don’t have communications or weather or air 

traffic control surveillance communications. It is to the EMS operator that is in a rural area that has no services, because he is 

below the radar screen, outside communications and not in an ATC 

environment. We have to create that system for him, and ADS-B 

provides us the best methodology to do that. So it is a safety enhancement and an operational efficiency enhancement. 

I will acknowledge freely that we sincerely appreciate the Administrator’s help and leadership in taking ADS-B to that level within 

the helicopter community to recognize the safety initiative and the 

operational information that it provides us. But it is a flip-side 

coin. As was previously noted with the question, how do you get an 

equitable system? You take our segment of the industry. We do not 

operate in that environment. We are paying for a system that 

builds runways and airports. We don’t runways and airports. We 

need heliports. 

How do we get that equitably put into place? We don’t mind paying our fair share. But make sure it is fair and make sure we get 

the benefit of the funds that we put in that reflect our segment. 

We do operate at airports occasionally. And some of the funds we 

pay absolutely and rightfully belong in the support of those airports that we operate at. It is not an easy question. 

Mr. ALTERMAN. One final point on what Mr. Boyer said. I think 

it points up a problem. One of the things that we mentioned in our 

testimony was, we don’t seem to have the definition of the system 

yet. We have components of the system. And that is a real problem. 

We as an organization and as an all cargo industry, have supported 

the development of ADS-B. But before the commercial airlines start 

investing multi-billions of dollars in the avionics to support that, 

183

we have to know what the system looks like and the benefits to the 

industry defined. We know that we have to do phase one, which is 

putting in ground stations, and that will help GA more than the 

commercial airlines. We don’t have any problem with that. But we 

have to do the research to understand and get the system so that 

the air to air applications, where the real benefits occur to the commercial airlines occur. We don’t have that defined yet. 

So we are total supporters of ADS-B. We have worked on it for 

over a decade now. But how it fits into the system and the cost and 

benefits to everybody in that system have been poorly defined. That 

is what makes everything so difficult. We don’t know what we are 

funding yet. 

Mr. GRAVES. That is actually the best point of all, and I see no 

reason why we need to put a funding system ahead of something 

we don’t even know quite yet what it is going to be. 

Will the Chairman allow one more? And I have to ask this half 

in jest, and it is to Mr. May. In light of the subject matter, and 

talking about user fees and how we are going to fund the system, 

I think it was in the Wall Street Journal recently, the article about 

air carriers using highly sophisticated software to fly through Europe, so that they would miss user fees in certain countries. In fact, 

this one airline was cited as, they used it to avoid about $146 million worth of user fees in Europe. 

I am just curious as to how that blends in with all this talk of, 

if we are trying to avoid user fees in Europe, then why on earth 

are we trying to implement them in the United States? 

Mr. MAY. Mr. Graves, sometimes you have to be able to answer 

in half jest as well as ask the question. 

Mr. GRAVES. I understand. 

Mr. MAY. It brings a smile to my face. 

Mr. COSTELLO. I thank the gentleman from Missouri. 

Let me in closing thank all of our witnesses here today. Certain 

it was a longer day than you anticipated or we anticipated your 

being here. But it has been very productive. I think there is one 

thing that we all can, I think, agree on, and that is that the FAA’s 

proposal in particular for the user fee system presents a lot of 

questions, answers that they have not been able to put forth yet. 

It seems to me that if you are going to radically change the current 

system that you need to explain what your alternative is in detail, 

outline the cost, the administrative cost as well as every other associated cost. And you need to get out and sell the plan. 

As I mentioned earlier, we were told last summer, in June, that 

we would receive the FAA’s proposal. Had we received it then, it 

would have given us time to analyze and to ask and try and spend 

some time on their proposal. Unfortunately, June slipped to September and then September to the end of the year. Then of course 

we received the proposal about 30 days ago. 

Realistically, I don’t know how we are going to be able to write 

a reauthorization bill and I don’t know how the FAA or anyone else 

would expect us to implement this user fee system as it has been 

presented. As the Administrator pointed out, we do have a time 

problem. We have a short window here for us here in the House 

to be able to mark a bill up, get it from the Subcommittee to the 

Full Committee to the Floor, let alone what our friends on the 

184

other side of the Capitol, the work that they have to do and then 

get it to conference and get it to the President. 

So I think it has been said, and I will repeat it again, Dr. Ehlers 

said that it was dead on arrival, Chairman Oberstar said that the 

user fee system today, that he would like to give it a proper burial. 

I think that it would be in our interest to consider everything that 

is on the table, but to be realistic and move on and address things 

that we can agree on and can address. 

So you have added to the debate today and we of course are holding a hearing tomorrow on the operations and safety issues. We 

will move on to hear from other stakeholders in upcoming hearings. 

We thank you for being here today. We thank you for your testimony and the Subcommittee stands adjourned. 

[Whereupon, at 4:00 p.m., the Subcommittee was adjourned.]

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340

HEARING ON A REVIEW OF FEDERAL AVIATION ADMINISTRATION OPERATIONAL AND 

SAFETY PROGRAMS 

Thursday, March 22, 2007, 

HOUSE OF REPRESENTATIVES, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, SUBCOMMITTEE ON AVIATION, Washington, DC. 

The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 

2167, Rayburn House Office Building, the Honorable Jerry F. 

Costello [Chairman of the Subcommittee] presiding. 

Mr. COSTELLO. The Subcommittee will come to order. The Chair 

would ask all Members, staff, and everyone in the room to turn off 

their electronic devices or put them on vibrate. 

Let me welcome our witnesses here, all of them. We have three 

panels today and we will hear from the first panel very shortly. 

The Subcommittee is meeting today to hear testimony on a review of the Federal Aviation Administration’s operational and safety programs. Today is an opportunity for the Subcommittee to hear 

from various stakeholders and those involved in the system their 

views, comments, and recommendations for the reauthorization. 

Let me say that the Chair will impose the same procedures that 

we used yesterday at our hearing, since we have a number of witnesses. I believe we have 11 witnesses to hear from today. I hope 

we don’t experience the number of roll call votes that we had on 

the floor yesterday. 

One is that the Chair will give an opening statement, will call 

on the Ranking Member to give his opening statement or comments, and then ask all of the Members to submit their opening 

statements for the record. 

Mr. Mica, I did not see you come in, but we certainly will recognize you. 

Let me begin by giving my opening statement. 

I welcome everyone here to the third Subcommittee hearing on 

the FAA’s reauthorization. This hearing will provide a general review of issues associated with the FAA’s operational and safety 

programs.

This hearing represents an opportunity for our panelists to discuss issues that they believe this Committee should consider in the 

FAA reauthorization. The first panel will include testimony from 

the FAA’s workforce, including the controllers, represented by the 

National Air Traffic Controllers Association; air traffic technicians 

and aviation inspectors, represented by the Professional Airways 

System Specialist; and other FAA professionals, represented by the 

American Federation of State, County and Municipal Employees. 

I have repeatedly stated that I am concerned about future staffing levels for the FAA’s controller and safety inspector workforces. 

In particular, over the next 10 years, approximately 70 percent of 

the FAA’s nearly 15,000 air traffic controllers will be eligible to retire. The FAA believes they could lose more than 10,300 air traffic 

341

controllers by 2015 and they will need to hire approximately 11,800 

controllers over the next 10 years to have enough recruits in the 

pipeline to meet the positions lost. 

There is no question that the FAA’s imposition of pay and work 

rules on the controllers’ workforce has increased retirements. According to NATCA, veteran controllers are currently retiring at a 

rate of more than three per day since the end of the fiscal year 

2006.

It is clear that the current contract negotiation process does not 

promote good faith negotiations and gives an unfair advantage to 

the FAA. I am committed to fixing this grossly unfair process during the FAA reauthorization bill. 

In addition, it is not just NATCA that is affected by the FAA’s 

interpretation of its authority to impose pay and rule works, it extends to the FAA’s entire workforce. I look forward to hearing from 

PASS and AFSCME on the status of their respective contract negotiations with the FAA. 

I am also concerned about the potential attrition in the FAA 

safety inspector workforce. I am told that over one-third of the FAA 

safety inspectors will be eligible to retire by the year 2010, and I 

was informed this morning and given a chart that, in fact, since 

the end of the last fiscal year in September, that we have already 

lost 77 inspectors. It is an alarming rate of 12 or 13 per month. 

So I am concerned about the staffing levels for the safety inspector 

workforce.

Last year, the National Research Council reported that the FAA 

lacks staffing standards for inspectors and recommended that the 

FAA undertake a holistic approach to determine its staffing needs. 

It is imperative that we make the investments in the FAA’s workforce now so that they can meet the new challenges for maintaining 

the highest level of safety in this ever-changing aviation environment.

Their carrier workforce is also well represented here by the Air 

Line Pilots Association, the Association of Flight Attendants, and 

the International Association of Machinists. With the airlines 

largely back on track after September the 11th, it is time once 

again to turn our attention to the workplace and safety issues. I 

look forward to hearing about issues of concern to the pilots, flight 

attendants, and mechanics. 

On our third panel today, we will hear from a diverse group, including a return visit from Dr. Dillingham of the Government Accountability Office, who, of course, was here with us yesterday and 

has been with us many times, to discuss issues related to safety, 

accommodating new users in the airspace system, airport congestion, and air traffic staffing and training. 

With that, I want to welcome all of our witnesses here today, and 

I look forward to hearing their testimony. 

Before I recognize the Ranking Member and the Ranking Member of the Full Committee for statements and comments, I would 

ask unanimous consent to allow two weeks for all Members to revise and extend their remarks, and to permit the submission of additional statements and materials by Members and witnesses. 

Without objection, so ordered. 

342

At this time, the Chair would recognize the Ranking Member of 

the Full Committee, Mr. Mica, for his comment or statements. 

Mr. MICA. Thank you. I will try to be brief. I commend you and 

our Ranking Member, Mr. Petri, for conducting this series of hearings which I think are vitally important to reauthorization and 

some very critical questions on how we fund a system for the future.

I think it is very important, too, that we have labor involved in 

some of these discussions so that we can move forward, and certainly labor I think is undoubtedly the largest percentage of our 

costs. Capital costs are just a fraction of what it does cost to run 

the system, so it is important that we include them in this process. 

I am also particularly pleased to be here today. Just a few minutes ago I got a call from Secretary Peters and also learned on the 

wire that the European Union Transport Commissioners have approved the Open Skies Agreement, which is probably one of the 

most historic events in international agreements that the United 

States has ever engaged in relating to aviation. And I think that 

is also important in regard to this hearing because we have to have 

a system that will handle this additional business at least on our 

side of the Atlantic, and then the incredible potential this holds for 

expanding employment and aviation industry, opening markets in 

communities that have never had international service, and the 

benefits to consumers, which are absolutely unprecedented. So we 

will see lower prices, see more jobs, dramatic expansion of air activity on the international side between both sides of the Atlantic. 

So a pretty exciting day. 

Yesterday, DOT announced the approval of Virgin America’s request, which I think is also historic because I think they will inject 

a new level of competition that we have not seen before. So some 

exciting things, but we have to have the system available, ready to 

operate and meet the needs of the future traffic that we will see 

dramatically expanded by these events. 

With those quick comments, I am going to stay for a few questions. I have read some of the testimony, but I thank you again for 

this hearing and allowing me to participate. 

Mr. COSTELLO. The Chair thanks Mr. Mica for his comments and 

the Chair recognizes the Ranking Member of the Subcommittee, 

Mr. Petri, for his opening statement or comments. 

Mr. PETRI. Well, thank you very much, Mr. Chairman. I would 

like to join you in welcoming the three panels that we have here 

as witnesses today. 

Today’s hearing is addressing FAA’s operational and safety programs, and while the testimony will reflect a broad variety of 

issues that Congress will be considering during this reauthorization cycle, it is important to remember that we are conducting this 

hearing at a time when America’s aviation system has been safer 

than at any other time in our Nation’s history. 

This remarkable safety record is not an accident, it has been 

achieved through sound policy and through continuous oversight 

and, of course, we can’t stop where we are, we must continue to 

strive for further improvements. 

So I look forward to learning more about the FAA’s operations 

and its safety programs and yield back the balance of my time. 

343

Mr. COSTELLO. I thank the Ranking Member for his comments 

Let me welcome our first panel of witnesses here today. As we 

said, we have 11 witnesses that are here to testify, and hopefully 

we will have all of you understand that we ask you to summarize 

your testimony. We have, I know, a number of questions and other 

Members who will be joining us. 

Our first panel, let me introduce and welcome: Mr. Pat Forrey, 

president of the National Air Traffic Controllers Association; Mr. 

Tom Brantley, the President of the Professional Airways Systems 

Specialists; Mr. Tom Waters, President of American Federation of 

State, County and Municipal Employees Local 3290. 

Gentlemen, the Subcommittee welcomes you here this morning 

and we would ask you to summarize your statements in five minutes or less, if possible, and we will have questions for you at that 

time.

The Chair recognizes Mr. Forrey for his opening statement. 

TESTIMONY OF PAT FORREY, PRESIDENT, NATIONAL AIR 

TRAFFIC CONTROLLERS ASSOCIATION; TOM BRANTLEY, 

PRESIDENT, PROFESSIONAL AIRWAYS SYSTEMS SPECIALISTS (AFL-CIO); AND TOM WATERS, PRESIDENT, AMERICAN 

FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES (AFSCME) LOCAL 3290

Mr. FORREY. Thank you, Chairman Costello, Ranking Member 

Mr. Petri, Mr. Mica. I would like to thank the Members of this 

Committee for inviting me to testify today to review operational 

issues and safety programs at the FAA. 

On behalf of the 19,000 aviation safety-related professionals that 

NATCA represents, I would like to praise both Chairman Costello 

and Chairman Oberstar for recognizing an urgent need to repair 

NATCA’s current contract dispute with the FAA and for risking 

their political capital in an attempt to right the injustice that we 

unilaterally imposed upon aviation safety professionals in July of 

2005, as well as America’s air traffic controllers last September. 

You need to know that the men and women charged with keeping 

the skies safe for the flying public appreciate all that you do for 

them. Thank you very much, sir. 

What these men and women are asking Congress for is not complicated. The workforce at the FAA simply wants a fair collective 

bargaining process. We want a process that includes the role for 

the agency, a role for Congress, and a role for an experienced arbitrator when the two sides cannot come to an agreement. Simply 

stated, we are looking for fairness. 

I am here to tell you that for the men and women in control towers, TRACONs, and en route centers across the Country, there is 

considerable disillusionment, frustration, and distraction due to the 

effects that these unilaterally imposed work rules have had. The 

impacts of this situation are affecting the safety margins of the system. Yet, despite having their rights denied by the FAA, my membership continues to work as the safety professionals that they are 

and hopes that a congressional correction could be made that has 

already eluded us to this date. 

Currently, there are tens of thousands of FAA employees working without a contract, and even though the FAA continually 

344

makes reference to a contract, the truth is that air traffic controllers, engineers, test pilots, nurses, lawyers, and others represented 

by NATCA are working under imposed pay and work rules. This, 

sir, is not a contract. 

Mr. Chairman, I want to be clear that this is not just a collective 

bargaining rights issue. The impact of the current situation is 

greatly affecting the agency, its employees, and, by extension, the 

safety of the entire aviation system. These unfair work rules have 

resulted in the increased early retirement of veteran controllers, 

the same controllers who safely landed 5,000 aircraft in just over 

two hours on September 11th. This acceleration of retirements has 

aggravated the already existing controller staffing crisis. 

These oppressive work rules have also resulted in mandatory 

overtime to offset the understaffing, denial of sick leave and vacation time, an increase in stress and fatigue, and low morale among 

FAA employees. Today there are fewer controllers watching over 

more traffic, and the fatigue and stress is beginning to show. 

Simply stated, because of the imposed work rules and pay, the 

agency has a problem retaining veteran controllers and recruiting 

qualified candidates. They have now sunk to the level of advertising for candidates on MySpace.com and Craig’s List. 

These problems have begun to negatively affect the safety margins in the system. Here are the facts. Because new hires now face 

a 30 percent pay cut, experienced military controllers are turning 

down FAA jobs in droves because it would mean a huge pay cut 

to them; retirements and even total attrition are exceeding the 

FAA’s planning for a fourth year in a row; and, more importantly, 

the resulting fatigue among the remaining employees is now having a major safety concern for us. Controllers are forced to work 

longer hours on position without a break, 10-hour days, and mandatory six-day work weeks due to the effects of the imposed work 

rules and resulting short staffing. 

I strongly urge this Committee to carefully study this safety 

issue. I firmly believe that without a concerted effort to attract experienced or qualified controllers and to retain our current workforce, the air traffic control system will continue to lose controllers 

that will mean flight delays, runway incursions, and increased 

chance of aviation disasters. 

And don’t let the FAA’s propaganda bamboozle you. According to 

the FAA Regional Administrator, Doug Murphy, 50 percent of the 

trainees fail and it takes three years for the controllers to certify, 

so hiring one-for-one isn’t going to adequately staff this system. 

Just two days ago the DOT Inspector General reported that approximately 2,563, or 11.1 percent, of the total midnight shifts they 

reviewed were staffed with only one controller before the Comair 

crash in Lexington last August. As the FAA has even now admitted, its own policy required two people in the Lexington facility, 

and only one was on duty at the time of the disaster. I firmly believe that was as a result of the agency’s refusal to backfill retirements or to use overtime. The IG report should be a wake-up call 

to the agency to reevaluate its new staffing plan and increase its 

new staffing standards, not cut them down to grossly negligent 

budget-driven levels. 

345

As USA Today reported yesterday, the IG reported that the FAA 

spokesman said the agency has stopped understaffing the towers. 

We disagree with this assertion and we have mandatory overtime 

stories to prove it. Some staffing facts are indisputable. The FAA 

Administrator told this Committee last week that traffic is up, yet 

the number of controllers has fallen by over 1,000 in just three 

years, and it is going to get worse. The FAA’s new staffing range 

calls for a reduction in controller staffing levels of between 9 percent and 26 percent from previously agreed upon safe staffing 

needs. I believe this Committee should ask for the supporting documentation and justification for this change. 

In terms of modernization of the air traffic control system, I want 

to be clear on one point: no one would like to see more efficient air 

traffic control technology put in place than the controllers using the 

equipment. With the proper tools in place, air traffic controllers 

could handle an increase in capacity while making the entire system safer and more efficient. The agency continues to refuse to 

allow controllers to be part of a collaborative process for new technology to ensure its timely delivery and successful implementation. 

Air traffic controllers not only want the modernization system; they 

need it and they demand it. 

As far as the Administrator’s FAA reauthorization proposal, 

NATCA believes it constitutes an ill-advised user fee financing system and other precursors to privatization that threaten to undermine an inherently governmental safety function. 

In closing, I would like to remind the Members of this Committee 

that, as a controller, my main concern is safety. I understand the 

safety implications of losing its most experienced controllers at a 

rate that is completely unacceptable: three per day. As a controller, 

I understand that new hires will need three years to certify and 

fail training at a rate of 50 percent in New York, according to FAA 

Regional Administrator Doug Murphy. As a controller, I understand the safety implications of an air traffic control system where 

40 percent of the controller workforce, by 2010, will have less than 

four years of experience. 

The safety of the system is severely compromised if the FAA cannot give its veteran controllers a reason to stay and help to rebuild 

the controller workforce of tomorrow before they take a well earned 

retirement. The FAA will not give them a reason to stay and help 

them keep the trainees. 

I would be happy to answer any questions you have, sir. 

Mr. COSTELLO. The Chair thanks you, Mr. Forrey. 

Mr. Brantley, the Chair recognizes you for five minutes. 

Mr. BRANTLEY. Thank you. Chairman Costello, Congressman 

Petri, and Members of the Subcommittee, thank you for inviting 

PASS to testify today. PASS represents approximately 11,000 FAA 

employees working throughout the United States and overseas, and 

we appreciate the opportunity to present our views on issues vital 

to aviation safety. 

Labor relations within the FAA are in a state of chaos due to the 

manner in which the FAA has approached contract negotiations 

with its unions. Under its interpretation of current law, if the FAA 

declares that the negotiations have reached impasse, the Administrator can send the matter to Congress. If Congress fails to act 

346

within 60 days, the FAA’s terms are unilaterally implemented, a 

process that hijacks the collective bargaining rights of FAA employees. Contract negotiations for four of PASS’s five bargaining units 

have been at impasse for over four years—four years—and there is 

no foreseeable end in sight. 

During negotiations over the contract for PASS’s largest bargaining unit, Air Traffic Organization Technical Operations, the 

agency’s behavior made it clear that it was not interested in good 

faith bargaining and was intent on declaring impasse as soon as 

possible, so PASS accepted the FAA’s proposal in order to give the 

employees that PASS represents a voice in the process. They responded by overwhelmingly rejecting the contract proposal. Yet, 

rather than respecting the employees’ rejection of its proposal and 

returning to the bargaining table, the FAA has instead chosen to 

pursue unilateral implementation of its terms through litigation. Is 

it any wonder that the 2006 FAA employee attitude survey showed 

that 64 percent of FAA employees disagree or strongly disagree 

with the following statement: I trust FAA management? 

It is clear that a change is needed in order to ensure FAA employees their right to collective bargaining. PASS is asking Congress to take action to clarify that the Federal Service Impasses 

Panel has jurisdiction over all bargaining impasses arising at the 

FAA and that binding arbitration before a neutral third party is 

the method used for resolving disputes. 

Understaffing is also a major concern for PASS, especially in our 

technician and safety inspector bargaining units. Inadequate technician staffing has resulted in more unplanned outages, a dramatic 

increase in restoration times, and a move toward a fix-on-failure 

approach where preventive maintenance and certification of NAS 

systems and equipment are significantly reduced. The FAA does 

not have a staffing model in place to accurately determine the 

number of trained technicians needed to meet the agency’s needs. 

PASS is requesting that Congress require a study of FAA technician training and the methods used by the FAA to estimate technician staffing needs. 

By 2010, as you pointed out, Mr. Chairman, almost 50 percent 

of FAA inspectors will be eligible to retire. Yet, instead of addressing its staffing problems, the FAA has chosen to increase its reliance on its designee programs. The agency has responded to repeated criticisms of its use of these programs by assigning even 

more hands-on work to designees that was once performed by FAA 

inspectors. The latest example is a concept known as the organizational designation authorization program, which would allow a private organization to be in charge of overseeing the designee. In essence, the industry overseeing itself. 

In order to protect the safety of the aviation system, PASS is requesting that Congress direct the FAA to put expansion of designee 

programs on hold until the National Academy of Sciences staffing 

model is implemented and recommendations issued by the GAO, 

including the establishment of a program to evaluate the agency’s 

designee programs can be thoroughly addressed. 

PASS is extremely concerned about several aspects of the FAA’s 

reauthorization proposal, including outsourcing of key components 

of the NAS, the creation of a partisan commission to justify 

347

outsourcing targets and facility closures, and ambiguous user fees 

to fund the agency. The United States has the largest, safest, and 

most efficient aviation system in the world. To introduce concepts 

that would hinder or abandon the work performed by these professionals would be to risk the foundation that keeps this Country’s 

aviation system safe. PASS remains committed to making sure that 

our Country maintains its standing as having the safest aviation 

system in the world, and turning that system over to private corporations will not accomplish that goal. 

Thank you, and I would be happy to answer any questions you 

may have. 

Mr. COSTELLO. We thank you. 

The Chair recognizes for his opening statement or summary Mr. 

Waters.

Mr. WATERS. Thank you, Mr. Chairman. Good morning Members 

of the Aviation Subcommittee. I am Tom Waters, President of 

AFSCME Local 3290. AFSCME is a labor organization that represents 1.4 million workers, predominantly in the public sector. Approximately 2,000 of our members are employed in various professional positions at the FAA Headquarters here in Washington. 

For the past seven years, I have had the honor to serve and represent the attorneys and administrative staff within the FAA’s Office of Chief Counsel. Today I am especially pleased to also represent, through my testimony, the AFSCME members within the 

other three FAA headquarter locals at the request of their presidents, my colleagues and friends, who are here today. 

Like the other unions, our story deals with the FAA’s conduct in 

contract negotiations, but rather than repeat the often cited history 

of personnel reform and related statutes, I want to amplify the cost 

in human terms of the FAA’s often sharp practices under reform. 

Working without a collective bargaining agreement for over six 

years, I have seen how quickly a workforce can be distracted and 

demoralized by the belief that its employer has dealt with it in an 

unjust and high-handed manner. After all, the issues at stake for 

the employee are no less than the employee’s career, livelihood, and 

the ability to keep his or her family healthy, safe, and secure. 

Our own ongoing contract dispute with FAA has its origins in the 

agency’s desire for a pay-for-performance salary system. In 1996, 

the FAA sought, and Congress granted, total authority to revise 

both the pay and personnel systems. Although we negotiated a contract under the new reform system, the FAA reneged and refused 

to implement, with the result that AFSCME members are now divided between two separate pay systems and serve under a hodgepodge of old and new work regulations negotiated, if at all, under 

a piecemeal process. 

I hasten to add that the employees in the Office of Chief Counsel—and I believe throughout headquarters—initially had little apprehension about the concept of pay-for-performance, called core 

compensation at the FAA. However, management’s performance 

monitoring on the specific five-tiered system was one of failure. So, 

in one of its first changes under personnel reform, management implemented a pass-fail system. These habits and sequence of events 

became the source of much workforce mistrust and ultimately led 

the employees in the Office of Chief Counsel to unionizing. Other 

348

headquarters employees followed and formed three more AFSCME 

locals.

From the summer of 2000 through February 2001, a 25-member 

negotiating team comprised of members of all AFSCME headquarters locals negotiated a 75-article contract with a management 

negotiating team comprised of management representatives from 

all affected lines of business. It was pursuant to a strict predetermined procedure for signifying closure for each article that the parties agreed upon each of the 75 articles. Productivity gains offset 

any pay raises. 

The four AFSCME locals overwhelmingly ratified the agreement 

on February 21st, 2001, by a vote of approximately 1,000 to 30. 

However, the elation was short lived because Administrator Garvey 

submitted the agreement to the Office of Management and Budget 

for approval and then ultimately refused to sign and execute the 

contract, alleging that OMB disapproved. As you know, OMB approval of an agency collective bargaining agreement is not—is 

not—a requirement under Federal labor law, nor did the union 

ever acquiesce to OMB review or approval. 

Between Congress, the FLRA, and the United States Court of 

Appeals for the District of Columbia, the history of the protracted 

litigation resulting from the Administration’s action, which the 

union lost, is a matter of substantial record and not repeated here. 

Worth recounting here, though, is that under the initial litigation, 

documents surfaced which refuted the agency’s representation. One 

document showed that the FAA asked OMB to change draft language in a letter responsive to a congressional inquiry. OMB’s review made it clear that the FAA management held the final decision on signing. The change requested by the FAA was to remove 

this language for wording that stressed that OMB did not concur. 

The agency’s intent to revise the OMB letter is perhaps as telling 

as the substance of the revision itself. I have the document with 

me, if anyone is interested in reviewing it. 

Even if it preferred OMB approval, the FAA shot itself in the 

foot by refusing to execute the agreement. After ratification, the 

headquarters workforce was satisfied that it had replaced the 

sharp edges of a pending unilaterally imposed pay-for-performance 

system in favor of a well planned, bilaterally agreed upon pay-forperformance system. As I said, employees were enthusiastic to put 

behind them the fear and distraction of a new pay system and the 

concomitant arguments with and suspicions about management. 

Instead, today, some employees are in an FAA-imposed pay system 

while others remain in a near exact replica of the General Schedule 

system. There is such chaos that even the attorney managers in my 

office sued the agency for more money. We have often pointless 

performance reviews. We have no meaningful grievance procedure. 

Litigation remains the only recourse when third party resolution is 

desired. All working conditions must be resolved on a piecemeal 

basis through impact and implementation bargaining. 

AFSCME has tried every means available to resolve this long 

and protracted contract dispute. We requested assistance from Congress and twice had report language inserted in appropriations 

measures directing that the agency implement the contact. The 

FAA ignored the directives. Considering the fact that AFSCME has 

349

exhausted all means to resolve this matter and the FAA has used 

all means to thwart our efforts and those of other unions who are 

in similar unfortunate positions, it is time for Congress to consider 

a legislative approach to resolving FAA’s failure to live up to the 

congressionally mandated task of legitimate personnel reform. 

We want not negotiate, but the fiscal year 1996 appropriations 

language that granted FAA unfettered discretion in personnel reform must be repealed because the agency’s version has led to poor 

morale and distrust. Employees must believe in the integrity of 

their employer and that they will receive a fair shake when it 

comes to bargaining with their employer. I urge the Subcommittee 

to act to eliminate the flawed and unfair bargaining process that 

currently exists at FAA in order to avoid any further misuse by the 

agency of its bargaining authority. 

In closing, I would like to invite each of you to the FAA to meet 

and speak with AFSCME members to fully understand the impact 

of the transactions and occurrences discussed here today. They are 

humble, dedicated, hard-working, and conscientious public servants 

who deserve better treatment than they receive from their management.

I thank you and I would be pleased to answer any questions. 

Mr. COSTELLO. We thank you and all of the witnesses that have 

testified so far this morning. 

Mr. Forrey, let me ask you, if I may. In your testimony you indicate that the FAA is not hiring controllers, but they are hiring 

trainees, and I wonder if you might explain the significance of your 

statement.

Mr. FORREY. Well, I think the agency likes to portray the fact 

that they hire a controller for every one that retires, but the fact 

is it takes years to train a controller to be fully certified at any facility. The average is about three, according to the FAA’s own Regional Administrator. And of those trainees we are finding a huge 

amount of individuals that are not making it and they are failing 

in training, and part of the reason being they are bringing them 

right out of these schools or they are bringing them off the street 

and they are sticking them in towers like Atlanta and O’Hare and 

New York TRACON and Dallas, and they don’t stand a chance. 

The military controllers that used to come into the FAA are now 

being briefed by their own colonels and generals on the agency’s 

payroll, jailhouse work rules, and pay system to stay in the military. So that avenue is kind of drying up for the agency and we 

are not getting those experienced controllers that might even help 

us in those busy facilities. 

So just a perfect example, at Atlanta tower there are 34 certified 

controllers there; they have 7 trainees, they are expecting only 2 

to make it; and the next year 12 of them are eligible to retire. 

There are 23 positions in that tower and next year, by this time 

in October, there might only be about 25 controllers working that 

facility. How do you work the busiest air traffic control facility in 

the world with 12 people or with 25 people? That is just ludicrous. 

They cannot train somebody in six minutes when they hire them 

and put them in the facility and be ready to go, it just doesn’t work 

that way. 

Mr. COSTELLO. Thank you. 

350

Mr. Brantley, let me ask you about the inspector staffing. You indicate in your testimony that because of the evolving industry, that 

the workload on the aviation safety inspectors have increased dramatically, and I want you to elaborate on that, explain that. 

Mr. BRANTLEY. Well, Mr. Chairman, the nature of the business 

for the aviation industry has changed, so they are going to more 

regional jets as opposed to their current practice, which is more 

flights, more planes. But also things like the agency implementing 

its new ATOS system, while that is not fully implemented and it 

is not fully developed yet, that has created a whole different set of 

work practices for inspectors. Things like aging aircraft, which 

Congress directed the agency to begin looking into I guess about 10 

or 12 years ago now, and it is just coming about, but that creates 

another workload. The explosion of outsourcing of maintenance by 

air carriers has created a workload because now, instead of just 

overseeing carrier itself, you know, it brings in the repair facilities 

that are now going to have to be overseen by the agency. 

So all of these things combined just create a lot more work, but 

the number of inspectors is not increasing. 

Mr. COSTELLO. The number of inspectors, I have been expressing, 

as well as other Members of this Subcommittee, the number that 

are eligible to retire and may be leaving, is the figure that I have 

been giving this morning, that since the end of September that we 

have seen 77 safety inspectors leave since October the 1st? 

Mr. BRANTLEY. Yes, sir, and that is a net loss. 

Mr. COSTELLO. It is a net loss. 

Mr. BRANTLEY. Yes, sir. 

Mr. COSTELLO. I wonder if you might just quickly, without going 

into a lot of detail, give us an update on the status of negotiations 

with the FAA. Is it at a standstill or is there any indication at all? 

Mr. BRANTLEY. Well, Mr. Chairman, as I mentioned earlier, for 

four out of the five bargaining units that we represent we have 

been at impasse, which is the stage where everything comes to a 

halt unless the agency decides to bring that to Congress. We have 

been at impasse for more than four years. Not a thing has happened in those four years by the agency to try to move these contracts to closure. The one contract that we had negotiations on in 

recent times, about a year ago—because we did not believe the 

agency was intent on reaching an agreement but, rather, their intent was to get to impasse so that they could impose their own 

terms—we actually accepted their proposal so we could put it to 

our Members for a vote. You know, our hope was, frankly, that seeing the results of that vote would wake the agency up, and 98 percent of our Members, in a record turnout, 98 percent voted no. So 

I think the message was there. Unfortunately, no one was willing 

to listen. So now we are involved in litigation. The agency is trying 

to implement the contract terms through litigation. We have a 

hearing next week, and I would be glad to keep you updated on 

how it is going, but essentially that is where we are. 

Mr. COSTELLO. Thank you. 

The Chair, at this time, recognizes the Ranking Member of the 

Full Committee, Mr. Mica. 

Mr. MICA. Well, thank you, Mr. Costello. 

351

I guess last night was American Idol. I didn’t miss it; instead, 

I—I did miss it. In fact, I never watch it. But I did stay up reading 

testimony. I did read all of Mr. Forrey’s—and thank you, it was 

probably one of the most comprehensive submissions I have seen—

and some of the others. I tried to catch up before today’s hearing. 

Your pages aren’t numbered, but the subject of the hearing, too, 

today is actually on, I guess, financing the system that we have 

got. Of course, a key component is personnel, since I asked and just 

found out that personnel costs will make up 80 percent of the budget cost in fiscal year 2008 and do now. But on this page here, Mr. 

Forrey, you say, third, a user fee based system is vulnerable to 

problems that disrupt aviation and commerce much as 9/11 and 

SARS did a few years ago. That is your statement, correct? 

Mr. FORREY. That is correct, sir. 

Mr. MICA. Well, I venture to say that if we look at the current 

system and we go back and look at 2001—we now have a 7.5 percent ticket tax and aviation fuel tax that compose most of the revenue—that also is subject to the same type of disruption. And we 

actually have the documentation to prove the dramatic affect and 

loss, so I don’t think that that is a very good criticism on what is 

being proposed by the Administration or the position. Which I support as a hybrid system. 

Let’s see, then I think you also said in your testimony staffingto-traffic, is that pretty much your position, trying to have staffing 

to the traffic? 

Mr. FORREY. I am claiming that the agency is staffing-to-budget, 

and not staffing-to-traffic. 

Mr. MICA. It is not staffing. But you would prefer staffing-to-traffic. I have a chart of traffic and staffing. 

Can we put that up there? We can go back a little bit. They are 

1999, 2000. Actually, according to staffing-to-traffic, if we use that 

model, FAA is still ahead of traffic, unless somebody could dispute 

these figures, but these are the figures. We have 14,618 controllers 

on board. That is in employment right now. Well, at the end of 

2006. So we are still ahead of traffic. 

In fact, it was interesting. Mr. Kuhl was here just a few minutes 

ago, and I visited a number of airports in September and October. 

One was Elmira, which brought this to light. Elmira, New York 

had a dramatic drop-off in traffic. There are very few flights in 

there; you can almost count them on a few hands. They had 13 air 

traffic controllers in 2001 and they still have 13 air traffic controllers, with almost no traffic. Now, I could cite others here. Just a 

few: Albuquerque, Seattle, Columbus, Milwaukee, San Francisco. 

The list goes on. 

So part of the problem appears to be that the staffing has been 

left at some levels in some places, and, Mr. Forrey, you cited in 

some places we don’t have enough air traffic controllers, is that correct?

Mr. FORREY. That is correct. 

Mr. MICA. So part of the problem might be distribution. First of 

all, we have more numbers and then we have many airports—and 

I will submit a list for the record—that have more air traffic controllers than needed—all of these experienced pretty severe declines, and we saw that across the Country. 

352

Now, let’s see, part of the problem, too, is applicants. Do we have 

a problem with applicants for these positions? 

Mr. FORREY. I believe you are going to run out of applicants. 

Right now the agency claims they have got about 3,000 or 3,500 

people in the pipeline, and the qualification level, to what extent 

we don’t know. 

Mr. MICA. Actually, there are over 2,000 applicants that have 

been ranked and rated as eligible. So there may be 3,000, but 2,000 

applicants. So we have got a little bit more evidence that we have 

applicants.

Now, one of the other things is the 10 day—of course, the people 

that we have working, I think you stated that—oh, wait, wait, 

wait. You did state, too, they are going from the schools to the towers. And we could play back the tape, but that is what you said. 

I don’t know that to be the case. Don’t they all go through Oklahoma City? 

Mr. FORREY. As far as I understand they go to Oklahoma City 

for basic instruction. 

Mr. MICA. But isn’t that a requirement, that you have to have 

those 10 weeks of training? 

Mr. FORREY. Yes, that is correct, but then they are putting them 

right into the towers, when they didn’t do that before, sir. 

Mr. MICA. But there is no one going from the schools to the towers.

Mr. FORREY. No, they spend 10 weeks at Oklahoma City. 

Mr. MICA. And the requirement is still just a college education, 

is that right, for those who enter. You can go directly as an applicant into Oklahoma or you could come from a school or from the 

military?

Mr. FORREY. All candidates go through Oklahoma City, whether 

you come from a school or whether you come off the street. And 

now they are advertising for no qualifications. 

Mr. MICA. Well, I just want to make certain for the record that 

we have that correct. 

And then the issue about 10-hour work days. Now, it is my understanding that a full-time controller’s basic work day is an 8-

hour shift, which includes a 30-minute meal break. The average 

controller’s time on board actually engaged in separating airplanes, 

according to—again, this I get from FAA—is 4 hours and 30 minutes per shift. That is the average time. Would that be about correct?

Mr. FORREY. I have no idea. 

Mr. MICA. Okay. And the other thing, too, about this issue of the 

10-hour days, anything over that amount of time that is set now 

would be voluntary. Is that correct? 

Mr. FORREY. I don’t know. I don’t know what you are talking 

about. Could you rephrase your question, because I am not sure 

what you are talking about? 

Mr. MICA. Well, again, under the terms of the previous contract——

Mr. FORREY. Well, we are operating under imposed work rules 

now, sir. 

Mr. MICA. Okay, but under the——

Mr. FORREY. The terms of the previous contract don’t apply. 

353

Mr. MICA. But is anyone forced to do more than the 8 hours? 

Mr. FORREY. Yes, in many cases they are. 

Mr. MICA. But that is voluntary——

Mr. FORREY. They are required to stay for 2 additional hours 

than the 8. Yes, it is happening a lot. Including 6 days when they 

don’t want to. 

Mr. MICA. Okay. Was any of this a subject of the questions in 

arbitration or in discussions during the contract discussions? 

Mr. FORREY. Absolutely. It was one of the issues that was at impasse and was unilaterally imposed on the workforce. 

Mr. MICA. Well, again, I talked to some of the negotiators and 

they told me that it was not, that the union never brought that 

into the discussions. 

Mr. FORREY. Well, I am telling you that we did. So there you go. 

Mr. MICA. Again, I just talked to one of them. And the purpose 

of the hearing is really to clarify this. 

Mr. FORREY. I understand. 

Mr. MICA. Finally, the period of the past contract was 1998, and 

then I think it went to about 2003 with an extension of two years, 

so over a total of that period of time the pay increase averaged a 

little over 10 percent per year, is that correct? 

Mr. FORREY. I disagree with that. 

Mr. MICA. On average? Well, they say through the time of the 

negotiation it was an 80 percent pay increase, because during the 

times——

Mr. FORREY. Who is they? 

Mr. MICA. Well, at the end of the second year extension, which 

was 2005, I think it was July of 2005 until April, the terms of the 

old contract prevailed, so the increase in pay would be related to 

the old contract, is that correct? 

Mr. FORREY. From 2001 up through the imposition of this work 

rule and pay system our controllers have been earning the same or 

less than the rest of the Federal Government employees on their 

annual increases. 

Mr. MICA. Average pay would be—and I have heard three different figures. Average pay with salary and benefits I have heard 

163, I saw a union document that said 173, and I am told 171. 

From your standpoint today, before us, what is the average salary 

pay and benefits for a controller? 

Mr. FORREY. With the existing workforce? I believe it is probably 

about 116 with average pay and locality pay. That is right now. 

But under the agency’s imposed work rules it will probably be 

somewhere around 84. 

Mr. MICA. That is quite different from what is publicly pronounced.

Mr. FORREY. By whom? 

Mr. MICA. Well, again, last year Mr. Carr put forth a document 

that said $173,000——

Mr. FORREY. That is with benefits. 

Mr. MICA.—pay, benefits——

Mr. FORREY. Benefits we have no control over, sir. That is what 

all Federal Government employees get. 

Mr. MICA. But that is the cost to us, which is——

Mr. FORREY. I understand. And I can tell you this, the cost——

354

Mr. MICA.—the 80 percent——

Mr. FORREY. And I lost, if we did nothing is flat for the next——

Mr. COSTELLO. The Chair can interrupt here. 

Mr. MICA. Well, thank you. Again, I was just trying to clarify 

some things for the record. Appreciate it. Yield back. 

Mr. COSTELLO. Let me ask a question for clarification here, because I am a little bit confused. The Administrator always says 

that the average salary with benefits is $170,000, and you are saying here that that is not anywhere close with the current workforce, is that correct? 

Mr. FORREY. That is correct. 

Mr. COSTELLO. Okay. 

The Chair, at this time, recognizes, under the five minute rule, 

Mr. Boswell. 

Mr. BOSWELL. Thank you, Mr. Chairman. I sense that this is a 

pretty important discussion we are having here today, and me and 

my colleague across the aisle there, we kind of use the system. 

Mr. Forrey, I think you answered us why we don’t have the pool 

from the military. I was going to ask you to expand on that, but 

I think that is pretty clear. They are being encouraged, because of 

things going on, to stay where they are. I think that is pretty clear. 

I would just like for you to—I apologize, I came in a little bit 

late, but would you just do two or three things? Would you just tell 

us as concisely as you can what is the shortage today; how many 

controllers are needed by calendar quarter over the next year for 

us to be safe and have trained controllers; and what does it take, 

in your opinion, to interest an individual to apply and train to become a controller? And if you have a number in mind, if you could, 

from your perspective, what would it take cost-wise to fix the situation in your mind? 

Mr. FORREY. Mr. Boswell——

Mr. BOSWELL. First, what is the shortage today? 

Mr. FORREY. The shortage today is about 1100 to 1200 controllers that we had three years ago. We have less than that. And the 

traffic is now growing. 

Mr. BOSWELL. Eleven to 1200? 

Mr. FORREY. Yes. We had 15,383 in 2003; we now have 14,000, 

as the Administrator’s fact book told us, 14,200, of which 2,000 are 

trainees, they are not even certified controllers. 

Mr. BOSWELL. I think the whole listing public ought to be concerned about that figure. Go ahead. 

Mr. FORREY. What we need, probably, at least for a starter, is to 

get back to the levels we had, that we all agreed on several years 

ago, that we thought would fill the system. Those were developed 

by good empirical standards based on traffic activity, based on 

number of positions, number of sectors, the amount of volume of 

traffic through each of the radar positions. Those were all calculated and tabulated along with very scientific how much time it 

takes to work, how much leave people get, everything else, to decide by facility what kind of staffing was required. 

The agency just solved their whole problem by just coming out 

with some range thing on their staffing standard that basically 

says, lo and behold, look at that, all the people we have on board 

right now fit within our ranges, so we don’t have a staffing problem 

355

anymore. They have not given us any kind of empirical data to support what they did, just rhetoric. 

So at least for a starter we would like to do that. We have asked 

the Administrator, I personally have asked the Administrator on a 

number of occasions and in writing, to get together with them and 

develop our staffing standards, that we be part of that. I think we 

have something to offer to that; we are the experts in the field. She 

has said that she would be willing to, but then, of course, at the 

same time they introduced this standard. So I am not sure if she 

is still willing or interested or not. But I think that is probably a 

good place to start, and involve the National Academy of Sciences 

in that process. 

As far as what it would take to interest controllers to come into 

this occupation, I think it would interest them that they don’t hear 

stories about controllers that call in sick because they have a fever, 

are forced to come in because they are going to get fired if they 

don’t, and end up vomiting on their radar position. At the same 

time, finding out that a supervisor with the same symptoms called 

in and said I can’t make it, and they said, fine, don’t come in, and 

replaced that person with overtime. That happened at Jacksonville 

Center. That is the kind of stuff going on in the field today. 

And until that changes, you are not going to see anyone really 

interested in taking this job. That is why they are passing it up. 

They are sending these kids to the Oklahoma City Academy at 

$18,000 a year, which is just over minimum wage, without any 

health benefits for three months, and then they are saying, you 

want the job? You go out there and do that. And, by the way, if 

you are successful there, we will put you in one of these facilities 

like New York TRACON or the Chicago TRACON or Dallas-Fort 

Worth TRACON, because we are going to get killed in those facilities with the staffing in about another 12 months, and the system 

is going to come to a screeching halt. And these kids don’t stand 

a chance. It is like taking some kid out of high school baseball, 

pitcher star, and sticking them on the New York Yankees and saying, all right, buddy, it is the ninth inning, bases are loaded, two 

outs, and you are up. That is not the kind of situation we want. 

Mr. BOSWELL. Well, I appreciate that and I sense your frustration. Having visited a few control stations in busy areas, it is a 

tough job. It is a tough job, and I want to thank you for staying 

in there and fighting for what you believe in to, one, keep the professional life and, two, to make it safe not only for us that fly and 

use the system, but for those many, many thousands of passengers 

who are out there flying every day. So thank you. 

Mr. FORREY. Thank you, sir. 

Mr. COSTELLO. I thank the gentleman. 

The Chair recognizes the Ranking Member of the Subcommittee, 

Mr. Petri. 

Mr. PETRI. Thank you very much, Mr. Chairman. Before I yield 

a minute to my colleague, the Ranking Member of the Full Committee, I just wonder if I could ask kind of a general question of 

both Mr. Forrey and Mr. Brantley, and that is I am sure that you 

and your members are focusing, as we are, on the rollout of 

NextGen technology, and this has great promise, obviously, and it 

seems to be about time. The industry is looking forward to it and 

356

it is already happening. What is your attitude on—I mean, this will 

affect staffing levels and job descriptions and a lot of changes in 

the system, and even locations of personnel and so on. Do you have 

an attitude toward all this? You know, some people have likened 

it to the difference between switchboard operators and what we 

have now. In some ways the job will become much more responsible 

because a lot of the routine parts of the controlling, for example, 

I guess, will be handled by the technology. Could you comment on 

that?

Mr. FORREY. Certainly. I would like to, sir. We are very interested in Next Generation Air Traffic Control System. I think it is 

about time it got done. I don’t know that this funding mechanism 

has anything to do with it. The agency spent $35 billion. The Government has given the agency $35 billion on new technology stuff 

since the 1980s, and the only thing we got out of it so far is new 

radar displays in our centers and terminals and a few little safety 

items like ASDX. That is poor management, that has nothing to do 

with funding. So this whole shenanigan about user fees is going to 

fund Next Generation, I think what you need is someone who is 

going to manage the operation better. That might go a long way 

towards getting new equipment. 

Secondly, the agency doesn’t want to include us for some reason. 

I don’t know why, but they don’t. So I have gotten myself involved 

with the JPDO, the RTCA, the IMC, and I am going to try and get 

the controller experience and the professional people that know the 

system involved in that avenue. We have been very well accepted 

and I am looking forward to it. 

But I am very interested in new equipment. We want it. We need 

it. But there has got to be more than just new equipment. The last 

time I looked, Buck Rogers was a TV show; it is not here, it is not 

today. I don’t follow those conspiracy theories that, you know, they 

are going to take air traffic controllers and put them out of a job 

because of new technology. That is hogwash. We need equipment 

that is going to be able to provide the controller the tools to move 

more capacity in the system in a safer manner. We are all for that 

and we want to be part of that, but we are being shut out of that 

process right now. 

Mr. BRANTLEY. Thank you. Congressman, I would echo, at least 

in part, what Mr. Forrey just said, and that is with regard to not 

being involved by the agency. You know, as late as three years ago 

we were involved in most of what was going on in the FAA as far 

as modernization. We had members that were part of these product 

teams to help evaluate it and develop the best possible product. 

Under this Administrator, the agency decided to no longer do 

that. Today we have no one involved in any modernization at the 

FAA. No one. 

Mr. MICA. Mr. Petri had yielded to me. 

Let me just extend what—well, first, he gave me the balance of 

his time. 

On the point of the trainees and somewhere between $17,000 and 

$19,000, they are paid for that 10-week period, they don’t get 

health benefits. Paying someone to go to school is unprecedented 

almost anywhere. With your predecessor, Mr. Carr, we had talked 

about actually shortening that course, certifying the 10 or 12 

357

schools that we could have, and either have two-or four-year programs where they came out better qualified, as some of the NATCA 

personnel I have talked to who went to private schools versus those 

that went for the 10-week course, and then the taxpayer wouldn’t 

have to pick up health care or that cost. Just like any other profession, they could go to school and pay it their own. And we have 

thousands of them coming through Embry-Riddle that are very 

qualified.

The other point, both of you are interested in actually having a 

say in this. What I am going to propose today is that we give you 

a say in this, that we take 80 percent of the money and that we 

give it to you, all the money, the personnel operational money, and 

we create a not-for-profit ESOP, employee stock ownership plan, 

and we let you run it. You run it instead of FAA. We get rid of 

the FAA Administrator overhead. You may chuckle at this, but I 

am prepared to do that, to turn it over to you, to the unions and 

whoever else wants to participate; give you that 80 percent of the 

money and let you run it. We will give you that. And don’t think 

it can’t be done. When I was chairman of Civil Service, I ESOPed 

1,000 employees in Mr. English’s district. They created a not-forprofit. They have since made a profit, they are paying taxes, and 

they do a wonderful job. There is no reason why we can’t do the 

same thing and turn it over to you. Are you ready to take it? 

Mr. COSTELLO. Mr. Petri’s time has expired. 

[Laughter.]

Mr. MICA. Let them answer. That would be an interesting question.

Mr. FORREY. I think the first thing I would do, Mr. Mica, is I 

would invite the agency to join me in that process. 

Mr. COSTELLO. The Chair recognizes the gentlelady from Hawaii 

under the five minute rule. 

Ms. HIRONO. I would like to ask all of the panelists I believe that 

the agency is moving toward privatizing various functions, including the running of whole towers. We have some of these occurring 

in my State, particularly, for example, at Kona Airport. I have a 

question to all of you as to what your concerns are regarding this 

move toward privatizing and public safety issues. Are there any inherent safety issues that we need to concern ourselves with this 

move toward privatization? 

Mr. FORREY. I will go ahead and start. Certainly, we have a very 

big concern about that. I mean, if you look at the FAA reauthorization proposal, they are talking about contracting out all the navigational needs at airports to the highest bidder, or the lowest bidder, 

I should say, and then selling those services to the users. They are 

talking about redefining VFR tower so they can contract them out 

more easily. 

We are very concerned about that because what happens when 

they contract it out is they reduce the employee personnel so they 

can make a profit, and that is what is happening in those contract 

towers out in the field right now. We don’t have any problem with 

the controllers, we think they are very good controllers; the problem is there are just not enough of them and there is no oversight. 

The agency says there is, but there is not the oversight that they 

have for FAA facilities, I can guarantee you that. 

358

And if you look at the flight service stations that they just did, 

the A-76 process with last year, we have already got reports now 

where we are calling the flight service station to report pirate reports. We have icing and things that are very urgent need information to know for the pilots, and they are saying we don’t do that 

anymore, we don’t do that service anymore. So now they are cutting out services so they can make their profits. 

I think privatizing in an inherently governmental function like 

air traffic control services is disastrous. 

Mr. BRANTLEY. Thank you. Yes, I agree, I think any time that 

the bottom line of whether it is making a buck or balancing the 

bottom line is the priority rather than safety, that just has so many 

inherent risks. I also think, quite frankly, if there was a way to 

make money at it, they would already be doing it. The reality is 

most airports are not capable of creating revenue, I believe, that 

would allow them to operate safely the way they do today. I think 

if they were privatized, they would have to scale back quite a bit, 

which means that a lot of communities that rely on the services of 

an airport would have to do without many things. 

So I don’t think it is as easy as just turning it over. I think part 

of this is kind of the general public welfare. And I don’t mean welfare as in the usual context here on the Hill, I mean as in the good 

of the people. 

Mr. WATERS. Do you want me to respond to that question? 

Ms. HIRONO. Sure. 

Mr. WATERS. I was going to try to avoid it, since I have to admit 

that I was the staff attorney on the contract towers program and 

still I became president of the union in 2000. So, I don’t know, that 

makes me kind of uncomfortable with Mr. Forrey. I wrote the 

memo on whether air traffic control at that level is inherently governmental.

I think that the contract tower program, at the level that it is 

at, worked okay, if that is how we decided to go. We tried to write 

oversight in it, but I can tell you that, from a legal standpoint, 

oversight is the issue. I think that a lot of the—at that time—it 

was in 2000 that I was in—a lot of the controllers were former FAA 

controllers, so I had confidence in them because they were FAA 

controllers; they just went to contract towers. But I think that it 

ought to be held to the level that it is at, instead of expanded. You 

know, the contract towers program came out of the firing in 1980, 

so it was an emergency sort of staffing remedy at that time. 

So it has to maintain oversight, our oversight, FAA oversight. I 

think a lot of times, having practiced a lot of government contracts, 

both at the FAA and for the Marine Corps, that, you know, it is 

true that contractors issue is profit margin and they will cut where 

they can. I have been involved in a lot of litigation where the contractor did not give what the government asked for, what it paid 

for. A lot of litigation. So you have got to maintain the oversight. 

With Mr. Forrey, I should have pleaded the fifth, probably. 

[Laughter.]

Ms. HIRONO. One more question. Since the FAA is supposed to 

provide the oversight for these privatized entities, etc., and if they 

are not providing that, is it Congress that should be providing that 

oversight?

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Mr. WATERS. Me? 

Ms. HIRONO. Anybody. 

Mr. FORREY. Well, I think they need to tighten up what they do 

when they oversight these facilities. They go and they do on-thespot checks maybe once a year, maybe more often, I don’t know. 

But the fact of the matter is these facilities, they are not automated like you have in the major terminals and major en route facilities, so there is no way to electronically catch them when they 

have errors or they make mistakes, and it is in their best interest 

not to report those. So, you know, it is kind of like the chicken 

guarding the hen house. So who knows? 

Mr. BRANTLEY. I personally would love to see Congress step up 

and provide some oversight, since it is not being done adequately. 

Mr. COSTELLO. The Chair thanks the gentlelady and recognizes 

the gentleman from North Carolina, Mr. Hayes. 

Mr. HAYES. Thank you, Mr. Chairman. 

Gentlemen, thank you for being here. I get the feeling—I want 

to make sure I get this correct—there is some tension between you 

all and the FAA. 

[Laughter.]

Mr. HAYES. Next Generation—Pat or anybody that would like—

excuse me, Mr. Forrey—ADS-B, is that the answer to all the ills 

of air traffic control and congestion and everything else out there? 

Mr. FORREY. I think it is the future surveillance system. It is not 

the answer, it is just one leg of the three-legged stool. 

Mr. HAYES. What capabilities are available to us with the equipment that is in the cockpit, in the towers, in the TRACONs right 

now that do a lot of the things that are proposed for ADS-B? I 

know that is a big question. 

Mr. FORREY. I think there is the opportunity right now for the 

FAA to start utilizing ADS-B in the oceans of the world, where we 

don’t have any radar coverage. 

Mr. HAYES. How about here at home? 

Mr. FORREY. Here at home, they are doing it in Alaska. I think 

they are doing a project down in the Ohio Valley with UPS or 

FedEx. I am not sure which. The Gulf of Mexico is another place 

where they are trying this new technologies. I think those are great 

opportunities and that is what they should be doing. I don’t know 

that they are doing it enough. 

Mr. HAYES. Okay. And those are specific applications. A lot of flying goes on within the continental United States. Given the fact 

that a lot of general aviation aircraft fly outside of the 3 percent 

of congested airspace, what does that do to the cost, as far as you 

and the controllers are concerned, does that add a whole heck of 

a lot to what you are doing? 

Mr. FORREY. Well, I guess contrary to popular belief, a blip is not 

necessarily a blip. Certain operations have certain different impacts and costs. Most VFR pilots that are tooling around out there 

have absolutely no influence or no impact on the system. 

Mr. HAYES. How about IFR guys tooling around——

Mr. FORREY. IFR guys? It depends, it depends. You know, the 

level of service, it just depends what flight strata you are in, what 

major airports you are around. Obviously, the more major the airVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00385 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
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port you are around or the higher the stratum of atmosphere, you 

are going to have a little bit more of an impact on the system. 

Mr. HAYES. Back to the 3 percent rule. I talked to your guys on 

the phone, on the radio, and in person, and they wanted me to get 

you all to talk about why you wanted to keep talking about the 

contract. But I think you have covered that, so I didn’t want them 

to think I had forgotten. 

Last, but not least, you kind of age yourself. You and I are Buck 

Rogers. There is some new guy now, I don’t know what his name 

is. I would love to see, Leonard and I and other pilots, Sam, we 

would put a working group together with all the players here, 

would certainly encourage—and I will see you next week in the office, we will see how we get this thing going. 

Mr. Chairman, thank you. I want to yield the rest of my time to 

Mr. Mica so he can finish up on his offer. 

Mr. MICA. Thank you. You had a couple of minutes here. 

Back to Mr. Forrey for a minute here. You separated the base 

pay, which you said was about 116, on average, is that correct? 

And the rest is benefits and——

Mr. FORREY. Here is the deal. I want to go back to the table and 

negotiate fairly. I don’t want to talk about what it was or what it 

is now. I want to talk about going back to the table, present the 

facts to an independent arbitrator who can delve through those 

facts. If the Administration is afraid to do that, the Administrator 

is afraid to do that, probably because her facts are not right. 

Mr. MICA. Again, what I am trying to do is get to sort of the 

money basis of this. You are trying to get a higher income for your 

folks, right? 

Mr. FORREY. I am trying to protect the system. I am trying to 

protect the occupation. I am trying to be able to go back to the 

table and negotiate fairly. I didn’t have that opportunity, sir. 

Mr. MICA. Well, part of my question also deals with financing 

NATCA. I am told, and I don’t know if this is correct, that 1.5 percent of the air traffic controllers’ base salary goes to fund NATCA. 

Is that the way you all finance most of your operation? 

Mr. FORREY. Well, first of all——

Mr. MICA. Is that the basis? 

Mr. FORREY. That is how we primarily finance it, yes. 

Mr. MICA. Have you lost money from this contract or are you on 

the terms of the old contract? This is an honest question. Someone 

told me that you are still on the terms of the 1.5 that applies to 

the old money versus that. Has NATCA had a net loss in money 

from the terms of the imposed work rules and what is going on 

now?

Mr. FORREY. No, we haven’t since we corrected the agency’s deduction of our dues. 

Mr. MICA. So you still get the same amount. 

PASS, how do you get money to finance yourself? Do you get this 

1.5 percent? 

Mr. BRANTLEY. No, sir. 

Mr. MICA. So if you get more money, then you don’t get more 

money.

How about AFSCME? 

Mr. WATERS. I am sorry, can you repeat your question? 

361

Mr. MICA. How do you get your revenue to operate, do you get 

1.5 percent of the base salary? 

Mr. WATERS. For our union? 

Mr. MICA. Yes. 

Mr. WATERS. Yes, sir. 

Mr. MICA. You do. 

Mr. WATERS. And if I could clarify, Mr. Mica. 

Mr. MICA. I am seeing no’s in the back. 

Mr. WATERS. I am sorry, it is .065. I am not sure I am clear on 

what you are asking, .065. 

Mr. MICA. You guys aren’t negotiating very well. 

Mr. WATERS. Well——

Mr. MICA. Thank you. I yield back the balance of my time. 

Mr. COSTELLO. I thank the gentleman. Let me just remind Members, if I may, that yesterday’s hearing was on the FAA’s financing 

proposal; today is on the operation and safety programs. And I realize that they are related, but I would hope that we are not all 

here to renegotiate contracts here in this room. 

Mr. BRANTLEY. We would welcome the opportunity, Mr. Chairman.

Mr. COSTELLO. The Chair recognizes the gentleman from New 

York, Mr. Hall, under the five minute rule. 

Mr. HALL. Thank you, Mr. Chairman. 

I don’t think that this is the proper place to grill our witnesses 

about how their bargaining units are organized or financed, although I can assume that when an administration takes a consistently anti-union stance across the board in every department of 

government, that it obviously doesn’t help the membership or the 

funding of the unions. 

Unfortunately, as one of you stated this morning, this is one of 

those government functions that probably shouldn’t be privatized 

and also shouldn’t be subject to this adversarial relationship when 

the safety of the flying public is at stake. I am offended and upset 

at the way it seems that all three of you and your members are 

being treated. 

Having said that, I will say—this is a point of information for our 

Ranking Member, Mr. Mica—that there are schools who pay students to go to school. My daughter actually was paid as a graduate 

student by the University of Maryland. My nephew has several engineering offers to him for a master’s and PhD candidate by very 

prestigious State schools where he will be paid, because he is such 

a desirable candidate, to go to acquire a master’s and a PhD. So, 

just as a factual thing, that simply isn’t true. 

I also would note that many of us up here, Members of this Committee, have junior or mid-level members of our staff who are in 

their twenties, probably, or maybe early thirties, and who don’t 

have the responsibility of thousands of passengers in the air at any 

given time that we are responsible for who are getting salaries 

close to just below or just above that $32,000 entry salary that I 

see in Mr. Forrey’s written testimony. 

Some of the letters from our military controllers who wrote rejecting offers of employment, saying that they could not take a pay 

cut down to $32,000 a year. I just want you to understand that I 

have some very capable—I am not putting my staff down, but I 

362

have some very capable members of my staff in their twenties who, 

going by our congressional pay scale that comes from the Congressional Member Services Office recommendations, I don’t think you 

can compare them to the skill and the importance of the job of a 

controller.

That is the end of my speech and here is my question. 

First of all, can you compare the expected impact of NextGen to 

the impact of spending a fraction of that money to fully staff and 

adequately pay the controller workforce and the other workforce of 

the agency? And I will start with Mr. Forrey. 

Mr. FORREY. I don’t think you can afford to not staff the system 

if you ever want to get to NextGen. NextGen is way down the road, 

it is concepts right now. I mean, ADS-B is just one piece of it, and 

it is only the air piece, it is not the ground piece. I mean, you can 

put all the airplanes you want in the air, but if you don’t have 

more space on the ground, what are they going to do? 

Same with the controller. If you want to jam twice as many aircraft into a sector I am working 25 already, and you want to stick 

another 25 in there because of the increased capacity, reduced separation standards, whatever you want to do to get that capacity, 

what tools are you providing the controllers to make sure they can 

do that safely without causing disaster? 

So you need the staffing to keep the system going. You need the 

staffing to train the next generation of controller who is going to 

be using and developing that equipment. And I think that is what 

you need to do, you need to get that——

Mr. HALL. Thank you. I am running out of time, so I will throw 

this out there to any or all of you. If you were given the ear of the 

FAA, what do you feel are the most important, the must-haves, the 

critical technological improvements that would allow the controller 

force to do its job, and what things do you think may be well intentioned but ultimately unnecessary or counterproductive out of this 

NextGen program? 

Mr. FORREY. Well, I think the most electronic thing we can get 

right now is called a human being. We need more of those. That 

is what we need right now. I think any kind of runway incursion 

devices, things of that nature, that would be great too, like ASDEX. We need that deployed throughout the system; it is only in 

about 35 facilities right now and we need it in a lot more places. 

Controllers are getting fatigued and they are missing things, and 

equipment like that is just another backup, another thing for us to 

have a bigger safety net on the system. 

Mr. COSTELLO. The Chair thanks the gentleman from New 

York——

Mr. HAYES. Thank you, Mr. Chairman. 

Mr. COSTELLO.—and recognizes the gentleman from Missouri, 

Mr. Graves, for five minutes. 

Mr. GRAVES. Thank you, Mr. Chairman. I have got some pretty 

quick questions, and I think you can probably answer them 

through just providing me with the data later, and I don’t even 

think we even need to go into, with me, the stuff with the privatization complete agreement. I think we are in agreement with this 

whole funding level for Next Generation. I think we are. 

363

But when was the last time we did—and, Mr. Chairman, you 

may be able to answer this—the last time we did the staffing set 

up the way it is now, was it in 1998, was that the last time we 

did——

Mr. FORREY. 1998, that is correct. 

Mr. GRAVES. Could you provide me the data on how the staffing 

was put together in 1998, how it was designed for that bill? Could 

you do that and just provide it to me, or the Committee, for that 

matter?

Mr. FORREY. Certainly. 

Mr. GRAVES. And then the next thing is I need to know, you have 

talked about new technology and, obviously, we have got some 

things out there we don’t even know what it is going to be yet, we 

don’t know what is going to be asked for. You know, we don’t even 

know what the system is. But what I want to know from you is 

what do you need. And be realistic, because, you know, we have to 

come up with a system that works, but what do you need as a controller to do your job. 

That is what I want to know. What do you need as a controller 

to do your job. If you would provide that to me. Whether it is one 

of these new systems which, again, we are not sure yet what that 

is going to be. I am talking about right now reality, what we can 

do the next thing with. 

And the last thing is—and you can start talking as soon as I get 

done, but I also want to know how you feel about—you were talking about staffing levels and having people who are qualified, but 

I had a young man in the Kansas City area that applied, highly 

qualified. In fact, this was an individual that was outstanding in 

obviously his college class where he graduated, but, yet he got 

caught up in this thing. They do the random—and the FAA is the 

one I know who has implemented this—it is the random choosing, 

you know, your name is drawn out of the hat and that is the first 

cut; it is not based on whether or not the kid is good enough or 

it is not based on whether or not he can qualify for it, it is this 

random cut, and I hate that. If I want somebody controlling an aircraft, I want somebody that knows what the heck they are doing, 

and I don’t care who it is. I don’t want a random system. 

I would like your comments on that. And, again, if we don’t get 

through it all, please submit it to my office or submit it to the Committee, however you want to do it. But the technology, if you can 

do that real quick, I would be very interested and also the other. 

Mr. FORREY. The technology right now is we could use more stuff 

for the runways, we could use more stuff for the en route facilities 

and the TRACONs. Newer equipment like the STARS implementation was a new standard terminal displays. There is a thing out 

there called ACDs. They can be installed a lot cheaper and do the 

same thing with more functionality for our controllers. Those could 

be distributed throughout the system on all our terminals and 

TRACONs.

We have facilities that are in disrepair. We have got facilities 

where people are getting sick from mold, infestation. It is destroying their lives and the agency does nothing about it. We need more 

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stressed, overworked. Those are the kinds of things we need right 

now.

As far as the—I can’t remember your last question. 

Mr. GRAVES. I was talking about the random lottery. 

Mr. FORREY. Yes, how they select people. That is based on what 

the agency does. I mean, that is their entire human resources division that is doing that kind of stuff, and we have absolutely no say 

in it one way or the other. 

Mr. GRAVES. I want that to change. And it gets right to your 

comment on qualified——

Mr. FORREY. In 1998, when we negotiated the last contract, we 

negotiated hiring people based on qualifications. The agency forced 

us out of that in 2003 and said, no, we want to pay them all the 

same, no matter what their qualifications are. I don’t know why. 

Mr. GRAVES. I think we have got an abundance of applicants I 

don’t like—and I think there are lots of people out there that will 

do—I do disagree with the United—I don’t know if I disagree with 

you or do disagree with you, I am not quite sure yet. But I do think 

there is an abundance of applicants out there. I think there is an 

abundance of applicants that can do the job, but cutting them out 

of the system purely because they don’t make the lottery I think 

is wrong. 

I have got one more. Please write it down and submit it to me. 

This goes along with the overall funding plan also, but what I need 

to know is if this contract is opened back up, when we are talking 

about funding levels, I want to know how much it is going to cost 

the taxpayers and the FAA immediately, and if it is made retroactive, how much it is going to cost them for the next 10 years. You 

can submit that to me also or just call me and let me know or submit it to the Committee. But I want the overall cost, because that 

is what we are talking about in this whole NextGen system. 

Mr. FORREY. I will give you something in writing, but I can just 

tell you right off the bat, if it just went back to where it was before 

it was imposed on it, it would be flat for the next 10 years, payroll. 

Mr. GRAVES. Because that is different than information I am getting, and that is the reason I want to get to the bottom of it, so 

please go through that with me. 

Mr. FORREY. We will do that. 

Mr. GRAVES. Thank you, Mr. Chairman. 

Mr. COSTELLO. The Chair thanks the gentleman. 

The Chair recognizes the gentleman from Iowa, Mr. Braley, for 

five minutes. 

Mr. BRALEY. Thank you, Mr. Chairman. 

I want to thank all of the panel for coming today, but most importantly I want to thank the members you represent for the role 

they play every day in keeping our skies safe and allowing us to 

get to where we need to go to. 

Mr. Forrey, in your testimony you talked about the direct correlation between controller staffing and safety, and I wondered if 

you could elaborate a little bit on that as it relates to circumstances in the tower when you are dealing with staffing shortages.

Mr. FORREY. I will try to, sir. When you have less bodies to work 

in the tower, you have fewer eyes watching the operation, you have 

365

more distractions on other duties you now have to do that you normally wouldn’t be doing if there were other people there in the 

tower; you have less ears listening to the frequencies and what is 

being said and relayed back and forth between the pilots; and you 

are working longer time on position because you don’t have people 

to relieve you. You are doing combined positions because you can’t 

open up positions because you don’t have enough staffing to do it. 

And this is a common occurrence happening every day in the system. We catch more and more near disasters on a common, regular 

day basis because we do, at some places, have appropriate staffing, 

but what is going to happen as that starts to reduce and whittle 

away, that safety net gets degraded and now the opportunity and 

chance for some near disasters can happen. 

I mean, just Atlanta, last month, we had a controller that inadvertently departed an aircraft head-on into six arrivals coming the 

opposite direction on that runway. Caught it two knots before they 

were going to hit rotation off the ground. It blew out the tires on 

the aircraft, but no one got off the ground and it ended up safely. 

That individual had worked overtime six-day work weeks four out 

of the last six weeks. That is a facility that is in severe crisis. 

Mr. BRALEY. Well, the last time you and I spoke we talked about 

a similar incident over my district, the 1st District of Iowa, out of 

your O’Hare unit as well, correct? 

Mr. FORREY. Correct. 

Mr. BRALEY. One of the other things that I noted in your written 

testimony is how the imposed work rules are causing strife between employees and management, decimating staffing levels by 

driving out veteran controllers at record pace, and destroying morale at the facilities, and you cite some additional examples. As 

someone who has studied human factors, can you talk about how 

these types of morale problems can have an impact on the ability 

of controllers to do their jobs in the tower on a day-to-day basis? 

Mr. FORREY. Well, first and foremost, I think our men and 

women in the field try to not let those distractions get in their way 

and they are still providing the safest operation in the world, and 

I commend them for that considering all that is going on and all 

the abuse that they are taking under these imposed work rules. 

I think some of the human factors you lose is they get worn out, 

they get tired, they get fatigued. They are working longer hours, 

they get angry. I mean, just at one of my facilities up in the Northeast last week, there was a confrontation between a supervisor and 

a controller in the hallway, where the controller accuses the supervisor of bashing him and throwing him up against the wall, and 

the supervisor accuses the controller of doing that. Well, the supervisor weighs 300 pounds; the controller works about 150 soaking 

wet. I mean, it is causing a lot of distraction and animosity between workers and the people that supervise them, and that is not 

a good thing for anybody. 

So, sooner of later, you know, someone is going to get involved 

into some kind of a confrontation and they are going to miss something, and that is what we are concerned about. So if you can’t 

have a happy workforce—and they are not happy, they are just 

leaving. We are losing about three a day through attrition. 

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Mr. BRALEY. And that provides a good transition for you, Mr. 

Waters, because in your written testimony on the pay-for-performance subject you talked about a factor that is very common in the 

workplace but nobody likes to talk about, that is the problem we 

encounter when there are workplace rules requiring regular performance evaluations that are never carried out and that employees never get the type of guidance and supervision that they are 

directed to and, therefore, disputes erupt between labor and management on whether or not an employee is living up to performance 

expectations.

You have cited specific examples where an attorney who was 

part of your bargaining unit had to write her own performance 

evaluation after never receiving one over a three-year period. I 

would just like you to have the opportunity to comment on how 

that affects morale in the workplace and contributes to some of the 

other problems we have been talking about. 

Mr. WATERS. Oh, it is a dramatic impact on morale because there 

is absolutely no trust. When you talk about pay-for-performance—

and I think, you know, attorneys in particular are willing—and I 

think I wrote in there that I told Administrator Garvey myself that 

we would be leading the charge for pay-for-performance. In my office, in my division, where we do government contract litigation, we 

have cited the taxpayer billions of dollars. I mean, we have confidence in our abilities, but what we don’t have is two or three performance appraisals for the last three years. 

The answer is to insist that the managers get graded on giving 

performance evaluations. I have been in the Marine Corps for 22 

years. We don’t have conversations in the Marine Corps did you get 

a performance evaluation this year? No, I haven’t had one for three 

years. You don’t have those because the officers are graded on their 

timeliness of giving those appraisals, and they have to be given. It 

is not even a possibility. 

So when I came to the FAA, I was shocked to see this. The other 

system that we had was so simple, especially on the merit system. 

You could look at the sheet and see that it required an initial counseling, and when that was; a mid-term counseling, and when that 

was; and then the final, and when that was. And as I cited, there 

were people who didn’t get them for years. I have heard stories of 

people who didn’t get them for 10 years. Sometimes I got them, 

sometimes I didn’t. I never got the initial or the mid-term. So I 

guess you could say that, yes, sir, that definitely breeds mistrust 

because you can’t have a pay-for-performance system if you are not 

measuring performance; it is impossible. And I know that adult 

professionals want feedback——

Mr. COSTELLO. The Chair thanks the gentleman from Iowa and 

recognizes the gentleman from Texas, Mr. Poe. 

Mr. POE. Thank you, Mr. Chairman. A couple comments, then I 

have a question for Mr. Forrey. 

I am concerned, of course, about the aging of air traffic controllers. I have been to the facility at Intercontinental Airport, and 

every time I go up there it looks like an AARP convention, and that 

concerns me because eventually those guys are going to quit, you 

know, they are going to retire. 

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I am also concerned about the training. I don’t know how long 

it takes to train an air traffic controller, but I think however much 

time is needed, we should not cut back on training in the name of 

getting more air traffic controllers. It sounds to me similar to we 

need more doctors in the United States, so we will just cut med 

school in half and we will get more doctors quicker. Both of those 

have to do with public safety. So however long it takes to train one, 

that is how long they need to be trained. 

But my concern is consolidation of facilities with Intercontinental 

Airport in Houston and also the Beaumont facility that I represent 

about 97 miles away. Your testimony, Mr. Forrey, about the consolidation of FAA facilities, as you know, I questioned last week 

Administrator Blakey about the possible consolidation of the Beaumont and the Houston Intercontinental TRACON facilities and the 

loss of personnel, including air traffic controllers. She told me that 

consolidation would ensure that our controllers would have the best 

equipment, but both facilities use the STARS system, so I am a little confused about that, so I look forward to her answer. But, in 

your opinion, what is driving this consolidation of Houston and 

Beaumont, and what will it mean to those of us who use this airspace, including me? And do you have an example, in your opinion, 

of where consolidation made sense and was a good idea, and how 

it differs from what the Administration is proposing at Beaumont 

and its BRAC-like consolidation in their FAA reauthorization legislation?

Mr. FORREY. I hope I can remember all that. I am very familiar 

with the Beaumont operation. They are essentially taking the airspace from the Beaumont tower and the surrounding area, putting 

that airspace over in the Houston Intercontinental facility, the 

TRACON, and they are not going to supply any staffing to support 

that airspace change, and they are going to downgrade that facility 

in Beaumont tower a couple levels, which is going to be about an 

8 percent pay loss to those employees right off the bat, and essentially contract that facility out. At least that is what I believe they 

are going to do, because they are going to fall down to that kind 

of traffic. 

As far as the user of the system, you now no longer have people 

that are familiar with that airspace and the surrounding terrain 

and the surrounding weather. When something happens, they are 

going to be stuck over in a facility 100 miles away that has no clue 

what kind of airspace they are dealing with over there; now all 

they have is a tower. 

The agency is in the practice now of closing down these approach 

controls and these smaller facilities on the midnight shifts and 

moving them over hundreds of miles away, the airspace, to controllers in other facilities and centers, en route facilities that have no 

clue of what goes on in that airspace. They have no up-to-date 

weather information, they don’t know what the terrain is like, and 

on many instances they don’t even have standard operating procedures on how they are going to run the operation because the agency hasn’t gotten around to it. 

So we are very concerned about consolidations. We are not opposed to consolidations. I mean, it does make sense in some instances, but not when the agency goes out and does a cost study 

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basis analysis and takes a 7,000 square foot facility and says, 

hmm, let’s make it a 14,000 square foot facility and see if it is just 

as easy and cheap to keep it here or to move it somewhere else. 

Well, they don’t need 14,000 square feet, they need maybe 7,000 or 

8,000 square feet. Give it an honest assessment. So those are the 

things we are looking at. 

Does it make sense to move those facilities to consolidate? In this 

particular instance, you are right, it doesn’t; they are both using 

the modernized equipment. You are taking away a benefit to the 

users of the system that fly in and around that Beaumont area. 

The New York TRACON and New York Center we are working 

on putting together a consolidated facility. That made sense. You 

have got two huge facilities out on Long Island. Put them into one. 

It consolidated the airspace and it allows you to provide better 

transportation routes in and out of that whole New York complex 

area. Through the surrounding centers, it impacted flights out of 

Boston, out of Cleveland, out of Atlanta, and Florida. It was a great 

plan, but we got shut out of that process too. 

So there is a time and place when we can do that. There are 314 

FAA facilities out there. Is it reasonable to believe in the future 

that they can continue to fund and update equipment in all 314 facilities? Probably not. But let’s make sure, when you do something 

like that, it is for the right reason, and right now we don’t believe 

it is for the right reason, they are just doing it for cost. 

Mr. POE. Thank you very much. 

What time I have left I yield to the Ranking Member, Mr. Mica. 

Mr. MICA. That is dangerous. I only have one quick question. 

The grievances that have been filed—you know, I consider air 

traffic controllers a profession and professionals, and you spoke to 

them as professionals, but I was told that since September 3rd, 

2006, there have been filed over 248,276 grievances. Now, all of 

that has to take time. This is one of the forms that has to be filled 

out with the documentation, which obviously is taking a lot of air 

traffic controllers away from their responsibilities. But this concerns me. This is a very serious amount of time. 

I really don’t think air traffic controllers—now, I know they have 

some differences with you call ‘‘work-imposed rules,’’ but this is not 

my idea—put this up there—this is not my idea of professionalism. 

So we have got to stop this and we have got to stop this and start 

acting like professionals in this process. This is not acceptable. 

Mr. COSTELLO. The Chair would observe that Mr. Poe’s time has 

gone over by a minute. 

We are going to be called for three votes, but before we do, I 

would recognize the gentleman from Oregon, Mr. DeFazio. 

Mr. DEFAZIO. Thanks, Mr. Chairman. I have been enjoying the 

debate, but let’s get back to some critical safety and operational 

issues here. 

I think a good case has been made that we need a just settlement and a contract, but I am going to go to something a little 

more specific, and the question goes to Mr. Brantley with PASS. 

I am very concerned to read in your testimony the FAA’s move 

to a fix-on-failure approach, abandoning periodic maintenance and 

certification of NAS systems. Is this true? 

369

Mr. BRANTLEY. Yes, sir, they are moving towards that approach 

and where, today, a lot of the maintenance is preventive in nature, 

the idea is to——

Mr. DEFAZIO. But if we have a failure, it is a critical component, 

doesn’t that mean we suddenly have airplanes that can’t leave, airplanes that can’t land, airplanes in holding patterns somewhere 

out there, and a lot of turmoil and potential for not only expensive 

delays, but also jeopardizing health and safety? 

Mr. BRANTLEY. Yes, sir, absolutely. And, you know, part of the 

problem is the way the agency looks at things today is different 

than they used to, as well. One of the fundamentals built into the 

system is redundancy, and if your primary system were to fail, you 

would begin restoring that immediately, even though you are on a 

backup, so that you have a safety margin as well. And one of the 

things that we are seeing now is as long as there is a backup that 

you can go to, in many instances they don’t even start getting 

someone to work on it until the next business day or the next time 

they have someone available. 

Mr. DEFAZIO. I think I read of an instance earlier this year, it 

might have been LA, I think, where both systems, both primary 

and secondary, went down. 

Mr. BRANTLEY. Yes, sir. And there wasn’t a person available that 

was actually—you know, the person that was assigned to cover the 

airport was also covering other airports in the area, so they weren’t 

there at LAX when it happened. 

Mr. DEFAZIO. Could we call this sort of penny wise and pound 

foolish? I mean, has the industry itself complained to the FAA 

about this, said, really, this doesn’t make a lot of sense to us here? 

Mr. BRANTLEY. Yes, sir, I think one of the factors is that outages 

of equipment that are equipment-related are such a small percentage of the overall agency outages, it doesn’t get the attention that 

at least I think it deserves. Because even though it is small, it is 

preventable to a large extent. So weather is something we are always going to struggle with, but that gets most of the agency’s attention.

And, yes, I think having the right number of trained people 

where they are needed is absolutely critical, and that is why we 

asked for a study on a staffing model and on training because, 

frankly, a debate right now about staffing is very hard to have because the agency can’t even determine where they should have people.

Mr. DEFAZIO. Is there a pending study? 

Mr. BRANTLEY. There is not. 

Mr. DEFAZIO. Okay. 

Mr. BRANTLEY. We are asking for some help. 

Mr. DEFAZIO. I think that is something the Committee might 

want to put into the FAA reauthorization that mandates such a 

study.

I note a number of other areas that I think are really critical. 

You say we also have a dearth of qualified safety inspectors. Could 

this be true? 

Mr. BRANTLEY. Yes, sir. And again, you know, the workload has 

increased and the number of inspectors has not. You know, it creVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00395 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
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ates a situation where inspectors are spending less time doing inspections.

Mr. DEFAZIO. So they are just checking paperwork that someone 

else created, like a designee or something——

Mr. BRANTLEY. Absolutely, sir. 

Mr. DEFAZIO. Or maybe a non-qualified maintenance facility. 

Mr. BRANTLEY. Well, unfortunately, many of those they are not 

even allowed to inspect unless the sponsor, whoever is contracting 

with them, offers to take them in. 

Mr. DEFAZIO. Wait a minute. So we have someone doing critical 

aviation maintenance over here, they have been contracted with by 

a qualified facility or an airline over here, this is not a qualified 

facility. Our inspectors, as few as they are and as little capability 

as they have to get around and inspect these things, they can’t go 

in there without——

Mr. BRANTLEY. Not an unannounced inspection. The sponsor has 

to take them in. And, you know, as bad as that is, even doing an 

inspection on a carrier or a certificated repair facility is becoming 

more and more rare because they are not allowed to, whether it is 

for reasons of budget, because they can’t travel to go to the facility, 

or just because they don’t want anyone going in there and disrupting the work the way they like to talk about it. 

Mr. DEFAZIO. You mean like overseeing the work? 

Mr. BRANTLEY. Exactly. 

Mr. DEFAZIO. Checking the work? 

Mr. BRANTLEY. Yes, sir. 

Mr. DEFAZIO. I find those things very alarming, Mr. Chairman, 

and hopefully we will have more opportunity to discuss those next 

week. But you need an adequate staffing level for your technicians, 

you need an adequate staffing level for the inspectors, and that is 

something I hope we can accomplish in the budget and then we 

will get into those other concerns next week. 

Thank you, Mr. Chairman. 

Mr. BRANTLEY. Thank you, sir. 

Mr. COSTELLO. I thank the gentleman from Oregon. 

The Chair, at this time, would announce we have a little over 

nine minutes. We have three votes on the floor. Immediately after 

the last vote we will come back and resume the hearing. 

At this time the Chair would recognize the distinguished Chairman of the Full Committee, Chairman oberstar. 

Mr. OBERSTAR. Thank you very much, Mr. Chairman, and thank 

you for your diligence in holding these hearings and thank all the 

other Members on both sides of the aisle for participating today. I 

regret I stopped in at the beginning, heard your presentation, then 

I had other children of transportation to deal with, like Water Resources Development and Technical Corrections Act, and a few 

other things that we are trying to wrap up here. 

We don’t need to spend a lot of time discussing—at least I 

don’t—discussing the concerns of the air traffic controllers. We had 

extensive hearings in 1981 and in 1980 about conditions in the facilities—whether towers, TRACONs, en route centers—about the 

state of the art of aviation technology. We went through all of that. 

We knew what needed to be done, it was all laid out in the course 

of hearings in the Subcommittee of Investigations and Oversight. 

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And when the government didn’t participate in a cooperative and 

constructive manner with the air traffic controllers, they walked 

out.

My father had card number one at the Steel Workers Union in 

1937, he was the first one to join. To establish the right of workers 

to bargain collectively and to withhold their services when the collective bargaining process broke down, that is a fundamental right. 

I was there at Farmington on August 4th. The strike occurred on 

August 3rd. And I stand with you today. We need to fix the collective bargaining process. Chairman Costello said that at the outset. 

We have got to fix it. 

This isn’t about what kind of shirt you wear in a darkened 

TRACON facility or what type of slacks you wear. Professionalism 

is not in your clothes, it is in your head. Professionalism is in the 

command you give to the aircraft. Professionalism is being able to 

handle 27 aircraft in your sector at a crisis time. 

When a KC-135, for example, is in that airspace and it has a fire 

onboard and it is loaded with fuel, and you have got to get the 

other 26 aircraft out of that airspace, and you need every bit of professionalism, I don’t give a damn whether you have got shorts on 

or a t-shirt on. I do care whether your commands are right; whether your separation is right; whether your management is sound. 

That is what this is about. The FAA needs to negotiate in good 

faith and we have to provide you with the tools to be able to do 

that, and we will find a way to do it. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. I thank the distinguished Chairman. 

Let me thank the first panel for their testimony and for answering our questions. You are dismissed. We thank you for your testimony.

We will hear from the second panel as soon as the Subcommittee 

resumes after the last vote. 

[Recess.]

Mr. COSTELLO. If we could ask those who are on the second panel 

to please have their seats, we will go ahead and get started. 

The Chair would like to welcome the second panel and make 

brief introductions. First, Captain Terry McVenes, the Executive 

Air Safety Chairman for the Air Line Pilots Association; Patricia 

Friend, the International President for the Association of Flight Attendants; Robert Roach, the General Vice President of the International Association of Machinists. We thank you for being here 

today and the Chair recognizes Captain McVenes under the five 

minute rule. 

TESTIMONY OF CAPTAIN TERRY MCVENES, EXECUTIVE AIR 

SAFETY CHAIRMAN, AIR LINE PILOTS ASSOCIATION; PATRICIA FRIEND, INTERNATIONAL PRESIDENT, ASSOCIATION OF 

FLIGHT ATTENDANTS-CWA; ROBERT ROACH, JR., GENERAL 

VICE PRESIDENT, INTERNATIONAL ASSOCIATION OF MACHINISTS

Mr. MCVENES. Thank you, Mr. Chairman, and good afternoon. I 

want to thank you all for the opportunity to outline the Air Line 

Pilots Association’s perspective on FAA safety and operational programs.

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ALPA is the world’s largest pilot union. We represent more than 

60,000 pilots in the United States and Canada. The Association 

was founded in 1931 and our motto since its beginning has been 

‘‘Schedule with Safety.’’ Even today, in spite of the challenges and 

obstacles facing the airline industry, airline pilots remain focused 

on operating airliners safely and, as a result, the U.S. safety record 

is the envy of the rest of the world. From pilot fatigue to securing 

funding for modernizing the airspace system, the 110th Congress 

will need to play a pivotal role within the aviation community to 

maintain our unrivaled safety record. 

Today’s air traffic system is under more pressure than ever to accommodate more airplanes in the same airspace, and we are all too 

familiar with the recent media reports of 10 hour ground delays 

some of our airlines have experienced. Those delays are unfortunate, but the broader issue is that these delays signal a weakness 

in the system that may eventually lead to an accident if it is not 

addressed.

We must take these delays as a warning signal that the system 

needs help. We must proactively manage the safety risks that exist 

in our industry through safety management systems, or SMS, before an accident occurs. ALPA is a strong SMS advocate and Congress needs to monitor the FAA’s progress on SMS implementation 

to ensure compliance with the ICAO standards deadline of January 

1st of 2009. 

The Aviation Safety Action Program, or ASAP, is a critical element of SMS or in any aviation safety program. It allows front-line 

employees to report safety and operational issues first-hand, enabling the industry to work together to find solutions to difficult 

problems.

As an industry, we have seen the value of ASAP go far beyond 

the cockpit to other employee groups in the airlines. Pilots and the 

airlines they fly for reap the safety and economic benefits of ASAP. 

In the air traffic arena, however, that same culture does not exist, 

and the front-line controllers’ advice and input is often not welcome. They do not have a means to report safety or operational 

issues in the same cultural environment that many of the pilots at 

the other end of the radio do. And even though the FAA has encouraged and promoted ASAP for our Nation’s airlines, they have 

not done so internally for the benefit of their own organization. 

In order to take that next step in aviation safety, all components 

of the system must be involved in ASAP, including air traffic control. Congress must urge the FAA to expeditiously make ASAP a 

reality for air traffic controllers. And just like the airlines, this requirement requires a commitment from the very top of the organization; in this case the FAA, and in this case specifically the FAA 

Administrator. The Administration can make this happen and it 

will have a tremendous impact on the safety and efficiency of our 

entire air transportation system. 

Allow me to switch now to transportation worker fatigue, which 

is a present and growing problem. FAA duty and roles for airline 

pilots are a dated patchwork of regulations developed over the past 

60 years. ALPA recommends that Congress strongly encourage the 

FAA to modernize flight and duty regulations using rational, scientifically based working hour limits. Being on duty for 15 or 16 

373

hours may make sense in a normal office environment, but it 

makes no sense for an airline pilot operating a complex machine 

in a complex environment, and it should make no sense to America’s traveling public whose lives often depend on split-second decision-making.

ALPA has long advocated one level of safety in the airline industry. Nevertheless, there are several discrepancies between cargo 

and passenger carrier regulations that must be addressed in order 

to bridge the safety gap between passenger and all-cargo operations. Cargo airlines often operate in the same type of aircraft to 

the same airports at the same times as their passenger counterparts, and these aircraft need to be operated to the same safety 

and security standards, regardless of their payload. Flight deck 

door and firefighting requirements, to name just two of the issues, 

simply do not provide the same safety and security for cargo airlines as for passenger airlines, and legislation can fix that. 

To keep our National Airspace System functional, Congress must 

secure long-term funding for improvements now. Modernization efforts must include upgrading computer and satellite systems to improve operational safety and efficiency. More effective tools must be 

developed that will increase capacity and will also result in lower 

fuel usage, reduce taxi times, more efficient gate management, and 

more efficient departures. 

As a tragic overrun accident at Midway Airport in December of 

2005 showed us, we also need to improve runway safety areas at 

all airports. The FAA’s own numbers tell us that 45 percent of our 

Nation’s airports must be improved to meet the standards. We also 

need to have more funding of industry research to develop accurate 

and reliable means to measure runway friction and to provide a reliable means to get accurate runway surface condition reports to 

the cockpit. 

Next week marks the thirtieth anniversary of the disastrous 

ground collision of two airliners in Tenerite. While much work has 

been done to prevent a similar occurrence from happening again, 

we are all too aware of several close calls in Chicago and Los Angeles just in the last nine months, any one of which could have had 

a similar disastrous result. The runway incursion problem has 

been thoroughly studied and mitigations have been devised that 

can lessen the risk of runway incursions. However, the Government 

and industry must be willing to devote the resources required to 

achieve long-term solutions to this problem. 

The final issue I want to mention is outsource maintenance oversight. One way that many of our carriers have cut costs since 9/

11 is by reducing the amount of maintenance they perform internally themselves. When maintenance is outsourced, oversight becomes more complex and more difficult. Congress must ensure that 

the FAA retains the mandates and the resources to fill its oversight 

role in the new economic environment of outsource maintenance. 

For more than 75 years, ALPA has had a tremendous impact on 

improving aviation safety. Today ALPA continues to be the world’s 

leading aviation safety advocate, protecting the safety interests of 

our passengers, fellow crew members, and cargo around the world. 

Congress must help us ensure that the airline industry’s safety net 

is not eroded. Together we can advance the aviation safety in the 

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years to come. As professional aviators who help keep this industry 

safe, together with the strong support of Congress, we are confident 

of success, success that is vital to the well-being of our Nation, our 

industry, and the traveling public. Thank you. 

Mr. COSTELLO. Captain, thank you. 

Ms. Friend, your statement, if you can give us a summary in five 

minutes or less. 

Ms. FRIEND. Thank you, Chairman Costello, for giving AFA the 

opportunity to testify today. Flight attendants, as the first-responders in the aircraft cabin, have a unique perspective on a number 

of the safety programs of the FAA, and we are pleased to have a 

seat here today to discuss some of these issues. 

Unfortunately, I must tell you that the FAA has repeatedly failed 

to take action on several fronts that would improve the overall 

safety of the employees that work under its jurisdiction. My written testimony highlights a number of important issues, but in the 

five minutes allotted today I want to focus on just two of them: 

flight attendant fatigue and the lack of basic workplace safety and 

health protections for flight attendants. 

Fatigue is a very real and serious concern for the flight attendant workforce in this Country, just as it is for pilots. Some air carriers are routinely taking advantage of a reduced rest provision 

which allows a rest period to be reduced to eight hours. It is our 

understanding that the original intent of this provision was to accommodate day-of scheduling delays such as bad weather or air 

traffic control problems. This exception has become the rule and 

flight attendants are now so exhausted that they have informed us 

that they have, in some cases, forgotten to perform critical safety 

functions.

Using the term ‘‘rest period’’ can be misleading because it involves much more than just sleep. The rest period can begin as 

soon as 15 minutes after an aircraft pulls into the gate and continue until one hour prior to the next scheduled departure. This 

rest period must also include waiting and travel time to the layover 

hotel; checking in; eating a meal, since many of our carriers have 

eliminated flight attendant crew meals; getting prepared for bed; 

then getting dressed for work the next morning; traveling back to 

the airport and preparing for the flight. Our members are reporting 

that the actual sleep time in an 8-hour rest is in many cases only 

between 4 and 5 hours. 

To further highlight the FAA’s turning of a blind eye to this 

practice, an FAA spokesperson, in response to a question from the 

media on this issue, stated the FAA rules on flight time and rest 

for both pilots and flight attendants are fundamentally sound; they 

serve aviation safety very well. We fundamentally disagree. 

Congress has recognized this problem and directed the FAA to 

conduct a study of flight attendant fatigue with a report that was 

due originally in June of 2005. After a year of stonewalling, the 

FAA finally released the report in June of 2006. The report concluded that flight attendants are definitely experiencing fatigue, 

and it went on to recommend specific areas for further evaluation. 

AFA’s request is that CAMI be directed to continue their initial research and that it receive adequate funding to do so. 

375

Like our longstanding battle to combat flight attendant fatigue, 

for well over 30 years AFA has been fighting for the most basic 

workplace safety and health protections for flight attendants. 

Those pleas continue to fall on deaf ears at the FAA. Flight attendants encounter numerous occupational injuries and illnesses while 

working aboard commercial flights. Their injuries are at rates several times greater than those for all private industry workers and 

even significantly greater than the rates experienced by construction workers. 

The reason that flight attendants continue to experience such 

high rates of injuries is that we are not covered under OSHA. The 

FAA has repeatedly refused to take any significant action to enforce standards protecting the occupational safety and health of 

flight attendants. The FAA claimed exclusive jurisdiction over our 

workforce in 1975. After decades of inaction by the FAA, AFA filed 

a petition for rulemaking in 1990, asking the FAA to adopt selected 

OSHA safety regulations and apply them to airline crew members. 

Seven years later the FAA finally responded, declining the petition, 

stating that the issues do not address an immediate safety concern. 

After increased pressure from AFA, progress seemed to be forthcoming when the FAA and OSHA entered into a historic Memorandum of Understanding in August of 2000. The MOU established 

a joint FAA-OSHA team to identify whether OSHA requirements 

could be applied to the working conditions of employees on aircraft. 

The first report of the joint team identified five basic OSHA protections that could be implemented without compromising aircraft 

safety concerns. Unfortunately, the team did not meet again until 

January 2002, at which time they could not agree on a time line 

for implementation of the relevant OSHA regulatory standards. 

The DOT Inspector General has issued a report which concluded 

that unless FAA and OSHA resume working together, we have no 

confidence that industry standards will be issued in the near future 

to address occupational hazards. The report went on to recommend 

several concrete actions that the FAA and OSHA should take. It 

stated ‘‘If these recommendations are not implemented, it will, in 

our opinion, be apparent that after 25 years of limited progress, an 

alternative approach will be necessary.’’ To date, the FAA and 

OSHA have taken no steps to implement the recommendations. 

In light of the continued stonewalling on the part of the FAA, we 

believe it is time for Congress to force the FAA to relinquish the 

exclusive jurisdiction over flight attendant workplace safety and 

health. Thirty years of inaction is far too long. 

Again, Mr. Chairman, thank you for giving me the opportunity 

to testify today. 

Mr. COSTELLO. Thank you, Ms. Friend. 

Mr. Roach, you are recognized to summarize your statement, 

please.

Mr. ROACH. Thank you, Mr. Chairman, for the opportunity to appear before this Committee. I am here representing the National 

Association of Machinists and Aerospace Workers at the request of 

International president R. Thomas Buffenbarger. We represent 

over 100,000 airline employees within this industry, employees at 

every classification with the exception of pilots. Our statement is 

in the record and we will be very brief here because, as I stated, 

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the statement is in the record and we don’t want to take up too 

much time. 

Our first situation is the NMB, National Mediation Board and 

National Labor Relations Board jurisdiction. While Congress has 

been discussing and voted on H.R. 800, the Employee Free Choice 

Act, which gives the employees an opportunity to be recognized by 

a carrier, we have a large group of employees who were certified 

under the National Labor Relations Act under the existing procedures, signed up for an election, voted secret ballot, had been represented in some cases for 10, 20, and 30 years, who overnight 

have lost union representation because of a change in the interpretation of the law by the National Labor Relations Board and the 

National Mediation Board. 

For example, in Minneapolis we had well over 200 members certified in the IAM since 1973. Overnight, in 2006, they lost union 

representation because they wanted improvements in their particular contract. This is creating an unsafe condition because, instead of having long-term loyal employees working on the airports, 

fueling planes and delivering certain items to the airports, we have 

a group of employees who are making minimum wage and change 

jobs very rapidly. We think that a change in the law is required 

to fix this problem. 

In addition, the lack of consistency by the National Labor Relations Board, National Labor Relations Act, and the Railway Labor 

Act in terms of express carriers. Under UPS, the employees, the 

truck drivers and the mechanics, the ground mechanics are covered 

under the National Labor Relations Act. At Federal Express, because the term ‘‘express carriers’’ was entered in the middle of the 

night into the law, Federal Express employees are all covered by 

the Railway Labor Act, which means to organize these employees, 

they must be organized throughout the entire Country, which is 

much different than what has happened at UPS. So there is a lack 

of consistency and there is not a level playing field between the 

carriers.

We represent a large number of flight attendants as well, and we 

echo Sister Friend’s concerns about flight attendant fatigue, as well 

as the fact that OSHA does not have control over the safety of 

flight attendants. We also have a concern about self-defense. Currently, today, self-defense training is voluntary and the TSA handles voluntary training. We do not believe that since 9/11 and the 

tragedy that 9/11 has caused, that self-defense training, which is 

designed to protect the individual flight attendant, as well as the 

flying public, should be voluntary. There should be mandatory 

training for all flight attendants, all active flight attendants. 

Foreign repair stations, there is insufficient oversight. There is 

not enough funding to get the proper inspections. A number of jobs 

have gone overseas, which every job that goes overseas is 16 other 

support jobs that we lose in this Country. We believe it is a matter 

of national security, as we export technology and jobs overseas, at 

some point in time some of this technology may come back to the 

United States to hurt us. It wasn’t that long ago that President 

Saddam Hussein was an ally of the United States, until he became 

a terrorist, a member of the axis of evil. 

377

Foreign competition, we quickly want to echo the sentiments of 

my colleagues here, that we do not believe that any additional foreign intervention into ownership of airlines would be beneficial. Increased ownership must not be allowed. Congress rejected President Bush’s Administration plan and that position should not 

change. The airports are a very safety sensitive place to work, it 

is a very dangerous place to work, and we believe that more oversight, not less oversight, is required. 

Since 9/11, we believe that because of subcontracting of work to 

small operations the safety of the airports and the employees and 

the flying public has been compromised. We stand ready to work 

with this Committee and the Members of Congress in providing 

any input that we can as a machinists union to improve the conditions.

We are prepared to answer any questions. Thank you. 

Mr. COSTELLO. Mr. Roach, we thank you. 

Captain McVenes, a couple of quick questions, please. One is in 

your testimony you indicate that there is a need to ensure that the 

aviation community does not become a culture of capacity, but a 

culture of safety, and I wonder if you might elaborate on that. 

Mr. MCVENES. Currently, today, there is a lot of emphasis being 

placed on increasing capacity and that is a good thing, it is good 

for the traveling public, it is good for everyone to get capacity up. 

However, we cannot increase capacity just for the sake of increasing capacity unless we make sure that good safety safeguards are 

part of the solution to increasing capacity. 

Mr. COSTELLO. I wonder if you might talk a little bit about the 

outsourcing of maintenance. In your testimony you indicate how 

there may be difficulty in the distance between maintenance being 

done and the people ultimately responsible for its correct completion, the more complicated the process might be by outsourcing to 

foreign countries and so on. 

Mr. MCVENES. What we are finding, there is a very wide range 

of differences in the various repair stations out there that many of 

the airlines are using for this outsourcing. Some are done very 

well, some are not done so well. The results that we are getting 

back when the airplanes come back into service, a lot depends on 

the oversight that took place by the regulatory authorities at that 

repair station. So we have to ensure that that oversight continues. 

If there is not good—you know, everybody has got budgets that 

they are trying to work under, including the FAA, when it comes 

to oversight, but we have to make sure that they have got the 

funding there to have the right oversight, regardless of where the 

repair station is, to ensure that the work coming out of there is 

done correctly. 

Mr. COSTELLO. Well, we share your concern, and if you were here 

for my opening statement, that is an issue that we are going to 

delve into further. 

Let me just say I really do not have questions at this time for 

Ms. Friend or Mr. Roach, but let me say that with the flight attendants, I think you have made a very compelling case, not just 

today, but in many instances, the 30 years of inaction. We hope 

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lation, we can address some of the issues that you in fact have 

been working so hard to address over the years. 

Mr. Roach, the issue with the National Mediation Board, I 

couldn’t agree with you more, and at some point in time I hope that 

we can work with you to address that issue as well. 

At this time, the Chair recognizes the Ranking Member of the 

Subcommittee, Mr. Petri. 

Mr. PETRI. Thank you very much, Mr. Chairman. Let me just 

say, first of all, as a member of the traveling public, I would like 

to thank all of your members for the generally high level of service 

that you provide. I mainly see the stewardesses or flight attendants, and they have a lot of challenges and do a great job almost 

all the time. 

I have a couple of questions, and this one you may not really 

want to answer, Captain, it has been a hot potato in the community for years. The international rules seem to be changing in the 

direction of allowing pilots who meet health safety standards to fly 

up to age 65 with a co-pilot who is 60 or under. This has been debated, obviously, and I know you have Members on both sides of 

this. Do you have any guidance you can offer to us here in Congress on that issue? 

Mr. MCVENES. Well, you are absolutely correct, it is a very divisive issue for all of us, and it is one that we really are putting a 

lot of effort into completely understand. As it stands right now, in 

light of the FAA’s announcement for wanting to change the rule—

and it is going to be placed into rulemaking—we feel that is the 

proper venue to deal with the age 60 question. Through that rulemaking process we can make sure that all the issues are addressed, safety and operational issues, to ensure they get addressed 

correctly, and whatever decisions are made, that they are done 

with all of those things in mind. But we really believe the rulemaking process is the way to go. 

Mr. PETRI. Thank you. 

In your testimony, Ms. Friend, you strongly urge that we have 

legislation to encourage regulations setting bag weight limits in the 

cabin, I guess, on the planes. Is there a reason for that? 

Ms. FRIEND. This is the carry-on bag issue? 

Mr. PETRI. Yes. 

Ms. FRIEND. Right. There are a number of reasons. First of all, 

the excess cabin baggage is a primary cause of a lot of injuries for 

our members attempting to get those bags properly stowed. We 

also believe if we limit the amount of baggage that is allowed into 

the cabin, that it also expedites the security process because the 

screeners have less bags that they have to examine through the xray machine, and we believe it increases the level of safety. I mean, 

there is just a limited amount of space in the cabin of that aircraft, 

and just traveling as a passenger, I can see how overstuffed those 

bins are, and I have no confidence at all that they would hold in 

any kind of an accident or incident, that that cabin would be littered with baggage and impede the safe evacuation of those passengers. So, yes, we strongly urge a reduction in the amount and 

size of baggage allowed in the cabin of the aircraft. 

Mr. PETRI. Mr. Roach, could you expand on your testimony opposing foreign investment in U.S. airlines? I am interested not in 

379

control or management of airlines, but just investment in the 

American corporate—it is a global world; we are investing all over 

the world in a variety of ways. Why wouldn’t it be a two-way 

street?

Mr. ROACH. Well, we are talking about control. The current investment level as it stands now, we are not trying to change that. 

But there is a lot of discussion about increasing investment from 

foreign carriers and in some cases some standards that don’t appear to be control but is control. I go back to my days when I represented people at British Airways and British Airways invested 

$450 million in U.S. Airways, and there was some discussion with 

the Department of Transportation that they could not have control, 

and an executive of British Airways said to me in the hallway one 

day, he said, you know, you don’t invest $450 million in anything 

and don’t have control; we have control. 

So the more investment that we allow and the higher the percentage of this investment, they, at some point, have control over 

these airlines and it becomes anti-competitive in our view. And 

they have decimated the foreign flags in this Country. All the foreign flags that used to fly here, they have all disappeared or been 

reduced. So we think that foreign investment could be a very bad 

thing once control, once a foreign carrier or a foreign entity takes 

control of an American or domestic carrier. 

Ms. FRIEND. Mr. Chairman, may I add a comment to that? 

Mr. COSTELLO. Please. 

Ms. FRIEND. I think, Congressman Petri, it is all in how you look 

at the U.S. air transportation system. I look at it as a public service, and in many cases as a part of our national defense when we 

provide the civil reserve air fleet and when we provide military airlift during times of war. It is not an auto plant or a bank or a telecommunications industry, it is part of our infrastructure, and I just 

don’t think that control of it should be in foreign hands. 

Mr. COSTELLO. Thank you. 

The Chair recognizes the gentleman from New York, Mr. Hall. 

Mr. HALL. Thank you, Mr. Chairman, and thank you to all of our 

panelists.

I agree, Ms. Friend, with the statement you just made about critical infrastructure and services that relate to our national security—at certain times they definitely relate to our national security—needing to be in American hands. 

I wanted to go back to Captain McVenes’ testimony that the fatigue cushion once provided by negotiated work rules has been 

completely eliminated. I was curious if you could elaborate on that. 

And then, Ms. Friend, if you would also speak to fatigue and to 

the CAMI study on fatigue and what recommendations were made. 

Mr. MCVENES. If you take a look at the regulations that have 

been developed for flight duty and rest periods, they really date 

back 60 years, to a time when we were flying piston-powered airplanes and sometimes three pilot crews and very short haul operations. The way we have dealt with the changes in the industry in 

spite of those rules has always been through the collective bargaining agreements, where we were able to secure more realistic 

rest periods, more realistic duty times from those collective bargaining agreements. 

380

After 9/11, when the industry went through a very tremendous 

economic downturn, we lost a lot of those—there were a lot of 

changes that were made in those collective bargaining agreements 

as they applied to flight and duty time and rest periods. Consequently, we are at a point now where most of our airlines are operating strictly under the basic Federal regulations, the FARs, so 

we are seeing now that we are having a lot more issues purely 

from a safety perspective just on fatigue, and the reason has been 

because the contracts have changed. 

Ms. FRIEND. Captain McVenes is right. Those duty and rest 

times were intended to be a floor, and a floor that we never actually had to face and work under until all of the concessionary 

agreements made during bankruptcy. We now know that it is an 

inadequate floor. 

But on your question of the original CAMI fatigue study, in the 

initial study, CAMI reported that they only had time to really review existing literature and do some preliminary interviews or surveying of cabin crew members or flight attendants. What they recommended that they do is a more extensive study, actually follow 

selected crew members around and measure their reaction times at 

certain points in the duty time or following the reduced rest. 

So we have asked or we are asking that they be fully funded for 

what they need to complete that study so that we can only identify 

that flight attendants are fatigued—we know that—but we can 

identify where is the break point, what is the maximum amount of 

duty and minimum amount of rest that is required to maintain the 

vigilance and the reaction time that is necessary. 

Mr. HALL. Thank you. I also wanted to ask, Ms. Friend, about 

your testimony about poor air quality in the cabin or treatment of 

the aircraft with pesticides and the risks that you are aware of or 

that you suspect to passengers and crew. 

Ms. FRIEND. On the question of the pesticides, several countries 

require either active pesticide spraying or residual pesticide spraying. We have a number of our members and we are aware of some 

passengers who have suffered continuing health problems as a result of being exposed to this spray. Talk about Australia, where we 

do residual spraying, where the cabin seats and the crew bunks are 

literally saturated with a pesticide and then allowed to dry for 

maybe 8 hours, and then people actually are seated. And, you 

know, whether or not you have a particular sensitivity, you know, 

you in fact can be affected by this spray even though it is dry. 

What happens with our members is that they have repeated exposure and they do build up a sensitivity and suffer from rashes and 

even from some neurological damage. 

We have been working with the Department of Transportation on 

an alternative to chemicals, something that is called an air curtain, 

and actually has been tested and does work. We are actually going 

to be testing it soon in Puerto Rico. The government there has 

agreed to test, and if they are satisfied that it works, then they will 

eliminate the chemical spray and go to this air curtain. So the DOT 

has been very cooperative in working with this and are committed 

with us to try to persuade other countries to abandon the chemical 

and go with this non-chemical approach. 

381

Mr. HALL. Thank you very much, and thanks for all the work 

that you do and your members do. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. I thank my friend from New York. 

The Chair recognizes now, under the five minutes rule, the gentleman from Illinois, Mr. Lipinski. 

Mr. LIPINSKI. Thank you, Mr. Chairman. I want to thank all of 

our witnesses for their testimony. I was actually back in my office 

listening to all your testimony. I appreciate the work that you do 

on behalf of those who are working and putting themselves in these 

situations. I know we were talking about flight attendants, the important safety role that they serve right now. I think that is especially true. 

One thing, quickly, I just want to ask in regard to, again, a safety question, but safety at airports. I want to ask Captain McVenes 

your testimony indicates that much more needs to be done to ensure the safety of runways and the airport environment. Right 

now, Midway Airport, there was an unfortunate situation where 

the plane ran off the runway. The runway safety areas are small 

there, but right now we are putting in the EMAS to restrict the 

planes that may go into the runway safety area. Are there any 

other recommendations that ALPA has in this regard in general? 

Mr. MCVENES. Certainly, the effects of EMAS installations are 

something that can really help at those airports that are geographically challenged, shall we say, for runway lengths. We also have to 

take a look at the operating waves that we allow some of the airplanes to operate at when they go into some of these airports to 

ensure that they can safely be operated. In the other areas of runway safety, there are tests being done with runway status lights, 

for example, that can help in the runway incursion area. Tests 

were done in Dallas, also in San Diego, and I know there are some 

other airports around the Country, including O’Hare, I think, that 

have taken a look at this system as a means to help that runway 

incursion problem. 

These type of things, along with perimeter taxiways, could really 

go a long way to help runway safety. And then we can start taking 

a look at some very simple solutions, simple things like proper 

markings on the taxiways and runways; hold short lines, how they 

are signed and marked can help in that runway incursion area, too, 

to help us in this, the runway safety problem we have. 

Mr. LIPINSKI. Thank you. 

A quick question for Mr. Roach in terms of airport workers. 

There has been some talk about maintaining safety and making 

sure only people who should be in an airport are allowed in there. 

Do you have any concerns one way or the other on the rules or the 

access right now to the airport? Do you experience any problems? 

Mr. ROACH. I think with a lot of the subcontracting of work that 

is going out, there are a lot of people coming on the airports that 

do not work for airlines, and that has been increasing over time. 

I recall some years ago at Continental Airlines, there were 100 employees who were working on the overnight cleaning who belonged 

to a company, not Continental Airlines, and it was found this company that had brought these people in had illegal documents and 

we didn’t know who these people were or what they were doing. 

382

The access to employees coming on the airport, they all must go 

through a security check, but access for non-airline employees, 

driving trucks onto the airport, is very bad, and we have a concern 

for the people that we represent that people have access to the airports who have not been checked, who don’t have criminal background checks, who have not been tested, and that these people are 

allowed to come on the airports. So we do have a concern about 

that particular group coming onto the airport. 

Mr. LIPINSKI. Thank you. 

Thank you. I yield back the balance of my time. 

Mr. COSTELLO. I thank the gentleman and I thank all three of 

our witnesses. We appreciate your testimony here today and look 

forward to working with you as we proceed with the reauthorization. Thank you. 

At this time, the Chair will ask the third panel to come forward, 

and while you are coming forward I will make the introductions. 

Dr. Gerald Dillingham is back with us today. He was here yesterday and was very patient yesterday and has been patient today. 

He is, of course, the Director of Physical Infrastructure issues with 

the Government Accountability Office. Mr. Steve Baker, who is the 

President of the FAA Managers Association; Mr. Warren Kroeppel, 

who is the General Manager of LaGuardia Airport, the Port Authority of New York and New Jersey; Dr. Steve Sliwa, who is the 

CEO and President of The Insitu Group; and Mr. James 

Renninger, who is the Director of Aviation Center of Excellence, 

Florida Community College at Jacksonville. 

We would ask that you all take your seats, and we will proceed 

with Dr. Dillingham. You are recognized. Again, we appreciate not 

only you being here yesterday and today, but all of your good work. 

You are always very responsive to the Subcommittee, both in the 

past and currently, and we appreciate all that you and your folks 

do.

TESTIMONY OF GERALD DILLINGHAM, DIRECTOR, PHYSICAL 

INFRASTRUCTURE ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; STEVE BAKER, PRESIDENT, FAA MANAGERS ASSOCIATION; WARREN KROEPPEL, GENERAL MANAGER OF LAGUARDIA AIRPORT, THE PORT AUTHORITY OF 

NEW YORK AND NEW JERSEY; STEVE SLIWA, CEO AND 

PRESIDENT, THE INSITU GROUP, INC.; JAMES B. 

RENNINGER, DIRECTOR, AVIATION CENTER OF EXCELLENCE, FLORIDA COMMUNITY COLLEGE OF JACKSONVILLE 

Mr. DILLINGHAM. Thank you, Mr. Chairman, Mr. Petri, Mr. Lipinski. This FAA reauthorization comes at a very critical time for 

the Nation’s air transportation system and the FAA. The current 

system is under stress, as evident by last year’s record delays and 

the increasing number and duration of air traffic control system 

outages. My testimony this afternoon addresses three specific questions: What progress is FAA making with the operation of the current ATC program that will be essential foundations for NextGen? 

Secondly, what are the key operational issues that need to be addressed to help ensure a successful transition to NextGen? And, 

third, what are the key safety areas that need to be addressed for 

383

the continued safe operation of the Nation’s air transportation system?

With regard to the current system, over the last few years, FAA 

has made significant progress in moving to more business-like and 

cost-effective operations of the air traffic control system. There are, 

however, some significant challenges that need to be addressed 

during this authorization period. One of those challenges is for 

FAA to institutionalize the progress that it has made in managing 

the operations of the current ATC system. This challenge is made 

even more difficult because the new FAA Administrator and a permanent leader of FAA’s air traffic organization will also need to be 

selected.

Mr. Chairman, because the next few years are very critical for 

implementing NextGen, FAA may want to identify a candidate for 

chief operating officer at the ATO who is able to serve the full fiveyear term. 

There are other significant challenges that need to be addressed. 

For example, FAA must address the problem of the increasing 

number and duration of ATC system outages. Maintaining existing 

systems as it begins to acquire NextGen systems is critical, since 

these existing systems will be the core of the Nation’s ATC system 

for years to come. 

Finally, continuing FAA initiatives, such as facility consolidations and closings, should be based on a risk assessment and with 

full involvement of the Congress and FAA’s internal stakeholders, 

including the controllers and the technicians. 

Now I would like to identify some of the key operational issues 

and challenges associated with the transition to NextGen. One 

challenge is FAA’s ability to maintain critical acquisitions on 

schedule and on budget. This will be essential to meeting the goal 

of transitioning to NextGen by 2025 and minimizing any cost increases and schedule delays. 

Another challenge is the coordination that will be necessary between the ATO, which is charged with the operation and maintenance of the current air traffic system, and the JPDO, which is 

sometimes referred to as being responsible for the visionary component of the system. 

The operational evolution partnership is FAA’s plan for providing 

continuity between the current system and the vision to come. The 

challenge is the extent to which the plan is actually implemented. 

Now I want to turn to our last issue and identify the areas that 

need to be addressed during reauthorization for continued safe operation of the air transportation system. First, ground safety is an 

area of concern and will continue to be because air traffic is forecast to grow substantially during the coming decade. FAA needs to 

keep on schedule to deploy technologies that help prevent runway 

incursions, a safety issue that remains on NTSB’s most wanted 

safety list. 

Second, FAA needs to work with Congress to establish the appropriate regulatory approach for some system users. For example, 

Congress may want to revisit FAA’s dual role of both regulating 

the safety and promoting the commercial space industry. In light 

of the recent spike in air ambulance accidents, FAA may want to 

384

revisit the regulation under which air ambulances currently operate.

A third safety area that needs attention is improving the accuracy and completeness of safety data and FAA’s analysis of that 

data. Accurate, complete information would provide FAA with the 

basis for a data-driven risk management safety approach. Such an 

approach could give the agency an early warning of hazards and 

national trends, thus potentially averting accidents. 

A fourth safety challenge is FAA’s ability to manage its human 

resources, specifically, the hiring, training, and deployment of its 

safety inspectors, engineers, technicians, and air traffic controllers. 

And, lastly, the FAA and the unions must find ways to work together to minimize conflict and maximize cooperation for operating 

the current system as well as transforming to NextGen. 

In the final analysis, each of these challenges that I have identified has the potential to significantly affect the safety and efficiency of the Nation’s air transportation system and should receive 

serious consideration in this reauthorization. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. Thank you, Dr. Dillingham. 

The Chair now recognizes Mr. Baker for his statement, if you 

could summarize in five minutes or less. 

Mr. BAKER. Thank you, Chairman Costello and Ranking Member 

Petri. I appreciate the opportunity to come before the Aviation Subcommittee and provide you with a perspective of the managers 

throughout the FAA system on safety and operational programs. 

The FAA Managers Association is made up of non-bargaining 

unit employees within the FAA from each of its lines of business. 

We promote excellence in public service and are the advocates of 

managing the skies in a safe and efficient manner for the flying 

public and the aviation industry, and adhere and implement the 

guidance of Congress. 

While we, as an association, represent all managers within the 

FAA, today I will primarily be focused on delivering the perspective 

of the air traffic managers within the system. I would like to focus 

my comments on basically three areas: first, thank you to this 

Committee for your leadership and including Section 226 in the 

last FAA reauthorization; second, I will discuss the need for increasing the air traffic front-line managers; and, third, I will share 

our perspective of how the current system is working. 

Section 226 expanded accelerated retirement to some second 

level managers within the air traffic control field. We basically 

have an accelerated system whereby, with 20 years and age 50, we 

can retire. With 25 years we can retire at any age. It was, in the 

past, limited to simply air traffic controllers and front-line managers. This Committee, under the leadership of then Chairman 

Mica and now Chairman Oberstar, along with Mr. Costello and Mr. 

Petri, got language inserted that expanded that retirement benefit 

and eliminated a huge disincentive for our controllers to move up 

within the ranks, and it is not often that we get to thank you guys 

for what you do for us. We really appreciate it. It was legislation 

that worked. It was bipartisan. It did exactly what it was supposed 

to. Thank you for that. 

385

My second point speaks to the pressing need for appropriate levels of oversight at the front-line level. It is important to emphasize 

where air traffic managers come from. We are not plucked out of 

the sky; we are not hired off the streets. We are actually air traffic 

controllers that have moved up within the organization. It is impossible to be a front-line manager, an air traffic manager in the 

FAA without having that background and experience. 

The actual floor set by Congress is currently 1,846 front-line 

managers. Unfortunately, that is a level that the FAA has been unable to attain thus far. In 1995, we had 772 operational errors, and 

operational errors, of course, are when aircraft get below the standards, too close. By 2005, that operational error rate had risen to 

1,506. That is a 95 percent increase in operational errors. In 1995, 

runway incursions were 249. By 2005, they were at 336. That is 

a 35 percent increase. 

The only difference between today and 1995 in the way we staff 

our facilities is actually in the front-line manager ranks. We have 

tried for several years, and Congress has helped in setting a floor, 

and we hope that Congress will continue to help us reach those levels of necessary front-line managers. We continue to try to work 

with the FAA to increase those levels of management. We are hampered by budgetary constraints and currently undergoing a huge 

restructuring, which you heard much about this morning, and I am 

sure you will continue to hear much about in the years to come. 

The FAA is hiring a brand new workforce. We are turning over 

an entire group of air traffic controllers in a very short amount of 

time. These are all reasons why we need the proper amount of 

front-line managers in there to oversee the changes that have to 

do with NextGen, that have to do with hiring a new workforce, that 

have to do with bringing on new systems. It all requires the proper 

amount of oversight, and I was pleased to hear all of the unions 

this morning express the need for proper oversight. 

We want to make sure that the Committee understands that our 

association, while independent from the FAA, is not at a battle 

with any of the unions over their contracts. We do, however, have 

grave concern that we are changing a process that has already 

been put in place. To reverse a process now would have very bad 

effects on the entire agency in terms of morale, in terms of cost. 

I have no problem with setting a set of rules up for future negotiations, but to go backwards in time now would have dire effects. 

These impasse procedures were developed in 1995, when the 

FAA was removed from Title V and a process was put in place to 

make sure that Congress maintained control of the budget. To send 

a contract to mandatory arbitration by a disinterested third party, 

Congress would lose control of that budget, and that concerns us. 

Mr. COSTELLO. Mr. Baker, we thank you for your testimony. 

At this time, the Chair recognizes Mr. Kroeppel. 

Mr. KROEPPEL. Chairman Costello, Congressman Petri, Congressman Hall, and the other distinguished Members of the Subcommittee, good afternoon. I am Warren Kroeppel, the General 

Manager of LaGuardia Airport for the Port Authority of New York 

and New Jersey. On behalf of the Port Authority, I would like to 

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386

ing the management of the Nation’s largest airport system and 

some of our current challenges. My comments will be brief and I 

request that my entire statement be entered into the record. 

The Port Authority of New York and New Jersey operates four 

airports that are critical to the Nation’s trade, travel, commerce, 

and tourism. It is a rapidly growing gateway. John F. Kennedy 

International, Newark Liberty International, LaGuardia, and 

Teterboro Airports are used by 104 million passengers with over 

2.6 million tons of cargo and 1.2 million aircraft movements in 

2006. LaGuardia is by far the smallest of New York area’s three 

commercial airports, consisting of only 680 acres in area. It has two 

intersecting 7,000 foot runways and four passenger terminals with 

73 gates. 

The FAA’s propose of NextGen legislation seeks to address a fundamental and undeniable problem: the scarcity of airfield resources 

at LaGuardia. It has been clear since the high density rule was established in the late 1960s that certain airports have insufficient 

runways and taxiways to handle unconstrained demand without 

experiencing significant congestion and the attendant delay and 

passenger inconvenience. 

At LaGuardia, the problem is exacerbated by the fact that no 

amount of labor, capital or entrepreneurship, can expand the constraint on that capacity, which is actually airport land. The highly 

constrained facilities at LaGuardia are not capable of absorbing the 

demand for access to the airport without the use of tools to manage 

the inevitable delay and strain on the airport infrastructure that 

would ensue if access were left unchecked. Managing congestion is 

just one of the key goals for LaGuardia in the post-high density 

rule era. 

Congress also had established the goal of creating opportunities 

for new entrants and ensuring service to small communities. In addition, the FAA and Port Authority were concerned about the efficient use of airspace or throughput. To address congestion management, the FAA correctly focuses on the need to continue to place 

limits on flight activity consistent with the supply of capacity. The 

Port Authority agrees that this is an FAA responsibility; however, 

the Port Authority believes that the current limit on operations at 

LaGuardia may not be low enough and that now is the time to further examine this limit to determine whether reduced hourly operations rate or other measures will prevent delays from accumulating to excessive levels. 

While we agree with the goal of providing new entrants and limited incumbents access to LaGuardia, we have great concern about 

the FAA’s approach. The NPRM proposed that starting in 2010, 

and every year thereafter, 10 percent of all existing operating authorities would be reallocated. The NPRM, much like the language 

in the NextGen bill, are silent on the mechanics of how this would 

actually work. 

A turnover of this nature would create excessive roiling for the 

entire airport community. Airlines that have spent years building 

their schedules so that it could provide hourly service in high demand business markets would be faced with potentially losing key 

pieces of their operation. Even if the airlines were successful in restoring some elements of their lost 10 percent by repurchasing 

387

through whatever mechanism is instituted, there is no certainty 

they would be able to restore their schedules. 

As for carriers who may successfully acquire new operating 

rights through their forced annual reallocation of the 10 percent of 

LaGuardia’s capacity, there is no certainty that they will find contiguous gate space which would permit them to take advantage of 

the new opportunity in a commercially viable manner. Both the 

NPRM and the NextGen bill are filled with uncertainty that is 

quite troubling to airlines, the airport, and the customers we serve. 

The Port Authority strongly agrees that in the case of 

LaGuardia, where it has been established that aeronautical capacity is finite and cannot be expanded, the over-abundance of service 

to large markets with small aircraft effectively precludes other 

services. Both the FAA and Port Authority differentiate between 

small planes to large places, which often poorly serve the traveling 

public, and small planes to small places, which is the only way 

small communities can afford access. 

Although the Port Authority supports the many principles, doctrines, and tenets that the FAA has articulated, in the Port 

Authority’s view, the proposed rule and legislation needless interfere with the airport operator’s proprietary rights to manage 

LaGuardia. More importantly, it appears that the proposal would 

have undesirable impacts on the airport, the airlines, and ultimately the traveling public due to the fundamental mismatch between the proposed airfield policy and the management of the land 

site infrastructure. 

The FAA’s proposal is too prescriptive and improperly assigns to 

the Federal Government the responsibility of managing access to 

the all-important airport gate facilities, rather than acknowledging 

the responsibility for doing so rests with the airport operator as the 

manager of the facility. 

The Port Authority has determined that an alternate approach 

is preferable, realizable, and responsive to the aforementioned 

goals. The FAA needs only to set the operational hourly limit and 

to establish the criteria for service to small communities. The Port 

Authority will then exercise its right to manage utilization of access to LaGuardia’s terminal and gate facilities, which avoids many 

of the potential pitfalls in the NPRM proposal and the NextGen 

legislation.

The Port Authority proposes using its proprietary rights to effectuate gate utilization measures, in consultation with air carriers, 

to achieve the objectives that Congress and the FAA have articulated. The Port Authority has legitimate interest as the proprietor 

of the airport to seek to optimize the efficient use of limited airport 

capacity and facilities to promote competition at LaGuardia. 

The FAA acknowledges there is a tremendous uncertainty embedded in the LaGuardia NPRM, uncertainty as to what Congress 

will authorize and uncertainty as to how market clearing charges 

will work in its first application in the United States aviation context. Rather than face this tremendous uncertainty with the resultant high disruptive effects on airlines, airports, and the customers, 

the Port Authority believes that it would be preferable to use gate 

leasing policy, which is a time-tested and common industry practice. The FAA should set the hourly capacity at LaGuardia, provide 

388

for small community access, and empower the Port Authority to 

proceed with its gate leasing policy. We urge Congress to enable 

the Port Authority to proceed with a simpler, more simple solution 

to LaGuardia’s congestion issue: incentive-based gate leasing policy.

If the Administration’s provision for congestion airports are incorporated into legislation, we then urge Congress to engage gate 

leasing policy as a potential market-based mechanism. 

Mr. COSTELLO. We thank you for your testimony, and the Chair, 

at this time, would recognize Dr. Sliwa. 

Mr. SLIWA. Thank you, Chairman Costello. Mr. Petri and Members of the Subcommittee, good afternoon. It is my pleasure to be 

here today in support of your review of FAA operational and safety 

programs in our Nation’s air traffic system. Thank you for this opportunity. There are some significant partnering opportunities 

which, if taken, can foster and advance commercial applications of 

unmanned aircraft system activity without compromising the safety and established operating procedures of the National Airspace 

System.

I am the CEO of Insitu, a small, fast growing company that develops and produces UAV systems. We received recognition in 1998 

as the first company to fly an unmanned aircraft across the Atlantic Ocean. It weighed 40 pounds, took 27 hours, and burned a gallon and a half of gas. More recently we are known as the developers of the ScanEagle system, which we jointly deploy with Boeing. It is flown over 36,000 hours in Iraq and from ships on the 

U.S. Navy, making it the fourth most used UAV in U.S. history, 

and is still on a commercial off-the-shelf, COTS, system. 

There are well over 400 small companies in the U.S. that are involved in unmanned aircraft system development and component 

manufacturing at various levels of sophistication. The situation is 

similar to the 1930s and 1940s, when many airplane companies 

built the legacy of aviation we all enjoy today. Many predict that 

the 21st century will be the century of autonomous aircraft. 

However, the commercial unmanned aircraft market is outpacing 

the incremental processes which create procedural or regulatory 

guidance. Current market analyses assess that the unmanned aircraft system products and services market will grow to be $15 billion in annual revenue within the next 8 years. We need your help 

to capture this market and, with its capture, help assure U.S. leadership in aviation. 

Although the operations to date have been in support of the military operations, civilian applications are beginning to become viable as these systems mature. In fact, we at Insitu have commissioned for several civilian applications in the coming year valued 

in the millions of dollars. We see many opportunities in the future, 

ranging from minerals assessment, search and rescue, resource 

management, and to homeland security. 

But these civilian applications, and even supporting the research, 

training, and production flight testing needs for military applications, require access to the U.S. airspace system. In fact, I would 

say that the foremost challenge in achieving growth in this dynamic market is a safe, sustained access to airspace. 

389

The FAA Unmanned Aircraft Program Office is developing guidance and regulations for the certification and integration of unmanned aircraft in the NAS and is supported by an FAA-commissioned industry working group through RTCA which just completed 

a compilation of recommended best practices and guidance material, and trade associations such as the Association of Unmanned 

Vehicle Systems, known as AUVSI. We in the industry applaud 

this first step and we are proactively collaborating with this Program Office and with other FAA offices and with industry working 

groups and trade associations. 

However, we can’t achieve progress rapidly on the current path. 

The United States unmanned aircraft industry is sometimes cast 

an envious glance at the regulatory practices of our allies and trading partners like Australia and Canada, which encourage unmanned aircraft experimentation with flexible risk assessment, 

continuous data collection, and continuous improvement. As a case 

in point, the FAA has stopped issuing certificates of authorization 

for other than government agencies to experiment with UAVs in 

the national aerospace system. This past February, the FAA published policy guidance in the Federal Register related to unmanned 

aviation systems and is viewed by many in our industry as an attempt to create regulations by policy inference. 

We believe that defining industry performance parameters without first encouraging the industry to demonstrate its level of performance is comparable to the classic catch-22 paradox. We applaud the efforts the FAA is making, but it is resource-constrained 

when it considers the challenges before it. Unmanned aircraft 

range in range from a few ounces to many tons in gross weight. 

Some have applications they want to test in very remote locations 

and others want to interoperate with commercial aircraft on instrument flight plans. 

Unfortunately, trying to apply rules and regulations to such a diverse field of unmanned aircraft, with a few pages of guidance, is 

problematic, and trying to quickly apply the current rules developed for the manned aircraft infrastructure to this class of aircraft 

is not likely to be fruitful for broad and rapidly evolving industry. 

For example, the FAA is currently using the manned experimental 

aircraft rules for unmanned aircraft industry, which has significant 

flaws as the industry develops. 

I have five suggestions helpful to the industry, to the FAA, and 

to our Nation: one, provide sufficient personnel and financial resources for FAA unmanned aircraft system policy exploration, development, and application; two, encourage the FAA to experiment, 

collaborate with industry, and collect data; three, reintroduce the 

use of civil certificates of authorization for commercial companies 

with appropriate FAA safety case reviews and monitoring; four, encourage the FAA to address huge variations in unmanned aircraft 

types and risk factors; and, five, discourage the current regressive 

practice of regulating via policy promulgation. 

In conclusion, safe access to the airspace requires both a mix of 

technology, policy, and regulation, and also judicious and reasonable experimentation. We encourage Congress to increase the FAA 

unmanned aircraft systems program application funding to equip 

the FAA with the tools and incentive to encourage military and ciVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00415 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
390

vilian experimentation, and we encourage Congress to support FAA 

sound policy based upon knowledge of distinct unmanned aircraft 

system classes, current technology, and industry needs. 

Mr. COSTELLO. Dr. Sliwa, thank you. 

Mr. Renninger, you are recognized under the five minute rule. 

Thank you. 

Mr. RENNINGER. Well, thank you, Chairman Costello and Members of this Subcommittee. I am pleased to be here today to discuss 

air traffic controller training, the FAA college initiative, and suggestions for increasing the number of qualified air traffic controllers.

As you are probably aware, there is a looming crisis in the Nation’s control towers, as controllers hired in the wake of the 1981 

strike reach retirement age. Not only do these controllers need to 

be replaced, but there is also a growing need to provide additional 

air traffic control services for the new transportation systems 

brought on by things such as very light jets. 

Government experts predict that by 2025 there will be three 

times the number of planes in the skies as there are today. Numerous GAO studies have been warning for years about the need to 

better prepare for controller attrition, and FAA’s own projections 

indicate that approximately 72 percent of the current air traffic 

controller workforce will be eligible to retire in the next 10 years. 

Clearly, there is a need to attract and train new air traffic controllers and use all available resources to provide the technical training they require. 

Currently, there are three sources from which the FAA gets air 

traffic controllers: number one is former DoD and FAA controllers; 

number two is students from the CTI schools; and number three 

is applicants responding to FAA vacancy announcements. 

The percentage of controllers supplied by the CTI programs varies, but was 33 percent of the total as of November 2005 and 25 

percent at the end of fiscal year 2006. Now, these figures do not 

reflect the true value of CTI graduates who had required less time 

to be certified after the mandatory on-the-job training for all controllers. Only controllers who have transferred from another FAA 

facility require less time to certify at their new positions. It is clear 

that the training and education that controllers receive at the colleges and CTI schools prepares them to join the air traffic controller workforce with minimal cost from the FAA. 

Now, CTI was started in 1989, when Congress established the 

Mid-America Aviation Resource Consortium (MARC) to provide 

ATC training in Minnesota. Hampton University followed shortly 

thereafter, and was awarded FAA funds for ATC training in 1990. 

Interest in this program led to the FAA adding three more schools 

in 1991: Community College in Beaver County, UND, and University of Alaska. Nine more schools were admitted to the CTI program in 1997. There have been no new schools added since 1997 

and there is no process with the FAA to become a CTI school, although there is a strong interest in joining this group by well qualified schools. 

Graduates of CTI schools earn either an associate’s or bachelor’s 

degree in aviation administration or management that incorporates 

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391

lers need this associate’s degree just to be a controller, and they 

need a bachelor’s degree if they want to move on into management. 

The cost of earning a degree varies widely among the CTI schools, 

from a low of about $4,000 for an associate’s degree from a public 

school to a high of almost $100,000 for a bachelor’s degree from a 

private university. The cost is borne by the student, who comes to 

the FAA ready for on-the-job training that is necessary to be certified.

Once in Oklahoma, they undergo further training before going to 

their final FAA facility, where they will have on-the-job training 

that is specific to each position. Only after successfully completing 

this training are the developmental controllers certified and able to 

begin working as air traffic controllers. 

Being designated a CTI school is very important for a college or 

university that wants to offer ATC training. Only graduates from 

a CTI school can have their names added to the hiring database 

maintained by the FAA. It is from this database that individuals 

are chosen for further training and employment. The FAA currently has no process to admit any new schools to the CTI program. 

Well qualified schools that offer other FAA certified training have 

indicated an interest in becoming CTI schools and have been 

rebuffed. The FAA needs to open the CTI school process that are 

able to meet the FAA standards for air traffic control training. If 

the FAA can certify training for pilots and aircraft mechanics, 

there should be no reason why they cannot certify air traffic controller training programs and degrees at colleges and universities. 

The benefits of becoming a CTI school are these: they increase 

the pool of pre-screened candidates and also the pool of qualified 

applicants at little or no cost to the FAA; they also have applicants 

in the region where the demand exists the most. The advantage of 

the flexibility of community colleges and universities, who are the 

experts in workforce education and training, is that we can do this 

at a fraction of the cost of what private schools charge. 

Mr. Chairman, this concludes my remarks, and I hope I have 

convinced you of the need to open up the FAA’s college training initiative program. I can tell you that Florida Community College at 

Jacksonville is currently providing FAA-certified training in aircraft mechanics, as well as pilot training, and we see no reason 

why we couldn’t do training in air traffic control as well. I think 

we can do this for the betterment of the air traffic controllers who 

are going to man our aircraft control towers, terminal radar facilities, and our traffic control centers of the future. 

Thank you very much. 

Mr. COSTELLO. We thank you for your testimony and we thank 

the entire panel. I know it is difficult to summarize your remarks 

in five minutes, but you all did pretty well. 

Let me ask a few questions. 

Dr. Dillingham, the FAA recently released an updated version of 

their controller workforce plan, and I just wondered what GAO’s 

impression is of this current version of the controller workforce 

plan.

Mr. DILLINGHAM. Mr. Chairman, we think that the FAA has 

done a credible job in recognizing that they have had more retirements than they had initially projected and, therefore, have made 

392

an attempt to bring more people into the pool. We do have a concern about the fact that there are fewer past DoD controllers and 

the fact that even some of the CTI graduates are finding other jobs. 

So what that means, of course, is that you are going to have a 

core of people that are going to need more training, you are going 

to have less experienced controllers in place for a while. I think the 

number is something like 40 percent of the controllers within the 

next five years will be there less than four years, and it usually 

takes three to five years to be a full performance controller. 

So they have made some steps. You know, it still is a work in 

progress, as far as we can tell. 

Mr. COSTELLO. And there is still reason for concern. I mean, we 

are not here to beat up on the FAA, we are here to delve into 

issues and arrive at conclusions and try and provide solutions. 

You heard testimony earlier today concerning the issue of the 

controllers, and I think it is a fact that there are fewer DoD controllers going to work for the FAA and, as you mentioned, the CTI 

grads are finding other jobs as they graduate. What is the primary 

reason for that. That hasn’t taken place in the past. 

Mr. DILLINGHAM. Well, I think it was mentioned earlier that our 

research has shown that when the candidates take a look at what 

the starting salary is now, as opposed to what it was prior to, when 

they understand what the work rules are, and another thing that 

was mentioned today that we also found to be the case is that DoD 

is offering incentives to keep their people in. So those are the major 

contributing factors that we have been able to discern. 

Mr. COSTELLO. In your opinion, what does the FAA need to do 

to ensure that there are enough air traffic controllers in the future 

to handle the traffic? 

Mr. DILLINGHAM. I think what they have started to do is a step 

in the right direction, that is, to look at staffing by facilities and 

also to get a surge of candidates to take into account that they are 

going to be losing more than they did in the past. I don’t know if 

you want to call it PR, but the notion that there is such discord 

between labor and management probably is something that has to 

be addressed; otherwise, you are not going to have people wanting 

to go into that situation, so somehow that has to be ameliorated. 

Mr. COSTELLO. And you mentioned, I think, in your testimony 

that if in fact—and we all, both the Ranking Member, Mr. Petri, 

and the Ranking Member of the full committee, Mr. Mica, Chairman Oberstar, and myself, we have all encouraged the FAA and 

the unions to try and come together and work out their differences 

and to reach an agreement. You mentioned in your testimony that 

if in fact relations between the FAA and their unions improve, it 

could have a positive effect on safety. I wonder if you might elaborate on that. 

Mr. DILLINGHAM. Yes, Mr. Chairman. I think it is a pretty well 

understood and accepted principle, and I think somebody mentioned it earlier today, the idea about a happy workforce, and I 

think it is a little bit more than a happy workforce. I think, you 

know, if people can concentrate on their jobs, particularly a job 

such as an air traffic controller job, you have got to have a focus 

on that, you can’t be concerned about other things. So that is one 

of the things. 

393

We also, at the Government Accountability Office, are trying to 

think about how we can do a study to actually look at labor management relations at FAA because it is clearly a unique situation 

in government. We recognize that we don’t think either the majority or the minority will ask us to do any work like that, so we are 

going to try to work with the Comptroller General to get permission to do that kind of work. 

Mr. COSTELLO. Very good. I thank you. 

The Chair recognizes the Ranking Member, Mr. Petri. 

Mr. PETRI. Thank you very much. I have several questions, first 

for Mr. Kroeppel. 

I get the impression—I mean, LaGuardia is under a lot of pressure. You are at capacity and you have a very huge market to 

serve, and your customers, both the traveling public and the airlines, spend a lot of years developing their shuttles and all of that 

sort of thing. Will you be developing some specific proposal or 

something that we can put our teeth into as we analyze the FAA’s 

proposal, to kind of have a managed capacity situation? They are 

trying to develop a national plan and you obviously have a lot of 

stakeholders and a huge problem and could be affected by it a lot; 

and there are control issues and uncertainty issues, and people 

have invested a lot in developing various programs. Could you expand on that or could we work with you on this? 

Mr. KROEPPEL. Yes. That is actually the gist of the issue, Congressman. As we had mentioned, the real issue here that we have, 

we agree with most of the FAA proposals, except for the one as far 

as just how to do it. The real key to this is we have to match the 

airspace capacity to the available ground resources. We actually 

did look at different market-based scenarios. We found that it 

didn’t work. 

So while we agree with the FAA that they should set the limit 

of airspace and also assign small community access, the way to 

really do this to make it work at an airport would be to give us 

the tool to use our own gate leasing and management system, and 

the best example I can give you is this: What really concerns us 

is in the proposal there is a proposal with 10 percent reallocation 

per year, and a good example of that would be, for example, if a 

Delta on the east side of the airport, in a terminal on the east side 

of the airport would lose 10 percent of its capacity, if, for example, 

an American Airlines on the west side of the airport, through some 

mechanism, would gain those, it really wouldn’t work for them because they wouldn’t have contiguous gates and economically it 

would not work for them. 

So we feel the only way we can actually match the land site resources to the air site capacity made by the FAA would be by giving the airport proprietary right of having this gate management 

system, which would allocate those scarce resources properly. 

Mr. Petri. Is there a money issue in this too? If you auction off 

obviously a scarce resource, one way to allocate it is by charging 

more or having people bid. Is there an issue as to who gets the 

money from some sort of a queue management system like that? 

Mr. DILLINGHAM. Well, that is one of the issues, but, really, we 

felt that if it does go to some type of auction-based solution or some 

type of peak period charge use, it really wouldn’t solve that issue. 

394

Where it breaks down for the airlines and the customers is how 

does that 10 percent, how do these resources on the ground, how 

do you match that, how does it become realized and how does the 

operation run smoothly. 

So the real key of that is the control would be us having control 

of the gates and basically managing the resources and making that 

available to new competitive services and allowing new entrants to 

come in. With the way the system is now, airlines can have gates 

and not utilize them to the proper capacity. So this solves a lot of 

issues.

Mr. PETRI. Well, this is a complicated issue that requires, I suspect, much more extensive analysis and discussion than we can do 

in this particular forum, but thank you for raising it and for your 

testimony.

I just wonder if I could talk with Mr. Baker for a minute. I don’t 

know if we should be alarmed or how we should deal with the situation of the quarter of a million grievances in the FAA. Is this a 

sign of bad management, or is this a tactic, or what is going on 

here?

Mr. BAKER. Well, if you look at the makeup of the grievances, 

Mr. Petri, you will find that many of them are grievances because 

my manager told me I couldn’t wear shorts to work. So many of 

them are frivolous. We actually have a huge concern about what 

so many of those types of grievances in the system, that we look 

over grievances. They all matter, but there are real grievances out 

there and we don’t want to miss those. Those grievances have overwhelmed the system. 

I believe they are under control now, off the facility level, which 

was my concern. The union has every right to grieve anything 

within the statute, and they did so. Now we have gotten it off the 

facility level and it is up at the higher levels, where it always 

should have been anyway. We did as good a job as I think we possibly could have, taking the distraction of the contract, imposed 

work rules, whatever you want to call what we have, out of the 

workforce so that our actual facilities can focus on safety, which is 

what we are there for, and I think we are doing that. 

Mr. PETRI. Thank you. 

Mr. COSTELLO. I thank the Ranking Member. 

In fact, the LaGuardia question, I was going to delve into that 

a little bit, but I think Mr. Petri covered it. I think it is an issue 

that is not going to be resolved today, but we are going to have to 

work with you and others on it. 

I have no further questions, and if the Ranking Member does 

not, I want to thank you, all of you and all of our witnesses today. 

I think it has been a very productive and comprehensive hearing. 

So we thank you. We look forward to working with you as we move 

forward with the reauthorization. 

With that, the Committee stands adjourned. 

[Whereupon, at 1:39 p.m., the Subcommittee was adjourned.]

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744

HEARING ON THE FEDERAL AVIATION ADMINISTRATION’S AIRPORT IMPROVEMENT 

PROGRAM

Wednesday, March 28, 2007

HOUSE OF REPRESENTATIVES

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, SUBCOMMITTEE ON AVIATION, Washington, DC. 

The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 

2167, Rayburn House Office Building, the Honorable Jerry F. 

Costello [Chairman of the Subcommittee] presiding. 

Mr. COSTELLO. The Subcommittee will come to order. The Chair 

will ask that all Members, staff, and everyone in the room turn off 

electronic devices or put them on vibrate. 

The Subcommittee is meeting today to hear testimony on a review of the FAA’s Airport Improvement Program. As we all can 

see, we have three panels of witnesses, I think a total of 15 witnesses to hear from today, so I would ask Members to take that 

into consideration and consider placing their opening statements in 

the record so that we can get to our witnesses. 

I will give an opening statement and then recognize the Ranking 

Member, Mr. Petri, for his opening statement or remarks, and then 

hopefully go directly to the witnesses. 

I want to welcome everyone to the fourth of our hearings on the 

FAA reauthorization. This hearing focuses on the FAA’s Airport 

Improvement Program. 

The FAA estimates that during the next five years there will be $41.2 billion of AIP-eligible infrastructure development, an average 

of about $8.2 billion a year. The Airport Council InternationalNorth America believes that total airport capital development 

costs, including the cost of non-AIP-eligible projects, to be about 

$17.5 billion per year from 2007 through 2011. 

While the FAA acknowledges that airport capital needs are up, 

the FAA’s new three-year proposal provides approximately $1.5 billion less for the AIP program than what the FAA requested for the 

first three years of its last reauthorization proposal, the Centennial 

of Flight Aviation Authorization Act. I want to repeat that. While 

the FAA acknowledges that capital needs are up, the FAA’s new 

three-year proposal provides $1.5 billion less for the AIP program 

than they requested for the first three years in the last reauthorization.

I believe that we will need a more robust program than what the 

FAA has suggested. I am concerned about the impact of these cuts 

on smaller airports. AIP grants are generally a larger source of 

capital funding for smaller airports. The GAO will testify today 

that 64 percent of the capital funding for smaller airports comes 

from the AIP program. 

The FAA is proposing a number of interesting changes to the AIP 

program that the FAA believes would help target more active 

smaller airports. However, even with the FAA’s programmatic 

745

changes, there would be less total funding for programs traditionally and specifically associated with small airports when compared 

with the current structure and funding levels. 

Further, under the FAA’s proposal, there may be some winners 

and losers when it comes to small airports. For example, while the 

busier smaller airports would receive larger non-primary entitlement grants than they now receive, the FAA estimates that several 

airports that are eligible to receive non-primary entitlement grants 

would no longer be eligible. I look forward to hearing from our witness today from the FAA as to why the FAA believes these airports 

should no longer be deserving of AIP eligibility. 

The FAA believes that cuts to the AIP program would be offset by raising the current $4.50 cap on the PFCs, raising it to $6.00. 

The PFC cap has not been raised since 2000, and many in the airport community believe that inflation and construction cost increases have eroded the PFC’s value. 

The FAA believes that an increase in the PFC cap to $6.00 would generate an additional $1.5 billion for airport capital development. 

I believe the PFC has been an important tool in improving and expanding our airports, and I agree that we should increase the cap 

of $4.50. There is no question that there has been a loss of purchasing power, and we must increase the cap to adjust for inflation. 

In addition, the FAA proposes to greatly expand the PFC eligibility for airport capital projects. More specifically, the FAA’s proposal would expand the PFC eligibility to encompass any airport 

capital project that is eligible to be funded with airport revenue, 

provided that the project is not anti-competitive. I have concerns 

with expanding the eligibility beyond its current scope. 

Some have argued that the PFC is essentially local money and, 

therefore, there should be more local control over how PFCs can be 

spent. Since a significant portion of PFC revenue comes from interstate passengers, I believe that PFC revenue should be used to promote national policies and goals, such as increased capacity, safety, 

and competition, within an integrated system. 

With that, I again welcome our witnesses here to testify before 

the Committee. Before I recognize the Ranking Member, Mr. Petri, 

for his opening statement, I would ask unanimous consent to allow 

two weeks for all Members to revise and extend their remarks and 

to permit the submission of additional statements and materials by 

Members and witnesses. Without objection, so ordered. 

At this time I would call on and recognize the Ranking Member, 

Mr. Petri, for his opening statement or any remarks. 

Mr. PETRI. Thank you very much, Mr. Chairman. I would like to 

thank our many witnesses this morning for coming and sharing 

their viewpoints on the important topic before us this morning, airport improvement funding and airport noise issues. 

The FAA proposal regarding funding of airport infrastructure 

raises several important issues which I look forward to hearing 

about today. A major portion of the proposal worthy of discussion 

is the proposed increase of the passenger facility charge and the 

impact of inflation and construction costs on the purchasing power 

of that charge over time. The expanded PFC project eligibility and 

streamlining of project approval processes are also obviously of interest to this Subcommittee. 

746

To many of the small airports in my district and around the 

Country, the airport improvement program is a significant source 

of funding for capital projects. For the past few years, Congress has 

authorized between $3.5 billion and $3.7 billion for that program, 

which has helped our small hub and non-hub airports grow and 

therefore provide more capacity within the national airspace system.

That level of investment has also greatly benefitted our reliever 

in general aviation airports. Therefore, I would like to hear about 

the Administration’s explanation as to how the lower AIP levels fit 

into their overall airport infrastructure financing proposal. 

I am also interested in the impact of the AIP formula changes 

on airports of all sizes. 

Part of that proposal is the new tiered non-primary entitlement 

program. I think it is an interesting idea, responsive to need, and 

look forward to hearing more about the specifics of that particular 

proposal.

The link that currently exists between airports turning back AIP 

money to the FAA and the receipts of PFC money by those airports 

is an interesting topic. It is particularly true given the way it links 

small airport financial interests to those of large airports. The 

agency’s proposal seems to de-link the financial interests, which 

raises questions as to what the impact on airports, both large and 

small, will be. Is it a necessary link? 

Also, the Administration’s proposal sunsets a number of 9/11-related provisions or programs from Vision 100. The agency states 

that it does this because, by and large, airports have recovered 

from 9/11. I look forward to hearing about this aspect of the proposal and of the state of airports in our Country. 

Once again, I would like to thank this panel and the other panels 

that we will be hearing from for coming today and look forward to 

your testimony, and yield back the balance of my time. 

Mr. COSTELLO. I thank the Ranking Member. 

The Chair would now introduce our first panel of witnesses. 

First, Mr. D. Kirk Shaffer, Associate Administrator for Airports at 

the Federal Aviation Administration; Dr. Gerald Dillingham, Director of Physical Infrastructure Issues with the U.S. Government Accountability Office, who has been in this room as many times as 

I have been in the last two weeks, but we welcome you back as always; Mr. Charles Barclay, President of the American Association 

of Airport Executives; and Mr. Greg Principato, President of the 

Airports Council International-North America. 

The Chair would recognize Mr. Shaffer under the five minute 

rule.

I mentioned earlier to Members and to witnesses we have three 

panels. We are attempting to hear from all of the stakeholders and 

everyone who, of course, has an interest in the reauthorization 

bills. We are trying to be as inclusive as possible, and that is why 

we have 15 witnesses today. So I would ask you to take that into 

consideration and try and, with the exception of the GAO, who has, 

I think, a slide presentation that will go a little bit longer than five 

minutes, I would ask you to summarize your statements in five 

minutes, if that is possible. And if you go a little bit over that, I 

will remind you and let you know. 

747

So, at this time, the Chair recognizes Mr. Shaffer under the five 

minute rule. 

TESTIMONY OF D. KIRK SHAFFER, ASSOCIATE ADMINISTRATOR FOR AIRPORTS, FEDERAL AVIATION ADMINISTRATION; DR. GERALD DILLINGHAM, DIRECTOR, PHYSICAL INFRASTRUCTURE ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; CHARLES BARCLAY, PRESIDENT, AMERICAN ASSOCIATION OF AIRPORT EXECUTIVES; AND GREG 

PRINCIPATO, PRESIDENT, AIRPORTS COUNCIL INTERNATIONAL-NORTH AMERICA 

Mr. SHAFFER. Good morning, Chairman Costello and Representative Petri, Members of the Subcommittee. This is my first appearance before the Subcommittee since joining the FAA, and I look forward to working very closely with the Subcommittee in the months 

ahead as you consider the Administration’s airport financing reform proposal. 

While my written testimony provides many details of our proposal, I would like to take my time this morning to highlight some 

of the changes that we propose for the Airport Improvement Program affecting small airports and also address our proposals for 

PFC reform. I know that our proposal has generated a number of 

questions and concerns with our stakeholders and with the Members of this Subcommittee, and I look forward to addressing those 

issues with you today. 

Before I get into specifics, let me give you a little background of 

how we developed this proposal and the data that supports it. 

During the past two years, we reached out to all of our stakeholders, to the airports, the consultant community, to the airlines 

and others, to find out the state of the industry. We also contacted 

the financial community because, as you know, AIP pays for only 

25 airport to 35 percent of airport capital development needs nationally. We reviewed engineering and planning data, and we reviewed airport financial data as well. 

Our review showed that capital needs are up. Our latest published report on airport needs, known as the NPIAS, is up about 

4 percent over the prior NPIAS. Even that figure is low since it did 

not account for the jump in construction costs and fuel surges in 

the summer of 2006. 

Airports have recovered financially from the financial shocks of 

9/11. Passenger and traffic operations are up at many locations, approaching pre-9/11 levels. Across all sizes of airports, net operating 

results—that is revenue minus expenses—are up. Large airports 

have returned to profitability. In contrast, while small airports 

have recovered financially, many operated at a deficit before 9/11 

and continue to do so. In other words, small airports continue to 

depend on Federal AIP dollars to meet their capital needs. 

The municipal bond market and rating agencies told us that airports remain much better financial risks than their airline tenants. 

For this reason, airports that have developed strong revenue 

streams independent of the airlines are especially favored. PFCs 

are viewed as just such a revenue stream because they depend on 

the underlying demographics of the markets that the airports 

serve, not on the health of the individual air carriers. However, 

748

PFCs would be even more effective financial tools if airports had 

more flexibility in the kind of capital projects they could finance 

with PFCs. 

Finally, current developments in air transportation, the transition to the NextGen air traffic control system, the introduction of 

very light jets, the growth of fractional ownership and point-topoint air traffic services, and continuing congestion at large airports mean that secondary and reliever airports, as well as other 

high activity general aviation airports, will face increasing investment needs. 

Based on these findings, our proposal is designed to do the following: assure a stable source of AIP funding for small commercial 

and GA airports; assure sufficient AIP funds available for the FAA 

to distribute and for the States to meet critical safety capacity and 

security priorities; convert the non-primary entitlement into a strategic investment tool that will help secondary and reliever airports, 

as well as other high activity GA airports, meet the new demands 

that will be put on them; and enhance PFCs as a local airport financing tool through an increased maximum PFC, broaden PFC 

eligibility and administrative streamlining. 

With regard to the non-primary entitlements and State apportionments, there is no doubt that the non-primary program enacted 

as part of Vision 100 helped a number of smaller GA airports upgrade and maintain their facilities, do comprehensive master planning, and construct revenue-producing facilities that help them become more self-sufficient. 

We fully support continuation of the NPE program, but with 

modifications that make sense for the entire spectrum of airports. 

Beginning in the summer of 2005, we looked at each and every GA 

airport in the system. We looked at the smallest and the largest. 

We looked at the types of aircraft that use these airports and what 

kind of infrastructure airports need to serve them safely and efficiently. We looked at it from an engineering perspective and a 

planning perspective. The data confirmed what common sense tells 

you: not all GA airports are created equal. Airports with more activity or with higher performance aircraft require more elaborate 

airfield infrastructure. 

When we then look at the GA community of airports, we see two 

major themes: different roles and different needs. In that context, 

we are proposing a four-tiered system of non-primary entitlements. 

The busiest, largest non-primary airports would be granted 

$400,000 per year. This category includes commercial service and 

reliever airports. The smallest GA airports, those with less than 10 

based aircraft, would not receive an annual entitlement. But let me 

be absolutely clear. We are not saying that these airports have no 

capital needs or that AIP should not support those needs. These 

airports will continue to qualify for State apportionments and discretionary funds. Also, we propose to preserve the 95 percent Federal share for these airports. All we are saying is that these airports’ capital requirements are intermittent, they do not require 

annual infusions of cash to sustain their infrastructure. 

We are proposing that about 750 airports would end up in this 

lowest tier under our proposal. We have heard people say that 

these 750 airports are going to lose money. That figure is simply, 

749

plainly wrong. We went into our grants database to look at what 

has been happening at these airports, and we had to focus on the 

airports that are not located in block grant States. We can’t track 

the grants in the block grant States. But in the 42 States that do 

not have block grants, nearly half the airports in the lowest tier 

either did not receive a non-primary entitlement or did not spend 

the non-primary entitlement money they got by taking a grant in 

the last four years. So the number of airports that will actually lose 

guaranteed annual money is a far more modest figure, around 300 

locations.

Let me please address one other aspect of our AIP proposals affect small airports. We have heard people characterize our proposal 

on the Federal share for small airports as FAA cutting the Federal 

sharing from 95 percent down to 90 percent. That assertion also is 

plain wrong. Vision 100 sets the expiration date for the 95 percent 

Federal share as September the 30th. All the FAA is proposing is 

that we let that entitlement expire as Congress intended it to. 

Let me briefly address the PFC program, Mr. Chairman. PFCs 

do remain fundamentally a local revenue, and after 17 years a very 

good track record has been amassed in the imposition and the application of PFCs. We are proposing, as you have noted in your 

opening comments, three principle changes to the PFC program: we 

want to raise the cap to $6.00 in recognition of the increased construction costs and the impacts of inflation over time since the last 

adjustment; we want to broaden the eligibility so that airports can 

use this revenue for more projects and produce even more revenue; 

and, finally, we want to administratively streamline the PFC process by essentially eliminating all the bureaucratic paperwork, with 

the exception of an annual report that looks a year back and a year 

forward.

That having been said, Mr. Chairman, I know that these are 

some substantial changes that we are proposing. Change is never 

easy, particularly change of the magnitude that we are suggesting. 

The undeniable fact is that we face a billion passengers coming 

through the system by 2015, and we have got to begin to prepare 

now to meet that challenge. 

This concludes my prepared statement. I would be happy to take 

your questions. 

Mr. COSTELLO. We thank you. 

The Chair now recognizes Dr. Dillingham. 

Mr. DILLINGHAM. Thank you, Mr. Chairman, and thank you for 

your consideration, Mr. Petri, Mr. Duncan, Mr. DeFazio, and Members of the Subcommittee. 

You asked GAO to examine four issues related to the reauthorization of the AIP program. The first issue focused on the nature 

and scope of airport capital needs. To address this issue, we compared estimates of capital development needs that were prepared 

by FAA and Airports Council International organization. Our analysis showed that ACI’s estimate of developmental costs is considerably higher than FAA’s. 

This graphic shows that for 2007 through 2011 FAA has estimated that annual development costs, in 2006 dollars, that is, will 

be a little bit over $8 billion. For the same period, ACI estimated 

that development costs would be slightly more than $15.5 billion. 

750

This is a difference of about $7.5 billion annually. The primary reason for the difference between the estimates is that FAA’s estimate 

only includes projects that are eligible for AIP grants, while AIC 

includes both eligible and ineligible projects. 

When we compared only AIP eligible projects in both estimates, ACI’s estimate still exceeded FAA’s by about $1.5 billion annually. 

The difference between the two estimates was accounted for because of differences in the definition, measurement, and timing of 

the projects. 

The second issue we addressed was how much money have airports received for capital development and where is that money 

coming from. This graphic shows that between 2001 and 2005 airports received an average of about $13 billion a year for capital development from a variety of sources. Overall, the primary source of 

airport funding was municipal bond proceeds, which is shown here 

in green. Bonds accounted for about half the total funds, followed 

by AIP at 28 percent, shown in yellow, and PFC, which is shown 

in orange and which accounted for about 17 percent of the total. 

State and local funds accounted for the remaining 5 percent. 

As you can see, smaller airports depend much more on AIP 

grants than larger airports. This graph shows that larger airports 

obtained only 14 percent of their funds from AIP grants, compared 

to 64 percent for smaller airports. 

A third issue that we examined was the extent to which current 

funding levels would be sufficient to meet capital development 

needs between 2007 and 2011. The bar on the left side shows that 

FAA has received about $13 billion for capital development in each 

of the last five years. The bar on the right shows that if airports 

continue to receive a similar amount of money over the next five 

years, it would cover all the projects in FAA’s capital development 

plan.

To get a more complete picture of the potential demand on capital, we combined FAA’s planned development cost and the cost of 

ACI’s ineligibility projects. As you can see, the bar on the right 

shows that the combined development costs for the next five years 

exceeds historical funding levels by about $1 billion annually. 

A more detailed analysis of this issue shows that the differences 

between past funding levels and future development costs is different for larger and smaller airports. For the 67 larger airports, 

the shortfall would be about $600 million annually, and for all 

other airports, including general aviation airports, the shortfall 

would be about $400 million annually. 

The last issue we examined was the potential effect of the Administration’s reauthorization proposal for airports. We concluded 

that the Administration’s proposal to increase the PFC ceiling from 

$4.00 to $6.00 will enhance funding for larger airports despite an 

overall reduction in AIP funding. However, the impact on smaller 

airports is more uncertain because these airports depend much 

more on AIP. The proposal would also reduce AIP by $750 million, 

or more than 20 percent of its current level. The proposal would 

also increase the amount that airports can collect from PFCs, potentially by as much as $1.1 billion annually. For smaller airports, 

which have far less capacity to collect PFCs, increasing the PFC 

ceiling may not compensate for the overall reduction in AIP funds. 

751

As a separate issue, our analysis raises questions as to whether 

the new fuel taxes that have been proposed to fund AIP will be as 

much as anticipated and whether additional sources of revenue 

may have to be found. This would certainly be the case if Congress 

appropriated more than $2.75 billion for AIP. 

In conclusion, Mr. Chairman, we expect that the demand for air 

travel will continue to increase and airports will need to make capital improvements to meet the capacity challenges in today’s system, as well as those of the NextGen. AIP will continue to play an 

important role in meeting those challenges and some elements of 

the Administration’s proposal are to be commended, such as simplifying the funding formula and giving FAA more discretion to fund 

high priority projects. However, other parts of the proposal raise 

concerns about its impact on smaller airports. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. Thank you, Dr. Dillingham. 

The Chair recognizes now Mr. Barclay. 

Mr. BARCLAY. Thank you, Mr. Chairman and Members of the 

Committee. It is always a privilege to testify before the T&I Committee.

I would just like to make several points in addition to our written testimony. The first is that airport executives are very concerned about their ability to meet the demand that is coming at 

this system with adequate airport capacity. We have the particular 

challenge, as you know, that it takes 7 to 10 years, sometimes 

more, for any major capital development at airports, so we need to 

be starting right now for things we want in this system and operating in the middle of the next decade. 

But regardless of any challenges we face, we know we are going 

to add one-third the number of passengers that we currently have 

to the system in the future, almost half, as a matter of fact. It is 

the equivalent of adding the population of the United States to the 

airport system that we currently have. Any of you that travel at 

busy times in the system know we don’t have the capacity at the 

present time to meet that kind of coming demand. And it is not 

just the issue of constraining an airport system. As this Committee 

also well knows that not meeting demand for air travel has broad 

ramifications for the economy in general. So we are here asking for 

the Committee’s help for our Members to be able to meet those demands that are coming at the system. 

Second point is that the existing elements of financing for capital 

development of airports have been absolutely ravaged by construction inflation. This is not your 2.7 percent CPI increase that the 

public understands. The latest figures are that in the last three 

years, in the 30 major markets, construction inflation has been just 

under 25 percent. It has been a huge increase in our projects and, 

as a result, we are recommending to the Committee much higher 

funding levels than are in the Administration’s plan, specifically, 

$3.8 billion with annual increases for AIP and a $7.50 cap on the 

passenger facility charge with indexing for future inflation, rather 

than today’s $4.50 or the $6.00 recommended by the Administration. We do appreciate their recognizing the need for an increase. 

In all candor, Mr. Chairman, I know people on the Committee 

have said, well, gee, a $3.00 jump is kind of a long reach that the 

752

airports are recommending. Let me, with all respect, remind the 

Committee that in 1999, eight years ago, the Committee voted for 

a $6.00 PFC overwhelming. The House of Representatives voted for 

a $6.00 PFC at that time, and it was only in negotiations with the 

Senate that it was cut back to $4.50. If you went back and took 

that $6.00 PFC and added inflation to it, you would be well over 

$8.00. The very first PFC was a $3.00 PFC that went up from zero 

to $3.00. This Committee recommended $3.00 to $6.00. So we think 

that both the history of this program makes a $3.00 increase reasonable by what has been past practice and, more importantly, the 

needs make it a reasonable increase. 

The Administration proposal on AIP is one that we have great 

respect for the professionals in Kirk’s office. They have done their 

best, were given too low a level by OMB for AIP, in our opinion. 

We start from current law, frankly, as the test as to whether a 

change in AIP would be good or bad. This Committee has, for 37 

years, been balancing out the needs of different categories of airports in the system and where money needs to flow, and that is a 

high hurdle to overcome for any new ideas in the system. We are 

certainly open to those, but we find a lot of merit in making sure 

that we continue the benefits of the current system and the balances that you have made in law in the past, but that we make 

sure we increase for all categories of airports the capital needs, because they have all been met with these challenges of construction 

inflation.

We would also recommend that the Committee continue to keep 

in mind, as it always has in the past, that the Trust Fund was developed to do capital development first, operations second. To some 

extent, I think the Administration is trying to switch that priority. 

A final brief comment. We would like to work with the Committee on small community air service provisions. We think they 

need to be strengthened over what is in the Administration’s program.

I would be glad to answer any questions, Mr. Chairman. 

Mr. COSTELLO. The Chair thanks the gentleman and recognizes 

Mr. Principato. 

Mr. PRINCIPATO. Chairman Costello, Congressman Petri, Chairman Oberstar, Members of the Subcommittee, thank you for this 

invitation to testify. 

As President of Airports Council International-North America, I 

am testifying on behalf of the local, regional, and State authorities 

that own and operate commercial service airports. Our members 

enplane more than 95 percent of the passenger and cargo traffic in 

this Country, domestic passenger and cargo traffic, and nearly all 

of the international passenger and cargo traffic. Nearly 400 aviation-related businesses are also members of ACI-North America. 

Passenger growth has returned and the stakes are high. As airports prepare their capital development strategies to meet these 

needs, they employ a variety of tools, including bond financing, 

PFCs, AIP, and airport-generated revenue. For a variety of reasons—ranging from the impact of construction cost inflation, to an 

outdated PFC cap, to unfavorable tax treatment for airport bonds, 

to the annual fight over proposals to cut AIP—it increasingly difficult for airports to meet increasing needs. Simply put, if Congress 

753

does not act to address these issues in reauthorization, airports will 

be left without the tools and financial resources needed to play 

their role in developing and maintaining a strong national air 

transportation system. 

To put this into context, as the Chairman said before, ACI-North America’s latest capital needs survey estimates over $17.5 billion 

in capital needs each year over the next five years. Given that the 

current Federal annual appropriation to meet those needs is $3.5 

billion, the reliance of the airport industry on locally generated 

funds, including PFCs and revenue bond financing that is often 

backed by PFCs, is obvious. 

The industry needs the full array of tools to finance the capital 

development necessary to support a growing, competitive air transportation system. For this reason, the airport community is advocating policy changes to permit greater airport access to capital, 

combined with the continuing and strong Federal investment in 

airport development. 

Based on construction cost inflation alone, we believe the PFC 

ceiling should be raised to $7.50, an index to return purchasing 

power. This change would simply allow airports to account for construction cost inflation and nothing more. It would keep the PFC 

whole, in other words. We also support the FAA’s proposal to 

streamline the program. PFCs have been in place for 17 years and 

are well recognized as a success. 

Airports have utilized their PFC authority diligently and in a 

balanced way to promote important national aviation priorities 

such as additional capacity, the promotion of competition and 

choice, noise mitigation, and safety and security enhancements. It 

is also important to note that more than 95 percent of PFC-backed 

projects have been implemented without airline opposition, and because PFCs are an efficient and effective way to finance projects, 

they often have the effect of reducing overall airline costs while 

providing needed capacity. 

I know there has been a great deal of discussion about how PFCs 

are used. Airports pursue a balance in their efforts to increase capacity. No airport would forego investing in potential air side capacity simply to build excess non-air side facilities. In Atlanta, 55 

percent of the newly opened runway was built with PFCs, providing huge capacity benefits not just to that airport, but to the 

Nation as a whole. The new runway in St. Louis will be 59 percent 

built with PFC funds. Those are clearly capacity-enhancing 

projects.

Yesterday, I spoke with the director of the Sacramento California 

Airport. He told me he has far more air side capacity than he is 

currently using, and he would like to bring more service in, but 

that his terminal couldn’t handle it. He needs to do a terminal 

project, which in this case I would argue is a capacity project. 

I also spoke with the director of the Asheville North Carolina 

Airport. He does not have any big air side projects right now, but 

needs to do work on his terminal in order to provide price and service competition for his community. He can’t do it without the combination of PFCs and AIP. 

With regard to AIP, we believe that the funding needs to be increased and the program strengthened. Applying the same conVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00779 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
754

struction cost inflation analysis to the AIP program, the authorized 

levels should rise to $3.8 billion, $4.0 billion, and $4.1 billion in the 

next three years. PFCs were meant to supplement, not supplant, 

AIP, and both need to be strong. 

It should also be mentioned that we believe air traffic control 

modernization will have enormous capacity and environmental benefit, and we fully support efforts to achieve that goal. 

Mr. Chairman, the members of ACI-North America and I thank 

you for this opportunity to testify, and we are at your disposal to 

work with you to promote the success and the expansion of the Nation’s air transportation system. Thank you very much. 

Mr. COSTELLO. The Chair thanks the gentleman and recognizes 

the distinguished Chairman of the Full Committee, Chairman 

Oberstar.

Mr. OBERSTAR. Thank you very much, Mr. Chairman. This is 

perhaps, of all the hearings we are holding, the most important on 

the future of aviation in the reauthorization. We have received—

I spent a great deal of time last night and this morning reading 

through the testimony—some of the best documentation I have 

seen in many years, and I think that is because the stakes have 

been raised by the Administration’s—I will be kind—proposal. I 

won’t put an adjective on it. 

Dr. Dillingham, as always, you provide us with very thorough, 

thoughtful, detailed, well supported documentation. Let me ask 

should AIP funding for terminal purposes be expanded? And for 

which purposes and what types of limits should be put on it? We 

have gone along for years saying AIP has all these limitations; one 

of them is terminals, one of them is activities that generate revenues. When I was in the position of Mr. Costello, chairing Aviation 

years ago, we sort of went along, just made assumptions and lived 

with those assumptions. Maybe we ought to reconsider. What do 

you think? 

Mr. DILLINGHAM. Chairman Oberstar, I think that the rationale 

for the funding decisions that were made some time ago still are 

valid; however, I think we also should b e open to looking at new 

opportunities in terms of making changes. 

Mr. OBERSTAR. And that means? 

[Laughter.]

Mr. OBERSTAR. You don’t want to just continue doing studies for 

us, you want to make some policy recommendations. This is your 

opportunity.

Mr. DILLINGHAM. Well, Mr. Oberstar, you know that the GAO is 

sort of prohibited from making policy recommendations. That is 

why I had to answer the way that I did. 

Mr. OBERSTAR. Well, that is why, over the years, we have hired 

some of your people to come on the staff. They have the substantive 

knowledge and then they come with all those hidden agendas that 

they had for years that they were repressed. 

Mr. DILLINGHAM. Yes, sir. 

[Laughter.]

Mr. DILLINGHAM. That is very true, sir. 

Mr. OBERSTAR. Well, I am not suggesting that we make a 

change, but I am saying we need to rethink a great deal of what 

we have ben doing in aviation. Mr. Barclay, who has a long history 

755

of—goodness, gracious, he goes back to the Wright Brothers in 

aviation——

Mr. BARCLAY. Don’t keep going, Mr. Oberstar. 

[Laughter.]

Mr. OBERSTAR. Your documentation is just filled with specifics, 

but you get to the PFC and funding that—wait, I had this marked 

here. A $7.00 PFC the Administration proposes for up to 10 medium or large hub airports if they agree to operate and maintain 

terminal area navigation equipment such as ILS and approach 

lighting systems and so on. Where did that wacky idea come from? 

This is a big cost shift. They have stuffed their hand into the pockets of the airport and say, all right, you pay for the things that we 

have been paying for, you increase the cost on passengers, and 

then we are going to say we got a budget cut. That is what that 

smells to me like. 

Mr. BARCLAY. I agree, Mr. Chairman. The notion—first of all, let 

me step back and say experimenting with ideas in general with 

pilot programs is something this Committee has done effectively 

over the years to find that balance you found over 37 years for an 

airport program, but one of the concerns that has always been 

there is if you start shifting nav aids into AIP, some future OMB 

is going to have a great incentive to start funding as much F&E 

as it can out of the AIP program, and you don’t wind up having 

enough money then for construction costs at airports. 

So we would agree with being very cautious about those ideas. 

Mr. OBERSTAR. Doesn’t this amount to double-charging of air 

travelers? They are paying out of the ticket tax for—of course, the 

FAA has this scheme of changing the whole financing structure, 

but if you keep it as it is and you shift it to PFC costs for a function that is an F&E account, you are already paying for the F&E, 

now we are going to pay again for the F&E account for airport 

lighting.

Mr. BARCLAY. In fairness to the Administration, there have been 

some airports in the past that have wanted to use AIP when they 

couldn’t get on the list for an ILS. 

Mr. OBERSTAR. Oh, yes, I know. Time and again they have 

bought other equipment because they couldn’t get it through the 

F&E account and they were trying to use AIP funds. 

Mr. BARCLAY. But normally the airports turn the operations of 

those facilities over to the FAA to then operate out of its account. 

So we share the concern that is being expressed. 

Mr. OBERSTAR. There are lots of these little treasure troves that 

are hidden deep inside that FAA budget proposal. You have, on the 

same page a little earlier, airports typically unable to refinance 

their debt take advantage of lower interest rates for 10 years. How 

did that come about? You were probably there when the original 

tax was done. You were probably over in the Senate staff when 

that was written. 

Mr. BARCLAY. Tell me again what I am talking about here? 

Mr. OBERSTAR. On page 12 of your testimony you make what 

seems to me a very reasonable proposal or request, to allow airports to refinance debt, take advantage of lower interest rates and 

have more revenues available. 

Mr. BARCLAY. That is a Finance and Ways and Means——

756

Mr. OBERSTAR. Why was the 10 years put in the first place? 

Mr. BARCLAY. I don’t know, Mr. Chairman. 

Mr. OBERSTAR. Why don’t you find out and come back to us? 

Mr. BARCLAY. We will get back to the Committee with that. 

Mr. OBERSTAR. It may have just been 10 years because some 

staffer at OMB said 10 years or some staffer on the House or Senate Ways and Means Committee said 10 years. But if there is a rationale behind it, we ought to understand that so that we can make 

an appeal to the Ways and Means Committee on your behalf. I 

think this is a sensible idea. 

Mr. BARCLAY. If I can add, Mr. Chairman, we are fundamentally 

asking for airport bonds to be treated the same way that highway 

bonds are treated. 

Mr. OBERSTAR. Yes. 

Mr. BARCLAY. We want identical treatment; nothing more, nothing less. 

Mr. OBERSTAR. Why not? Why was this difference made? 

In PFC-funded projects there is a creeping move, and it is sort 

of growing by increments, of airlines wanting to have a veto over 

PFC projects. What do you think? 

Mr. BARCLAY. Bad idea. The airports have moved strongly since 

deregulation to get rid of mutual air—not mutual aid, but majority 

and interest clause agreements and things that give airlines the 

right to veto projects that competitors will want to come in and 

use. So we should keep independence for airports for those projects. 

Mr. OBERSTAR. That was one of the six points I wrote down in 

my discussion from that chair with Secretary Skinner in 1990. I 

said they were not going to have veto. They should have a strong 

consultative role. FAA, DOT have an oversight role. Maybe we 

strengthen that role so some questionable projects could be filtered 

out or modified. And also the requirement for a competition plan 

by airports so that we ensure that, as we increase capacity, we also 

increase opportunities for competition. 

Mr. BARCLAY. Well, in the history of the PFC program, there 

have only been two turned down, and only one of those was objected to formally by the airlines. So the rhetoric that this is a 

highly contentious program is really not met by the record that 

most of these projects are worked at. Airports should consult. The 

airline opinions are important, but they shouldn’t have a veto over 

the programs. 

Mr. OBERSTAR. I have just a couple more points, Mr. Chairman 

Mr. Principato, 17 percent, for a very long time, of the PFC was 

going into capacity, the rest was going into other terminal needs 

and on-airport ground needs. If there is to be an increase in the 

PFC, would you agree to a requirement also that a higher percentage of the PFC go into capacity projects and runway, taxiway, 

parking apron improvements? 

Mr. PRINCIPATO. Well, as I said in my testimony, we believe that 

certainly when you allocate the amount of PFC that has gone into 

interest, the number is much higher than 17 percent. I think we 

spoke the other day. It is really more like 30. 

Mr. OBERSTAR. In the last two or three years it has gone into 40 

plus percent. 

757

Mr. PRINCIPATO. Right. And airports always seek a balance, as 

well. I used the Sacramento Airport example earlier, where they 

have the air side capacity they need, but they can’t bring in the 

service they would like because their terminal can’t handle it. So 

they need to use PFCs to do a terminal project to make the most 

of their air side capacity. 

Mr. OBERSTAR. One of the reasons that I wrote that language 

into the PFC, because the airlines don’t give a hoot how you get 

there or what you do when you get to the airport, they just say this 

is the time we are going to take off, and you are here or we leave 

without you. They don’t care how you get there. 

Mr. PRINCIPATO. And then you would have someplace to let the 

passengers out and pick them up. 

Mr. OBERSTAR. So airports worry about that. You are the advocates for the public. 

Mr. PRINCIPATO. Right. And the airlines need to have someplace 

to let the passengers off and pick them up and so forth. 

I also think that those statistics may understate a little bit the 

capacity benefit. I used the Atlanta example before, which had capacity benefits throughout the entire Country, and 55 percent of 

their new runway was built with PFCs. So I think we are seeing, 

as you said yourself just a minute ago, a trend for more and more 

PFC financing for important projects like that. 

Mr. OBERSTAR. By my estimate—it is my own horseback estimate 

of keeping track of canceled projects after September 11—airports 

diverted $3.4 billion, roughly $3.5 billion to security needs at airports. I have advocated that airports should be compensated for 

these through the AIP program or the Defense account or out of 

general revenues. Have you folks in the ACI done some discussions 

about those diversions of funds to security needs? 

Mr. PRINCIPATO. We certainly agree with you that this is a national defense, national security priority and that it ought to be 

handled that way, but whether through Defense or Homeland Security or whatever, we generally agree with you on that. 

Mr. OBERSTAR. Mr. Shaffer, does FAA have an opinion on expanding use of AIP funds or PFC funds for terminal requirements? 

Mr. SHAFFER. The FAA is comfortable with the limitations that 

presently exist, Mr. Chairman, but, of course, as I have spoken 

about earlier this morning, we do believe that the eligibility for 

PFCs as a form of local revenue should be expanded. 

Mr. OBERSTAR. Thank you. Appreciate it. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. Thank you. 

The Chair recognizes the ranking Member of the Subcommittee, 

Mr. Petri. 

Mr. PETRI. Thank you very much, Mr. Chairman. 

I wonder, Mr. Barclay, you referred briefly in your oral testimony 

to the small airport program, ideas that you might have for 

strengthening that program. Could you expand on that a bit? 

Mr. BARCLAY. Well, it is fundamentally expanding, adding funding to the programs that the Committee has already established. 

We think there is a lot of merit in the current small airport fund, 

compared to the recommendation of the Administration to create a 

new discretionary account, because it ties together the interest of 

758

large and small airports and the PFCs. Entitlements are given 

back; that money goes to smaller airports. Expanding that program 

as we expand the PFCs seems to us to be a good idea. 

Smaller airports, as you noted in your opening statement, small 

airports are heavily reliant on a robust AIP program. If they are 

going to have capital development that is needed for the future, 

they get the majority of their funds from that kind of program, and 

we really need to have—airports shouldn’t be looked at as individual facilities; airports are a network. Every passenger that takes 

off from a small airport, virtually everyone is bound for a large airport somewhere in the system. Many of the people that get on airplanes at large airports are bound for small airports. So we need 

to look at a network approach to the financing, which means PFCs 

for large airports, increases in those, and AIP increases for smaller 

airports. So we very much want to work with the Committee to expand the current programs and make sure small airport needs are 

met.

Mr. PETRI. This next question kind of follows up on that both for 

you and for Mr. Dillingham, and that is if you could talk a little 

bit about the Administration’s proposal to expand the discretionary 

AIP program. When we look at it, we think, well, the appropriators 

will earmark it all, so what impact would this really have on the 

air industry if it is supposed to be a network and kind of balanced 

improvement, and is there some way to achieve that objective? 

Could you kind of discuss the merits of expanding that discretionary program? 

Mr. DILLINGHAM. Mr. Petri, as I understand it, the Administration’s proposal does not change the national priority system in 

terms of what discretionary monies would be spent for, that they 

would still be spent for safety and security and environment and 

capacity. I think that the larger airports receive a higher score for 

those same projects, and also that the larger airports would tend 

to have more of those projects. It is not clear to me that the smaller 

airports will benefit from that kind of change. 

Mr. BARCLAY. Overall, in the Administration’s program, they 

would cut the total funding for airports by that $765 million and 

$430 million of that would come out of the accounts that are aimed 

at smaller airports. So it is both an issue of allocation and are the 

programs the right ones to be shifting. I assume the Ranking Member is talking about the non-primary entitlements, where the 

tiering of non-primary airports has merit to look at that. But taking away the guaranteed entitlements from the smallest airports in 

the system is again something we would question unless it is replaced by a guaranteed discretionary pool or some other new idea 

that would get over the accounting problems that we think the Administration is legitimately trying to figure out, how can we not allocate lots of money to smaller airports that aren’t going to draw 

on it. That has got merit, but so does guaranteeing these smaller 

airports that the money will be there when they need it. 

Mr. PETRI. Thank you. We would like to work with you further 

in this area in particular. Thank you. 

Mr. COSTELLO. Thank you, Mr. Petri. 

The Chair recognizes the gentleman from Colorado, Mr. Salazar. 

Mr. SALAZAR. Thank you, Mr. Chairman. 

759

Mr. Dillingham, I was noticing the comparison here that you 

have compared to FAA and the comparison that talks about the 

planned development costs. Could you expand on that a little bit? 

And maybe Mr. Shaffer could also talk about that a little bit. 

But, also, how do you define small airports? What is your definition of small airports? 

Mr. DILLINGHAM. The analysis that we tried to present that show 

the difference between what ACI was estimating as planned capital 

development and what the FAA has in its national integrated plan 

for airports, the NPIAS, basically, FAA produces a document of airport needs that sort of is a bottoms-up approach from which they 

get the needs from the airport, and they move towards a national 

system of airports being concerned primarily with making sure 

that safety, security, capacity, standards, those things are met 

based on the forecast of traffic for the Nation’s system. So that is 

what generates the amount from FAA. And it is all for projects 

that are eligible for funding by Federal grants, the AIP. 

Whereas, ACI includes projects that are not eligible for funding 

by Federal grants, AIP, and oftentimes they are money-generating 

projects, as such, or projects that they would be able to fund with 

private sector money. So that is the difference that we were making, and that accounts for the difference in the planned development costs between the two. 

Small airports, we are talking about small hubs and non-hub airports is what we define as small airports in our presentation. 

Mr. SALAZAR. Mr. Shaffer? 

Mr. SHAFFER. Mr. Salazar, further in regard to what Dr. 

Dillingham was just saying, the precise definition that you are requesting is for a small hub, that is an airport that enplanes from 

one-quarter of one percent down to five one-hundreds of a percent 

of the total national enplanements on an annual basis. A non-hub 

is one that enplanes less than five one-hundreds percent of the national total, but more than 10,000 per year. And then you drop 

below that even to the non-primary commercial service airports. 

Those are, as I say, non-primary airports; they have between 2,500 

and 10,000 enplanements per year. 

Mr. SALAZAR. Thank you. 

Mr. Dillingham, in your estimate or your analysis, I think Mr. 

Barclay referred to the inflationary costs or construction inflation 

of 25 percent. I think that is the figure that he used. Did you take 

into account that inflationary cost? 

Mr. DILLINGHAM. No, we did not. That clearly would raise the 

cost, and I am not sure that the FAA took that into account in 

their development of their numbers as well. 

Mr. SALAZAR. So, Mr. Barclay, would you say that the Administration’s proposal is the correct way to follow, or should we try another angle? 

Mr. BARCLAY. No, sir, the Administration’s proposal doesn’t have 

enough money in its to build the capacity we need to meet the demand that is coming at the system, so that is why we say we sort 

of start from the wisdom of current law that has been worked out 

over many years, and we need to move up from there. 

Mr. SALAZAR. Thank you, Mr. Chairman. I yield back. 

760

Mr. COSTELLO. The Chair at this time recognizes the gentleman 

from Tennessee, Mr. Duncan. 

Mr. DUNCAN. Thank you, Mr. Chairman. 

Mr. Shaffer, at one point we were losing general aviation airports 

at a rate of one per week. Is that trend continuing? And how important do you consider the more active general aviation airports 

to the entire national aviation system? 

Mr. SHAFFER. Congressman Duncan, I don’t have the exact figures on the tip of my tongue. There are a couple of airports out 

west that I am aware of that the local community is presently debating keeping open or not, and some of the advocacy groups in the 

Country are working very diligently to keep those open. 

Honestly, in regard to the second part of your question, general 

aviation airports, that is where my heart is. That is where I grew 

up, on an airport with grass runways. So that is part of my focus. 

But, of course, I have to put that cinnamon aside and do exactly 

what I think you are suggesting, and that is look at the system as 

a whole and evaluate each airport in that system as a part of that 

integrated whole. 

Indeed, general aviation airports, particularly with the advent of 

very light jets, more point-to-point air taxis, more fractional ownership of aircraft will become more and more important to the national system, and that is one of the primary motivations of the Administration’s proposal to free up more money so that we can focus 

that money on the small airports and the general aviation airports, 

to help them prepare for the advent of more traffic and congestion. 

Mr. DUNCAN. All right. Thank you. 

Dr. Dillingham, you mentioned in your report that the FAA 

wants to expand the privatization program for airports, and, of 

course, they have done that in other countries to a much greater 

extent than we have here. You know, there has been very little activity so far in the five airport pilot program that we authorized. 

Do you think it can be expanded quite a bit by removing this airline veto and the other proposals that they are making? 

Mr. DILLINGHAM. Mr. Duncan, just as you said, the pilot has 

been around for a number of years and there hasn’t been very 

much interest in it. As we go around the Country, we don’t hear 

a clamor for airport privatization. 

Mr. DUNCAN. Okay. 

Mr. Barclay and Mr. Principato, let me ask you this. The FAA 

estimates that we are going to have 300 million more passengers 

in the next seven or eight years. How far behind are we and are 

we reaching a crisis point at some of these airports? Also, in your 

studies, have you taken into consideration the tremendous growth 

areas? And what I am talking about, for instance, the Knoxville 

metropolitan area, for instance, is growing by leaps and bounds. 

There are places in the northeast and other parts of the Country 

that are losing population or just barely staying the same. How 

much have you taken that into consideration, that the needs might 

be growing faster in certain areas than others? 

Mr. PRINCIPATO. Well, you mention Knoxville. Bill Marston, who 

runs the Knoxville Airport, is on our board and keeps our attention 

focused on that, and does a great job, by the way. Certainly, we are 

looking at that. The service patterns are changing. As I stated beVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00786 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
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fore, airports look at their own circumstances and are working 

very, very hard to meet the expanding and changing needs in their 

communities and trying to expand the reach, but this 300 million 

new people is an inescapable fact. I have yet to find anybody who 

doesn’t think that is going to happen. That seems to be the one 

number everybody agrees on. 

Mr. DUNCAN. Have we been able to speed up some of these 

projects? I remember years ago they said it took, for the big main 

runway at the Atlanta Airport, it took 14 years from conception to 

completion. That is part of what I am getting at when I say how 

far behind are we. If we are going to take a long time for some of 

these projects——

Mr. PRINCIPATO. We have made a lot of progress in the last 10 

years, but we are still behind. And if we don’t update the tools at 

our disposal, the PFCs, keep AIP strong and growing, then we are 

just going to fall further and further behind. 

Mr. DUNCAN. What effect would it have, Mr. Barclay, if the Senate did to you again what they did before? You know, the Senate 

messes up a lot of things. 

[Laughter.]

Mr. DUNCAN. I agree with you, Congressman, that they did this 

last time. You know, you are making the point that one of the 

beauties of the PFC is that it is a ceiling, it is not a requirement, 

and it has got restrictions on it. And airports, their local government, they don’t have a profit incentive, they don’t have the incentive to go build things that aren’t needed. But where you do have 

the needs, if you provide the room that airports can utilize, an increased PFC, they can go build things where they need them. 

We are not at a crisis now. Post-9/11, as you know, that gave us 

some extra time. We were going to reach a billion passengers by 

2011, before 9/11 occurred. But we then also turned around and 

started spending a lot of money on security, and we are still spending a lot of time on security at the same time we are trying to add 

capacity. So when you balance all those issues out, our members 

tell us we are not in a crisis now, but we will be if we get that population the United States added to the system and we haven’t 

started building this year and next year. 

Mr. DUNCAN. I will just end with this. In some ways we are 

going overboard on this security and shortchanging the expansion 

of capacity efforts. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. Thank you. 

The Chair, at this time, recognizes the gentleman from Oregon, 

Mr. DeFazio. 

Mr. DEFAZIO. I thank the gentleman. 

Mr. Shaffer, are you familiar with the history of PFCs? 

Mr. SHAFFER. Very much so. 

Mr. DEFAZIO. Are you? Okay. So you are familiar with the period 

during which PFCs did not exist and the reasons why they didn’t 

exist?

Mr. SHAFFER. Yes, sir, I am. 

Mr. DEFAZIO. Okay. And that had to do with? 

Mr. SHAFFER. Revenue diversion, sir. 

762

Mr. DEFAZIO. Okay, that is good. You don’t think that, potentially, your rather broad expansion of the license for PFCs could 

lead to what many people might consider revenue diversion? 

I have one other question. Do you know the breakdown on PFC 

revenues between what is collected at origin versus what is collected en route? 

Mr. SHAFFER. I don’t. 

Mr. DEFAZIO. Okay. 

Mr. SHAFFER. I would be glad to get that for you if it would be 

of assistance to you. 

Mr. DEFAZIO. It would be very useful, because my point is that 

I really think it is hard to make the case that an en route fee is 

a local revenue. You know, I fly from Eugene to Denver, I pay a 

PFC in Denver. I have never even been outside the new terminal 

on the grounds, never. And I think there are a heck of a lot of other 

people in that situation at Chicago or anywhere else. I have been 

outside in Chicago twice in 20 years, I think. 

So I think making the case for a local revenue is hard, and I am 

concerned, as the original Democratic author of PFCs, that we may 

be headed back down that route where we are making it more controversial than it needs to be. My position would be, yes, you may 

be able to make a case—you certainly, I think, can make a case for 

terminal construction in some airports, but I am worried about the 

latitude you are proposing and would urge you to rethink that, 

with your knowledge of the history. 

Mr. SHAFFER. I believe I understand your concern, Congressman, 

and I will see if I can’t get that en route PFC data for you. 

Mr. DEFAZIO. That would be very helpful. 

Dr. Dillingham, I know we have plowed this ground many times, 

but as I understand the Administration’s fee proposal, it presents 

us with a deficit, basically, in terms of our capital needs for our airports as we move toward a billion or more passengers in the nottoo-distant future, is that correct? 

Mr. DILLINGHAM. Yes, sir. 

Mr. DEFAZIO. Now, if we kept the current fee structure and that 

many people really flew and airline ticket prices stayed about 

where they are, all things considered, would that create enough 

revenue to fill that deficit? 

Mr. DILLINGHAM. Yes, sir. Based on our analysis and based on 

our understanding of the CBO analysis, it would provide enough 

revenues.

Mr. DEFAZIO. I mean, that is assuming other things are pretty 

much held the same. 

Mr. DILLINGHAM. Yes, sir. 

Mr. DEFAZIO. But we could fill that deficit. 

Mr. DILLINGHAM. Yes, sir. 

Mr. DEFAZIO. Okay. And, again, not asking you to pass a policy 

judgment or talk about the inequities that some of us feel are created by the Administration proposal, particularly the burden on 

GA, the Administration proposal would produce revenues that 

would not be adequate to meet that capital deficit, is that correct? 

Mr. DILLINGHAM. I am sorry, would you say that again, Mr. 

DeFazio?

763

Mr. DEFAZIO. Well, I mean, their proposal, unless you were to 

further increase the gas tax or something else, would not produce 

revenues sufficient to meet that deficit. 

Mr. DILLINGHAM. We have some concerns about that based on 

the way, as we understand, FAA computed their numbers, not taking into account the potential lessening of purchasing of gas tax 

and the elasticity issue. 

Mr. DEFAZIO. Okay. 

Mr. Barclay, I would just like you to sort of give us where do you 

see—we talked a little bit, when I saw you yesterday, about the 

need to streamline PFCs. I don’t want to create an unnecessary 

and redundant paperwork process, but just be real candid here. Is 

what the Administration is proposing just getting rid of unnecessary paperwork or is it really creating the potential that we won’t 

be adequately monitoring how PFCs are going to be spent? 

Mr. BARCLAY. I honestly think you can streamline and go to a 

certification and auditing kind of procedure, because you have got 

experience in the system that, as I say, there has only been two 

PFCs turned down in the history of the program. So that gives you 

a track record to go on. And you know you have got the local 

checks and balances on these projects and on the levying of fees 

that are at least locally looked on as a local fee once they elect to 

put it on. 

So the Administration recommendations, putting aside eligibility 

for the moment, but just streamlining, is one that is well worthwhile. We have done some experimenting with that at the smaller 

airports, and it seems to have worked pretty well. 

Mr. DEFAZIO. Okay, thank you. My time has expired. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. Thank you. 

The Chair recognizes the gentleman from Missouri, Mr. Graves. 

Mr. GRAVES. Thank you, Mr. Chairman. 

I am just trying to clarify where we are in this whole proposal, 

in the FAA’s proposal in terms of AIP. It is a network, as Mr. 

Shaffer pointed out, and wheels don’t work without spokes, and our 

aviation network doesn’t work without general aviation facilities, 

that is all there is to it. But it is not just about GA airports; there 

are a lot of jobs out there, there are a lot of small businesses out 

there that completely depend on those airports to function. 

What I am trying to figure out, the FAA’s proposal is going to 

cut the AIP program considerably. In fact, in Missouri, which is obviously the State I am looking at, we are talking about $2.1 million 

to the State for the Airport Improvement Program. Is that correct, 

is that the direction we are going to go? I hear talk about discretionary funding. This is just vitally important to many of our 

States and to GA. The program is designed to get GA pilots off the 

bigger airports. I mean, obviously, it works in conjunction with the 

bigger airports, and, just like you said, it is a network, and it is 

a network that is important. We don’t want those delays at the 

larger reports; get GA off of those airports and get them onto the 

smaller airports. 

But where are we in this process? Is the program being cut considerably? Are those funds going to be discretionary? I want to 

764

keep that guaranty there. Somebody answer the question. I am trying to figure out where we are at. 

Mr. SHAFFER. I couldn’t agree with you more, Congressman, in 

terms of the critical nature of general aviation airports, not only on 

a local level, but as a part of the national system of airports. What 

we are proposing the AIP level plus the modifications that we are 

proposing to AIP and the passenger facility charge program includes things like this: a standalone State apportionment fund, and 

now with a minimum of $300 million per year in that fund; raising 

the discretionary account from $148 million, I believe it is, which 

is a number that is almost 20 years old, up to $520 million, preserving the 95 percent Federal share for that smallest tier of the 

nine and fewer based aircraft, preserving the 95 percent Federal 

share.

In making a lot of common sense changes, as you know, as a general aviator, one of the things that enables those airports to generate the most revenue is fuel sales. The other one is hangar rental. Well, right now, if one of those airports wants to spend AIP 

funds to add a credit card reader to their existing fuel farm, they 

can’t do it, and that just makes no sense at all. Same result with 

regard to putting new skin on a bunch of T hangars. It is not eligible; you have to knock them down and start from scratch, and that 

just makes no sense. So we want to remove, frankly, silly restrictions that disable the smaller airports from being more sufficient. 

Mr. GRAVES. Well, at my airports, my GA pilots are extremely 

frustrated. They are being told that their taxes are going to go up 

300 percent and they are going to lose money to fix their airports 

at the same time, and it is extremely frustrating to them. 

But this program is absolutely vital, and I hope that the Members of the Committee are paying close attention to this because 

those small airports out there depend on it. I would love to see 

some changes in it, some changes that make sense. We need to 

keep that money there and we need to make sure that it is always 

going to be there. We don’t want to cut it. 

Mr. Dillingham, I don’t know if you had anything or not. 

Mr. DILLINGHAM. No, sir. 

Mr. GRAVES. Thanks, Mr. Chairman. 

Mr. COSTELLO. I thank the gentleman. 

The Chair recognizes now the gentleman from Wisconsin, Mr. 

Kagen.

Mr. KAGEN. Thank you, Mr. Chairman. 

And thank you to all of you for your presentations, they have 

been very enlightening. As a new Member on this Committee, there 

is a great deal to learn. For many years I have been a great fan 

of the GAO. They have tremendous work and my reading of their 

product is that they have very little bias to add. So without getting 

Dr. Dillingham to be political, I will just ask you yes or no questions, and you can plead the fifth, if you would like. 

[Laughter.]

Mr. DILLINGHAM. Thank you, sir. 

Mr. KAGEN. Isn’t it true that the proposal by the Administration 

is really attempting to do more with less? 

Mr. DILLINGHAM. Yes. 

Mr. KAGEN. So I got that right. 

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Mr. DILLINGHAM. Do you believe that the funding level proposed 

by the Administration for AIP is adequate to meet the current 

needs and future needs of our airport system? 

Mr. DILLINGHAM. According to FAA’s estimates, it is. 

Mr. KAGEN. And according to your own analysis and years of experience?

Mr. DILLINGHAM. I think there is some value to looking at what 

the airports propose in terms of what they think they need. I mean, 

I think there is a balance in there. I think one of the things that 

needs to be considered is that the FAA proposal is a very complicated, integrated proposal where one element of it sort of is dependent on another element and you sort of have to take it as a 

whole to make some sense of it. And if you start pulling it apart, 

you start to see things where there is not enough money here or 

this shouldn’t be done this way. So I think they intended it to be 

taken as a whole rather than the parts of it. 

That is a little bit more than yes or no. Sorry. 

Mr. KAGEN. So much for yes or no questions. Thank you. 

[Laughter.]

Mr. KAGEN. Mr. Barclay, the current level of funding proposed 

would have a significant effect on small airports like where I am 

from in Northeast Wisconsin, Green Bay and Appleton. Can you 

comment, please, upon what you would recommend the level of 

funding be for AIP and others? 

Mr. BARCLAY. Well, the current appropriated level is just over $3.5 billion. The current authorized level is $3.7 billion. We are recommending really a modest increase from the authorized level, 

start it at $3.8 billion and then take it up over the years of the authorization. Frankly, that is trying to be cognizant of the difficult 

budget decisions the Committee and the Congress have to make. 

And we have the advantage of having this leverage that the PFC 

can be used primarily by the larger airports. We can then shift 

more of the AIP to smaller airports, and you can get a balance that 

way. You don’t have to entirely rely on the Federal budget for everything in the airport system. 

So we would like to see at least that $3.8 billion level met for 

the first year of the program. 

Mr. KAGEN. Mr. Principato, you mentioned in your opening statement that you would like to see a more creative and more functional contribution from bonding. 

Mr. PRINCIPATO. Yes. 

Mr. KAGEN. What specifically do you have in mind? 

Mr. PRINCIPATO. That tax treatment of bonds? 

Mr. KAGEN. Correct. 

Mr. PRINCIPATO. On the tax treatment of bonds, about 60 percent 

of airport bonds—as Dr. Dillingham’s slide showed before, over half 

of airport finance comes from bond, and about 30 percent of that, 

by the way, is backed by PFCs. So the PFCs have a utility well beyond just the dollar that you bring in. But about 6 percent of airport bonds are treated as private activity bonds, so subject to AMT; 

they can’t advance refund them, so that adds to the cost of putting 

airport capital projects into place. 

Our modest proposal would be simply that any project that is eligible for AIP or PFC be counted as a public purpose project and 

766

be treated by the tax code that way. I know that is not this Committee’s jurisdiction, but that would be our modest proposal. And 

if you like that idea, we would like to work with you on seeing if 

we can follow up on that. 

Mr. KAGEN. We do have friends in other committees. 

Thank you very much, Mr. Chairman. I yield back my time. 

Mr. COSTELLO. The Chair recognizes at this time the gentlelady 

from Oklahoma, Ms. Fallin. 

Ms. FALLIN. Thank you, Mr. Chair. 

Mr. Dillingham, when I was viewing your charts that you were 

showing earlier, you talked about your difference in estimates on 

the FAA’s and the ACI’s average annual plan development costs 

that are coming up, and you showed a difference of $5.8 billion and 

what you anticipate the needs would be compared to the FAA’s estimates, and then you segmented that out to ineligible and eligible 

AIP costs. Can you explain what an eligible cost would be and why 

the FAA does not include that in their estimates of needs for the 

future?

Mr. DILLINGHAM. An eligible cost is defined by statute. The statute says what is eligible for PFC. So that is what we mean when 

we say eligible AIP. Ineligible AIP are projects that are not included in the statute, and in large measure these are oftentimes 

that are income-generating projects such as a parking garage or 

some other income-generating project on the airport grounds. 

I don’t want to speak too much for FAA in terms of why they 

don’t include them, but I think their estimate is based on what the 

statute allows them to include. Therefore, they wouldn’t have something that couldn’t be paid for by Federal grants as a part of their 

estimate.

Ms. FALLIN. Well, I guess that was my question, Mr. Chairman, 

if I could follow up. Your estimate costs are a lot higher than the 

FAA’s, so if they are ineligible, why would we include that as something that is part of the costs? 

Mr. DILLINGHAM. Well, actually, it is the airport organization’s 

estimates of what their cost would be, and, again, not wanting to 

speak too much for the airport, since they are sitting close by, I 

think the airports see the needs differently than FAA in terms of 

they may see that some projects that—like it was explained earlier 

this morning, like if FAA concentrates on the air side—runways 

and taxiways and things like that—it is also important from the 

airport’s perspective that passengers have someplace to pick up 

their bags, someplace to get on the airplane and that kind of thing. 

So they have a different perspective on sort of what they think is 

needed to enhance the system. 

I think the airport people can probably speak better to that than 

I can. 

Mr. PRINCIPATO. That is our organization’s estimate, and we look 

at the entirety, the terminal, the gates, and everything else, because they are all really capacity projects when you think about it. 

You can have a lot of runways and the all work really well, but if 

you only have a couple of gates, you have no place to put the people. So that is one thing, we look at the whole picture. 

The other is airports pursue a variety of strategies to raise capital for projects and so forth, particularly smaller airports are lookVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00792 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
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ing at the parking garage issue and so forth. So we really look at 

the entirety of what is going on at the airport. 

If I could say one other thing just about the difference in our 

number and the GAO number—I was talking to Dr. Dillingham’s 

staff beforehand and we are going to work with them—our number 

is—we put an inflation adjustment into our number. Not construction cost inflation, a smaller inflation number, to get to our $17.5 

billion over the next five years, and theirs are in constant 2006 dollars, so they are in deflated dollars. Also, we need to work with 

them, but we think they may understate the cost of repaying bonds 

that are out there. Again, about 60 percent of airport projects are 

financed with bonds, and it may understate that, but we need to 

sit down with their staff and work that out 

Ms. FALLIN. Well, I have got a few minutes left, so I am going 

to ask you a question, Mr. Shaffer. 

In light of them saying that there are some things that they believe should be eligible, have you had a discussion with the airports 

about changes that might be made to allow things that they need 

that would enhance service at the airports? 

Mr. SHAFFER. We have, and that discussion is ongoing. More fundamentally, we have also been and continue in discussions not only 

with the airports, but with Dr. Dillingham’s staff in terms of getting down to a common understanding of which projects, for what 

period of time, and under what eligibility is included in these needs 

estimates.

Ms. FALLIN. Thank you so much. 

I yield back my time. 

Mr. COSTELLO. The Chair thanks the gentlelady. 

At this time, the Chair recognizes the gentleman from Washington State, Mr. Larsen. 

Mr. LARSEN. Thank you, Mr. Chairman. I will just take a few 

minutes to ask some questions. Mr. Costello will be back in a few 

moments.

The first question is for Mr. Shaffer and has to do with comments on page 11 of your testimony. Mr. Oberstar asked some 

questions about one of the pilot projects you propose. The other 

pilot project you propose is use of AIP dollars specifically to install 

ADS-B equipment. Relating back to the hearing we had last week, 

I think the testimony last week was on the Next Generation ATC 

program. There were estimates anywhere from $12 billion to $15 

billion from FAA, $10 billion to $14 billion from private airports. 

I may have those numbers wrong, but the magnitude is still the 

same. So you are looking at $22 billion to $29 billion over the next 

several years from user fees, from increased gas tax, and from 

some bonding authority in the second ten years, paid by potential 

surcharges.

So the question I would have is with that amount of money going 

potentially into the Next Generation ATC system, which would include ADS-B, why do you think it makes sense to use AIP dollars 

for ADS-B when, again, previous testimony to the Committee 

shows there is going to be a lot of money, potentially, flowing into 

Next Generation ATC? 

Mr. SHAFFER. Congressman, that pilot program is directed toward those areas of the Country where either the ADS-B installaVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00793 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
768

tions would not be included in the NextGen rollout or where, for 

example, either a community or an airport wants to install ADSB in advance of the Administration’s F&E schedule and budget. So 

it is really a supplement to the NextGen system as we have proposed it. 

Mr. LARSEN. In addition to that, in your pilot project, does it not 

include the control over that particular portion of ADS-B system by 

the installer, or would this be part of the FAA system run by the 

FAA, staffed by the FAA? 

Mr. SHAFFER. It would be part of the system, Congressman. 

Mr. LARSEN. Would it be run by the FAA and staffed by the 

FAA?

Mr. SHAFFER. Yes, that is my understanding. 

Mr. LARSEN. That is your understanding. How much do you anticipate would come out of the AIP to finance this pilot project, 

have you done an estimate on that? 

Mr. SHAFFER. I don’t have it on the tip of my tongue, Congressman, and I apologize for that; I will get it for you. I will also add 

that there is interest already in the system for doing things of this 

nature. For example, the State of Colorado has already begun installing ADS-B there because their terrain is such that there is 

really no amount of radar that can cover and provide the sort of 

air traffic control that a lot of general aviators, for example, need 

and desire. 

That tells us that there is a lot of interest in that. 

Mr. LARSEN. [Presiding.] Are they doing that out of AIP dollars? 

Mr. SHAFFER. No, they are doing that on their own presently. 

Mr. LARSEN. Doing it on their own. 

Dr. Dillingham, in your analysis of the FAA versus AIP funding 

structure, did you take into account, did you make any estimate on 

the amount of AIP dollars that would be used in this pilot project 

to finance an earlier roll-out or supplemental roll-out of ADS-B? 

Mr. DILLINGHAM. No, we did not, Congressman Larsen. 

Mr. LARSEN. So those numbers are not included in your analysis? 

Mr. DILLINGHAM. Not specifically. No, sir. 

Mr. LARSEN. Not specifically. So if they were, that would mean, 

in my mind, I guess it would mean there would be fewer AIP dollars on your bottom line analysis. 

Mr. DILLINGHAM. Yes, sir. 

Mr. LARSEN. Mr. Barclay or Mr. Principato, have you looked at 

that particular pilot project and the impact that spending AIP dollars and the availability of AIP dollars for ADS-B roll-out and what 

that means for AIP dollar availability? 

Mr. BARCLAY. That goes back to my earlier answer. We are hesitant to endorse giving AIP dollars going to nav aids, rather than 

F&E dollars going to nav aid. So some experimentation with the 

issue, let me step back and say we are big fans of ADS-B and the 

next gen system. We agree that is the right pattern to go with. It 

is a fundamental part of that system. There are a number of things 

about this pilot program we question. The money is not going to 

the airports and it is coming out of AIP, rather than F&E. So we 

would be happy to work with the committee to redesign that. 

Mr. LARSEN. Okay. 

769

Mr. PRINCIPATO. Actually, we have many of the same concerns, 

certainly with the last point Mr. Barclay made about some of the 

money not going to the airport. On the ILS question, I just wanted 

to put one more issue on the table. If we do move in the direction 

of a pilot program, a lot of airports have concern about the liability 

issue, if they are going to take that on. If the Congress in its wisdom puts it in place, we need to look at the liability issue moving 

forward.

Mr. LARSEN. I noted that in one of your testimonies, the liability 

if you were to take responsibility. 

That takes my time. Where is the list here? The Chair recognizes 

Mr. Hayes of North Carolina. 

Mr. HAYES. Thank you, Mr. Chairman. 

A question for Mr. Barclay and Mr. Shaffer together, and thank 

you all for being here today. 

How does the FAA count aircraft? If you were at a towered airport, obviously the arrivals and departures are counted, but many 

airports do not have towers and operate very safely, and have lots 

of traffic. In terms of AIP money, can you help me with that? 

Mr. SHAFFER. Congressman Hayes, that is a great question. We 

put a lot of effort into figuring out the best way to count it. As you 

point out, if you have a tower, then obviously you have the log 

books and the radar tracks and you know exactly what is going on. 

We also analyzed whether fuel sales might be a way of figuring 

out the number of based aircraft at a particular airport. For a variety of reasons, we concluded that was not likely to yield an accurate result, so we settled on the idea of getting the end numbers 

off of the aircraft at each particular airport. 

Honestly speaking, the results in collecting that data up to this 

point have been spotty across the Country. Some areas we have 

gotten pretty high percentages of response, and others pretty low. 

As I sit here, I am open-minded, and if you have a better way to 

figure out that number of based aircraft, I would love to talk to you 

about it. 

Mr. HAYES. Of course, based aircraft is important, but the folks 

that are coming and going to do business at that airport is equally 

important. I am thinking in my District, Salisbury is a non-towered 

airport. A tremendous of commerce goes in and out of there, not 

based traffic. Concord has the data. As you say, tracking information is available. The aircraft are, I am not a computer guy. Can 

you punch a button and say who went to Salisbury that day, Mr. 

Dillingham?

Having this conversation, Congressman Graves reminded me of 

a Phil Boyer quote, ‘‘Give me a mile of highway and you can go a 

mile. Give me a mile of runway and you can go anywhere in the 

world.’’ And that is crucial as we face the future. 

Do you want to comment on that, Mr. Barclay? Do you have 

some idea from an airport standpoint of how we might painlessly 

and properly count aircraft in and out? 

Mr. BARCLAY. Well, I think it is currently done by estimates. We 

will get back to you. I have forgotten the details of exactly how 

they estimate those numbers, but your broader point is exactly 

right. To use a larger airport example, the Atlanta Airport recently 

did a cost/benefit analysis of their impact on the local economy. It 

770

was $18 billion a year at one airport. We are talking about investing for all 550 airports in the country that get air carrier service, 

3,500 airports that are eligible, a lot less money than that for the 

entire country. 

Hong Kong spent $25 billion to build one airport for their country. It shows the importance to the economy in general of making 

these investments and what a wise investment it is for the, frankly, modest amount of money that we are investing in large and 

small airports, because the small ones are just as important to 

their communities as the large ones are to theirs. 

Mr. HAYES. Okay, if you will help us track that going forward. 

Mr. Dillingham was talking about all these additional passengers 

for airlines and general aviation. In the next generation equation 

from your perspective, has the revenue stream from these additional passengers, which we basically agree are going to occur, has 

that been taken into account as to what the present system is 

going to generate in terms of revenue dollars? 

Mr. DILLINGHAM. I think when you look at the overall FAA proposal in terms of its move to user fees or the necessity to move to 

user fees for adequate revenues, it has not been taken into account, 

although the proposal does address some of the other issues that 

are of concern to the aviation community. 

Mr. HAYES. Thank you. 

So Mr. Shaffer, again welcome. The necessity for the next generation, I don’t think we have come to that determination yet in 

terms of dollars, but you all make sure as this cost accounting system, which I am trying to match with something, doesn’t quite 

measure up. Let’s make sure we know how many dollars are coming in. If we take something that doesn’t appear to be broken, then 

don’t try to fix it until we need it. If you could kind of keep us up 

to speed on that. 

Mr. Chairman, with time left, I yield back. Thank you all again. 

Mr. LARSEN. Thank you. 

Mr. Hall of New York? 

Mr. HALL. Thank you, Mr. Chairman. 

Thank you all, our illustrious panel. 

First, I wanted to ask Mr. Barclay what the most common 

landside projects are that PFC’s fund? 

Mr. BARCLAY. It is primarily gates. Again, if you have your 

airside build-out, and you want to maximize the utilization of that, 

PFCs were designed to be able to fund gates and particularly gates 

that would allow more competition into the airport. 

Mr. HALL. Thank you. In your testimony, you indicated the 

changing of the Federal share for airfield paving and rehabilitation 

projects for runways and taxiways at large and medium airports, 

and from 75 percent to 50 percent would be hardship. Could you 

elaborate on that, please? 

Mr. BARCLAY. Well, if the purpose in general is to provide more 

funds for construction at airports, reducing the amount of money 

in the Federal share doesn’t seem to make sense to us. That was, 

we think, driven primarily by the much lower number in the Administration’s program. They are trying to make the dollars go farther so they reduced the Federal share of those programs. 

771

If you pull an extra 25 percent away like that, you are just going 

to have to find it somewhere else in the airport financing system. 

So we think it makes sense to leave the percentages where they 

are.

Mr. HALL. Okay. 

Mr. Shaffer, three quick related questions here. The FAA’s proposal would eliminate the Military Airport Program discretionary 

AIP setaside. Could you explain the reasoning for that? 

Mr. SHAFFER. Yes, sir. The Military Airport Program is presently 4 percent of the discretionary fund. It is about $35 million a year. 

But the number of airports coming into that program has dwindled 

to almost, well, it is single digits on an annual basis. Most of the 

airports that are presently in the program are second time entrants, and the new entrants are just ones and twos. So we want 

to leave the criteria in place, but the level of traffic there, or participation if you will, simply does not any longer justify the setaside, and it causes the setaside mainly to be an accounting exercise. But we are not removing the criteria. When an airport comes 

up that wants to go through that program, that will be available 

to them and we will have the money to fund it. 

Mr. HALL. The setaside will be available? 

Mr. SHAFFER. Not the setaside, but the program, the criteria to 

fund the types of projects like hangars and passenger terminals 

and things that a military airport ordinarily does not have, but are 

needed to convert to a civilian airport. 

Mr. HALL. Okay. The proposal would sunset the 95 percent Federal AIP contribution to small airport projects and return it to 90 

percent. What is the logic there? 

Mr. SHAFFER. That is a great question, Congressman. It is simply 

this. When Congress established that 95 percent participation level 

by the Federal Government, it was in response to the impacts of 

9/11. We are now six years down the pike almost from 9/11. As I 

testified earlier this morning, those impacts financially, trafficwise, passenger counts, are largely now gone and airports have recovered. So we are simply suggesting that Congress let the sunset, 

which you put in the provision in the first place, go ahead and 

occur.

Mr. HALL. Okay. The last question would be, well, there are two 

parts to this. Why has the FAA proposed to eliminate the reliever 

airport setaside? And also, the new tiered approach to non-primary 

entitlements which handle funding to the bigger small airports, I 

was curious if you could let me know either now or later in detail 

specifically how that would affect airports like Stewart International Airport which is in my District. 

Mr. SHAFFER. Sir, the reliever setaside is presently two-thirds of 

1 percent of the discretionary account on an annual basis. That 

translates into about $5 million a year. In actuality, we spend 

something in excess of $22 million every year on reliever airports. 

So this is a classic example of a true accounting exercise. The setaside really has been overcome by our actual commitment to assisting those airports. So we think that the setaside is no longer necessary.

I don’t know where Stewart falls out. I am very familiar with 

that airport, having flown in there many times when it was still 

772

an Air Force base, but I will have to get the response to you on 

that. I don’t know which tier you would fall in. 

Mr. HALL. Thank you. I appreciate it. 

I yield back. Thank you. 

Mr. COSTELLO. [Presiding.] I thank the gentleman. 

The Chair at this time recognizes the gentlelady from Florida, 

Ms. Brown. 

Ms. BROWN. Thank you, Mr. Chairman. 

Mr. Shaffer, I want to follow up with your discussion about the 

FAA proposes to eliminate the Military Airport Program. You all 

brought this program elimination up the last time, and it was my 

amendment that reinstated it. You indicated that it was for hangars and other things. What the communities use that for is for 

those runway expansions, and most communities cannot afford to 

keep it up. But after 9/11, the military continued to use those runways in those communities, even though BRAC had done away 

with the major portion of what they were for. 

So I don’t understand. Do you not talk to the military? 

Mr. SHAFFER. Actually, Congresswoman, we consult with them 

directly and often. Let me clarify what I said earlier just so everybody understands. We are not eliminating the program. The criteria for entrants and participation in the Military Airport Program 

will remain on the books for airports that want to go through that 

program. All we are suggesting is that the number of airports that 

now would be eligible is so small that FE 

Ms. BROWN. What is it? About six? Is it about six a year, I think. 

Mr. SHAFFER. That sounds about right, ma’am. 

Ms. BROWN. Well, that is what it was before. 

Mr. SHAFFER. Well, I understand what you are saying. We are 

simply saying that we have the money to put those airports 

through the system, but that number continues to decline. Six may 

not be exactly right currently, but it is a single digit number. So 

the setaside as a financial matter really doesn’t have——

Ms. BROWN. Maybe we can talk and work on some additional 

language so that I can be assured that it will be available for those 

communities that want to continue these programs, in conjunction 

with the military. 

Mr. SHAFFER. I would be happy to do that. 

Ms. BROWN. Okay. My next question, the FAA proposes changing 

the Federal share of airfield payment and rehabilitation projects 

for runways and taxiways at large and medium hub airports from 

75 percent to 50 percent. How are the airports going to finance 

these significant increases particularly given the additional security issues that the airports have had to step up to the plate with? 

Mr. SHAFFER. The obligation to maintain the airfield that is paid 

for in part by the Federal Government has always resided with the 

airport owners and operators, Congresswoman. Our proposal to adjust the level of participation on rehabilitation going forward is in 

part a recognition of that preexisting obligation on the part of the 

airport owner and operator, but likewise, a recognition on our part 

that that is still an asset in the national system of airports, so the 

Federal Government should continue to have an investment in 

that.

773

I recognize exactly what you are saying with regard to the security burdens that have been placed on the airports. For example, 

in our proposal in-line EDS systems would be an exception, if you 

will, compared to prior practice, where even if an EDS system was 

being built for a sole user, just one airline, that would still be eligible for Federal participation because as you point out there are big 

dollars involved, and of course it is a critical priority. It is safety, 

security, which one of them is first? 

Ms. BROWN. It is there together. 

Mr. SHAFFER. They are together. 

Ms. BROWN. They are twin babies. Would anybody else like to respond to that? 

Mr. PRINCIPATO. I think the point about security is a good one 

for two reasons. As we talked about before, airports have been 

called upon to do more in the security area, and this is obviously 

a national and homeland security issue. And also, as we talked 

about the cost of building capital projects at airports and so forth, 

even construction costs, inflation understates it because there is a 

whole security component to that project you have to provide for 

that security. So I am glad you brought that up. We really start 

from the proposition, as has been said before by both Mr. Barclay 

and myself, that capital needs are going up. Everybody recognizes 

that, and so we start from the proposition that we should be increasing resources rather than decreasing them. 

Ms. BROWN. Thank you very much. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. I thank the gentlelady. 

The Chairman at this time recognizes the gentleman from Florida, Mr. Buchanan. 

Mr. BUCHANAN. Thank you, Mr. Chairman. 

Mr. Shaffer, what impact would the Administration’s proposed increase in the AIP discretionary $520 million have on the various 

airport communities? Where is that money going to be primarily 

spent? Or where would it be used? 

Mr. SHAFFER. Sir, it will be spent on safety, security, capacity, 

those high priority projects that the smaller airports will be confronted with, given the advent of the various different types of 

transportation that I have already enumerated. We need to get out 

in front of that, if you will, and that has a benefit for the rest of 

the system as well because if we can put the very light jets, the 

air taxis and transportation modes like that at the smaller airports, that helps relieve congestion on the large and medium hubs. 

Mr. BUCHANAN. Okay. 

Mr. Dillingham, and I know you have said it a couple of times 

in your presentation here, how do you define small and large airports?

Mr. DILLINGHAM. We consider medium and large hubs as larger 

airports. And the smaller airports were the small hubs and below. 

I think Mr. Shaffer has the exact number of enplanements, the 

technical definition of them, if you would. 

Mr. BUCHANAN. In our community, I am looking at Sarasota, and 

I have Tampa, which I know is a large airport, and Atlanta is a 

big airport. But is Sarasota considered a small airport in your definition? Or would you know that? 

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Mr. SHAFFER. Yes. It is a small hub, I believe, sir. 

Mr. BUCHANAN. Okay. And just in the way of history, I am new 

to the committee, too. The PFCs, there has been a lot of discussion 

about increasing that. But why do we look at that just strictly as 

an option for large airports, or the top seven or eight airports? And 

why isn’t that an option for little smaller airports if they felt that 

they needed that capability or something? 

Mr. BARCLAY. Congressman, if I could answer that. One of the 

important values of PFCs is you don’t have to just spend them as 

you collect them. You can use them to back bonds. So even at an 

airport the size of Sarasota, if they have projects that are bondable, 

they get leverage off the PFC revenues that they collect, and they 

can use them together with other revenues to back bonds. 

Mr. PRINCIPATO. If I can just add to that, that really makes them 

the most effective, efficient, flexible financing mechanism for these 

kind of projects. Not all airports have gone to $4.50. I think 25 percent of medium and large hubs are still at $3.00. They don’t have 

a PFC; 35 percent of small hubs have not gone to $4.50, but 65 percent have gone there. If we do convince you to raise the PFC ceiling 

up to $7.50, as has been said before, not all airports will go to 

$7.50. Airports in communities can have flexibility within that to 

really set their own rate and plan their own capital projects. It 

works for airports of all sizes. 

Mr. BUCHANAN. But you talked about the growth in terms of passengers in the next decade or so, and everybody believes that it 

could be very much a reality. Do you think $7.50 makes sense? I 

know you touched on that as well, that that is something that we 

should consider? 

Mr. PRINCIPATO. I think the $7.50, the argument we have made is that $7.50, if you apply construction costs and inflation to the 

$4.50 PFC, that would be almost $7.50 in 2008, the first year of 

this authorization. So we didn’t pick the number really out of the 

air. We analyzed it and came up with that number. 

If I might offer one small idea, there has been some fear that all 

airports may go to $7.50 and some folks, the airlines and others, 

multiply it out and say it will be $2 billion or $3 billion, whatever. 

If you put a set of rungs in there, maybe in 25 percent increments, 

airports in communities would have the flexibility to maybe do a 

$5.50 or $5.75, whatever works for that community. It is a very 

flexible tool that really gets you much more than a dollar’s worth 

of value. 

Mr. BUCHANAN. Once last comment for just any of the panel 

members. I look in our community. Tampa is our largest airport by 

far, but we have three or four other airports around it that have 

a lot more capacity, but yet we are looking to do a massive expansion in the one airport. Why is that? Why do we have airports that 

are under-utilized in the surrounding area? In our area, and I am 

sure it is in different areas of the country, but yet we keep plowing 

the money into the major airport that is there. Is it just because 

that is where people want to go, or the marketing? What drives 

that? Because we have other airports that could probably do five, 

ten times the business they are doing, but yet we keep expanding. 

I am all for Tampa Airport getting bigger, but I just want to understand the rationale. 

775

Mr. BARCLAY. You have seen very strong growth at the airports 

surrounding Tampa, in addition to Tampa’s growth. At airports, 

part of the challenge is you want to meet the marketplace demand, 

so people obviously want to keep going to Tampa. Our job is to 

build out the capacity there to meet that demand, but also make 

sure it is available. Because we have a seven to ten year time horizon, we want Sarasota to have the capacity to pick up more 

AirTran service, more other kinds of new services when Tampa is 

not the right market for them. 

We need to build out as much capacity in this Country as we can. 

A lot of us who have been around Washington for a while remember when Dulles was described as a white elephant. More capacity 

then was needed, and today it is one of the most valuable resources 

on the whole East Coast. 

Mr. BUCHANAN. I wasn’t just thinking of Sarasota. I was thinking of St. Pete-Clearwater. Those other airports have a lot more capability.

I thank you. My time is up. I yield back. 

Mr. COSTELLO. I thank the gentleman. 

The Chair has just a few questions, and then we will move on 

to the second panel. 

Mr. Barclay, let me ask you. You heard me mention in my opening statement my concern about the Administration’s proposal to 

replace the small airport fund with a small airport setaside program. I wonder if you would comment. Are you supportive of the 

Administration’s proposal? 

Mr. BARCLAY. We are not, Mr. Chairman. First of all, it is much 

less money in the Administration’s proposal. And second, on the 

philosophy, we think there is an advantage to continuing to tie together the interests of large and small airports in the PFC Program. The entitlements that are given up there go to the small airport fund. That has been a reason why all airports in a network 

system see an advantage to the two different kinds of funding. So 

our inclination is to continue to support the small airport fund and 

continue to build that. 

The Administration plan would mandatorily take the large and 

medium hub airports out of the entitlement program. We see an 

advantage to continuing to let them elect whether they get out of 

that or stay in AIP or increase the PFC. 

Mr. COSTELLO. So you clearly are opposed to the Administration’s 

proposal.

Mr. BARCLAY. We agree with the Chairman. 

Mr. COSTELLO. Dr. Dillingham, let me ask you again concerning 

small airports and the Administration’s proposal. How would small 

airports compete for discretionary funds under the Administration’s 

proposal?

Mr. DILLINGHAM. Small airports would compete in the same way 

that large airports compete, basically on the criteria by which discretionary funds are allocated in terms of safety and capacity and 

environment and security. However, large airports, their scores are 

higher for those same projects. Large airports tend to have more 

of those projects. The bottom line is, small airports will be disadvantaged.

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Mr. COSTELLO. So there is no question there would be winners 

and losers? 

Mr. DILLINGHAM. Absolutely. 

Mr. COSTELLO. Very good. 

Last question, Mr. Barclay. As you know, the Administration’s 

proposal calls for increasing the fuel tax both on commercial and 

general aviation. At least part of the revenue would fund the AIP 

Program, research and development, and the EAS Program. I wonder if you would comment, does it really matter where the source 

of the revenue comes from to the AIP Fund? If so, why? 

Mr. BARCLAY. It does, Mr. Chairman. We would not agree philosophically with the notion that AIP should be funded out of one 

very narrow set of taxes mostly on one part of the industry, general 

aviation. We think that all of the users of the system get a benefit 

out of airport capacity and what we fund in AIP, and we should 

continue that kind of broader base of funding. 

Mr. COSTELLO. I thank you. 

The Chair thanks all of the witnesses on the first panel for being 

here today. 

I would recognize Mr. Petri for any comment that he might have. 

Mr. PETRI. Our colleague, Mr. Coble is hurrying over because he 

had a question. There he is. Mr. Coble had a question. You go 

ahead and ask it. I don’t know what it is. 

Mr. COSTELLO. We are holding the whole show up for you. 

Mr. PETRI. Go to a microphone. Here it is. 

Mr. COBLE. First of all, Mr. Chairman, I apologize to you and the 

Ranking Member and all in the room. We had a Judiciary markup 

and I couldn’t get away. I am not even sure whether my question 

has been asked or not, but let me go into this. 

Mr. Shaffer, if I may? 

Mr. SHAFFER. Yes, sir. 

Mr. COBLE. A number of general aviation airports in my District 

are dependent upon the dollars from the AIP, the Airport Improvement Program, to meet market demands and make necessary upgrades. Would you elaborate for me, if you would, how the proposed 

tiered system would be more effective than the current entitlementbased system? And what, if any, reaction have you received from 

the airports that may be adversely affected by these changes? 

Mr. SHAFFER. Sir, the tiered system that we have proposed is a 

recognition of the fact that not all general aviation airports are created equal. There is a broad range of operational levels, some have 

very simple airfields, others very complex airfields. They have different levels of need on an annual basis and on a long-term basis. 

So our tiered proposal is our best effort to allocate the funds 

where they are most needed to meet oncoming safety, capacity, and 

security projects amongst these airports. 

With regard to the reaction that we have received, it will come 

as no surprise to anyone that those that are in the lower tier, the 

nine or fewer based aircraft, are not very happy about that because 

no one likes to lose something that they already have. But as I 

pointed out in my earlier testimony, for the last, and this is just 

one example, over the last four years, there are 114 of these airports across the Country that have qualified for a non-primary entitlement, but have not taken a grant for four years. 

777

We can only conclude from that that they simply did not have 

a need for the money during those years. That is not to say that 

they won’t eventually have a need, because they certainly will. It 

is just that they don’t need it year after year after year. 

What we are proposing positions us to meet their intermittent 

demands, for example, every 10 or 15 years, whatever it works out 

to be, if they need to overlay a runway or expand a ramp or whatever the project happens to be, we will be in a position financially 

to pay for that project from the Federal side just like we always 

have.

Mr. COBLE. I would like to talk to you in more detail about this. 

Dr. Dillingham, good to have you back up here. 

Mr. Chairman and the distinguished gentlemen from Illinois and 

Wisconsin, we are all subjective. That is to say, I am hoping that 

my airports will be beneficiaries of good things to come. I think I 

speak for all of us up here. We are that parochial and we are that 

selfish about our places back home. 

I had good folks in my office last week. Two were from my counties. A third was not. And I said to the third one, I am going to 

treat these other two better than we will treat you. He said, well, 

all 100 counties are important to me. I said, six counties are important to me. We are guilty of that. 

Mr. Chairman, thank you, and Mr. Petri. I apologize again for 

my belated arrival. 

Mr. COSTELLO. I thank the gentleman. 

The Chair would recognize another Member who came in after 

a markup. This will be the final round of questions for this panel. 

The gentleman from Illinois, Mr. Lipinski, is recognized. 

Mr. LIPINSKI. Thank you, Mr. Chairman. 

Just helping take care of those things in the Science Committee, 

the Chair there, and was not able to do, chairing this panel here 

this morning. 

I just wanted to really go down a general road here, looking at 

PFCs. I certainly think PFCs are an important piece of the funding 

for necessary capital improvements at airports. But now we are 

looking at expanding PFCs, increasing the amount that can be 

charged for PFCs. So I just wanted to take a step back, first of all, 

and ask you what types of capital improvements are being funded 

right now, and then take a step forward, are there improvements 

that are not being done right now at the airports that you believe 

that the PFCs need to be expanded in order to cover these types 

of improvements, or further capital improvements? 

I just want to throw that question out there because I think we 

really need to look at, when we are talking about increasing PFCs, 

what are they being used for and what more do you think they 

should be used for with this increase. 

Whoever wants to start out. 

Mr. PRINCIPATO. Well, I think the part of your question about the 

expansion of the eligibility. What we are really looking for is for 

the $4.50 PFC to be made whole against construction cost inflation 

because after all, we are not buying a loaf of bread with it. We are 

buying construction with it. Construction costs have soared. There 

is a table in my testimony that talks about that. 

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Certainly, major runway and airfield projects are being funded 

by PFCs. The Atlanta runway, 55 percent of that runway was by 

PFCs. It increased their arrival rate from 88 flights an hour to 117 

just in the last year since that runway was opened, just huge capacity benefits. I told the Chairman the story yesterday. My wife 

flew to Bloomington, Illinois just south of where you are from, 

through Atlanta, and everything was just right on time and worked 

really well. So Bloomington was benefitting from that project. The 

St. Louis runway, 59 percent was PFC. 

Again, a lot of PFC dollars are going into terminal projects as 

well because once the plane lands, you need to place to bring the 

people and take them of. In Charleston, West Virginia, they put 

PFCs into an expansion of the runway safety area. It is a smaller 

airport, but they also added four gates and a hold room so they 

could handle the additional flights that that smaller community is 

being able to generate. 

So it has really been a wonderful tool for airports of all sizes. 

Mr. BARCLAY. When we talk about the passengers increasing by 

50 percent or adding 300 million passengers to the system by 2015, 

90 percent of those passengers are at the large and medium hub 

airports. The top 80 airports have 90 percent of those passengers. 

They are the most reliant on passenger facility charge increases to 

meet that growing demand. 

So you have two issues involved. One is should you expand eligibility for PFCs. We have a split opinion among our members as to 

whether or not you should expand eligibility. We have unanimity 

among the members that we have to increase that level if we are 

going to meet the demand coming for new facilities at airports. 

Mr. DILLINGHAM. Mr. Lipinski, I take it from a slightly different 

angle. We don’t have any disagreement with the fact that construction costs have increased and that there should be some consideration of raising the cap on PFC. However, we would caution that 

when you look at changing what is eligible for PFC, when you look 

at indexing PFCs, we would just caution that there should be due 

consideration for congressional oversight and accountability when 

we look at those aspects of it. 

Mr. PRINCIPATO. On the expansion of the eligibility, as Mr. Barclay mentioned, there are some different views, but particularly the 

smaller airports, and both our memberships are very interested in 

seeing if we can work something out here to expand eligibility. 

They have less ability to go to the capital markets, and some 

projects that are not now eligible are really an important way to 

raise revenue for their capital program. So some of the smaller airports are interested in the eligibility expansion issue. I think as we 

go through this, perhaps we could work together on seeing if there 

is a way to help them. 

Mr. LIPINSKI. Dr. Dillingham, could you just briefly expand on 

your thoughts on increased congressional oversight? 

Mr. DILLINGHAM. Well, for example, if you index PFCs, it could 

mean that that airports and/or FAA does not have to come back to 

Congress on an annual basis or reauthorization basis for raising 

the PFC. Also, if the eligibility for PFCs is expanded, it is quite 

possible that PFCs will be spent for things that could be financed 

from the private sector market. 

779

Again, Congress’s role is to sort of set the criteria by which PFCeligible projects are identified. 

Mr. LIPINSKI. Thank you. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. I thank the gentleman from Illinois. 

Again, we would like to thank each of our panelists on the first 

panel for your thoughtful testimony. We look forward to your continued input as we go forward with the reauthorization. So thank 

you very much. 

At this time, the Chair would invite the second panel to come forward please. As they are coming forward, I would like to introduce 

them and yield to some of my colleagues to make an introduction 

as well. 

The first panelist on the second panel will be Mr. James E. Bennett, President and CEO of the Metropolitan Washington Airports 

Authority; the Honorable Nuria Fernandez, the Commissioner of 

Aviation in the City of Chicago; Ms. Elaine Roberts, President and 

CEO of the Columbus Regional Airport Authority; Mr. John Clark, 

the Executive Director at the Jacksonville Aviation Authority. 

I would yield at this time to my friend from Florida, Mr. Buchanan, to introduce a witness from his area. 

Mr. BUCHANAN. Thank you, Mr. Chairman. 

I want to take a moment to introduce Rick Piccolo. Rick is the 

President and CEO of the Sarasota-Bradenton Airport, which sits 

right in the middle of our two counties, two of the bigger counties 

I represent. 

Rick is also the Chairman of the Airport Council InternationalNorth America. We are proud of that, Rick. Rick and I have had 

an opportunity to work together for probably six to eight years for 

economic development. We talk a lot about airport issues because 

I have also been in the aviation business. 

So I want to thank the Chairman of the Council. We are proud 

of that, for taking his time to come to the committee today. I look 

forward to hearing about your testimony. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. I thank the gentlemen from Florida. 

Next, I would introduce Ms. Karen Ramsdell, who is the Airport 

Director, Santa Barbara Municipal Airport; Mr. Doug Kimmel, who 

is the Airport Manager from the Williamson County Regional Airport in the southern part of my congressional District. Mr. Kimmel, 

we are pleased to have you here to offer your testimony. Mr. Kimmel is a graduate of the Southern Illinois University. The President of that university is a former colleague of ours, and was on 

the Transportation Committee and on this Subcommittee. So we 

welcome you here today and we look forward to your testimony. 

The Chair would now yield to my friend from Oregon to introduce a witness from Oregon. 

Mr. DEFAZIO. Thank you, Mr. Chairman. 

I want to thank the next witness for making the long trip. He 

even had one more leg than I have, and it is as far away from 

Washington as you can get, which is often a blessing. 

So Mr. Gary LeTellier, who is the Executive Director for the Coos 

County Airport District at Southwest Oregon Regional Airport. We 

have renamed it, so I had to read that. I am not quite up on the 

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name yet. He comes to Oregon with extraordinary experience in 

major airports. He has a professional education in aviation from 

Embry-Riddle and a master’s from the University of Washington. 

He flew with United Airlines. He was a military aviator. I don’t 

think you could have a broader experience. And Gary might not 

agree with this, but I am going to say that in a way, you look at 

his past experience and you wonder how did he end up in Coos 

Bay? And I would say it has to do with the water. It is on the Pacific Ocean. It is a beautiful, beautiful community. I think Gary 

chose to move there when he could have had what would be considered by many, not those of us from Oregon, but others, much more 

prestigious positions in major urban areas around the country, but 

he has chosen to honor us with his work. I really appreciate you 

being here today. 

I do have to say, Mr. Chairman, I have a markup in Homeland 

Security and also a hearing in Resources. I am going to have to absent myself at this time, but I leave it in your able hands. 

Mr. COSTELLO. We trust that our friend from Oregon will protect 

the interests of this committee. 

Mr. DEFAZIO. There are a few aviation issues that we will be discussing in the markup. 

Mr. COSTELLO. We thank you. 

The Chair now recognizes Ms. Brown from Florida to introduce 

a witness from Florida. 

Ms. BROWN. Thank you. I want to thank you again for holding 

this hearing. 

I want to take a moment to introduce Mr. John Clark, one of today’s distinguished panelists, who is from my home town of Jacksonville, Florida. He is a life-long aviation professional and is currently the Executive Director and CEO of the Jacksonville Aviation 

Authority, which includes Jacksonville International, two general 

aviation airports, and a former military airport that is being 

transitioned to civilian use. In 2006, the airport handled over 6 

million passengers and 140 million pounds of air cargo. John is a 

past board member of the American Association of Airport Executives and is currently the Secretary Treasurer of the Airport Council International Board. Prior to his time in Jacksonville, he was 

Detroit Airport Director and held management positions in Sacramento.

John will testify about the tremendous population growth in our 

area and the anticipated need for nearly $500 million in capital 

programs over the next 10 years. This can only be done by reauthorizing and enhancing the Airport Improvement Program and 

providing all our airports with the funding they need to continue 

to serve the flying public in a safe and efficient manner. 

With this, I want to welcome John Clark and the other distinguished panelists to today’s hearing. I am looking forward to hearing your ideas on strengthening the Airport Improvement Program. 

Thank you. 

Mr. COSTELLO. The Chair now recognizes the gentleman from 

Colorado, Mr. Salazar, to introduce a witness who will be actually 

on the third panel. 

Mr. Salazar? 

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Mr. SALAZAR. Thank you, Mr. Costello, and thank you for indulging me. 

It is my honor today to introduce someone who is from Colorado 

and has been with the Colorado Department of Transportation for 

over 15 years. He worked under both the Democratic and Republican Administrations in Colorado. It is my honor today to introduce Travis Vallin who has been the Director of the Colorado Division of Aeronautics for 10 years in the State of Colorado. He is now 

the current Chairman of the National Association of State Aviation 

Officials. Although he is on the third panel, and I apologize Mr. 

Chairman because I have to run off to another committee hearing, 

Travis, welcome. 

Mr. COSTELLO. I thank the gentleman from Colorado. 

Let me announce to everyone that we expect to have four votes 

on the floor of the House right at 12:30. What we intend to do is 

when we get down to about five minutes, we will recess, go to the 

floor, vote and we will come back immediately, which should be 

about approximately 30 minutes from the time that we recess. So 

I will just put you on notice that we will be coming right back. 

The Chair recognizes, and again as you can see, we have eight 

witnesses on this panel. We have your written statements. I can 

tell you that I sat up late last night and early this morning reading 

some of the testimony. So we would ask you to summarize your 

written statement in five minutes or less. 

The Chair recognizes at this time Mr. Bennett. 

TESTIMONY OF JAMES E. BENNETT, PRESIDENT AND CEO, 

METROPOLITAN WASHINGTON AIRPORTS AUTHORITY; THE 

HONORABLE NURIA I. FERNANDEZ, COMMISSIONER OF 

AVIATION, CITY OF CHICAGO; ELAINE ROBERTS, A.A.E., 

PRESIDENT AND CEO, COLUMBUS REGIONAL AIRPORT AUTHORITY; JOHN CLARK, EXECUTIVE DIRECTOR, JACKSONVILLE AVIATION AUTHORITY; FREDERICK J. PICCOLO, 

PRESIDENT AND CHIEF EXECUTIVE OFFICER, SARASOTA 

MANATEE AIRPORT AUTHORITY; KAREN RAMSDELL, AIRPORT DIRECTOR, SANTA BARBARA MUNICIPAL AIRPORT; 

DOUGLAS KIMMEL, AIRPORT MANAGER, WILLIAMSON COUNTY REGIONAL AIRPORT; GARY W. LETELLIER, AIRPORT MANAGER, SOUTHWEST OREGON REGIONAL AIRPORT 

Mr. BENNETT. Chairman Costello, Ranking Member Petri and 

Members of the Aviation Subcommittee, on behalf of the Metropolitan Washington Airports Authority I want to thank you for inviting 

me to testify today. 

I am President and Chief Executive Officer of the Airports Authority, the operators of Ronald Reagan Washington National Airport and Washington Dulles International Airport. In addition, I 

wear a hat today as Chair of the Airport Legislative Alliance Policy 

Roundtable. The ALA is comprised of 119 airports large and small 

located throughout the United States. 

I had the privilege of attending FAA’s annual forecasting conference here in Washington, D.C. just the other day. Among the 

distinguished speakers was FAA Administrator Marion Blakey. In 

the course of her remarks, she reminded the 600 assembled guests 

that Washington Dulles International was going to be one of the 

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fastest growing commercial airports in the United States between 

2006 and 2020, with a projected growth in aircraft operations of 68 

percent, and a 112 percent growth rate in passenger enplanements. 

The Airports Authority utilizes quite effectively the two financing 

mechanisms that are part of the FAA reauthorization legislation 

before the Subcommittee, namely the AIP and PFC programs. Together, these financing tools are important components of our ability to expand and maintain the infrastructure to keep pace with 

the significant growth that Administrator Blakey referred to in her 

remarks.

In that regard, any legislation or proposal that would affect either of these programs is of great interest not just to the Airports 

Authority, but to airports nationwide. The Airports Authority has 

a $7 billion capital construction program planned through 2016. 

The program is funded with $4.7 billion in bonds, $1.7 billion in 

PFCs, and $600 million in AIP grants. 

In the execution of the current program, we are spending roughly $2 million per day on construction and related services at Dulles 

Airport. We agree with the Administration’s recommendation to increase the AIP discretionary fund to $520 million to meet the need 

of letters of intent. 

LOIs are important financing tools for airports. As a matter of fact, in 2006, the Airports Authority received a $200 million letter 

of intent from the FAA to fund the construction of our much-needed fourth runway at Dulles, which we plan to open in October of 

2008. This LOI represents approximately 56 percent of a total 

project cost of $357 million. By having this LOI available, we are 

able to construct this much-needed capacity enhancement to the 

airport in a cost-effective manner. 

Of equal importance to the Airports Authority is the issue of passenger facility charges and the proposal to increase them. Since 

PFCs were authorized by Congress in 1990, they have become the 

second largest source of financing infrastructure at the Airports 

Authority, following only behind bonds. PFCs have not kept pace 

with the rate of construction inflation. Most airports have committed their PFC authority well into the future. For example, at 

Dulles our PFC authority is used through the year 2017. PFCs 

originally authorized airports to collect a maximum of $3 per 

enplanement. This increased to $4.50 in 2001. However, because of 

the inflation and the increased cost of construction, PFCs do not 

have the buying power that Congress authorized. Today, they 

should be increased. 

I support the Administration’s proposal to increase the PFC to a 

level of $7.50 in lieu of $6.00 per enplanement, which has been proposed by the FAA. At the $7.50 rate, the construction buying power 

of the PFC will return to about the same rate as when it was authorized at the $4.50 level in 2001. To further prevent the erosion 

of the buying power of the PFC, we believe that it should be indexed to construction inflation. 

I also would like to, in the interest of time, speak very briefly 

about bonds sold through the capital markets. We believe that 

bonds sold through the capital markets should be classified as public bonds, and not subject to the alternative minimum tax. Because 

most airport bonds are considered private activity, they are subject 

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to the AMT and the penalty of the AMT is between 20 and 30 basis 

points on each of our bond sales, which amounts to about, we have 

over $4 billion in debt. That AMT penalty adds nearly $10 million 

annually to our airline rates and charges at the two airports. 

Chairman Costello, Ranking Member Petri, thank you again for 

inviting me here to testify. 

Mr. COSTELLO. We thank you, Mr. Bennett. 

Commissioner Fernandez? 

Ms. FERNANDEZ. Good afternoon, Chairman Costello, Ranking 

Member Petri, and the honorable and distinguished Members of 

this committee. On behalf of the City of Chicago, its 3 million residents, our two airports, I want to thank you for the opportunity to 

present our views on this very important reauthorization proposal. 

As a large airport hub, we are facing some very significant challenges as it relates to upgrading, and we are not alone. All the 

other large airport hubs are in the same place that we are. What 

we foresee is that in the coming years, it will take billions of dollars to maintain vital infrastructure and billions more to increase 

capacity. If you add the FAA’s need to modernize the air traffic 

control system, you will see that a very robust and dependable 

funding for the air transportation network is an urgent national 

priority.

Airport financing is the key element to meeting the needs of 

growing demand for air travel. The FAA has projected, as has been 

mentioned here, that air traffic will reach 1 billion enplanements 

per year, 300 million additional enplanements by 2015. Moreover, 

FAA’s forecast for O’Hare International is expected to increase in 

traffic from 37 million enplanements that we experienced in 2006, 

to 53 million in 2020. Similarly, Midway International Airport anticipates increase from 8.9 million to 16.3 million. That is a significant increase. 

Without adequate financing for capacity-increasing projects, it 

will be very difficult for our airports to safely and securely accommodate the substantial growth in air traffic. So therefore, the ability of airports to find a reliable source for their capital is going to 

continue to be critical for the future of aviation. 

I want to thank this committee for its support of the O’Hare 

modernization program, which is a prime example of how crucial 

the different funding sources are now and they are being used to 

finance capacity enhancements at airports. Over 35 percent of the 

funding for phase one of the OMP is comprised of AIP grants and 

PFC funding. As we work towards the phase two of this very important program, AIP and PFC will play a significant role in funding the completion of the modernization of our airports. 

First, I would like to discuss the importance of the PFC provision 

in the reauthorization proposal. We believe that the FAA’s decision 

to increase the cap to $6.00 is a step in the right direction, but it 

does not go far enough. We recommend that Congress set the PFC 

cap at $7.50 and index it to inflation, because the effects of the inflation have diminished the power of current PFC levels to adequately finance airport construction projects. 

Additionally, we note that the increasing PFC cap is merely that, 

a ceiling. It does not require airports to adopt the $7.50 PFC, but 

rather it gives airports the flexibility to select the level that best 

784

addresses their needs. Market principles, we believe, and agreements with airlines will determine the level of PFC that their passengers are willing to absorb. 

We appreciate the fact that FAA was receptive to the airport’s 

concerns at the existing PFC application process, which was overly 

bureaucratic and burdensome. Their proposal for new measures 

will help streamline the PFC process and get us the dollars 

quicker.

Second, a balanced capital investment strategy for airports requires a strong AIP program. AIP is important to airports of all 

sizes, and we are encouraged that there was an increase included 

in the AIP discretionary account, and that all existing AIP letter 

of intent commitments will continue to be honored. 

For large airports, a robust AIP discretionary program is critical. 

These funds are being used by airports for very important safety, 

security, expansion programs for capacity, and more important, to 

address some of the environmental needs of our airports, as we 

continue to strike the right balance between the airport and its 

compatibility with the surrounding community. 

I would like to just once again thank the committee for this opportunity to come before you and express our gratitude for all the 

important work that you have done, as we continue as a large hub, 

and all airports in this Nation, to look for funding sources and the 

flexibility that we need to continue to be implementing safety and 

security to the aviation industry. 

Thank you. 

Mr. COSTELLO. We thank you for your testimony, Commissioner 

Fernandez. I would note that the Administrator and I both came 

to Chicago not too long ago and had a briefing on the O’Hare modernization, as well as the proposal to privatize Midway Airport, 

which of course I have expressed some concerns about. But let me 

say that both the Administrator and I were impressed with how 

well the project is going as far as the expansion of O’Hare. 

The Chair recognizes Ms. Roberts at this time. 

Ms. ROBERTS. Thank you, Chairman Costello, Ranking Member 

Petri, and Members of the House Transportation and Infrastructure Subcommittee on Aviation. Thank you for inviting me to participate in this hearing on the Administration’s proposal to reauthorize the Federal Aviation Administration’s Aviation Improvement Program. 

As the CEO for the Columbus Regional Airport Authority, I am 

also wearing a second hat today. I am the Chairperson of the 

American Association of Airport Executives this year. 

Just briefly, we operate three airports, all different sizes, with 

unique roles. Port Columbus is our passenger, commercial airport, 

a medium hub. Rickenbacker is a cargo airport, also jointly used 

with the military. And Bolton Field is a general aviation airport. 

The latter two are relievers to Port Columbus. 

You have heard the forecast for continuing growth in our industry. We have seen similar growth in Columbus over the last few 

years. Not only have we rebounded from the impacts of 9/11, but 

even more significantly, we suffered a 25 percent reduction in all 

of our scheduled departures just in mid 2003 by America West, 

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bounded now from that cutback as well, and have had record passenger growth in four of the last five months. 

Traffic for the first two months of this year is also up over 10 

percent, and projected to continue to climb, largely due to new air 

service being brought to our market. Southwest has also continued 

to grow and became our largest airline last year and grew 18 percent in terms of passenger growth. 

Our cargo traffic has also been up significantly at Rickenbacker. 

We saw a 20 percent increase in cargo tonnage in December, and 

ended the year with over 250 million pounds of cargo, as well as 

over 37 percent more landed weight. Our general aviation airport 

has over 110 based aircraft and has also seen steady growth in 

terms of operations. 

All of this just means that we have an increased demand for continued infrastructure development at our airports. We have a $1.2 

billion capital program for the next 12 years in Columbus for our 

airports. Due to rising construction costs and the rate of inflation, 

we also are not convinced that the current resources we have are 

adequate to cover this program. We ask your help in helping secure 

more resources to accommodate that increasing demand as costs 

are also rising. 

I also appreciate the fact that the Administration has proposed 

to increase PFCs to $6.00, but would urge you to consider increasing it further to the $7.50 rate that you have heard a lot about this 

morning. Also, by increasing AIP funding to at least $3.8 billion for 

fiscal year 2008, we think those two primary funding sources will 

help airports of all sizes. Although we are a medium hub airport 

in terms of Port Columbus, and we are not totally reliant on the 

AIP funding, we are still looking to receive over $110 million of AIP 

funds for a proposed new runway that is currently in the EIS process. We are looking to have about one-fourth of that runway project 

covered by PFCs and the remainder we would have to go out and 

issue new debt and pass on the cost to the airlines. 

AIP funds are also critical for us at Rickenbacker in particular. 

It is in the Military Airport Program and has significant capital 

needs, including $15 million to rehabilitate one of our 12,000 foot 

runways. The airport is not self-sufficient yet, due largely to the 

large investment required in infrastructure. 

One-fourth of our entire capital program for the next 10 years is 

projected to be paid for with PFCs. So a $7.50 PFC is really important to our long-range requirements. It would generate about $10 

million per year right now at our current level of enplanements, 

which is around 3.4 million enplanements per year. 

We have used PFCs, like many airports, largely for airside capacity projects, extending runways, airfield improvements, as well as 

about 10 years ago, adding some gates to our terminal for needed 

capacity.

In summary, although over half of our capital program will be 

paid for with airport-generated funds like parking revenues and 

concession fees and issuing new airport revenue bonds, AIP funding and PFCs are essential for us to be able to operate all three 

of our airports and keep up with the growing demand for infrastructure.

786

I thank you again for the opportunity to be here today. I hope 

you will continue to provide airports of all sizes in this Country 

with the tools that we need to be able to keep up with the increasing demand and to help offset the rising cost of construction. 

Thank you very much. 

Mr. COSTELLO. We thank you, Ms. Roberts. 

The Chair now recognizes Mr. Clark. 

Mr. CLARK. Thank you, Mr. Chairman and Congressman Petri 

and Members of the committee. 

I represent Jacksonville Aviation Authority. It is a system that 

has four airports, the primary airport being Jacksonville International Airport, which we saw 6 million passengers in 2006. 

Since you have the written testimony, I would just like to take 

the opportunity to emphasize three points in my written testimony. 

That is in support of the increase of the passenger facility charge 

from $4.50 to $7.50. This has become very important to the Jacksonville Aviation Authority as we are faced, like other airports, 

with many capital demands. But the PFC allows a greater level of 

flexibility in being able to respond more timely than any other 

mechanism that we have at this point. So we highly encourage an 

increase of the PFC to $7.50 and more flexibility with that funding 

mechanism.

Also, we would like to speak to the military assistance program. 

Having been in a community that was part of the BRAC process 

and bringing on an airport into our system that actually adds considerable capacity, the military assistance program has provided a 

level of funding which otherwise we would not have been able to 

move forward on the development of Cecil Field. 

To this day, Cecil Field is now in consideration for a commercial 

space port. It provides activity and capacity for air cargo, as well 

as maintenance and repair and overhaul. So we would like to extend and encourage this committee to consider the continuation of 

the military assistance program. 

Additionally, we rely on AIP funding and would encourage that 

the committee would consider levels that are at least of current authorization levels. To decrease it would only hurt our system and 

our ability to meet the capital needs of the airport system. 

Our final point, in trying to recognize the continuous demands on 

the need and infrastructure at the airports, we, too, are looking at 

the possibilities of privatization, and therefore would encourage in 

the Administration’s proposal increasing the number of privatization opportunities. As we try to address in an innovative way the 

way we will provide funding and grow the system in Jacksonville, 

we have begun to look at the alternatives. One of those alternatives 

is airport privatization. 

Having spent several years now looking at the models, both in 

Europe and Australia and in Canada, we believe that there is opportunity here in the United States to consider airport privatization as the community continues to grow. Jacksonville happens to 

be one of the fastest growing communities in the Southeast, and 

therefore we are trying to determine what are the best ways that 

we can continue to fund our capital programs and meet the growing needs of our region. 

787

Mr. Chairman and Members of the Committee, I will end my remarks there. 

Thank you. 

Mr. COSTELLO. Mr. Clark, thank you. I am pleased to hear that 

the Military Airport Program has worked for you. It was my first 

year in Congress and first year on this committee and Subcommittee that Congressman Henry Nowak and I offered the 

amendment that created the Military Airport Program. So we are 

pleased that it has worked for you. 

The Chair now recognizes Mr. Piccolo. 

Mr. PICCOLO. Chairman Costello, Ranking Member Petri and 

Members of the committee, thank you for the opportunity to appear 

and speak to the issue of AIP. 

I would also like to thank Mr. Buchanan for your kind introduction.

I appear today wearing two hats, first as Chairman of Airports 

Council International-North America. Our member airports enplane over 95 percent of the domestic and virtually all the international airline passengers and cargo traffic in North America. I 

also wear my hat as President and Chief Executive Officer of the 

Sarasota Bradenton International Airport, a small hub facility on 

the west coast of Florida. 

This year is critical for aviation in the United States. The expiration of the Federal Aviation Administration’s programs, taxes and 

fees provides an historic opportunity to make needed changes that 

enhance and strengthen our national air transportation system for 

decades to come. 

Main Street and downtown were the centers of commerce and 

economic growth prior to the construction of our Interstate Highway System. When the Federal highway system linked our Country 

from coast to coast, economic expansion ensued that created a large 

middle class with increased educational and economic opportunity 

for millions of Americans. 

Airline deregulation and the creation of the computer have made 

the term ‘‘global economy’’ a part of our lexicon. The key component 

of our Country’s ability to compete successfully in this global economy has been a robust and expanding aviation platform, not just 

from the major hubs like Atlanta, Chicago, New York and Los Angeles, but from smaller facilities that have made global markets accessible and cost-effective, places like Louisville, Kentucky; Greenville-Spartanburg; and Flint, Michigan, which are located near 

major automobile manufacturing facilities; or Rochester, Minnesota, home of the world’s renowned Mayo Clinic; or wonderful 

tourism destinations like Palm Springs, California or Sarasota, 

Florida. These facilities provide critical access for our citizens and 

visitors.

The FAA has taken some innovative first steps in their proposal 

and they are to be applauded for their effort. With that said, there 

are some areas of concern for smaller airports. The AIP funding 

source must be stable and predictable. We are concerned that dedicating just international arrival and departure taxes, along with 

some portion of gasoline taxes and general fund contributions, will 

lead to a very unstable funding source for AIP. 

788

Small and non-hub airports are much more dependent on this 

program for their capital funding needs. It would seem fair and 

prudent that whatever tax and fee program is devised should be 

used to fund all facets of the aviation system, rather than reserving 

specific parts of each program. This cross-financing of the system 

ensures that during difficult times, all sections must sacrifice 

equally. The Passenger Facility Charge ceiling should be raised to $7.50 

and the application process must be streamlined and eligibility 

rules aligned with airport needs. The PFC program is a way for 

local communities to make direct decisions on how to build infrastructure and compete in the global marketplace. This increase in 

the flexibility for its use as the local governing body deems appropriate is a critical element in the future of our Nation’s airports. 

The Small Community Air Service Development Program should 

be preserved, not eliminated, as proposed by the Administration. 

Sarasota Bradenton International Airport is a shining example of 

the success of the program. Before receiving that grant, the airport 

had lost 50 percent of its passenger traffic and was bleeding 1.6 

million passengers annually to Tampa International. In 2005, SRQ 

received a grant of $1.5 million that was used to attract a low-cost 

carrier, AirTran Airways, which started with three daily flights to 

two cities. In 2006, AirTran carried almost 400,000 passengers and 

provided nine daily departures to five nonstop destinations during 

peak season, and five daily departures to three nonstop destinations off season. 

SRQ has been one of the fastest growing airports in the Nation 

since that time, and the economic health of the airport and the 

community has been helped many times over by this investment. 

Not only did this result in increased ridership, but the introduction 

of low-cost service injected competitive pricing into the community. 

We all know that airlines have been pushing their prices higher 

in an effort to become profitable. At SRQ, the average fare increase 

from 2004 to 2006 is 15.5 percent. However, in markets where 

AirTran was introduced, fares have risen less than 1 percent over 

those two years. This has resulted in a saving of $17 million for 

our local consumers. In addition, the additional 400,000 passengers 

have additional economic impact on the community. 

Finally, small airports are feeders to larger facilities. They help 

feed the hubs and provide efficiency. If small airports fail or cannot 

remain competitive, those passengers must drive to larger facilities. 

In 2000, the Airport commissioned an environmental study that 

measured the effects of that bleed of 1.6 million passengers annually. It resulted in the following environmental impacts. 

There were 224 million miles of additional road travel; 11.2 million additional gallons of fuel were consumed; and the added carbon dioxide in the air was 1.28 billion grams. There were 203 million additional grams of nitrous oxide, and 2.24 million additional 

grams of particle matter. As you can see, these figures cover only 

one small airport. The support of the Nation’s small and non-hub 

airports is not only good economic policy, but it is good environmental policy. 

On behalf of all our members, and small airports in particular, 

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ward to working with you to strengthen our national aviation system.

Thank you, Mr. Chairman. 

Mr. COSTELLO. Thank you, Mr. Piccolo. 

Ms. Ramsdell? 

Ms. RAMSDELL. Chairman Costello, Ranking Member Petri, and 

Members of the House Transportation Infrastructure Subcommittee 

on Aviation, I thank you for inviting me to participate in this hearing today. 

Santa Barbara Municipal Airport is a small hub airport on the 

coast of California. Last year, the airport had over 400,000 

enplanements and ranked in the top quarter of non-primary and 

primary commercial service airports in terms of enplanements. 

The FAA terminal area forecast projects a 45 percent increase in 

Santa Barbara enplanements by the year 2020. In 2002, Santa 

Barbara completed its master plan after many years of environmental hurdles. The plan proposed some priority projects for our 

airfield. Two of the projects addressed runway incursions, and a 

project to extend the safety areas at each end of our main runway 

to meet current FAA standards. 

The plan proposed also a 67,000 square foot airline terminal 

project to meet current and future demand. Our ACIP for 2008 to 

2012 totals $61 million. That is in contrast to the $71 million in 

entitlement and discretionary money that the airport received over 

the last 20 years. The airfield safety projects totaled $35 million. They will be com- pleted this year, with our $15 million fiscal year 2007 AIP request. 

Funding for these projects included four years of the airport’s entitlement plus discretionary funding. PFCs provided the local AIP 

match.

The terminal project will be funded with AIP grants and debt financing, and I might add, our first debt in the airport’s history, 

and using PFCs to back debt service. Due to increasing construction costs, our project square footage and other features of the 

project have been cut and cut and cut. It has been 30 years since 

the last expansion of the terminal, and passenger use has grown 

over 100 percent. 

AIP grants and PFCs are the financial resources that Santa Barbara depends on for the critical capital development projects. I urge 

you to increase the PFC cap from $4.50 to $7.50. With PFC revenues at Santa Barbara growing at about 3 percent per year, but 

construction costs in Santa Barbara growing at about 6 percent per 

year, you can see that our purchasing power has eroded every single year that we go forward. 

At Santa Barbara, the additional PFC revenues above what we 

need for debt service would be used to fund other eligible features 

of our terminal project that have been cut, and also fund the AIP 

match for airfield safety and infrastructure projects. 

I urge you to increase the AIP funding levels, even one year with 

a 35 percent cut as currently proposed can impact a small airport’s 

ability to construct a project, and will impact our terminal project. 

If levels are increased, Santa Barbara could fund eligible portions 

of the terminal project for which there are not sufficient AIP dollars under current levels, and additional AIP funds would also be 

790

used to complete airfield safety and infrastructure projects that we 

have had to plan for at least five years away due to lack of available funding. 

I urge you to maintain the 95 percent Federal AIP share for 

smaller airports. For many small airports which have large projects 

such as our airfield safety projects, coming up with a 5 percent 

match is difficult, let alone a 10 percent match. For that project, 

we got a substantial amount of discretionary funding, but it doesn’t 

help if you can’t come up with the local share. 

Santa Barbara’s air passenger traffic has fully recovered from 

September 11, yet the security impacts to our terminal taking up 

more space has increased as our passenger demand has also increased. AIR-21’s enactment increased AIP funding levels, increased PFC cap, and then the increase in the Federal AIP share 

after 9/11, combined to make it possible for Santa Barbara to construct over $35 million in airfield safety projects over the course of 

four years. 

Today, increasing the AIP funding levels, increasing the PFC 

cap, and maintaining the Federal AIP match, combined will make 

it possible now for Santa Barbara to construct its air terminal 

project to meet passenger growth, and have funding for future capital priorities. 

Chairman Costello, Ranking Member Petri, and Members of the 

Aviation Subcommittee, I want to thank you for inviting me to appear before you today and to represent the small airports perspective. I urge you to continue to assist airports of all sizes to keep 

pace with the increasing passenger demand and skyrocketing construction costs by raising the PFC cap and increasing AIP funding. 

These actions will have an impact on Santa Barbara Airport by 

improving safety and increasing air terminal capacity to meet 

growing passenger demand. 

Thank you. 

Mr. COSTELLO. We thank you for your testimony. 

Let me announce that we have four votes on the floor. We have 

six minutes to get over to the Capitol to vote. We are going to recess at this time. I would expect that we will come back immediately after the last vote, which I would guess will be somewhere 

in about 20 to 25 minutes. So we will recess until then. 

[Recess.]

Mr. COSTELLO. The Subcommittee will come to order. 

Mr. Kimmel? 

Mr. KIMMEL. Thank you, Mr. Chairman, Representative Petri 

and Members of the Aviation Subcommittee, I am honored to be 

here today to discuss the AIP program and its significance to 

Williamson County Regional Airport, a non-hub primary commercial service airport located in Southern Illinois. 

Though the services and benefits our airport provides to the surrounding region are significant, so too is the reality of the financial 

challenges we face. In any given year, airport revenue struggles to 

cover the cost of operating and maintaining the facility. So as we 

have heard here earlier today, capital improvement projects at 

smaller airports, particularly such as ours, can only be accomplished with funding through AIP. 

791

In recent years, we have relied on AIP to extend our primary 

runway, acquire land, remove obstructions, rehabilitate and expand 

aircraft parking areas and taxiways, and acquire aircraft rescue 

and firefighting equipment. Over the next five years alone, we have 

identified project needs requiring over $6.6 million in AIP funding. 

Mr. Chairman, I ask that the Aviation Subcommittee account for 

the capital development needs of our Nation’s airports by supporting AIP funding levels in the amount of $3.84 billion and $4.2 

billion for fiscal years 2008, 2009 and 2010 respectively, while setting forth a minimum level of 25 percent as the general fund contribution throughout this period. 

Also important for smaller airports, as has been discussed this 

morning, will be retaining the Federal matching fund amount of 95 

percent. A $500,000 airport improvement project, as an example, 

that has a local matching share that increases from $25,000 to 

$50,000 is truly significant to smaller organizations, and in many 

cases could prevent smaller airports from moving forward in a 

timely manner with planned and necessary improvements. 

Regarding the small airport setaside fund, there certainly has 

been discussion this morning indications that this will result in reduced funding for smaller airports. So I would certainly ask that 

we exercise caution with considering any formula change that has 

that potential across the board. Though we are not a general aviation airport, I would offer that any future formula based upon a 

tiered level of funding for airports, the only way that that could 

have any viability would be if that lowest tier still is afforded entitlement funding under AIP. 

I would like to voice support of an increase in the PFC cap up 

to $7.50. Though paling in comparison to the amount of money that 

this generates at larger airports, this increased funding capability 

is significant, too, for smaller airports that also must be creative 

in financing airport improvements. 

Now, alongside AIP, two other programs that are of particular 

concern to smaller airports during this reauthorization proposal 

and period are the Essential Air Service Program and the Federal 

Contract Tower Program. Connecting small communities to the national air transportation system is both fundamental for local economic vitality and is in the national interest. This was stated by 

the GAO in its reference to the Essential Air Service Program. Unfortunately, once again the current proposal would result in over 

70 communities being dropped from the program, including 

Williamson County Regional Airport. This discontinuation of air 

service that would result for communities across the Country would 

be an unprecedented tragedy in Federal aviation policy. 

The Contract Tower Program is a vital safety and economic asset 

to smaller airports as well. At our airport, the mix of student pilot 

training from nearby Southern Illinois University’s program, and 

our own air carrier operations, makes the ability to maintain these 

air traffic control services essential to safe operations. In the short 

term, our airport will likely depend upon the cost sharing provisions of this program in order to maintain these services. So I 

would like to make particular mention of the need to authorize $8.5 

million for the cost-sharing program in fiscal year 2008. 

792

Finally, Mr. Chairman, I would like to voice my opposition to the 

proposed increases in general aviation fuel taxes and user fees. 

General aviation is a very broad term and it consists of numerous 

small operators and private aircraft owners far less capable of absorbing an increase in costs. If such a proposal were to be implemented, then that effect would be fewer operators providing fewer 

operations at smaller airports across the Country, and fewer services to the public. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. We thank you, Mr. Kimmel. 

The Chair recognizes Mr. LeTellier for five minutes. 

Mr. LETELLIER. Chairman Costello, Ranking Member Petri, and 

Members of the Subcommittee, thank you again for my invitation 

to be here today. I am testifying on behalf of the Coos County Airport District, who is the owner and operator of the Southwest Oregon Regional Airport, a non-hub commercial service airport on the 

coast of Oregon. 

As a small hub commercial service airport, our planning and capital needs for development and renewal and replacement of aging 

infrastructure are met almost exclusively from the AIP and passenger facility charge programs. I would like to just hit a couple 

of highlights of my written testimony to you now. 

The first is the increase in AIP funding. The Administration’s re- quest for $2.75 billion of AIP in the next fiscal year is about $1 billion less than what the Congress has authorized for this current 

year. The proposal would reduce the total entitlements for non-hub 

airports from $307 million to $269 million, a $38 million reduction 

year over year. 

It also appears as if the Administration’s proposal to replace the 

small airport fund with a small airport discretionary fund could 

also cost small airports. 

We, like our colleagues, urge you to increase AIP funding so the 

program can at least keep pace with increasing construction costs, 

and ask you specifically that you protect small communities like 

ours from penalties being imposed through the formula changes for 

the distribution of the AIP funding. 

We also are concerned over the Administration’s proposed reduction of the Federal share for AIP projects. AIP funding actually accounted for 94 percent of all capital expenditures for non-hub airports in fiscal year 2003. This proposal would decrease the eligible 

share for a qualified AIP project at smaller non-hub airports to 90 

percent. In our case, PFCs are used for the actual match, and our 

ability to collect is very small. So a 5 percent increase in matching 

fund requirements for us would prevent us from moving forward 

with many of our planned construction projects. 

We would also like to see the PFC cap increased. You have heard 

that at $3.00 PFC in 1990 is worth only $1.73 today; and a $4.50 

PFC is worth $2.86 over 2000. The American Association of Airport 

Executives’ analysis projects that a $4.50 PFC in the year 2000, adjusted for inflation and increases for construction costs, would need 

to be $7.20 this year. The Administration’s proposal to raise the 

cap on PFCs to $6.00 is not enough to overcome the effects of inflation and increasing construction costs. We therefore join our other 

colleagues in asking you to raise the PFC to $7.50. 

793

We believe that it is important to ensure that there is a stable 

source of funding to pay for the airport improvement program and 

we are concerned about the Administration’s proposal to increase 

general aviation fuel taxes. 

Fourth, I wanted to talk just a moment about continuing the 

Small Community Air Service Development Program. Small and 

rural communities with non-hub airports like ours have struggled 

since deregulation. There is a very deliberate trend toward fewer 

flights by incumbent airlines to these communities, even though 

overall passenger levels are continuing to increase across the Country. Congress and the Administration should work together to ensure that these small and rural communities can continue to have 

access to our national aviation system. It is disappointing that the 

Administration’s proposal does not include funding for this vital 

program. We urge you to reauthorize this program up to $50 million for the Small Community Air Service Development Program. 

Mr. Chairman, that concludes my remarks. I would just like to 

say that you have heard remarkable unanimity here today from the 

industry about the Administration’s proposed legislation. 

Thank you very much. 

Mr. COSTELLO. Thank you very much. 

We thank each of our witnesses on this panel. A few brief questions, if I can. 

Mr. Bennett, I am pleased that you touched on the bonds, so you 

have covered that question for me. But in your written testimony 

you indicate that you would suggest that when the FAA is denying 

a grant to the PFC authority to a project that you would like them 

to give 30 days notice. Can you explain the reason for that? 

Mr. BENNETT. Yes, sir, Mr. Chairman. Thank you for that question. The effort there is to make sure that there is no retroactive 

reversal under this scenario, a retroactive reversal of a PFC that 

might otherwise have moved forward without the opportunity to 

discuss that with the FAA. The concept is not in the manner in 

which PFCs are currently approved. 

It would be in a more streamlined manner and it would be very 

difficult for airports following that streamlined approach to have 

the FAA have the ability to just at some point down that process 

just cut them off. We would like some kid of 30 day notice period 

so that we could say, wait a minute, let’s talk about this; just don’t 

completely cut this PFC off today. Give us an opportunity to review 

and comment and try to change your mind before you disapprove 

that.

Mr. COSTELLO. Thank you. 

Commissioner Fernandez, speaking of streamlining the PFC 

process, you indicate in your testimony that the process is overly 

bureaucratic and burdensome. I wonder if you might explain some 

of the problems that you have personally experienced with the bureaucratic process. 

Ms. FERNANDEZ. Thank you very much, Mr. Chairman, for that 

very important question. As you know, we have been moving forward with our air modernization program, and one of the challenges we face is that a significant portion of that capital program 

is reliant on PFCs. We have had the good fortune to work very 

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tion as it relates to ensuring that the various elements contained 

within the application meet their satisfaction. 

But we are also on a time table where the cost of the project is 

going to continue to increase if decisions are not made in a timely 

fashion. So as we go back and forth with the Federal Aviation Administration to resolve the issues contained in the application, we 

would urge them to expedite that application so that we can in the 

near future submit future applications to be able to continue, keep 

our project within the time line that have established, and avoid 

any increases in construction costs and labor by deferring the construction bids waiting for these funds to be available. 

Mr. COSTELLO. Mr. Clark, you indicated that the PFC funding is 

too restrictive. I wonder, are there any projects in Jacksonville at 

the Aviation Authority that have not been completed because of the 

restrictions? In other words, if the restrictions were removed, what 

projects would you endeavor to undertake? 

Mr. CLARK. Thank you, Mr. Chairman. The recent example of the 

restrictiveness of the PFC is, we needed to buy some additional 

land for a proposed future runway. And although land is eligible, 

the criteria is that you have to be at at least 65 percent of capacity 

of your existing runway. 

The problem that we ran into is immediately adjacent to the airport there is a development that is occurring that will bring some 

15,000 homes right on the fringe of the airport. Our position was 

we needed to buy the land to protect that next parallel runway system. Trying to work through the process with the FAA, we were 

going to have to buy the land whether we got PFC funding or not. 

We just needed to do that to protect the future interest of the airport.

So in that manner, sometimes even though there is flexibility 

with PFC, it can be very difficult to accomplish what the airport 

needs in a more timely manner. It was looking at the fact that this 

development was about to occur and is occurring and we would not 

have had the ability to protect the interests of the airport on a 

long-term basis. 

Mr. COSTELLO. Thank you. 

Mr. Piccolo, you indicate that you believe, I think you say a proper and equitable level of support should come from the Federal 

Treasury, from the general fund. 

Mr. PICCOLO. Yes. 

Mr. COSTELLO. I wonder, what do you consider proper and equitable, the percentage, for instance? 

Mr. PICCOLO. The historical average has been, in prior years, the 

25 percent range. So we think that somewhere in that area is a 

good percentage. There is a great deal of benefit for the entire 

Country, both from a defense standpoint and from an economic 

standpoint. Having a quarter of those revenues coming from the 

general fund seemed to be something that for a long time the Congress traditionally did, as it was before. 

Mr. COSTELLO. Just as a side note, I am in total agreement with 

you. For those who I think have a tendency, some of our friends 

at the FAA, to shift costs and to reduce the contribution from the 

general fund, I think we ought to be trending in the opposite direction. Those who never use the system benefit, the Country benefits 

795

as a whole. As a result, there ought to be a robust contribution 

from the general fund. Mr. Kimmel, you describe in your testimony $6.6 million in AIP 

funding for your airport in anticipated needs over the next five 

years. I wonder, what type of projects, quickly, are you planning, 

and what would be the result if the AIP funds were not available? 

Mr. KIMMEL. First and foremost, one is actually required by 

FAA, due to our certification as a commercial service airport, a 

runway safety area issue of having to relocate the end of our northsouth runway to accommodate the higher standards. Obstruction 

and removal, more land acquisition, pavement projects, runway 

overlay, ramp expansion. 

And this doesn’t even taken into account what I foresee us coming up with in the next five years, particularly at our airport, 

which is the need for a new airline terminal. You have been to our 

airport on many occasions, and unfortunately we are in a facility 

that we have talked about capacity constraints. They are not always airside. And in our case, in particular, even a smaller regional airport, we have a 1972 facility that was designed with utter 

disregard for the functions of what we need it to accommodate. We 

have grown out of that facility right now and so, we are this year 

putting some AIP money into a planning study for a new terminal, 

new terminal development, looking at options on expanding on to 

the existing but most likely replacing the existing. So the $6.6 million figure that I used earlier doesn’t even take 

into account the probable need for a new airline terminal. 

Mr. COSTELLO. I thank you. 

The Chair recognizes at this time the Ranking Member of the 

Subcommittee, Mr. Petri. 

Mr. PETRI. I have a kind of general question for any or all of the 

panel members to comment on, and that is, really your attitude 

and the role of airports, your attitude toward and the role, if any, 

of airports in the NextGen effort or the FAA’s effort and plan to 

roll out more modern and satellite and transponder-based air traffic control as opposed to the old radar-based system. Do you have 

any comments or concerns about that as it affects airports? 

Mr. BENNETT. Just speaking from our perspective, our concern is 

we need it soon. And we need to make sure that there is a method 

to fund it and get it in place. Because every estimation of our system suggests that demand is going to far exceed the capacity of the 

existing system. We need NextGen and we are very hopeful that 

it moves forward with dispatch. 

Ms. FERNANDEZ. I would echo that sentiment. One of the concerns that I have as a large hub is the fact that the forecast for 

the increase in operations is just eight years away. If we are talking about 300 million more operations in the air space and we are 

still using technology that dates back 20 years, that is a pretty 

frightening scenario. So clearly, the sooner this new technology can 

be rolled out, the better. As we are looking to more technology to 

supplement the manpower that is overseeing that technology, I 

think it is necessary that the Next Generation be implemented expeditiously.

Mr. CLARK. I would echo my concerns and just say that when you 

look at the fact that you can get in your car and go on GPS and 

796

know exactly where you are and where you are moving to, it would 

seem that it is something that we would also have with aviation, 

which is much more technologically-involved. 

Mr. KIMMEL. I would offer that the technology is needed. But the 

existing funding mechanisms, based upon the Aviation Trust Fund, 

need to be utilized to fund it. The proposal with user fees and increases in taxes would kill smaller airports. I have 50 based aircraft that I can guarantee you would stop flying if they had to pay 

any more than what they already do. And we don’t have a control 

tower, and we have less revenue and have to come back and ask 

for me from the Federal Government. 

Mr. COSTELLO. I thank the gentleman. 

The Chair recognizes at this time Mr. Moran. 

Mr. MORAN. Mr. Chairman, thank you very much. I am pleased 

to join you here today and just generally like to get caught up. I 

missed the testimony, although I have had the opportunity to at 

least read the summaries of your testimony today. The AIP program is a very important one across the Country but clearly in 

States like Kansas, where we are so rural and the sources of revenue so limited. I appreciate the comments earlier that I heard 

about the importance of contract tower program, the essential air 

service program. Those are ones that matter significantly to communities I represent. 

But I wanted to give you the opportunity, I am dismayed, can’t 

imagine that anyone could reach the conclusion that Federal funding of AIP can be anything but increased. The suggestion that it 

would be reduced just absolutely makes no sense to me. And I 

wanted to give you the opportunity to put on the record the kinds 

of consequences you would see if the idea of AIP funding was reduced as proposed by the Administration, and give you the chance 

to point out any of the increased costs, the cost structure that you 

are facing in projects that you are contemplating at your airports. 

Ms. ROBERTS. I would be happy to start. We have three airports, 

all of different sizes, a commercial passenger airport, a cargo airport and a general aviation. All three depend pretty heavily on AIP 

funding. We have a big project at Port Columbus, our medium hub 

commercial airport for about a $150 million replacement runway 

that we are in the middle of an EIS and in conversations with the 

FAA. We are optimistic that we would get about 50 percent of that 

from AIP and multi-year letter of intent. 

The Rickenbacker, our cargo airport, has been heavily dependent 

on AIP and partially through the military assistance program. We 

have large needs there, having inherited a facility that was formerly exclusively military use, two long runways, a lot of pavement. And we are using every dime we can get from the AIP program as well as using local dollars. 

So all three of our airports would be sorely hurt if we were not 

able to get AIP. It covers about 10 percent of our projected $1 billion capital program for our three airports in Columbus. 

Mr. MORAN. Any comments about increasing costs? My impression would be that you are facing a cost structure, increasing construction costs. 

Ms. ROBERTS. Absolutely. We have seen construction costs rising 

in the project right now that we are jointly funding with the State 

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department of transportation. We have seen the cost rise from a 

$40 million estimate to about $55 million. Because of Federal highway limitations, our State DOT is telling us we are going to have 

to fund the shortfall, which is almost $15 million. Not that that is 

an AIP project, but those are costs that then come out of other 

funding sources, or we issue new debt which ends up raising the 

costs to the airlines ultimately and makes it harder for medium 

and smaller airports to attract good air service for their communities.

Mr. MORAN. Thank you. 

Mr. PICCOLO. Congressman, also on the construction cost index 

issue, not only has it gone up about 25 percent and eroded the effectiveness of AIP, but also for some places in Florida we have seen 

construction cost rises of about 50 percent. It really pushes a lot 

of projects right off the table. So a cut in AIP on top of the inflationary pressures that are in the construction cost index would 

have a very significant impact I think on airports across the Country, particularly in areas where that construction cost index is 

growing even faster. We have seen that go up some due to the hurricane issues that we have had the last couple of years in the 

southeast. There is so much work to do that there is such a demand for materials that it affects the public projects as well as the 

private projects. 

Ms. FERNANDEZ. Just to quickly punctuate on the significance of 

the AIP program, we at O’Hare, for instance, we look at the AIP 

as one component of our funding sources. We put together a five 

year capital improvement program, and that include sa portion of 

AIP that we feel will be necessary. FPCS have always been a supplement to the AIP. We can’t have a diminish in one and not an 

increase in the other. They really need to go hand in hand. That 

is how we have built not only our five year CIP, but we also, as 

part of our O’Hare modernization program, which is a $2.8 billion 

program, 12 percent of that program is intended to be financed 

through the AIP. So it is very important to us not only that it remains robust, but that it remains a dependable, sustainable funding source. 

Mr. BENNETT. I would echo those concerns from the large airport. 

With large programs such as we have here in Washington, approaching about $7 billion, you have to have all sources of funding 

brought to bear in order to execute that project, so that you can 

keep your facility in a competitive manner with respect to the fees 

that you have to charge for the use of your facilities. And AIP is 

important even at a large airport in Washington. At Washington 

Dulles we are in the process as we speak of constructing a fourth 

runway that is being funded with, 56 percent of the resources for 

that project are coming from the AIP program through a multi-year 

letter of intent of about $200 million. So it is very important to 

those kind of capacity projects. 

Mr. RAMSDELL. Congressman, at Santa Barbara Airport, a small 

hub, any cut in AIP, combined with the increased construction 

costs, will cause us to cut back or need to cut back more on our 

terminal project, which is already pretty much cut to the bone. 

More AIP would also help reduce the debt that we will need to 

incur which in turn will help reduce costs to the airlines it services. 

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Mr. KIMMEL. Just briefly, Congressman, I had touched on the importance of maintaining in AIP the 95 percent Federal share. 

Though Vision 100 had put that in place on a temporary basis, I 

would contend that that higher share should have been in place 

long before. Smaller airports, whether it is as a result of September 

11th or other factors, have and continue to struggle in recent years. 

Costs of construction, as you have been hearing, and other significant factors. 

In our portion of Illinois, our electric rates have gone up 40 percent in the last few months. I have a bill on my desk, our airline 

terminal went from $1,500 to $3,800. Our matching local fund, 

based upon our $1 million entitlement right now at 95 percent, of 

course, is $50,000. Going up to $100,000, we would be looking for 

areas to cut in order to do, plan any necessary AIP projects. 

Mr. LETELLIER. Congressman, I would just like to echo my colleagues’ comments. At the Southwest Oregon Regional Airport, our 

only access to capital funds are AIP and PFCs. So our revenue 

streams are not sufficient to access commercial debt markets. So 

without a PFC and AIP program, our capital program would come 

to as screeching halt. Needless to say, if you decrease it from our 

current allocations, it certainly is not going to help us any. 

Mr. COSTELLO. I thank the gentleman from Kansas, and I thank 

all of our witnesses for being here today and we thank you for your 

testimony. I am sure that we will be speaking with and working 

with you as we go through the reauthorization process. Thank you 

very much. 

We would now invite the third and final panel to come forward. 

I will do introductions as you are moving forward. Mr. Travis 

Vallin has been introduced by our colleague form Colorado, Mr. 

Salazar, but he is the Director of the Division of Aeronautics for 

the Colorado Department of Transportation. The Honorable James 

Healy, County Board Member from DuPage County, Illinois; and 

Mr. Robert Bogan, who is the Deputy Director of the Morristown 

Municipal Airport. 

So we would ask the three of you to come forward, if you would, 

and take your seat. 

Mr. PETRI. Mr. Chairman, I wonder if I could ask unanimous 

consent to introduce a statement by our colleague, Rodney Frelinghuysen, who is very interested in and wanted to express his support for the Morristown Municipal Airport. 

Mr. COSTELLO. Without objection, it will be a part of the record. 

The Chair recognizes Mr. Vallin at this time. 

Mr. VALLIN. Good afternoon, Chairman Costello, Mr. Petri and 

Members of the Subcommittee. On behalf of the National Association of State Aviation Officials, NASAO, I thank you for this opportunity to share with you our thoughts. 

My name is Travis Vallin, and I am the Aeronautics Director 

with the Colorado Department of Transportation. But today I speak 

to you on behalf of the men and women in State aviation agencies 

in all 50 States, Guam and Puerto Rico. We are a little bit unique 

from the testimony that you have heard today in that we represent 

aviation in all our collective States. 

Airports, pilots, general aviation, commercial and airlines all fall 

underneath the category of customers. As I have said many times 

799

to Congressman Salazar, I am the State Aeronautics Director, and 

we represent what is in the public’s best interest. I am proud to 

say that NASAO’s testimony today is based on that same simple 

principle: what is in the public’s best interest. 

I will provide to you my testimony in three general categories. 

First, what we like; second, what we have concerns over; and third, 

things that we just can’t support. 

First of all, what we like. The States fully support and encourage 

the modernization of the air traffic control system. NASAO members have been part of this transformation for years, whether it be 

the Wide Area Multilateration System funded by the State of Colorado or all the Atlantic Coast States putting in State-sponsored 

ADS-B ground stations. What we think is right about this proposal 

is that FAA agrees with us and the Administration is supporting 

ADS-B funding from the airport improvement program. 

We also like the idea of the proposed hard floor for the $300 million for the State apportionment funding, as this is one of the most 

valuable investment categories to State aviation agencies in meeting the demands of the general aviation airports. NASAO also believes that Congress is going in the right direction with the PFC. 

Like our partners at ACI and AAAE, we agree that PFCs must be 

raised to $7.50 to meet the needs. 

Next, some of the issues that we area little concerned about. 

There has been a lot of testimony today about the non-primary entitlement program. As you know, the proposed system would put 

airports into four different categories, resulting in net losses to 

many States. At this point, NASAO cannot support the four-tiered 

proposed system, but the good news is, we are actively working 

with the FAA headquarters airports office to find a workable solution that is a win-win for all of us. 

Now the issues that we just can’t support and think are not in 

the public’s best interest. First of all, the proposed AIP level of 

$2.75 billion. That level simply will not meet the needs of the aviation community, both large and small, and it will not allow us to 

continue to be successful. NASAO recommends authorizing AIP at 

$3.8 billion in 2008. 

The essential air service program, which as many of you know 

is a lifeline to small and rural communities. The Administration’s 

proposal would eliminate more than 60 communities and slash the 

budget to $50 million. NASAO recommends and supports that Congress continue the EAS program and fund it at a minimum of $127 

million. NASAO does not believe that the current funding structure, which has created the largest, safest and most efficient air 

transportation system in the world, is broken. The change to a 

radically different user fee system that would actually collect less 

user fees than what we enjoy today is most certainly not in the 

public’s best interest. NASAO is adamantly opposed to any new 

user fees for general aviation. 

We also strongly believe that increasing fuel taxes on GA by 

about 250 percent would not be in the public’s best interest. 

NASAO respectfully suggests that you have an excellent template at your disposal. That is Vision 100. And that the general 

fund contribution be no less than 30 percent. 

800

Lastly, NASAO is opposed to the Administration’s attempt to impose a new board of directors on the FAA. We feel they already 

have one, and that is you, the U.S. Congress. 

That concludes my statement, Mr. Chairman. Thank you again 

for allowing NASAO to participate in this hearing and this legislative process. 

Mr. COSTELLO. We thank you, and the Chair recognizes Mr. 

Healy at this time. 

Mr. HEALY. Thank you, Mr. Chairman, Members of the Subcommittee. My name is James Healy, I am a county board member 

from DuPage County, Illinois. 

Unlike all the other panel members today, I, like you, am an 

elected official, elected by the voters of my district. Today I speaking in behalf of the other county officials across America and 

NACo, the National Association of Counties, which represents the 

3,100 urban, suburb and rural counties. 

Counties own about one-third of the Nation’s commercial and 

general aviation airports. This includes some of the largest airports 

in the United States, including the hubs in Miami, Las Vegas, Cincinnati, Milwaukee, Fort Lauderdale and Orange County, California. Counties also own or appoint the governing boards of the 

airport authorities at small airports, such as the Williamson County Regional Airport, the Outagamie Regional County Airport in 

Wisconsin, and the facility owned by my county, the DuPage County Airport, the third or fourth largest airport in Illinois, and a reliever for O’Hare Field. 

Earlier this month, NACo adopted its policy on the Aviation Reauthorization bill. Much of our policy relates to the AIP program. 

Over the next five years, the existing airport infrastructure, both 

airside and landside, will be strained by increased usage and counties across America are trying to meet that need. Accordingly, 

NACo recommends the AIP program be funded at an average level 

of no less than $4 billion annually during the next reauthorization 

period. Further, NACo supports guaranteed funding of the AIP program through the existing point of order provisions or an even 

stronger guarantee. 

One way to help ensure higher funding into the future is to index 

the revenue sources of the Aviation Trust Fund, such as the ticket 

tax and fuel taxes and adjust them annually. NACo believes the 

current revenue structure in place since 1970 and the revenue 

sources funding the AIP program have worked and should be continued.

NACo fully supports allowing airports to increase the passenger 

facility charge to no less than $6. NACo believes the FAA-proposed 

funding of the trust fund is likely to lead to a substantially smaller 

AIP program. The proposed 70 cents per gallon tax on aviation fuel 

would be devastating to smaller airports and ultimately lead to less 

revenue for needed improvements. NACo proposes that the proposed user fees based on air traffic control usage on general aviation. NACo believes the proposal would be counter-productive, adversely affecting safety and ultimately increasing gridlock on the 

Nation’s hubs and undermine the investment counties have made 

in airport facilities. 

801

Airports must have the flexibility to use the AIP and PFC funds 

to invest in landside and off-airport capital projects that are closely 

related to the operation and success of an airport. That includes 

roads, interchanges and public transit that are an integral component to the growth and sustainability of these airports. The priorities set by the local government bodies must be recognized. 

While passengers need to be assured of the dependability of their 

flights, they also need to feel they can get to the airports easily and 

on time. This is especially true given the extra time passengers 

need at airports for security measures. It is important to begin 

moving away from the silo approach to mobility and begin to think 

of a comprehensive system of moving our citizens. Intermodalism 

is not just a buzz word we now use in the lexicon of transportation. 

It is what county officials are striving for. 

Restrictions of what can be funded with AIP dollars is a major 

concern to county officials. At DuPage County Airport, our application was denied for funding of an emergency response vehicle to 

meet the needs of the larger corporate aircraft, which are equal to 

the size of commercial airliners. In another example, Outagamie 

County, Wisconsin, has invested in and operates a regional airport 

in Appleton, Wisconsin, serving a region of 500,000 people. However, the county is unable to use AIP funds for a new road into the 

airport and other related expenses as part of a $7.2 million parking 

and access project for that airport. 

Allowing airports to use AIP funds for these types of related purposes makes sense to NACo. Counties are asking you to remove the 

shackles from how we use AIP and PFC funds. Our constituents 

have entrusted us to use these tax dollars wisely. We simply ask 

that you give us that same trust. 

Based on feedback from some of our members regarding the 

eight-State AIP block grant program, it is NACo’s believe this program imposes an unnecessary administrative layer between the 

airports and the FAA. The program should be eliminated and permit those airports to work directly with the FAA. The smaller GA 

airports in these States can continue to get technical assistance 

from their State agencies, the same as they do the other 42 States, 

which are not part of this program. 

Thank you for this opportunity to address the Committee. I 

would be happy to answer any questions. 

Mr. COSTELLO. Thank you, Mr. Healy. 

The Chair now recognizes Mr. Bogan. 

Mr. BOGAN. Chairman Costello, Ranking Member Petri and 

Members of the Subcommittee, thank you for giving me an opportunity to testify at this hearing. 

I am Robert Bogan, Deputy Director of Morristown Municipal 

Airport in Morristown, New Jersey. I am here representing a group 

called Sound Initiative, a coalition for quieter skies. Sound Initiative was formed by airports and counts as its members airports, 

local governments and homeowner and citizen groups that are concerned about aircraft noise. Our goal is to encourage you to complete the job this Committee started in 1990 by phasing out all 

noisy Stage 1 and Stage 2 aircraft. 

802

As you know, the FAA divides aircraft into three categories by 

the amount of noise they make. Stage 1 aircraft are the loudest, 

Stage 2 are also noisy, and Stage 3 aircraft are the quietest. 

By 1985, most Stage 1 aircraft had been phased out as a result 

of earlier regulatory action taken by the FAA. In 1990, at the initiative of Mr. Oberstar and this Subcommittee, legislation was enacted to begin the phase-out of most Stage 2 aircraft. That legislation was included in the 1990 FAA reauthorization bill, known as 

the Airport Noise and Capacity Act, or ANCA. The phase-out of 

Stage 2 aircraft called for in ANCA was completed by the year 

2000.

However, both the FAA regulatory action and the 1990 Congressional action applied only to aircraft weighing more than 75,000 

pounds. Noisy Stage 1 and 2 aircraft that weighed less than that 

were not affected, and many continue to fly to this day. 

According to the FAA, as of last summer, there were about 1,330 

Stage 1 and Stage 2 aircraft registered in the United States. These 

Stage 1 and Stage 2 aircraft comprise about 13.5 percent of jet aircraft weighing less than 75,000 pounds. Although these aircraft 

represent a relatively small percentage of the total U.S. fleet, the 

FAA noted in a letter to the former Chairman of this Committee 

that while not an issue when measured at the system level, there 

are a few airports where, especially when adjusted for their limited 

number of operations, this segment of aircraft appears to contribute in a significant fashion to noise exposure contours. 

So today, although those aircraft are small in number relative to 

all aircraft, many airports across the United States report that 

they account for a majority of noise complaints. In fact, at some 

airports, 50 to 80 percent of the noise complaints received are related to Stage 1 or Stage 2 aircraft. Sound Initiative was formed 

to address this problem. 

Sound Initiative was organized by a group of airport operators 

who are on the front line of the aircraft noise debate on a daily 

basis. Across the Country, airport managers must respond to the 

concerns of neighbors, government officials, the news media and 

others who want to know what they are doing about aircraft noise. 

Some airports have installed sophisticated monitoring systems that 

identify aircraft and the noise they make when departing. Others 

have long relied on programs that try to be responsive to neighbors’ 

noise concerns by mediating their complaints with operators based 

at their facilities. 

But real action can only come from trying to reduce noise at its 

source. The power of local airports to do this is severely limited. 

That is why we call on Congress to complete the job it started in 

1990 and phase out all noisy aircraft, regardless of how much they 

weigh. What happens at an airport like Morristown, when these 

Stage 1 and Stage 2 aircraft go away, it means quieter skies for 

people living and working nearby. 

Morristown is among the busiest airports catering to corporate 

and smaller business aircraft in the New York City metropolitan 

area, logging an average of 210,000 departures and arrivals each 

year. Operations include those of based corporate tenants, transient business use, flight training and recreational traffic. Although 

only one Stage 2 aircraft is based at Morristown, more than half 

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the noise complaints from neighbors are the result of other Stage 

2 aircraft landing and taking off there. 

In a recent study, we reviewed the sound contour and the noise 

footprint of all airplanes and jets departing Morristown’s runway 

23. The study also looked at what would happen to those contours 

if only Stage 3 aircraft departed from the runway. The results show 

a significant reduction in the noise impact to our neighbors. As you 

can see in the chart, the noise footprint is radically reduced, it 

takes that footprint out of the town of Madison, which it pretty 

well encompassed, and it relieves about 3,000 people from the daily 

noise impact. 

On the other hand, we have the example of Naples Airport in 

Florida. That airport tried to work through the FAA’s existing Part 

161 process to phase out noisy aircraft. It spent hundreds of thousands of dollars on consultant studies to tell it what it already 

knew about the need to reduce aircraft noise. When the airport instituted restrictions based on the Part 161 study, the airport lost 

funding from the Federal Airport Improvement Grant Program. 

In the end, Naples successfully defended the lawsuits against it 

and did succeed in banning noisy aircraft at its airport. But it cost 

more than $3 million, money that could have been spent on safety 

or security projects. 

I can assure you that other airports do not have the funds to 

take on the system the way Naples did. Rather than attempt to develop an airport-by-airport solution which has yet to be achieved 

even once by the Part 161 process, we believe a lasting, long-term 

nationwide solution to the aircraft noise problem can only come 

from Congress. 

Sound Initiative does have a proposal we would like this Committee to consider to address this noise problem. Under our proposal, a copy of which is attached to the end of the written testimony, all Stage 1 and Stage 2 aircraft would have to cease operations in the 48 contiguous States three years after enactment. Almost all of these aircraft are close to 20 years old, most are much 

older than that. 

So three years seems like a reasonable balance between the 

needs of aircraft owners to change over to quieter aircraft and the 

needs of airport neighbors for noise relief. It comes more than 17 

years after Congress set precedent for this type of action and 7 

years after the last Stage 2 weighing more than 75,000 pounds operated or was modified to meet Stage 3 standards. 

Our proposed legislation goes a step further, however, by recognizing that some airports, due to their location or other factors, 

may not have as much need for noise relief. In those cases, we propose to let airports notify the FAA that they are wiling to continue 

to allow Stage 1 and Stage 2 aircraft to operate there. 

Mr. Chairman, Congress provided noise relief to our Nation’s 

larger airports several years ago. It is now time to provide added 

relief to those airports and to extend the same relief to the people 

who live near smaller reliever and satellite airports. On behalf of 

Sound Initiative, I urge you to include our proposed legislative language or something similar to it in the Subcommittee FAA reauthorization legislation. 

Thank you very much. 

804

Mr. COSTELLO. I thank you. 

Let me follow up with a question. You mentioned the Naples Airport under the Part 161 process. Why did they lose their funding? 

Mr. BOGAN. At some point, there was clearly some confusion 

about whether the actions that were taken by the airport were 

legal. I believe that the FAA merely took the position that it was 

not, that the Naples action was not consistent with FAA policy, so 

they withheld grant funding. 

Mr. COSTELLO. Do you have any idea how long the process, going 

through the court system, how long it took and the approximate 

cost to litigate? 

Mr. BOGAN. We were up here last week and this week, and I did 

run into a group from Boca Raton who was very familiar with that. 

They said it was up around $5 million and it took quite a while. 

I think multiple years were involved. 

Mr. COSTELLO. Thank you. 

Mr. Healy, in your testimony you talk about how you support, or 

NACo supports eliminating the eight-State AIP block grant program. I wonder if you would tell us why you support the elimination.

Mr. HEALY. That came about at our last conference here in 

Washington. As you know, we have county commissioners from 

across the Nation come together. Several of them came in from 

Michigan and from North Carolina, saying they were having a 

problem with it. I phoned home to my State, talked to my airport 

director, he said the same thing. 

The reason is, we believe it is an unnecessary level of extra government. There is definitely a need for State agencies to assist 

smaller GA airports that don’t have the resources or expertise to 

apply and utilize State Federal grant funds. However, for airports 

that do have these resources, dealing with State agencies under a 

Federal block grant program is an unnecessary and ineffective system. It is a bureaucracy that is adding to the cost of us doing business in our airports. It does not even eliminate the need for us to 

go to the FAA in the process of getting approvals for projects. It 

just adds to another layer of government, and we believe that it 

should be eliminated so that we can deal directly with the FAA. As 

the other 42 States do with their airports, the smaller airports that 

need this type of assistance would continue to go to the State agency.

Mr. COSTELLO. Very good, thank you. 

The Chair now recognizes the Ranking Member of the Subcommittee, Mr. Petri. 

Mr. PETRI. Thank you for your testimony. 

Just one or two fairly quick things. It is my impression, Mr. 

Bogan, living part of the time within the flight path going to an 

airport, that there has actually been considerable improvement in 

the last few years as silenter planes have been phased in. Is that 

your experience, too? 

Mr. BOGAN. Absolutely. I believe corporate America has stepped 

up, recognizing that they want to be good neighbors, too. My tenants have all upgraded their aircraft over the last 10 years, and 

they are all flying Stage 3 aircraft, save for one who is nostalgic 

for the old days, I guess. But yes, there has been quite an improveVerDate 0ct 09 2002 09:25 Nov 26, 2007 Jkt 000000 PO 00000 Frm 00830 Fmt 6633 Sfmt 6633 P:\DOCS\34788.TXT HTRANS1 PsN: JASON
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ment, and that is part of the problem. The community has now 

been educated to expect quieter aircraft. When one of these Stage 

2s show up, they can tell the difference. 

Mr. PETRI. I guess that is right. 

Mr. Healy, why is it easier for the, we usually hear the opposite, 

why is it easier for local airport authorities to deal with the FAA, 

the Federal Government, than with these State aviation agencies? 

Mr. HEALY. We already have to deal with the FAA. So to us, it 

is just another process we have to go through. We first go to the 

State agency, then we are at the same time either simultaneously 

or afterward dealing with the FAA on the same type of projects. 

Mr. PETRI. So it is not necessarily easier, it is just duplicative? 

Mr. HEALY. It is duplicative, and actually, it sometimes is a hindrance. Because if you are turned down at the first stage, you don’t 

know if you can go to the second stage dealing with the FAA. 

Again, we realize that some of the smaller counties and some of 

those smaller airports may need that type of assistance from their 

State agencies. We are not saying not to. We are saying that the 

other 42 States in the Nation are able to handle that by working 

with their local agencies and local airports. But for the eight States 

that have it, we believe that it is cumbersome. 

Mr. PETRI. Thank you. 

Mr. Vallin, your testimony was somewhat critical, I should say, 

but strongly critical in some aspects of the Administration’s proposal but supportive in others. I wondered if you could talk a little 

bit about the new four-tiered non-primary entitlement program, 

which is a significant proposal people are looking at very carefully. 

Are there any changes or what changes would you make in that 

proposed program? 

Mr. VALLIN. Right now, we do have open communications with 

the FAA on that. We are running a lot of different scenarios. 

The problem that we face is when you take that tiered system 

today and you implement what the dollars will look like, I will give 

you an example, the State of Montana will lose about $700,000 

from what they realized under a straight $150,000 entitlement. 

The State of Colorado goes up $1.2 million. 

So because it creates such an inequity when it comes to winners 

and losers, it is very difficult for NASAO to take a positive position 

on putting fewer dollars in some of our smallest airports. A couple 

of scenarios that we are looking at is maybe adjusting the funding 

levels a little bit. But we understand it is a very complex issue. It 

is kind of like a Rubik’s cube, we make an adjustment, we run the 

analysis and then we see where the winners and losers are. So we 

are actively involved in that process and hopeful we can find a winwin in that negotiation. 

Mr. PETRI. Thank you. Thank you all very much. 

Mr. COSTELLO. The Chair thanks the gentleman. 

Let me thank our witnesses on this panel for being here today. 

We appreciate your time. You just happened to end up on the third 

panel, so you had to sit here quite a while. We appreciate your patience, your testimony and look forward to working with you and 

to considering your suggestions and your testimony as we go 

through the reauthorization process. 

806

We thank you, and this concludes this hearing. Until our next 

hearing tomorrow morning, the Subcommittee is adjourned. 

[Whereupon, at 2:30 p.m., the Subcommittee was adjourned.]

807


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Æ


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