FY 1999 FAA ANNUAL REPORT

-1-

A MES SAGE FROM THE AD MIN IS TRA TOR

It is a privilege to present the Federal Aviation Administration’s (FAA)

Annual Report for FY 1999. This year, the FAA has received, for the first

time, an unqualified or “clean” audit opinion from the Department of

Transportation’s Office of Inspector General. This is a significant event

for the FAA, since the Chief Financial Officers Act of 1990 requires

audited financial statements that fully disclose the agency’s financial

position and results of operations. The financial statement provides

information not only for the effective allocation of resources, but also with

which Congress, agency managers, the public, and others can assess

financial performance and stewardship. The FAA’s achievement will, I

believe, go a long way toward enhancing our financial credibility and is a

tribute to our people at headquarters and in every region and center who

struggled to correct our previous financial statement audit findings. 

I also commend the extraordinary effort of hundreds of FAA employees

who helped make our transition to Y2K a total success. This undertaking

required us to evaluate and certify 628 different systems under the

pressure of an unmovable deadline – a daunting task by any measure. 

The past 12 months continued a winning streak for American aviation. It was the eighth consecutive year of air

traffic growth in the United States. Domestic air carriers, profiting from one of the strongest economies in our

history, carried a record 664.5 million passengers in 1999. This trend will continue, with the number of air

travelers increasing to more than one billion within a decade. 

For the FAA, this growth means that aircraft operations at our air route traffic control centers will increase from

45.7 million next year to 59.4 million in 2011. To meet this demand, the FAA’s aggressive modernization effort is 

progressing on three fronts: to sustain and renew our infrastructure; to add to the margin of safety in air travel;

and to improve system capacity and efficiency. Safety, as always, is our first priority and the primary design

requirement for all our new technologies.

To maintain the reliability of our current systems while renewing our aviation infrastructure, we have

incorporated both major and minor changes in the air traffic control system. Thus far, we have installed and

integrated more than 750 major systems and hardware components into the National Airspace System (NAS).

During 1999, we replaced the host and oceanic computer system equipment used to control air traffic at

20 en route and 3 oceanic centers. We are also replacing the associated radar display systems at t he 20 en route

centers. During the spring of 2000, we will dedicate the last of the display system replacements, modernizing

controller workstations at the en route centers and providing a powerful platform for future enhancements.

STARS – the standard terminal automation replacement system -- is now running in both El Paso, Texas, and

Syracuse, New York, and testing continues on the wide area augmentation system, which improves the

navigational accuracy of the satellite-based global positioning system.

New technology will also enable us to reduce some of the risks to safety due to hazardous weather. In our

modernization blueprint, we have included many weather initiatives to provide more precise and timely

advisories en route and in the terminal areas. At major airports, installation of terminal Doppler weather radar

provides warnings about potentially dangerous wind shear and microbursts.

Modernization will also improve the capacity and efficiency of the system, leading to fewer delays, lower costs,

and better service. Key to our long-term success is Free Flight Phase 1 – the first step in an innovative approach

to air traffic control that will eventually allow pilots, wherever practical, to choose their own r outes and file flight 

plans that allow the most efficient and economical routes. The overall benefit is to enable our air traffic control

system to accommodate the future increase in flights and provide more optimum routings for aircraft in the

Nation’s airspace.
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FY 1999 FAA ANNUAL REPORT

Free Flight Phase 1 is a clear example of the FAA’s “evolutionary, not revolutionary” approach to NAS

modernization. Under this building block approach, we not only reduce the risks of cost overruns and schedule

delays, but also take into account the changing nature of emerging technology. With our new incremental,

evolutionary approach, we will be able to accommodate these changes and incorporate them into the NAS in a

managed fashion.

The challenge facing the FAA is to finance the capital investments that will allow the agency to make key safety

improvements, keep up with growing air travel demand, and improve efficiency of aircraft operations. Our

initiatives in cost accounting, personnel, and acquisition reform and our strong partnership with industry will

enable us to manage our resources and future demands placed on the NAS effectively. 

The millennial celebrations that marked the close of 1999 signified for many our entry into a new era of great

promise and exciting prospects. I believe aviation is rich in opportunities, and I am confident that, by harnessing 

the possibilities of advanced technology, the FAA will succeed in maintaining the high standards expected by a

Nation and a world increasingly dependent upon safe and efficient air travel.

Jane F. Garvey

Ad min is tra tor
FY 1999 FAA ANNUAL REPORT

-3- TA BLE OF CONTENTS

Ta ble Of Con tents

Mes sage From The Ad min is tra tor ............................................................................1

In tro duc tion...................................................................................................................5

CHAP TER 1. Man age ment Dis cus sion and Analy sis...........................................7

Overview......................................................................................................................7

Fi nan cial Highlights..................................................................................................19

FAA’s Stra te gic Goals................................................................................................25

CHAP TER 2. Fi nan cial State ment.........................................................................43

Mes sage from the Chief Fi nan cial Of fi cer................................................................43

Fi nan cial State ment Audit Re port...........................................................................45

Limi ta tions of the Fi nan cial State ment...................................................................55

Fi nan cial State ment..................................................................................................56

Notes to the Fi nan cial State ment.............................................................................61

Re quired Sup ple men tary In for ma tion.....................................................................95

Glos sary of Ac ro nyms ................................................................................................97

In dex............................................................................................................................102
FY 1999 FAA ANNUAL REPORT

-4- CHAP TER 1

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FY 1999 FAA ANNUAL REPORT

INTRODUCTION

The FAA Annual Report for FY 1999, prepared inconformity with the Chief Financial Officers Act

of 1990, documents FAA’s recent accomplishments

and financial initiatives. It consists of two chapters.

The first chapter contains a three-part Management

Discussion and Analysis. The first part is an overview 

that includes a statement of the FAA mission, a

description of our overall organization, and a brief

review of program accomplishments keyed to FAA’s

major lines of business. The second part contains

financial highlights for FY 1999. The third part

provides a summary of the agency’s strategic goals

and a discussion of our performance in meeting those

goals. 

The second chapter presents the FAA financial

statements for FY 1999. Opening with a message

from the Chief Financial Officer, it continues with the

auditor’s report, the financial statements and notes,

and required supplemental information pertaining to

the agency’s stewardship of its resources and other

matters.

Readers who wish to learn more about the FAA and its 

programs are encouraged to visit our website at

www.FAA.gov.

INTRODUCTION -5- CHAP TER 1
FY 1999 FAA ANNUAL REPORT

INTRODUCTION -6- CHAP TER 1

(THIS PAGE IN TEN TION ALLY LEFT BLANK)
Management Discussion and Analysis

OVER VIEW

THE FED ERAL AVIA TION AD MIN ISTRA TION

The Air Commerce Act, enacted by Congress in1926, entrusted to a single agency the authority

to regulate and foster civil aviation development.

During the formative years that followed, aviation

was the responsibility of a complex, tripartite

structure within the Commerce Department. The

rapid growth of air travel in the 1950’s promoted calls

for a separate agency, wholly dedicated to safe and

efficient air transportation. Congress created the

Federal Aviation Administration (FAA) in 1958, to

operate and maintain the air traffic control system for

both civil and military aviation. Since 1967, FAA has

been an operating administration within the

Department of Transportation (DOT). Legislation

enacted in 1995 gave formal confirmation to the

principle that safety is the agency’s first and foremost

priority.

During 1999, air travel in the United States recorded

another year of impressive growth. Some 664 million

people boarded U.S. commercial flights – roughly 20

million more than the previous year. The ability of the 

FAA to handle this heavy volume of traffic without

compromising safety and security is a testimony to

the dedicated professionalism of our workforce. The

certain prospect of continued growth is a test of our

ability to make wise and timely investments to ensure 

the future vitality of American aviation.

FAA’s responsibilities extend virtually to every aspect 

of aviation and involve a wide range of stakeholder

interests. While its historic concern has been U.S.

aviation, increasingly it must work in partnership

with counterpart agencies abroad to solve common

problems arising from globalization. As the industry

continues to rapidly expand, so do the complexity of

vital issues and the degree of their

inter-connectedness. Success in maintaining high

levels of safety, security, and system efficiency

requires constant coordination among airports and

air carriers, aircraft manufacturers and technology

suppliers, industry representatives and consumer

groups, state and local governments at all levels, and

international organizations. Many Federal entities

are involved as well, including, among others, the

National Aeronautics and Space Administration

(NASA), Department of Defense (DOD), the National

Transportation Safety Board (NTSB), and the

National Oceanic and Atmospheric Administration

(NOAA). The FAA is the focal point of change within

the aviation community, while at the same time it

continues to perform the critical duties entrusted to

it.

This annual report presents the work of the FAA from

two different perspectives. One looks at the

day-to-day operational activities that are so crucial in

sustaining the Nation’s economic growth and

retaining the public’s confidence in the safety of air

travel. The second looks ahead to describe how the

FAA is preparing for the future. The scale and

complexity of the aviation industry require that we

begin now to build the essential infrastructure

necessary to meet the demand we anticipate in the

years, even decades, ahead. The prudent

apportionment of our limited resources between

current and future needs is a constant challenge for

FAA management.

FAA MIS SION

The Federal Aviation Administration (FAA) provides

a safe, secure, and efficient aerospace system that

contributes to national security and the promotion of

U.S. aerospace safety. In fulfilling this mission, the

FAA manages and supports the operations, facilities,

and equipment that provide the air traffic services of

the National Airspace System (NAS), regulates and

oversees civil aviation and commercial space

transportation, and protects the users of commercial

air transportation against terrorist and other

criminal acts. The FAA also conducts research and

acquires new equipment to improve aerospace safety

and keep pace with the demand for air services,

administers the Airport Improvement Program (AIP)

for airport development, and oversees the Federal

role in an extensive national airport system

consisting of more than 3,000 public use airports. As

the leading Federal agency responsible for aviation,

the FAA is dedicated to providing air travelers with a

technically advanced airspace system that meets the

highest attainable levels of safety, security, and

efficiency.

FY 1999 FAA ANNUAL REPORT

OVERVIEW -7- CHAP TER 1
OR GANI ZA TION

The FAA is headed by an Administrator who is

assisted by a Deputy Administrator. Reporting to the

Administrator are six Associate Administrators who

direct the principal functions that support the

agency’s mission. Also reporting to the Administrator

are the Chief Counsel, nine Assistant Administrators, 

and two office directors responsible for other key

programs. FAA’s field organizations – where nearly

90 percent of all FAA employees work – are

concentrated in nine geographical regions and two

major centers, the Mike Monroney Aeronautical

Center and the William J. Hughes Technical Center.

Together, the FAA team of over 48,000 employees

administer the world’s busiest civil aviation system.

FY 1999 FAA ANNUAL REPORT

OVERVIEW -8- CHAP TER 1

FAA HEADQUARTERS FIELD ORGANIZATIONS

Associate Administrator for Regulation and

Certification

(AVR)

Assistant Administrator for Regional and Center

Operations

(ARC)

Associate Administrator for Civil Aviation Security

(ACS)

Alaskan Region

(AAL)

Associate Administrator for Air Traffic Services

(ATS)

Central Region

(ACE)

Associate Administrator for Research and

Acquisitions

(ARA)

Eastern Region

(AEA)

Associate Administrator for Airports

(ARP)

Great Lakes Region

(AGL)

Associate Administrator for Commercial

Space Transportation

(AST)

New England Region

(ANE)

Office of the Chief Counsel

(AGC)

Northwest Mountain Region

(ANM)

Office of Civil Rights

(ACR)

Southern Region

(ASO)

Office of Government and Industry Affairs

(AGI)

Southwest Region

(ASW)

Office of System Safety

(ASY)

Western-Pacific Region

(AWP)

Office of Public Affairs

(APA)

Mike Monroney Aeronautical Center

(AMC)

Office of Information Services

(AIO)

William J. Hughes Technical Center

(ACT)

Free Flight Phase 1

(FFP1)

Assistant Administrator for Policy, Planning, and

International Aviation

(API)

Assistant Administrator for Human Resource

Management

(AHR)

Assistant Administrator for Financial Services

(ABA)

FAA HEAD QUAR TERS AND FIELD OR GANI ZA TION
FY 1999 PRO GRAM HIGH LIGHTS

Regulation and Certification

The FAA oversees the safety of aircraft and the

credentials and competency of pilots and

mechanics, develops mandatory safety rules, sets

high standards for civil aviation, and sponsors

related research. In FY 1999, the FAA completed

275,450 inspections, evaluations, and audits,

helping to make air travel among the safest modes

of transportation. The FAA also evaluates foreign

governments’ oversight of their airlines serving

U.S. airports and releases the results via its

website (www.faa.gov) so that the public can know 

which countries meet international safety

standards. 

The FAA and its partners are committed to

reducing the already low air carrier fatal accident

rate in the United States by 80 percent by the year

2007. In support of this goal, FAA’s Safer Skies

agenda focuses on the most critical safety issues –

controlled flight into terrain, loss of control,

uncontained engine failures, runway incursions,

FY 1999 FAA ANNUAL REPORT

OVERVIEW -9- CHAP TER 1

FAA Employment

(Permanent Employees)

Air Traffic

Services

73%

Commercial

Space

Transportation

*

Civil Aviation

Security

2%

Regulation

and

Certification

12%

Airports

1%

Resear ch and

Acquisitions

4%

Staff Offices

8%

 * Less than 1/2 of 1 %
approach and landing, weather, pilot decision

making, survivability, passenger seat belt use,

carry-on baggage, child restraints, and passenger

behavior. 

• Since announcing Safer Skies in April 1998, the

FAA has issued nine airworthiness directives (AD)

to guard against uncontained engine failure, a

Notice of Proposed Rulemaking (NPRM) on terrain

awareness and warning systems, a series of

proposed rule changes designed to improve the

safety of flight in icing conditions, and launched a

major consumer education campaign on carry-on

baggage safety. As part of an initiative to address

concerns about the effects of aging on aircraft

non-structural systems, FAA issued AD’s directives 

in FY 1999 instructing operators to inspect wiring

within fuel tanks and fuel pumps on U.S. registered 

Boeing 747, 737, 727, and Airbus A300 aircraft. 

• In October 1998, the FAA began a new approach for

inspecting and monitoring air carriers. The Air

Transportation Oversight System (ATOS) uses

powerful analytical tools to identify the areas of

highest risk so that the FAA can target its

resources most effectively. A GAO report released

in June 1999 concluded that ATOS promises to

significantly strengthen the FAA’s inspection effort 

and urged a more aggressive schedule of

implementation.

Civil Aviation Security

The Federal Government recognizes aviation security 

as an important element in national security strategy

and U.S. counterterrorism policy. The FAA works

with local security, intelligence, and law enforcement

agencies to protect passengers, personnel, aircraft,

and critical national airspace facilities against

terrorist and other criminal acts. Threats are

monitored continuously and, when necessary, the

FAA orders heightened precautions.

• As recommended by the White House Commission

on Aviation Safety and Security, a total of 170

voluntary consortia, whose membership includes

airport operators, airlines, local law enforcement,

tenants, FAA security agents, and other

Government officials, have been established at U.S. 

airports and are encouraged to meet regularly to

identify, discuss and solve local security problems.

• FAA has purchased a total of 136 systems for

screening checked baggage and 649 devices for

detecting traces of explosives in passengers’

carry-on and check bags. These systems and

devices have been deployed to 80 U.S. airports.

There are now two models of certified explosive

detection systems (EDS) from InVision

Technologies and a third from L-3 Communications 

that will give FAA and the airlines a choice among

types of systems and vendors, thus encouraging

competition. Under existing contracts, the FAA

can purchase up to 60 L-3 Communications

examiner 3DX 6000 and up to 60 InVision

CTX-9000 explosive detection systems over 3 years.

• In accordance with provisions of the Omnibus

Consolidated and Emergency Supplemental

Appropriations Act of 1999 (P.L. 105-277), all major 

air carriers have agreed in writing to assume

operations costs for all installed EDS and other

advanced technologies. They have also agreed to

pay maintenance costs following the expiration of

vendor warranties and the initial maintenance

periods in the U.S. Government purchase

contracts. Letters to this effect were received in

November and December 1998 and in January

1999. Congress was notified that these agreements 

were signed by a letter delivered on January 25,

1999. FY-99 procurements were delayed until the

provision of this law was met, but on March 31,

1999, FAA purchased 21 CTX-5500 EDS’s from

InVision Technologies for $18.9 million. Three

more were bought in June for $2.7 million, and

seven more were purchased in August 1999 for $6.3

million. 

FY 1999 FAA ANNUAL REPORT

OVERVIEW -10- CHAP TER 1

InVision CTX-5500
• In 1998, FAA began deploying computer-based

training (CRT) for security screeners to ensure

high-quality, standardized training, provide

opportunities for realistic practice with all types of

threats, reduce overall training time, and combine

training with performance testing. Thirty-seven

airports are using the system.

• In addition to the computer-based training

systems, the FAA has leased 30 advanced

checkpoint x-ray units for operational evaluation

that will use a threat image projection system to

continuously train and monitor screener

performance. If the evaluation is successful, up to

420 of these x-ray devices may be purchased.

• In April 1999, FAA issued an NPRM on “Security of

Checked Baggage on Flights within the United

States.” The proposal would require airlines to use

an automated passenger prescreening system to

select checked bags for screening by explosives

detection systems or by subjecting them to “bag

matching” to make sure the bags do not fly unless

the passengers are on board. The

Computer-Assisted Passenger Prescreening

System (CAPPS) streamlines passenger

prescreening by automating the process, reduces

passenger inconvenience by greatly reducing the

need for physical searches of bags, and protects civil 

liberties by eliminating the human factor in

passenger prescreening. More than 90 percent of

the flying public already fly under this new

passenger prescreening regime since all the major

airlines and over 40 regional carriers are using the

automated system voluntarily.

• Airport and air carrier vulnerability assessments

were conducted throughout the year as

recommended by the White House Commission on

Aviation Safety and Security, and FAA facility

security risk management assessments were

performed as required by the Presidential Decision

Directive on Critical Infrastructure Protection

(PDD-63).

• Over 800 FAA special agents have been using labor

intensive but realistic operational testing and

special assessments, in combination with

surveillance and scheduled inspections, to evaluate 

and improve airport and air carrier security and

dangerous goods shipping operations. Agents

unknown to air carrier and airport personnel

simulate criminal and terrorist tactics based on

standard protocols. They also use the test results to 

educate screeners and their supervisors on the

spot.

• FAA has worked with airport operators across the

country to deploy additional FAA explosives

detection canine teams to screen suspicious

packages, cargo and bags, and to search airliners

and terminals. The agency procures the dogs and

funds training of both the dogs and their handlers

to meet FAA explosives detection standards and

monitors annual certification testing on each of the

teams to ensure these standards are maintained.

The number of FAA explosives detection canine

teams rose from 87 teams and 26 airports in 1996 to 

174 teams at 39 airports this year. Certified canine

teams are now deployed at each of our busiest,

major U.S. airports.

Air Traffic Services

FAA provides extensive, integrated support to pilots

during every phase of a flight. Air traffic controllers

at local airports direct airplanes that are taking off,

landing, or flying within the visual range of their

tower – usually about 5 miles. Controllers in terminal 

radar control facilities handle aircraft for one or more

airports in a large metropolitan area, generally

within 30 to 40 miles of the area’s major airport.

Controllers at 21 en route centers guide airplanes in

flight from one city to another. Traffic management

specialists at the David J. Hurley Air Traffic Control

Systems Command Center (ATCSCC) in Herndon,

Virginia, plan and balance the flow of air traffic,

nationwide, to minimize delays and congestion.

Flight service stations (FSS) operate around the clock

to provide flight plan filing, weather data, and

information briefings to pilots. A staff of highly

skilled engineers and system specialists maintain

and troubleshoot over 39,000 items of equipment,

software, and hardware; assign and protect more

than 40,000 aeronautical radio frequencies; and

conduct some 11,000 flight inspections annually to

ensure the safe operation of the Nation’s air traffic

control systems. 

FAA is a 24-hour/ 7 days a week service delivery

organization. On a typical day, FAA controllers

handle approximately 200,000 takeoffs and landings,

moving some 1.8 million passengers, and the number

continues to grow. U.S. commercial air carrier

passenger enplanements are expected to increase

from 664 million in 1999 to 1 billion in 2011. During

that period, the number of aircraft operations at FAA

FY 1999 FAA ANNUAL REPORT

OVERVIEW -11- CHAP TER 1
air route traffic control centers is expected to grow 2.4

percent each year. Operations at FAA and contract

towers will grow 2.2 percent annually. Maintaining

the National Airspace System (NAS) in a safe and

efficient manner, while providing for the anticipated

growth in the use of the NAS, is the FAA’s top priority.

Two initiatives – reducing the number of airport

runway incursions and reducing aviation delay —

received special attention during FY 1999.

Initiatives Aimed at Reducing Runway

Incursions

From 1993 to 1998, the number of runway incursions

— accidents involving aircraft on the ground –

steadily increased. For calendar year 1999, however,

preliminary numbers indicate that the number of

runway incursions decreased to 322 compared to 325

for calendar year 1998. In FY 1999, FAA continued to

focus its efforts on preventative measures such as

awareness, education, and technological initiatives.

• FAA Runway Safety Program exhibits at major air

events are drawing increased interest and

understanding from the aviation community. 

• Implementation of “Now” Strategies (inexpensive,

near-term runway incursion reduction initiatives)

is on course with 15 of 18 strategies completed. 

• National Runway Incursion Action Teams (RIAT)

visits were completed at 20 locations. Regional

RIAT’s were conducted at seven additional

locations. 

• Mandatory refresher training for air traffic control

specialists on runway incursions has been

implemented. 

• Deployment of airport surface detection equipment

(ASDE) – with 38 of 40 systems installed at the end

of FY 1999 – is nearing completion. The airport

movement area safety system (AMASS) program

continues work on an automation enhancement to

the ASDE Model 3 to provide controllers with

automatically generated visual and aural alarm

alerts to aid in the prevention of loss of life and

property as a result of runway incursions and other

potential unsafe conditions. 

• Over the past year, a dedicated team has been set

up within the Air Traffic Service to coordinate a

systematic approach for reducing the risk of

runway incursions. 

Initiatives Aimed at Reducing Aviation Delay 

During FY 1999, the rate of volume and equipmentrelated delays declined from 31.92 delays per 100,000

flight operations to 30.37 delays per 100,000 flight

operations. This decrease was due to a number of

FAA initiatives. The ATCSCC has placed increased

emphasis on honoring commitments to aircraft,

helping to eliminate the practice of “no notice

holding.” Collaborative decisionmaking (CDM) was

begun in 1997 and continues to be used in ground

delay programs. The National Operations Control

Center (NOCC) located within the ATCSCC was

established in January 1999. The NOCC collaborates

daily with traffic management to ensure NAS

equipment services are available for use. A primary

focus of NOCC is delay mitigation when the issue is

FAA equipment.

Most aviation delays, however, are the result of

weather. In FY 1999, bad weather accounted for

about 69 percent of all delays. The significant

increases in delays in the summer of 1999 were

largely due to bad weather. An evaluation conducted

by the FAA, in association with the Air Transport

Association (ATA) and the National Air Traffic

Controllers Association (NATCA), identified 167

remedial actions to undertake at the 33 en route and

terminal facilities and the ATCSCC. Work on these

items is ongoing. In a separate move, FAA

Administrator Jane Garvey met with senior industry

executives and NATCA representatives on August 5

and 6, 1999. During this and subsequent meetings,

FAA laid out steps to take immediately to reduce

delays. One was to expand the decisionmaking role of

the ATCSCC, where controllers have a

comprehensive grasp of weather and traffic

conditions everywhere in the country. Longer-term

improvements are expected from the National

Airspace Redesign, which over the next 8 years will

produce more open and flexible access to the airspace

and more predictable traffic flow. Air Traffic will need 

to impose fewer flight restrictions and will be able to

do a better job balancing sector demand and capacity

over a wide range of conditions. The heavily

congested airspace east of the Mississippi River will

be the first to be redesigned.

Research and Acquisitions

FAA Acquisition and Research programs develop,

validate, and acquire technology, systems, designs,

and procedures that support directly the agency’s five

principal operational and regulatory responsibilities:

FY 1999 FAA ANNUAL REPORT

OVERVIEW -12- CHAP TER 1
air traffic services, certification of aircraft and

aviation personnel, certification of airports, civil

aviation security, and environmental standards for

civil aviation.

Research priorities in FY 1999 included aircraft

structures and materials; fire and cabin safety; crash

injury-protection; explosive detection systems;

improved ground de-icing operations; better tools to

predict and warn of weather hazards, turbulence, and

wake vortices; aviation medicine; and human factors. 

• In FY 1999, FAA research led to the development,

successful demonstration, and delivery of a

prototype eddy-current sensor for inspecting

titanium disks used in aircraft engines. Jentek

Sensors, Inc., Waltham, Massachusetts, developed

the eddy-current device, which is capable of

detecting microscopic surface damage that can be

the initiation site for cracks. 

• The Aging Nonstructural Systems Research

Program (NSRP) formally got underway in FY 1999.

The objectives of the NSRP are to develop

technologies and techniques to ensure the

continued safe operation of aircraft electrical and

mechanical systems. Research results will be used

to support new and pending regulatory action and

to facilitate compliance with new and existing

regulations.

• FAA completed the construction of the Full-Scale

Aircraft Structural Test Evaluation and Research

(FASTER) facility at the FAA William J. Hughes

Technical Center. FASTER is being used to test

full-scale fuselage panel specimens under

conditions representative of those seen by an

aircraft in actual operation. 

In August 1999, to reduce the risk of the spread of fire

aboard aircraft, FAA ordered operators of 699 aircraft

to replace insulation blankets covered with metalized

Mylar. The announcement followed 8 months of

extensive testing at the William J. Hughes Technical

Center.

• In April 1999, the FAA commissioned the national

Pavement Test Facility at the William J. Hughes

Technical Center. This $21 million dollar facility

was a joint venture between the FAA and the

Boeing Corporation. It is a unique facility that will

enable fullscale testing of pavement test sections

using various aircraft landing gear configurations

under simulated wheelloading scenarios. The test

facility will be used extensively to develop

improved pavement design and construction

specifications and to evaluate impacts of proposed

new large aircraft on airport pavement.

FAA published two reports in FY 1999, documenting

tests demonstrating the severe fire hazards

associated with the release of oxygen from

pressurized bottles involved in a suppressed cargo fire 

and outlining thermal protection criteria for the

bottle carrying cases (overpacks) to protect the bottles 

from being overheated by a fire. The FAA reported

tests are discussed in a final rule issued by the

Research and Special Programs Administration

(RSPA) on August 19, 1999, which places restrictions

on the shipment of pressurized oxygen bottles,

including requiring that the bottles be placed in

overpacks when transported aboard aircraft.

Among the remaining risks in air travel, weather

ranks high. FAA is putting in place sophisticated

technologies that provide advance warning of

hazardous conditions. Major projects to increase

safety include the integrated terminal weather

system (ITWS) and the weather and radar processor

(WARP). ITWS is a safety and planning tool that

provides air traffic managers in control towers and

terminal approach control facilities with real time

weather products such as windshear and microburst

predictions, storm cell hazards, gust front, and

lightening detection. ITWS will be installed at 45

airports presently supported by terminal Doppler

weather radar (TDWR). WARP is the primary tool

used by en route air traffic management personnel to

obtain, process, and display weather information. 

• Freezing drizzle aloft has been suspected of causing 

several in-flight icing accidents and incidents over

the past few decades. To learn more about the

occurrences and characteristics of freezing drizzle

and freezing rain aloft, FAA researchers are

developing a centralized database of fine-scale

measurements in these kinds of icing conditions.

FAA is also sponsoring the development of an

aircraft mounted wide area ice detection system.

This effort is being performed under a cost-share

contract with BFGoodrich Aerospace Aircraft

Sensors Division. The prototype system was

delivered in May 1999 and was installed in the FAA 

Technical Center’s B-727 ground test vehicle for

preliminary fit and functional checks. 

In FY 1999, appropriate and approved human factors

documentation was included in the development and

FY 1999 FAA ANNUAL REPORT

OVERVIEW -13- CHAP TER 1
implementation plans for the standard terminal

automation replacement system – early deployment

capability (STARS-EDC); controller-pilot data link

communications (CPDLC); Free Flight Phase 1

(FFP1); operational and supportability

implementation system (OASIS); display system

replacement – computer-human interface

(DSR-CHI); and the host and oceanic computer

system replacement (HOCSR), phases 1 and 2 

acquisition programs. The programs were assessed as 

meeting human factors requirements commensurate

with the status of the program’s development. The

Human Factors Working Group, comprised of

representatives from the FAA, labor union

leadership, and industry, has developed a process to

identify, monitor, and resolve human factors issues

throughout the entire acquisition process so that

these issues do not arise unexpectedly and too late in a 

program.

Significant strides were also made in infrastructure

renewal. Throughout 1999, FAA continued to push

the modernization of the U.S. air traffic control

system, upgrading or replacing as necessary the

radar, communication switches, ground-based

navigation aids, computer displays, radios and other

equipment critical to the safety and efficiency of the

NAS. 

• The HOCSR has been completed at 20 FAA en route 

control centers and three oceanic centers. HOCSR

vastly expands the main ATC computer’s capacity

while making it physically smaller, faster, more

efficient and reliable.

• The transition to the display system replacement

(DSR) for the 30 year old radar displays used by en

route air traffic controllers reached the halfway

mark and will be completed by mid-2000. 

FY 1999 FAA ANNUAL REPORT

OVERVIEW -14- CHAP TER 1

The HOCSR components include a laptop computer with

windows-driven software to monitor and maintain the

equipment.

The first version of the standard terminal automation

replacement (STARS) is now running in both El Paso, Texas,

and Syracuse, New York.

DSR provides improved color displays, computer hardware,

and software.
• The Blueprint for NAS Modernization: An Overview 

of the National Airspace System (NAS)

Architecture, released in January 1999 guides the

FAA’s acquisition programs. Prepared in

collaboration with aviation community, the NAS

Architecture describes how the evolution of the

national airspace will be managed to handle future

growth in aviation while maintaining the highest

safety standards.

Free Flight Phase 1

To accommodate future growth, new

technologies and capabilities must be

introduced that increase the capacity

and efficiency of the NAS. Because of its

complexity, Free Flight will be

introduced incrementally in the “build a

little, test a little” mode of systems

acquisition.

The first phase of the Free Flight

program began in October 1998. Its

objective is to make previously known,

but not widely used, air traffic management

capabilities quickly available to deliver early benefits

to service providers and users of the NAS. These

capabilities are: surface movement advisor (SMA),

collaborative decision- making (CDM), traffic

management advisor, (TMA) passive final approach

spacing tool (pFAST), and the user request evaluation 

tool (URET). 

• SMA – a tool that provides aircraft arrival

information to airline ramp towers and operations

centers— was delivered to Detroit Metropolitan

and Philadelphia International Airports in

December 1998. 

• CDM tools that provide airline operations centers

and the FAA with real-time access to current NAS

status information and enable them to negotiate

directly on user preferences are already in place

nationwide and are estimated to have saved airline

operators some four million minutes of delay. 

• TMA and pFAST deliveries are scheduled to begin

in January/February 2000. Both are part of the

center TRACON automation system (CTAS) tool

set that will assist controllers and traffic

management specialists in sequencing, spacing,

and assigning runways to aircraft. These

capabilities will allow controllers to manage

increased traffic demands at selected airports.

• URET is a powerful software tool that gives

controllers a 20-minute strategic look-ahead

capability to detect potential conflicts when

considering pilots’ requests for altitude and route

changes. In September 1999, FAA chose Lockheed

Martin to develop and deploy a production-quality

URET. The system will be available to controllers

in late 2001 through 2002.

Airports

FAA works to improve the infrastructure of the

Nation’s airports, in cooperation with airport

authorities, local and state governments, and

metropolitan planning authorities. As part of its

safety oversight mission, the FAA certifies airports

serving air carrier aircraft operating with more than

30 seats and periodically inspects those airports for

compliance with established safety standards. 

• In FY 1999, FAA’s Office of the Associate

Administrator for Airports awarded approximately 

$1.958 billion in new AIP grants-in-aid obligations

to improve and expand the Nation’s airports. New

grants awarded this fiscal year included the

following: 868 grants totaling $1,389.8 million for

primary airports; 62 grants and $64.0 million for

nonprimary commercial service airports; 131 grants

totaling $149.0 million for reliever airports; 341

grants and $211.2 million for general aviation

airports; 45 grants worth $13.7 million for airport

system planning; and $131 million in 37 State Block

Grant Program grants. In addition, $241.2 million

was awarded for 115 grants to achieve noise

compatibility for communities near airports. This

amount included the purchase of noise-impacted

land adjacent to airports, soundproofing residences 

and schools, and for other efforts to reduce noise.

• The collection of passenger facility charges, which

FY 1999 FAA ANNUAL REPORT

OVERVIEW -15- CHAP TER 1
must be approved by the FAA, is an additional

source of revenue for airports. During FY 1999,

the FAA’s airport personnel processed 111

passenger facility charge (PFC) applications,

approving approximately $3.5 billion in PFC

collections to fund approximately 600 projects.

• The level of noise at the Nation’s airports and

surrounding areas continued to decline in FY 1999

as airlines, in compliance with the Airport Noise

and Capacity Act of 1990, took older, noisier “Stage

2” airplanes out of service. The Act required that all 

civil aircraft over 75,000 pounds be the quieter

“Stage 3” by January 1, 2000. In a Report to

Congress released in August 1999, Transportation

Secretary Rodney E. Slater announced that the

Nation’s commercial jet aircraft fleet is the quietest

in history and will continue to achieve record low

noise levels into the next century.

Commercial Space Transportation

The Office of Commercial Space Transportation

oversees the safety of commercial space launches and

regulates the growing commercial space industry.

The organization licenses commercial space launches

that take place in the United States or are conducted

by U.S. citizens anywhere in the world. 

• In May 1999, FAA – along with the Commercial

Space Transportation Advisory Committee

(COMSTAC) – announced the latest commercial

space transportation forecasts. These forecasts

project that an average of 51 commercial launches

per year will occur worldwide through 2010,

compared with 36 launches conducted in 1999. 

• Among significant launches, in March 1999, an

international consortium led by Boeing conducted a 

first-of-its-kind, licensed commercial launch of a

rocket from the mid-Pacific, using a converted oil

platform. Launching from a mid-ocean location on

the Equator benefits from the maximum rotational

forces of the Earth. Before issuing the license, the

FAA conducted an extensive safety assessment. 

• On April 21, 1999, following the industry review of

the reusable safety guidelines, FAA issued an

NPRM for Reusable Launch Vehicle and Reentry

Licensing Regulation and is moving ahead with

industry to fashion a regulatory program to address 

public safety issues. An NPRM was also issued in

June 1999 that addresses licensing and safety

requirements for operation of a launch site. A final

rule, Commercial Space Transportation Licensing

Regulations, was issued on April 22, 1999. Work is

also proceeding on the following rulemakings:

requirements for financial responsibility for

reentry activities, launches from non-Federal sites, 

and amateur rocket activity. 

Agency Administration

FAA strives to make its operations more efficient and

responsive by employing sound business practices,

introducing advanced information systems,

maintaining a highly skilled workforce, and operating 

a model workplace. 

In June 1998, FAA inaugurated a pilot program

within the Office of Research and Acquisitions (ARA)

to test a new core compensation plan for the FAA. On

April 23, 2000, the core compensation plan will be

expanded throughout the agency to include all

nonbargaining unit FAA employees. The new plan

replaces the general schedule (GS) grade levels with

12 pay bands linked to market pay levels. The new

plan is intended to help the FAA recruit highly

qualified employees and to both retain and motivate

the many strong performers already working at the

agency.

FY 1999 FAA ANNUAL REPORT

OVERVIEW -16- CHAP TER 1

The Zenit-3SL launches from its ocean-based platform
Two top administrative priorities in FY 1999 were the

need to (1) obtain a clean audit opinion on the agency’s 

FY 1999 Financial Statement, and (2) establish a

cost-accounting system. 

• Dedicated teams, co-chaired by financial and

program staffs and the Office of the Inspector

General (OIG), were formed to properly capitalize

and document FAA’s physical assets. At the end of

FY 1999, all significant milestones prerequisite to

an OIG audit had been completed. FAA is also

working with OST and the OIG to modify the

existing accounting system to capture the new

standard general ledger accounts and to change or

convert existing records to meet new reporting

standards. FAA also accelerated development of a

process improvement plan. This plan, when

completed, will identify changes in systems and

procedures necessary to ensure the continued

integrity of our financial reporting and analysis.

• Two and a half years ago, FAA began taking steps to 

establish a cost-accounting system. Initial data

from the cost accounting system for the FY 1998

cost of en route and oceanic services were released

in late July 1999. FAA expects the cost-accounting

system to be fully implemented in FY 2002. 

FAA is a full partner in the ONE DOT Management

Strategy – a program that emphasizes collaboration

among departmental branches. In Kansas City,

Missouri, for example, the FAA Regional Office is

located in the same building with other DOT offices,

making it more convenient for DOT area customers.

ONE DOT also encourages employees to see

themselves as leading the way to transportation

excellence. In FY 1999, FAA hosted numerous events

in support of the Garrett A. Morgan Technology and

Transportation Futures Program and continued its

active participation in the Welfare-to-Work program,

support to Minority Business Enterprises, and other

collaborative initiatives.

Year 2000 (Y2K) Compliance 

• As of June 30, 1999, FAA had completed all Y2K

fixes in its mission critical and noncritical computer 

systems and reported that all were Y2K compliant.

As a further safeguard, FAA added a

post-implementation phase to its approach. All

enhancements, changes to the system, and

deployment of new systems that FAA would

normally undertake were closely monitored to

ensure continued Y2K compliance. 

• FAA published a Business Continuity and

Contingency Plan (BCCP) detailing what actions

the agency would take should problems arise

associated with Y2K. The plan built on other

contingency plans already in place to deal with

eventualities. The BCCP was reviewed and tested

for operational soundness, including the staffing

and communications required to support “Day

One” (January 1, 2000) operations.

• On November 2, 1999, FAA announced that none of

the Nation’s 565 airports regulated by the FAA had

been found to have Y2K problems that will affect

the airport’s ability to meet regulatory safety

requirements during the year 2000 rollover. The

announcement followed a review of those airports

by FAA’s Airports organization to ensure their

readiness. Additionally, an NPRM was issued on

July 21, 1999, that would require certain airport

operators to conduct a one-time readiness check of

selected airfield equipment and systems early on

January 1, 2000, and report the results to FAA.

• FAA Administrator Jane Garvey encouraged

airlines throughout the world to support the

International Air Transport Association (IATA)

Y2K Program. The FAA, with the endorsement of

IATA, sponsored the resolution that led to the

International Civil Aviation Organization’s (ICAO) 

Y2K assessment criteria and the reporting of Y2K

readiness. FAA also conducted extensive testing to

ensure the adequacy of communications exchange

with the approximately two dozen countries with

which FAA has direct interface. FAA, OST, and the 

Department of Defense reviewed information

gathered by ICAO and other sources on the Y2K

readiness of foreign civil aviation authorities and

made the results available to help U.S. citizens

plan international travel.

• At midnight, December 31, 1999, the FAA’s air

traffic control system successfully managed the

rollover to the year 2000 without incident. FAA

continued to monitor and upgrade FAA systems

throughout March 2000, ensuring that all systems

safely transitioned through the February 29th Leap 

Day rollover. The total cost of the FAA Y2K effort

was $238 million.

FY 1999 FAA ANNUAL REPORT

OVERVIEW -17- CHAP TER 1
-18-

FY 1999 FAA ANNUAL REPORT

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FY 1999 FI NAN CIAL HIGH LIGHTS

FAA BUDGET

F

AA is financed through annual and multi-year

appropriations authorized by the Congress. The

largest appropriation – Operations – funds the

salaries and associated costs to operate and maintain

the air traffic control system and to carry out its safety 

inspection, regulatory, and security responsibilities. 

The FAA budget also includes three capital

investment programs: (1) the Facilities and

Equipment (F&E) appropriation authorizes funds to

modernize and expand the air traffic control system;

(2) the Airport Improvement Program (AIP) provides

grants funding to expand and improve the Nation’s

public-use airports; and (3) the Research,

Engineering, and Development appropriation

provides funds to develop new aviation technology

and systems. 

The Airport and Airway Trust Fund (Trust Fund),

maintained through the deposit of aviation excise

taxes, finances 100 percent of the F&E, AIP, and

R,E&D capital investment programs. These critical

capital investment programs are described in three

regularly issued plans: the Aviation System Capital

Investment Plan (CIP); the National Aviation

Research Plan; and the National Plan of Integrated

Airport Systems (NPIAS). In addition to funding the

capital programs, the Trust Fund pays a portion of the 

FAA’s operating cost. From FY 1995 through FY

1999, the Operations appropriation has received

approximately 50 percent of its funding from the

Trust Fund and the balance from the General Fund.

Overall, in FY 1999, the Trust Fund financed nearly

74 percent of the FAA’s total budget.

Airport and Airway Trust Fund. The Airport and

Airway Revenue Act of 1970 created the Trust Fund

to provide a stable source of funding to finance

investments in the airport and airway system and, to

the extent funds were available, cover the operating

costs of the airway system. The Act provided for the

deposit of aviation excise taxes into the Trust Fund.

Since its establishment, various changes have been

made to the rate structure supporting the Trust Fund. 

The most recent changes were centered in the

Taxpayer Relief Act of 1997 (P.L. 105-34), effective

October 1, 1997:

• Extends aviation taxes for 10 years (through

September 30, 2007).

• Retains existing freight waybill, general aviation

fuel/gas taxes. 

• Converts the 10 percent ad valorem tax on domestic 

passenger tickets to a combination ad

valorem/flight segment tax over 3 years beginning

October 1, 1997, where a domestic flight segment is

a flight involving a single takeoff and a single

landing. The timetable for these taxes is as follows:

9% plus $1 per segment from Oct.1, 1997,

through Sept. 30, 1998;

8% plus $2 per segment from Oct.1, 1998,

through Sept. 30, 1999;

FY 1999 FAA ANNUAL REPORT

FI NAN CIAL HIGHLIGHTS -19- CHAP TER 1

FY 1999 FAA Funding

by Source

(Dollars in Millions)

$1,480

$8,335

Airport and

Airway

Trust Fund

General

Fund

(1) Excludes $7.273M administrative/travel rescission per P.L.

106-51.

FY 1999 FAA BUDGET (1)

Di stribution by A ppropriation and Obligation Limitation

(Dollars in M illions)

F&E $2123

R,E&D $150 Airports Grants

$1950

Operations $5592
7.5% plus $2.25 per segment from Oct.1,

1999, through Dec. 31, 1999;

7.5% plus $2.50 per segment from Jan.1,

2000, through Dec. 31, 2000;

7.5% plus $2.75 per segment from Jan.1,

2001, through Dec. 31, 2001;

7.5% plus $ 3 per segment from Jan.1,

2002, through Dec. 31, 2002.

• After 2002, the $3 segment rate will be indexed

to the Consumer Price Index (CPI).

• Imposes a new 7.5 percent tax on payments to

airlines for frequent flyer and similar awards

by banks and credit card companies,

merchants, frequent flyer program partners -

other airlines, hotels, or rental car companies,

and other businesses.

• Increases the current $6 international

departure tax to $12 per passenger and adds a $12

international arrival tax. If an intermediate stop

exceeds 12 hours, subsequent domestic segments

are taxed as domestic transportation. These taxes

were indexed to the CPI as of January 1, 1999.

• Retains a special rule for flights between the

Continental United States and Alaska or Hawaii at

$6 for departures. This tax is indexed to the CPI

starting January 1, 1999. 

• Lowers tax rate on flights to certain rural airports

to 7.5 percent, and omits flight segment tax

component.

• Transfers revenues from the 4.3-cents-per-gallon

aviation fuel tax formerly dedicated to reduce the

national U.S. deficit from the General Fund to the

Airport and Airway Trust Fund.

While held by Treasury, Trust Fund monies are

invested in Government securities. Any interest

earned is deposited into the Trust Fund. Amounts 

are withdrawn from the Trust Fund as it is needed 

and transferred into each FAA appropriation to

cover necessary outlays. The uncommitted

balance in the Trust Fund, which was $6.67 billion 

at the end of FY 1999, is expected to continually

decrease if the proposed option to fund FAA’s

budget totally from the Trust Fund without any

General Fund contributions materializing. Also,

this is dependent on no change in the aviation

taxes outlined above.

Operations. Funds from the Operations

appropriation are used to pay salaries and other costs

required to operate and maintain the ATC system on

a 24-hour basis. Other mission-critical expenses

financed by this appropriation include salaries and

associated costs for: (1) the planning, direction, and

evaluation of FAA programs; (2) engineering for the

establishment of air navigation facilities; (3) the

development and enforcement of flight standards and

civil air regulations; (4) the promulgation and

enforcement of standards, rules, and regulations

governing the physical fitness of airmen; (5) the

administration of research and development

programs; (6) the protection of the traveling public in

commercial U.S. air transportation against terrorist

and other criminal acts; (7) regulating commercial

space transportation industry; and (8) national

FY 1999 FAA ANNUAL REPORT

FI NAN CIAL HIGHLIGHTS -20- CHAP TER 1

Operations Appropriation

(By Budget Activity)

Administration

5%

Research and

Acquisitions

1%

Airports

1%

Staff Offices

2%

Regulation and

Certification

11%

Civil Aviation

Security

2%

Commercial

Space

Transportation

*

Air Traffic

Services

78%

Operations

Obligation Trends

Fiscal Years1990 - 1999

(Dollars in Millions)

5,553

5,248

4,931

4,531 4,580 4,573 4,641

4,361

4,036

3,825

0

1,000

2,000

3,000

4,000

5,000

6,000

FY '90 FY '91 FY '92 FY '93 FY '94 FY '95 FY '96 FY '97 FY'98 FY'99

Obligations*

 * Less than 1%
integrated airport planning and the supervision of

grants-in-aid for airport expansion and improvement.

Facilities and Equipment (F&E). Funds from the

F&E appropriation are used to modernize, expand,

and replenish the ATC infrastructure. Examples of

F&E programs include the deployment of improved

controller-pilot data link communications; the

replacement of aging ATC computer hardware and

software in en route centers and terminal radar

approach control facilities; the installation of

advanced radar for airport surveillance to help

prevent runway incursions and to warn of

hazardous weather; the augmentation of GPS; the 

fielding of automated decision support tools that

will enable controllers to allow users greater

freedom to fly more direct routes; and the

deployment of explosive detection systems (EDS)

and other security devices for screening

passengers, baggage, and cargo. 

The Blueprint for NAS Modernization: An

Overview of the National Airspace System

Architecture Version 4.0, released in January

1999, describes the joint FAA and industry

operational concept and long-term plan for evolving

the NAS to handle future growth in aviation

while enhancing safety. The NAS Architecture is

the principal framework of NAS infrastructure

investment decisions.

Research, Engineering and Development

(R,E&D). The FAA’s R,E&D programs are

directed toward improving safety, security,

capacity, efficiency, and ensuring the

environmental compatibility of the NAS. Areas of 

primary focus include continued research in

aircraft structures and materials; systems

security research; improved aviation weather

products, and resolution of environmental issues.

FAA human factors and aviation medicine research

will focus on how to best accommodate changes in

equipment and procedures and other studies to

reduce the risk of human error by agency personnel

and air crewmembers. 

Guided by the NAS Architecture, FAA publishes an

annual R,E&D Plan which describes initiatives for

NAS service improvements and development of the

next generation air traffic management system.

Airport Improvement Program (AIP). Section

47104 of Title 49, U.S.C., authorizes the Secretary of

Transportation to make project grants for airport

planning and development under the AIP to

maintain a safe and efficient nationwide system of

public-use airports that meets both present and

future needs of civil aeronautics. The payment of

user taxes to the Federal Government by air

travelers and shippers contributes to the Airport

and Airway Trust Fund and makes it possible to

fund one-fourth to one-third of all capital

development at the Nation’s public-use airports.

Consequently, no Federal monies are withdrawn

from the General Fund for federally assisted

projects to maintain and enhance airport safety,

preserve existing airport infrastructure, and

expand capacity and efficiency throughout the

FY 1999 FAA ANNUAL REPORT

FI NAN CIAL HIGHLIGHTS -21- CHAP TER 1

Facilities and Equipment

Obligation Trends

Fiscal Years 1990 - 1999

(Dollars in Millions)

2,541

2,345

1,551

1,895

2,137

2,491

2,112 2,093 2,036 2,083

-

1,000

2,000

3,000

FY '90 FY '91 FY '92 FY '93 FY '94 FY '95 FY '96 FY '97 FY '98 FY '99

Obligations*

Grants-in-Aid for Airports

Obligation Limit Trends

Fiscal Years 1990 - 1999

(Dollars in Millions)

1,425

1,800 1,900 1,800 1,690

1,450 1,450 1,460

1,700

1,958

0

500

1,000

1,500

2,000

2,500

FY '90 FY '91 FY '92 FY '93 FY '94 FY '95 FY '96 FY '97 FY '98 FY '99

Obligations

Research, Engineering and Development

Obligation Trends

Fiscal Years 1990- 1999

(Dollars in Millions)

144

199

181

263

256

229

212

199 198

1 37

0

50

100

150

200

250

300

FY '90 FY '91 FY '92 FY '93 FY '94 FY '95 FY '96 FY '97 FY '98 FY '99

Obligations*
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL HIGHLIGHTS -22- CHAP TER 1

STATEMENT OF OBLIGATIONS INCURRED BY APPROPRIATION

AND MAJOR OBJECT CLASSIFICATION

( Values Rounded to the Nearest Thousand)

Fiscal Year 1999

Operations

Facilities and

Equipment R,E&D

Grants-inAid for

Airports Totals

Personnel Compensation $3,369,977 $188,136 $26,095 $3,584,208

Civilian Personnel Benefits 889,122 46,668 5,403 941,193

Benefits for Former Personnel 152 152

Travel and Transportation of Persons 93,274 34,981 2,854 131,109

Transportation of Things 27,665 3,727 192 31,584

Rent, Communications, and Utilities 427,291 54,402 251 481,944

Printing and Reproduction Service 10,720 309 92 11,121

Other Services 684,535 1,325,984 67,004 2,077,523

Supplies and Material 85,401 41,745 4,417 131,563

Equipment 40,200 256,266 3,116 299,582

Land and Structures 1,648 132,580 134,228

Investments and Loans 0

Grants, Subsidies, and Contributions (1) 6,000 39,321 $1,990,171 2,035,491

Insurance Claims and Indemnities 1,349 48,026 49,375

Interest and Dividends

Refunds

Total $5,631,333 $2,138,824 $148,745 $1,990,171 $9,909,073

(Percentage Rounded to the Nearest Tenth)

Fiscal Year 1999

Operations

Facilities and

Equipment R,E&D

Grants-inAid for

Airports Totals

Personnel Compensation 59.8% 8.8% 17.5% 36.2%

Civilian Personnel Benefits 15.8% 2.2% 3.6% 9.5%

Benefits for Former Personnel 0.0%

Travel and Transportation of Persons 1.7% 1.6% 1.9% 1.3%

Transportation of Things 0.5% 0.2% 0.1% 0.3%

Rent, Communications, and Utilities 7.6% 2.5% 0.2% 4.9%

Printing and Reproduction Service 0.2% 0.1% 0.1%

Other Services 12.2% 62.0% 45.0% 21.0%

Supplies and Material 1.5% 2.0% 3.0% 1.3%

Equipment 0.7% 12.0% 2.1% 3.0%

Land and Structures 6.2% 1.4%

Investments and Loans 0.0%

Grants, Subsidies, and Contributions 0.0% 0.3% 26.4% 100.0% 20.5%

Insurance Claims and Indemnities 0.0% 2.2% 0.5%

Refunds

Total 100.0% 100.0% 100.0% 100.0% 100.0%

Note- Data source is the SF-225 produced from the Departmental Accounting and Financial Information System. This statement will not 

agree with the financial statement
airport system. The AIP program received four

separate short-term reauthorizations during FY 1999

with the program lapsing on September 30, 1999.

The National Plan of Integrated Airport Systems

(NPIAS) draws selectively from local, regional, and

state planning studies to estimate the costs associated 

with establishing a system of airports adequate to

meet the needs of civil aviation. Costs identified in the 

NPIAS are eligible (nominally) for Federal

grants-in-aid. Over the next 5 years, airport

development to keep pace with growing aviation

demands will cost $35.1 billion.

The Passenger Facility Charge (PFC) Program,

authorized by the Aviation, Safety and Capacity

Expansion Act of 1990, provides an additional source

of capital funding for the expansion and preservation

of airport infrastructure in the national air

transportation system. This legislation allows public

agencies controlling commercial service airports,

after receiving approval from the FAA, to charge

enplaning passengers a $1, $2, or $3 facility charge.

PFC collections and AIP funds are complementary in

the overall funding of airport improvements. The

majority of PFC approved projects are also eligible

for further funding under the AIP. As of

September 30, 1999, authorized collections for the

307 locations approved since 1992 totaled over

$24.2 billion. As of September 30, 1999, 69 percent of

those primary airports eligible to collect PFC’s were

approved to do so. Collections, which first began on

June 1, 1992, now produce revenue for airports at a

rate exceeding $1.4 billion per year.

Although these revenues are not considered Federal

funds, the public agency’s application to impose a PFC 

must be approved by the FAA.

FY 1999 FAA ANNUAL REPORT

FI NAN CIAL HIGHLIGHTS -23- CHAP TER 1
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL HIGHLIGHTS -24- CHAP TER 1

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STRATEGIC GOALS

The development of mission-oriented goals,

formulated in concert with the aviation community it

serves, is a continuing process within the FAA. In

1998, FAA fine-tuned its strategic plan to advance the

three goals central to its mission: safety, security, and

system efficiency. These strategic goals recognize the

priorities outlined by the White House Commission on 

Aviation Safety and Security; the priorities and

concerns of the FAA’s partners in state, local

government, and industry; and FAA’s longstanding

commitment to provide the American people with the

safest and most efficient airspace system possible.

• Safety. By 2007, reduce the U.S. air carrier fatal

accident rates by 80 percent from the 1994/1996

levels.

• Security. Prevent security incidents in the

aviation system. Improve by a specified percentage 

from a 1998 baseline. 

• System Efficiency. Provide an aerospace

transportation system that meets the needs of

users and is efficient in the application of FAA and

aerospace resources.

The strategic plan, supplemented by the FAA Annual

Performance Plan, serves as a top-level link between

the program activities found in the agency’s budget.

The following chart illustrates how, in FY 1999, the

FAA continued to channel its resources in directions

dictated by its strategic plan goals.

FY 1999 FAA ANNUAL REPORT

STRA TE GIC GOALS -25- CHAP TER 1

F u n d in g L in k t o A g e n c y S t r a t e g i c G o a l s

1

F Y 2 0 0 0

( D o l la r s i n T h ou s a n d s )

S T R A T E G IC G O A L S S a f ety . S e c u r i ty S y s te m

E ffi c i e n c y

A p p ro p r i a t i on

O p er a t io n s

A i r T r af fi c S e r v i ce s 4, 6 9 6 ,4 8 7 . 0

A v ia ti o n R e gu la ti o n a n d C e r tifi ca ti o n 6 6 7 , 63 1 . 0

C iv il A v ia ti o n S e cu r ity 1 4 4, 6 4 2 .0

A i r p o r t s 5 0 ,6 0 8 . 0

R e se ar c h a n d A cq u i s iti o n s 1 8 3 ,7 4 0 . 0

C o m m e r c ia l Sp a ce T ra n s p o r t ati o n 6 , 83 8 . 0

S t a ff O ffi c e s 3 4 , 68 6 . 0 8, 6 7 8 .0 2 4 5 ,6 9 6 . 0

T o ta l 7 0 9 , 15 5 . 0 1 5 3, 3 2 0 .0 5, 1 7 6 ,5 3 1 . 0

F a c il i t i es a n d E q u i p m en t

E n g in e e r in g, D e v e l o p m e n t, T e s t a n d

E v a lu a ti o n

5 1 , 80 2 . 0 4 4 8 ,2 7 6 . 1

P ro cu r e m e n t a n d M o d e r n i z a ti o n o f A T C

F a c iliti e s a n d E q u ip m e n t 1 7 2 , 15 2 . 0 5, 4 0 0 .0 8 6 9 ,9 5 1 . 0

P ro cu r e m e n t o f n o n -A T C F a c iliti e s a n d

E q u ip m e n t

5 6 , 60 0 . 0 1 1 9, 3 2 5 .0 1 8 ,4 0 0 . 0

F & E M i s s i o n S u p p o r t 2 6 8 ,0 0 6 . 1

P e r so n n e l a n d R e la te d E x p e n se s 4 3 , 74 5 . 2 2 1, 4 5 6 .8 2 4 3 ,8 8 5 . 8

T o ta l 3 2 4 , 29 9 . 2 1 4 6, 1 8 1 .8 1, 8 4 8 ,5 1 9 . 0

R e s ea r c h , E n g i n e e r i n g a n d D ev e lo p m en t

S y s te m D e v e l o p m e n t a n d

In f r a s tr u c tu r e

3 , 05 7 . 0 3 9 7 .0 13 8 1 5 . 0

C a p a c it y a n d A ir T r a ffi c M a n a g e m e n t

T e c h n o lo g y

4 , 00 0 . 0 0 1 2 ,0 0 0 . 0

W e a t h e r 9 , 45 9 . 0 0 6 ,3 0 6 . 0

A i r c ra ft S af e t y T e c h n o l o gy 3 9 , 63 9 . 0 0 0

S y s te m S e cu r ity T e ch n o l o g y 0 5 3, 2 1 8 .0 0

H u m a n F a c t o r s a n d A v ia ti o n M e d i c in e 2 6 , 10 7 . 0 0 1 0 0 . 0

E n v i r o n m e n t a n d E n e rg y 3 ,4 8 1 . 0

S t r at e gi c P a r tn e r s h ip s 56 8 . 0 5 6 8 .0 2 8 5 . 0

T o ta l 8 2 , 83 0 . 0 5 4, 1 8 3 .0 3 5 ,9 8 7 . 0

G r a n t s i n A i d to A i r p o r t s

G r a n ts 6 2 , 40 0 . 0 9, 8 0 0 .0 1, 5 2 8 ,8 0 0 . 0

T o ta l 6 2 , 40 0 . 0 9, 8 0 0 .0 1, 5 2 8 ,8 0 0 . 0

1 FY 2000 Budget
PERFORMANCE GOALS

The FAA Annual Performance Plan defines those

performance goals and indicators used to measure the 

agency’s progress in achieving its strategic goals. The

following performance goals underscore FAA’s

commitment to each of its mission-oriented goals:

Safety

• Air Carrier Fatal Accident Rate. Reduce the

fatal aviation accident rate for commercial air

carriers per 100,000 flight hours from the

1994-1996 baseline rate of 0.037 to 0.034 by 1999

and 0.033 by 2000

• Runway Incursions. Reduce the number of

runway incursions to a level 15 percent below a

1997 baseline of 318 incursions to at or below 270

incursions in 1999 and 2000.

• Operational Errors (Air Traffic). Reduce the

rate of operational errors and deviations per

100,000 activities by 10 percent from 1994

baselines (0.54 errors and 0.11 deviations) to a 1999 

target rate of 0.496 for errors and 0.099 for

deviations. The 2000 targets are 0.486 errors and

0.097 deviations per 100,000 activities.

Security

• Aviation Security. Increase the detection of

explosive devices and weapons that may be brought 

aboard aircraft. (Detection rates are sensitive

information protected under 14 CFR, Part 191.

Performance goals and actual trend data will be

made available to appropriate parties upon

request.)

Efficiency

• Runway Pavement Condition. Maintain in

good or fair condition at least 93 percent of runways 

at all commercial service airports and reliever

airports, as well as selected general aviation

airports.

• Aviation Delay: Reduce the rates of air travel

delays by 5.5% from a 1992-1996 baseline of 181

delays per 100,000 activities. 

• Flight Route Flexibility: Increase the number of

flight segments that aircraft are able to fly off

ATC-preferred routes to 80 percent from a 1996

baseline of 75 percent. 

• Aircraft Noise. Reduce the number of people in

the U.S. exposed to significant aircraft noise by at

least 64 percent from the 1995 baseline of 1.7

million. 

• All Weather Access to Airports. Increase access

to the Nation’s airports during adverse weather

conditions by publishing 500 GPS/WAAS

approaches per year for the next 2 years, from a

prior year (FY 1995-1998) baseline of 1,453

approaches. 

The progress reports that follow are primarily for

1998, as 1999 data will not be available until the DOT

Performance Report is sent to Congress March 31,

2000. The 1999 data will be available on the DOT

website at www.dot.gov. 

FY 1999 FAA ANNUAL REPORT

STRA TE GIC GOALS -26- CHAP TER 1
Performance Measure: Fatal aviation accidents

(Commercial air carriers) per 100,000 flight hours.

Goals: 1999 2000 2001 

 .034 .033 .031 

1998 Performance: .006

Special Challenges: The fatal accident rate is very

low, as most of the major causes of accidents have

been identified, and FAA and the air transportation

community have implemented numerous system

changes to reduce the accident rate further.

What Happened in 1998: There was a single fatality 

related to commercial aviation during calendar year

1998, which involved a ground crewmember. With

very low accident rates, year-to-year variance should

be expected as results fluctuate as they follow longer

trends in the industry. Viewed in this context, 1998’s

rate dropped from the unusually high rate in calendar

year 1997 and continues the long-term trend toward

improved safety in commercial aviation.

External factors influencing this goal in 1998 include

the expanded use of small jet aircraft in the scheduled

regional segment of the industry, which appears to be

contributing to the marked safety improvements in

that segment. Since the introduction of jet transports

into commercial aviation in the late 1960’s, they have

proven to be safer and more reliable than propeller

driven aircraft.

Greater emphasis within the industry training

programs on human factors and crew resource

management and their importance may also be

having a positive effect on aviation safety in the

commercial section.

In 1998, the Certification, Standardization, and

Evaluation Team (CSET) created an enhanced

Certification Process Document (CPD), making

identification of regulatory requirements for air

carrier certification based on types of operations and

types of aircraft significantly easier. By eliminating

confusion on the applicability of rules, it ensures that

all carriers would be certified at one level of safety.

Significant strides were made in using the Safety

Performance Analysis System (SPAS), a

computer-based decision support tool to help aviation

safety inspectors identify certificate holders that may

present a safety risk. Software enhancements

continue to improve the functionality of the system.

One hundred and thirty-five SPAS training classes at

11 sites were conducted during FY 1998, expanding

the number of aviation safety inspectors training to

exploit the full capability of SPAS.

FY 1999 FAA ANNUAL REPORT

STRA TE GIC GOALS -27- CHAP TER 1

Leading Causes of U.S. Air

Carrier Fatal Accidents (1987-1996)

Runway

Incursions

12%

In-Flight

Fire

6%

Landing

3%

Loss of

Control

32%

Other/

Unknown

26%

Ice/Snow

9%

Controlled

Flight into

Terrain

12%

Why We Act. Commercial aviation is one of the safest forms of transportation. But when passengers board an

airplane, they give up personal control and face an unfamiliar risk. While fairly rare, aviation accidents can have

catastrophic consequences, with large loss of life. The public demands a high standard of safety and expects

continued improvement. In 1997, the White House Commission on Aviation Safety and Security established a

goal of reducing the fatal accident rate by 80 percent by 2007.

AIR CAR RIER FA TAL AC CI DENT RATE

Commercial Air Carrier Fatal

Accident Rate

0.00

0.05

0.10

0.15

0.20

1988 1992 1996 2000

Trend Goal
A resource-targeting model was also developed in

1998 to provide an analytical tool for use in

prioritizing workload requirements in terms of

Aircraft Certification’s highest safety priorities. The

model is specifically designed to improve the

effectiveness and efficiency of the Aircraft

Certification Systems Evaluation Program. 

FAA has identified and, in 1998, began implementing

safety recommendations for flightcrew interacting

with flight deck systems. Implementation of these

human factors recommendations is underway in

design, training, crew qualifications, and their

associated regulatory material and processes.

Assessment of Current Year (FY 2000)

Performance Plan: The long-term trend in

commercial aviation safety remains on target for the

FY 2000 goal; however, variance in year-to-year

results should be expected because occurrences are so

rare. 

Strategies and FY 2001 Initiatives: FAA will

continue to work with the aviation community and

other governmental agencies to identify causal factors 

of accidents and intervene accordingly to prevent

potential causes of future accidents. FAA’s “Safer

Skies” effort in the commercial aviation area includes

the following six accident categories: controlled flight

into terrain, loss of control, uncontained engine

failure, runway incursion, approaches and landings,

and weather. Task forces representing Government

and industry are working on identifying intervention

strategies designed to reduce or eliminate these

threats to aviation safety. The runway incursion

initiative, another important FAA safety program, is

addressed under a separate performance goal. 

• FAA’s “Safer Skies” effort with the aviation industry

in FY 2001 will feature implementation and further

identification of selected interventions in controlled

flight into terrain and uncontained engine failure.

Causal analysis will begin for weather-related

accidents; recommended interventions will be

identified for loss of control accidents; and detailed

implementation plans will be completed for

approach and landing accidents and runway

incursions. For 2001, FAA targets a 20 percent

reduction in fatal accidents in the 6 areas of the

“Safer Skies” initiative, which will be the key factor

in reducing the overall fatal accident rate. 

• FAA’s regulation and certification program

establishes aviation safety standards, monitors

safety performance, conducts aviation safety

education and research, issues and maintains

aviation certificates and licenses, and manages

rulemaking. 

• FAA’s aviation medicine research program works

to enhance cabin safety factors via studies that

include crash injury protection provided by

improved seat/restraints, emergency evacuation,

and crew protective breathing systems; and is

developing guidelines based on accident research,

toxicological findings, and analyses of information

from the aeromedical consolidated database to help 

prevent aircraft accidents, injuries, and death. 

• FAA’s research in safety technology supports the

regulatory program, which sets safety standards

for aircraft design and maintenance. Areas studied 

include fire-resistant materials for cabin interiors,

fire detection equipment, inspection and

maintenance of aging aircraft, and prevention of

engine failures. 

Other Federal Programs with Common

Outcomes: FAA and NASA have harmonized their

aviation safety goal that committed each agency to

pursue activities that will directly contribute to an 80

percent reduction in the fatal air carrier accident rate

by 2007. The two agencies are developing an

integrated research plan that will support the

achievement of the common goal.

FY 1999 FAA ANNUAL REPORT

STRA TE GIC GOALS -28- CHAP TER 1
FY 1999 FAA ANNUAL REPORT

Performance Measure: Number of runway

incursions.

Goals: 1999 2000 2001 

 270 248 241 

1998 Performance: 325

Special Challenges: Growth in airport operations

has averaged over 3.5% per year. With an increased

tempo of operations, the risk of incursions increases.

Runway incursions are most likely to occur at

complex, high volume airports. These airports

typically have multiple parallel or intersecting

runways; multiple taxiway and runway intersections; 

complex traffic patterns, and the need for vehicular

and aircraft traffic to cross active runways.

What Happened in 1998. The total count of runway

incursions has increased steadily between 1993 and

1998. Runway incursions fall into three general

classifications: operational errors, pilot deviations,

and vehicle/pedestrian deviations. For 1998, the

breakdown was 28% operational errors, 56% pilot

deviations, and 16% vehicle/pedestrian deviations.

The main causal factors for runway incursions

continue to be communications, airport knowledge,

and cockpit procedures for maintaining orientation.

The communications problem generally results from

incorrect understanding of the controller’s

instructions. In numerous incidents, the pilots

continued onto or crossed active runways even though 

controllers had told them to hold. Lack of knowledge

of the airport appears to be another significant factor,

because pilots are uncertain about taxi routes.

Cockpit-procedures become a problem when

flightcrews become absorbed in other duties and do

not pay adequate attention to controller’s

instructions. FAA is addressing these problems by

producing education programs to enhance cockpit

awareness for avoiding runway incursions.

The preliminary numbers for 1998 showed what may

be a tapering off in the growth of runway incursions.

There appears to be a smaller increase in runway

incursions in 1998 (5 percent growth over 1997

instead of the 18-20 percent annual growth seen

before). When this count is normalized to airport

operations, the rate of incursions per 100,000

operations was 0.5 – the same rate as in 1997. While a 

continued increase in runway incursions is

unacceptable, the apparent stabilization of rate may

indicate that programs designed to lower risk are

beginning to have an effect.

The principal external factor contributing to runway

incursions is the increased capacity and volume at

major airports, which increase the opportunity for

runway incursions. In 1998, airport operations

increased by 1.1 million over 1997’s already high

volume of 62,508,615 – a 1.8 percent increase. 

In 1998, the FAA promoted awareness by preparing

exhibits for conferences held by general aviation user

groups and the Oshkosh Fly-In. The Runway

Incursion Action Teams visited five airports with

runway incursion incidents and developed action

plans to reduce incursions at Cleveland, Los Angeles,

and Long Beach.

Assessment of Current Year (FY 2000)

Performance Plan. FAA is working to meet its

CY 2000 goal of 248 runway incursions or less. As

actions to educate pilots and use of the Runway

Incursion Action Teams to reduce incursions have

STRA TE GIC GOALS -29- CHAP TER 1

RUNWAY INCURSIONS

Why We Act: Runway incursions create dangerous situations that can lead to serious accidents. A runway

incursion occurs when an aircraft, ground vehicle, or person occupies or crosses a runway that is in active use for

takeoffs or landings. The largest aviation disaster in history (at Tenerife) resulted from a runway incursion.

Reducing the number of runway incursions will lessen the probability of accidents that potentially involve

fatalities, injuries, and significant property damage.

Runway Incursions

0

100

200

300

400

1989 1991 1993 1995 1997 1999 2001

Trend Goal
shown positive results, FAA will continue and expand

these efforts. The teams will visit 20 airports in 1999,

and they will set an aggressive schedule for 2000. In

addition, FAA is investigating and implementing new

technologies such as AMASS and automatic

dependent surveillance (ADS/B) to further reduce

runway incursions.

Strategies and FY 2001 Initiatives: Since human

error is the primary cause of runway incursions, FAA

will continue to focus its efforts on training and

technology that compensates for human error. The

Runway Safety Program is a systemwide

comprehensive plan to reduce incidents and accidents

directly attributable to runway incursions and

improve airport surface operations. The Airport

Surface Operations Safety Action Plan identifies

goals, objectives, and actions that can be met by

management or procedural changes; training and

awareness initiatives; improvements in airport

navigation aids, signs and surface markings; and

technology enhancements.

• FAA’s “Safer Skies” agenda includes a special focus

on reducing runway incursions.

• FAA plans to continue development of procedures,

training programs, and potential improvements to

airports to reduce runway incursions. FAA will also 

begin procurement of a prototype low-cost surface

detection system that could be used to assist

controllers in locating airport surface traffic.

• FAA’s approximately 3,000 controllers assigned to

the tower cab at airports have a major role in

preventing runway incursions. They provide

specific instructions to pilots and groundcrew on

when aircraft and vehicles can be moved or must

stop and wait for other aircraft and vehicles to clear

the runway or taxiway.

• FAA will upgrade airport surface detection systems 

and begin replacement of obsolete components at

the 40 airports with surface detection systems. 

• FAA will continue deploying the surface movement

advisor – a computer display that makes it easier

for controllers, airlines, and airport operators to

share information on aircraft taxiing and better

manage airport ground traffic. 

• FAA’s Runway Incursion Program Implementation 

Plan provides for the continuation of training

enhancements and awareness of surface incident

problems. This plan includes increasing the

number of Runway Incursion Action Team visit

and improvements in determining trends and

providing problem solution information to prevent

incursions. Airport surface safety campaigns will

continue to promote pilot and airport operator

involvement in issues related to surface incident

awareness.

• Installation/acceptance of airport movement area

safety system (AMASS) production systems began

in April 1999. As previously mentioned in this

report, AMASS provides automatically generated

visual and aural alarm alerts to controllers to aid in 

the prevention of loss of life and property that could

result from runway incursions.

Other Federal Programs with Common

Outcomes: DOD has developed software, based on

radar images, for detection of aircraft and other

vehicular movement to reduce runway incursions at

military airports.

FY 1999 FAA ANNUAL REPORT

STRA TE GIC GOALS -30- CHAP TER 1
Performance Measure: Operational errors per

100,000 activities

Goals: 1999 2000 2001

 .496 .486 .600

1998 Performance: .55

Performance Measure: Deviations per 100,000

activities

Goals: 1999 2000 2001

 .099 .097 #

1998 Performance: .18

# Goal for deviations discontinued after FY 2000.

Special Challenges: Operational errors are a result

of human error. FAA may already be approaching an

expected level of human performance, in which case

further automation would be needed. Analysis has

shown that five factors are significant: traffic

management relationships, quality assurance

programs, training, management involvement, and

control room environment. The most significant

external factor influencing this measure is the

increasing volume of air traffic activity, which adds to

traffic complexities. From 1997 to 1998, air traffic

volume rose by 3% and in 1999 increased at an annual

rate of 4%.

What Happened in 1998: The FAA’s Air Traffic

Services (ATS) responsibility is the day-to-day safe

operation of the Air Traffic Management (ATM)

system. Rules and procedures are in place to assure

separation. Violations of these rules are reported and

counted as operational errors and deviations.

In 1998, operational errors were 0.55 per 100,000

facility activities, missing the goal of 0.504.

Deviations were 0.18 per 100,000 facility activities,

missing the goal of 0.101. FAA is studying the reasons 

for these increases, which may be the result of several

factors including closer scrutiny of the data. Errors

and deviations are recorded by Air Traffic

Management facilities and are based on standard

parameters that must be exceeded for an incident to

be recorded. A survey of these facilities in August

1998 indicated a widespread misunderstanding of the 

procedures used in interpreting the data. The

corrected interpretation of these procedures may

explain a portion of the current increase.

Analysis has shown the top three causal factors for

operational errors/deviations categories to be:

1. Failure to project future status of displayed data, 

2. Failure to comprehend displayed data, and

3. Failure to detect displayed data.

The Office of Air Traffic Planning and Procedures is

using information on causal factors to develop and

improve procedures to help reduce the error rates.

The Office of Air Traffic Resource Management is also 

using this information to address training issues.

Special evaluations were conducted on a case-by-case

basis at facilities with increasing trends in

operational errors/deviations. Processes common to

all facilities were broken down into five areas and

observed: traffic management relationships, quality

FY 1999 FAA ANNUAL REPORT

STRA TE GIC GOALS -31- CHAP TER 1

OPERATIONAL ERRORS (AIR TRAFFIC)

Why We Act: One of the fundamental principles of aviation safety is “separation” — the need to maintain a safe

distance from other aircraft, terrain, obstructions, and certain airspace not designated for routine air travel. Air

traffic controllers employ separation rules and procedures that define separation standards for many different

environments where aircraft operate. Pilots flying under visual flight rules operate under a “see and avoid”

policy. Pilots using instrument procedures rely on air traffic controllers’ instructions to guide them. When

aircraft are allowed to violate these separation standards, an operational error occurs.

Operational Errors & Deviations

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

1988 1990 1992 1994 1996 1998 2000

Error Trend Error Goal

Dev. Trend Dev. Goal
assurance programs, training issues, management

involvement, and control room environment. The

observations were provided to Regional Quality

Assurance Staffs for development of corrective

initiatives.

In 1998, the FAA also had regional quality assurance

staffs participate in twice-weekly tele-conferences to

focus attention on operational error/deviation

reduction efforts.

FAA developed and distributed quarterly analysis of

causal factors and observed trends for recent

operational errors/deviations and implemented an

Air Traffic Quality Assurance Order. This provided

renewed focus on the responsibilities of operational

supervisors to provide recurring technical training to

ATCS’s to enhance control effectiveness.

Assessment of Current Year (FY 2000)

Performance Plan: Until the nature of the recent

increases in error and deviation data is understood,

achieving the 2000 goals is uncertain. The data are

being studied for anomalies in reporting. Data

reporting issues suggest that it is not realistic to set a

goal for operational errors at the level of detail implied 

by the FY 1999 and FY 2000 goals. Therefore, the FY

2001 goal has been set to only one decimal place. 

FAA is conducting quarterly safety meetings with all

Regional Quality Assurance Staff managers. These

meetings disseminate operational error/deviation

causal factors; review performance trends

attributable to errors/ deviations; and identify, review 

and disseminate successful operational

error/deviation reduction initiatives.

FAA has also developed a change to Air Traffic

Quality Assurance Order 7210.56A to require facility

management and regional Air Traffic Division

involvement in recertification following

operational/error/deviation (effective May 1, 1999).

FAA developed a Quality Assurance Review (QAR)

process to identify and correct controller performance

deficiencies prior to occurrence of an operational error 

or deviation. QAR’s provide the means to identify,

investigate, and resolve performance deficiencies

through corrective training (effective May 1, 1999).

Strategies and FY 2001 Initiatives: One of the

major approaches to reducing operational errors is to

provide a common understanding of procedures and

policies among controllers and users. Training for

controllers and pilots is central to this and will

continue to be the focus of Air Traffic Service safety

strategies. Technological improvements such as

deployment of modern displays, new decision support

tools, and improved communication systems will

support better determination of aircraft location and

reduce errors and miscommunication between pilots

and controllers. FAA will:

• Address and reduce repeat incidents by

individuals through meaningful individual skill

enhancement/remedial training.

• Implement a requirement for facilities to provide

corrective action to significant problems identified

by facility evaluations within 5 days.

• Conduct special assessments of selected facilities

that have increases in the operational error rate.

• Implement annual controller skill checks to

identify deficiencies and areas where special

training is needed.

Other Federal Programs with Common

Outcomes: None.

FY 1999 FAA ANNUAL REPORT

STRA TE GIC GOALS -32- CHAP TER 1
Performance Measure: Percent of runways in

good or fair condition (commercial service, reliever, 

and selected general aviation airports).

Goals: 1999 2000 2001

 93% 93% 93%

1998 Performance: 95.1%

Special Challenges: Although runway

rehabilitation is among the highest priorities of FAA’s 

Airport Improvement Program (AIP), projects must

be initiated by airport operators who pay a portion of

the cost. The availability of grants for rehabilitation

may detract from regular maintenance programs,

which are usually funded entirely by the airport

operator.

What Happened in 1998: In 1998, about 73% of

commercial service airports had runways in good

condition, and 24% were in fair condition. Only 3%

were noted in poor condition.

State aviation agencies are increasing their use of

computer-based pavement management systems to

prioritize grants for runway pavement rehabilitation

and to predict when different types of maintenance

and rehabilitation are most likely to be cost effective,

measures that should increase the effectiveness of

state and Federal expenditures on airfield pavement.

External factors influencing this goal in 1998 include

air carrier flight operations at commercial service

airports, which have increased by 13 percent over the

past 5 years. This volume of operations can increase

wear on runway pavement. Countering this impact

have been generally mild winters in 1997 and 1998,

which may have helped in the accomplishment of

runway resurfacing and repair.

Assessment of Current Year (FY 2000)

Performance Plan: The 1998 results exceed the

FAA performance standard of at least 93% of runways 

in good or fair condition. A similar result is

anticipated in 2000.

Strategies and FY 2001 Initiatives: Maintaining

and rehabilitating runway costs less than total

reconstruction of runways. Since FY 1995, AIP grant

recipients have been required to show evidence of an

airport pavement maintenance management

program. An AIP demonstration program was

conducted to fund crack sealing at nonprimary

airports, and the FAA has proposed legislation to

make this program permanent.

• FAA will continue to give requests for runway

rehabilitation a high priority in 2001. FAA

estimates that approximately 200 runways will be

rehabilitated with AIP aid in 2001. The availability 

of AIP funds for this purpose will have the most

immediate influence on runway pavement condition.

• If the Administration’s legislative proposal is

statutorily enacted, AIP funds will be available for

pavement maintenance at smaller airports.

• FAA will continue research to refine pavement

design to accommodate new, larger aircraft that

will impose very heavy wheel loads on pavement.

• In response to the General Accounting Office’s July

1998 report “Airfield Pavement: Keeping Nation’s

Runways in Good Condition Could Require

FY 1999 FAA ANNUAL REPORT

STRA TE GIC GOALS -33- CHAP TER 1

RUNWAY PAVEMENT CONDITION

Runway Pavement Condition

80

85

90

95

100

1988 1990 1992 1994 1996 1998 2000

Trend

93

Pe rformance Standard

Why We Act: Deteriorated airport runway pavement can damage propellers, turbines, and airplane landing

gear. Proper design, construction, and maintenance can slow this deterioration, but runways still need

complete rehabilitation every 15 to 20 years. This means that during a typical year, five to seven percent of

runways require rehabilitation. Federal airport funding helps achieve this necessary level of reh abilitation,

and - combined with proper maintenance - helps keep runway condition at or above the minimum level needed

to ensure efficient airport operation.
Substantially Higher Spending,” the FAA will

pursue more effective programs for inspecting and

reporting the condition of runway pavement.

Other Federal Programs with Common

Outcomes: None.

FY 1999 FAA ANNUAL REPORT

STRA TE GIC GOALS -34- CHAP TER 1
Performance Measure: Volume and

equipment-related delays per 100,000 flight

operations.

Goals: 1999 2000 2001

 30.70 # #

1998 Performance: 32.55

Performance Measure: Aviation delays per

100,000 activities.

Goals: 1999 2000 2001

 # 171 171

1998 Performance: #

# The measure for Aviation Delays was changed

after 1999 to include all causes of delay, including

weather.

Special Challenges: As traffic increases, delays are

likely to increase. Consequently, maintaining the

current delay rate in the face of increasing traffic

represents a significant accomplishment. Due to the

air traffic density and the amount of adverse weather,

capacity constraints at large hub airports lead to delays

throughout the National Airspace System (NAS). 

What Happened in 1998: In FY 1998, the rate of

volume and equipment-related delays was 31.92 per

100,000 flight activities. This met the FAA goal of

31.95 or less.

The 1998 results follow a multi-year trend of

generally diminishing volume and equipment delays.

These results may be due to a number of FAA

initiatives. The Air Traffic Control Systems

Command Center (ATCSCC) has placed increased

emphasis on honoring commitments to aircraft,

helping to eliminate the practice of “no notice

holding.” Collaborative decision making (CDM) was

begun in 1997 and continues to be used in ground

delay programs. The increased dissemination (within 

24 hours) of written maintenance alert information

contributes to reduced equipment delays by preventing

similar events that stem from a common cause.

Most aviation delay and variance in delay is the result 

of weather. While FAA initiatives to improve weather 

prediction and flight routing can serve both to

improve safety and to reduce delays, the FAA’s ability

to manage weather delays is more limited, and

aviation safety will always be the foremost concern in

air traffic control.

Viewed from the perspective of airline passengers, the 

on-time arrival rate for the ten largest air carriers has 

generally declined in recent years despite a general

improvement in FAA volume and equipment related

delays. DOT tracks these arrival rates and reports

this performance as a public service but sets no goals

since this outcome is significantly influenced by

industry equipment and operations.

FY 1999 FAA ANNUAL REPORT

STRA TE GIC GOALS -35- CHAP TER 1

AVIATION DELAY

Aviation Delays

0

100

200

300

Aviation Delays Target

Why We Act: Commercial aviation delays are estimated to cost the airlines over $3 billion a year. Passengers

are directly affected by the inconvenience of delays in terms of missed flight connections, missed business

meetings, and loss of personal time. With demand for passenger travel increasing each year, there are

approximately 20 congested airports, each with an estimated average annual delay of over 20,000 hou rs, and

delays throughout the system are projected to increase.

Total Number of Delays (By Cause)

0

50

100

150

200

250

300

350

1992 1993 1994 1995 1996 1997 1998

Weather

All Other

Equipment

Volume
The most significant external factor influencing the

rate of volume and equipment delays is the steadily

increasing use of theNAS. Increased volume leaves a

small margin to absorb delays.

In other related FY 1998 activities, the Operations

Network (OPSNET), which is used by air traffic to

record delays and activity counts, was redesigned to

ensure year 2000 compliance and provide more

information on the conditions that have resulted in

delays. The ATCSCC also continues to conduct

training classes in order to provide more accurate

view of delays in the system.

Assessment of Current Year (FY 2000)

Performance Plan: Current assessment of aviation

delays shows that the FY 2000 target should be

achievable with the current mix of strategies and

initiatives. For FY 2000, the performance measure

has been expanded to address all causes of delay,

including weather.

Strategies and FY 2001 Initiatives: FAA

strategies to reduce delays include NAS

improvements, better weather reporting systems, and 

defining user priorities. .

• FAA is implementing air traffic automation

enhancements in Free Flight Phase I. By the end of

2001, the traffic management advisor will be

installed and operating in seven centers;

collaborative decision making tools will be fully

developed and operational; the user request

evaluation tool will be installed and operating at

three centers; and the surface movement advisor

will be operating at six airports.

• Existing controller workstations are being

upgraded to run enhanced software (display system 

replacement). New equipment will improve system 

reliability and allow the new software to be added to 

existing controller automation tools. 

• Existing computer processing hardware was

replaced for the central computer complex in all 21

centers. The host and oceanic system computer

replacement (HOSCR) provides faster processing of 

data, improved reliability and supportability, and

is year 2000 compliant.

• Improved modeling of airspace capacity,

development of better algorithms, completion of

prototype development, and evaluation of new

equipment for collaborative decision making with

users will lead to new tools to improve traffic flows. 

• FAA is developing two major systems to improve

weather reporting, processing, and dissemination.

The integrated terminal weather system (ITWS)

will consolidate information from several sources,

which is provided to airport towers. The weather

and radar processor (WARP) will report weather

information and integrate weather radar data

provided to the FAA centers. 

• In support of the two programs above, FAA is

continuing to implement and improve existing

weather sensors such as the NEXRAD weather

radar, terminal Doppler weather radar, low level

windshear alert system, a windshear detection

channel for the terminal radar, and the automated

surface observing system. 

• FAA’s weather research program for 2001 will be

developing a fog prediction model to better forecast

when visibility will be adequate for airport

operations and an enhanced wake turbulence

monitoring system for San Francisco Airport and

support for wake turbulence programs at other airports.

Other Federal Programs with Common

Outcomes: NASA has developed enhanced software

tools for air traffic control in partnership with FAA.

In addition, the FAA’s aggressive aviation weather

research program, in collaboration with the National

Weather Service (NWS) and other Government

agencies is investing in improved numerical weather

models to provide more detailed and timely

hazardous weather detection and forecasting.

Improved icing, turbulence, oceanic convection, and a

National Ceiling and Visibility Forecast Program

provide the tools for improved flight planning and

collaborative decision making. The further

development of the aviation gridded forecast system

provides for tailored, route specific flight planning for

safer, more efficient operations.

FY 1999 FAA ANNUAL REPORT

STRA TE GIC GOALS -36- CHAP TER 1

F ligh t Opera t ion s Ar rivin g O n -T im e

(M ajo r U.S. Air Car riers )

5 0

6 0

7 0

8 0

9 0

10 0

90 91 9 2 93 9 4 95 96 97 98

Tre nd
Performance Measure: Percentage of flights

that aircraft are able to fly off ATC-preferred

routes.

Goals: 1999 2000 2001

 80.0% 80.0% 80.0%

1998 Performance: 76%

Special Challenges Growth in aviation increases

the complexity of air traffic control, making it more

difficult to allow unrestricted flights in all areas of the

system. The goal of the program is to increase system

flexibility as much as possible without interfering

with safety.

What Happened in 1998: In 1998, 76.2% of flights

were not subject to ATC preferred routes, falling just

short of the FAA goal of 77%.

The aim in not assigning preferred routes is to give

increased flexibility to aircraft, which may translate

into improved scheduling efficiency and reduced

flight miles. The action of not assigning or

eliminating preferred routes does not automatically

make a contribution to the goal of aviation efficiency.

It does provide flexibility to the industry and the

potential for improved efficiency in certain situations. 

The impact of eliminating an ATC preferred route

depends on the amount of traffic between the

associated city pair. The impact increases as the

amount of air traffic between the associated city pair

increases.

An external factor complicating goal achievement is

the increase in air traffic activities, which have been

growing at approximately 4% annually. 

Activities in 1998 included a 180-day testing for the

elimination of 68 published routes, which began in

May 1998. The current preferred route database

contains approximately 2,000 high altitude preferred

routes.

Other initiatives that may have partially supported

this goal are the National Route Program (NRP) and

the Required Navigation Performance Standards

(RNP-10). The NRP allows aircraft to file more

efficient routes unimpeded by the preferred route

system between 200 nautical miles from the

departure airport and 200 nautical miles from the

destination airport. The RNP-10 allows for reduced

separation standards in the Pacific oceanic area that

affords greater flexibility for route planning.

Also, in a continuing effort to reduce systemwide

delays, a new procedure was implemented in 1998

that required all requests for preferred route

restrictions to be coordinated through the Air traffic

Control Systems Command Center (ATCSCC). The

aim of this procedure was to prevent restrictions that

might impact several en route centers and cause

unnecessary customer delays in the air and on the

ground. 

Assessment of Current Year (FY 2000)

Performance Plan: The FAA is on track to achieve 

FY 1999 FAA ANNUAL REPORT

STRA TE GIC GOALS -37- CHAP TER 1

FLIGHT ROUTE FLEXIBILITY

Why We Act: Many of the most heavily traveled routes in the National Airspace System have published air

traffic control (ATC) preferred routes, which are based on flying from one navigational aid to another to ensure

accuracy in navigation. These routes are designed to minimize conflict in congested airspace, and they are an

especially important tool in helping air traffic controllers organize traffic flow around major airports. However,

these routes can differ significantly from the routes that pilots or flight planners would normally propose

between two cities. They desire the capability to optimize their operations based on their own objectives and

constraints, which vary flight by flight and user by user. By allowing aircraft to fly the most direct routes or

choose other indirect routes to avoid weather, there can be time and cost savings or smoother flights that avoid

turbulence. Enhanced automation aids now being developed facilitate the use of more direct routes.

Flight Route Flexibility

50.0

60.0

70.0

80.0

90.0

100.0

1996 1997 1998 1999 2000 2001

Trend Goal
the FY 2000 performance plan target with existing

strategies and initiatives. 

Strategies and FY 2001 Initiatives: FAA is

implementing the Free Flight Phase I program to

allow greater use of direct routes. The enhanced

software tools and the Conflict Probe software allows

controllers to better project future flightpaths and

maintain separation for flights off the preferred

routes.

• FAA is continuing to work closely with airlines to

share NAS information to enhance collaborative

decision making. Airlines often have priority

preferences among their own flights and can

indicate to FAA which flights are most important.

Collaborative decision making is mostly by voice

communication now, but software and hardware for 

automated collaborative decision making are being

developed within the Free Flight Phase I Program. 

• FAA will install and operate the user request

evaluation tool at three centers which allows

controllers to project aircraft flight paths into the

future and clear pilots for direct routes. This

automation tool allows pilots to fly the most

efficient routes between terminal control areas. 

• FAA is continuing work on the software

development necessary to enhance and expand the

capability of Conflict Probe. 

• FAA is considering methods for incorporating

Published Preferred Route Reduction (P2R2) and

DP/STAR into a single program, further enhancing

flexibility while providing for increased complexity

in the air traffic system.

• FAA is developing both equipment and procedures

to allow more direct flights through restricted flight 

areas that are not in use.

Other Federal Programs with Common

Outcomes: FAA has coordinated with DOD for

several years to allow direct flights. This coordination 

will involve the military sharing the airspace on a

real-time basis rather than prescheduled timeframes. 

This enables the commercial airlines more route

flexibility and will assist the FAA as wider scale use of 

direct flights are made.

FY 1999 FAA ANNUAL REPORT

STRA TE GIC GOALS -38- CHAP TER 1
Performance Measure: Number of people in the 

United States (in thousands) who are exposed to

significant noise levels (65 decibels or more).

Goals: 1999 2000 2001

 680 600 600

Actual: 1,100

Special Challenges: Much of the recent progress

has been achieved by legislatively mandated

transition of airplane fleets to newer-generation

aircraft that produce less noise. Most of the gains

from this change will be achieved by FY 2000. The

Airport Noise and Capacity Act (ANCA) of 1990 set

December 31, 1999, as the deadline for elimination of

Stage 2 (older, noisier) aircraft weighing more than

75,000 pounds. Growth in aviation activity also works 

against easy progress.

What Happened in 1998: In 1998, about 1.1 million

people were impacted by significant aircraft noise at

the 250 largest civil airports with jet operations in the

United States.

At the end of 1998, Stage 3 airplanes comprised 86.9

percent of the total fleet of large civil subsonic turbojet 

airplanes, compared to an estimated 45 percent in

1990 when Congress enacted the ANCA. Diminishing 

gains after FY 2000 reflect the full implementation of

this Act. 

1998 modeling used improved airport and population

data. Therefore, while the airline fleet data indicate a

higher introduction of airplanes that have been

“hushkitted,” the overall noise exposure was slightly

higher than projected. The new analysis still

confirms that, as a result of the legislated phase-out

program, the number of people exposed to significant

aircraft noise exposure continues to drop.

External factors such as population growth, shifting

population density, urban development around

airports, and increasing flight activity all have

impacted this goal. These factors have generally

increased the numbers of people potentially exposed

to aircraft noise. A positive factor in lowering noise

exposure has been aircraft fleet recapitalization

within the industry. Updated airline fleet data for

1998 indicate a higher than expected introduction of

airplanes that have been “hushkitted” to comply with

the Stage 3 noise standard.

Activities in 1998 included funding for noise

reduction activities such as the soundproofing of

residences and buildings used for educational or

medical purposes in the vicinity of airports, the

purchase of buffer zones around airports, and noise

reduction planning.

FAA also monitored the annual Stage 2 phaseout

compliance plans of the airlines and produced an

annual report to Congress on the progress.

Assessment of Current Year (FY 2000)

Performance Plan: To estimate the number of

people exposed to significant aircraft noise, FAA uses

a statistical modeling technique using data from the

250 largest civil airports with jet operations in the

United States. FAA is currently updating the model

with additional results from individual airport

studies to produce more accurate results. While the

downward trend will not change, the new model may

indicate higher numbers of residents exposed to

aircraft noise. But no major shifts are expected in the

trends. FAA will retain its 2000 target of 0.60 million

people exposed to significant aircraft noise and

continue to track the Stage 2 phaseout plans of the

airplane operators.

FY 1999 FAA ANNUAL REPORT

STRA TE GIC GOALS -39- CHAP TER 1

AIRCRAFT NOISE EXPOSURE

Why We Act: Public concern and sensitivity to aircraft noise around airports is high. In recent years, noise

complaints have increased even while quieter aircraft technology has been introduced. This aircraft noise is an

undesired by-product of our mobility, and the Government acts to reduce the public’s exposure to unreasonable

noise levels.

Exposure to Aircraft Noise

(65 decibels or more)

0

1000

2000

3000

4000

1985 1990 1995 2000

Goal Trend
Strategies and FY 2001 Initiatives: FAA pursues

a program of aircraft noise control in cooperation with

the aviation community through noise reduction at

the source (development and adoption of quieter

aircraft), soundproofing and buyouts of buildings near 

airports, operational flight control measures, and

land use planning strategies.

• The FAA’s Airport Improvement Program will

continue to provide funds for such noise reduction

activities as the soundproofing of residences and

buildings used for educational or medical purposes

near airports, purchase of buffer zones around

airports and noise compatibility planning. 

• The FAA will continue to develop noise research

and assessment technologies 

• FAA Air Traffic Services will implement

operational flight control measures to help reduce

neighborhood exposure to aircraft noise.

• FAA will continue examination and validation of

the methodologies used to assess aircraft noise

exposure 

• DOT will develop a research plan and program for

international certification noise standards for

turbojet airplanes that will be more stringent than

the current Stage 3 standards.

Other Federal Programs with Common

Outcomes: FAA is engaged with NASA in joint noise

reduction technology research. The research

objective is to identify technological concepts to

reduce community noise impact of future subsonic jet

airplanes by half (7 to 10 decibels), relative to 1992

technology, by the year 2001.

FY 1999 FAA ANNUAL REPORT

STRA TE GIC GOALS -40- CHAP TER 1
Performance Measure: Total number of

published GPS airport approaches.

Goals: 1999 2000 2001 

 1953 2453 #

1998 Performance: 1453 

Performance Measure: Number of runways that 

are accessible in low visibility conditions

Goals: 1999 2000 2001 

 # # 1191 

1998 Performance: #

# The measure for Access to Airports was changed

after 2000 to more accurately measure the outcomes 

of FAA actions.

Special Challenges: Developing the approaches

requires accurate survey information for airport

runway location and any obstacles near the flightpath for approach. These surveys are performed by

the National Geodetic Survey. Increasing all weather

access depends on both having a published approach

and increasing the number of aircraft equipped to

make precision approaches. To maximize the benefits 

to aviation users, FAA will need to develop

approaches for all qualifying airports that do not

currently have electronic aids to support an

instrument approach, and aircraft not presently

equipped will need to install a WAAS receiver.

What Happened in 1998: 516 GPS approaches were 

published during FY 1998. This number exceeds the

production goal of 500 approaches and resulted in a

total of 1,453 approaches nationwide.

FAA’s objective is to improve access to airports during 

low visibility conditions. The number of published

global positioning system approaches is one measure

of improved user access. Although it may be

impossible to measure the exact benefits because

there are no towers at many of the smaller airports,

increased schedule reliability for commuters and air

taxis, as well as improved access for all of general

aviation, will result from increasing the number of

published approaches.

In 1998, FAA also began developing special

nonprecision GPS procedures to provide improved

access for hospital heliports, enabling emergency

medical service helicopters to operate in IFR

conditions.

Assessment of Current Year (FY 2000)

Performance Plan: FAA has established the goal of

publishing 500 approach procedures per year through 

the year 2000. An estimated 4,100 GPS wide area

augmentation system (WAAS) precision approaches

will be developed over the next several years. In

addition, approximately 500-600 approaches are

required to support GPS local area augmentation

system (LAAS) precision approaches and will be

accomplished over several years.

Strategies and FY 2001 Initiatives: To improve all 

weather access to airports, FAA is focusing on

FY 1999 FAA ANNUAL REPORT

STRA TE GIC GOALS -41- CHAP TER 1

ALL WEATHER ACCESS TO AIRPORTS

Why We Act: Of the nearly 4,000 public use airports with paved runways in the United States, approximately

600 of these airports have an instrument landing system (ILS) that provides horizontal and vertical guidance for

precision approaches. Precision approaches allow the ability to land during poor visibility. Since many airports

have more than one runway, the total number of runways with precision landing guidance (including altitude

guidance) is about 1,080. With the availability of GPS, augmented by the Wide Area Augmentation System

(WAAS), the number of runways with precision approach capability will increase, thus lessening the impact of

weather-related delays.

G PS Approaches

0

500

1000

1500

2000

2500

3000

1994 1996 1998 2000

Trend Target
increasing the number of runways with precision

landing guidance availability and providing pilots

with the information needed to fly precision

approaches. An increase in the number of GPS and

WAAS approach procedures published will continue

to support this initiative. 

• FAA’s WAAS program will fund the development of

the approaches. Information is generated specific

to the airport location, and an “approach plate” is

published which gives the altitudes and path to the

runway for the approach. 

• WAAS provides accuracy and integrity information

that is necessary to fly precision approaches. Initial 

WAAS operational capability will be established

with two communication satellites providing

position corrections. In 2001, FAA will continue

development of WAAS to full operational capability

including software and hardware upgrades to the

operating system.

• FAA requested funding for the addition of a second

frequency (1227 MHz for non-safety-of-life

applications) and a third frequency (1176 MHz for

safety-of-life applications such as civil aviation) to

the GPS satellites. The new frequencies will

decrease interference problems and further

improve the accuracy corrections to the basic GPS

signal. 

Other Federal Programs with Common

Outcomes: The basic enabling technology for

precision approaches is the GPS satellite navigation

system developed and maintained by DOD. An

Interagency GPS Executive Board, including DOD,

DOT (FAA and USCG), Department of Commerce,

and Department of State, was established to begin to

implement the two new civil GPS frequency signals

on the GPS satellites. This group will work together

to coordinate civil and military outreach and report

the progress on international acceptance of the

recommended third civil GPS signal. FAA will

continue to coordinate with NOAA for map

information and the Office of National Geodetic

Survey for airport surveys.

FY 1999 FAA ANNUAL REPORT

STRA TE GIC GOALS -42- CHAP TER 1
FY 1999 FAA ANNUAL REPORT

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FAA spends $10 billion annually to improve and maintain the safest,

most efficient aviation system possible for the 655 million commercial

passenger enplanements and thousands of cargo and private flights

which occur annually. Our mission depends on our ability to properly

manage and track the flow of resources through the agency. In an era of

tight budgets and lean Government, we must continue to invest the

public funds entrusted to us in the most cost-effective way possible.

As we began FY 1999, two goals were at the top of our agenda. The first

was to obtain a clean audit opinion on our Financial Statements. The

second was to establish a comprehensive cost accounting system.

In order to properly capitalize and document the FAA’s physical assets,

we set up dedicated teams, co-chaired by FAA financial and program

management and the Office of the Inspector General (OIG). At the end

of FY 1999, all significant milestones prerequisite to an OIG audit had

been completed, together with the OIG’s fieldwork. On February 29,

2000, the FAA received an unqualified opinion (clean audit) on the FY

1999 Financial Statements from the OIG. FAA is also working with the

Office of the Secretary (OST) and the OIG to modify the existing

accounting system to capture the new standard general ledger accounts and to change or convert existing

records to meet new reporting standards. Our new DOT-wide accounting system, DELPHI, is scheduled for

FAA implementation in 2001. FAA convened a cross functional group and accelerated development of a

capitalization process improvement plan to identify priorities for FAA-wide action. The plan identifies changes

in procedures and priorities that become necessary to ensure the continued integrity of our financial asset

systems.

Our second goal began 2 1⁄2 years ago, when FAA started developing a cost accounting system. This system will

be key to providing FAA with the type of cost data necessary to manage the organization in the most efficient

way possible. In FY 2000, FAA will finalize the cost data for Air Traffic Services in the en route, oceanic, and

flight service station environments. Starting in FY 2001, we will complete the implementation of the Air Traffic

Service line of business by providing cost information on the terminal and tower environment. The entire project 

for all offices and lines of business is expected to be completed in FY 2002.

I am very pleased with the accomplishments FAA has made this year. The advances in financial practices and

our efforts toward establishing a cost accounting system have been impressive. These accomplishments are the

result of a hard working dedicated workforce. Our future challenges will be to maintain these advances by

continuing to achieve a clean opinion and by using the cost accounting information to improve our business

practices. I believe these challenges are significant, and we are prepared to succeed.

The FY 1999 financial statements have been prepared in accordance with the Chief Financial Officers Act of

1990 with guidance on form and content provided by the Office of Management and Budget (OMB) and the

Federal accounting standards provided by the Federal Accounting Standards Advisory Board (FASAB).

Questions regarding this annual report may be directed to the Financial Statements, Analysis and Control

Branch, AFM-310, 800 Independence Avenue, S.W., Washington, DC 20591.

Donna R. McLean

Chief Financial Officer

MAN AGE MENT RE PORT OF THE CHIEF FI NAN CIAL OF FI CER
FY 1999 FAA ANNUAL REPORT

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LIMITATIONS OF THE FINANCIAL

STATEMENT

• The financial statements have been prepared to report

the financial position and results of operations of the

Federal Aviation Administration, pursuant to the

requirements of 31 U.S.C. 3515(b).

• While the statements have been prepared from

the books and records of the FAA in accordance

with the formats prescribed by the Office of

Management and Budget (OMB), the statements

are in addition to the financial reports used to

monitor and control budgetary resources which are

prepared from the same books and records.

• The statements should be read with the realization

that they are for a component of the U.S.

Government, a sovereign entity. One implication of 

this is that liabilities cannot be liquidated without

legislation that provides resources to do so.

FY 1999 FAA ANNUAL REPORT

LIMI TA TION OF THE FI NAN CIAL STATEMENT -55- CHAP TER 2
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -56- CHAP TER 2

U. S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

CONSOLIDATED BALANCE SHEET

As of September 30, 1999

(Dollars in Thousands)

Assets

Intragovernmental

Fund Balance with Treasury (Note 2) $ 751,507

Investments (Note 3) 12,655,469

Accounts Receivable, Net (Note 4) 42,228

Other (Note 5) 162,970

Total Intragovernmental Assets $ 13,612,174

Accounts Receivable, Net (Note 4) $ 32,383

Loans Receivables and Related

Foreclosed Property, Net (Note 6) 381

Cash and Other Monetary Assets (Note7) 63,091

Inventory and Related Property, Net (Note 8) 910,141

General Property, Plant, and Equipment, Net (Note 9) 10,848,880

Other (Note 5) 63,378

Total Assets $ 25,530,428

Liabilities

Intragovernmental Liabilities:

Accounts Payable $ 33,722

Environmental Cleanup Costs (Note 10) 328,992

Debt (Note 11) 24

Other Intragovernmental Liabilities (Note 12) 298,069

Total Intragovernmental Liabilities $ 660,807

Accounts Payable $ 538,917

Loan Guarantees -

Federal Employee and Veterans Benefits (Note 14) 965,669

Environmental Cleanup Costs (Note 10) 986,976

Other Liabilities (Note 12 &13) 1,340,474

Total Liabilities $ 4,492,843

Net Position Balances:

Unexpended Appropriations (Note 15) $ 349,703

Cumulative Results of Operations 20,687,882

Total Net Position $ 21,037,585

Total Liabilities and Net Position $ 25,530,428
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -57- CHAP TER 2

U.S.DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION

CONSOLIDATED STATEMENT OF NET COST

For the Year ended September 30, 1999

Programs (Note 16 & 17)

Air Traffic Service

Intragovernmental $ 766,046

With the Public 4,352,951

Total 5,118,996

Less Earned Revenues (38,256)

Net Air Traffic Service Costs $ 5,080,741

Regulations & Certification

Intragovernmental $ 107,381

With the Public 617,080

Total 724,461

Less Earned Revenues (1,240)

Net Regulations & Certification Costs $ 723,221

Research & Acquisition

Intragovernmental $ 74,999

With the Public 1,204,582

Total 1,279,581

Less Earned Revenues (30,813)

Net Research & Acquisition Costs $ 1,248,768

Airports

Intragovernmental $ 24,665

Administration

With the Public

Grants Program 1,537,188

Administration 51,032

Total 1,612,885

Less Earned Revenues (18)

Net Airports Costs $ 1,612,867

Civil Aviation Security

Intragovernmental $ 19,985

With the Public 133,200

Total 153,185

Less Earned Revenues (868)

Net Civil Aviation Security Costs $ 152,317

Commercial Space

Intragovernmental $ 787

With the Public 5,512

Total 6,299

Less Earned Revenues (180)

Net Commercial Space Costs $ 6,119

Other Programs

Intragovernmental $ 65,942

With the Public 197,632

Total 263,574

Less Earned Revenues (66,958)

Net Other Program Costs $ 196,616

Costs Not Assigned to Programs $ 187,333

Less Earned Revenues Not Attributed to Programs $ (13,080)

Net Cost of Operations $ 9,194,902
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -58- CHAP TER 2

U. S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

CONSOLIDATED STATEMENT OF CHANGES IN NET POSITION

As of September 30, 1999

(Dollars inThousands)

Net Cost of Operations $ (9,194,902)

Financing Sources

Appropriations Used 1,421,564

Taxes and Other Non-Exchange Revenues (Note 18) 11,125,469

Donations (Non-ExchangeRevenue) 129,266

Imputed Financing (Note 19) 354,525

Transfers-In 18,122

Transfers-Out (19,519)

Other -

Total Financing Sources $ 13,029,427

Net Results of Operations $ 3,834,525

Prior Period Adjustments (Note 20) 3,636,556

Net Change in Cumulative Results of Operations 7,471,081

Increase (Decrease) in Unexpended Appropriations 13,232

Change in Net Position 7,484,313

Net Position Beginning of Period $ 13,553,272

Net Position End of Period $ 21,037,585
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -59- CHAP TER 2

U. S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

COMBINED STATEMENT OF BUDGETARY RESOURCES

For the year ended September 30, 1999

(Dollars in Thousands)

Budgetary Resources (Note 21)

Budget Authority $ 13,638,200

Unobligated Balances - Beginning of Period 9,727,100

Spending Authority From Offsetting Collec tions 4,230,985

Adjustments (12,729,374)

Total Budgetary Resources $ 14,866,911

Status Of Budgetary Resources

Obligations Incurred $ 14,154,788

Unobligated Balances-Available 479,739

Unobligated Balances-Not Available 232,384

Total Status of Budgetary Resources $ 14,866,911

Outlays

Obligations Incurred $ 14,154,788

Less: Spending Authority From Offsetting

Collections and Adjustments (4,484,097)

Obligated Balance, Net Beginning of Period 5,059,898

Obligated Balance Transferred, Net -

Less: Obligated Balance, Net - End of Period (5,224,006)

Total Outlays $ 9,506,583
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -60- CHAP TER 2

U. S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

COMBINED STATEMENT OF FINANCING

For the year ended September 30, 1999

(Dollars in Thousands)

Obligations and Nonbudgetary Resources

Obligations Incurred $ 14,154,788

Less: Spending Authority for Offsetting

Collections and Adjustments (4,484,097)

Donations not in the Budget 129,266

Financing Sources for Cost Subsidies 354,525

Transfers-in (out) (1,398)

Exchange Revenue not in the Budget (6,765)

Nonexchange Revenue Not in the Entity's Budget 35,522

Less: Trust or Special Fund Receipts Related to Exchange Revenue

in the Entity's Budget (137,203)

Other (Year-End Accounts Payable Accruals) 150,504

Total Obligations as Adjusted, and Nonbudgetary Resources $ 10,195,142

Resources That Do Not Fund Net Cost of Operations

Change in Amount of Goods, Services, and Benefits

Ordered but not yet Received or Provided $ (29,003)

Change in Unfilled Customer Orders 36,118

Costs Capitalized on the Balance Sheet

General Property, Plant & Equipment (3,238,387)

Loans 20

Purchase of Inventory (96,517)

Purchases of Non-Government Investments -

Adjustment to Cost Capitalized on the Balance Sheet 4,984

Financing Sources that Fund Costs of Prior Periods (Note 22) (1,948,570)

Collections That Decrease Credit Program Receivables or Increase

Credit Program Liabilities -

Adjustment for Trust Fund Outlays that do not Affect Net Cost

Other - Identified PriorPeriod Adjustments 3,718,407

Total Resources That Do Not Fund Net Cost of Operations $ (1,552,948)

Costs That Do Not Require Resources

Depreciation and Amortization $ 540,918

Bad Debt Related to Uncollectible Non Credit Reform Receivables -

Fixed Price Variation (31,699)

Revaluation of Assets and Liabilities -

Gain on Disposition of Assets (181,509)

Cost of Goods Sold 142,317

Other (22,456)

Total Costs That Do Not Require Resources $ 447,571

Financing Sources Yet To Be Provided (Note 22) $ 105,137

Net Cost Of Operations $ 9,194,902
Note 1. Summary of Significant Accounting

Policies

A. Basis of Presentation

These consolidated financial statements have been

prepared to report the financial position, the net cost

of operations, the changes in net position, the status

and availability of budgetary resources, and the

reconciliation between proprietary and budgetary

accounts of the Federal Aviation Administration

(FAA). The statements are required by 31 U.S.C.

3515, the Chief Financial Officers Act of 1990, and as

amended by the Federal Financial Management Act

of 1994, which is Title IV of the Government

Management Reform Act of 1994. They have been

prepared from the books and records of FAA in

accordance with (1) the hierarchy of accounting

principles and standards approved by the principals

of the Federal Accounting Standards Advisory Board,

(2) the Office of Management and Budget’s (OMB)

Bulletin 97-01, Form and Content of Agency Financial 

Statement, and (3) the Department of Transportation

(DOT) and FAA’s accounting policies which are

summarized in this note. These statements, with the

exception of the statement of Budgetary Resources,

are, therefore, different from the financial

management reports, also prepared by the FAA

pursuant to OMB directives that are used to monitor

and control the FAA’s use of budgetary resources.

The FAA applies accounting principles and standards

and complies with operating policies and procedures

established, issued, and implemented by the General

Accounting Office (GAO), the OMB, and the

Department of Treasury, as recommended by the

Federal Accounting Standards Advisory Board

(FASAB), which is recognized by the American

Institute of Certified Public Accountants (AICPA) as

the entity to establish the Generally Accepted

Accounting Principles (GAAP) for the Federal

Government. The financial statements have been

prepared in accordance with the following hierarchy

of accounting principles and standards, which

constitutes another comprehensive basis of

accounting:

1. Individual Standards agreed to by the Director of

OMB, the Comptroller General, and the Secretary of

the Treasury and published by OMB and the General

Accounting Office;

2. Interpretations related to the Statement of Federal

Financial Accounting Standards (SFFAS) issued by

OMB in accordance with the procedures outlined in

OMB Circular A-134, “Financial Accounting

Principles and Standards”;

3. Requirements contained in OMB Bulletin 97-01,

Form and Content, and its amendments in effect for

fiscal year 1998;

4. The Department of Transportation (DOT)

accounting policies and reporting requirements;

5. FAA accounting policies summarized in this note

and FAA Order No. 2700.31, Uniform Accounting

Systems Operations Manual, and related

documentation containing the FAA-specific

accounting policy; and

6. Accounting principles published by authoritative

standard-setting bodies and other authoritative

sources (1) in the absence of other guidance in the first 

five parts of this hierarchy and (2) if the use of such

accounting standards improves the meaningfulness

of these financial statements.

B. Reporting Entity

The FAA was created in 1958. The FAA’s mission is to

operate the Nation’s air traffic control system and to

regulate the aviation’s safety and security. FAA is

responsible to provide U.S. air travelers with an

efficient, safe, secure, and technically advanced

airspace system. 

The FAA activities as per Treasury designation can be 

grouped into four funds. 

Entity Title

1. Trust 

Fund

Airport and Airway Trust Fund

Cash and Investments

Grants-in-Aid

Facilities and Equipment

Research and Development

Programs Administered by Other

Agencies

2. Revolving

Fund Aviation Insurance Program

3. Franchise 

Fund Administrative Services 

4. All Others Operations

(Unsegmented) Facility and Equipment

 Development

FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -61- CHAP TER 2
Aircraft Purchase Loan

 Guarantee

 - Borrowing Authority for 

 Program Expenses

 - Appropriation to Liquidate

 Borrowed Funds and 

 Accrued Interest

General Fund Miscellaneous

 Receipts 

Suspense Clearing

 Accounts

Items Not Classified by 

 Financing Source

The Airport and Airway Trust Fund (Trust Fund)

financed approximately 74 percent of the fiscal year

(FY) 1999 total budget. The only appropriations

receiving General Fund financing are the Operations

appropriation and, when enacted, the appropriation

to liquidate debts to the Treasury incurred for the

Aircraft Purchase Loan Guarantee Program. (No

such liquidating appropriation was enacted in FY

1999.) Approximately 26 percent of the FY 1999

funding of the Operations appropriation was financed

by the General Fund, and the remainder was funded

by the Trust Fund. Infusing funds from the Trust

Fund to the Operations appropriation is accomplished 

by periodic transfers. Once a transfer is made, the

corresponding portion of the Operations account

derived from the Trust Fund is accounted for under

the General Fund Operations appropriation symbol,

thus losing the identity of the source. 

C. Budgets and Budgetary Accounting

Congress annually enacts appropriations to permit

the FAA to incur obligations for specified purposes.

For FY 1999, the FAA was accountable for Trust Fund 

appropriations, General Fund appropriations, a

Revolving Fund, a Franchise Fund, and borrowing

authority. The FAA recognizes budgetary resources

as assets when cash (funds held by Treasury) is made

available through Treasury General Fund warrants

and Trust Fund transfers. See paragraph B above.

D. Basis of Accounting

Transactions are recorded on an accrual accounting

basis and a budgetary basis. Under the accrual

method, revenues are recognized when earned, and

expenses are recognized when a liability is incurred,

without regard to receipt or payment of cash. Trust

Fund revenues derived from excise taxes are treated

differently. They are recorded on the basis of cash

transferred from the General Fund to the Trust Fund. 

Transactions are also classified by fund account. This

is accomplished by assigning to each transaction a

unique attribute (Treasury symbol) identifying the

corresponding appropriation and its period of

availability. 

Budgetary accounting facilitates complying with

legal controls on the use of Federal funds.

E. Revenues and Other Financing Sources

Congress enacts annual, multi-year, and no-year

appropriations to be used, within statutory limits, for

operating and capital expenditures. Additional

amounts are obtained from service fees (e.g., landing

and registry fees) and through reimbursements for

services performed for domestic and foreign

governmental entities.

The Trust Fund is sustained by excise taxes collected

by the Internal Revenue Service (IRS) from airway

system users. The IRS records excise tax revenues

deposited in the General Fund on a cash basis;

Treasury transfers an equivalent amount from the

General Fund to the Trust Fund. The Trust Fund also 

earns interest from investments in Treasury

securities. Interest income is recognized as revenue

on the accrual basis.

Appropriations are recognized as a financing source

when expended. Revenues from service fees and

reimbursements are recognized concurrently with the 

recognition of accrued expenditures for performing

the services. 

F. Fund Balances with the U.S. Treasury and

Cash

The U.S. Treasury processes cash receipts and

disbursements. Funds at the Treasury are available

to pay agency liabilities. The FAA maintains petty

cash (imprest funds) outside the Treasury to facilitate 

small purchases. The FAA does not maintain cash in

commercial bank accounts. The FAA does not

maintain any foreign currency balances. Foreign

currency payments are made either by the Treasury

or the Department of State and are reported by the

FAA in the U.S. dollar equivalent.

FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -62- CHAP TER 2
G. Investment in U.S. Government Securities

Unexpended funds in the Trust Fund and Aviation

Insurance Revolving Fund are invested in U.S.

Government securities. A portion of the Trust Fund

investments is liquidated semi-monthly in amounts

needed to provide cash for the FAA appropriation

accounts. The Revolving Fund investments are

usually held to maturity. Investments, redemptions,

and reinvestments are controlled and processed by

the Treasury. 

H. Accounts and Loans Receivable

The FAA’s financial statement includes the activities

and balances of relevant Treasury General Fund

Miscellaneous Receipt accounts. The FAA maintains

accountability for defaulted loans under the Aircraft

Purchase Loan Guarantee Program. Upon default,

the FAA established accounts receivable in the

General Fund Miscellaneous Receipts account to

reflect the amount due from the borrower for principal 

and interest. The FAA also established an

intragovernmental liability to offset the accounts

receivable which represents an asset of the Treasury,

not the FAA.

I. Operating Materials and Supplies

Operating materials and supplies consist primarily of

unissued materials and supplies that will be

consumed in normal operations. In FY 1998, the FAA

discontinued the use of standard cost and began

valuing materials and supplies using moving

weighted average. Other classifications of materials

and supplies are valued on the basis of actual prices

paid.

Adjustments for the proper valuation of reparable,

excess, obsolete, and unserviceable items are made to

the appropriate allowance account at fiscal yearend.

The allowance for reparable items is recognized as a

current period expense. The allowance for excess,

obsolete, and unserviceable items is recognized as a

gain or a loss. Operating materials and supplies are

reclassified as expenses or work in progress when

consumed or issued.

J. Property, Plant and Equipment (PP&E)

FAA capitalizes an acquisition if its costs exceed

$25,000 and has a useful life exceeding 2 years. The

FAA reports general PP&E at original acquisition

cost.

Depreciation expense is calculated using the

straight-line method. No depreciation expense is

recognized on an asset during the fiscal year it is put

in service. 

A full year’s depreciation will be recognized during

the asset’s final year of use. The FAA does not

recognize residual value of its PP&E, except for

aircraft, which are depreciated to a 25% salvage

value. The FAA adopted this depreciation policy in

FY 1998 and, at that time, recognized accumulated

depreciation for prior years as well. The useful life

classifications for capitalized assets are as follows:

Asset Classification

Useful Life 

(years)

Offices, Buildings, Warehouse

Buildings, Residential Properties, Air

Traffic Control Towers, and En Route

Air Traffic Control Centers

40

Mobile Homes, Aircraft 20

Original Roads, Sidewalks, Parking

Lots, and All Other Structures 15

Printing, Photographic, and

Projection Equipment 13

Capital Improvements, Facility

Modifications, Leasehold

Improvements (or expiration of lease

whichever comes first), Portable and

Installed Communications Equipment 

Excluding Air Navigation and Air

Traffic Control Facilities, and

Avionics Equipment

10

Office Furniture and Equipment

including the following categories:

Prototype and Experimental,

Research and Development Test,

Shop, Emergency Readiness,

Training, Portable Test and Rack

Mounted Test Equipment for Air

Navigation and Air Traffic Control

Facilities, Aircraft Test Equipment,

and Other Nonclassified Equipment

7

Vehicles and Automatic Data

Processing Equipment 5

FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -63- CHAP TER 2
The FAA has established the following categories of

economic service life for some of its personal property

and facilities and equipment assets. 

Functional Area

Economic

Service Life 

(Range)

Decision Support Systems 4-20

Communications 10-20

Weather 15-20

Navigation/Landing 20

Surveillance 20

Facilities 40

Facilities’ Support Equipment 20

Mission Support 20

User Equipment 10-20

Buildings acquired under capital leases are amortized 

over the lease term. If the lease agreement contains a

bargain purchase option or otherwise provides for

transferring title of the asset to the FAA, the building

is depreciated over a 40-year service life. 

Construction in progress is valued at actual (direct)

costs, plus applied overhead and other indirect costs

as accumulated by the regional project materiel

system. 

The General Services Administration (GSA) receives

payment for real property that is under its control and 

is used by the FAA. Payments are made from an

appropriation to the Office of the Secretary of

Transportation (OST), part of which (corresponding to 

the FAA costs) is derived from the Trust Fund. 

K. Prepaid and Deferred Charges

Advance payments are generally prohibited by law;

there are some exceptions, such as subscriptions.

When permitted, payments made in advance of the

receipt of goods and services are recorded as prepaid

charges at the time of prepayment and recognized as

expenses when the related goods and services are

received.

L. Liabilities

A liability represents the amount to be paid by the

FAA as the result of a transaction or event that has

already occurred. The FAA, absent of an

appropriation, cannot liquidate any liabilities.

Liabilities for which an appropriation has not yet

been enacted are, therefore, classified as unfunded

liabilities, and there is no certainty that such

appropriation will be enacted.

M. Borrowing Payable to the Treasury

Borrowing involves loans from the Treasury to fund

expenses in the Aircraft Purchase Loan Guarantee

Program. Treasury renews the debt obligation until

the FAA receives an appropriation to liquidate the

principal and interest. No such appropriation was

enacted for FY 1999.

N. Interest Payable to the Treasury

The FAA owes interest to the Treasury based on its

debt to the Treasury as a result of borrowing for the

Aircraft Purchase Loan Guarantee Program.

O. Annual, Sick, and Other Leave

Annual leave is accrued as it is earned, and the

accrual is reduced as leave is taken. At each bi-weekly 

pay period, the balance in the accrued annual leave

account is adjusted to reflect the latest pay rates and

unused hours of leave. Funding will be obtained from

future financing sources to the extent that current or

prior year appropriations are not available to fund

annual leave earned but not taken. Sick leave and

other types of nonvested leave are expensed when

taken.

In FY 1998, under the National Air Traffic Controller

Association (NATCA) agreement, Article 25, Section

13, Air Traffic Controllers covered under the Federal

Employees Retirement Systems (FERS) became

eligible, upon retirement, for a sick leave buy back

option. 

P. Accrued Workers’ Compensation

A liability is recorded for estimated and actual future

payments to be made for workers’ compensation

pursuant to the Federal Employees’ Compensation

Act (FECA). The liability consists of the net present

value of estimated future payments calculated by the

U.S. Department of Labor (DOL) and the

unreimbursed cost paid by DOL for compensation

paid to recipients under FECA. The actual costs

incurred are reflected as a liability because FAA will

reimburse DOL 2 years after the actual payment of

expenses. Future Appropriations will be used for the

reimbursement to DOL.

FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -64- CHAP TER 2
Q. Retirement Plan

The FAA employees who participate in the Civil

Service Retirement System (CSRS) are beneficiaries

of the FAA’s matching contribution equal to 7 percent

of pay to their annuity account in the Civil Service

Retirement and Disability Fund. 

On January 1, 1987, the Federal Employees

Retirement System (FERS) went into effect pursuant

to Public Law 99-335. FERS and Social Security

automatically cover most employees hired after

December 31, 1983. Employees hired prior to January 

1, 1984, could elect, either to join FERS and Social

Security or to remain in CSRS. FERS offers a savings

plan to which the FAA automatically contributes 1

percent of pay and matches any employee

contribution up to an additional 4 percent of pay. For

FERS participants, the FAA also contributes the

employer’s matching share for Social Security. 

Beginning in fiscal year 1997, the FAA began to

recognize the cost of pensions and other retirement

benefits during the employees’ active years of service.

The Office of Personnel Management (OPM)

actuaries determine pension cost factors by

calculating the value of pension benefits expected to

be paid in the future and communicate these factors to 

the FAA for current period expense reporting. OPM

also provides information regarding the full cost of

health and life insurance benefits. The FAA

recognized the offsetting revenue as imputed

financing sources for the extent of these additional

expenses that will be paid by OPM.

R. Contingencies

The FAA recognizes losses for contingent liabilities

when such losses are probable and reasonably

estimable. 

FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -65- CHAP TER 2
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -66- CHAP TER 2

Note 2. Fund Balances with Treasury

Unobligated and restricted fund balances represent balances of appropriations for which the period of

availability for (voluntary) obligation has expired. These balances are only available for upward adjustments of

obligations incurred during the period for which the appropriation was available for obligation or for paying

claims attributable to the appropriation. Pursuant to 31 USC 1552, appropriation accounts are canceled at the

close of the fifth fiscal year following the last fiscal year for which they were available for obligation. Fund

balances in the amount of $130.7 million in canceled appropriations at fiscal yearend were removed from the

balance sheet. The amount withdrawn biweekly from the Trust Fund is based on cash outlays, not on

obligational authority, to minimize interest costs. Negative unobligated balances are covered by invested funds

in the Airport and Airway Trust Fund.

Note 3. Investments

(Dollars in Thousands)

Unobligated Unobligated

Obligated & Available & Restricted Total

Trust Fund $ 1,999,733 $ (1,885,059) $ (194,213) $ (79,539)

Operations General Fund 636,346 23,103 41,114 700,563

Franchise Fund 5,214 2,212 7,426

Revolving Fund (76,047) 125 76,113 191

Other Funds 122 122,744 - 122,866

Total $ 2,565,368 $ (1,736,875) $ (76,986) $ 751,507

(Dollars in Thousands)

Cost

Amortization

Method

Unmortized

(Premium)

Discount

Investments

Net

Other

Adjustments

Market

Value

Disclosur

e

Intragovernmental

Securities:

Nonmarketable, Par Value

Trust Fund (1) $ 12,413,727 $ $ 12,413,727 $ -

Nonmarketable,

Market-Based

Aviation Insurance Interest

Revolving Fund (2) 74,293 Method (2,200) 72,093 - -

Subtotal 12,488,020 (2,200) 12,485,820 - -

Accrued Interest 169,649 169,649 -

Total $ 12,657,669 $ 12,655,469 $ -
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -67- CHAP TER 2

A total of $12.4 billion was invested in U.S. Treasury Certificates of Indebtedness as of September 30, 1999, at a

rate of 6.25 percent, maturing June 30, 2000. 

(1) Nonmarketable par value Treasury securities are special series debt securities, issued by the Bureau of the

Public Debt to Federal accounts, and are purchased and redeemed at par (face value) exclusively through

Treasury’s Finance and Funding Branch. The securities are redeemed at face value on demand; thus, i nvesting

entities recover the full amount invested, plus interest. The Trust Fund investments are made by the Fund’s

trustee, the Secretary of the Treasury.

(2) Nonmarketable, market-based Treasury securities are debt securities that the Treasury issues to Federal

entities without statutorily fixed interest rates. Although the securities are not marketable, their terms (prices

and interest rates) mirror the terms of marketable Treasury securities. FAA amortizes premiums and

discounts on market-based Treasury securities over the life of the security using the interest method. The

following amounts are invested in market-based Treasury securities: 

Note 4. Accounts Receivable

A delinquency notice is sent to each debtor when billings remain uncollected for 30 days after the Bill for

Effective

Maturity Interest

Date Rate Amount

1 12/09/1999 4.25% $ 14,107,000

2 03/30/2000 4.48% 24,615,000

3 06/22/2000 4.89% 16,727,000

4 09/14/2000 4.95% 18,844,000

$ 74,293,000

(Dollars in Thousands)

Gross Allowance for Net

Accounts Uncollectible Amount

Due Amounts Due

Intragovernmental Receivables $ 42,228 $ - $ 42,228

Other Receivables 39,186 (6,803) 32,383

Total Receivables $ 81,414 $ (6,803) $ 74,611

Reconciliation of Uncollectible Amounts:

Intragovernmental Other

Beginning Balance $ - $ (5,868)

Additions - (4,237)

Reductions - 3,302

Ending balance $ - $ (6,803)
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -68- CHAP TER 2

Collection date. A second delinquency notice is sent another 30 days later if the debtor does not respond. Salary

or retirement offset action may be taken when the debtor is a current or former Federal employee. Other

attempts at collection may be taken for debtors who are not current or former Federal employees. In 1997, the

FAA implemented certain provisions of the Debt Collection Improvement Act of 1996, P.L.1041-34, which

requires, among other things, that Federal agencies submit accounts receivable that are over 180 days

delinquent to the Department of Treasury (Treasury) for collection. Treasury may take such actions as tax

refund offset, consumer reporting, and referral to collection agencies. An allowance for uncollectible accounts

receivable is established either based upon a monthly review of outstanding accounts and the failure of all

collection efforts, management determines that collection is unlikely to occur, or when an account for which no

allowance has already been established is submitted to Treasury for collection. Accounts receivable in

appropriations canceled on September 30, 1999, pursuant to 31 USC 1552, are no longer FAA assets.

Accordingly, accounts receivable balances totaling $466,660 in canceled appropriations at fiscal yearend were

removed from the balance sheet.

Note 5. Other Assets

(1) Represents advance payments to other Federal

Government entities under 31 USC, 1535 for agency expenses not yet incurred or for goods or services not yet

received. 

(2) Includes assets transferred between FAA regions. Transferred items remain in the undistributed asset

account until removed by the recipient region. Transfer transactions may include some expenses.

(3) Represents advance payments to employees for agency expenses not yet incurred. 

(Dollars in Thousands)

Other Entity Assets Intragovernmental

Advances and Prepayments $ 97,793 (1)

Undistributed Foreign Costs 920

Undistributed Costs - Treasury Clearing 710

Other Assets - Undistributed 63,547 (2)

Total Other Assets Intragovernmntal $ 162,970

Other Entity Assets

Advances and Prepayments 63,378 (3)

Total Other Entity Assets $ 226,348
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -69- CHAP TER 2

Note 6. Loans and Loan Guarantees, Non-Federal Borrowers

FAA has no direct loan programs, but FAA administers the Aircraft Purchase Loan Guarantee Program.

Authorization for issuing new loan guarantees expired in 1988. The only remaining program function is to

maximize recoveries from defaulted loans. 

Accounts receivable from debtors on account of defaulted guaranteed loans are reported net of an allowance for

estimated uncollectible amounts. The Federal Credit Reform Act was enacted after the authority to issue new

guarantees expired and, therefore, does not apply to FAA’s loan guarantees. 

Administrative expenses to maintain residual values in this program are minimal. FAA has no full-time

employees administering the program. 

Note 7. Cash, Foreign Currency and Other Monetary Assets

Note 8. Inventory and Related Property

Inventory and related property consist of general operating material and supplies, aircraft parts, and spare

parts located at field facilities. FAA uses the moving weighted average cost method to value operating materials 

(Dollars in Thousands)

Defaults on Pre-1992 Guaranteed Loans:

Aircraft

Purchase

Loan

Guarantee

Program

Defaulted

Guaranteed

Loans

Receivable,

Gross

Interest

Receivable

Allowance

for Loan

Losses

Foreclosed

Property

Defaulted

Guaranteed

Loans

Receivable,

Net

$ 711 $ 7 $ (337) $ - $ 381

(Dollars In Thousands)

Imprest Fund $ 54

Undeposited Collections 63,037

Total Cash, Foreign Currency, and Other Monetary Assets $ 63,091

(Dollars in Thousands)

Operating Material and Supplies:

Value Allowance Net Value Valuation Method

Items Held For Use $ 806,539 $ - $ 806,539 Moving Weighted Avg

Excess, Obsolete Unserviceable 31,756 (10,106) 21,650 Moving Weighted Avg

Items Held for Repair 234,153 (152,201) 81,952 Moving Weighted Avg

Total Inventory and Related Property $ 1,072,448 $ (162,307) $ 910,141
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -70- CHAP TER 2

and supplies. In FY 1999, FAA conducted an inventory of 100 percent of its spare parts. FAA currently expenses 

operating materials and supplies as issued or consumed. 

Items are considered for repair based on condition levels and if the maximum repair cost does not exceed 65

percent of the original cost. The allowance method is used to account for operating materials and supplies held

for repair, reducing the net carrying value of such items to 35 percent of their original cost. Current period

expenses are recognized for the amount of the annual increase or decrease to the allowance account. In FY 1999, 

FAA recognized $12.3 million increase in the allowance for items held for repair. 

Scrap and salvage items are written down to zero value and may be sold for nominal amounts. FAA transfers

excess items for disposal into the Governmentwide automated disposal system. Disposal proceeds may go to the

General Fund or to an FAA appropriation, depending on the nature of the item and the disposal method. FAA

may not donate items.

Note 9. Property, Plant and Equipment, Net

(1) In FY 1999, FAA validated and documented the historical cost basis of its Buildings and Structures primarily 

through the use of cost estimation models, based on dates placed in service, size, and support docu mentation.

The cost basis of Buildings and Structures was decreased by $43.2 million (a prior period adjustment) as a result 

of this analysis.

(2) In FY 1999, FAA performed “top-down” analyses of the budgets, contracts, and expenditures for its major

systems of the NAS acquired during the past two decades. These analyses identified the capitalizable costs of

each system, resulting in a revised valuation for each major system in use. The restated Equipment asset costs

are now supported by documentation compiled through this “top-down” study. The cost basis of Equipment

assets was increased by $4.0 billion as a result of these analyses. 

(3) FAA established performance measures for its Construction in Progress (CIP) portfolio in FY 1999 and

identified 17,000 project records (with costs of $1.5 billion) due to be closed out to in-service assets by yearend.

All such records have been closed out by September 30, 1999, and the yearend CIP balance represents only

active projects. For these remaining 9,000 projects, FAA has established central documentation files that

substantiate these costs. 

(4) In FY 1999, FAA recognized a gain on fixed assets of $10 million for excess and surplus property in

Utilization Screening and Disposition (USD) system.

(Dollars in Thousands)

Net

Deprec Services Acquis Accum. Book Value

Class of Fixed Assets Method Life Value Deprec FY 1999

Land None None $ 77,445 $ - $ 77,445

Buildings & Structures SL 15-40 3,062,081 (1,426,948) 1,635,133

Leasehold Improvements SL * 32,612 - 32,612

Aircraft SL 20 406,180 (139,027) 267,153

Aircraft Engines SL 7 2,761 - 2,761

ADP Software None * 28,451 - 28,451

Equipment SL 5-20 9,328,273 (3,081,140) 6,247,133

Assets Under Capital Lease SL Term-40 154,039 (51,033) 103,006

Construction in Progress None None 2,401,710 - 2,401,710

Property Not in Use * * 53,476 - 53,476

$ 15,547,028 $ (4,698,148) $ 10,848,880
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -71- CHAP TER 2

(5) Based on these revised property balances, FAA recalculated accumulated depreciation as of September 30,

1999. The accumulated depreciation for Buildings and Structures was increased $97 million as of that date (a

prior period adjustment) to reflect a new balance of $1.4 billion. The accumulated depreciation for Equipment

was increased by $565 million to reflect a new balance of $3.1 billion. Depreciation expense was d etermined for

1999 on these assets, based on the new property values.

Note 10. Environmental and Disposal Liabilities

In FY 1999, FAA reviewed all its environmental liabilities. It concluded that OSHA/Environmental C ompliance 

and Air Traffic Control (ATC) at DOD base closures are not a liability to the agency. This resulted in a decrease

of $515.4 million; $512.2 million for OSHA/Environmental Compliance and $3.2 million for Air Traffic Control

(ATC) at DOD base closures. The environmental remediation and decommissioning cleanup costs computed for

FY 1999 included a restatement and correction of amounts previously reported by FAA program offices.

Because of the changes in approach to handling both environmental and decommissioning cost, the past cost

estimates were reduced in FY 1999 and would not be properly included in current calculation of fees.

(1) In FY 1999, FAA revised its procedures for estimating its environmental remediation liability by basing the

estimates on known cleanup sites, not budget projections. FAA’s liability for environmental cleanup and

decommissioning as of September 30, 1999, is $105.6 million. This resulted in a $723.3 million decrease, of

which $700.2 million is a prior period adjustment and $23.1 million is a current year expense. The $700.2

million is the difference between the FY 1998 $828.9 million reported amount and the revised amount of $128.7

million. The $23.1 million is the difference between the revised $128.7 million amount and the $105.6 million.

(2) FAA’s liability for environmental cleanup and decommissioning costs as of September 30, 1999, was $1.2

billion. The decrease of $.7 billion was based on changes in assumptions previously used for the investment

analysis of the Satellite Navigation program. 

(3) In FY 1999, FAA complied with Statement of Federal Financial Accounting Standards #6, Chapter 4, by

implementing the Option #2 method, i.e., recognizing the annual change in environmental liabilities as a

current year cost associated with assets placed in service in the current year. When FAA is able to collect new

aviation user fees and the portion of environmental costs expected to be recovered is material, FAA will convert

to the Option 1 method, i.e., amortize the environmental costs over the life of the asset. 

(Dollars in Thousands)

Intragovernmental Other Total

Environmental Remediation $ 26,392 $ 79,176 $ 105,568

Environmental Cleanup and Decommissioning 302,600 907,800 1,210,400

Total Environmental Liabilities $ 328,992 $ 986,976 $ 1,315,968
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -72- CHAP TER 2

Note 11. Debt

Note 12. Other Liabilities

(Dollars in Thousands)

Beginning Net Ending

Balance Borrowing Balance

Other Debt:

Aircraft Purchase Loan

Guarantee Program

Debt to the Treasury $ 24 $ - $ 24

Total Debt $ 24 $ - $ 24

(Dollars in Thousands)

Other Intragovernmental Liabilities NonCurrent

Liability

Current

Liability Total

Advances from Others $ - $ 16,447 $ 16,447

Accrued Payroll & Benefits to Other Agencies - 46,002 46,002

Proceeds From Replacement of Property - 12 12

Other - 47,745 47,745

Liabilities Covered by Budgetary Resources $ - $ 110,206 $ 110,206

Federal Employees Compensation Act $ 104,035 $ 83,828 $ 187,863

Liabilities Not Covered by Budgetary Resources $ 104,035 $ 83,828 $ 187,863

Total Other Intragovernmental Liabilities $ 104,035 $ 194,034 $ 298,069

Other Intragovernmental Liabilities

Advances from Others, Unclassified $ - $ 3,007 $ 3,007

Accrued Payroll & Benefits to the Employees - 193,171 193,171

Liability for Unapplied Collections - 28,010 28,010

Other Accrued Liabilities - 118,088 118,088

Liabilities Covered by Budgetary Resources $ - $ 342,276 $ 342,276

Accrued Unfunded Annual Leave & Assoc. Benefits $ 374,754 $ - $ 374,754

Sick Leave Compensation Benefits for Air Traffic Controllers 37,684 - 37,684

Capital Leases (Note 13) 89,104 - 89,104

Contingent Liabilities for Legal Claims 470,756 470,756

Contingent Liabilities for Return Rights 17,300 8,600 25,900

Liabilities Not Covered by Budgetary Resources $ 989,598 $ 8,600 $ 998,198

Total Other Liabilities $ 989,598 $ 350,876 $ 1,340,474
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -73- CHAP TER 2

(1) Accrued payroll and employee benefits represent the unpaid pay period September 23 through September

30, 1999.

(2) An unfunded liability is recorded for unreimbursed actual cost to be made for workers’ compensation

pursuant to the Federal Employees’ Compensation Act (FECA) to the Department of Labor (DOL), which

administers the Federal Employees’ Compensation Fund. Funding for the amount charged to FAA is normally

appropriated for the fiscal year ending 2 years after the FAA accounting period in which the expense was

incurred. Therefore, FAA’s FY 1999 accrued liability includes workers’ compensation benefits paid by DOL for

the periods July 1, 1997, through June 30, 1998; July 1, 1998, through June 30, 1999; and July 1, 1 999, through

September 30, 1999.

(3) The estimated liability for accrued wages include annual, home, and military and compensatory hours plus

the agency’s cost of employee benefits associated with such compensated absences for the period ending

September 30, 1999.

(4) In FY 1998, under the National Air Traffic Controllers Association (NATCA) agreement, Article 25, Section

13, Air Traffic Controllers covered under the Federal Employees Retirement Systems (FERS) became eligible,

upon retirement, for a Sick Leave Buy Back Option. Under this option, an employee who attains the required

number of years of service for retirement shall receive a lump sum payment for forty (40) percent of the value of

his or her accumulated sick leave as of the effective date of their retirement. The total estimated sick leave buy

back contingency for FAA for those air traffic controllers eligible for retirement, based on current sick leave

balances, for FY 1999 is $37.6 million.

(5) In FY 1999, FAA recognized $470.8 million for legal claims that have been asserted and are pending. Of this

amount, $56.2 million was estimated to be paid from agency appropriations and $414.6 million to be paid from

the permanent appropriation for judgments, awards, and compromise settlements (Judgment Fund)

administered by the Department of Justice. The $470.8 million is $37.4 million higher than the $433.4 million

that was recognized in FY 1998. The $37.4 million difference was recognized as an FY 1999 expense. FAA’s

maximum exposure for loss for contingent liabilities associated with legal claims is $14.8 billion.

Effective in FY 1999, the Office of Management and Budget initiated a change in the standard for recognizing

loss contingencies for pending or threatened litigation and asserted claims. The change, which was contained in 

Statement of Recommended Accounting Standards Number 12, dated December 1998, amended paragraph 38

of Statement of Federal Financial Accounting Standards (SFFAS) No. 5 by replacing the phrase “more likely

than not” in the second bullet, with the word “likely.”

(6) Contingent Liabilities for the Return Rights Program decreased by $6 million from $31.9 million in FY 1998

to $25.9 million in FY 1999. Because of evidence that the FY 1998 liability may have been overstated, the

$6 million decrease was treated as a prior period adjustment. The program covers temporary assignments for 2

to 4 years. At the beginning of FY 1999, approximately 518 employees who previously had accepted t ransfers to

overseas or certain domestic locations were contractually entitled to a future return move at Government

expense. The typical cost per move is $50,000. The liability may be overstated because not every employee

remaining in the program will exercise his or her right. If every employee in the program did exercise his or her

right, the liability would be as follows:

FY 2000 $ 8,600,000

FY 2001 $ 11,900,000

FY2002 $ 5,350,000

FY2003 $ 50,000

$ 29,900,000
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -74- CHAP TER 2

Note 13. Leases

FAA as Lessee

Capital Leases

Capital leases cover land and buildings at the MMAC in Oklahoma City, Oklahoma and at the WJHTC in

Pomona, New Jersey. (Operating leases discussed in the following section cover other real property.) FAA

leases the MMAC land and buildings from the Oklahoma City Airport Trust at $12 million per year. FAA leases

real property, including the WJHTC technical building, from the Atlantic County Improvement Authority at

$4.8 million per year.

FAA’s capital lease payments are funded annually. The following represents capital lease accounting

treatment under generally accepted accounting principles:

(1) Capital lease assets are recorded at the net present value of the total minimum lease payments over the lease 

duration, valued at the lease inception.

(2) In FY 1996, FAA implemented the depreciation/amortization provision of SFFAS No. 6, which is applicable

to assets acquired under capital lease. The total assets, valued at $154 million under capital lease for FY 1999,

is $38 million less than the $192 million reported in FY 1998. The $38 million asset reduction is attributable to a 

correction in the method for computing leased assets. The $38 million was treated as a prior period adjustment.

(3) Amounts due within the current fiscal year corresponding to the principal portion of the lease payments are

recorded as current year obligations. The remaining principal payments are recorded as unfunded lease

liabilities. The imputed interest is funded and expensed annually. Interest amounts imputed to subsequent

years (aggregating $68 million) are not recorded as unfunded liabilities in the Departmental Accounting and

Financial Information System (DAFIS).

(Dollars in Thousands)

Summary of Assets Under Capital Leases:

Land & Buildings: $ 154,039

Less: Accumulated Amortization 51,033

Net Assets Under Capital Lease $ 103,006

Future Payments Due

Fiscal Year

Year 1 (FY 2000) $ 16,182

Year 2 (FY 2001) 14,823

Year 3 (FY 2002) 14,620

Year 4 (FY 2003) 14,398

Year 5 (FY 2004) 14,339

After 5 Years (FY 2005 to Contract End) 82,748

Total Future Lease Payments 157,110

Less: Imputed Interest 68,006

Total Capital Lease Liability $ 89,104

Liabilities not covered by budgetary resource$s 89,104
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -75- CHAP TER 2

Operating Leases: 

FAA leases property, aircraft, equipment, and telecommunications under operating leases. Such leases are

funded annually and expensed as recurring charges in DAFIS. Unfunded liabilities and future funding

requirements for operating lease payments due in future years are not recorded in DAFIS. 

The cumulative amount due on operating leases after 5 years does not include estimated payments for leases

with annual renewal options. Estimates of the lease termination dates are subjective, and any projection of

future lease payments would be arbitrary. 

FAA as Lessor: 

Operating Leases

FAA leases Ronald Reagan Washington National Airport and Washington Dulles International Airport to the

Metropolitan Washington Airports Authority, the airports’ sponsor. The lease took effect in March 1987 at $3

million per year for a 50-year term. Subsequent annual rental payments are adjusted by applying the Implicit

Price Deflator for the Gross National Product published by the Department of Commerce. Additionally, the

parties may renegotiate the level of lease payments attributable to inflation costs every 10 years. Upon lease

expiration, the airports and facilities, originally valued at $244 million, together with any improvements

thereto, will revert to the Federal Government. In addition, FAA leases equipment to foreign governments and

leases parcels of Government-owned land, generally for agriculture. 

(Dollars in Thousands)

Future Payments Due

Land & Mach &

Fiscal Year Buildings Equipment Other Total

Year 1 (FY 2000) $ 56,075 $ 0 $ 324 $ 56,399

Year 2 (FY 2001) 46,235 0 324 46,559

Year 3 (FY 2002) 38,635 0 248 38,883

Year 4 (FY 2003) 31,164 0 201 31,365

Year 5 (FY 2004) 24,001 0 201 24,202

After 5 Years (FY 2005 to Contract End) 116,487 0 4,535 121,022

Total Future Operating Lease Payments $ 312,597 $ 0 $ 5,833 $ 318,430

(In Thousands of Dollars)

Future Payments Due

Land & Mach &

Fiscal Year Buildings Equipment Other Total

Year 1 (FY 2000) $ 4,295 $ 90 $ 0 $ 4,385

Year 2 (FY 2001) 4,380 90 0 4,470

Year 3 (FY 2002) 4,466 90 0 4,556

Year 4 (FY 2003) 4,554 90 0 4,644

Year 5 (FY 2004) 4,622 90 0 4,712

After 5 Years (FY 2005 to Contract End) 150,401 0 0 150,401

Total Future Operating Lease Payments $ 172,718 $ 450 $ 0 $ 173,168
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -76- CHAP TER 2

Note 14. Federal Employee and Veterans Benefits Payable 

Note 15. Unexpended Appropriations

The differences represent the amount of undelivered orders and accounts payable that exceed the total amount

of unrequisitioned cash authority, the Treasury cash balance and the unobligated authority, and other

differences carried forward from prior years.

Note 16. Total Cost and Earned Revenue by Budget Functional Classification

Note 17. Net Cost by Programs

FAA’s six lines of business represent the programs reported on the Statement of Net Cost. Assigned cost centers

to each line of business permit the direct accumulation of costs. Other costs that are not directly traced to each

line of business, such as agency overhead, are allocated by applying ratios representing the cost for each line of

business cost compared to total expenses, excluding grants.

Other Post-Employment Benefits

Federal Employees Compensation Act:

Actuarial Liabilities $ 965,669

Total 965,669

Dollars in Thousands

(Dollars in Thousands)

Operations

General

Fund

Other

Funds Total

(1) Unobligated

(a) Available $ 23,103 $ 44 $ 23,147

(b) Unavailable 41,114 967 42,081

(2) Undelivered Orders 320,859 910 321,769

Sub-total $ 385,076 $ 1,921 $ 386,997

Other Differences (37,294) - (37,294)

Total Unexpended Apprioprations $ 347,782 $ 1,921 $ 349,703

(Dollars in Thousands)

Total Cost Earned Revenue Net Cost

Functional Classification:

Transportation Programs $ 9,316,209 $ (123,115) $ 9,193,094

Community and Regional Development Programs 1,794 - 1,794

General Government Programs 14 - 14

Total Cost $ 9,318,017 $ (123,115) $ 9,194,902
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -77- CHAP TER 2

Note 18. Taxes and Other Nonexchange Revenue

Taxes are collected by the Department of the Treasury (Treasury) Internal Revenue Service for FAA’s Airport

and Airway Trust Fund. These taxes can be withdrawn only as authorized by various FAA appropriations. The

amounts reflected above are taxes reported to FAA by Treasury. Treasury estimates taxes to be collected each

quarter and adjusts the estimates by actual collections. 

Note 19. Imputed Financing: 

(1) In FY 1999, FAA recognized as imputed financing the amount of accrued pension and post-retirement benefit 

expenses for current employees. The assets and liabilities associated with such benefits are the r esponsibility of 

the administering agency, OPM.

(2) In FY 1999, amounts paid by the Judgment Fund in settlement of claims or court assessments against the

FAA were recognized as imputed financing. 

(Dollars in Thousands)

Passenger Ticket Tax $ 7,486,262

Waybill Tax 411,791

International Departure Tax 1,484,443

Fuel Taxes 1,012,870

Tax Refunds and Credits (3,887)

Investment Income 733,990

Other Nonexchange Revenue -

Total Taxes and Other Nonexchange Revenue $ 11,125,469

(Dollars in Thousands)

Office of Personnel Management $ 327,902 (1)

Dept. of Justice Judgment Fund 26,623 (2)

Total Imputed Financing $ 354,525
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -78- CHAP TER 2

Note 20. Prior Period Adjustments

In FY 1999, FAA recorded the following prior period adjustments:

Note 21. Statement of Budgetary Resources Disclosures

The statement accurately represents the agency’s status of budgetary resources for FY 1999 and was largely

prepared from the budgetary accounts in the DAFIS trial balance. Those line items required on the statement,

but not supported by DAFIS, were derived from the equivalent DAFIS proprietary accounts and budgetary

financial documents, e.g., the SF-132, Apportionment and Reapportionment Schedule, and the SF-133, Report

on Budget Execution. In the Budgetary Resources section, Budget Authority and Unobligated Balances -

Beginning of Period are derived from budgetary financial documents. In the Status of Budgetary Resource

section, Unobligated Balances Available and Not Available are also derived from budgetary financial

documents. In the Outlays section, Obligations Incurred and Obligated Balances are derived from budgetary

and proprietary accounts. The budgetary resource documents used to support the line items, e.g., the SF-132

are certified by FAA and approved by OMB. The outlays and other budgetary balances are reconciled with

Treasury and OMB monthly, quarterly, and annually.

The net amount of budgetary resources obligated for undelivered orders at the end of FY 1999 was $4.4 billion.

The Aircraft Purchase Guarantee Program is funded under the authority to borrow from the U.S. Treasury

granted by Congress in the DOT and Related Agencies Appropriation Act, 1983. Borrowing authority is

implemented through a blanket promissory, which provides FAA with a line of credit for the full amount of

borrowing authority granted by Congress. Because authorization for issuing new loan guarantees expired in

1988, FAA has not issued any new guaranteed loans. In FY 1999, FAA had an outstanding loan which it

refinanced through an advance from Treasury, which is payable with interest on September 30, 2000.Although

FAA does have borrowing authority, it is seeking a liquidating appropriation to pay off the remaining note with

Treasury and end the program.

(Dollars in Thousands)

Reconciliation of General Ledger to Property

Systems $ (3,020,557)

Prior Period Depreciation 805,712

Revision of Environmental Remediation Cleanup

Cost Estimates (700,181)

Correction Environmental Cleanup and Disposal

Costs (471,500)

Reduction of Environmental Liability for

OSHA/Environmental Compliance (512,200)

Sick Leave Compensation Correction (28,846)

Correction to Gain and Loss General Ledger

Accounts 192,698

Airport Improvement Program - Correct Grant

Current Year Expenses 155,667

Other Adjustments (57,349)

Total Prior Period Adjustment $ (3,636,556)
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -79- CHAP TER 2

Under congressional legislation, in FY 1998, FAA was authorized $1.95 billion in contract authority and

liquidating authority for $1.6 billion, which are derived from the Airport and Airway Trust Fund and available

until expended, for the Grants-in-Aid Programs. The contract authority available at the end of FY 1999 was

$101 million.

Congress mandated permanent indefinite appropriations for the Facilities and Equipment, Grants-in-Aid,

and Research, Development & Engineering in order to fully fund special projects that were ongoing and

spanned several years.

FAA does not have any differences between the information reported on the statement and the amounts

described as “actual” in the Budget of the United States Government for FY 1999.

FAA incurred several adjustments to its budgetary resources in FY 1999. The Facilities & Equipment Fund was 

increased by $20 million and the Research, Engineering and Development Fund was increased by $220,000

through funds transferred from the OMB Information Technology and Related Expenses (Y2K Emergency

Fund). The Operations appropriation was reduced by $50 million for funds transferred to the Essential Air

Service and Rural Airport Improvement Program Fund.

Note 22. Financing Sources yet to be Provided

(Dollars in Thousands)

Decreases:

Other Accrued Liabilities $ (5,123)

Environmental Liability (1,928,332)

Capital Leases (15,115)

Financing Sources That Fund Costs of Prior Periods $ (1,948,570)

Increases

Federal Employee Compensation Act (FECA Actuarial) $ 38,889

Federal Employee Compensation Act (FECA Actual) 6,799

Contingent Liabilities for Legal Claims 37,312

Other Liabilities 22,137

Total Financing Sources Yet to be provided. $ 105,137
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -80- CHAP TER 2

Note 23. Custodial Activity

Note 24. Other Disclosures

Contract Negotiations. FAA had a total of $131.8 million in commitments (funds reserved for possible future 

obligations) under unexpired Facilities and Equipment and Research, Engineering, and Development

appropriations. The commitments were for purchases of goods and services for which contract negotiations have 

not been completed (i.e., agency obligations had not been incurred) at the end of FY 1999.

Contract Options. As of September 30, 1999, FAA had $18.8 billion in unobligated contracts. The terms of

these contracts give FAA the unilateral right to purchase additional equipment or services or to extend the

contract terms. Exercising this right would require the obligation of funds in future years.

Letter of Intent. FAA has authority under 49 U.S.C. 47110(e) to issue letter of intent (LOI) to enter into AIP

grant obligations; but LOI’s do not create obligations. FAA has issued LOI’s covering FY 1988 through FY 2010

in the aggregate amount of $2.9 billion. FAA had obligated $1.8 billion of this total amount from FY 1988

through FY 1999, leaving $1.1 billion unobligated as of September 30, 1999. FAA anticipates obligating $149

million of this total amount in FY 2000.

AIP Grants. The FY 1999 AIP grant authority totaled $1.95 billion, including over $1 billion in entitlements to

specific locations. The sponsors of these entitlements claimed all but $136 million. This amount will be

available from unused or newly enacted contract authority to those sponsors through FY 2001 or 2002 in the

case of nonhub primary airport locations. 

Aviation Insurance Program. FAA is authorized to issue hull and liability insurance under the Aviation

Insurance Program for air carrier operations where commercial insurance is not available on reasonable terms

where the operation to be insured is necessary to carry out the U. S. Government’s foreign policy. No claims for

losses were pending as of September 30, 1999.

FAA may issue (1) premium insurance, for which a risk-based premium is charged to the air carrier and (2)

nonpremium insurance. FAA maintains standby nonpremium war-risk insurance policies for 48 air carriers

(Dollars in Thousands)

Revenue Activity:

Sources of Cash Collections:

Tax Revenues $ -

Miscellaneous 21,831,535

Total Cash Collections 21,831,535

Accrual Adjustments (+/-) 306,585

Total Custodial Revenue $ 22,138,120

Disposition of Collections:

Transferred to Treasury General Fund $ 21,831,535

Increase (Decrease in Amounts Yet to be Transferred) 306,585

Refunds and Other Payments -

Retained by the Reporting Entity -

Net Custodial Revenue Activity $ -
FY 1999 FAA ANNUAL REPORT

FI NAN CIAL STATEMENT -81- CHAP TER 2

having approximately 1,050 aircraft available for Defense or State Department charter operations. No coverage 

was extended during 1999.

FAA normally insures only a small number of air carrier operations at any time and establishes a

maximum liability for losing one aircraft. In many cases, that maximum liability for both hull loss and

liability is $1 billion; but it is usually less and, because FAA can use its regulatory authority to stop flights to

high-risk areas and/or terminate insurance coverage, the range of possible liability to FAA in any year is

assumed to be between zero and $2 billion. Since the inception of the program (including the predecessor

Aviation War Risk Insurance Program dating back to 1951) only four claims ranging between $626 and

$122,469 have been paid.
FY 1999 FAA ANNUAL REPORT

SUP PLE MEN TARY STEW ARD SHIP INFORMATION -82- CHAP TER 2

U.S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

Stewardship Investment

Non Federal Physical Property

Airport Improvement Program

For the Fiscal Year Ended September 30, 1999

(Dollars in Thousands)

State/Territory FY 1998 FY 1999

Alabama $ 15,556 $ 18,134

Alaska 77,949 70,802

Arizona 47,243 53,135

Arkansas 19,291 21,694

California 101,897 106,161

Colorado 44,768 43,452

Connecticut 1,348 4,971

Delaware 284 197

District of Columbia 206 54

Florida 60,752 71,746

Georgia 41,604 43,556

Hawaii 7,142 12,131

Idaho 12,532 15,578

Illinois 74,514 63,596

Indiana 21,213 27,467

Iowa 16,983 30,450

Kansas 11,250 7,451

Kentucky 43,116 32,741

Louisiana 20,338 24,442

Maine 5,505 4,943

Maryland 9,765 18,136

Massachusetts 22,615 15,259

Michigan 47,890 50,995

Minnesota 23,430 27,902

Mississippi 9,788 14,393

Missouri 35,996 30,089

Montana 13,367 16,727

Nebraska 13,015 14,240

Nevada 30,420 22,981

New Hampshire 11,743 8,789

New Jersey 9,918 25,906

New Mexico 5,327 10,149

New York 67,664 86,754

North Carolina 31,226 50,572

North Dakota 10,980 8,263

Ohio 33,843 46,374

Oklahoma 5,240 14,949

Oregon 17,682 16,138

Pennsylvania 63,025 57,544
FY 1999 FAA ANNUAL REPORT

SUP PLE MEN TARY STEW ARD SHIP INFORMATION -83- CHAP TER 2

Rhode Island 2,692 10,813

South Carolina 15,419 22,926

South Dakota 10,112 8,893

Tennessee 34,885 36,477

Texas 98,154 103,308

Utah 12,910 8,808

Vermont 5,219 4,141

Virginia 21,733 31,069

Washington 18,405 44,454

West Virginia 19,564 12,592

Wisconsin 30,406 25,512

Wyoming 9,337 7,871

American Samoa 1,329 676

Guam 1,260 10,341

Northern Mariana Island 3,272 4,027

Puerto Rico 10,482 7,163

Trust Territory of Pacific 479 27

Virgin Islands 2,384 9,231

Administration 52,075 75,680

Grand Total....................... $ 1,436,541 $ 1,612,867

STEWARDSHIP INVESTMENT

Non-Federal Physical Property.

Airport Improvement Program. FAA makes project grants for airport planning and

development under the Airport Improvement Program (AIP) to maintain a safe and

efficient nationwide system of public-use airports that meets both present and future

needs of civil aeronautics. FAA works to improve the infrastructure of the Nation's

airports, in cooperation with airport authorities, local and state governments, and

metropolitan planning authorities. In FY 1999, FAA issued 1,489 grants to improve

and expand the Nation's airports.

U.S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

Stewardship Investment

Non Federal Physical Property

Airport Improvement Program

For the Fiscal Year Ended September 30, 1999

(Dollars in Thousands)

State/Territory FY 1998 FY 1999
FY 1999 FAA ANNUAL REPORT

SUP PLE MEN TARY STEW ARD SHIP INFORMATION -84- CHAP TER 2

U.S. Department Of Transportation

Federal Aviation Administration

Stewardship Investment

Research and Development

For the Fiscal Year Ended September 30, 1999

(Dollars in Thousands)

Expenditures 1998 1999

Applied Research $ 103,274 $ 104,544

Development 48,237 18,358

R&D Plant 11,254 14,290

Administration 54,179 36,466

Total $ 216,944 $ 173,658

Stewardship Investment

Research and Development.

Research. FAA conducts research and provides the essential air traffic control infrastructure

to meet increasing demands for higher levels of system safety, security, capacity, and efficiency.

Research priorities in FY 1999 included aircraft structures and materials; fire and cabin safety;

crash injury-protection; explosive detection systems; improved in-flight icing and ground

de-icing operations; better tools to predict and warn of weather hazards, turbulence and

wake vortices; aviation medicine, and human factors.
FY 1999 FAA ANNUAL REPORT

SUP PLE MEN TARY STEW ARD SHIP INFORMATION -85- CHAP TER 2

U.S. Department Of Transportation

Federal Aviation Administration

Supplementary Information

Deferred Maintenance

For the Fiscal Year Ended September 30, 1999

(Dollars in Thousands)

Asset Costs to Return to

Category Method Condition* Acceptable Condition

FY 1998 FY 1999

Land - - - (1)

Buildings Condition Assessment Survey 4&5 18,214 17,539

Other Structures and Facilities Condition Assessment Survey 4&5 1,231 37,442

Aircraft and Aircraft Engines - - - (2)

National Airspace System

(NAS) Equipment - - - (3)

General Purpose Equipment - - - (4)

Assets Under Capital Lease - - -

Total 19,445 54,981

* Condition Rating Scale:

1: Excellent

2: Good

3: Fair

4: Poor

5: Very Poor

Information on FAA’s deferred maintenance is based on condition assessment survey (annual inspection).

Standards (orders) are provided for evaluating the fixed assets condition. These standards are combined with

FAA’s technicians’ knowledge, past experiences, and judgment to provide the following:

* Minimum and desirable condition descriptions

* Suggested maintenance schedules

* Standard costs for maintenance actions

* Standardized condition codes

There have not been material changes in the standards in recent years.

FAA recognizes maintenance expense as incurred. However, maintenance was insufficient

during the past several years and resulted in deferred maintenance on Buildings and

Other Structures and Facilities.

(1) No material maintenance was deferred on land.

(2) Maintenance was not deferred on the FAA aircraft. The aircraft maintenance was ensured through

the aircraft maintenance, inspection, preventive maintenance, and alteration programs of the Flight

Inspection Maintenance Division programs.

(3) The FAA did not defer maintenance on NAS equipment. The maintenance of the Airway Facilities (AF)

systems, subsystems, and equipment in the NAS is guided by the general principle of ensuring availability

and reliability of air traffic control, navigation, and communication services. In order to minimize the quantity

and duration of service interruption and outages, both planned and unplanned, AF does not generally

defer the maintenance of the electronic equipment. Various reasons may cause a maintenance cycle to be

skipped, but the maintenance is performed during the next cycle. FAA Order 6000.30 states the minimum

standards for reliability and availability of NAS equipment. AF’s following initiatives ensure the highest

possible levels of performance of NAS equipment:

* Periodic and preventive maintenance programs

* Maintenance of backup equipment for key services in case of equipment interruption or missed maintenance

* Competent technical maintenance staff

(4) The amount recorded as FAA’s general purpose equipment was not material, therefore, no material

maintenance was differed on these equipment.
FY 1999 FAA ANNUAL REPORT

SUP PLE MEN TARY STEW ARD SHIP INFORMATION -86- CHAP TER 2

U.S. Department Of Transportation

Federal Aviation Administration

Supplementary Information

Intra-Governmental Transactions

For the Fiscal Year Ended September 30, 1999

(Dollars in Thousands)

Intra-Governmental Assets

Agency

Fund

Balance

with

Accounts

Receivable Investments Other

Department of the Treasury $ 751,507 $ 778 $ 12,655,469 $ 162,970

Office of the Vice President 7

Department of Agriculture 93

Department of Commerce 605

Department of the Interior 993

Department of Justice 95

Department of the Navy 1,096

Department of the Army 100

General Services Administration 27

National Science Foundation 9

Department of the Air Force 8,216

Fed. Emergency Mgmt. Agcy. 221

National Aeronautics & Space Adm 452

Department of Energy 66

US Trade & Development Agency 247

Department of Defense 7,093

Other Agencies 22,130

Total $ 751,507 $ 42,228 $ 12,655,469 $ 162,970

Intra-Governmental Liabilities

Agency

Accounts

Payables

Debt

Borrowings

from Other

Agencies Environmental Other

Other Agencies $ 33,722 $ 24 $ 328,992 $ $110,206

Department of Labor $187,863

Total $ 33,722 $ 24 $ 328,992 $ $298,069

Agency Expenses

Department of the Treasury $ 73

Department of Justice 26,623

Office of Personnel Management 902,213

Department of Agriculture 150

Department of Commerce 275

Department of the Interior 90

Department of Justice 20

Department of the Army 8

General Services Administration 50

Department of Health & Human Services 127

Department of Defense 198

Department of Labor 84,885

Department of Transportation 16,739

Other 5,499

Total Expenses $ 1,036,950
FY 1999 FAA ANNUAL REPORT

SUP PLE MEN TARY STEW ARD SHIP INFORMATION -87- CHAP TER 2

U. S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

SUPPLEMENTARY STATEMENT OF BUDGETARY RESOURCES SUPP

AS OF SEPTEMBER 30, 1999

(Dollars in Thousands)

Airport & Airway Trust Fund Trust Fund Trust Fund

Trust Fund Grants-in-Aid Facilities & Research, Eng. &

Corpus to Airports Equipment Development

BUDGETARY RESOURCES

Budget Authority $ 3,365,643 $ 2,410,000 $ 2,121,255 $ 150,367

Unobligated Balances - Beginning

of Period 9,151,040 - 443,040 7,940

Spending Authority From

Offsetting Collections - 27,506 4,872

Adjustments (12,516,610) (414,285) 139,264 8,406

Total Budgetary Resources $ 74 $ 1,995,715 $ 2,731,066 $ 171,585

STATUS OF BUDGETARY RESOURCES

Obligations Incurred $ 74 $ 1,990,171 $ 2,233,188 $ 157,042

Unobligated Balances-Available - 5,545 362,536 13,639

Unobligated Balances-Not Available - - 135,343 904

Total Status of Budgetary Resources$ 74 $ 1,995,715 $ 2,731,066 $ 171,585

OUTLAYS

Obligations Incurred $ 74 $ 1,990,171 $ 2,233,188 $ 157,042

Less: Spending Authority From Offsetting

Collections and Adjustments - (45,715) (166,771) (13,369)

Obligated Balance, Net Beginning of Period - 2,502,678 1,664,699 184,340

Obligated Balance Transferred, Net - - - -

Less: Obligated Balance, Net - End of Period - (2,882,220) (1,535,870) (154,355)

Total Outlays $ 74 $ 1,564,913 $ 2,195,247 $ 173,658
FY 1999 FAA ANNUAL REPORT

SUP PLE MEN TARY STEW ARD SHIP INFORMATION -88- CHAP TER 2

U. S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

SUPPLEMENTARY STATEMENT OF BUDGETARY RESOURCES

AS OF SEPTEMBER 30, 1999

(Dollars in Thousands)

Aviation IntraInsurance Franchise Other Agency Consolidated

Revolving Fund Operations Funds Eliminations Total

$ - $ - $ 5,590,934 $ - $ - $ 13,638,200

72,428 951 50,780 921 - 9,727,100

3,502 17,785 4,177,320 - - 4,230,985

2 - 54,712 (863) - (12,729,374)

$ 75,932 $ 18,736 $ 9,873,745 $ 58 $ - $ 14,866,911

$ 315 $ 17,751 $ 9,756,244 $ 4 $ - $ 14,154,788

75,429 - 22,547 44 - 479,739

188 985 94,954 10 - 232,384

$ 75,932 $ 18,736 $ 9,873,745 $ 58 $ - $ 14,866,911

$ 315 $ 17,751 $ 9,756,244 $ 4 $ - $ 14,154,788

(3,504) (17,785) (4,236,895) (58) - (4,484,097)

189 3,953 703,855 183 - 5,059,898

- - - - - -

(141) (5,214) (646,088) (118) (5,224,006)

$ (3,142) $ (1,294) $ 5,577,116 $ 11 $ - $ 9,506,583
FY 1999 FAA ANNUAL REPORT

SUP PLE MEN TARY STEW ARD SHIP INFORMATION -89- CHAP TER 2

Assets

Intragovernmental

Fund Balance with Treasury $ 191

Investments 72,092

Total Intragovernmental Assets $ 72,283

Total Assets $ 72,283

Liabilities

Other Intragovernmental Liabilities 3

Total Intragovernmental Liabilities $ 3

Accounts Payable $ 3

Other Liabilities 26

Total Liabilities $ 32

Net Position Balances:

Cumulative Results of Operations 72,251

Total Net Position $ 72,251

Total Liabilities and Net Position $ 72,283

As of September 30, 1999

(Dollars in Thousands)

U. S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

AVIATION INSURANCE REVOLVING FUND

BALANCE SHEET
FY 1999 FAA ANNUAL REPORT

SUP PLE MEN TARY STEW ARD SHIP INFORMATION -90- CHAP TER 2

U. S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

AVIATION INSURANCE REVOLVING FUND

STATEMENT OF NET COST

For the year ended September 30, 1999

(Dollars in Thousands)

Costs:

Programs

Public $ 383

Less Earned Revenues (3,503)

Net Program Costs $ (3,120)

Net Cost Of Operations $ (3,120)
FY 1999 FAA ANNUAL REPORT

SUP PLE MEN TARY STEW ARD SHIP INFORMATION -91- CHAP TER 2

Net Cost of Operations $ 3,120

Financing Sources

Imputed Financing 13

Total Financing Sources $ 13

Net Results of Operations $ 3,133

Net Change in Cumulative Results of Operations 3,133

Change in Net Position 3,133

Net Position Beginning of Period 69,118

Net Position End of Period $ 72,251

For the year ended September 30, 1999

(Dollars in Thousands)

U.S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

AVIATION INSURANCE REVOLVING FUND

STATEMENT OF CHANGES IN NET POSITION
FY 1999 FAA ANNUAL REPORT

SUP PLE MEN TARY STEW ARD SHIP INFORMATION -92- CHAP TER 2

Assets

Intragovernmental

Fund Balance with Treasury $ 7,426

Accounts Receivable, Net 299

Total Intragovernmental Assets $ 7,725

Accounts Receivable, Net $ 2

General Property, Plant, and Equipment, Net 2,447

Other 4

Total Assets $ 10,178

Liabilities

Intragovernmental Liabilities:

Accounts Payable $ (239)

Other Intragovernmental Liabilities 1,455

Total Intragovernmental Liabilities $ 1,216

Accounts Payable $ 2,506

Other Liabilities 1,862

Total Liabilities $ 5,584

Net Position Balances:

Cumulative Results of Operations $ 4,594

Total Net Position $ 4,594

Total Liabilities and Net Position $ 10,178

As of September 30, 1999

(Dollars in Thousands)

U. S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

FRANCHISE FUND

BALANCE SHEET
FY 1999 FAA ANNUAL REPORT

SUP PLE MEN TARY STEW ARD SHIP INFORMATION -93- CHAP TER 2

U. S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

FRANCHISE FUND

STATEMENT OF NET COST

For the Fiscal Year Ended September 30, 1999

(Dollars in Thousands)

Costs:

Programs

Intragovernmental $ 17,158

Less Earned Revenues (16,593)

Net Program Costs $ 565

Net Cost Of Operations $ 565
FY 1999 FAA ANNUAL REPORT

SUP PLE MEN TARY STEW ARD SHIP INFORMATION -94- CHAP TER 2

Net Cost of Operations $ (565)

Financing Sources

Imputed Financing 577

Total Financing Sources $ 577

Net Results of Operations $ 12

Prior Period Adjustments 28

Net Change in Cumulative Results of Operations 41

Increase (Decrease) in Unexpended Appropriations -

Change in Net Position 40

Net Position Beginning of Period 4,554

Net Position End of Period $ 4,594

For the Fiscal Year Ended September 30, 1999

(Dollars in Thousands)

U.S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

FRANCHISE FUND

STATEMENT OF CHANGES IN NET POSITION
REQUIRED SUPPLEMENTARY

INFORMATION

ADMINISTRATIVE SERVICES FRANCHISE

FUND

Background/Fund Establishment

The franchise concept is designed to create

competition within the public sector for the

performance of a variety of support services. This

allows for the establishment of an environment to

maximize the use of internal resources through the

consolidation and joint-use of like functions and to

gain the efficiencies and economies of scale associated

with the competitive offering of services to other

Government agencies.

The Government Management Reform Act (GMRA) of 

1994, Public Law 103-356, provided for the

establishment of six franchise fund pilot programs.

The six pilots were authorized by the President’s

Chief Financial Officers (CFO) Council prior to

submission of the FAA Franchise Fund proposal.

However, the CFO Council’s Franchise Fund Working 

Group strongly endorsed the FAA proposal and

recommended submission to Congress as a

franchise-like operation. This endorsement resulted

in congressional approval, and the Administrative

Services Franchise Fund was established in FY 1997.

Services

The Administrative Services Fund offers a wide

variety of services. These include international

training, accounting, payroll, travel, duplicating,

multi-media, information technology, and

management training. 

The customer base for Franchise Fund services

includes DOT and non-DOT Government agencies.

The FY-99 revenue percentages by customer are

identified in the customer base pie chart.

Benefits/Accomplishments

Benefits from the franchise environment occur

incrementally over time through efficiencies and

economies of scale associated with development of

partnerships and consolidation of like functions plus

the addition of new customers. During the first 3

years of operation, activities within the

Administrative Services Franchise Fund have

identified a number of advantages, benefits, and

results from participation in the fund. The general

impacts/benefits are:

• A more businesslike orientation

• Customer-driven decisions

• Emphasis on the cost of doing business and the full

recovery of costs

• Reduction in the delivery price of some products/services

• Flexibility of the revolving fund environment

including reduction of year-end crunch

• Use of retained earnings to build a base for

equipment upgrades, improved services, etc.

• Renewed employee enthusiasm and the sense of

challenge

• Development and refinement of specific measurement

processes

• Identification of partnering/consolidation opportunities

Specific accomplishments include:

• Centralized/consolidated international training activities

at the FAA Academy at no additional cost.

• Increased FAA influence on global aviation system

and improvement of overall safety through advancement 

of the international training program.

• Absorbed a reduction in the printing budget

allocation with no commensurate reduction in

service level.

• Consolidated two services (multi-media and

printing) into one division with a single manager

(instead of two) resulting in ability to shift

resources to the working level.

• Purchased equipment upgrades in printing and

multi-media to improve technology, increase

capability, and replace worn-out units through use

FY 1999 FAA ANNUAL REPORT

RE QUIRED SUP PLE MEN TARY INFORMATION -95- CHAP TER 2

Customer Base

Other

DOT

.64%

OST

4.30%

USCG

5.70%

Non

DOT

3.43%

FAA

85.93%
of the retained earnings provisions of the revolving

fund. This resulted in improved service delivery

and would not have been possible using the annual

appropriation cycle alone.

• A cost avoidance of approximately $2.8 million

annually due to significantly lower prices than local 

quick print competitors ($0.025 versus $0.07 per

impression).

• Reduced cost per impression from $0.025 to $0.023

(8%) in FY 1999 resulting from efficiencies gained

through new technology and economies of scale

associated with new customers and increased

product output.

• Centralized permanent change of station (PCS)

processing within the agency.

• Negotiated an agreement with one new customer

for collections processing, one new customer for

PCS processing, and one new customer for

accounting services.

FY-99 Fund Activity

The fund provided services totaling $17.3 M in FY-99.

The following is a graphic presentation of the

distribution of customer reimbursement by service

activity for FY 1999.

In addition, collections of $769K were made during

FY-99 for services to be performed in FY-00. The

breakdown of this $769K deferred revenue is: $67K

deferred revenue collected by International &

Management Training; $244K deferred revenue

collected by Multimedia & Information Technology;

$15K deferred revenue collected by Printing &

Distribution; and $443K deferred revenue collected

by Financial Services.

FY 1999 FAA ANNUAL REPORT

RE QUIRED SUP PLE MEN TARY INFORMATION -96- CHAP TER 2

FY 99 Services Provided

Multi-Media &

Information

Technology

6%

Duplicating

31%

International

&

Management

21%

Financial

Services

(Accounting,

Payroll,

Travel)

42%
GLOSSARY of ACRONYMS

A

AATF Airport and Airway Trust Fund (also 

Trust Fund)

AC advisory circular

ACSI Airport Certification Safety Inspector

AD advisory directive

ADR alternative dispute resolution

AEAP Atmospheric Effects of Aviation 

Project

AF airway facilities

AGARS advanced general aviation research 

simulator

AIP Airport Improvement Program

AMASS airport movement area safety system

AMS acquisition management system

ANCA Airport Noise and Capacity Act

ANPRM Advanced Notice of Proposed 

Rulemaking

ANS FAA NAS Transition and 

Implementation Office

APMS automated performance measuring 

system

AQP advanced qualification program

ARA Office of Research and Acquisition

ARAC Aviation Rulemaking Advisory 

Committee

ARFF aircraft rescue and firefighting

ARSR air route surveillance radar

ARTCC air route traffic control center

ARTS automated radar terminal system

ASCEP Aircraft Certification Systems 

Evaluation Program

ASDE airport surface detection equipment

ASI aviation safety inspector

ASOS automated surface observing system

ASR airport surveillance radar

AT air traffic

ATA Air Transport Association

ATC air traffic control

ATCBI air traffic control radar beacon 

interrogator

ATCSCC Air Traffic Control Systems Command 

Center

ATCT airport traffic control tower

ATFM air traffic flow management

ATOS Air Transportation Oversight System 

ATS Air Traffic Services

AVN Aviation System Standards

B

BCCP Business Continuity and Contingency Plan

C

CAEP Committee on Aviation 

Environmental Protection

CAMI Civil Aeromedical Institute

CAPS computer-assisted passenger 

screening

CAS cost-accounting system

CBT computer-based training

CCLD core capability limited deployment

CDC computer display channel

CDM collaborative decisionmaking

CERAP center radar approach control

-97- FRE QUENTLY USED AC RO NYMS

FY 1999 FAA ANNUAL REPORT
CFO Chief Financial Officer

CHI computer-human interface

CIP Aviation System Capital Investment 

Plan

CMD FAA Center for Management 

Development

CMS curriculum modernization system

COMSTAC Commercial Space Transportation 

Advisory Committee

COTS commercial off-the-shelf

CPD Certification Process Document

CPDLC controller-pilot data link 

communications

CRS child restraint system

CSET Certification, Standardization, and 

Evaluation Team

CSRS Civil Service Retirement System

CTAS center/TRACON automation system

D

DAFIS Departmental Accounting and 

financial Information System

DBE disadvantaged business enterprise

DCCR display channel complex rehost

DOD Department of Defense

DOL Department of Labor

DOT Department of Transportation

DOTS dynamic ocean track system

DSR display system replacement

DYSIM dynamic simulation

E

EAA Experimental Aircraft Association

EDS explosives detection system

EEO equal employment opportunity

EMS emergency medical service

ERS early resolution system

ETD explosives trace detector

F

F&E facilities & equipment

FAA Federal Aviation Administration

FAATSAT FAA telecommunications satellite

FANS Future Air Navigation System

FASAB Federal Accounting Standards 

Advisory Board

FASTER Full-Scale Aircraft Structural Test

Evaluation and Research

FDIO flight data input/output

FECA Federal Employees’ Compensation Act

FERS Federal Employees’ Retirement 

System

FFP1 Free Flight Phase 1

FLIR forward-looking infrared

FOQA flight operations quality assurance

FQIS fuel quantity indication system

FSS flight service station

FY fiscal year

G

GA general aviation

GAIN global analysis and information 

network

GAO General Accounting Office

GPS global positioning system

GSA General Services Administration

H

HOCSR host and oceanic computer system 

replacement

-98- FRE QUENTLY USED AC RO NYMS

FY 1999 FAA ANNUAL REPORT
I

IAIPT FAA/NASA Interagency Air Traffic 

Management Integrated Product Team

IASA International Aviation Safety 

Assessment

IATA International Air Transport Association

ICAO International Civil Aviation 

Organization

IFR instrument flight rules

ILS instrument landing system

IPT integrated product team

IRS Internal Revenue Service

ITWS integrated terminal weather system

IVT interactive video teletraining

J

JRC FAA Joint Resource Council

L

LAAS local area augmentation system

LLWAS low level windshear alert system

LOB lines of business

LOI letter of intent

LTP LAAS test prototype

M

MAP Military Airports Program

MCC maintenance control center

MLS microwave landing system

MMAC Mike Monroney Aeronautical Center

MOA memorandum of agreement

MOPS minimum operational performance 

standards

MOU memorandum of understanding

MRM maintenance resource management

N

NAS National Airspace System

NASA National Aeronautics and Space 

Administration

NASAO National Association of State Aviation 

Officials

NATCA National Air Traffic Controllers 

Association

NEXCOM next generation air ground 

communications

NEXRAD next generation weather radar 

NIMS NAS Infrastructure Management 

System

NMCC National Maintenance Control Center

NOCC National Operations Control Center

NPIAS National Plan of Integrated Airport 

Systems

NPRM Notice of Proposed Rulemaking

NRP National Route Program

NSRP Non-Structural Systems Research 

Program

NSSA National Safe Skies Alliance

NTSB National Transportation Safety Board

O

OASIS operational and supportability 

implementation system

OCC Office of Chief Counsel

ODL oceanic data link

ODRA Office of Dispute Resolution for 

Acquisitions

OIG Office of the Inspector General

OMB Office of Management and Budget

OPSNET Operations Network

-99- FRE QUENTLY USED AC RO NYMS

FY 1999 FAA ANNUAL REPORT
OST Office of the Secretary of 

Transportation

OTA Office of Tax Analysis

P

P2R2 Published Preferred Route Reduction

PFAST passive final approach spacing tool

PFC passenger facility charge

POET post operations flight evaluation tool

PP&E property, plant and equipment

PVD plan view display

Q

QAR Quality Assurance Review

R

R,E&D research, engineering & development

RAPID repair assessment procedure and 

integrated design

RFE Russian Far East

RIAT Runway Incursion Action Teams

RNP-10 Required Navigation Performance 

Standards

ROC regional operations center

S

SATMS space and air traffic management 

system

SATNAV satellite navigation

SATORI systematic air traffic operations 

research initiative

SEIPT Security Equipment Integrated 

Product Team

SFFAS Statement of Federal Financial 

Accounting Standards

SIAPS standard instrument approach 

procedures

SMA surface movement advisor

SOP Safety Oversight Program

SPAS safety performance analysis system

SPEARS Screener Proficiency Evaluation and 

Reporting System

STARS standard terminal automation 

replacement system

T

TAWS terrain awareness and warning system

TDWR terminal Doppler weather radar

TERP terminal instrument procedures

TFM traffic flow management

TGF target generation facility

TIP threat image projection

TMA traffic management advisor

TMU traffic management unit

TRACON terminal radar control

U

URET user request evaluation tool

USAF United States Air Force

USCG United States Coast Guard

V

VLTA very large transport aircraft

VSCS voice switching and control system

VTABS VSCS training and backup switch

W

WAAS wide area augmentation system

WARP weather and radar processor

-100- FRE QUENTLY USED AC RO NYMS

FY 1999 FAA ANNUAL REPORT
WJHTC William J. Hughes Technical Center

WOC Washington Operations Center

WSP weather systems processor

-101- FRE QUENTLY USED AC RO NYMS

FY 1999 FAA ANNUAL REPORT
-102-

FY 1999 FAA ANNUAL REPORT

(THIS PAGE INTENTIONALLY LEFT BLANK)
INDEX

A

accident rate, fatal, 27-28

Administrative Services Franchise Fund, 92-96

aging aircraft

 Non-Structural Systems Research Program,

 13

Air Traffic Control Systems Command Center

 decision-making role, 11, 12, 35-36

 flight route flexibility, 37-38

 National Operations Control Center, 12

air traffic management capabilities

 collaborative decision making, 12, 15, 35

 passive final approach spacing tool, 15

 surface movement advisor, 15, 30

 traffic management advisor, 15

 user request evaluation tool, 15

air traffic operational errors

 Quality Assurance Review process, 32

 reporting problems, 31-32

 technologies and training, 32

air traffic services

 Air Traffic Control Systems Command

 Center, 11, 12, 35-36

 anticipated growth, 11-12

 aviation delay initiative, 12, 15, 35-36

 runway incursions initiative, 12, 29-30

Air Transportation Oversight System, 10

aircraft cabin safety, 28

aircraft ice detection system, 13

aircraft noise

 proportion of Stage 2, Stage 3 aircraft, 39

 research and technologies, 40

airport access, all weather

 local and wide area augmentation system

 approaches, 41-42

 nonprecision GPS procedures, 41

 request for new GPS satellite frequencies, 42

Airport and Airway Trust Fund

 impact of Taxpayer Relief Act of 1997, 19-20

Airport Improvement Program

 financial statements, 80, 89-91

 grants-in-aid, 15-16

 noise reduction activities, 40

 pavement crack sealing, non-primary airports, 33

airport movement area safety system, 12, 30

airport noise, 16, 39-40

 Airport Improvement Program activities, 40

 statistical modeling of, 39

airport pavement

 conditions, 33-34

 crack sealing at non-primary airports, 33

 test facility, 13

airport surface detection equipment, 12, 30

automatic dependent surveillance, 30

aviation delays

 air traffic automation enhancements, 36

 collaborative decision making, 12, 15, 35

 due to weather conditions, managing, 12, 35-36

 elimination of “no notice holding” practice, 12, 35

 National Operations Control Center

 established, 12

 Operations Network redesign, 36

 weather systems, 36

aviation gridded forecast system, 36

Aviation Insurance Revolving Fund, 80-81, 89-91

aviation medicine research, 28

aviation safety

 air carrier fatal accident rate, 27-28

 aircraft cabins, 28

 as strategic goal, 25-32

 FAA/NASA integrated research plan, 28

 operational errors, air traffic, 31-32

 regulations, clarification, 27

 research and technology, 28

 runway incursions reduction, 29-30

 runway pavement condition, 33-34

 Safer Skies agenda, 28, 30

 Safety Performance Analysis System, 27

aviation security, civil

 airport and air carrier vulnerability assessments, 11

 as strategic goal, 25, 26

 baggage screening, 10, 11

 computer-assisted passenger prescreening system, 11

-103- INDEX

FY 1999 FAA ANNUAL REPORT
 computer-based training for screeners, 11

 explosive detection systems, costs borne by

 air carriers, 10

 explosives detection canine teams, 11

 operational testing, surveillance, simulations, 11

 White House Commission on Aviation Safety

 and Security, 10, 25

aviation system efficiency

 aircraft noise exposure, 16, 39-40

 airport access, all weather, 41-42

 as strategic goal, 25, 26, 33-42

 aviation delay, 12, 15, 35-36

 commercial and military sharing of airspace, 38

 flight route flexibility, 37-38

C

Certification, Standardization, and Evaluation

 Team, 27

collaborative decision making, 12, 15, 35, 38

commercial space transportation

 advisory committee forecasts, 16

 launches, 16

 regulation, Commercial Space Transportation

 Licensing, 16

 regulation, Reusable Launch Vehicle and

 Reentry Licensing, 16

computer-assisted passenger prescreening

 system, 11

controller-pilot data link communications

 human factors documentation, 13-14

D

DELPHI accounting system, 43

display system replacement, progress, 14

display system replacement-computer-human

 interface

 human factors documentation, 13-14

E

eddy-current sensor, aircraft engines, 13

employee compensation, pilot program, 16-17

explosive detection systems, 10

F

FAA administration

 clean audit opinion, FY1999 Financial

 Statement, 17, 43

 core compensation pilot program, 16-17

 cost-accounting system progress, 17, 43

 Garrett A. Morgan Technology and

 Transportation Futures Program, 17

 Minority Business Enterprises support, 17

 ONE DOT Management Strategy participant, 17

 Welfare-to-Work program, 17

FAA Budget

 Airport and Airway Trust Fund, 19-20

 Airport Improvement Program, 21, 23

 for Facilities and Equipment, 21

 for Operations, 20

 for Research, Engineering and Development, 21

FAA mission, 7

FAA organization overview, 8

FAA publications

 Airport Surface Operations Safety Action Plan, 30

 FAA Plan for Research, Engineering and

 Development, 21

 human factors documentation, 13-14

 The Blueprint for NAS Modernization: An

 Overview of the National Airspace System

 Architecture, 15, 21

FAA websites

 DOT, www.dot.gov, 26

 FAA, www.FAA.gov, 5

Figures and Tables

 Aviation Delays, 35

 Aviation Delays, by cause, 35

 Commercial Air Carrier Fatal Accident Rate, 27

 Commercial Air Carrier Fatal Accident Rate,

 leading causes, 27

 Exposure to Aircraft Noise, 39

 FAA Employment, 9

 FAA Headquarters and Field Organization, 8

 FAA Regional Boundaries, 9

 Facilities and Equipment, obligation trends, 21

 Flight Operations Arriving On-Time, 36

 Flight Route Flexibility, 37

 Franchise Fund, customer base, 95

 Franchise Fund, services, 96

 Free Flight Phase 1, air traffic management

-104- INDEX

FY 1999 FAA ANNUAL REPORT
 capabilities, 15

 Funding Link to FAA Strategic Goals, 25

 FY1999 FAA Budget, 19

 FY1999 FAA Funding by Source, 19

 GPS Approaches, 41

 Grants-in-Aid for Airports, obligation limit

 trends, 21

 Operational Errors and Deviations, 31

 Operations Appropriations, 20

 Operations, obligation trends, 20

 Research, Engineering, and Development,

 obligation trends, 21

 Runway Incursions, 29

 Runway Pavement Condition, 33

Financial Statements

 administrative services franchise fund,

supplementary information, 95-96

 Aviation Insurance Revolving Fund, Balance

 Sheet, 89

 Aviation Insurance Revolving Fund, Changes

 in Net Position, 91

 Aviation Insurance Revolving Fund, Net Cost, 90

 Combined Statement of Budgetary

 Resources, 59

 Combined Statement of Financing, 60

 Consolidated Balance Sheet, 56

 Consolidated Statement of Changes in Net

 Position, 58

 Consolidated Statement of Net Cost, 57

 Franchise Fund, Balance Sheet, 92

 Franchise Fund, Changes in Net Position, 94

 Franchise Fund, Net Cost, 93

 limitations of, 55

 Obligations Incurred by Appropriation and

 Major Object Classification, 22

 OIG audit report, 48-54

 OIG memorandum, 45-47

 stewardship investment, airport improvement

 program, 82-83

 stewardship investment, research and

 development, 84

 supplementary information, deferred

 maintenance, 85

 supplementary information, intra-

 governmental transactions, 86

 Supplementary Statement of Budgetary

 Resources, 87-88

Financial Statements Notes

 accounting policies, 61-65

 accounts receivable, 67-68

 cash, foreign currency, and other monetary

 assets, 69

 custodial activity, 80

 debt, 72

 environmental and disposal liabilities, 71

 federal employee and veterans benefits

 payable, 76

 financing sources yet to be provided, 79

 fund balances with Treasury, 66

 imputed financing, 77

 inventory, related property, 69-70

 investments, 66

 leases, 74-75

 loans and loan guarantees, non-federal

 borrowers, 69

 net cost, by programs, 77

 other assets, 68

 other disclosures, 80-81

 other liabilities, 72-73

 prior period adjustments, 78

 property, plant, and equipment, 70-71

 Statement of Budgetary Resources

 disclosures, 78-79

 taxes, other nonexchange revenue, 77

 total cost and earned revenue, 76

 unexpended appropriations, 76

flight route flexibility, 1-2, 37-38

 Free Flight Phase 1 program, 1, 38

 reduced separation standards, 37

 use of Conflict Probe software, 38

Free Flight Phase 1

 air traffic automation enhancements, 36

 air traffic management capabilities, 15

 flight route flexibility, 1-2, 38

 human factors documentation, 13-14

Full-Scale Aircraft Structural Test Evaluation

 and Research facility, 13

-105- INDEX

FY 1999 FAA ANNUAL REPORT
G

Garrett A. Morgan Technology and Transportation

Futures Program, 17

GPS satellites

 request for new frequencies for civil use, 42

H

host and oceanic computer system

 replacement

 completions, 14, 36

 human factors documentation, 13-14

human factors research, 13-15

 Human Factors Working Group, 14

I

integrated terminal weather system, 13, 36

International Air Transport Association

 Y2K Program, 17

L

local area augmentation system, 41-42

N

National Air Traffic Controller Association

 actions to reduce aviation delays, 12

National Airspace redesign

 flight route flexibility, 1, 12, 37-38

 GPS approaches, 41-42

 GPS satellite frequencies, 42

 host and oceanic computer system

 replacement, 14, 36

 The Blueprint for NAS Modernization:An Overview

of the National Airspace System

 Architecture, 15, 21

National Ceiling and Visibility Forecast

 Program, 36

National Operations Control Center, 12

National Plan of Integrated Airport Systems, 23

National Route Program, 37

noise, airport and aircraft, 16, 39-40

O

operational and supportability implementation

system

 human factors documentation, 13-14

P

Passenger Facility Charge Program, 15-16, 23

passenger screening, computer assisted, 11

passive final approach spacing tool, 15

Pavement Test Facility, 13

R

regulation and certification

 Air Transportation Oversight System, 10

 airworthiness directives, 10

 Certification, Standardization, and Evaluation

 Team, 27

 Commercial Space Transportation Licensing, 16

 Reusable Launch Vehicle and Reentry

 Licensing, 16

research and acquisition programs, 12-15

 Aging Non-Structural Systems Research Program, 13

 eddy-current sensor, aircraft engines, 13

 fire hazards, Mylar blankets and oxygen

 bottles, 13

 freezing drizzle aloft, ice detection system, 13

 Full-Scale Aircraft Structural Test Evaluation

 and Research facility, 13

 human factors, 13-15

 integrated terminal weather system, 13, 36

 Pavement Test Facility, 13

 weather and radar processor, 13, 36

runway incursions

 airport movement area safety system, 12, 30

 airport surface detection equipment, 12, 30

 FAA Runway Safety Program, 12, 30

 Now Strategies, 12

 Runway Incursion Action Teams, 12, 29, 30

 technologies, 30

S

Safer Skies Agenda

 accident categories, 9-10, 28, 30

 airworthiness directives, 10

Safety Performance Analysis System, 27

standard terminal automation replacement systems

 human factors documentation, 13-14

-106- INDEX

FY 1999 FAA ANNUAL REPORT
strategic goals

 aviation safety, 25-32

 aviation security, 25, 26

 funding for, 23

 system efficiency, 25, 26, 33-42

surface movement advisor, 15, 30

T

terminal Doppler weather radar, 1

traffic management advisor, 15

U

user request evaluation tool, 15

V

vertical separation requirements

 operational errors, 31-32

 Required Navigation Performance Standards, 37

W

weather and radar processor, 13, 36

weather research and technology, 36

White House Commission on Aviation Safety

 and Security, 10, 25

wide area augmentation system, 41-42

Y

Y2K compliance

 Business Continuity and Contingency Plan, 17

 costs of, 17

 support of International Air Transport

 Association program, 17

-107- INDEX

FY 1999 FAA ANNUAL REPORT
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