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25–482 PDF 2018

THE NEED TO REFORM THE FEDERAL AVIATION 

ADMINISTRATION AND AIR TRAFFIC CONTROL 

TO BUILD A 21ST-CENTURY AVIATION SYSTEM 

FOR AMERICA 

(115–15) 

HEARING 

BEFORE THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

MAY 17, 2017 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

FRANK A. LOBIONDO, New Jersey 

SAM GRAVES, Missouri 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

BOB GIBBS, Ohio 

DANIEL WEBSTER, Florida 

JEFF DENHAM, California 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RODNEY DAVIS, Illinois 

MARK SANFORD, South Carolina 

ROB WOODALL, Georgia 

TODD ROKITA, Indiana 

JOHN KATKO, New York 

BRIAN BABIN, Texas 

GARRET GRAVES, Louisiana 

BARBARA COMSTOCK, Virginia 

DAVID ROUZER, North Carolina 

MIKE BOST, Illinois 

RANDY K. WEBER, SR., Texas 

DOUG LAMALFA, California 

BRUCE WESTERMAN, Arkansas 

LLOYD SMUCKER, Pennsylvania 

PAUL MITCHELL, Michigan 

JOHN J. FASO, New York 

A. DREW FERGUSON IV, Georgia 

BRIAN J. MAST, Florida 

JASON LEWIS, Minnesota 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

STEVE COHEN, Tennessee 

ALBIO SIRES, New Jersey 

JOHN GARAMENDI, California 

HENRY C. ‘‘HANK’’ JOHNSON, JR., Georgia 

ANDRE ́ CARSON, Indiana 

RICHARD M. NOLAN, Minnesota 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut, Vice 

Ranking Member 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

JARED HUFFMAN, California 

JULIA BROWNLEY, California 

FREDERICA S. WILSON, Florida 

DONALD M. PAYNE, JR., New Jersey 

ALAN S. LOWENTHAL, California 

BRENDA L. LAWRENCE, Michigan 

MARK DESAULNIER, California 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... v 

TESTIMONY 

Hon. Calvin Scovel III, Inspector General, U.S. Department of Transportation ..................................................................................................................... 10 

Joseph W. Brown, President, Hartzell Propeller, Inc. .......................................... 10 

Robert W. Poole, Jr., Director of Transportation Policy, Reason Foundation .... 10 

Paul M. Rinaldi, President, National Air Traffic Controllers Association .......... 10 

Dorothy Robyn, Independent Policy Analyst ......................................................... 10 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Hon. Calvin Scovel III ............................................................................................. 70 

Joseph W. Brown ..................................................................................................... 90 

Robert W. Poole, Jr. ................................................................................................. 97 

Paul M. Rinaldi ........................................................................................................ 105 

Dorothy Robyn ......................................................................................................... 116 

SUBMISSIONS FOR THE RECORD 

Hon. Bill Shuster, a Representative in Congress from the State of Pennsylvania, submission of the following: 

Letter of May 4, 2017, from Hon. James N. Mattis, Secretary of Defense, 

to Hon. John McCain, Chairman, Senate Committee on Armed Services .................................................................................................................. 40 

Letter of February 10. 2016, from Ronald P. Brower, Corporate Secretary, 

NetJets Inc., et al., to Mr. Shuster .............................................................. 126 

Press release, ‘‘SWAPA Urges House Passage of AIRR Act,’’ February 

25, 2016 .......................................................................................................... 127 

Press release, ‘‘Allied Pilots Association endorses AIRR Act,’’ March 3, 

2016 ................................................................................................................ 129 

Letter to members of the National Air Traffic Controllers Association 

(NATCA) from Paul Rinaldi, President, NATCA, et al. ............................. 131 

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

responses to questions for the record from Hon. Bill Shuster, a Representative in Congress from the State of Pennsylvania, and Hon. Frank A. 

LoBiondo, a Representative in Congress from the State of New Jersey ......... 88 

Hon. Rick Larsen, a Representative in Congress from the State of Washington, submission of the following: 

Written statement from the Professional Aviation Safety Specialists ......... 133 

Written statement from the National Business Aviation Association ......... 140 

Hon. Peter A. DeFazio, a Representative in Congress from the State of Oregon, submission of article, ‘‘Inspectors Say a Major Canadian Airline Disaster is ‘Likely,’ ’’ by Carl Meyer, National Observer, April 3, 2017 ................ 147 

ADDITIONS TO THE RECORD 

Written statement from the Helicopter Association International ...................... 151 

Written statement from Jeff Martin, Executive Vice President Operations, 

JetBlue Airways ................................................................................................... 154 

Letter of May 24, 2017, from Gerald L. Dillingham, Ph.D., Director, Physical 

Infrastructure Issues, U.S. Government Accountability Office, to Hon. Bill 

Shuster, Chairman, House Committee on Transportation and Infrastructure ........................................................................................................................ 159 

Page

IV 

Letter of June 1, 2017, from Stephen L. Johnson, Executive Vice President, 

Corporate Affairs, American Airlines, to Hon. Bill Shuster, Chairman, 

House Committee on Transportation and Infrastructure ................................. 164 

Letter of June 1, 2017, from Steve Morrissey, Vice President, Regulatory 

and Policy, United Airlines, to Hon. Bill Shuster, Chairman, House Committee on Transportation and Infrastructure .................................................... 165 

v 


Insert offset folio 1 here 25482.001

JiliU §O!)nstcr 

QCIJairnmn 

Mat~wi\1,Sttlfgi.'S 

Staffl);rector 

TO: 

FROM: 

RE: 

May 12,2017 

Members, Committee on Transportation and Infrastructure 

Staff, Committee on Transportation and Infrastructure 

1ilrlrr l!t lllrjf •1•• 

l\unkiu~ £1flrmbtr 

Committee Hearing on "The Need to Reform FAA and Air Traffic Control to 

Build a 21 51 Century Aviation System for America" 

PURPOSE 

The Committee on Transportation and Infrastructure will meet on Wednesday, May 17, 

2017, at l 0:00a.m. in 2167 Rayburn House Office Building to hold a hearing on the need for 

fundamental reform of the air traffic control (ATC) system. The Committee will receive 

testimony from the Inspector General of the Department of Transportation (DOT IG), the 

President of the National Air Traffic Controllers Association, a former Clinton and Obama 

Administration Official, the Director Policy of the Reason Foundation, and the 

President of Hartzell Propeller. 

BACKGROUND 

The aviation system is comprised of a diverse community, including commercial 

aviation, general aviation, unmanned aircraft, airports, commercial space transportation, and 

others. Commercial and general aviation help transport millions of passengers and move billions 

in revenue ton-miles of freight safely and securely all across the country. Impacts are also seen 

state-by-state, where airports and air operators help connect large and small communities and 

create jobs and increase economic output. 1 

A TC services includes safely guiding aircraft between supplying aeronautical 

information, and operating navigation and communications equipment. In the United States, 

A TC began as a private sector enterprise in the mid-l930s2 The federal government took over 

ATC in subsequent years and the process culminated in the creation of the Federal Aviation 

Administration (FAA) in 1958. Today, the FAA provides ATC services within the United States 
vi 


Insert offset folio 2 here 25482.002

and certain international airspace 3 Within that airspace, air traffic controllers handle 

approximately 50.000 operations daily. 4 

FAA's 35-Year Legacy of Failed ATC Modernization Management 

The FAA· s day-to-day operation of the A TC system is safe and, generally speaking, 

reliable. However, the A TC system is still predominantly based on antiquated technologies and 

procedures that arc inadequate to support a modern aviation industry. The long-term growth and 

success of American aviation requires. among other things. an A TC system capable of meeting 

the dynamic needs of diverse airspace users and the timely and cost-effective deployment of 

innovative technologies that improve the safety and efticiency of the system. The FAA's 

stewardship of ATC system modernization has been one of waste, inefficiency, and 

mismanagement. There arc decades of DOT IG audits. Government Accountability Office 

(GAO) reports, and independent third party reviews documenting the extraordinary waste of tax 

dollars and poor management of a continuous string of FAA "'modernization" programs dating 

back to the early 1980s. 

One of the FAA's early attempts at modernization was the Advanced Automation System 

(AAS). The FAA proposed AAS in 1983 with an estimated cost of $2.5 billion and a completion 

date of 1996. 5 By 1986. the GAO expressed doubts whether the benefits of AAS would exceed 

its costs and questioned the savings the FAA used to justify the investment. 6 By 1992, cost 

estimates rose to $5.1 billion and the completion date slipped to 20027 In 1994, the FAA 

restructured the program because of""sevcre cost. schedule. and technical problems.''8 As a 

result, cost estimates rose to S7.6 billion and completion slipped to 2003. Of the $2.6 billion the 

FAA spent on AAS by 1994. computer hardware and software costing $1.5 billion was 

determined to have been ''wasted."9 In 1998. the DOT lG reported that AAS failed. "because of 

overambitious plans" and "'poor FAA oversight of contractor performance .. .'" 10 One participant 

in the AAS project was later quoted as saying, ··[i]t may have been the greatest failure in the 

history of organized work.'" 11 The FAA Associate Administrator for Acquisitions stated that. 

""lw]e royally screwed up AAS. no doubt about it, in any way that a project could be screwed 

1 Speech of FAA Administrator Michael Huerta beJore the Aero Club of Washington. "'All fc)f One, and One for 

All."" Oct. 16.2014, Washington, D.C., available at 

http://www. faa.govinews/speeches/news __ story .cfm?newsld= 17554&omniRss••speechesAoc&cid-l 04 _Speeches. 

5 U.S. Government General Accounting Office. ·'Air Traffic Control: Advanced Automation System Still 

Vulnerable to Cost and Schedule Problems"", Report No. GAO/RCED 92-264 at 1 (Sept. 1992). 6 U.S. Government General Accounting Office. Testimony of Dr. Carl Palmer before the Subcommittee on 

Transportation and Related Agencies. Committee on Appropriations: '"Federal Aviation Administration's 

Acquisition of the Advanced Automation System"'. No. GAO/T-IMTEC-87-4. at 6-7. (Apr. 21, 1987). 7 Supra at footnote 5, Report No. GAO/RCED 92-264 at l. 8 lJ.S. General Accounting Office. Testimony of Gerald L. Dillingham. "Air Traffic Control: Evolution and Status of 

FAA's Automation Program··. No. GAOIT-RCED/AIMD-98-85. at I (Mar. 5, 1998). 

'' fd at 3. 

"U.S. Department ofTranspot1ation- Office of Inspector General, "Audit Report: Advance Automation System··. 

Report i'io. AV-1998-1 U. at 2 (Apr. 15, 1998). 

"Edward Cone., "The Ugly History of Tool u""''U'P"''"' 

2 
vii 


Insert offset folio 3 here 25482.003

up." 12 Throughout the program. FAA repeatedly assured Congress about AAS' progress; a 

Congressional staffer reported that. "[tjhey would say there were a few problems. but they were 

being worked out. Everything seems to be going well-- until it collapses.'' 13 

Today, the FAA is approximately 14 years into the development of its latest 

modernization initiative known as the Next Generation Air Transportation System (NextGen). 14 

FAA initially described NextGen as fundamentally transforming how air traffic would be 

managed. In 2015. however. the National Research Council found that "NextGcn. as currently 

executed, is not. .. broadly transformational" and that it "is a set of programs to implement a 

suite of incremental changes to the NAS [National Airspace System].'' 15 

A key example of an oversold program is the Automatic Dependent Surveillance 

Broadcast (ADS-B) program. ADS-B provides air traffic controllers with the GPS locations of 

aircraft, which is more precise and timely than radar data. ADS-B was initially touted as a way 

to help free up congested airspace and enable more capacity. In 2010, the FAA issued 

regulations mandating most aircraft operators install ADS-B equipment by 2020. 16 However, far 

from providing congestion relief or reduced separation, in a 2014 report the DOT IG found that 

ADS-B will offer only limited benefits by 2020 and costs of the ADS-B program will outweigh 

benefits by as much as $588 million. 17 As it has become unclear what meaningful and costeffective benefits ADS-B expenditures will result in, aircraft operators. already skeptical of the 

FAA's promises. are postponing installation of i\DS-B equipment until the last minutc. 18 

The FAA's management of ADS-B raises broader questions regarding how the FAA 

manages NextGen programs. For instance. the DOT IG has concerns with the FAA's practice of 

"dividjing] its programs into multiple segments. and fundjingj each segment for a set timeframe 

or number of milestones .. .'' 19 The DOT IG points out that while this may minimize risk, it 

..... masks how much a program will ultimately cost by breaking program costs up by individual 

segments ... .'-20 In the intervening years between AAS and ADS-B, there are several other 

examples of the FAA failing to deliver on its capital-intensive technology promises.21 

ld 

"ld 

" )l.l!J;l>;)j_\v_,YY"-li!i~Jm•!Ln.<'Kt&"JL 15 National Council. David E. Liddle and Lynette l. Millett. Ed. "A Review of the Next Generation Air 

Transportation System: Implications and Importance of System Architecture", at I (2015) 10 14 C.F.R. 9§ 91.225 & 91.227. 

,., U.S. Department of Transportation- Ofticc oflnspector General, ''Audit Report: ADS-B Benefits are Limited Due 

to a Lack of Advanced Capabilities and Delays in User Equipage.'· Report No. A V -2014-105 at 3, 9 (Sept. II. 

2014). 

·s John Croft, "General Aviation May Not Meet FAA ADS-B Mandate For 2020··. Aviation Week. (Dec. 23. 2016): 

http :1 /av iationweek.com/aerospacc-20 I 7! general-aviation-mav-not-meet- faa -ads-b-mandate-2020 

'''U.S. Department of Transportation Office of the Inspector General, "Total Costs. Schedules, and Benefits of 

FAA ·s NextGen Transformational Programs Remain Uncertain"'. pp 6, A V-2017-009 (November I 0, 2016): see 

also, Department ofTransp011ation Office of the Inspector General, "FAA Reforms Have Not Achieved Expected 

Cost. Efficiency. and Modernization Outcomes", Rcpolt No. A V -2016-015. at 11-12 (January 15, 20 16). 

ld at 6. 21 Edward A. Lester & R. John Hansman, Report No. IC AT -2007-2, "Benetits and Incentives for ADS-B Equipage 

in the 1'\ational Airspace System".§ 2.7.1 (Aug. 2007). 

3 
viii 


Insert offset folio 4 here 25482.004

The Decline of American l,eadership In ATC 

Until the mid-1980's, governments around the world grappled with the same issues 

currently facing the United States. They had government-operated A TC services that were 

adequately functional and safe on a day-to-day basis, but were plagued with conflicts-of-interest. 

wastefulness, inefficiency. and long-term financing difficulties. In 1987. New Zealand took 

\vhat was then a truly revolutionary step and created an independent A TC service provider 

separate from the safety rcgulator. 22 Countries around the world followed suit. Today, over 60 

countries have successfully separated their ATC service provider from their government safety 

regulator. The United States is one of a handful of industrialized countries that has yet to do so. 

The results of separating A TC have been quite positive according to multiple audits and 

studies over the years. In 2005, the GAO studied the experience of independent air navigation 

service providers in Australia. Canada. Germany, New Zealand. and the United Kingdom and 

found that safety "remained the same or improved.''23 (emphasis added) The GAO also found 

that all five countries. "invested in and benefited from new technologies and equipment, which .. 

. lowered their costs by increasing controllers· productivity, and produced operating efficiencies, 

such as fewer or shorter delays ... 24 These findings were affirmed in a 2008 study published in 

Canadian Public Administration25 The researchers found the separation of A TC improved 

service quality, reduced costs, and maintained financial stability with a neutral or positive impact 

on safety.26 In 2014, the MITRE Corporation released a FAA-requested study about the effects 

of separating A TC on the safety regulatory agencies left bchind 27 The study found that 

separating ATC has been successful in each of the six countries studied: the United Kingdom. 

Canada. New Zealand. Australia. France. and Germany; and further found that there was 

unanimity among the safety regulators that separating out the A TC enterprise was "'worth it" 28 

The International Civil Aviation Organization has also recognized the potential for efficiency 

and performance gains by separating A TC from government in its guidance.29 

While the United States used to be the unquestioned leader in aviation, FAA's inability to 

modernize A TC has put this leadership into doubt. A TC providers around the world are 

increasingly looking to Canada's independent ATC service provider. NavCanada, for its 

expertise in supplying and deploying the latest A TC systems 30 NavCanada is also leading the 

effort to commercialize an American-invented technology to monitor air traffic from space 

22 https://www.airways.co.n?/ 23 U.S. Government Accountability Office, "Air Traflic Control: Characteristics and Pcrtbnnance of Selected 

International Air Navigation Service Providers and Lessons Learned from Their Commercialization,'' Rpt. No. 

GA0-05-769, at 4 (Jul. 2005). 

"!d. 

''Glen McDougall and Alasdair Roberts, "Commercializing Air Traffic Control: Have the reforms worked""· 

Canadian Public Administralion, Vol. 51. No. I. pp. 45-69. (Mar. 2008) 

/d.at 68. 27 Dan Brown, Tom Berry. Steve Weiman. and E.J. Spear. ·'CAA International Structures", MITRE Product. 

MPI40527 (Oct. 2014) 

ld at 9. 

and.-lir .\'avigation Sen-ices, Doc 9082, at I-1. Ninth ed. (2012). 

!ili!!2Ji~QL~C£i!lli!!!ll.J;illJ;n:llQILfu.!isL<w:l Alan Levin. Flight Controllers See Future in 

4 
ix 


Insert offset folio 5 here 25482.005

around the globe. In the meantime. the FAA remains unable to acquire and deploy that same 

technology. 31 Canada is not alone. The United Kingdom ·s NA TS service provider also actively 

markets its expertise around the world 32 The FAA, on the other hand, continues to focus its 

resources on its own customized systems. such as Standard Terminal Automation Replacement 

System (STARS) and its offshoots. which it began implementing in 1996.33 The FAA is also 

working on its En Route Automation Modernization (ERAM) system. Sadly. FAA still requires 

manual handoffs by telephone of aircraft crossing the Northern border whereas Canadian 

controllers already have automated digital handofftools 34 Unless the United States changes 

course, it is plausible. or more likely inevitable. that American ATC will become a follower 

rather than the standard-setter in new ATC technologies. 

FAA Personnel, Procurement, and Organizational Reforms Have Not Worked 

While many opponents of separating A TC from the FAA call for "targeted'' reforms of 

the FAA to address widely recognized problems. most of the reforms called for have already 

been tried and failed. Congress has attempted various legislative fixes starting in 1995, with 

reforms to FAA's acquisitions and personnel systems 35 The results have not been encouraging. 

Between 1996 and 20 !2, the FAA· s budget increased by 95 percent while productivity 

'"d.:creased substantially.''36 FAA was freed from federal procurement and personnel laws, but 

developed processes very similar to and with the same bureaucratic red tape. as the laws they 

were freed from. With I imited exceptions, the FAA· s performance in procuring and managing 

the development and implementation of capital projects has not improved. In 1996. Congress 

required the FAA to develop a cost accounting system so it could measure its financial 

performance. 37 The FAA spent approximately $66 million on the systems, but does "not 

regularly analyze the operational and cost data generated to determine if it could reduce costs or 

improve productivity.''38 

CO:'IICLUSION 

Bottlenecks. failures. and inefficiencies in the A TC system cascade throughout the rest of 

the aviation system and broader economy. The cost is growing larger and more apparent each 

year. The mismatch between bureaucratic decision-making of a government agency and the 

business decision-making required to ensure the long-term success of A TC in the United States 

Aaron Karp. "NATCA president: FAA falling behind on ATC technology". Air 1i'ansport World, Aug. 24,2016. 

"Department ofhansportation and Related Agencies Appropriations Act. /996, Pub. L. I 04-50. 109 Stat. 460. § 

347(a) (Nov. 15, 1995); Federal Aviation 1/eaulhori::ation Act of 1996. Pub. L. I 04-264. §§ 253 & 276. (Oct. 9, 

1996): !l"ende/1 H. For</ Aviation Investment and Reform Act for the 2 !"Century. Pub. L. I 06-181. § 303, (Apr. 5. 

2000). FAA Moderni::ation and llefimn Act()/ 2012. Pub. L. 112-95. § 204, (Feb. 14, 20 12). 

'

6 Supra footnote 19. Report No. AV -2016-015 at2, 5. 

federal Aviation Reuuthori=ation.·lct oj'/996, Pub. L. I 04-264. § 276, (Oct 9, 1996). 

"U.S. Depat1ment of Transportation Office of the [nspector General, "Assessment of Cost Accounting System and 

Practices- Federal Aviation Administration". Report No. Fl-2008-045. at I (Mar. 21. 2008): Supra footnote 19. 

Report No. AV-2016-015 atiO. 

5 
x 


Insert offset folio 6 here 25482.006

cannot be reconciled through further legislative reforms of the FAA. The proven and 

demonstrably successful approach of separation from government is the only approach to 

ensuring America's long-term leadership in aviation. 

WITNESS LIST 

Hon. Calvin Scovel. III 

Inspector General 

U.S. Department of Transportation 

Mr. Paul Rinaldi 

President 

National Air Traffic Controllers Association 

Mr. Robert Poole 

Director of Transportation Policy 

Reason Foundation 

Ms. Dorothy Robyn 

Former Special Assistant to the President for Economic Policy 

Mr. Joseph W. Brown 

President 

Hartzell Propeller. Inc. 

6 
(1) 

THE NEED TO REFORM THE FEDERAL AVIATION ADMINISTRATION AND AIR TRAFFIC 

CONTROL TO BUILD A 21ST-CENTURY AVIATION SYSTEM FOR AMERICA 

WEDNESDAY, MAY 17, 2017 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

WASHINGTON, DC. 

The committee met, pursuant to notice, at 10:04 a.m. in room 

2167, Rayburn House Office Building, Hon. Bill Shuster (Chairman 

of the committee) presiding. 

Mr. SHUSTER. The committee will come to order. 

I now recognize Mr. LoBiondo for a motion. 

Mr. LOBIONDO. Pursuant to rule 1(a)1 of the rules, Committee on 

Transportation and Infrastructure, I move that the chairman be 

authorized to declare recess during today’s hearing. 

Mr. SHUSTER. The question is on the motion. 

All those in favor, signify by saying aye. 

All those opposed, signify by saying nay. 

In the opinion of the Chair, the ayes have it, and the motion is 

agreed to. 

I want to thank everybody for being here today. This is an important hearing we are having here today and talking about some, 

what I consider to be, extremely important legislation. And I believe everybody on the committee, both sides of the aisle, believe 

that the reauthorization of the FAA, reforming it to making it a 

better system for all Americans, is extremely important to all of us. 

The way America travels, moves goods, and conducts business 

today depends on an efficient transportation network. And in order 

to remain competitive, we need a 21st-century infrastructure with 

modern, 21st-century technology. 

This is especially true of our aviation system, but the fact is the 

FAA’s infrastructure is increasingly obsolete, and its technology is 

still cemented in the last century. And to just quote my colleague, 

my esteemed colleague from Oregon, in a hearing we had not too 

long ago, he said that ‘‘The FAA is the only agency of Government 

worse at procurement than the Pentagon.’’ Congress has tried to 

reform it. It didn’t stick. We have got to try something different to 

get it to be more agile, to give us the 21st-century equipment and 

software we need. 

Then there is the issue of the actual sort of shape of the FAA 

bureaucracy. Congress, back in 1986, gave the FAA the license to 

reform personnel practices to deal with some of the mid-level manVerDate Aug 31 2005 10:59 Jan 19, 2018 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\FULL\5-17-2~1\25482.TXT JEAN
2 

agement bulge and to streamline the agencies and decisionmaking 

process, but that didn’t take either. 

And he goes on to propose a 21st-century, constitutionally chartered corporation in order to accomplish these goals and make it 

self-funding, self-sufficient, and not subject to appropriations or 

shutdowns or anything else that a Congress might imagine. 

Now, I think that we can see by that statement, and I think as 

we talk here today, we agree there is a problem. There is a solution 

at hand. It is just the forum that we are going to debate vigorously 

on what we think is the best outcome. But as a result, over these 

past 30 years, the shocking amount of taxpayer dollars that we 

have wasted over the last 31⁄2 decades, over $50 billion, and that 

is why this is one of my highest priorities this year is a comprehensive FAA reform and reauthorization bill. 

So far this year we have held reauthorization hearings looking 

at air transportation, manufacturing, airports, and new entrants 

and innovations. Today we will focus on the need for air traffic control reform, divesting the high-tech service, 24/7 service business, 

from Government and shifting it to an independent, not-for-profit 

entity. 

It is appropriate we are holding this hearing during Infrastructure Week. No other single infrastructure reform has as much potential to improve travel for the average American flyer or to ensure our hard-earned leadership in aviation. 

Although our aviation system is safe, the FAA’s structure and 

how air traffic is managed have been broken for decades. The decisions we make in the FAA reauthorization bill this year will either 

move us toward a 21st-century aviation system America needs or 

doom us to repeating the failures of the past over and over again. 

Everyone should be reminded of what happens if we choose the 

status quo. It means our system will be subject to more budget constraints, sequestration, and threats of Government shutdowns. Sequestration isn’t gone. In 2013, sequestration led to furloughs and 

reduced operations, controller hiring and training suffered, and the 

FAA bureaucrats tried to shut down contract towers. 

Fiscal constraints continue to be tight—so is the Federal budget—and that is not going to change anytime soon, and it may get 

worse. We continue to rely on the unstable, dysfunctional annual 

appropriations cycle. We have had no stand-alone transportation 

appropriations bill since 2006, and over that time period Congress 

has passed 42 continuing resolutions to keep Government doors 

open. 

The FAA also relies on authorizing legislation, and it took Congress 23 short-term extensions over 5 years before it passed the 

previous long-term FAA authorization bill. 

Under these conditions, the FAA bureaucracy has been trying to 

undertake a high-tech modernization of air traffic control systems 

for over three decades. It is not working, and it is never going to 

work. Sadly, in today’s digital age, our controllers still manage 

planes with paper strips, which of course I have brought a few to 

remind people of that. And if anybody hasn’t been in a control 

tower, they ought to go into a control tower and see it. 

Some argue that the latest attempt to modernize—NextGen—is 

showing some signs of progress, but we all know any progress is 

3 

incremental at best, and only in locations where the FAA partnered 

with the private sector. And let’s remember, the name ‘‘NextGen’’ 

was really just a rebranding of the FAA’s ongoing, failed efforts to 

modernize the system. ‘‘NextGen’’ is just a marketing term, not an 

actual technology or innovation, but it sounds catchier, so Congress 

will fund it year after year. 

But the bottom line is there should be far more progress by now. 

Money has never been the problem. Congress has provided more 

than $7.4 billion for NextGen since 2004. Results are the problem. 

According to the FAA’s own calculations, the return on the taxpayers’ $7.4 billion investment has only been about $2 billion in 

benefits. And we have still got a long way to go. 

According to the DOT inspector general in 2014, the projected initial cost for NextGen was $40 billion, but they have said it could 

double or triple and be delayed another decade. Over the years, the 

FAA has described NextGen as a transformation of America’s air 

transportation network. They also said it will forever redefine how 

we manage the system. 

But in 2015, the National Research Council confirmed what was 

already becoming painfully clear. According to the NRC, the original version of NextGen is not what was being implemented. It is 

not broadly transformational, and it is not a fundamental change 

in the way the FAA handles air traffic. Only in the Federal Government would such a dismal record be considered a success. 

While the FAA continues to fall behind, the rest of the world is 

moving on, with new technologies, without the United States involvement. Nothing less than America’s leadership is at stake in an 

industry that we pioneered and have led since Kitty Hawk. 

Some have proposed targeting reforms to fix the FAA’s problems, 

but that is an approach we have already tried many, many times, 

starting in the 1980s. Since 1995, Congress has passed various reforms to allow the FAA to run more like a business. 

Procurement reform in 1995 for the FAA to develop a more flexible acquisition management system. Additional reforms in 1995 exempt the FAA from most Federal personnel rules and allowed the 

FAA to implement more flexible rules for hiring, training, compensating, and assigning personnel. Procurement reforms in 1996 developed a cost accounting system. 

Additional personnel reforms in 1996 allowed FAA to negotiate 

pay. Organizational reforms in 2000 to establish a COO position. 

Additional reforms to allow greater pay so the FAA could recruit 

good candidates, particularly for a COO position. Additional reform 

in 2000 by the Executive order to create the Air Traffic Organization. 

Organizational reforms in 2003 to establish the Joint Planning 

and Development Office to better coordinate NextGen. Reforms in 

2012 to establish a chief NextGen officer. Property management reforms in 2012 to allow a better process for realignment and consolidation of facilities. 

All have failed to result in the FAA being run more like a business. The FAA has always performed like a massive bureaucracy 

and will continue to. It is the only DOT agency that serves as both 

transportation service provider and safety regulator. Regulating 

itself is an inherent conflict of interest, and separating the two 

4 

functions is simply good Government. It is time for reform that is 

truly transformational. 

Real change can be difficult—we have learned that over the 

years—but the broader lesson over the last several decades is that 

the true risk lies in doing nothing. Last year’s bill that passed out 

of committee will serve as a framework for new legislation, but we 

are open to change. We want to talk to people and get their ideas, 

and that is what we hope to hear today. 

As we continue to move forward, our air traffic control reform 

proposal will be based on the following principles. Create an independent, not-for-profit corporation to provide air traffic services. 

Fund the new service provider by fees assessed for air traffic service. Free the new service provider from governmental dysfunction, 

political interference, and the uncertainty of the Federal budget 

process. 

Create a governance structure that is right-sized and balanced, 

and a board with sole fiduciary responsibility to the organization. 

And I need to repeat that: fiduciary responsibility. That is a legal 

term. If you are on a board of directors in the United States, and 

you have the fiduciary responsibility, it is not to who appointed you 

to the board; it is to the board. It is to that organization is who 

you are responsible for, and that is the law. That is just not some 

pie in the sky. People can be removed and be prosecuted if they are 

not doing their fiduciary responsibilities. 

Ensure connectivity, access to the airspace, and the continuity of 

air services for general aviation, small and rural communities, and 

airports that serve them. And let me for the record remind people, 

I am from a rural district. I have one very small airport. I doubt 

I have more than a handful of people that work for the airline industry, but I have several hundred GA pilots. 

So if anybody thinks that I want to harm the GA or rural communities, they just don’t know who I am and where I am from because I am committed to make sure what we do protects small and 

rural communities and protects the GA community. The GA community is over a $1 billion industry. Why in the world would I 

want to harm an industry that produces so much good for this 

country? 

We want to ensure full access to airspace and air services to support our armed services and their national security mission. Free 

the air traffic control business from the FAA’s bureaucratic procurement process and the appropriations cycle. End the Federal 

Government’s decades long pattern of costly, delayed, and failed 

management of modernization. Give the new service provider the 

ability to access financial markets, leverage private funding for 

multiyear capital projects needed to modernize the system. 

Allow the FAA to focus on its safety mission and certification 

mission. Ensure continued oversight of the air traffic services by 

the FAA, DOT, and Congress. 

And, of course, lots of people are out there saying that that is not 

what we are going to do, but let me be clear: the FAA, the Department of Transportation, and Congress will still maintain vigorous 

oversight to the airspace of this country and ultimately allow all 

users of the system, including airline passengers and the general 

public, to realize the significant benefits of a modern air traffic conVerDate Aug 31 2005 10:59 Jan 19, 2018 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\FULL\5-17-2~1\25482.TXT JEAN
5 

trol system, including decreases in delays, flight times, and congestion. 

Previous efforts to reform the FAA and modernize the system 

teach us that the only way to realize these benefits is to get the 

Government out of the way. As President Ronald Reagan said, 

‘‘Government is not the solution to the problem; Government is the 

problem.’’ And we see all over the world people turning to the private sector, whether it is Europe or it is Asia, Australia, New Zealand, Canada, look around the world. Countries, governments are 

looking to partner with the private sector because they see they do 

it better. 

Since the introduction of the AIRR Act [Aviation Innovation, Reform, and Reauthorization Act] over a year ago, this has been an 

ongoing process of education and discussion. We have held over 130 

meetings with stakeholders, including both supporters and opponents of the AIRR Act. We have had numerous meetings with 

Members of the House, the Senate, the White House, and other 

committees. These meetings have been extremely productive and 

given us new ideas to improve the legislation. 

As I said, I want to hear the same thing from today’s witnesses. 

What are your ideas that we can build upon on the principles that 

I have outlined? We have also gone to Canada to see their system 

firsthand, and we will go again with more Members. And I would 

encourage any Member that wishes to go on May 25, Thursday, in 

the afternoon, we will be heading up to Canada and coming back 

on May 26 to, again, go up there not so we can imitate their system 

but to learn from the lessons of their system, to learn to help to 

fix our own broken structure. 

Over 60 countries have followed this kind of reform, and it has 

worked in each case. Opponents of reform either ignore the evidence or must believe we are less capable than the other 60 countries, and for me that is a bit outrageous. We are the United States 

of America. We can do this. We can do this better than anybody 

else. So it is time for us to take a look and to move forward. 

Air traffic control is not inherently a governmental function. It 

is a 24/7 technology service. For those who worry that the system 

is too complex, I would say this. The most complex thing in the airspace is not the air traffic control system; it is the airplane. It is 

the people at Boeing and Airbus and Cessna and the people that 

build these aircraft. That is the most complicated thing in the system. 

And the FAA already oversees those highly sophisticated private 

sector aircraft manufacturing, maintenance, and flight operations 

at arm’s-length. We don’t build airplanes today; the Government 

doesn’t, and that is the most complex thing in the system. 

Overseeing air traffic control is not going to be more complicated 

than anything else the FAA already does. This transformational reform will fix our obsolete and dysfunctional air traffic control structure, move beyond the wasteful, inefficient status quo, and benefit 

all of the users of the system. 

Ultimately, reform will give the American flyer a safe, efficient, 

aviation system, using 21st-century technology to ensure more ontime departures, more direct routes, using less fuel, which will be 

better for the environment, and less wasted time on the tarmac. 

6 

Ladies and gentlemen, again, I thank the witnesses for being 

here. And with that, I will yield to the ranking member for an 

opening statement. 

Mr. DEFAZIO. Thank you, Mr. Chairman. Jim would have been 

proud. That is the longest opening statement since former chairman Jim Oberstar, but you only did it in one language. So we could 

have—we could add a simultaneous translation perhaps. 

Thanks for the time, Mr. Chairman. First off, I spent about over 

an hour with Dr. Dillingham from the GAO, who I would say is the 

foremost expert and the longest term critic of the FAA, its procurement process, and movement toward a 21st-century system. And I 

am not aware that any other member of the committee has spent 

that time with him, and he has not been invited to testify. 

He has a different story to tell today, and he thinks it will be 

a mistake—and I am paraphrasing—but we are now on the cusp 

of a 21st-century system that will be the envy of the world. And 

he and other experts—MITRE Corporation, others—say a massive 

change now, where you cleave the FAA into parts, you leave the 

most vital thing to our manufacturers’ certification, subject to appropriations, sequestration, and shutdowns. 

You leave the most vital thing that is important to the American 

public, which is safety and oversight of safety, subject to sequestration, shutdowns, and political meddling. The only thing that gets 

moved is the ATO, and the ATO would be moved and essentially 

effectively controlled by the airlines. I note the airlines aren’t here 

today, perhaps because they haven’t looked so great recently in 

public, and I would also note that the airlines themselves have had 

outages 36 times, major outages, 36 times since 2015. 

I am not aware that the national air traffic control system has 

had a major disruption, with the exception of deliberate sabotage 

by a contractor who knew how to get the system and the backup 

system. But the airlines, on their own, with no sabotage, have 

managed to melt down their dispatch and their reservation systems 

36 times, stranding millions of people, so they can do it better. 

Right? That is an interesting question. 

So I think that members of this committee that want to be educated on this should take—and maybe we can invite them in here 

and spend that hour with Dr. Dillingham and hear the story of how 

things have changed and the progress we are making and the potential for disruption at this point in time. 

In terms of funding, the FAA is currently projected over the next 

decade to be 97 percent self-funded. Unfortunately, the way our colleagues around here and the budget process works, despite the fact 

they are self-funded, they can be sequestered or shut down. That 

is a simple, simple fix. Take it off budget; make it into a trustfunded program. They are raising the revenues. That is a simple 

fix. 

No, we are going to cleave it in half, put vital functions over 

here, still subject to sequestration and shutdown, and take this one 

part and put it over here and say somehow they are going to selffund. 

Now, the question of course is, how are they going to self-fund? 

The airlines have told me time and time again they hate the ticket 

tax, they hate the ticket tax. They say, ‘‘That is our money.’’ 

7 

I say, ‘‘No, it is not your money. I buy a ticket, I pay the tax, 

the tax goes to the Government. It is not your money.’’ 

They say, ‘‘No, no. That affects the price of the ticket, and competition and everything else. It is a horrible thing.’’ 

So if they do away with the ticket tax, there goes 70 percent of 

the revenues. What are they going to put in its place? It is going 

to be a per operation charge, or something. We don’t know. Congress will have no say over this. 

Now, there will be a board, if I could have that slide, and a construct which is—we will show here—for the person running the 

slides, if you could put up this slide, please. And this is the new 

construct. Anything that affects competition will go through this 

process. The board makes a decision about a new approach, a new 

route, new fees. 

All that goes through this process and then goes to the Secretary. 

The Secretary will have established a large, new office of consultants within his, or at this point her, office who will advise the Secretary, he will have a limited period of time, and if the Secretary 

and the board disagree, they go to court. Now that is a great way 

to deal with new approaches, funding, and a whole bunch of other 

things. 

Congress will have nothing to say about what people or the 

American people are charged for running this system. When the 

ticket tax goes away, what happens to the AIP [Airport Improvement Program]? What happens to safety? What happens to certification? 

We had testimony from a gentleman in here who has an intriguing new model to serve small and mid-sized cities. And he said his 

biggest problem is certification, and he said people are good at the 

FAA. There aren’t enough of them doing certification. They don’t 

have enough funding. 

Well, is this new enlightened board going to generously fund that 

also? We have assurances, ‘‘Don’t worry about those things.’’ You 

can put that down now. 

Now, we have heard other things here that are, you know, an interesting construct, which is we are way behind because we don’t 

use ADS–B [automatic dependent surveillance-broadcast]. If I could 

have the first slide, please. Can we get a slide? 

OK. This is the oceanic airspace, and you will notice that a vast 

majority of the planes are in oceanic control by U.K. and Canada. 

So they are using ADS–B. Makes sense. Now, we are not. Currently, airlines pay, to have satellite-based navigation, a fee in this 

low part of the chart. There aren’t that many because people do the 

loop to the north. 

So, in fact, you know, we have—NAV CANADA has one aircraft 

in continental airspace for every aircraft in oceanic airspace. We 

have 1 aircraft in oceanic airspace for every 51 in the air over the 

United States of America. 

Now go to the second slide. Oh, by the way—yes, go to the second 

slide. Now, see all that yellow? That is the U.S. That is going to 

be totally ADS–B, satellite-based, in 2020, with an exception. 

The airlines have petitioned and been given permission from the 

FAA for exceptions because many of their older planes do not have 

modern enough GPS systems to use the new ADS–B. The airlines, 

8 

again, have petitioned that they have a number more years before 

those planes would be able to use the ADS–B system—not the 

FAA, the airlines themselves. 

Now, Canada is going to continue to have a radar-based system 

because they don’t have much domestic traffic. And so we are being 

criticized because we won’t pay a bunch of money for the few 

planes that use our oceanic airspace, but we are going to put, you 

know, 100 times that many plans under ADS–B in 2020. 

Now, here is my fear. My fear is there were disruptions in Canada, there were disruptions in Great Britain, including the bankruptcy of the system, and a bailout, and, you know, every system 

that has transit, and all the others in the world have gone to Government-based corporations or Government-controlled corporations. 

And there are only two countries that have gone the other way. 

And MITRE has done studies; others have done studies. There will 

be a period of disruption, particularly when you are cleaving the 

agency in half, and the certification people over here who have to 

certify the new approaches, who have to certify the new equipment, 

oh, they are on furlough because the stupid Congress did another 

shutdown or sequestration. Oh, but the ATO is up and running. 

Well, you can’t use those new approaches because the people over 

here who have to certify it can’t work. 

Now, splitting this agency in half does not make sense to me. 

Now, the chairman talked about the failed reforms. I sat down with 

the FAA Administrator, who also has not been invited to testify before this committee on this subject, who I think has made tremendous strides and brought the agency way under control compared 

to anyone else in recent history. 

And he said, well, they failed because Congress failed to say that 

the trolls at OMB and the Secretary couldn’t meddle. So the proposed reforms didn’t go forward because OMB took control, as they 

do over too many things, and then the Secretary messed with it 

and they ended up with a system—I know, Mr. Poole, you find this 

amazing, you know, but, you know, that is the way it happened, 

and these did not go forward. 

So, simply, you can just say we are going to give authority to reform procurement, we are going to give authority to reform personnel, to the head of the FAA whose proposals will not be subject 

to OMB because they are now self-funding, and will not be subject 

to meddling by the Secretary of Transportation and her staff. That 

would be a significant way to get there. Put it off budget. 

It is already raising the revenue it needs, but, no, we are going 

to have a new corporation that is going to figure out a different 

way to raise revenue, and, oh, by the way, forget about safety, forget about certification. They are afterthoughts over there in the 

Government, not funded by any stable source. 

I have invited a witness today, and I hope people listen carefully, 

Joe Brown. He is the president of Hartzell Propeller. His family 

has been involved in the aviation business since the Wright Brothers, actually. 

It is an interesting story, but he won’t have a chance to tell that 

today because I want him to focus on his experience, both in that 

industry and as a pilot, and to talk about what he sees as the 

things that are at risk as a pilot, a GA pilot in this country, and 

9 

things that we have done that are extraordinary for GA pilots that 

would be at risk in a new system because, why would the commercial airlines give a darn about all those GA airports and all those 

new, improved approaches and updating those, because that costs 

money and that is not in their interest. They don’t use them. They 

don’t care. 

So we will hear from him, and I think his testimony is going to 

be a little more compelling than a couple of think-tank people that 

we are going to hear from yet again and again and again. But we 

haven’t heard from the FAA Administrator, we haven’t heard from 

Dr. Dillingham, but Ms. Robyn is here for the second or third time, 

and Mr. Poole for the umpteenth time from his wonderful rightwing think-tank. 

So that is what we have before us, Mr. Chairman. I do think 

there are things we could agree upon, but, you know, I do not believe that privatizing the ATO is the answer. 

Thank you. 

Mr. SHUSTER. Well, I thank the gentleman. You almost equaled 

my opening statement. You were 2 minutes short. But, look, this 

hearing is going to be about—it has to be about knocking down 

things that just aren’t true. What Mr. DeFazio puts up on his 

chart, it is not my proposal. I don’t know whose proposal it is. It 

may be Mr. DeFazio’s proposal, but it is not mine. And let me just 

start off. To undermine the whole thing, start at the very, very top. 

It says on his chart if they decide to increase passenger aviation 

taxes, they cannot—they cannot—this new entity cannot increase 

taxes. They don’t—under law, they cannot do that. 

Second, it says the corporation decides to change—let me finish 

with that. 

Mr. DEFAZIO. Are we having a debate, or are we having a hearing? 

Mr. SHUSTER. Well, we are going to have a debate, I think. The 

only person that can raise taxes is the United States Congress. So 

that is patently false. 

The second thing at the top is the corporation decides to change 

ATC safety procedures. That can’t happen. They have to come back 

to the regulator, to the FAA. So, again, I don’t know whose chart 

this is. It is certainly not my chart. So as we move forward, I hope 

folks—— 

Mr. YOUNG. You might want to call that fake news. 

Mr. SHUSTER. I don’t want to go there. I don’t want to go there. 

And just one other point that the gentleman said, Congress—he 

said Congress and OMB failed. He is absolutely right. He is making my case. We have to take this out of the Congress, out of the 

OMB, stopping the way they operate. It is crazy. But, again, I am 

concerned that he is taking it all out. Will there be any oversight 

in his new idea of how to run it? 

But, again, this chart, the chart that he put up there, that is not 

my chart. So, ladies and gentlemen, I have got to be very clear on 

that. 

Mr. DEFAZIO. Mr. Chairman, if I could rebut for 1 minute. 

Mr. SHUSTER. You certainly can. 

Mr. DEFAZIO. Thank you, Mr. Chairman. They can set user fees. 

User fees I consider to be taxes. I consider the ticket tax to be a 

10 

user fee, but we can argue semantics over that. But they are going 

to determine how the system is funded, which is tantamount to 

taxation without review by the Ways and Means Committee or 

Congress. 

And, secondly, I am not proposing—I am proposing to give the 

FAA Administrator that authority free of OMB and secretarial interference, and also we would give them a budget that is free from 

sequestration and shutdowns through their own funding mechanism. Congress would set the funding, if it needs to be adjusted. 

Congress could intervene if they felt the reforms weren’t warranted, unlike in your privatized system. 

Thank you, Mr. Chairman. 

Mr. SHUSTER. I thank the gentleman, and we will now go to our 

witnesses. I would like to welcome again our panel. I believe everybody has testified before us before on at least one occasion, or 

maybe a few. 

First, the Honorable Calvin Scovel III, the inspector general of 

the United States Department of Transportation. He has been here 

many times. 

Joseph W. Brown, the president of Hartzell Propeller, Incorporated. I believe you testified in 2014, so this is your second time 

here. 

Mr. Robert Poole, director of transportation policy at the Reason 

Foundation, who has been thinking deeply about this subject for 

many years. 

Mr. Paul Rinaldi, the president of the National Air Traffic Controllers Association, who has been before us before. 

And Dorothy Robyn, the independent policy analyst and former 

Clinton administration official, who, again, has been through the 

wars on this many, many times, and we appreciate you being back 

here to look at your insights. 

So, again, I look forward to hearing your testimony. I ask unanimous consent that our witnesses’ full statements be included in the 

record. And without objection, so ordered. 

Since your written testimony has been made part of the record, 

the committee would request that you limit your oral testimony to 

5 minutes. 

And with that, Mr. Scovel, you may proceed. 

TESTIMONY OF HON. CALVIN SCOVEL III, INSPECTOR GENERAL, U.S. DEPARTMENT OF TRANSPORTATION; JOSEPH W. 

BROWN, PRESIDENT, HARTZELL PROPELLER, INC.; ROBERT 

W. POOLE, JR., DIRECTOR OF TRANSPORTATION POLICY, 

REASON FOUNDATION; PAUL M. RINALDI, PRESIDENT, NATIONAL AIR TRAFFIC CONTROLLERS ASSOCIATION; AND 

DOROTHY ROBYN, INDEPENDENT POLICY ANALYST 

Mr. SCOVEL. Chairman Shuster, Ranking Member DeFazio, 

members of the committee, thank you for inviting me to testify on 

FAA’s efforts to implement reforms and modernize the National 

Airspace System. My testimony today will focus on OIG’s past and 

ongoing work regarding FAA’s efforts to implement various agencywide reforms, as well as its progress and challenges with NextGen. 

Mr. SHUSTER. Can you pull the mic a little closer to you? 

Mr. SCOVEL. Yes, sir. 

11 

Mr. SHUSTER. Don’t be afraid of it. 

Mr. SCOVEL. While my office does not make policy recommendations, I will also discuss how other countries have structured their 

aviation systems and highlight key factors that policymakers may 

wish to consider in evaluating FAA’s structure. 

Over the last two decades, FAA has made several reforms in response to congressional mandates to improve operations, cost effectiveness, and management. These include establishing new employee compensation systems, as well as an acquisition management system. FAA has also undertaken multiple reorganizations to 

improve the agency’s efficiency and reduce expenses. In addition, FAA achieved more than $2 billion in cost savings 

over a 13-year period by outsourcing flight service stations. 

Despite this progress, FAA’s reforms have not achieved their intended cost or productivity outcomes. Instead, budgets have increased, with a 35-percent increase in FAA’s total budget after adjusting for inflation between fiscal years 1996 and 2015. 

In addition, FAA’s productivity initiatives for its air traffic controller workforce have not yielded improvements, in part because 

FAA did not establish measurable productivity and cost goals or 

metrics. 

FAA’s reforms have also fallen short in improving its ability to 

deliver key NextGen technologies on time and within budget. This 

is due to longstanding management weaknesses, such as overambitious plans, unreliable cost and schedule estimates, unstable requirements, and ineffective contract management. For example, 

FAA has made progress with its six NextGen transformational programs, such as installing the ground system for ADS–B. However, 

FAA has not determined when the programs will start delivering 

benefits or how they will improve the flow of air traffic or controller 

productivity. Although FAA currently estimates the six projects at $5.7 billion, 

their total costs and completion dates remain unknown, in part because their requirements continue to evolve. 

Furthermore, weaknesses with internal controls and oversight 

problems have hindered FAA’s contract management, which we 

found in our reviews of sole source, service support, and small business set-aside contracts. To its credit, FAA has worked with industry to identify and launch some of the highest priority NextGen capabilities. For example, a key priority is performance-based navigation, or PBN, which allows more fuel-efficient aircraft routes and 

reduces airport congestion. 

FAA fully deployed these procedures at the northern California 

metroplex in 2015, well ahead of schedule. FAA has also deployed 

new technologies at some airports to enhance controller-to-pilot 

data communications and runway operations, yet many risks remain to complete these and other NextGen priorities, and full benefits for users remain years away. 

Key challenges include addressing community noise concerns 

with PBN routes, resolving avionics issues, and integrating complex, onboard systems and controller technologies. 

As Congress, the administration, and stakeholders consider 

FAA’s structure, other nations may offer a helpful comparison. At 

the request of this committee, we reviewed the aviation systems of 

12 

Canada, France, the United Kingdom, and Germany. All four have 

separated their safety and oversight functions, which remain Government-controlled, from the air traffic control functions. 

Air traffic control has been commercialized—their term—into air 

navigation service providers via various organizational structures. 

These providers finance their operations through user fees, and 

may finance their infrastructure and modernization efforts with 

long-term bonds and other debt instruments. They also embark on 

smaller modernization efforts and roll them out incrementally 

using a variety of methods, such as modifying commercial off-theshelf products. 

Yet, any discussion on FAA’s structure should consider our Nation’s unique characteristics. As you know, the U.S. runs the busiest and most complex aviation system in the world, with more operations each year than the other four nations combined. Safety, financing, and labor issues will also be key questions. 

Ultimately, safety will remain the top priority in overseeing our 

National Airspace System. Regardless of what the future looks like, 

strong controls and oversight will be vital to maintain a safe, innovative transportation system. 

This concludes my statement, Mr. Chairman. I look forward to 

answering questions you or the committee may have. 

Mr. SHUSTER. Thank you, Mr. Scovel. 

And with that, Mr. Brown, you may proceed. 

Mr. BROWN. Chairman Shuster, Ranking Member DeFazio, members of this committee—— 

Mr. SHUSTER. You can bring your mic closer. Get right up close 

to it because then we can hear you better. We want to make 

sure—— 

Mr. BROWN. Is this better? 

Mr. SHUSTER. Better. 

Mr. BROWN. Chairman Shuster, Ranking Member DeFazio, and 

members of the committee, I would like to thank you for inviting 

me here today. My name is Joe Brown, and I come today as a businessman and a pilot. I also represent a company called Hartzell 

Propeller, a 100-year-old aviation business whose roots trace to the 

Wright Brothers. 

Located in rural Ohio, we do our business out of a 4,000-foot runway that takes us all over this country to our customers, in Texas 

and Florida and Georgia and Minnesota, and everywhere in between. Because our customers build airplanes, they are around airports. Our business depends, and their business depends, on the 

amazing infrastructure that the citizens of this country have put 

into the national airspace. 

And we also depend on another thing, which is the incredible 

freedom to fly that we enjoy in this country. And because of those 

things, we have made a market in this country like no other for 

aviation, and we are very grateful for that and deeply invested. 

Now, as a pilot, 400 to 500 hours a year my office is the cockpit. 

And when I fly, I find a modern system, a high-functioning system, 

and I have seen it evolve over time right before my eyes. I find controllers that do their job well. I find easy access and powerful technology. 

13 

I can file a flight plan from my smartphone and get my proposed 

route, back before I get to the airport, in a text. When I take off, 

I have GPS navigation systems on board that allow me to fly pointto-point all over this country. A couple of months ago, I took off out 

of the Dallas/Fort Worth metro area and got cleared direct to Burlington, Vermont, 1,300 miles ahead. 

And while I am flying, I have the veil of safety brought to you 

by ADS–B which is, in fact, deployed, giving me traffic callouts and 

separation cues and weather in my route of flight. And when I 

come in for landing, I can pick from 3,000 precision approaches 

brought to me by a NextGen feature called WAAS [Wide Area Augmentation System], including at my home airport, which I value 

tremendously on foul weather days. 

So the bottom line for me is, NextGen is working. It works for 

me every day, and it is getting stronger all the time. And from a 

technology standpoint, I believe we are on the right track. 

It is proper to ask in modernization, where should we go next? 

Many are arguing that what we should do is spend the next 5 to 

7 years focusing on the structure and the governance of our Air 

Traffic Organization. I don’t like that risk profile. I don’t think we 

should be distracted. 

As a businessman, I think that what we will find is that we will 

raise more questions than we can answer, questions that don’t 

have clear answers, and questions that will burn up precious time 

trying to answer, like how will we assure equity among users, and 

how will we finance this organization, and what borrowing risk can 

it take. 

And what about new market entrants; how do they fit into this 

picture? And that doesn’t even address whether the people are better served by the structure after we transfer so much national 

wealth to it. 

Because I am a business guy, I get to evaluate a lot of companies, and I have bought several. And we have a simple framework 

when we are looking at an investment. We say, what are its 

strengths? Can they be leveraged? Do they differentiate it in the 

business we are trying to do? And what are its weaknesses, and do 

we understand those weaknesses, and can we fix them? 

And when both of those things are true, we buy that company 

because we know if we elevate strengths and reduce weaknesses 

that we will create value. And in my calculus, the ATO presents 

exactly that risk profile—enormous strengths, world-class systems, 

and very specific weaknesses that we can address. 

The conclusion I have drawn is that we should not spend 5 to 

7 years distracted by change, knowing that things take longer and 

cost more, with the hope that at the end this restructuring journey 

will deliver a big payoff. 

What is next? I think that we should stay on track with the technology plans that the NextGen Advisory Committee and the FAA 

have agreed to. The stakeholders are already aligned, and the technology that is in the field works, and there is more technology coming. 

Let’s keep tuning and strengthening the collaboration that has 

been driving so much progress. Even Government overseers recognize that the NextGen Advisory Committee is having impact, and 

14 

it has been run by an airline executive, so clearly the strongest 

voice is setting the priorities. 

Let’s expand on the technologies that are already deployed. For 

example, DataComm is in the field today at 55 towers in the country and will be delivering en route services to aircraft by 2019. 

NextGen is deployed and getting better all the time, but let’s tackle 

specific weaknesses that we have in the system, like the way we 

finance the FAA and the ATO, and the way we give them mechanisms for doing long-term capital planning and investment. 

And, finally, let’s work on that ATC infrastructure. There are a 

number of ways that private-public partnerships could put these 

guys in better buildings. In the next 5 to 7 years, we could have 

them all in better buildings. 

I encourage us to take a different path to think about options 

that are fixing the fixable and elevating strengths. Thank you for 

the time today. I look forward to questions. 

Mr. SHUSTER. Thank you very much, Mr. Brown. 

Mr. Poole, you may proceed. 

Mr. POOLE. Good morning, Mr. Chairman, Ranking Member 

DeFazio. As some of you know, I have been researching this subject 

for close to four decades. Most recently, I have been part of two 

working groups, one for the Business Roundtable and the other for 

the Eno Center. 

Both groups have concluded that we have major fundamental 

funding and structural problems and that corporatization of the 

ATO is the best solution. That was also the conclusion that the 

FAA Management Advisory Council reached unanimously in their 

2014 report that called for corporatizing the ATO. 

My focus this morning is primarily on the issue of governance. 

The Business Roundtable group recommended a nonprofit corporation in which customers and other stakeholders govern. This is basically a user co-op, except for the addition of other stakeholders—— 

Mr. SHUSTER. Can you pull that mic a little closer to you? 

Mr. POOLE [continuing]. Users. 

Mr. SHUSTER. That thing moves, I think. Pull the whole box towards you. 

Mr. POOLE. All right. 

Mr. SHUSTER. Please. Thank you. 

Mr. POOLE. The structure proposed is basically a user co-op with 

the addition of other stakeholders. 

And the governance model that was proposed in last year’s bill, 

as recommended by BRT [Business Roundtable] and Eno, was intended to be a U.S. adaptation of NAV CANADA’s nonprofit, stakeholder-governed corporation, running in the best interests of all the 

stakeholders. But the stakeholder board from last year has been 

described misleadingly as giving control over the airspace to the 

major airlines. 

This, of course, has led to serious concerns from general aviation 

groups, people in small towns with small airports, and rural legislators. But in a nonprofit, user co-op, there are no shareholders. 

Every board member has an equal vote with any others, so even 

if there were airlines on it, which there won’t be, they would only 

have a small minority of the members, and they could easily be 

15 

outvoted by other members because all votes are equal. It is not 

like in a corporation where you have preferred shareholders. 

Now, this model is consistent with international aviation law, 

with ICAO [International Civil Aviation Organization] principles, 

and with global best practices. And the proposal did not originate 

with the airlines. I would like to set the record straight on that. 

The Business Roundtable group began in 2011, made an initial 

presentation to A4A [Airlines for America] in the spring of 2012. 

We got a pretty cool, if not negative, reception at that point. No 

one wanted to restart the battles that had raged over this issue in 

previous decades. Everything changed in the spring of 2013, thanks 

to the sequester. Controller furloughs, a closed FAA Academy, 

threatened closure of 189 contract towers, got everybody’s attention. In response, A4A, NATCA [National Air Traffic Controllers 

Association], and AOPA [Aircraft Owners and Pilots Association] 

all requested new conversations with the BRT working group. 

And, in May 2013, all three groups in the conference room at 

Business Roundtable agreed that an air traffic control corporation—converting the ATO into a corporation, self-funded and out of 

the Federal budget, was the best approach. 

After this happened, that fall, Governor Engler and several others briefed Chairman Shuster on the proposal. This was not coming 

from the airlines. 

The BRT group included a former FAA Administrator, a former 

Chief Operating Officer of the ATO, two former senior officials of 

U.S. DOT, and several consultants. Our governing model, as I said, 

was patterned after NAV CANADA’s. Their stakeholder board represents airlines, general aviation, unions, and the Government, 

plus four other private citizens selected by the stakeholder members. 

No board member at NAV CANADA can hold any paid position 

in an aviation organization. It is a system that really works. And 

of four seats elected by airlines, two are from major airlines, retired people. One is from an air tour company, and one is from a 

regional airline serving the Far North. 

Now, the U.S. is larger and has a much larger general aviation 

community. GA, as a key stakeholder, should have more than one 

seat. Since small airports are so vital, airports definitely are a 

stakeholder that should be electing a board seat as well. 

And I think in terms of the airlines, regional airlines and cargo 

airlines should be defined as stakeholders in addition to perhaps 

two seats from the major carriers. My written testimony gives one 

example of a proposed 15-member stakeholder board. 

Let me close with the concerns of small airports. Having airports 

and regional airlines as stakeholder is part of the answer, but Congress needs to deal with the fears about loss of control towers at 

small airports and worries that somehow service might be dropped 

in rural areas. 

First of all, Congress could specify that any airport meeting a 

reasonable benefit-cost test should be assured of getting tower services, which is the standard today. 

Second, FAA would be in charge of aviation safety, and no 

changes in procedures or equipment could happen without its OK. 

16 

They might be proposed by the corporation, but would have to pass 

muster with the FAA, and could not be done unilaterally. 

Third, ATO’s inadequate funding today gives airports the short 

end of the stick. There has been a moratorium on contract towers 

since fiscal year 2014. So small airports are losing today, not getting what they need, because of FAA’s ongoing budget problems. 

A self-funded corporation would mean improvements for small 

airports, thanks, number one, to predictable user fee revenues and 

a financed capital improvement program for facilities. Secondly, a 

corporation would very likely implement remote tower technology 

that would increase the benefits from having a tower because of 

better surveillance, and reduce the costs; therefore, the benefit-cost 

ratio would be higher, and more small airports would qualify. This 

would be a boon for small airports, not a detriment. 

That concludes my testimony, and I will be happy to deal with 

questions. 

Mr. SHUSTER. Thank you very much, Mr. Poole. 

And with that, Mr. Rinaldi, you may proceed. Thank you. 

Mr. RINALDI. Good morning, Chairman Shuster, members of the 

committee. Thank you for the opportunity to testify—— 

Mr. SHUSTER. Microphone. 

Mr. RINALDI [continuing]. In front of you today. 

Mr. SHUSTER. Slide that whole thing towards you, the whole box. 

There you go. 

Mr. RINALDI. How about that? We currently run the largest, 

safest, most efficient, most complex, most diverse airspace system 

in the world. It contributes $1.5 trillion to our gross domestic product and provides over 12 million American jobs. 

Our National Airspace System is unique, unequalled, and 

unrivaled by any country. This is due, in large part, to the impeccable work the men and women that I represent do every day. 

NATCA members guide approximately 70,000 flights per day in the 

United States, ensuring over 900 million passengers arrive safely 

at their destination every year. 

The United States airspace system is considered the gold standard in the aviation community, but that status is at risk. Unstable, 

unpredictable funding and the status quo threaten it. We need a 

stable, reliable, predictable funding stream to operate our current 

system and allow for growth in the United States aviation system. 

Although NATCA is calling for change, we cannot support any 

proposal without fully reviewing all its details. It is not only that 

we oppose the status quo, which is very much broken, we also oppose any system that would put ATC in a for-profit model. 

In order for NATCA to consider support of any proposal, it must 

meet our four core principles of reform. First, any new system must 

keep the safety and the efficiency of the National Airspace System 

the top priority. 

Second, any reform must protect our members’ employment relationship. This must maintain our members’ pay, benefits, retirement system, healthcare system, as well as their work rules and 

our contract. 

Third, any reform system must have a stable, predictable funding stream, adequately enough to support air traffic control services, growth, new users, staffing, hiring, training, long-term modVerDate Aug 31 2005 10:59 Jan 19, 2018 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\FULL\5-17-2~1\25482.TXT JEAN
17 

ernization projects. Also, this reform must provide a stable funding 

stream through the transition period. 

Fourth, any reform must maintain a dynamic, diverse aviation 

system that continues to provide services to all segments of the 

aviation community and to all airports across America. I cannot 

emphasize enough how important it is to continue to provide services to many of the diverse users in the National Airspace System. 

Both large and small, new and old, big city to rural America, the 

United States has a vibrant, general aviation community that relies upon us. Rural America’s economic success is tied to access to 

the National Airspace System. 

Last year, NATCA supported the AIRR Act of 2016 because it 

met these four core principles. While we do not believe there is only 

one solution to the problems, we will carefully review all proposals 

using the same standard. Please don’t take NATCA’s position as a 

need for stable, predictable funding as to mean the appropriators 

have not done their job. 

The appropriators in both chambers of Congress on both sides of 

the aisles have done their job well. The problem stems from lack 

of regular order we have been experiencing for over 10 years now. 

This lack of regular order has led to stop-and-go funding, many 

threats of shutdown, and our current staffing shortage. 

We are at a 28-year low of fully certified controllers. We have 

10,532 certified controllers; approximately 3,000 are eligible to retire at this time. 

In addition, unstable funding has prevented on-time implementation of NextGen modernization projects. NATCA takes pride in our 

role in partnering with the FAA in developing and implementing 

important modernization projects. We have successfully worked on 

many over the years. Unfortunately, all have been impacted by uncertainty of funding. 

If you just look at fiscal year 2018, as we approached April 28 

of this year, the FAA shifted its focus from NextGen to shutdown. 

We then received a 1-week funding extension, followed by a 5- 

month funding bill. While we are elated over the funding bill, 5 

months is certainly no way to plan for the future in aviation. 

Congress needs to pass an FAA reauthorization bill that provides 

stable, reliable, predictable funding. Congress should exempt the 

FAA employees from indiscriminate sequester cuts. Otherwise, we 

will see a hiring freeze, reduced staffing, furloughs, delays, reduced 

capacity, and suspension of key NextGen programs. 

I want to thank you for calling this hearing. We must all remain 

vigilant and focused on the horizon as we try to expand and modernize the National Airspace System. 

Thank you. 

Mr. SHUSTER. Thank you, Mr. Rinaldi. 

And with that, Ms. Robyn, you may proceed. 

Ms. ROBYN. Thank you, Chairman Shuster, Ranking Member 

DeFazio, members of the committee. I appreciate being here this 

morning. 

I am a policy wonk, and I am a Democrat. I testified before some 

of you during the 5 years I spent in the Obama administration, 

first as the Deputy Under Secretary of Defense for Installations 

18 

and Environment, and then as the GSA Public Buildings Commissioner following the scandal at GSA. 

Previously, I spent 8 years on President Clinton’s White House 

economic team, where during his second term I was the point person on aviation and air traffic control, among other issues, a policy 

focus I maintained after leaving the White House, first at Brookings and then as an economic consultant. 

The first point I want to make this morning is that 

corporatization of the air traffic control system is not a radical 

idea, nor is it a Republican idea. The Clinton administration tried 

unsuccessfully to do this in 1995 with its proposal to create a selfsupporting Government corporation, USATS, which would be run 

by a CEO and a board and regulated at arm’s-length by the FAA. 

At the time, only four countries had corporatized their air traffic 

control system. Now more than 60 other countries have done so. 

The second point I want to make is that the rationale for USATS 

applies no less today than it did in 1995. Let me briefly restate it. 

One, air traffic control is not an inherently governmental function. To repeat, it is not inherently governmental. Keeping planes 

safely separated is complex and safety-critical, but it is a purely 

operational process that follows well-established rules. 

Like running an airline or manufacturing a Boeing 787, air traffic control can be performed by a nongovernmental entity as long 

as it is subject to oversight by FAA safety regulators whose job is 

inherently governmental. 

Two, precisely because of the operational nature of the air traffic 

control system, the Federal Government is poorly suited to running 

it. The consensus of countless blue ribbon commissions and expert 

reports is that air traffic management is a 24/7 technology-intensive service business trapped in a regulatory agency that is constrained by Federal budget rules, burdened by a flawed funding 

mechanism, and micromanaged by Congress and the Office of Management and Budget. 

Is it a monopoly? Yes. At least for now. But the telephone system 

was a monopoly for many years, and we didn’t have the Government operate that. 

My final—the final rationale for USATS, the current arrangement is flawed on safety grounds. This is important. Echoing safety 

experts worldwide, ICAO, the International Civil Aviation Organization, has long called for the air traffic control regulator to be 

independent of the operation it regulates in order to avoid conflicts 

of interest. We are one of the only industrial nations in which the 

same agency both regulates and operates the air traffic control system. 

In sum, 22 years after USATS was dead on arrival when it got 

to Congress, the international aviation community treats air traffic 

control as a commercial service business, and most countries have 

spun it off as an autonomous self-supporting entity, both to give it 

the agility that a business needs and to provide the necessary separation from the safety regulator. The U.S. has gone from failed innovator to laggard. 

The current proposal, the AIRR Act, differs from USATS in one 

important way. USATS was a Government corporation because 

that was the only model that existed in 1995. NAV CANADA, 

19 

which came along a short time later, has shown us a better approach for the reasons you have heard and that we will discuss further this morning. 

Had NAV CANADA existed in 1995, I strongly suspect that it, 

rather than New Zealand’s Government corporation—the best 

model at the time—would have been the prototype for the Clinton 

administration’s USATS proposal. 

In closing, let me say that I have listened long and hard to the 

arguments made by opponents of the chairman’s proposal, particularly Democrats. I look forward to discussing these criticisms this 

morning, but I think it is a mistake to view this proposal as ideological, as one committee member characterized it last year. 

I believe in a robust Federal role in many areas, and I think the 

Federal Government gets far too little credit for its accomplishments. But I also believe that the Federal Government has often 

excelled by recognizing where its direct involvement is necessary, 

and where it is not, to achieving its objectives. 

And sometime I would like to tell you about privatized military 

family housing as the greatest quality of life program the Defense 

Department has ever implemented. That is not ideology; that is 

good Government. 

Thank you. 

Mr. SHUSTER. Thank you very much, Ms. Robyn. 

We are going to start with questions. I would ask all Members 

to stick to 5 minutes. If we need to go to a second round, I will 

be more than happy to indulge. 

First question I have to Mr. Brown. Mr. Brown, I really appreciate you being here. It is the second time you have testified before 

this committee, and you and I have sat down I think on a couple 

of occasions to talk privately about your concerns in the industry 

and in general. 

And of all the witnesses there, I feel like I am a kindred spirit 

with you. I was a business owner myself, so I know what you do 

every day, getting up, making sure you are meeting the bills, making sure your operations are functioning. And, again, in a world 

that you have got to deal with an agency like the FAA sometimes 

can be challenging. 

But as a business owner, would you allow your businesses to 

grow a budget, your operational budget, 95 percent over a 10- or 

15-year period, while at the same time the cost of service increases 

75 percent and all the while you are losing customers? Would that 

be something that you would tolerate as a business owner? 

Mr. BROWN. Of course not. I would be very concerned about that 

if I was a business owner. 

Mr. SHUSTER. Absolutely. And I would, too. And I think you are 

absolutely on the mark. When you look at a business, you look at 

the strengths, what can you leverage, how can you make it stronger, and the weaknesses, and can you change them. 

And so I would say on that business model, when you are in the 

business world, that works. But when you are dealing with the 

Federal Government, that weaknesses part, there is not a way we 

can change this. We have tried for 30 years to change it, and the 

only way to do it, I believe, is separation. 

20 

I also—I don’t want to speak for Mr. DeFazio, but he believes 

separation, but looks different than I do. So, again, I really appreciate you being here. I appreciate you laying out. But the thing we 

are really up against here is trying to change something that has 

not been able to be changed for 35 years, and that is the real challenge we face here and we have to address. 

But thank you so much for being here. I appreciate that. 

I would like to ask Mr. Rinaldi, I brought the paper strips here 

today that I was introduced to by Mr. Rinaldi. These are the paper 

strips of the DC area TRACOM [Terminal Radar Approach Control] 

for 1 day. This is what we use. And, Mr. Rinaldi, could you talk 

to me a little bit about the paper strips? Why do we use them, and 

what is our most modern towers? I think we have our most modern 

towers we can throw up on the screen there. 

Mr. RINALDI. Well, those are paper strips that we stuff all day 

long in our towers across the country and move—as we move the 

control of an airplane from position to position, we pass the strip 

to controller to controller. 

We have tried, and we are actually in the process one more 

time—and this is another reason why an interruption in funding 

could be a problem—we are working right now with the agency and 

with Leidos on a new program that would actually move that to 

100 percent electronic as other countries around the world are 

using electronic. 

It is an efficiency thing. If you look at our new towers in San 

Francisco—— 

Mr. SHUSTER. Is that San Francisco? 

Mr. RINALDI. That is San Francisco right there on a foggy day, 

which happens a lot in San Francisco, and ground stops. The controller is actually just moving paper around that little work area 

because—just to keep some type of order of how the airplanes are 

going to come out. 

Mr. SHUSTER. And can they put up the Las Vegas tower, too? 

Mr. RINALDI. That is the first—yes, that is Las Vegas right there. 

These are both brandnew FAA facilities. They are—— 

Mr. SHUSTER. They are the most modern. 

Mr. RINALDI. Well, they are the newest facilities. They were actually supposed to have an electronic flight strip program in them. 

The problem is, because of reduced funding, we were never able to 

make it on time. So we are using paper now, which is still very 

safe. We are just losing some efficiencies. 

Mr. SHUSTER. Right. 

Mr. RINALDI. But we would like to get to an electronic flight strip 

program as they use around the world. 

Mr. SHUSTER. And the thing that tipped me off that this is the 

most modern tower you have is that is a plastic container they are 

putting them in, not a wooden crate. So they have advanced to 

plastics, so that is pretty impressive. But show us the NAV CANADA tower. That is—can you talk a little bit about what NAV 

CANADA does? 

Mr. RINALDI. Well, as you can see, the controller has a good line 

of sight, head is not down looking at paper. All the information is 

in front of them, and it is definitely more efficient. 

21 

Mr. SHUSTER. And can I ask you one further question? Would 

you say that the London airspace is the most or least complex airspace in the world? 

Mr. RINALDI. I would say that—around London Heathrow; is that 

what you are talking about? 

Mr. SHUSTER. Yes. 

Mr. RINALDI. London Heathrow Airport, I would say it is a very 

busy, complex airspace—— 

Mr. SHUSTER. Extremely complex. And what system are they 

using? 

Mr. RINALDI. They are using the NAV CANADA flight strip program. 

Mr. SHUSTER. NAV CANADA. OK. All right. I thank you very 

much for that, and I yield to Mr. DeFazio. 

Mr. RINALDI. Thank you. 

Mr. DEFAZIO. Thank you, Mr. Chairman. 

Mr. Brown, I don’t think you quite got a chance to respond to Mr. 

Shuster’s question. Would you like to expand on your answer 

there? 

Mr. BROWN. Yes, I would. The way that I have been thinking 

about this is as a businessman, and I think the national airspace 

is a fundamental economic driver in our country. Our country is 

more aviation centric than any other country in the world. You can 

see that in the traffic patterns, in the utilization, in the number 

of pilots. 

And the way I think about this whole, what is the value of return on the level of investment that we make in our ATO and our 

airspaces, what industry have we created in this country? What are 

the returns on that industry? 

So what I think is that when you have a question like that sent 

to somebody like me, I immediately go to the larger and very, very 

significant economic value of an industry that exists uniquely in 

this country. We are the market leader in aircraft production of 

every type and stripe. We are the market leader in engine production of every type and stripe. We have the best avionics manufacturers in the world, and that is generating an enormous public return in tax revenues and jobs. 

So I think you have to put all of the economic value in the bucket 

before you ask a question that is just yes or no, in my opinion. 

Mr. DEFAZIO. Thank you. Mr. Rinaldi, I am sure you are familiar 

with the 2002 collision between DHL and a Russian passenger aircraft under the aegis of Skyguide, the Swiss Government corporation. What caused that? 

Mr. RINALDI. That was caused between lack of communication 

between ANSPs. 

Mr. DEFAZIO. And wasn’t there one person on duty who had multiple tasks because—— 

Mr. RINALDI. It was a fatigue issue with the controllers also. 

Mr. DEFAZIO. Right. So a little bit problem with cutbacks in the 

controller workforce under the private corporation. Oh, but they 

have kept safety oversight separate; is that correct, from the Government corporation? 

Mr. RINALDI. That is correct. 

Mr. DEFAZIO. Yes. 

22 

Mr. RINALDI. That is correct. 

Mr. DEFAZIO. When is the last time we had an air-to-air collision 

here due to a controller error? 

Mr. RINALDI. A very long time, and I don’t like to talk about it. 

Mr. DEFAZIO. Right. So you must have said at least 20 times 

during your testimony and your answer—funding, stability, sequestration, furloughs, talking about the new—our much more sophisticated electronic flight strips, which are going to integrate other aspects of the system and have much more capability than the much 

more static model used by NAV CANADA that actually was offered 

to the FAA a decade ago here, and they didn’t think it made it up 

with all the new capabilities of NextGen. 

And I think you said there—you weren’t saying, ‘‘I don’t think it 

will work.’’ You said, ‘‘We are worried about delays and reduced 

funding,’’ did you not? 

Mr. RINALDI. That is correct. I have no doubt we will be able to 

develop our own system. It really comes from we are working collaboratively with the manufacturer, along with the FAA. It really 

comes from a lack of funding or funding uncertainty as we move 

forward. 

Mr. DEFAZIO. So, Mr. Scovel, would you agree that that is a significant problem? 

Mr. SCOVEL. I would, Mr. DeFazio. Funding is a significant problem, as you and Mr. Rinaldi have pointed out. However, I would 

also say that there are other issues to bear in addition to funding. 

Mr. DEFAZIO. That is fine. But, and so, let’s see, if I think about 

it, funding, sequestration, shutdowns, that all has to do with Congress. So if we had the FAA with its current funding sources, 97 

percent projected over the next 10 years, so just a few efficiencies 

would get us to 100 percent self-funded without meddling, exempt 

them from sequestration and shutdowns, would that solve many of 

your concerns? I am not saying all, but would that solve many of 

your concerns, Mr. Rinaldi? 

Mr. RINALDI. Yes. As I said in my opening statement, we don’t 

believe there is one answer to the problems here, but we do believe 

the status quo is unacceptable, and we would not look at a for-profit model. But we would look at anything that was proposed and 

just hold our core principles against what—— 

Mr. DEFAZIO. Well, let me just interrupt. Quickly, Mr. Brown, 

when we had, you know, our last hearing, one of the many Mr. 

Poole has been to, he said if there was a problem and ATC became 

insolvent, customers would have to pay more. And then the question, of course, becomes, if it then fails, who is responsible? Who 

would be responsible if the ATC failed financially in this country? 

Mr. BROWN. Now, that is one of my risk calculus when I think 

about this problem. The day the assets move out of the public sector and into the private sector, we have moved the essence of the 

system and the people with it. And there is no way we can spend 

1 day without that system full functioning and healthy and thriving. And so all the financial risk accrues to the people regardless 

of where that monopoly reports. 

Mr. DEFAZIO. So too big to fail. 

Mr. BROWN. Too big to fail is my concern. 

Mr. DEFAZIO. I think I have heard that before. Thank you. 

23 

Mr. SHUSTER. I thank the gentleman. 

With that, Mr. LoBiondo. 

Mr. LOBIONDO. Thank you, Mr. Chairman. 

Mr. Scovel, for you, over 3 years ago, Mr. Larsen and I directed 

the FAA and the NextGen Advisory Committee to come up with 

four capabilities that could provide near-term benefits, given the 

constrained Federal budget that we work with. These priorities 

were supposed to be the low-hanging fruit, the things the FAA 

could get done and prove to the industry that they can deliver the 

benefits. 

I think I am now hearing you say that for many of the NAC priorities full implementation of all capabilities and a realization of 

those benefits remain years away. So the question for you, Mr. 

Scovel, is: why are the NAC priorities or the easy things taking 6 

to 7 years to implement? 

Mr. SCOVEL. Thank you, sir. You are right. The four NAC priorities have been the focus of effort for both industry and FAA. Perhaps unbeknownst at the time, or certainly not fully appreciated at 

the time, there were significant risks to each of them, whether we 

are talking about PBN, DataComm, surface operations, or multiple 

runway operations. Each of those presented its own problems in 

bringing them to fruition. 

I would say that right now we are at the point where the timeframe of 2019 is perhaps when DataComm in the en route environment will begin to be implemented, through maybe 2021 will be 

what we in my office are calling a pivot point for the realization 

of benefits from these four NAC priorities. 

Mr. LOBIONDO. So with this pivot point, I mean, what is your assessment if we don’t make this? I mean, does this ripple out for 

how long, or can you talk about that a little bit? 

Mr. SCOVEL. Sure. We don’t know. Yes, FAA has had problems, 

it is no secret, making completion deadlines before, honoring representations to Congress and the Secretary as to where they are in 

different programs. 

FAA, together with the NAC, have an implementation program 

and a working group that is birddogging it as closely as they possibly can. However, the problems that are outlined in my written 

statement are significant. They may yet derail the program to some 

extent. The choice, at that point, is to continue to press forward. 

So it may go on beyond 2020, 2021, but at this point we don’t 

know. 

Mr. BROWN. Congressman, would it be OK if I added something 

to that? 

Mr. LOBIONDO. Yes. 

Mr. BROWN. One of the things that I don’t think is getting fair 

discussion in the modernization effort that we are in is that first 

you have to invent and deploy the technology, which has generally 

been the FAA’s purpose. But then the user community has to 

equip, and in many cases change equipment to experience the benefits. And that is exactly where we are right now, and that is why 

there is an inflection point coming up. 

We have ADS–B fully deployed on a nationwide basis in terms 

of the ground structure, but only a percentage of the aircraft flying 

24 

enjoy the benefits because they are not ADS–B compliant. Likewise, that will be true of DataComm and other technologies. 

So where we are right now is the FAA has done a lot of heavy 

lifting, and the users have to equip. And in the next several years, 

that is why the transformative change is going to flow into the system. 

Mr. LOBIONDO. I would like to yield my time to Mr. Shuster. 

Mr. SHUSTER. I thank the gentleman. I just want to point out we 

continue to come back to this argument that—and not an argument, but the facts are it is the Congress and it is OMB and the 

political process that causes a big part of these problems, along 

with the bureaucracy. 

So taking an agency out of Government, and already going right 

to failing and going bankrupt, if everybody recalls, on 9/11 we injected I think it was $15 billion into the airline industry to prop 

them up. We had to have an aviation industry. 

So I am not willing to sit here and say this agency is going to 

fall because I don’t believe it is, because most of the money can be 

provided by the users. And if you look at the model that we have 

been looking at in Canada, they have a reserve fund. They did not 

require the Federal Government of Canada to inject money. 

The British did, the British for-profit. And as Mr. Rinaldi says, 

I have no intent, I would not—I would oppose going for a for-profit 

organization. I think that, again, using this as too big to fail, we 

faced that in 2001, but there are models out there that we can look 

at and learn from to make sure that they are set up in a proper 

form. 

But the most important thing—and, again, I keep hearing agreement over and over again—it is the bureaucracy, it is OMB, it is 

the Congress, the starts and stops would cause these problems. 

With that, I recognize Mr. Larsen for questions. 

Mr. LARSEN. Thank you, Mr. Chairman. First off, I would ask 

unanimous consent for the written statement of PASS [Professional 

Aviation Safety Specialists] and the National Business Aviation Association to be entered in the record. Mr. Chairman, unanimous 

consent? 

Mr. SHUSTER. Yes. 

[The written statements of the Professional Aviation Safety Specialists and the 

National Business Aviation Association are on pages 133–146.] 

Mr. LARSEN. Thank you very much. 

So, for Mr. Rinaldi, you are a member of the FAA’s Management 

Advisory Council; is that correct? 

Mr. RINALDI. I am, sir. 

Mr. LARSEN. So on March 15 of this year, the MAC, shorthand 

is MAC, issued a letter calling for reforms that would not require 

splitting up the FAA, and you signed the letter, along with other 

members of the MAC. So do you agree with the MAC’s recommendations, or how should we read that, from your end of 

things? 

Mr. RINALDI. I do. As I said in my opening statement, there are 

many ways to fix this problem. We don’t think there is just one. 

Just so you do know, that letter was circulated. I did offer edits, 

and it was not incorporated into it, but I do support that letter, 

25 

that we need stable, predictable funding, and flexibility in our 

budgets. 

Mr. LARSEN. And there are different—and you argued there are 

different ways to achieve that goal. 

Mr. RINALDI. Absolutely. 

Mr. LARSEN. Yes, right. 

Inspector, we heard in some comments today that the air traffic 

control system is safe, but it is broken. I fly 2,306 qualified air 

miles one way on United Airlines and back again for my commute. 

Can the system be safe and broken, or should I drive? 

Mr. SCOVEL. It is safe, of course, and that is—— 

Mr. LARSEN. How can it be safe if it is broken? It seems to me 

that there is a fundamental argument going on here that says we 

have to go to privatization because the system is broken that actually controls the airspace. And if it is broken, I don’t know how it 

could be—happen to be safe, and so it would support the privatization argument. 

However, if it can’t be safe and broken, it would seem to undermine the whole argument for privatization. 

Mr. SCOVEL. I would characterize the system currently certainly 

as safe, and the record shows that. For a number of years now, 

there have been no commercial aviation fatal accidents. As far as 

broken, I would take issue with that characterization. I would say 

certainly modernization has been lagging far behind where it 

should be, but it is not broken. 

Mr. LARSEN. Well, that is good to hear. I will cancel my car rental. 

Mr. Brown, I just want to explore a separate issue with you, but 

it is tied because we are trying to get an authorization bill done. 

And I think largely there is bipartisan support on a lot of issues, 

including with differences around the edges, UAS incorporation 

into the airspace, certification reforms. 

It seems to me all of these are being held up by this debate on 

the ‘‘to be or not to be’’ question with regards to privatizing the air 

traffic control system. Can you talk a little bit, again just briefly, 

about why certification is important, and why some of these other 

issues are important that we move forward on, but yet we ourselves are lagging on getting them done because we continue this 

debate over and over on privatization? 

Mr. BROWN. I am happy to do that. I would say that Congress 

has been incredibly supportive of the idea of facilitating improved 

ways to market through certification. We have had great support 

and friends in Congress come to our aid to try to make our United 

States aviation industry as strong as possible, and that has been 

matched with very good appropriations support as well. 

So the thing is is we all tend to agree that there are opportunities, and we tend to line up behind them. What is troubling is 

when they get stopped in mid-stride because they can’t get into the 

regulatory basis. And what that means to me is that we are market 

leaders in all of our product categories in aviation, and when we 

can’t go to market in the ways that these reforms allow us to do, 

well, then somebody else is gaining on our heels, and at the end 

of the day I always care about extending competitive advantage. 

26 

Of course, the other thing that has often been a problem is that 

if you create uncertainty, customers have no idea whether they 

want to invest now or later, and they err on the side of later. So 

for me there is something really important about keeping the vital 

function of certification up and running and manifesting the reforms that we all agree to. 

Mr. LARSEN. Well, I appreciate hearing that, and I wanted to be 

sure folks did hear that. I thought that would be the answer. It is 

just that this main point is that this is not—we are not working 

on a privatization bill. We are working on an FAA reauthorization 

bill. It has many moving parts, many of which we agree on, Democrats and Republicans, and yet it is being—those are being held up 

by this one debate. And it seems to me we can move forward on 

the things we agree on moving forward. 

So I yield back. Thank you. 

Mr. SHUSTER. I thank the gentleman and now recognize Chairman Young. 

Mr. YOUNG. Thank you, Mr. Chairman, and thanks for having 

this hearing. This is a very interesting one. But you know my interest in—my interest in my State. Eighty percent of our communities are not connected by highways. We have—in that area of 

aviation, we have 700 airstrips, more than any State in the union, 

by the way. We have 8,000 pilots and 10,000 per capita as far as 

aircraft. 

And my interest in general aviation—and the chairman and I 

have discussed this before—and as long as Alaska is taken care of 

and their need for general aviation are not being run by the larger 

airlines, I will be somewhat interested in what we are doing. 

And it means a lot to me some of you haven’t been—and I think, 

Mr. Brown, you did fly in Alaska; did you not? 

Mr. BROWN. I sure did. 

Mr. YOUNG. For, what, 2 years? 

Mr. BROWN. I had a chance to spend a few weeks up there flying 

around the back country. 

Mr. YOUNG. OK. And did you have any trouble with air traffic 

controllers? 

Mr. BROWN. I did not. 

Mr. YOUNG. That is good because—— 

Mr. BROWN. They are few and far between. 

Mr. YOUNG [continuing]. I think they are some of the best. 

But I would like to ask, Mr. Scovel, did Canada file—its system 

file for bankruptcy? 

Mr. SCOVEL. Not that I am aware, sir. 

Mr. YOUNG. Are you sure? I am just curious about that because 

that always concerns me. 

I would suggest, Mr. Chairman, my interest, I think we may be 

addressing the one spot is—probably the best part in the FAA is 

the air traffic controllers. But the FAA itself, the management, is 

not in good shape. I don’t know how you change that. I think 

maybe we ought to spend our time on studying the regulations that 

they pass. I don’t know, the last time I checked there was a book 

about that big of regulations, why the FAA doesn’t work. 

I have a classic example in Alaska where they came down with 

a regulation where a village that does not have navigation or an 

27 

onsite weather reporter or any modern technology have not done 

so, aircraft would come in, and because—it is perfectly clear, aircraft can come in, but cannot land because they have to have someone on the ground to tell them what the weather is. That is the 

regulation. 

So I think, Mr. Chairman, I am interested in seeing what we can 

do about revamping the whole FAA, but not the air traffic controllers so much, but the system they have is badly managed. And if 

we can do that, I am willing to listen to a lot of things you have 

got to suggest. 

Mr. SHUSTER. Will the gentleman yield the rest of his time to 

me? 

Mr. YOUNG. Yes. 

Mr. SHUSTER. I appreciate the gentleman saying that, and that 

is what we are after. And the gentleman knows, maybe I should 

say the gentleman is guilty because you have been here since 1973 

or 1974. 

Mr. YOUNG. Abraham Lincoln and I flew airplanes. Go ahead. 

Mr. SHUSTER. You were involved in every one of those reauthorizations, and you know better than anybody else—— 

Mr. YOUNG. That is right. 

Mr. SHUSTER [continuing]. That they have not worked. They 

have failed every single time. I think there are some in this room 

that might say—and I won’t point them out—that 25 years ago 

there were four or five layers of management at the FAA. Today 

there are 9 or 10. That is what we do across the system in Government. 

We say we are going to reform something and we just put a couple more layers in there. We never take the system down and rebuild it, and that is what you do when you have a failed system. 

You take it out, you say we are going to do something different, 

and, again, we have got lots of ability to look around the world to 

see who has worked and who hasn’t worked. 

Mr. Brown, I think you made a very great point. Something that 

I believe in, and part of my passion for this is to get the certification right. We are the leaders in the world. We invented aviation. 

But you said something else very important. When you can’t go to 

market with your products because of the certification process, the 

competition is nipping at your heels. 

Well, if we don’t fix certification, they are not just going to nip 

at your heel; they are going to take big chunks out of the back of 

your leg and eventually they are going to cause you real problems 

in the marketplace. So this certification is critical—critical—to this 

reform that I am putting forward. 

And when you look at what the MITRE Corporation said in their 

report, first of all, they interviewed six of the different CAAs 

around the world, and it was unanimous stating that the separation of CAA from air traffic control provision was worth it. Among 

the benefits expressed are an increase in focus by the regulator and 

the ANSP—the focus on safety by the regulator and the ANSP and 

improved efficiency. 

That is what I am talking about here. If you separate them, you 

make the FAA focus on their core mission and that safety and that 

certification. Now they are running this big organization, and they 

28 

are doing a lousy job of it. And, again, when I point my finger at 

the FAA, as my mother always told me, there are three fingers 

pointing back. And that is the Congress, OMB, the administration. 

This is an opportunity to take it out and let it function like it 

has been able to around the world. And getting certification right 

is absolutely paramount in what I am trying to accomplish and 

what we hope to be able to accomplish in this reform. 

And with that, I yield to Ms. Norton. 

Ms. NORTON. Thank you very much. Mr. Chairman, if I may say 

so, especially under my colleagues on the other side, structural reform has always proved very difficult. Almost all the structural reforms that have been made in the United States have been made 

by Democrats, and they are not calling for structural reform as we 

have just done with the Affordable Healthcare Act. 

I have a question. It could be Mr. Poole, it could be Mr. Reason. 

It is a question that is a rising issue and one that I have requested 

a hearing on. It has to do with airplane noise. When I say ‘‘a rising 

issue,’’ I mean all over the United States. 

Here in my own jurisdiction—and I represent the people of the 

Nation’s Capital—but across—so much so across the Nation that 

we formed a Quiet Skies Coalition, a bipartisan coalition, to respond to issues that, by the way, NextGen has just left right out 

there. NextGen, we are making progress in the air; on the ground, 

people are complaining. 

And, of course, as a result of those complaints, I have been able 

to have the FAA come to see me. I have asked for a hearing by this 

committee, and I would like to get some responses about how this 

private corporation might respond to an issue like Quiet Skies. 

So who would my constituents and the constituents of my colleagues call if they had noise complaints? Mr. Reason, Mr. Poole? 

Mr. POOLE. My understanding, Congresswoman, is that this 

would still be the FAA as the safety regulator that would have to 

approve procedures or deny new procedures. And so if procedures 

are changed so that noise goes up in a community impact, it would 

be the FAA’s jurisdiction to say yes or no or how to modify it. It 

would not be the corporation’s discretion to just unilaterally do 

those things. 

Ms. NORTON. Did you have—— 

Mr. SHUSTER. If the gentlelady would yield—— 

Ms. NORTON. Yes. 

Mr. SHUSTER [continuing]. I can answer that question also. 

Ms. NORTON. Yes, sir. Yes. 

Mr. SHUSTER. Will the gentlelady yield? 

Ms. NORTON. Yes, sir, I will. But it will not take from my time, 

I hope. 

Mr. SHUSTER. Mr. Poole is absolutely correct. If there is a noise 

issue, or flight patterns change, there is a NEPA [National Environmental Policy Act] process and major Federal actions that the 

FAA will continue to have after this transaction. Again, let me dispel the notion. This organization is not going to control the airspace. It is going to operate in the airspace with the FAA control 

over it. 

And so they have to go through this Federal process by the 

NEPA, which is the FAA sets up a review process and approves 

29 

significant airspace changes. So if there is—and especially related 

to metroplex’s major large-scale airspace redesign projects, they are 

going to have to go to the FAA, conduct a NEPA review, and any 

action taken will have to, again, be approved through the FAA. 

So, once again, this is not just giving away willy-nilly, the airspace. We will still—not only will we own the airspace; we will still 

have oversight over the airspace. 

And I yield. 

Ms. NORTON. I thank the chairman for his response. And I have 

never heard of anything so bureaucratic in my life. In fact, I can’t 

understand why we could leave one part of this operation under 

Government control and take the other part—even though both are 

vital to all we do in the skies, I have never heard of efficiency 

being—and, by the way, I hope my time wasn’t taken because the 

chairman had an intervention, which I think was appropriate. 

So I don’t understand how you could bifurcate the system, expect 

it to be more efficient, expect it to be more safe. 

Now, let me take an elephant in the room off the table. I will do 

it, if I may, by asking Mr. Rinaldi, have you received any assurances from any of the proponents of this bill concerning collective 

bargaining, pensions, other workers’ rights? Because otherwise I 

see a fresh controversy on top of the many controversies this bill 

has already given us. Mr. Rinaldi? 

Mr. RINALDI. Thank you for the question, Madam. At this time, 

there is no bill in front of us, so there is nothing I can compare 

it to. In the 2016 AIRR Act, there was strong language that gave 

us a fair bargaining process, and that was in there, and also a robust transition period that would allow us to keep everything we 

have and keep the workforce whole. 

Ms. NORTON. And I take it you would insist upon that in exchange. 

Mr. RINALDI. Absolutely. That is bullet number 2 of reform. 

Ms. NORTON. Thank you very much. 

Mr. SHUSTER. I yield the gentlelady an extra 30 seconds, since 

I took some of your time. 

Ms. NORTON. That is all right. With that question, I yield back. 

Mr. SHUSTER. I thank the gentlelady. 

And with that, Mr. Barletta is recognized for 5 minutes. 

Mr. BARLETTA. Thank you, Mr. Chairman. I would like to address some comments made by Mr. Brown. Mr. Rinaldi, you are 

one of the foremost experts on aviation and air traffic safety in the 

world. Would you support a legislative proposal that jeopardized 

safety? 

Mr. RINALDI. Absolutely not. That is our first core principle. 

Mr. BARLETTA. Would you support a proposal that jeopardized 

national security? 

Mr. RINALDI. Absolutely not. 

Mr. BARLETTA. Would you support a proposal that further weakened our ability to modernize the aviation system? 

Mr. RINALDI. Absolutely not. 

Mr. BARLETTA. Finally, do you support the air traffic control proposal and the AIRR Act last year? 

Mr. RINALDI. I did, yes. 

Mr. BARLETTA. Thank you. 

30 

Mr. Poole, some have suggested that ATC reform is a giveaway 

of assets. We understand that taxpayers have already paid for 

them in fuel, ticket, and cargo taxes. If a new entity had to buy 

them, won’t the same people pay twice? 

Mr. POOLE. That is correct, Congressman. They have been paid 

for by aviation excise taxes over the years, and all we are talking— 

we are not talking about selling the system or giving it away. 

We are talking about transforming the existing Air Traffic Organization into a better organizational model that would be insulated 

from the travails of the Federal budget, and able to operate as it 

should be, like a business, paid for by its customers. 

Mr. BARLETTA. Dr. Robyn, as a public policy expert, what is your 

response to such an allegation? 

Ms. ROBYN. As to the question of whether the assets should be 

transferred at no cost: It has been handled different ways. In the 

Canadian case, there was some payment for assets. I can certainly 

see the argument that Bob Poole makes, however. I think if that 

were the only debate, then we would be making real progress, if 

we could agree on everything except what the dollar price on the 

assets should be. 

Mr. BARLETTA. Thank you. 

Thank you, Mr. Chairman. 

Mr. SHUSTER. Thank you, Mr. Barletta. 

Mr. Sires is recognized. 

Mr. SIRES. Thank you, Mr. Chairman. You know, my colleague 

said he takes the plane home every week. I take the train home 

every week, and it is safe or broken, but I don’t expect you to say 

anything, Mr. Scovel. 

My issue is I have problems when we get compared to Canada. 

Big problems. 

Mr. SHUSTER. Mr. Sires, can you speak more directly into the 

mic? We didn’t quite hear you. 

Mr. SIRES. I will have to eat it if I get any closer. 

Mr. SHUSTER. Like you are going to kiss it. 

Mr. SIRES. I have a problem when we get compared to Canada. 

It reminds me of the argument with the health bill. They have a 

great health system. We don’t. Canada only has 40 million people; 

we have 350 million people. It is a lot easier to set up a health system for a country that only has 40 million people. 

I have some fears regarding this. They have 40 towers; we have 

500 towers. Obviously, can you assure me that, if we go this route, 

that we are not too large to fail? Because I also have a concern regarding the airlines. I think the airlines are getting so big that it 

is very difficult to manage, and I raised that issue the other day 

when we had a hearing here. 

Can you assure me that my fears are wrong, that this big effort, 

I am wrong about it? Well, I will start with Mr. Brown. 

Mr. BROWN. I love flying in Canada, and I love the country of 

Canada, but I do not—— 

Mr. SIRES. Well, I don’t dislike the country of Canada. 

Mr. BROWN. Exactly. But I don’t think—— 

Mr. SIRES. I just don’t want to be compared to Canada. 

Mr. BROWN [continuing]. I don’t think the comparison of our national airspace and management system to Canada is anything 

31 

other than an exercise in gleaning some observations. But it is not 

proper to directly compare. I mean, for sure, in our system, we are 

driving a much more substantial portion of our economy out of the 

aviation sector and the airspace that supports it. 

I mean, we have 10 times more pilots, 50,000 flights a day. It 

is a wholly different organization. So for me, when I think about 

Canada, I believe that they made a choice that they thought suited 

their purposes with the role of aviation and its infrastructure, but 

we are faced with entirely different objectives here. 

And as far as I am concerned, the system that we have been living in has done a masterful job of adjudicating all of the interests 

of stakeholders, all of the interests of our expansive country and 

the States that are in it, and their needs. And so I can applaud 

things they have done that have worked for their country, but I 

also very much applaud things we have done in our country. 

And I would take exception to one thing Ms. Robyn said, which 

is she characterized our system as a laggard. That is just false. We 

have the technology deployed in our system today that no other 

country can rival. We lead in our NextGen initiative. So, you know, 

I am pretty proud of where we are and, by the way, I know it because I fly it. It is not a mystery, and it is not a theory. 

Mr. SIRES. Thank you. 

Mr. Poole, can you answer? 

Mr. POOLE. Yes. First of all, Canada’s system is the second largest in the world in terms of flight operations. So it is the best comparator we have. You know, we are nine times bigger in terms of 

flight activity, but their model has worked extremely well for 20 

years. It is not too big to fail, and neither would ours be. 

If you go to the credit markets, the people who finance revenue 

bonds for these, they give investment grade ratings to the Brits, 

the Germans, the Australians, the Canadians, because they have 

a dependable user fee revenue stream that you can basically bank 

on. 

And neither NATS nor NAV CANADA declared bankruptcy. Both 

were hit hard by 9/11 because of the North Atlantic traffic. NATS 

was brandnew and got an additional investment from their two 

main owners, the British Government and the airline group. NAV 

CANADA simply raised their rates somewhat, maybe I think it was 

10 or 15 percent for a couple of years, and built up their reserve 

fund. And since then they have a substantial reserve fund, in case 

of another serious downturn, that they can work through without 

having to—— 

Mr. SIRES. Mr. Scovel, can you just—I have got 30 seconds left. 

Mr. SCOVEL. Sure. As you know, my office looked at the air traffic control organizations for the other four countries, and we were 

told by officials in those organizations that they considered part of 

their borrowing authority to be leveragable or be recognized by private lenders because ultimately, should something drastic go 

wrong, the Government would step in behind them. 

I am not representing that that would be the case here. That is 

your policy call to make. I am simply relaying what officials for 

other air traffic control organizations have told us about their systems. 

32 

Mr. SIRES. Join those four countries that were on the hook; is 

that what you are saying? 

Mr. SCOVEL. Conceivably. They may be. There would be policy 

calls for their legislatures and executive branches. 

Mr. SIRES. Thank you, Mr. Chairman. 

Mr. SHUSTER. Thank you. 

I now recognize Mr. Meadows for questions. 

Mr. MEADOWS. Thank you, Mr. Chairman. 

Mr. Poole, let me follow up a little bit on what you were just 

talking about in terms of the Canadian system versus the air traffic control system here in the United States because there are people that would say, well, we are 10 times the size of that in Canada. 

And so as you look at that larger size, let’s talk about scalability. 

Is there any way that you can look at the scalability of the Canadian model versus what we would employ here and make some conclusions? 

Mr. POOLE. Sure. First of all, we already have the scale. We are 

not talking about building from scratch an air traffic system. We 

already have the scale, the facilities, the technology. 

Mr. MEADOWS. So what you are saying is—— 

Mr. POOLE. We are talking about an organizational model. 

Mr. MEADOWS [continuing]. Because of what we already have in 

place, that we can make better—— 

Mr. POOLE. We can easily transition to a different governance 

model and a different funding model, and hopefully that will lead 

over time to an organizational culture that is more innovative, that 

can innovate and implement things faster than the large bureaucracy at FAA. 

The inspector general reports for 25 years have said FAA continually fails to manage programs properly. They take far longer than 

they were scheduled. NAV CANADA has a superb track record on 

that. If you scale up NAV CANADA’s capital investment, annual 

capital investment to our size, and say what would we be investing 

if we had their system, they are accomplishing all their modernization for, in equivalent terms, half of what we spend on capital investment. 

Mr. MEADOWS. Hold on. Let me make sure I understand that. 

They are actually improving their system for half of the cost that 

we are spending? 

Mr. POOLE. Yes, sir. Demonstrated fact. 

Mr. MEADOWS. Mr. Scovel, would you agree with that? Because 

I saw you shaking your head yes on a lot of the things he was saying. Don’t ever play poker, by the way, but go ahead. 

[Laughter.] 

Mr. SCOVEL. Wouldn’t dream of it. No, and if I was shaking my 

head, it wasn’t necessarily to agree or to assent. My office, quite 

frankly, hasn’t examined that part of NAV CANADA’s operation. 

We don’t know the degree to which their capital improvement program might compare against our scaled up system. 

Mr. MEADOWS. All right. So when will NextGen be completed, 

Mr. Scovel? We have had other—this is not your first rodeo, nor 

mine, so at what point will NextGen be completed? Because we 

continue to allocate unbelievable sums of money, and I hear at best 

33 

ambiguous dates of when it will be completed. So what does the inspector general’s office say? 

Mr. SCOVEL. Well, let me say, first, FAA’s estimate is 2030 at a 

cost of $36 billion split between Government and private industry. 

Mr. MEADOWS. But would you agree that this has been one of the 

few times that we can see that even under this best case scenario 

we continue to exceed an unlimited budget? 

Mr. SCOVEL. I would have to say we don’t know. We don’t know 

what the total cost might be, nor do we know what the completion 

date will be. It is important to note, though, that NextGen—— 

Mr. MEADOWS. Do you not see why that would be a problem for 

somebody who is a fiscal hawk like me, that we continue to allocate 

money with no end in sight? 

Mr. SCOVEL. Absolutely. 

Mr. MEADOWS. All right. Mr. Brown, let me come to you. I am 

a little confused because you seem like you are a business guy. Are 

you a business guy? 

Mr. BROWN. I would certainly think so. 

Mr. MEADOWS. OK. Well, as a business guy—and I am one, too— 

are you suggesting that we need more Federal control? 

Mr. BROWN. I am suggesting that we have a system that is delivered and—— 

Mr. MEADOWS. That is not what I asked. It is a great answer to 

a question I didn’t ask. Are you suggesting that we need more Federal control? 

Mr. BROWN. I am suggesting our control is proper. 

Mr. MEADOWS. All right. So let’s talk about general certification, 

something you probably know, and it is one of my sweet spots 

being from North Carolina. Would you say that we need more Federal control in the certification process? 

Mr. BROWN. I think what we have is proper. 

Mr. MEADOWS. So you don’t want it to be more streamlined? 

Mr. BROWN. But that is not the same as reducing control. That 

is about efficiency. 

Mr. MEADOWS. Well, it is. It is about regulation, so at some point 

you have to transfer that. So let me go and let me tell you where 

I am concerned with. We have got NextGen that may or may not 

get done by 2030. We continue to spend billions of dollars. In fact, 

I have stakeholders who continue to implement it from a stakeholder standpoint, and from a Federal Government standpoint we 

are lagging behind. 

We actually have monies that have been allocated for NextGen 

that get kind of pilfered over to maintain legacy computer systems 

under the FAA. I have under good authority that we are doing 

that, and so as we look at that, why would you suggest that the 

Federal Government can do something more efficiently than perhaps private stakeholders? 

Mr. BROWN. You know, my calculus—— 

Mr. MEADOWS. Can the Federal Government run your business 

better than you do? 

Mr. BROWN. I would hope not. 

Mr. MEADOWS. I would hope not either. So why would you suggest that they can do that here? 

34 

Mr. BROWN. Well, because we are talking about a range of interests here that is much larger than my business. I mean, my business, I get to pick my product, I get to pick my customers, I get 

to decide what I think the value proposition is, I get course corrected by—— 

Mr. MEADOWS. And it is efficient that way, right? 

Mr. BROWN. Yes. But the point—— 

Mr. MEADOWS. So what if we had stakeholders who were making 

the same exact decisions that you are making with some parameters that are out there, wouldn’t you think that that would be 

more efficient? 

Mr. BROWN. Actually, you have outlined my top concern, which 

is that if this organization picks their customers and picks their 

service level and picks their product, they are no longer going to 

be—— 

Mr. MEADOWS. But the chairman has already said that that can’t 

happen. We have an airspace that is available to everybody. 

Mr. SHUSTER. The gentleman’s time has expired. 

Mr. BROWN. Thank you for making that point. 

Mr. SHUSTER. Mr. Brown, you can finish if you wish. 

Mr. BROWN. I believe that I have made my point, which is that 

the thing about this enterprise, one of the things that I am concerned with, is that it is a coalition of stakeholders with a shared 

purpose, which is to serve their own ends. And the thing that I like 

about the Federal role in our airspace today is that it adjudicates 

an enormous diversity of needs in this community. Whether it is 

the Alaskan pilot who is flying kids to school or whether it is my 

business in Ohio or air tractors in Olney, Texas, they all have a 

seat at the table. And this has been demonstrated in this room 

today. 

Mr. MEADOWS. Yes. My time has expired. I appreciate it. 

Thank you, Mr. Chairman. 

Mr. SHUSTER. I thank the gentleman. 

I now recognize Mr. Johnson for questions. 

Mr. JOHNSON OF GEORGIA. Thank you, Mr. Chairman. I think I 

am probably like most Americans, and what we really want out of 

the air traffic control system is safety, safe operation. 

And, Mr. Scovel, in your testimony you stated that, since 1958, 

the FAA has overseen the safe operation of the busiest and most 

complex air traffic system in the world. And you stated during your 

testimony that there have been no commercial aviation accidents 

over the past few years. Do you believe, sir, that the American-controlled airspace is the safest airspace in the world? 

Mr. SCOVEL. I haven’t looked at all the others, sir, but I would 

say it is definitely safe. We are in the golden era of aviation safety 

right now. 

Mr. JOHNSON OF GEORGIA. Well, we are in the golden era, and 

I think, Mr. Rinaldi, you mentioned that we are the gold standard 

of air traffic control in the world; did you not? 

Mr. RINALDI. We are, sir, the largest, safest, most efficient. 

Mr. JOHNSON OF GEORGIA. And, Mr. Brown, you fly every—well, 

you put in 500 hours a year minimum flight time, and you are 

strongly committed to the concept that our airspace is safe and 

35 

that the operations that make it safe are up to par, and it is joyful 

to fly under that system. 

Mr. BROWN. I agree. And most pilots will tell you it is one of the 

most amazing experiences you can have, and it is something the 

Government does extremely well. 

Mr. JOHNSON OF GEORGIA. Now, Mr. Poole, you would not disagree with that; would you? 

Mr. POOLE. No, I don’t disagree at all. We have a very safe—— 

Mr. JOHNSON OF GEORGIA. We have a safe air traffic control system. 

Mr. POOLE. Right. But we are paying a price—— 

Mr. JOHNSON OF GEORGIA. Well, I am going to get to that in second. 

Mr. POOLE. OK. 

Mr. JOHNSON OF GEORGIA. I mean, we are safe, and we have 

been safe since 1958 under FAA control, and the argument is being 

made that we need to change that. Mr. Brown, I think I heard from 

both you and Mr. Rinaldi the concept of if it ain’t broke, don’t fix 

it. 

And, Mr. Scovel, I heard you, in terms of there have been some 

FAA reforms that have not achieved the expected outcomes in the 

areas of personnel, acquisition, and organizational reforms. But 

those failures don’t lead you to the conclusion that the air traffic 

control system should be privatized, correct? 

Mr. SCOVEL. Respectfully, I don’t believe that is my call to make. 

The Congress and the administration are the policymakers, the decisionmakers. I am trying to present information for your consideration in making those decisions. 

Mr. JOHNSON OF GEORGIA. Thank you. 

And, Mr. Poole, you are an advocate for privatization. You are an 

advocate to turn the air traffic control system over to the free markets. Your website for the Reason Foundation states that the Reason Foundation is committed to advancing the values of individual 

freedom and choice, limited Government, and market-friendly policies. 

So I am assuming that you would be of the mind, as stated by 

the chair of the committee, that Government is the problem and 

not the solution. And so, therefore, you want to take the Federal 

Government or the FAA out of this equation, which has been so 

safe for Americans—— 

Mr. POOLE. May I respond? 

Mr. JOHNSON OF GEORGIA [continuing]. Since at least 1958? 

And, Ms. Robyn, you agree with him, and you say that, first of 

all, the air traffic control system can be performed or can be run 

more effectively by a nongovernmental entity, and you also say 

that Government is poorly suited to run—— 

Ms. ROBYN. Yes. 

Mr. JOHNSON OF GEORGIA [continuing]. The air traffic control 

system—— 

Ms. ROBYN. Yes. 

Mr. JOHNSON OF GEORGIA [continuing]. Despite the comments 

that we have heard from Mr. Scovel, Mr. Brown, and Mr. Rinaldi, 

and the clear fact that we haven’t had—I mean, our airspace is 

safe. But you say that—— 

36 

Ms. ROBYN. Could I respond, please? 

Mr. JOHNSON OF GEORGIA. You say that it could be done better. 

Why do you say that? 

Ms. ROBYN. If we wanted to have the safest system possible, we 

would keep—— 

Mr. JOHNSON OF GEORGIA. We don’t have it now? 

Ms. ROBYN [continuing]. Keep all planes—— 

Mr. JOHNSON OF GEORGIA. We don’t have the safest—— 

Ms. ROBYN. If we wanted to have a—— 

Mr. JOHNSON OF GEORGIA. We don’t have the safest system now? 

Ms. ROBYN. If we wanted to have perfect safety—— 

Mr. JOHNSON OF GEORGIA. Isn’t it—OK. Well, let me ask—— 

Ms. ROBYN [continuing]. You would leave—— 

Mr. JOHNSON OF GEORGIA [continuing]. You this question. Isn’t 

it a fact that we have the safest air traffic control system in the 

world right now? 

Ms. ROBYN. We have a system that is operated and regulated by 

the same entity. That—— 

Mr. JOHNSON OF GEORGIA. Is it a good one? Isn’t it a good one, 

though? 

Mr. SHUSTER. The gentleman’s time has expired. 

Ms. ROBYN. That is—— 

Mr. SHUSTER. But if the gentleman wishes to allow the witness 

to answer—— 

Ms. ROBYN. We are not in compliance—— 

Mr. SHUSTER [continuing]. Would you—Ms. Robyn, 1 second. The 

gentleman’s time has expired. If you want, though, I will allow her 

to finish answering the question or not. It is up to you. 

Mr. JOHNSON OF GEORGIA. Please respond. 

Mr. SHUSTER. Ms. Robyn. 

Ms. ROBYN. If we wanted to have zero accidents, we would have 

the air traffic control system keep all planes on the runway. You 

would have no planes in the air. That would guarantee perfect 

safety. That is, obviously, not what you want. You want a system 

that contributes to the economy while being safe. We haven’t—— 

Mr. JOHNSON OF GEORGIA. That is not the kind of system that 

we have. 

Mr. SHUSTER. The gentleman’s time has expired. Ms. Robyn, 

thank you very much for answering the question. 

With that, I recognize Mr. Woodall for 5 minutes. 

Mr. WOODALL. Thank you, Mr. Chairman. Since my friend from 

Georgia and I share a county back home, I will just pick up where 

he left off with Ms. Robyn. 

I appreciate your written testimony because I think so often, as 

perhaps your exasperation shows, we—— 

Mr. SHUSTER. Can you speak into the mic, Mr. Woodall? 

Mr. WOODALL [continuing]. We have a tough time talking to each 

other about these—— 

Mr. SHUSTER. Speak directly into the mic. We can’t hear you very 

well. 

Mr. WOODALL. After you have given that advice to every member 

of the panel, you would have thought I would have internalized 

that, Mr. Chairman. I cannot pull my box closer, though, as—I can 

pull the chair closer. 

37 

Ms. Robyn, I want you to help me with the language to talk 

about this issue because it does seem when we talk about change 

so often we end up with—it is Mr. Weber’s big head that I can’t 

get past. I can’t move both the microphone and—Mr. Weber, can 

I—thank you. 

[Laughter.] 

Mr. WOODALL. It is just between me and Ms. Robyn here that we 

are working on it. It is a physical manifestation. 

Mr. WEBER. Mr. Chairman, do I get equal time? 

Mr. WOODALL. It is a physical manifestation of your head. It is 

not an ego issue. It is actually a physical. 

Help me with the language about how we talk about this, because I have been to see the NAV CANADA operation. And thinking about Mr. Poole’s reference to scalability, it does seem like the 

successes they have had we could have in an exponential fashion. 

And it is not as if this is the chairman’s idea or the President’s 

idea. 

This is something that policy wonks have been talking about for 

decades. Help me create this conversation in a language—I sit on 

the Budget Committee. I hear my friend Mr. DeFazio say, ‘‘Well, 

you know, if only we could fund the system better and deal with 

sequestration and get Congress to work better,’’ yes, those are kind 

of the issues we have been working on for three or four decades, 

and we have only finished the budget process on time four times 

in 40 years. So help me talk about this in a nonpartisan way. 

Ms. ROBYN. The FAA is two-hatted. It does two very different 

things. It regulates all aspects of aviation, and that is an inherently governmental activity. You cannot write a contract that 

makes it possible for the private sector to carry that out. It requires judgment calls that the private sector can’t make. 

It also operates in the air traffic control system. That is not inherently governmental. That is operational. That is no different 

than when GSA goes to the private sector and has them build a 

building. It is not an inherently governmental activity. 

The idea that the regulatory part of the FAA needs help, I agree 

with Mr. Brown. The idea, though, that in order to fix that you 

don’t spin off the nongovernmental part, that is illogical to me. 

That is exactly what you want to do—spin off the noninherently 

governmental part, so that the FAA can focus on its regulatory 

function. 

Mr. WOODALL. Well, let’s talk about that just for a moment because I agree with Mr. Brown. The American taxpayer, the American flying public, has invested an amazing amount of time and 

treasure into building what is the busiest airspace on the planet. 

So when we talk about changing that from a governmental function to a—well, I don’t know anybody who talks about a private 

function. I hear them talk about a corporatized function, a cooperative function. Tell me what that looks like. 

Ms. ROBYN. Well, so we—in the Clinton administration, we proposed a Government—we proposed moving into a Government corporation because that was the only model that existed. That model 

works very well in many parts of the world. But in this country, 

Government corporations are politicized and they cannot function 

effectively as businesses. 

38 

And so NAV CANADA has come up with a model that takes it 

out of Government altogether, and that is appropriate. It works in 

theory and, more important, it has worked in practice beautifully. 

Mr. WOODALL. The business folks that I talk with back home 

often prefer the devil they know to the devil they don’t know. 

Ms. ROBYN. Yes. 

Mr. WOODALL. And I can only imagine the strain it puts a private operator under to say, ‘‘We are going to yank the pendulum 

back and forth with the political winds.’’ But it was the conclusion 

of the Clinton administration that the best way to avoid the political winds in this space was this spinoff proposal? 

Ms. ROBYN. Yes. Yes, absolutely. Yes. This was something proposed early on. It came out of a blue ribbon commission, one of 

many that has looked at this issue, and we proposed it in 1995. It 

was dead on arrival on Capitol Hill. 

Mr. WOODALL. Mr. Chairman, I think Mr. Brown was right when 

he talked about all of the amazing economic developments and successes that have been the product of our second-to-none airspace 

system. I hope that we can follow this pattern to keep the politics 

out and move us on to best-in-world space. 

Mr. SHUSTER. You are absolutely right. And, again, as I said earlier, there is no way I want to mess up, screw up, the economic impact that the aviation industry across the board has. 

So, with that, I yield to Mr. Carson for 5 minutes. 

Mr. CARSON. Thank you, Chairman. 

Mr. Brown, it seems the FAA is already in the process of implementing much of the NextGen infrastructure you are calling for. 

We have been told that 2020 deadlines will be met. As a pilot, sir, 

can you tell us about the NextGen technology that is already online 

and how you are using it? And do you believe we need to replicate 

these systems through privatization? 

Mr. BROWN. Great question. I was just thinking about this about 

a month ago or so. I took off from Piqua, Ohio, population 20,000, 

from a small airport and flew to Albany, Georgia, a small town 

with a very vital aviation manufacturer that is a global leader and 

a big exporter. I flew point to point. Because of GPS navigation, I 

had en route weather on the way, and I shot a WAAS approach 

into Albany, Georgia, precision to the numbers. 

Now, these two towns, in the grand scheme of things, in the 

grand scheme of our national airspace, have been treated to their 

resources to build two global leaders in their space and have the 

airport infrastructure to thrive. 

And I look at that as a perfect example of how Government in 

this case is working for the economy, because without that kind of 

infrastructure and the technology that is driving the flying to and 

from those places, I don’t think these businesses would be located 

in Piqua, Ohio, or Albany, Georgia. And, frankly, I think that is a 

victory for the people. 

Mr. CARSON. Thank you, sir. 

Lastly, this is a general question. I am very concerned that, as 

introduced, this new private air traffic control panel does not include one of the largest users of U.S. airspace, the DoD. I would 

like to hear from any of the witnesses their view on how this will 

39 

impact the close coordination that currently takes space and takes 

place, and what impact there will be to our national security. 

Ms. ROBYN. I will answer that, and let me start by saying that, 

although I spent 3 years in the Pentagon, air traffic control was not 

part of my portfolio. I did, however, work very closely with the people in the Air Force who have the day-to-day liaison with the FAA. 

I worked with them on issues of interference of wind turbines and 

long-range radar among other things. 

The Department of Defense has huge equities in the National 

Airspace System. DoD manages 15 percent of the national airspace. 

DoD has 15,000 aircraft, which is more than all U.S. commercial 

airlines put together. DoD depends heavily, as a user, on the air 

traffic control system. 

And they support the spinoff of the air traffic control system. 

There is a letter from Secretary Mattis to Senator McCain stating 

that while it has to be done carefully, so as to protect the arrangements that are currently in place, it is not inconsistent with national security. 

Mr. CARSON. Sure. Yes, sir. 

Mr. POOLE. This is an issue that has come up in every one of the 

60 countries that has corporatized their system in one form or another. Australia today has a joint project between the Australian 

military and Airservices Australia to modernize the overall basic 

air traffic software. 

It is being developed jointly, will be used jointly, with side-byside military and civilian controllers. There are side-by-side military controllers in NATS in the U.K. working together. This is 

pretty much a routine function now. 

And, in fact, there is an annual conference on military air traffic 

control that is cosponsored by the Air Traffic Control Association 

in conjunction with the ATCA’s own national conference each year. 

So this is an issue. As Dorothy Robyn said, it needs to be handled very carefully to be sure that all the current procedures are 

incorporated, but it is not considered a problem anywhere in the 

world that I am aware of. 

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

Mr. SHUSTER. I thank the gentleman. I appreciate the gentleman’s question. 

I want to offer for the record a letter from Secretary of Defense 

Mattis. Some have said the DoD has come out in opposition to this. 

Well, this letter does not say that, and any suggestion of it is false. 

Secretary Mattis has indicated his support for moving ATC service 

out of the FAA in a letter he wrote to Senator McCain who requested that. 

So without objection, I want to offer this for the record. 

[The information follows:] 

40 


Insert offset folio 7 here 25482.007

The Honorable John McCain 

Chairman 

SECRETARY OF DEFENSE 

!000 DEFENSE PENTAGON 

WASHINGTON. OC 20301·1000 

Committee on Armed Services 

United Stales Senate 

Washington, DC 20510 

Dear Mr. Chairman: 

for your March 13. 2017,ietter 

services provided Federal 

MAY-~ 

for our views on these types of services from the perspecti•ve 

Denm1ment of Defense You also requested DoD's recommendations on how 

orrvat:tza1Jon could he while govemmental 

responsibilities for national security, aerospace sov'el'el~tniY OJpenatic~ns. and 

necessary prioritization of military airspace use for test and ev!!lUiitio:n. training and 

readiness purposes. 

privati7Jltion of ATC services and recogtli7J~s 

responsibilities, as you 

hoc con1mittee connpri:sed 

bc<molrmc Council Security Council to eosure pri1vatization 

forward preserve our national security interests. 

Sweeney, 

letter. 

!or all that you do for our Nation. Please do not hesitate to contact Mr. Kevin 

at if you have any questions regarding tbis 
41 

Mr. SHUSTER. And with that, Mr. Rokita. 

Mr. ROKITA. I thank the chairman. 

I thank the chairman for holding this hearing. I thank the witnesses for their testimony. 

Starting with you, Mr. Brown, knowing that you are a private 

pilot and a member of GAMA [General Aviation Manufacturers Association] and active in AOPA and so on and so forth, and for the 

record and for the committee members, knowing that you fly 400 

hours per year, which is about four times the average general aviation pilot, you are familiar with the system. 

Do you believe that general aviation pilots have a right to access 

airports of any size? 

Mr. BROWN. Not only do I believe that, I experience it. 

Mr. ROKITA. Yes, on a daily basis. Talk into the microphone, 

please. 

Thank you. 

Should they be denied access to an airport? 

Mr. BROWN. No, not on principle. 

Mr. ROKITA. Can you talk about the danger that would pose to 

the aviation ecosystem that we are all a part of if that were to happen? 

Mr. BROWN. That is an existential threat to the business. Access 

is everything to the pilot who buys equipment I make and airplanes they fly. 

Mr. ROKITA. Right, and every one of those pilots pays into the 

system, right? 

Mr. BROWN. Yes. 

Mr. ROKITA. How? 

Mr. BROWN. Through the fuel tax. 

Mr. ROKITA. Yes, and it is more than adequate for what we use 

of the system, right? 

Mr. BROWN. Yes, and it is not bureaucratic, and it is real time, 

and there is no bureaucracy associated with it. 

Mr. ROKITA. Right. And it is not that we want to fly into international airports every day or cause any problems, but the fact is 

we have a right to do that because we paid into the system. 

And sometimes, like for example your customers, you may need 

to access an airport like that. 

Mr. BROWN. Correct. 

Mr. ROKITA. So what are the dangers of a board made up of some 

members of the ecosystem where board governance suggests that 

you can have control of a board with as little as 30 percent of the 

seats? 

What dangers does that pose to general aviation if this is all 

board controlled in terms of access? 

Mr. BROWN. One concern I have is that on such a board, you 

would have centers of gravity that would begin to overwhelm minority voices of any sort and preclude the arrival of new entrants 

that might have a radical impact in our economy. 

Mr. ROKITA. Absolutely, which makes the point that it is good to 

have a disinterested party in this or a referee or an umpire to decide these issues like we have right now in FAA, or if the members 

of this witness table who agree with the chairman’s proposal here 

would really want privatization, if they would propose a plan that 

42 

actually does that because right now the proposal at least in the 

AIRR Act, and who knows what we are going to see here when this 

language is produced, does not do that. 

I used to be the Secretary of State of Indiana. I know about 

privatizing Government assets. We received $3.8 billion when we 

leased the Indiana toll road with Governor Mitch Daniels. What we 

did not do is give a monopoly away. We did not take the toll road 

and give it to an interested party or a board made up of interested 

parties. We put it out for bid. 

So if we really want to privatize something, which is apparently 

the proposal here, why are we not talking about something like 

that? 

We did not give the Indiana toll road to the truckers and say, 

‘‘Oh, I am sure you will take care of the cars, too, and I am sure 

you will not limit access to the on and off ramps that exist along 

the Indiana toll road, especially when you truckers want to get 

steel to or from one of those mills up in northwest Indiana.’’ 

Because it would not work. It does not make sense, just like this 

board made up of interested stakeholders, to use Congressman 

Meadows’ term for it, will not work either. 

Mr. Rinaldi, if I can paraphrase your testimony, it seems like a 

lot of it was focused on funding and sequester and Government 

shutdown and the fits and starts that go along with that, and I 

completely agree with you. 

You also heard Ranking Member DeFazio say, and it is accurate, 

97 percent of FAA funding is on its own. It is not from the general 

fund, and there was a suggestion made that one way to solve this 

and the problems you bring up in your testimony is to just take it 

off budget. 

Now, I am vice chairman of the House Budget Committee. I am 

not here to necessarily say that that is the right answer or that I 

support it, but is that not an answer? 

They said there is certainly more than one answer to this problem that we are talking about in this hearing today. 

Mr. RINALDI. Absolutely. There is more than one answer, and 

that is a legitimate answer. 

Mr. ROKITA. We could take care of all of that simply by taking 

this off budget. Again, 97 percent of the funding is not coming from 

the general fund anyway. 

Mr. RINALDI. Yes. That is a good answer. 

Mr. ROKITA. Chairman, my time has expired. 

Mr. SHUSTER. I thank the gentleman. 

Where am I? Ms. Frankel is recognized for 5 minutes. 

Ms. FRANKEL. Thank you. 

Well, I will just start off by being a little snarky. You know, we 

put a businessman in charge of the country, and all I can say is 

OMG about that, and every agency would like to be exempted from 

sequestration, and I have a solution for that, which is to privatize 

those of us who are not doing our job. 

All right. So enough for the humor. Listen. I am not a mean person, but just on the issue of transparency, and first I want to thank 

you all and not to impugn anyone’s integrity, but we have a list of 

different organizations or people who are for the privatization, who 

43 

are against it. Different airlines are for; some are for, some are 

against. Consumers groups are for and against. 

Could you just tell me here, anybody, do any of you consult with 

any of these and get paid or consult with any organization or are 

discussing employment with them? Those of you who are in the 

public sector included? 

OK. Just wave your hand. 

Ms. ROBYN. No. 

Mr. BROWN. No. 

Mr. RINALDI. No. 

Ms. FRANKEL. OK. All right. Thanks. 

So I am trying to simplify this, which is probably not a smart 

thing to do, but I am trying to understand it. It sounds to me like 

there were a number of reasons, those of you who would support 

a change in the system. 

One has to do with a consistency in the funding; is that correct? 

I know the air traffic controllers did really emphasize that. 

Then I think another issue was trying to move more efficiently 

towards a more modern safety technology. Is that one of them? 

And then I think one of the issues was having the regulators separated from the operators. That was it. 

Is there another issue there that I am missing? 

Mr. POOLE. Well, there is another big issue. 

Ms. FRANKEL. OK. Which is that? 

Mr. POOLE. And that is the organizational culture of FAA, which 

gets into the procurement problems, chronically over budget, late 

delivery of things, not getting productivity out of new technology in 

the way that it should be done. 

Ms. FRANKEL. OK. 

Mr. POOLE. That is a big problem. 

Ms. FRANKEL. Good. Thank you. I do not know why that skipped 

my mind, but that is the one I had my next question about. OK? 

What kinds of things do you think this new organization could 

do that the Government is not able to do? I mean, what will you 

be skipping? 

And what would be the potential unintended consequences? I 

would like those who are for this movement to give us your opinions on that. 

Mr. POOLE. Well, I will start. I mean, one thing would be to be 

able to hire and pay the best talent from private industry as program managers and as expert engineers and software people. 

There are good people in the FAA, but they are hamstrung in a 

system that has a lot of basically career lifers who are happy to be 

in a process that is very time-consuming and that has numerous 

people who can say no at many points along the way, that drags 

out the process, and if you have people who are not performing 

well, it is very difficult to get rid of civil servants. 

Ms. FRANKEL. Does anyone want to defend the honor of the civil 

servants? 

Mr. RINALDI. I will be happy to. 

Ms. FRANKEL. Yes, go ahead. 

Mr. RINALDI. As I said in my opening statement, we have by far 

the best aviation professionals in the world working for the FAA. 

44 

Aside from the funding stream, one of the things we would also 

like to see fixed is something that Ranking Member DeFazio also 

brings up is the procurement requirement process and the multiagency oversight, which then puts us into a bureaucratic laden 

process of requirements and procurement, and it delays our process 

of implementing new technology. 

Ms. FRANKEL. I would guess that that bureaucracy, which can 

drive everybody crazy, was probably gotten, in part, there because 

of abuses I am going to guess and to try to avoid that, right? 

Mr. RINALDI. I think every time we have a hearing there is more 

oversight that goes into it. So it kind of self-fulfills itself every time 

we have a hearing of something that is not working right within 

Government. 

Ms. FRANKEL. I only have 15 seconds. 

The contract towers, what happens to them? 

Mr. RINALDI. Well, we represent 94 of those contract towers and 

the members that work there. It is very important to us to keep 

service open to all facilities across the country, all airports, and to 

continue to have a very diverse system, whether it is big city or 

rural America. 

Ms. FRANKEL. Thank you, Mr. Chair. I yield back. 

Mr. SHUSTER. I thank you, Ms. Frankel. 

Ms. Frankel, I am not familiar with all of the new words on the 

computer. OMG, does that mean ‘‘oh, man, he’s good’’? 

With that I yield to Mr. Westerman. 

Mr. WESTERMAN. Thank you, Mr. Chairman, and thank you for 

your leadership on this important issue. 

I have had the opportunity to visit some control towers, and the 

first thing I would like to say is to acknowledge that we have some 

amazing men and women that are working in our air traffic control 

towers, doing an excellent job. 

And we have an air traffic control system that works. The proof 

is in the pudding. You can see it working every day. 

I am relatively new to Congress, and I am new to this committee, 

but I have a unique background having practiced as a professional 

engineer for nearly 25 years. Much of my work involved analyzing 

processes and technologies and helping my clients stay on the cutting edge. I have seen organizations that failed to even embrace 

technology, and they usually went out of business. I have seen organizations that embraced but failed to implement technology, and 

they usually went out of business. 

To be successful in business, you have to not only embrace new 

technology, but you have to implement it properly. 

Now, ATC is not going to go out of business regardless of the 

technology it embraces or implements because, quite frankly, it is 

too critical to fail. And it has been said, and it has been said in 

this meeting today, ‘‘if it ain’t broke, don’t fix it.’’ 

However, I believe this is not a question of a broken ATC, an 

ATC that does not work, or even an ATC that refuses to embrace 

new technology. This is a question of how to implement the best 

technology and operate the safest and most efficient system in the 

world so that our airline passengers and general aviators get the 

maximum benefits. 

45 

I am studying our existing systems. I am visiting installations 

and learning as much as I can about the latest technology. I can 

confidently say that even though technology may be embraced, it 

is not being successfully implemented as well in the U.S. as it is 

relative to other systems. 

I am from a rural district. I have got one contract-manned tower 

in my district. There is lots of general aviation and lots of aerospace manufacturing located at the rural airports in my district. 

Mr. Brown even mentioned airports like these in his testimony. 

I am thinking of an airport I visited just a few weeks ago in 

Mena, Arkansas, that has a lot of aerospace manufacturing there. 

It is in the mountains, and the radar cannot see it. 

They had a radio tower that got blown down in a tornado a few 

years ago that still has not been fixed. So if you are trying to take 

off from Mena, you have to pull out on the taxi and call up the air 

traffic control on your cell phone and try to get clearance to take 

off, but they still found a way to make it work. 

But the point is the last thing I want to hurt is rural airports 

or service to rural America. I want to see it improved. 

Mr. Rinaldi, some of the opponents of ATC reform claim that new 

service providers would be able to deny access to sovereign airspace 

in a small community and general aviation airports. From the perspective of those actually providing air traffic control, how do you 

respond to those claims? 

Mr. RINALDI. Thank you, sir. Thank you for the question. 

Air traffic controllers have a very simple philosophy when it 

comes to providing service to all users. It is first come, first serve, 

and when a general aviation aircraft enters into our airspace or 

whether it is a commercial airline, it is to expedite their process 

as safely as possible. 

And so we provide service to all users of the system. 

Mr. WESTERMAN. Ms. Robyn, I first want to say I appreciate your 

testimony. I have been in a number of hearings that have been 

held by the Aviation Subcommittee leading up to this. We have 

heard some pretty inflammatory rhetoric intended to scare small 

communities about the future of their commercial air service. 

I have got two EAS [Essential Air Service] airports, one of them 

in my hometown, but two of them in my district, as well as numerous smaller ones. So I have a vested interest in making sure this 

is not the case. 

Do you think a more innovative and agile ATC provider will ultimately provide more options to more communities, such as the 

usage of remote towers? 

I have seen some of those, and it is amazing technology. 

Ms. ROBYN. I do, yes, and I think that is critical. I do not understand this assumption that some are making that this entity, a 

corporatized entity, would somehow be a threat to small communities and rural airports. Air traffic control is a network. The nature of networks is that the bigger they are, the lower the cost. It 

is relatively inexpensive to add a node to that network, particularly 

if you can go to newer technology like remote towers. 

This small communities argument has been made. It was made 

in opposition to airline deregulation. It was made in opposition to 

46 

trucking deregulation. It is part of the playbook of people who oppose change. 

All of those changes, I would argue, have been very, very good 

for our economy. Small communities, I do not see any reason that 

they would be hurt by this. It is not in the airlines’ interest or certainly not in the controllers’ interest; it is not in Government’s interest; it is not in the stakeholders’ interest to have that happen. 

Mr. WESTERMAN. Thank you. 

Mr. SHUSTER. Thank you. 

Mr. Lipinski is recognized for 5 minutes. 

Mr. LIPINSKI. Thank you, Mr. Chairman. 

I think it is very important, and I have talked with the chairman, and he has always and continues to have an open mind on 

this, and I think it is going to be very important to see the text 

of the bill to have a better understanding of what exactly is in 

there. 

Ms. Norton spoke earlier about concerns about noise around airports, and that is a major concern that I have. I have Midway 

International Airport in my district, O’Hare not too far away. As 

the patterns flying in and out of those airports has changed in recent years, there have been a lot of constituents of mine who had 

a lot of complaints, and we have gotten the FAA now say they are 

going to do a better job of listening and paying attention to what 

some of these issues may be. 

I have a great concern moving ahead about what exactly the 

rules are going to be in the future if we did have an ATC moved 

under a corporation. The chairman says that NEPA would still 

apply, but I have concerns about what exactly is going to happen 

to the FAA. 

Is the corporation going to propose the patterns and then the 

FAA has to then have their say on that, approve them or not approve them? 

That is a concern that I have. Mr. Rinaldi, I do not know if you 

have any. The bill that we had last year, do you know anything 

about what that would have done? 

Mr. RINALDI. Well, the regulatory and certification process would 

have stayed within the FAA. So it would still be ultimately the 

FAA overseeing noise complaints and new procedures. 

Mr. LIPINSKI. Would they have the authority then or would there 

just be a back-and-forth with the corporation over it? The corporation propose and the FAA then have to approve or how would that 

work? 

Mr. RINALDI. Hypothetically, it is hard to answer that question 

right now, but I will tell you while we are moving forward with 

metroplex and PBN in many cities, the FAA is going out and doing 

joint community meetings along with the users and the stakeholders to explain what we are trying to accomplish in making the 

skies greener, safer with less noise. 

But keep in mind as the technology makes it to be more precise 

on approaches, there are certainly winners and losers when it 

comes to noise. That is a fact, and that is a true fact. 

Mr. LIPINSKI. Obviously, my concern is to make sure that my 

constituents and all around the country, those who are going to be 

impacted by these changes, are going to be able to have a say, and 

47 

right now their say is through us here in Congress and through the 

FAA. I want to make sure that occurs. 

But I want to move on to another question before I run out of 

time. I am concerned that some of the estimates for the timeline 

for a new ATC corporation are near a decade. We heard earlier 5 

to 7 years, and my concern is about air traffic controller hiring. 

Will there be a troubling lack of accountability and transparency 

as this occurs and make ATC hiring and staffing difficult, if not almost impossible, to do during this transition period, Mr. Rinaldi? 

Mr. RINALDI. One of the things we would really have to see in 

the bill is a very robust transition period where we would seek a 

stable, predictable funding stream so that we can continue to hire 

and accomplish the goals of the agency while it is still in control 

and if it was going to a not-for-profit, federally chartered company 

at the same time, that it would be a robust transition period enhancing the safety of the system, at the same time continuing to 

hire, train and modernize the system. 

Mr. LIPINSKI. The control of the academy for training air traffic 

controllers, who would have that control? 

Mr. RINALDI. I believe in the AIRR Act of 2016, that was left up 

to the transition on who would actually still control the FAA Academy in Oklahoma City. 

Mr. LIPINSKI. So that was not laid out there? 

Mr. RINALDI. I do not believe it was. 

Mr. LIPINSKI. It is to be determined further on. 

All right. Thank you very much. It is something that I look forward to seeing the bill and the details, and I look forward to maybe 

having another hearing at that point. 

But I thank the chairman, and I yield back. 

Mr. SHUSTER. I thank the gentleman. 

With that I recognize Mr. Smucker. 

Mr. SMUCKER. Thank you, Mr. Chairman. 

I’d like to pick up where my friend, Mr. Westerman, left off and 

further clarify some of the issues that he raised. 

One is there seems to be some confusion in the debate about 

what we call ‘‘use of airspace’’ and who will and who will not be 

making decisions about that. In fact, I believe that some are perhaps incorrectly conflating airline service, business decisions and 

the provision of providing the ATC’s services. 

Mr. Rinaldi, you specifically addressed that by saying that you 

simply provide the services to whoever shows up in the airspace essentially. But I guess I would like to further clarify that. 

Mr. Poole, maybe I will ask you. Could you please clarify to me 

that the new entity that is being proposed will simply provide those 

ATC services to any entity wishing to receive those services? 

And I will put it in a slightly different way. Will this ATC entity 

decide where airlines fly? 

Mr. POOLE. Absolutely not, Congressman. Airlines will decide 

where they want to fly, and presumably the system will accommodate any desires that they have of where to fly. This, of course, includes air taxis, regionals as well as major carriers. 

We are not privatizing the airspace. We would only be 

privatizing or corporatizing the provision of the air traffic services, 

including the financing of new facilities and new technology. 

48 

But all of the safety regulation and ownership of the airspace remains with the Federal Government in the form of the FAA. That 

is very, very clear-cut. 

Mr. SMUCKER. Thank you. I appreciate the clarification. 

Mr. Poole, I will ask you another question. The district that I 

represent in Pennsylvania includes three smaller airports, no major 

international or domestic airport in the district, but each of these 

smaller airports serve a county and are critically important. They 

are economic drivers in the county, and so concerns have been 

raised. 

I just want to ask you directly about any potential impact of this 

system on the smaller airports. I have one in particular, the Chester County area of my district, that has an application in for a control tower, and it is just an example. 

Mr. POOLE. Right. 

Mr. SMUCKER. But I guess I want to hear again. I want to be 

sure. Do you think we will see under this program an improvement 

for small airports? 

And if so, how? 

Mr. POOLE. I do think there will be an improvement. For one 

thing, because of FAA funding limitations, we have this moratorium on new contract tower approvals that has been going on since 

fiscal year 2014, and the only way that could be lifted today is if 

there were a significant budget increase for FAA or they cut out 

some other funding for other things like NextGen and so forth that 

nobody would really want to see. 

The best hope, I think, for small airports and expanding the 

reach of control towers is a better funded organization that is also 

one that adopts a new technology that increases benefits and reduces cost so that the contract tower benefit-cost ratio can be higher for small airports that might not qualify today with a conventional several-hundred-foot-tall structure, but could easily afford a 

contract tower and actually get better service from it. 

Mr. SMUCKER. Thank you. 

One quick question, Mr. Brown. You asserted that nongovernmental air service provider would somehow be outside of democratic oversight, and I just want to point that just a few weeks ago 

we had executives here from United, American, Southwest, and 

Alaska who were sitting right here in this room where you are and 

getting grilled by folks up here. 

Congress oversees the entire aviation sector, including regulated 

private businesses. So I would just like to hear. Can you explain 

why you believe that a regulated air traffic service provider would 

be outside of democratic oversight? 

Mr. BROWN. It is my understanding that this would be empowered as a business that can effectively decide what it invests in, 

how much it borrows, what technologies it picks, maybe what—— 

Mr. SMUCKER. But still with congressional oversight. 

Mr. BROWN. Well, are we going to have a committee for how they 

spend their money and what they invest in and where they deploy 

PAPIs [precision approach path indicators] and VASIs [visual approach slope indicators] and where they put up the next 

DataComm tower? 

Because if we are, why would we carve it out? 

49 

Mr. SMUCKER. All right. Thank you. 

I yield back my time. 

Mr. SHUSTER. I thank the gentleman. 

That is what we have today, the United States Congress it is 

called, and it is not functioning well, and that is what we are trying to get away from so it can operate more like you, Mr. Brown, 

operate, which, again, you have an extremely successful business, 

but you decide that based on business decisions, not based on 

whether Bill Shuster wants a tower or does not want a tower. 

So with that I yield to Mr. Duncan, not I am sorry. Not Mr. Duncan. Mr. Payne is recognized. I am sorry. 

Mr. PAYNE. Thank you, Mr. Chairman. 

Listening to all of this testimony and the different opinions, the 

American taxpayer has invested more than $50 billion in air traffic 

control systems in just the last 20 years. Under the chairman’s proposal to privatize ATC last year, the Federal Government would 

have handed over ATC assets worth billions of dollars to a private 

corporation free of charge. 

If the ATC corporation was to hit financial or operational difficulties and needed to be taken over by the Government, it is my understanding, per the takings clause of the Constitution, the Congress would have to pay to reacquire the ATC assets. We would 

have to pay for what we gave away for free. 

What does the panel think about this? Mr. Scovel? 

Mr. SCOVEL. Thanks. 

As I mentioned earlier, I do not believe it is my role, sir, as inspector general to express an opinion on a purely policy call like 

that. 

However to your point about valuation of assets specifically, our 

work each year to audit departments’ financial statements, to include FAA’s financial statements, has shown us that the net book 

value of FAA assets that might reasonably be considered for transfer to a nongovernmental agency at the end of the last fiscal year 

amounted to $13.7 billion. 

Ideally or probably a lesser figure than that would be actually 

transferred if the Congress and the administration were to agree 

to take air traffic control out of Government, but nonetheless, that 

is a policy decision for you to consider. 

A valuation of those assets in any event, whether it is with the 

request or requirement that the new entity pay back the Government, is still going to be required because potential lenders and 

borrowers are going to want to see what the value of collateral is 

that they are putting up their money against. 

Mr. PAYNE. Thank you. 

Mr. Brown? 

Mr. BROWN. I think people are trying to solve problems here, and 

I, frankly, respect the dialogue. 

I am not a status quo guy. I actually think there are real opportunities to improve the management of the FAA, and I have found 

very often in the certification side, they are willing to listen. 

But among the things I am concerned about, besides equity in 

the system, is whether the logic makes sense in the risk-reward 

profile. I mean, this is a real question to me, and I am just asking 

it as a business guy. 

50 

I am here because I make my living selling products into aviation, but the lineup that I am concerned about is if we assure the 

workforce that the future is as they need it to be for the purposes 

of serving their interests, and we underwrite the risk of this enterprise, more surely than anything else I know that to be true. When 

we are perhaps enjoined in litigation with this enterprise when it 

is challenged on things that it does and when we give up our assets, some $20 billion, to do it and empower a monopoly, when I 

look at that enterprise, I want it to report to the people unequivocally. 

It has served us well for 50 years. It will serve us well in the 

future, and so I wrote in my testimony this is a question of principle for me. It is not a question of challenging other members’ objectives or motivations. It is an honest disagreement about the policy play here. 

Mr. PAYNE. OK. Thank you. 

Mr. Poole? 

Mr. POOLE. Well, in the hypothetical event of a bankruptcy, 

which I guess is what you were talking about as a possibility, you 

have a liquidation in a bankruptcy, in which case a takings clause 

thing I do not think would apply. Creditors would be the ones dealing with the bankruptcy situation, and they would potentially be 

in a position to look for a different operator to take over and restart 

the system. 

Mr. PAYNE. But if there were no takers, if the Government had 

to step back in? 

Mr. BROWN. Well, what if there are takers? I mean, the net effect 

of your scenario there is that we transfer $20 billion to a company 

who makes bad bets, and they end up owned by the Bank of New 

York. That is a bad outcome. Those might be the credit providers. 

Mr. POOLE. They might be the credit providers. 

Mr. PAYNE. Mr. Rinaldi, in your testimony you talked about the 

concern for your membership. Any time anything is streamlined, if 

you think that your benefits and things are going to stay the same 

under that scenario, I have got a bridge to sell you, too. 

But could you answer the question? 

Oh, I’m sorry. 

Mr. RINALDI. What was the question? What bridge do you want 

to sell me? 

Mr. PAYNE. That is not that question. The original question that 

I asked that I laid out, but my time has expired. I guess you were 

not listening. 

Mr. RINALDI. I was listening. 

Mr. SHUSTER. I thank the gentleman. 

There are limits to all infrastructure, technologically and human, 

and because of that we are taking a 5-minute break. 

[Recess.] 

Mr. SHUSTER. The committee will come to order. 

I now recognize the vice chairman of the full committee, Mr. 

Duncan, for 5 minutes. 

Mr. DUNCAN. Well, thank you, Mr. Chairman. 

And as some people here will recall, Mr. Poole and I think others, I chaired the Aviation Subcommittee for 6 years, from 1995 

until 2001, and Speaker Gingrich asked me to hold the first hearVerDate Aug 31 2005 10:59 Jan 19, 2018 Jkt 000000 PO 00000 Frm 00060 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\FULL\5-17-2~1\25482.TXT JEAN
51 

ings on the proposed Air Traffic Control Corporation. Ms. Robyn, 

I think, will remember that. 

At that point I think almost everybody, maybe with the exception 

of Mr. Poole, was opposed to it, but Chairman Shuster has done an 

amazing job now and has brought some groups and people onboard 

that were not in favor of this proposal at the time. 

But I am sorry I did not get to hear Mr. Rinaldi’s and Ms. 

Robyn’s testimonies because I had other meetings, but I do want 

to say to Mr. Brown that I was impressed by your testimony, and 

I can assure you that I think your people will tell you that general 

aviation has not had a stronger supporter than I have been, and 

I am sure that the chairman will do everything possible to make 

sure that general aviation’s concerns are heard loud and clear in 

any proposal that we end up with in this regard. 

But, Mr. Scovel, you have been with us several times before, and 

you know that I have had concerns for a long time about some of 

these costs and the delays and so forth. 

I noticed in your testimony, you say, ‘‘However, FAA has not 

fully identified the total costs, the number of segments, their capabilities or completion schedules for any of the six programs. In addition, FAA has not determined when the transformational programs will start delivering benefits or how they will improve air 

traffic flow or controller productivity.’’ 

These cost things concern me, and you told me in response to 

questions that I asked in a 2014 hearing, you stated, ‘‘We are probably looking years beyond 2025, perhaps another 10 even, and we 

are probably also looking at the total expenditures in an order of 

magnitude two to three times that of the initial $40 billion estimate to achieve the original plan.’’ 

I am wondering: Do you stand by those statements that you 

made in 2014 or what is the situation now? 

And also you heard Mr. Brown basically say that everything is 

going pretty good. 

Mr. SCOVEL. Thanks, Mr. Duncan. 

As part of your introduction, you mentioned your long service on 

the committee. I still wear with pride the label that you gave me 

at probably my very first appearance before the committee where 

you said, ‘‘Mr. Scovel, you are the committee’s hired skeptic.’’ So I 

appreciate that and my staff does, too, because that fits our role. 

Mr. DUNCAN. You and I have been around for a long time. 

Mr. SCOVEL. Yes, we have. Thank you. 

I do stand by those numbers, and what I meant to convey when 

I said that was the uncertainty of the numbers at that point. The 

numbers appear to have changed a little bit recently because FAA’s 

estimates have come to $36 billion, a completion date thereabouts 

2030 or so, but still the uncertainty remains because at least for 

the six NextGen transformational programs, FAA’s segmentation 

practices in managing those acquisitions have not led to any kind 

of clear understanding as to total cost or ultimate completion date. 

So we are still very much in an uncertain environment with regard to those programs and the price tags. It is clear what has happened over time though is that those programs have become part 

of a more general and rolling implementation of modernization efforts, to be sure. FAA, to its credit, has worked much more closely 

52 

with industry over the last couple of years and the NAC to get 

their priorities down, and FAA has been working hard to execute 

on those. 

So I do want to be fair certainly to the agency when I say that, 

but cost and completion dates are still much uncertain. 

Mr. DUNCAN. All right. Ms. Robyn, you said that your original 

proposal when you worked on it was dead on arrival. Why do you 

think that was and where do you think we are now? 

Tell me what you think is different now. 

Ms. ROBYN. I think it was dead on arrival because it, frankly, imposed additional financial burden on the users. 

At the time, more of the funding of the air traffic control system 

came from the general fund as opposed to ticket taxes. We, the 

Clinton administration, our highest priority was balancing the 

budget, and so our proposal entailed a bill for the users that was 

unacceptable. 

So I think for the airline industry that was a problem. I think 

for House Democrats it was much of what you hear today. It was 

an opposition to something that was seen as not privatization, but 

something like that. 

I think this is a great debate. I think we’re making progress. We 

are arguing over the value of the assets that get transferred. You 

know, there are proposals to create a Government corporation. Admittedly, it would have the regulatory function as part of it, which 

is, I think, highly flawed, but I think we have advanced the debate. 

Mr. DUNCAN. Well, my time has gone by so quickly. Just quickly 

I would like to ask Mr. Brown there are, they tell me, some 60 

countries that have done some form of privatization. We visited 

them in New Zealand and certain other countries. Have you talked 

to some of the general aviation people in some of these other countries? 

Of course, I know general aviation is very small in many of those 

countries. 

Mr. BROWN. Yes. 

Mr. DUNCAN. Have you visited or looked into that any? 

Mr. BROWN. I have, and I think those countries made choices 

they thought were sensible for their taxpayers and their public interest and, frankly, for the scale and scope of their aviation industries, which are quite, quite small. 

So my reference point in many of those countries is that general 

aviation is already a miniscule part of the economy. People do not 

fly. They do not have the freedom to fly. They do not create pilots. 

They do not build airplanes. 

And so in my mind, they are taking a function that is not critical 

to their economy and they are outsourcing it. In my mind, in our 

country what we do with our national airspace is, in fact, an economic engine and a critical one, and I think it works pretty darn 

well, and that is where the origin of my interest and my point of 

view come from. 

Mr. DUNCAN. All right. Thank you very much, Mr. Chairman. 

Mr. SHUSTER. I thank the gentleman. 

Ms. Titus is recognized for 5 minutes. 

Ms. TITUS. Thank you, Mr. Chairman. 

53 

It is interesting what Ms. Robyn just said. Her bill was dead on 

arrival because airlines wanted it but they did not want to pay for 

it. Now that they are getting it free, they seem to be all in and it 

does not seem to be dead on arrival. I find that interesting. 

Ms. ROBYN. No. 

Ms. TITUS. But the question I want to ask is to Mr. Poole. I want 

to go back. 

We hear a lot about the assets. Let’s talk about the people who 

are involved. You, Mr. Poole, and the Reason Foundation and your 

donor network have been talking for decades about privatizing all 

aspects of Government, not just the FAA. 

In fact, in 2010, you wrote a piece for downsizinggovernment.org 

that was a project of the CATO Institute, and you talked about the 

need to privatize and commercialize the air traffic system back 

then. 

One of the major arguments that you made was the cost of running the system, and in particular, you went into extensive detail 

about the history of air traffic controllers and the cost of salary and 

benefits to those professionals who operate the system. You noted 

that two-thirds of the FAA’s operational expenses are due to what 

you called the high cost of labor. 

You have gone on to reference the efficiency of Canada where 

they have downsized the system, ‘‘shrunk the system’’ I think was 

the term, and cut down on the number of towers. 

So considering all that you have written in this issue, and now 

we have this bill before us, I want you to walk me through exactly 

how you are going to address the high cost of labor as you make 

the system more efficient. 

Mr. POOLE. Well, thank you for letting me clarify. What we have 

seen in countries such as Germany and Canada and others that 

have corporatized their systems is not downsizing the controller 

workforce. In many cases, Canada in particular, the need was to 

increase the controller workforce which was low because of decades 

or many, many years of underfunding by Transport Canada. 

The downsizing that could take place is in the middle management ranks, the bureaucracy, because it is so many layers and so 

convoluted that it extracts a high cost out of the users, whether 

they are paying aviation user taxes or actually direct user fees. 

That is where the need for looking at that cost is. It is in the 

middle management ranks of the bureaucracy, not in the day-today controller workforce that is undersized for the task at hand 

today. 

As Paul Rinaldi has said, we are at a low point of certified professional controllers today, and it is partly because of the shutdown 

of the training academy that was out of commission for nearly a 

year, and also because of some politicization of the selection process 

that has now been partly overturned, thanks to Congress. 

So we do have problems, but it is not controllers. It is the bureaucracy. 

Ms. TITUS. I wish that reassured me, but when you talk about 

efficiency and cutting costs and high cost of labor and benefits and 

controllers are part of that system, I do not know that I believe 

that that is where you are going to stop, is at so-called middle 

management. 

54 

But I would ask Mr. Rinaldi. He is sitting right there next to 

you. He represents these folks. It is not just you. A number of conservative media outlets keep talking about high labor costs, high 

labor costs. Let’s get more computers. Let’s have fewer people. 

So I would ask you, Mr. Rinaldi: Just what assurances do you 

have that once your members are under control of a private system 

that is dominated by representatives of for-profit companies who 

are looking to run the system as cheaply as possible because it is 

about their bottom line, you heard they did not want to pay for it 

before, but they are getting it free now. 

How do you know your members are going to be protected once 

this current contract is over? 

Mr. RINALDI. Thank you, Madam Congresswoman. 

Great question. First of all, we have nothing in front of us to actually compare to see exactly what type of worker’s protections 

would be in the new language. So anything I would say would be 

speculating. 

But I will tell you we are a highly trained, highly skilled, highly 

efficient workforce, and we keep hearing about Canada. We keep 

hearing about the United States. We run roughly 10 times the traffic they do in Canada, but only 5 times the amount of controllers. 

We are highly efficient. 

And I stand behind the work of the air traffic controllers in this 

country, and I put them against anybody else in the world because 

we have the best in the world. 

Ms. TITUS. I totally agree with that, and that is why I want to 

be sure they are protected under any kind of new system going forward. 

Mr. RINALDI. Me, too, and I am with you. 

Mr. SHUSTER. And I would just say, and I think Mr. Rinaldi said 

this before, under the AIRR Act from last year, we had support 

from the air traffic controllers as well, if I could for the record, submit letters of support from NetJets, Southwest Airlines Pilots’ Association, the Allied Pilots Association, and NATCA. 

So I would like to submit these letters for the record. 

Without objection, so ordered. 

[Letters of support and written statements from NetJets, Southwest Airlines Pilots’ Association, the Allied Pilots Association, and NATCA are on pages 126–132.] 

Mr. SHUSTER. And with that I recognize Mr. Mitchell for 5 minutes. 

Mr. MITCHELL. Thank you, Mr. Chair, and thank you for all of 

the witnesses remaining for a long day. 

Mr. Scovel, you note in your report that FAA reform efforts have 

not slowed the overall cost growth or improved the productivity, 

and you talk about the fact that their budget between 1996 and 

2015 grew by 95 percent. 

Also, earlier Mr. Duncan referenced that the hope is—I stress 

‘‘hope’’—the $36 billion will be the cost to get NextGen up, and 

sometime around 2030 it may come to fruition. I am hoping to still 

be around in 2030. 

Let me ask you a question, Mr. Brown. 

Am I wrong, Mr. Scovel, that that accurately portrays your analysis? 

55 

Mr. SCOVEL. Yes, it is correct. 

Mr. MITCHELL. Mr. Brown, like you I am a private business guy. 

I am an aircraft owner. I have owned several aircraft. In fact, one 

of your props was on one of them. Thank you. 

If you had a business that could not tell you what it was going 

to cost to put out a set of products, could not tell you when they 

were going to get it done, but said eventually we will get there, 

how likely is it that you would buy that business or keep it? 

Mr. BROWN. That would not be in the category of strong indicators for that business. 

Mr. MITCHELL. Thank you. 

Mr. BROWN. And it would cause me to ask a lot more questions. 

Mr. MITCHELL. Well, let me go to the next question. We talk 

about the value of the assets. There has been a lot of discussion 

about that. Mr. Scovel, how do we, quote,‘‘pay for the assets,’’ and 

I use that term loosely in the case of the FAA? How do we pay for 

those assets that we already have? 

Mr. SCOVEL. Mostly they are funded by excise taxes on ticket 

sales, gas taxes from GA users. There is an infusion, as well, from 

the general fund. 

Mr. MITCHELL. And, Mr. Brown, you have a lot of assets in your 

business, and what depreciation schedule do you use on them? 

Mr. BROWN. Seven years on capital equipment. 

Mr. MITCHELL. About 7 years you have fully depreciated them. 

Usable life on a lot of the equipment is what, 10 years? 

Mr. BROWN. Yes. It can be longer, but yes. 

Mr. MITCHELL. Not much longer, especially not in major capital. 

Mr. Scovel, what is the average age of some of the equipment 

that is in the FAA right now? Air traffic controllers. 

Mr. SCOVEL. The air traffic control structure is aging and getting 

older by the minute, obviously. The en route centers that manage 

high-altitude traffic, maybe 50 years on average, 25 years on average for terminal radar approach control. 

Mr. MITCHELL. I would like someone to explain to me maybe in 

writing some way why we are losing our mind about, quote, ‘‘the 

value of these assets’’ when, in fact, in the real world outside these 

hallowed halls, the value of the assets is less than zero. 

In fact, the question is how you dispose of them if, in fact, there 

were a value on those and you could not use those assets because 

that is what we are talking about. We are talking about assets that 

have gone beyond the half-life yet we somehow would think we 

were giving it away to somebody. 

In fact, some of these assets we want someone to take them 

away. 

A followup question also if you can, Mr. Poole. The countries that 

have gone to some version of privatization, third party other than 

the Government running the ATC system, 60 countries or so, they 

all had safe, relatively safe airline or flight systems before they divested, right? 

Mr. POOLE. Yes, they did, and the study that was done by 3 universities about a decade ago looked at I think it was 5 years before 

and after comparison of 10 of those countries and found that safety 

did not go down in any of them, and it was either the same or better following the corporatization. 

56 

Mr. MITCHELL. Mr. Rinaldi, same question. Have they all had 

safe systems as they made their transition? 

Mr. RINALDI. Yes. 

Mr. MITCHELL. Any of your cohorts around the world say, ‘‘Oh, 

my God, we have gone to a third party or a privatized system and 

the world is now threatened?’’ 

Mr. RINALDI. Completely opposite. Most of them would never go 

back to Government structure. 

Mr. MITCHELL. See, I have flown Canada’s system. I have flown 

Europe’s system, and I have, for better or worse, flown the system 

here. I have got some interesting routing we could talk about, Mr. 

Brown. Flying back to Detroit through Fort Wayne was an interesting route. That was quite helpful. 

The point is that we had a lot of discussion about bifurcating the 

FAA. Just because it was together when they created this thing, 

somehow there has been discussion that it is a terrible thing to 

talk about making it more efficient and separating it, like somehow 

it is a holy ground. 

It is not working well. It is costing us a ton of money. If the argument is we just throw more money at it we hope it will get better, we say in my company hope is not a plan. It is a last step before desperation. We are at desperation. 

One more comment, which is about the discussion about being 

controlled by the outside stakeholders. Big parts of my district are 

powered by rural electric cooperatives, lots of stakeholders, lots of 

interests, and those people would not give that up for the world because do you know what? It actually worries first about the customers and service and not about the politics, about what you 

talked to here about sequestration and all the other mess. It worries first about are we delivering the service we promised to deliver. 

That is my hope for ATC reform and a board that has a fiduciary 

interest to deliver the service at a cost we can actually manage. 

Thank you, sir. My time is up. You have been patient, and you 

rapped your gavel. I am done. 

Mr. SHUSTER. I thank the gentleman. 

And next is Mr. Weber is recognized for 5 minutes. 

Mr. WEBER. Thank you, Chairman. 

Mr. Scovel, when you had your comments you said you had identified some longstanding management weaknesses. Can you elaborate on those? 

Mr. SCOVEL. They were. Yes, thanks for the opportunity. 

By management weaknesses I am referring to those in FAA’s acquisition practices. We cited in our testimony overambitious planning. ADS–B and ERAM [En Route Automation Modernization] 

would be key examples of that. I cited in our testimony the need 

for stable requirements for acquisitions to be successfully executed. 

ERAM and the SWIM [System Wide Information Management] 

programs would be examples of where FAA had shortcomings in 

that area. 

Contract oversight, generally, across the board. As we have audited FAA’s programs, we have found areas that needed significant 

improvement, all the way from incentive fees to the requirement, 

FAA’s own requirement, for independent Government cost estiVerDate Aug 31 2005 10:59 Jan 19, 2018 Jkt 000000 PO 00000 Frm 00066 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\FULL\5-17-2~1\25482.TXT JEAN
57 

mates in sole source contracting. Some FAA acquisitions personnel 

were not even following their own requirements. 

So as you can see, there have been some significant shortcomings 

along the line. They have affected not only the NextGen programs 

proper but others that are in support of other areas of air traffic 

control and NextGen. 

Mr. WEBER. My first year on the committee I know you said that 

you had received the label of the committee’s biggest skeptic. 

Mr. SCOVEL. Hired skeptic. 

Mr. WEBER. Hired skeptic. 

Mr. SCOVEL. And if I may, I was not skeptical of the committee. 

I was skeptical—— 

Mr. WEBER. I am glad you clarified that. 

Mr. SCOVEL [continuing]. Of information, of proposals, of information, with the idea of bringing data for the committee’s consideration. 

Mr. WEBER. OK. Great. How long have you been the hired skeptic? 

Mr. SCOVEL. A little over 10 years now, sir. 

Mr. WEBER. Ten years. OK. So you have been doing this and 

watching this FAA for 10 years. Is that fair? 

Mr. SCOVEL. Yes, sir. 

Mr. WEBER. You said there were some requirements for them to 

continue to evolve. So fix those problems you just laid out for us. 

What are those requirements? 

If they were to stay in place, how does it evolve? 

Mr. SCOVEL. If FAA were to retain responsibility for air traffic 

control, first, continue to consult extensively with stakeholders. 

Where FAA has gone off the rails, largely it is because they have 

not done that. 

Mr. WEBER. And you would think that the new process that the 

chairman is submitting would continue to consult with stakeholders? 

Mr. SCOVEL. Well, stakeholders would play a large role in decisionmaking under a proposal as I understand how it may ultimately be. 

Mr. WEBER. Well, they will have a board that has been discussed 

back and forth, but in that scenario, they would be in constant 

communication with the stakeholders, their businesses, the different parts of the group. 

Go ahead. 

Mr. SCOVEL. I am sorry. I may have misunderstood your predicate. I thought you were asking if FAA were to keep responsibility 

for air traffic control. 

Mr. WEBER. Well, it was, but you are saying if they continue to 

be, and I am saying contrast that with what the recommendation 

here is, and that is that they would definitely be doing that. Go to 

step 2. 

Mr. SCOVEL. They do. Focus on the acquisition system because 

as I understand it, that’s the essence of the aviation community or 

users’ dissatisfaction right now with FAA. 

It is not on the safety side. We have all recognized FAA right 

now is in what I called earlier the golden era of aviation safety 

58 

through its own efforts, industry’s efforts, Congress’ efforts, as well 

as the efforts of my office. 

But where dissatisfaction is arising, it is in the air traffic control 

modernization area. So focus on FAA’s acquisition practices, the acquisition management system, which is the regulation that governs 

FAA’s practices and needs to be updated. It needs to be revised. 

The workforce needs to be properly certified and trained. 

All of those things that I talked about earlier about planning and 

good requirements need managerial attention. 

Mr. WEBER. Could be done in the new system that the chairman 

is proposing. Let me stop you if I may because I am running out 

of time. 

Mr. Poole, stand-alone airports, we have got a couple small ones. 

Well, let me do this first. Mr. Rinaldi, you said that you all represented 40 or something of those airports? 

Mr. RINALDI. Ninety-four. 

Mr. WEBER. Ninety-four. Thank you. 

Mr. Poole, back to you, what happens to those airports now? 

Mr. POOLE. Well, those airports are owned by municipalities usually. They get funding from the AIP Grant Program. None of that 

would change. AIP would continue to be an FAA function and do 

that. 

The main criterion affecting those small airports is whether they 

have a tower or not, and if they have a tower and it is obsolete and 

needs to be replaced, how is it going to get paid for and can it be 

afforded? 

That is where I think, first of all, the legislation can spell out 

that everybody is entitled to a tower that meets the benefit-cost 

ratio, and the financing capability and openness to better technology of the corporation would very likely adopt remote towers as 

a more cost-effective way to be able to expand the scope of tower 

services to small airports that may not qualify today, but probably 

could with a better benefit-cost ratio. 

So I think there is a very bright future for small airports. 

Mr. WEBER. OK. Thanks for elaborating. 

Mr. Chairman, I yield back. 

Mr. SHUSTER. I thank the gentleman. 

Mr. LaMalfa is recognized for 5 minutes. 

Mr. LAMALFA. Thank you, Mr. Chairman. 

Much discussion on the reform of FAA and air traffic controllers, 

and no doubt the controllers are doing very well with what they 

have to work with, but when we see the potential here for improvement with reform, I think a previous GAO report showed that reforms like we are talking about would have really no negative impact on safety. In many cases, safety improved. 

What we have not seen is that throwing more money at it, FAA 

had not really improved; if anything, even in some cases a negative 

effect. 

The potential for savings, as we have seen with the oft spoken 

of Canada system, shows that we can have a very positive effect 

on safety as well as saving money. 

So what I wanted to ask Mr. Poole and Ms. Robyn would be: Do 

we really expect that these savings that would be achieved can be 

59 

actually passed down to the consumers on what they would expect 

for their cost? 

Mr. POOLE. Well, that is an obviously good question to ask, and 

that depends really on is there a competitive airline market. If 

there is a competitive airline market, then lower costs are more 

likely to be passed on in ticket prices, for example, than if there 

is not a competitive market. 

I think there are some concerns being raised about how competitive our airline market has gotten to be in recent years. I mean, 

there are some things we do not have time to discuss here, things 

Congress could do to try to make the airline market somewhat 

more competitive than it has been. 

Mr. LAMALFA. OK. Ms. Robyn, similar? Ditto? 

Ms. ROBYN. Yes, and I think in addition to passing savings on, 

I think you are trying to expand the system to allow more throughput, and you need new technology to do that. We are not at the cutting edge of that. 

You need new technology in order to allow for an expansion of 

the system. 

Mr. LAMALFA. For both of you again, if we were to move in this 

direction of ATC privatization, smaller airports, rural airports, you 

know, the threat of towers closing, what might be the expectations 

we would see for rural airports. 

Just in general, I know we have been touching on it here in general, but what is it going to mean for rural airports and their viability? 

Mr. POOLE. Well, I will repeat what I said a few minutes ago. 

I really think that a better funded system able to do large scale 

capital financing, one of its priorities would be facility replacement 

and some degree of consolidation, but also expanding the scope. 

Right now, as I said, we have a moratorium on contract towers. 

FAA has a moratorium that is denying a couple dozen airports that 

are on a waiting list. Some of them have already qualified in terms 

of benefit-cost ratio, but there is just no funding available for FAA 

to do that. 

A well-funded system that is focused on serving its customers 

better and open to aggressively using new technology, like remote 

towers, I think, offers the best future I can imagine for small airports in this country. 

Mr. LAMALFA. Thank you for that. 

I am running out of time. I want to jump to Mr. Scovel for a second here talking about contract towers. 

So they are pretty important at smaller service airports and general aviation, et cetera. Up to 50 percent of civilian airports that 

have military operations use contract tower airports. 

Now, it is very important to have these operations, which is 

around 250 of them in the country. Would you comment please, Mr. 

Scovel, on the value of the contract towers to air traffic safety and 

efficiency in our Nation’s system and the cost effectiveness of this 

to FAA and as well as taxpayers? 

Mr. SCOVEL. Yes. At this committee’s request, we reviewed the 

FAA’s Federal contract tower program several times, and we have 

concluded that generally they are as safe; they are as well respected and appreciated by users as FAA operated towers; and on 

60 

average, they save or avoid for FAA $1.5 million per year in costs 

versus FAA operated towers. 

Mr. LAMALFA. Per tower? 

Mr. SCOVEL. Per tower, correct. 

Mr. LAMALFA. Significant. OK. 

Mr. SCOVEL. We would cite Federal contract towers as a missed 

opportunity for FAA. We understand that in recent years there 

have been funding difficulties perhaps, but well before that FAA 

had opportunities to pull more towers into the Federal contract 

tower and took a pass. 

It has been a decade or longer since FAA has moved any towers 

into the Federal contract tower program. 

Mr. LAMALFA. Perhaps we should move more of them. 

Mr. SCOVEL. It depends on funding. 

Mr. LAMALFA. Always that. 

Mr. SCOVEL. Yes, sir. 

Mr. LAMALFA. Thank you, Mr. Chairman. 

Mr. SHUSTER. I thank the gentleman. 

Mr. Perry is recognized for 5 minutes. Finally, Mr. Perry. 

Mr. PERRY. Finally. Well, I have not been here half of the meeting. 

Ladies and gentlemen, thank you for your time. 

I had a lengthy question for Mr. Scovel about contract towers, 

but I think I missed half of them and Mr. LaMalfa just asking 

them. 

Suffice it to say the only thing I want to add in case it has not 

been added it is important to note that 47 percent of all military 

operations at civilian airports are at contract tower airports. 

I am a rotary wing guy. So you know, not too much on the low 

altitude and route chart. The sectional is probably more important, 

but that having been said, it seems to me based on at least the answer I got to hear regarding my colleague’s question that you feel 

that they are efficient and cost effective to the FAA and to the taxpayer. 

Is that a fair summation, Mr. Scovel? 

Mr. SCOVEL. Yes, completely fair. 

Mr. PERRY. OK. Thank you. 

And I know that is not necessarily the context of this hearing, 

but I think the context is, well, I will just use this. Between 1996 

and 2012, the FAA’s budget increased by 95 percent. Meanwhile 

productivity decreased substantially, and I am talking about personnel procurement and organizational reforms. 

Doing the same thing over and over again, while I appreciate Mr. 

Brown saying we can tweak this, my argument would be that we 

have tried and tried to it seems not great effect, and I think I am 

probably be kind, right? Not great effect. 

Let me ask you this, probably Mr. Poole and Mr. Rinaldi. I am 

really interested in the UAS propagation in the United States and 

the UTM, and I am wondering in the context of what we are talking about, the proposal policy model that we are talking about, if 

either one of you could describe what you feel your organization, 

especially you, Mr. Rinaldi, would feel needs to be in place if that 

is currently missing for us to come to some kind of UTM. 

61 

Because we have put requirements on the FAA to come up with 

something here and there are deadlines, but I feel like we are just 

way behind, and I just want to make sure that there is not something we are missing from your viewpoint. 

Mr. RINALDI. Thank you, sir. 

Safely integrating UAVs into our airspace is a monumental task, 

and it has taken a lot of resources in the FAA and certainly distracting us from working on NextGen as we are working on bringing UAVs into and incorporating them into our system. 

So one of the things I would like to see is some type of user fee 

base for these UAVs so they actually can pay into the Aviation 

Trust Fund right now and pay for the system like everyone else 

does pay for the system. 

Mr. PERRY. Is there a model that you know of regarding some 

kind of a participation for maybe commercial users as opposed to 

incidental private? 

I am just curious. 

Mr. RINALDI. That is a great question. 

Mr. PERRY. It is an important concept. 

Mr. RINALDI. It is a great question, and I think everybody is kind 

of scratching their head right now because they are not using fuel, 

and we base mostly on fuel or ticket tax, and they would not have 

either of that. So we actually have to come up with a new concept. 

Mr. PERRY. So it might be like miles flown or something like 

that? 

Mr. RINALDI. Well, I am really not sure how it would work. 

Mr. PERRY. It would be a user fee? Well, OK. That is an important part of the discussion. I’m glad you brought it up. 

Mr. Poole, what is your input? Do you know what the airlines 

want to see in integrating? 

Mr. POOLE. I have no idea what the airlines think about this. 

Mr. PERRY. OK. 

Mr. POOLE. I do think there is a possible bifurcation between the 

very low altitude, mostly hobbyist uses of UAS, where there is a 

lot of interest in some kind of non-FAA private solution to this that 

Silicon Valley folks are talking about in cooperation with NASA. 

So I think we need to separate that in terms of being different 

from the controlled airspace in which our airliners and many private planes fly. 

Mr. PERRY. But there are going to be incursions into controlled 

airspace whether it is an air drone or—— 

Mr. POOLE. Yes, that is a significant problem we need to deal 

with. 

Mr. PERRY. There are incursions now in both controlled and uncontrolled airspace, which is part of the issue, and I feel like we 

need to get to it. 

But does anybody else have something to add? 

Mr. RINALDI. No, we do see a lot of incursions today and a lot 

of spottings that commercial airlines are seeing, and I think the 

sooner we can safely integrate them and come up with a process, 

the safer the system will be. 

Mr. PERRY. So while I would agree with you it does divert some 

attention, resources, time, energy, what have you, you cannot just 

ignore the fact. 

62 

Mr. RINALDI. No, I would not ignore it. 

Mr. PERRY. I think that is really, really foolish, right? 

Mr. RINALDI. It is an emerging technology, an emerging user into 

the system, and it is a very important user into the system. 

Mr. PERRY. And I think actually to a great extent it can be an 

enhancement. I mean, some of the technologies that are emerging, 

especially in the navigation arena itself, could be used commercially to greatly enhance. 

I was talking to the gentleman next to me and now my time has 

expired, Mr. Chairman, but you know, as an aviator myself, the 

sky is unlimited. You know, I am limited on the ground when I pull 

out of the parking lot. I have got to stay on the road or I am going 

off-road, and yet we have the same system since I have been flying 

for 20 or 30 years now. I essentially have got to take off and then 

go get on the highway instead of just going literally from point to 

point. 

I do not know what the savings is estimated at going literally 

from point to point, but it has got to be monumental over thousands and millions and billions of flights, commercially or otherwise. 

Anyway, Mr. Chairman, I yield. Thank you. 

Mr. SHUSTER. I thank the gentleman. 

With that, Mr. Sanford is recognized for 5 minutes. 

Mr. SANFORD. I thank the chairman. 

I just want to bore down just for 1 second. I guess I will begin 

with you, Mr. Rinaldi. From an air traffic control standpoint, a blip 

is a blip, right? 

Mr. RINALDI. Well, not necessarily. We work all airplanes safely 

and efficiently. There are some heavy aircraft that you need to 

weight turbulence separation. So each blip, you know, for lack of 

a better term, gets treated safely and efficiently, but there are different ways to work them. 

Mr. SANFORD. Fair enough. But the wing tip vertices off of a 

Piper Cub is going to be very different than the wing tip vertices 

off a 747 in term of separation. 

Mr. RINALDI. Absolutely. 

Mr. SANFORD. That is what you are getting at, but from the 

standpoint of management, it is essentially the same, right? 

Mr. RINALDI. Yes. 

Mr. SANFORD. So I think that one of the things that I have heard 

particularly from the cargo carrier side is the fear that if you move, 

are they going to be disproportionately impacted in that they weigh 

more. 

From a traffic control standpoint, they do not take more time. 

They do not really use more stuff, but are they going to be disproportionately impacted relative to other small aircraft? 

And I just love it. I see you shaking your head up and down. I 

do not know if it means yes or no, but I would love to hear some 

of your all’s thoughts on that because I think that is one of the 

things as we go through these deliberations we have really got to 

ferret out. 

Yes, ma’am. 

Ms. ROBYN. On the pricing side, most economists would say the 

current approach of funding the air traffic system through the tickVerDate Aug 31 2005 10:59 Jan 19, 2018 Jkt 000000 PO 00000 Frm 00072 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\FULL\5-17-2~1\25482.TXT JEAN
63 

et tax is very inefficient because it is not correlated with the cost 

that users impose on the system, and so you want to go to a costbased system. 

What the rest of the world uses is a weight and distance charge, 

and they use weight because they cannot fully cover their costs 

typically with just a distance charge. You want to charge marginal 

costs, but you want to cover your full cost, and weight is a way of 

doing that. 

It is called Ramsey pricing in economic terms, and the cargo 

folks object to that. And I think there is some really important 

analysis to be done about just how big that weight component has 

to be. 

I think there is reason to think that the FAA may overstate their 

fixed costs, which is what requires you to have a weight component 

to the charge. There is a tendency for regulated utilities to overstate their fixed costs versus their marginal costs. 

So I think this is a really important issue, and I do not think we 

should just blindly adopt the standard weight and distance charge. 

Mr. SANFORD. Yes, sir. 

Mr. POOLE. I have looked into this. In a 2001 Reason Foundation 

study, we actually had a lot of dialogue with one of the major cargo 

carriers, and they persuaded us that a strict weight-distance formula would cause a significant increase in the cost share that they 

would pay. 

And we came up with an idea that said, ‘‘All right. Look at’’—— 

Mr. SANFORD. And let me interject. It is ultimately not they pay. 

It is we pay. 

Mr. POOLE. Well, ultimately, yes. 

So what we came up with was we looked at the flight patterns 

by time of day, and it turned out that most of the cargo flights do 

not take place at the busy times of day or at the busiest hubs at 

those times of day. 

And so if you put into the pricing formula a congestion factor, 

that you could basically hold the cargo carriers’ share to about 

what it is today without having to discard the global standard of 

an overall weight-distance formula. 

ICAO does permit congestion related factors going into airport 

and air traffic pricing. Hardly anybody does it except the U.K. 

major airports, Heathrow and Gatwick, but that is consistent with 

ICAO charging principles. 

And I think that is a way that should be definitely explored for 

the cargo airlines. 

Mr. SANFORD. I think that is fascinating in that if you look at 

this notion of optimizing the use of our structure in this country, 

I think this notion of going to premium pricing based on congestion 

or load is going to become a bigger and bigger issue, whether it is 

on surface transportation, air transportation or other. 

I see I have 25 seconds, but it looked like you had a thought 

down there at the end, but maybe you did not. 

Mr. SCOVEL. I have many thoughts, sir, but not on this particular 

subject. Thank you. 

[Laughter.] 

Mr. SANFORD. Fair enough. With that I yield back, Mr. Chairman. 

64 

Mr. SHUSTER. I thank the gentleman. 

Mr. Davis is recognized for 5 minutes. 

Mr. DAVIS. I bet I can guess that thought: When is this going to 

be over? 

And then you have got Members like me that keep coming in and 

out. I apologize that we are shuttling back and forth between two 

different committee hearings today, but this is a very important 

one, one that I believe from many of the responses that we have 

heard today and many of my colleagues that it centers on what is 

really this debate of what is the cost of doing nothing. 

I mean, it has already cost the taxpayers billions of dollars to put 

towards NextGen, and we are not seeing the progress that we as 

America, with the air system that we have, be upgraded to even 

be able to compete on the same level with some of our allies. 

I cannot help to compare it to work that has already been done, 

and we discussed this today. You have, what has been done in Canada, what has been done in the United Kingdom. 

Canada has bought twice the technology at half the cost, and has 

done so in one-third of the time. 

So let me start with you, Mr. Rinaldi. What do you think would 

be the cost of doing nothing? 

Mr. RINALDI. Yes, status quo or doing nothing is unacceptable. 

September will be here before we know it. We will be looking at 

another possible Government shutdown, and as I said in my opening statement, as we lead up to a shutdown, the FAA turns their 

attention from NextGen or from UAV implementation to shutdown 

procedures. 

For the last 10 years, this happens a couple of times a year, and 

we lose this time. It is 4 or 5 weeks leading up to it; 5 weeks on 

the back end of it, and they are not sure what sequester is going 

to bring us if we actually do get a budget and do get a bill passed 

or what type of cuts we are going to have into the aviation system. 

A lot of discussion about rural America. I will tell you and you 

remember, sir, that when sequester hit in 2013, the FAA looked at 

closing over 238 air traffic control towers. 

Mr. DAVIS. That was a very interesting list. It contained a lot of 

them in my district. 

Mr. RINALDI. Most of them were in rural America, absolutely. 

Mr. DAVIS. Well, thank you. 

Mr. Poole, do you have any comments on this? 

Mr. POOLE. I think almost everything has been said, but I think 

on technology, the comparison with NAV CANADA is brilliant because they have things that we are only planning now. They have 

fully rolled out nationwide controller pilot data link, while we are 

looking at maybe 6 or 8 years before we have that in en route airspace. 

They have across the North Atlantic very soon satellite-based positioning thanks to their investment in Aireon, this satellite-based 

global coverage. All of the places that do not have radar, which is 

70 percent of the earth’s surface, will now have radar-like separation possible because NAV CANADA and several other ANSPs 

have invested in that and are now subscribing to it, and FAA was 

unable to invest and cannot figure out how to subscribe to it. 

65 

So the idea that we are the gold standard, the most modern in 

the world is no longer true, and the more the status quo continues, 

the less that is going to be true. We are going to be falling farther 

and farther behind the state of the art. 

Mr. DAVIS. Well, as we wind this hearing down, I want to make 

sure that we reiterate a few points. This new ATC entity is not 

going to decide where airlines or anyone can and cannot fly, correct? 

Mr. POOLE. That is correct. They will not decide anything about 

where airlines fly. 

Mr. DAVIS. Thank you. 

And, Ms. Robyn, I want to address some more information that 

I have seen about the motives of the board under the AIRR Act 

proposal. Despite the fact that the bill clearly states that two directors will be appointed by the Secretary of Transportation to act in 

the public interest, some have questioned the motives of the board. 

Can you describe your understanding of the governance of the 

board and how it will actually operate? 

Ms. ROBYN. Congressman Mitchell referred to the electric cooperative in his district, and it is analogous to the cooperatives we have 

in the utility industry, and the agriculture and insurance sectors. 

Mr. DAVIS. And they work, right? 

Ms. ROBYN. Yes, they work beautifully. Air traffic control provision is still a monopoly. I think technology will change that, but for 

the time being it is still a monopoly. So you need a design that protects against any kind of monopoly abuse. 

And the Canadian model does that by having the stakeholders 

select the board members, and the board members are fiduciaries, 

as the chairman emphasized in his introduction. They have a fiduciary responsibility. That has been critical to NAV CANADA’s success. 

Mr. DAVIS. And quote of the day, entities like this that are already operational work beautifully. So I appreciate that. 

And we as policymakers—— 

Mr. SHUSTER. Keep going. 

Mr. DAVIS. Thank you. 

We as policymakers do not have a lot of time here. You know, 

we can sit and debate what is working and what is not, and Mr. 

Rinaldi mentioned that the FAA has got to deal with not only 

NextGen but UAS technology, which I once questioned an official 

about what Canada is doing correctly. 

We do not have a lot of time to fix this. Today is the time to act. 

Now is the time to act, which is why this is so important. 

So thank you. 

Mr. SHUSTER. I thank the gentleman. 

We do not have much time, but we do have time for Mr. DeFazio 

to have 5 minutes and me to have 5 minutes because they have 

called a vote, and we have got 12 minutes and 28 seconds. So I will 

strictly enforce the 5-minute rule. 

Mr. DEFAZIO. OK. Thank you, Mr. Chairman. 

I just want to point out in the DoD memo there is a sentence, 

‘‘And recognizes the potential risks regarding DoD’s national security responsibilities.’’ 

66 

I would like to put in the record an article from the National Observer in Canada. Headline, ‘‘Inspectors Say a Major Canadian Airline Disaster is ‘Likely,’ ’’ and they talk about the major cutbacks 

in the safety which was retained by the Government. 

And then I would move on. Ms. Robyn, do you remember Executive Order 13180 by President Clinton? 

[The National Observer article entitled, ‘‘Inspectors Say a Major Canadian Airline 

Disaster is ‘Likely,’ ’’ is on pages 147–150.] 

Ms. ROBYN. Is that the one that created the ATO? 

Mr. DEFAZIO. The one that says air traffic control is an inherently governmental function. 

Ms. ROBYN. Yes, the date of that is December 7th, and they 

were—— 

Mr. DEFAZIO. Thank you. Thank you, Ms. Robyn. I do not have 

time. Ms. Robyn, I do not have time. Thank you. 

So, Mr. Scovel, so we just kind of said, oh, our assets are old and 

someone down there said they are not worth anything. 

How old is that? I think that is 13, right? That is Houston, val- ued at $62 million. Then, of course, we have property in Long Island, kind of valuable. 

I mean, have you broken out the assets in terms of property values? 

In Canada they valued the system, and they had to pay for it, 

correct? 

Mr. SCOVEL. They did. 

Mr. DEFAZIO. OK. And the inspector general in Canada, auditor general, and this is Canada, little, dinky Canada, they paid $1.5 

billion, and we are proposing that nothing would be paid here and 

there is no value, and they said it was undervalued at $2.6 billion. 

How old was their system? Because you are saying our system 

is old and decrepit and these guys say it is not worth anything. 

Was theirs brandnew, spiffy back then? 

Mr. SCOVEL. No. 

Mr. DEFAZIO. OK. So they paid for it, but here we have a much 

larger investment that we are going to transfer for free, and of 

course, we have the whole problematic thing about taking. 

And you valued it at $13.7 billion. How much of that would you 

depreciate? 

Mr. SCOVEL. How much of that would depreciate it? 

Mr. DEFAZIO. No, I mean what is land value versus building? 

You do not know? 

Mr. SCOVEL. That is the infrastructure alone. I do not believe it 

involved the property value. 

Mr. DEFAZIO. OK. So it is quite valuable. 

Now, let’s go to small airports. Almost everybody on that side is 

sensitive to GA. They represent more rural districts, and we heard 

that they will not direct where people fly. 

That is correct, but this board will decide where we invest. Here 

is the statement of the CEO of Jet Blue. ‘‘We also need to direct 

infrastructure improvements into the regions of the country that 

will produce the most benefits, like the Northeast Corridor.’’ 

The airlines get four seats on that board. That is the opinion of 

Jet Blue. We heard the same thing from the former CEO of United 

67 

and, oh, by the way, there is no airport representative on the board 

whatsoever, at least as the bill was written last year. 

So we say we are going to protect rural interests. We are going 

to pretend it. 

Now, Mr. Brown, you talked about WAAS. There are 4,421 

WAAS. Did those come for free? And do they have to be maintained, updated? 

Mr. BROWN. Well, the FAA like night owls produce them one airport at a time until they arrived on my doorstep, and I was amazed 

by them, but they got paid for by the user fees and fuel taxes that 

fueled the system. 

Mr. DEFAZIO. Yes. We heard how much money has been wasted, 

except we have been investing in things like that which are not 

valuable to the commercial industry. 

Except for maybe Jackson Hole and a couple other places, does 

the commercial industry use those? 

Mr. BROWN. Anybody can use those if they have the right equipment. The problem is most of their airlines do not have the right 

equipment. 

Mr. DEFAZIO. Well, that is interesting. 

Does anybody know of another country in the world that is ready 

to turn on a ground-based ADS–B system in 2020 for all of their 

air traffic? Anybody who is so equipped, any other country in the 

world doing that, ground-based domestically, not over the ocean? 

Mr. POOLE. Australia. It is already in operation. 

Mr. DEFAZIO. OK. So we have got one, and we are going to be 

there, too. 

So we hear a lot about this over the ocean stuff. I am not particularly concerned about the tiny fraction of over the ocean flights we 

control and whether or not they get free ADS–B because there are 

not that many planes to worry about the congestion and flying closer together, whereas domestically we may get some benefit from 

the system, but it still begs the question of how many planes can 

you land at the same time at many of our airports, which has to 

do with airport scheduling. 

Revenues, apparently there is an assumption that Congress will 

repeal the ticket tax. I mean, right now our current taxes are yielding about $14 billion a year, and the ATO is $11.1 billion. So that 

assumes Congress is going to repeal substantial taxes, I assume. 

That is correct, and then the new board will determine how to 

pay for the ATO. 

OK. I see a nodding of the head, yes. 

Thank you, Mr. Chairman. 

Mr. SHUSTER. I thank the gentleman. 

And let me start off first by saying that investment will not be 

directed by this new board. There will still be eight IP funds that 

will be going directly out to these small and medium-size airports 

around the country. So that is not actually accurate. 

One of the things that Ms. Titus brought up, which I think is 

very, very important and she was directing it to Mr. Rinaldi was 

about the air traffic controllers, and let me tell you one of my biggest concerns in this proposal is that we make sure we move those 

highly trained, highly technical, highly skilled, efficient air traffic 

controllers to the new system. And if you do not do them the right 

68 

way, one-third of them—I think I am correct—one-third of the certified controllers can retire tomorrow if they are not happy. 

So for me that is something very important, and I can tell you 

I have been criticized by conservative groups around this town because they just do not get it. You have to take the qualified workforce with you. 

So, Mr. Rinaldi, I know we talked a little bit about the count 

going up at NAV CANADA. The controller count goes up. What are 

your thoughts on not only the controller count, but middle management? 

Mr. RINALDI. Well, if you look at, and it was brought up earlier, 

NAV CANADA when they were in Government, they had roughly 

6,700, 6,800 employees, of which 2,000 were air traffic controllers. 

Now that it is a highly functioning, not-for-profit corporation, 

they have about 4,300 employees, of which 2,000 of them are 

roughly air traffic controllers. 

So the controller workforce stayed the same or went up a little 

bit. It is the middle management that they attrited through retirements in a humane way, and they just did not backfill those positions. 

I call a lot of that, you know, between the middle management 

within the agency and the multilayers of contractors they have 

within the agency also, it is one of the things that is already being 

privatized out there with all of these contractors within FAA headquarters. 

I call that the ‘‘clay.’’ It actually stops good things from happening at the very top, and things that are happening trying to 

change at the operational level. 

Mr. SHUSTER. And so those of us that are not geologists, nothing 

permeates down and nothing permeates up, correct? 

Mr. RINALDI. Yes. 

Mr. SHUSTER. I understand what ‘‘clay’’ is then. 

Mr. RINALDI. It is 15 levels of no to get to yes. 

Mr. SHUSTER. Exactly. And then finally, I just wanted to make 

the point here that, first of all, something was said along here that 

the airspace would be restricted. 

We made it clear in AIRR 1 but maybe not clear enough to make 

sure that this new entity will not be able to restrict airspace. The 

plan, plain and simple, we are going to strengthen that language 

to make sure the general aviation community knows they are not 

going to be restricted by this new entity. 

That is the FAA having the regulatory oversight of this if that 

is the case to do something like that. 

Second, when we talk about NAV CANADA, our system is 10 

times larger. No doubt about it. I believe because we are so big and 

so complex, that is a reason to move to the system so that we can 

manage it much better. 

You know, we are already scaled to a size to handle those greater 

operations, 3,000 facilities, 14,000 controllers, 6,000 technicians, 

5,000 managers. We are scaled to handle this today. 

And then I might add, again, and this is something that is very 

troubling to me and it should be troubling to anybody who is in the 

business world, we are 9 to 10 times larger, depending on how you 

69 

want to measure it, than Canada. We spend 25 times to 28 times 

more in CapX than they do. 

And as was mentioned by Mr. Davis, the former CEO of NAV 

CANADA said, he gets twice as much technology at half the cost 

three times as fast. 

So, again, as a business owner, a former business owner, if we 

are spending 25 to 28 times more in CapX and we are getting very 

little for it, that is a real problem. That is a real problem for the 

American taxpayer. That is a real problem for the system. 

If we were doing it efficiently, my goodness, how we could drive 

the costs down, and as I spoke to the folks in NAV CANADA, and 

I think everybody understands, this is a volume business, and if we 

go to the system, our volume is so tremendous it will dramatically 

drive down the cost, and we will have more money out there to do 

things to help more communities, to do things to help the efficiency, the technology, the employees. 

So, again, this is something we have got an opportunity, and I 

said to the airlines when I was here last time when they did something very wrong, we have an opportunity here to do something 

very right, and I hope we seize this opportunity because I am 

afraid it is not going to come along again. 

Ms. Robyn, I think I am the first one who called you the right 

name today. 

[Laughter.] 

Mr. SHUSTER. I know you have been engaged in this for a number of years. You started in the Clinton administration, and I appreciate all of the value you bring here, as well as Mr. Poole and 

Mr. Brown. Thank you so much for being here today. Your perspective is very valuable to us. 

Again, I want to reiterate. I am a GA guy. I am a rural guy. 

There is nothing I want to do to hurt those people who are my constituents, but I think what we have at hand here is something to 

help the United States of America to continue for us to be the leader in aviation around the world. 

So again, thank you all for being here today. I appreciate your 

time. 

And I would ask unanimous consent that the record of today’s 

hearing remain open until such time as our witnesses have provided answers to any questions that may be submitted to them in 

writing. 

And I ask unanimous consent that the record remain open for 15 

days for any additional comments or information submitted by the 

Members and witnesses to be included in the record of today’s 

hearing. 

Without objection, so ordered. 

I would like to thank the witnesses again, and there are no other 

Members, so we are adjourned. 

[Whereupon, at 1:38 p.m., the committee was adjourned.] 

70 


Insert offset folio 8 here 25482.008

Before the Committee on Transportation and Infrastructure 

United States House of Representatives 

For Release on Delivery 

Expected at 

10:00 a,m, EDT 

\\i ednesday 

May 17,2017 

CC2017012 

Observations on FAA's 

Efforts To Implement 

Reforms and Modernize 

the National Airspace 

System 

Statement of 

Calvin L. Scovel III 

Inspector General 

U.S. Department of Transportation 
71 


Insert offset folio 9 here 25482.009

Chairman Shuster and Members of the Committee: 

Thank you for inviting me to testify on the Federal Aviation Administration's (FAA) 

efforts to implement organizational reforms and modernize the National Airspace 

System (NAS). Since 1958, FAA has overseen the safe operation of the busiest and 

most complex air traffic system in the world. Over the past 2 decades, Congress has 

enacted legislation specifically aimed at making FAA more efficient and cost 

effective while expediting modernization projects. Congress has also provided the 

Agency with significant support to modernize the National Airspace System, most 

notably through its backing of the Next Generation Air Transportation System 

(NextGen)-a multibillion-dollar transportation infrastructure project intended to 

modernize our Nation's aging air traffic system. 

Our past and ongoing work has examined FAA's implementation of its reform 

authorities as well as high-priority NextGen investments. My testimony today is based 

on this work and will focus on FAA's (1) efforts in implementing personnel, 

organizational, and acquisition reforms and (2) progress and challenges with FAA's 

NextGen efforts. Though my office does not make policy recommendations, J will 

also discuss how other countries have structured their aviation systems and highlight 

factors that this Committee may wish to take into account as it considers making 

changes to FAA's organizational and financing structures. 

SUMMARY 

Since 1995, FAA has implemented several reforms in response to congressional 

mandates to improve its operations, acquisition practices, technology delivery, and 

cost management. These include implementing a new employee compensation 

system, establishing an Acquisition Management System (AlviS), and undertaking 

multiple reorganizations. However, these reforms have not achieved the expected cost 

and productivity outcomes. In addition, while FAA has reported that it improved its 

management of large-scale modernization projects and acquisitions, our \Vork 

continues to find that several systemic issues impact FAA's ability to meet its overall 

cost, schedule, and implementation goals. FAA is making progress in implementing 

some high-priority capabilities for NextGen, such as working with industry to 

implement more fuel-efficient routes during takeoffs and landings. However, several 

risks remain to be addressed in delivering these priorities and achieving expected 

benefits, such as resolving complex technology integration issues. As Congress and 

the Administration consider changes to FAA's structure, other nations that have 

commercialized their air traffic navigation systems-such as Canada, the United 

Kingdom, France, and Germany-may serve as a helpful frame of reference. At the 

same time, policy makers will need to take into account other important factors, such 

as the unique scale and complexity of the United States NAS. 

1 
72 


Insert offset folio 10 here 25482.010

FAA REFORMS HAVE NOT ACHIEVED EXPECTED OUTCOMES 

Over the past 2 decades. Congress has granted FAA authority to reform the Agency's 

operations, acquisition practices, technology delivery. and cost management. FAA has 

taken several steps in response, including major internal reorganizations to improve 

efficiency. Despite these reforms, however. FAA's total budget, operations budget, 

and compensation costs have nearly doubled, while the Agency has not realized 

corresponding cost and operational efficiencies. In addition. longstanding 

management problems have led to further delays with FAA's efforts to deliver new 

technologies and major acquisitions. 

FAA Has Implemented Congressionally Mandated and Other Reforms 

Since 1995, FAA has implemented congressionally mandated personnel and 

organizational reforms and established measures to improve its internal operations 

and reduce costs (see table 1 ). These efTorts include establishing the Air Traffic 

Organization (ATO), implementing new performance-based compensation systems, 

negotiating collective bargaining agreements with its bargaining units, and 

implementing a cost accounting system. 

Table 1. Summary of FAA Reforms 

Legislation 

Personnel Reforms 

In 1995, legislation was passed that exempted 

FAA from most Federal personnel rules, 

allowing it to implement a new personnel 

management system with more flexibility in 

hiring, training, compensating, and assigning 

personnel. In 1996, additional legislation 

required FAA to negotiate pay with its 

units. 

In 1995, legislation granted FAA relief from 

Federal acquisition laws and regulations and 

directed FAA to develop an AMS to meet its 

unique needs. FAA's AMS was designed to be 

Jess prescriptive and more flexible than the 

FAR by allowing procurement officials to use 

discretion to employ any procedures that are 

not captured in AMS. 

Reforms 

In 1996, legislation was passed requiring FAA 

to establish a cost accounting system. In 

2000, legislation required FAA to appoint a 

Chief Operating Officer (COO) to oversee 

daily operation and modernization of the air 

traffic control system. Later that an 

Executive Order created the 

Key FAA Reform Efforts 

• 1996: FAA implemented the Core Compensation System 

(performance-based pay system). 

• 1998: FAA negotiated the first collective bargaining 

agreement with the National Air Traffic Controllers 

Association. It has since negotiated four more 

agreements (2003, 2006.2009, and 2016). 

• 1996: FAA implemented AMS 

• 2004: FAA began using phases and segments• to budget 

for major acquisition systems to meet Office of 

Management and Budget (OMB) guidance and initiatives 

to improve acquisition management. 

• 2012: FAA created single points of accountability for 

contracting officers and program managers and an FAAwide program management office for acquisitions. 

• 2003: The first COO was appointed. 

• 2004: FAA established the ATO. 

• 2006: FAA implemented a cost accounting system. 

• 2011: FAA moved the NextGen program office out of 

A TO and placed it under an Assistant Administrator to 

increase visibility for the program. 

* OMB guidance states that agenctes should break large acquisitions into smaller, more manageable segments for more efficient 

project and acquisition management purposes 

2 
73 


Insert offset folio 11 here 25482.011

In addition, FAA carried out multiple reorganizations to flatten its organizational 

structure and improve efficiency. For example, after establishing the ATO in 2004, 

FAA restructured the ATO's administrative and support functions in 2006 and 

consolidated nine regional service offices into three new service centers (Eastem, 

Central, and Western). In 2012, FAA created Deputy Chief Operating Officer and 

Chief of Staff positions and merged the terminal and en-route services units to form 

the Air Traffic Service Unit under a single vice president. FAA also eliminated four 

Senior Vice Presidents and combined the safety and technical training services units 

into one unit. These changes eliminated duplicate statT and reduced FAA's 

administrative overhead expenses by consolidating leases and implementing new 

processes for purchasing equipment and supplies. 

FAA has also taken steps to reduce its costs. For example, in February 2005, FAA 

awarded a 1 0-year contract to Lockheed Martin to operate flight service stations in the 

continental United States, Puerto Rico, and Hawaii. Last November, we reported that 

FAA has achieved most of the anticipated cost savings from contracting out flight 

service operations-about $2.13 billion over a 13-year period. 1 FAA achieved these 

savings through reorganization of flight service operations, modernizing facilities and 

equipment, consolidating service stations, and reducing statT levels. Effective 

contractor oversight also contributed to savings, including 22 measures to evaluate 

contractor performance and input from pilots and other users. The Agency also 

implemented a broad-based set of initiatives intended to reduce costs such as 

communication and travel. 

Reforms Have Not Achieved Expected Cost and Productivity Outcomes 

FAA's reform efforts have not slowed the Agency's overall cost growth or improved 

operational productivity as intended. Instead, between fiscal years 1996 and 2015, 

L-'\A 's total budget grew by 95 percent, 2 its operations account increased by 110 

percent, and its total personnel compensation and benefits (PC&B) costs doubled (see 

figure 1 ). 3 Despite the rise in FAA· s PC&B budget FAA's workforce levels have 

dropped over the past 2 decades. and the number of air traHic facilities the Agency 

operates has essentially remained the same. 

1 FAA Achieved .ifost Cost Savings From Contracting Out Flight Service Stations, but ;Veeds To 

Determine the Future of Program (OJG Report No. AV2017015). November 16. 2016. OIG reports arc 

available on our \Veb site at htip://\\W\\.oig.dot.gov/. 2 In 2000. Congress passed legislation that significant!; increased funding f()r the Airport Improvement Program and 

Facilities and Equipment. 

; Even v.hcn adjusted tOr inflation. the totul budget increased 35 percent the Operations account increased 45 percent and 

PC&B cost increased 16 percent. 

3 
74 


Insert offset folio 12 here 25482.012

Figure 1. FAA's Total Budget, Operations and Total PC&B 

Costs, Fiscal Years 1996 Through 2015 (Dollars in Millions) 

$18,000 ,-------·-·--------------------·--·--------·----··--------

$16,000 t----------------------:::;';;;iiii'----;;;;;;;;;;;;;;;;.---

$14,000 +-----------:::7"""';;;;;;;;----~~:::=-----------­

$12,000 +-----------:>~"-----------------------­

$10,000 

$8,000 

$6,000 

$4,000 

$2,000 

$0 +---~-.,--·~·-.,...-~--,.---,---,.-.--,....--,-~~-r·~"f"'"--.-"r'----r----r--"""'1 

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 

-Total Budget -operations Budget 

Note: Dollars shown are current dollars and have not been adjusted for inflation. 

Source: OIG analysis of FAA data 

PC&B Costs 

Between fiscal years 1996 and 2015, the total number of full-time 

equivalents decreased by 9 percent, from 47,508 to As of2015, 

FAA's controller workforce stood at FTEs. Over the last 20 years, its 

controller workforce has up to 1 FTEs (see 

Figure 2. FAA's Total Number of Direct-Funded FTEs and Air Traffic 

Controllers Fiscal Years 1996 Through 2015 

60,000 ,..----------------·--------------------

40,000 50,000 ~~~=:::::::-:::::~;;;:;;;::::::::::::::;;:;~ ~ 

30,000 f-----------··----------·------------------·-·----

10,000 

20,000 ~::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::~ ~ 

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 

-rota! FAA Direct-Funded FTEs --Total Air Traffic Controllers FTEs 

Source: OIG analysis of FAA data 

FAA has not met the goals of its reform efforts because it has not taken full 

advantage of its authorities when new personnel systems or used sound 

business practices to its operational and cost effectiveness. Our 

work has noted various opportunities FAA has missed to achieve the outcomes it 

intended for its reforms. For ex<lm!Jle: 

4 
75 


Insert offset folio 13 here 25482.013

• FAA has not effectively leveraged personnel reform flexibilities. While FAA is 

exempt from most Federal personnel laws and regulations covered by Title 5, 4 

many of its personnel policies, such as premium pay, leave, and grievances, 

continue to min·or Federal rules---due in part to FAA's unionized workforce, 

which negotiated benefits and other personnel matters that are in line with Federal 

regulations. However, FAA did use its personnel reform authorities to change and 

expand the number of pay systems for its workforce. In addition, last January the 

National Academy of Public Administration reported that it was not possible to 

determine whether exempting FAA from Title 5 addressed the human resource 

challenges the Agency faced in the 1990s. such as attracting and retaining 

qualified staff and reassigning employees in response to changing needs. 5 The 

report also questioned whether the Agency had maximized these flexibilities in 

other areas, such as hiring and recruiting. 

• FAA has not demonstrated improvements in controller productivity. 

Controller work rules that FAA and the National Air Traffic Controllers 

Association negotiated have not increased productivity or reduced the Agency's 

operating costs as intended. In 2014, we reported that FAA implemented 

51 initiatives intended to increase controller productivity, reduce operating costs, 

and improve training and hiring practices. 6 However, only two of the initiatives 

resulted in measurable cost savings. Six initiatives increased Agency costs, and 43 

lacked quantifiable baseline productivity and cost goals, making it difficult to 

assess their effectiveness. Moreover. according to a 2015 study, FAA's unit cost 

of service has increased by 71 percent since 1997, due largely to a decline in 

operations with no offsetting decline in operating expenses. 7 We also reported that 

FAA does not systematically collect or analyze controller workforce data to 

reduce costs or improve productivity, and FAA officials could not agree on which 

metrics are appropriate to measure controller productivity. 

• FAA has not taken advantage of opportunities to reduce facility costs. 

Notably, since 2000 the Agency has not converted any of its FAA-operated towers 

to the Federal Contract Tower Program-despite its recognition of potential cost 

savings. As we reported in 2012, a contract tower costs on average about 

$1.5 million less to operate than a comparable FAA tower, mainly due to lower 

staffing and salary levels. 8 

~Title 5 is the s~ction of the U.S. Code that covers Federal personnel statutes. 

Fedaal Avwtion Administration: Personnel Re.furm !:,jfectiwness As·sessment_ National Academy of Public 

Administration. Januarv 2017. 6 f>t1 Lacks the Jletrfcs and Data Seeded To Accurately }Ieasure the Outcomes of Its Controller Productivitv Initiatives 

(OIG Report No. AV20l4062). July 9. 2014_ -

' Optionsji1r F4A Air TrajJlc Control Reform. testimony of Dorothy Robyn before the House Committee on Transportation 

and Infrastructure. Subcommittee on Aviation. March 24.2015. 8 Contrael Towers Continue To Provide Cost-EfTecti1'e and Air Tn?fjic Serriccs. hut Improved Oversight qf 1he 

Program Is .Yeeded(OfG Report No. AV2013009). No\·cmbcr 5. 

5 
76 


Insert offset folio 14 here 25482.014

These and other issues have stemmed from FAA's lack of basic business practices to 

oversee its operations and make decisions. While FAA has implemented systems, 

such as a cost accounting system, to operate more like a business, it does not regularly 

analyze the operational and cost data generated by these systems to determine if it 

could reduce costs or improve productivity. Several FAA officials and users have 

noted that while FAA successfully maintains one of the safest, most complex systems 

in the world, the Agency places limited focus on factors such as cost efficiency or 

productivity enhancement. This mindset also encourages managers to go with the 

''status quo'' when making cost and operational decisions regarding the NAS, such as 

ineffectively using overtime at air traf1ic facilities. 

Management Problems Continue To Hinder FAA's Efforts To Deliver 

New Technologies and Major Acquisitions 

FAA's reforms have also fallen short in improving its delivery of new technologies 

and capabilities. Major projects-including some critical to NextGen--have 

experienced cost increases and schedule slips. Our work continues to find that several 

systemic issues underlie FAA's problems in delivering new technologies on time and 

within budget. These include overambitious plans, unreliable cost and schedule 

estimates, unstable requirements, software development problems, poorly defined 

benefits, and ineffective contract and program management. 

To help reduce cost and schedule risks, FAA now manages systems in phases, which 

the Agency says improves learning and management through the early identification 

of potential issues. While this approach can help move a program forward, it can also 

mask the overall cost, schedule, and capabilities of several large budget programs. For 

example, FAA has adopted a segmented approach to implementing its six 

"transformational'· programs, 9 a multibillion-dollar set of initiatives required to 

implement NextGen and introduce new capabilities. As we reported in 2016, FAA has 

made some progress implementing these programs and has approved costs and 

schedules for their initial segments. 1

° For example, FAA approved funding of 

$2 billion for the first segment of Data Communications (DataComm) and $2.7 billion 

for three segments of the Automatic Dependent Surveillance-Broadcast system 

(ADS-B), including the recently completed ground-based infrastructure and the 

ongoing rollout of ADS-!3 services and applications. 11 As of November 2016, cost 

estimates for the transformational programs (as currently envisioned) total over 

$5.7billion (compared to $2.1 billion in 2012) and extend beyond 2020. However, 

9 rhe six transformational programs are Automatic Dependent Surveillance-Broadcast (ADS~B). System Wide Information 

Management (SWIM). Data Communications (DataComm). NAS Voice System (1'\VS), Common Support ServicesWeather tCSS· Wx), and Collaborative Air Trame Management-Technologies (CA H1·T). 

w Total Costs. Schedules, and Bene_flts (~(FAA ·s ,YextGen TransfOrmational Prof?rams Remain Uncertain (OIG Report No. 

AV20l7009). November 10.2016. 

i 

1 DataComrn will alio'' contro!lcrs to send digital messages to pilots. ADS"B technology uses satellite~based GPS and is 

intended to allow fAA to transition from ground-based radar to a satellite-based system f()r improving surveillance and 

management of air traffic. 

6 
77 


Insert offset folio 15 here 25482.015

FAA has not fully identified the total costs, the number of segments, their capabilities, 

or completion schedules for any of the six programs. 

In addition, FAA has not determined when the transformational programs will start 

delivering bene11ts or how they will improve air traffic flow or controller productivity. 

For example, FAA"s ADS-B program currently focuses on the ADS-BOut capability 

(the broadcast of infom1ation to ground systems). which is mandated for airspace 

users to equip by January 1. 2020. ADS-B Out will only provide few benefits to 

airspace users except in airspace where radar is limited or nonexistent. FAA expects 

users could gain more widespread benetits through ADS-B In, which will enable 

display of the infmmation in the cockpit. However, ADS-B In requirements continue 

to evolve. 

These weaknesses arc not limited to FAA's transfmmational programs. As we 

reported in January 2016, 12 8 of FAA's 15 major system acquisitions that were 

ongoing as of September 30, 2013, 13 had cost increases and 8 had schedule delays. 

Overall, ongoing major system acquisitions experienced a cumulative cost increase of 

$3.8 billion beyond FAA's original estimates 14 and delays ranging from 7 to 174 

months, with an average delay of 51 months. In response to our recommendation, 

FAA now annually identifies the total ongoing costs-including both open and closed 

segments-for each acquisition that involves multiple segments. However, it remains 

difficult to determine whether desired capabilities have been delivered as planned, in 

part because FAA's reporting does not always identify changes to an acquisition's 

scope. 

Furthermore, FAA has demonstrated ineffective contract management and lack of 

internal controls in several acquisitions and agreements we have reviewed. For 

example: 

• FAA has not done enough to reduce its use of sole-source 15 contracts, as directed 

by OMB in 2009. As we reported in May 2016. between fiscal years 2008 and 

2014, FAA awarded 624 sole-source contracts with a total value of about 

$2.2 billion. 16 Also, FAA had not adequately conducted many pre-contract award 

practices required by AMS- such as procurement planning or developing 

11 r-:4A RefOrms Have So! Achieved E.1.pected Cost, !fficien(v. and Jfodernization Outcomes (OIG Report No. 

AV2016015).January 15.2016. 

u To evaluate the effectiveness of FAA's refi:mns on current acquisitions. \Ve limited our review to all major acquisition 

systems that were acti\'C as ofSeptemhcr 30. 2013-which \\US the latest fiscal )Car with available information at the time 

\'>C stmicd our audit 

!.J About $3. t billion of the $3.8 billion cost increases for the eight systems were associated v .. ith the Standard Terminal 

Automation Replacement System (STARS) and the Wide Area Augmentation System--FAA's oldest actiYC major 

acquisitions at the time. About $1.46 billion of the STARS and WAAS increase is associated \Vith O\,crruns to initial 

baselines. and $1.67 billion was due to technolog) refreshment and enhancements. Six other programs experienced 

combined cost increases of$692 million---Qf\\hich $539 million \Vas associated \\ith cost overruns to initial baselines. and 

$153 million \Vas due to 

'~Sole-source contracts arc 1

b FAA f.acks Adequate 

May 9. 2016. 

and carry the risk of overspending. 

Jutc·.)UI/rccContracts (OIG Report No. Zi\2016065). 

7 
78 


Insert offset folio 16 here 25482.016

independent cost estimates to ensure reasonable prices. We projected that the total 

estimated value of sole-source contracts that did not fully comply with key AMS 

requirements is $962 million, or 51 percent of the total estimated value of 

contracts in our universe. 

• FAA does not always ensure adequate oversight on its multiple award contracts. 

Our 2012 audit 17 of FAA's Systems Engineering 2020 (SE-2020) contracts, 

originally valued in 2010 at $7.3 billion, 18 found that unreliable cost baselines 

and overstated contract values may have affected the FAA's ability to manage 

total contract costs. Due to these concerns and the significant funding involved, 

we arc conducting a follow-up audit of FAA"s award and oversight of SE-2020 

task orders to assess w·hether FAA's actions for awarding task orders and 

overseeing the SE-2020 acquisition program are sufficient to meet its program 

mission. 

FAA also did not effectively oversee procurements awarded with its Electronic 

FAA Accelerated and Simplified Tasks (eFAST) 19 program. We recently 

reported20 that some of the contracting officer representatives responsible for 

overseeing eFAST procurements lacked required certifications and specific 

procurement expertise. We also found a lack of documented oversight plans. 

FAA is not adequately managing its use of other transaction agreements-which 

are not required to follow many laws, regulations, and policies that apply to more 

traditional acquisition and financial assistance instruments such as contracts and 

grants. Our ongoing review has identified concerns with incomplete file 

documentation, inadequate oversight, and funding and program vulnerabilities. 

We expect to report on FAA's oversight of other transaction agreements later this 

year. 

Management weaknesses with major programs are also exacerbated by gaps in FAA's 

AMS guidance for acquisitions. When FAA implemented AMS in 1996, it believed 

that it would have increased flexibility to rapidly field systems at less cost. FAA's 

Administrator at the time stated that FAA's goal for AMS was to cut acquisition costs 

by 20 percent and acquisition schedules by 50 percent within 3 years. compared to 

earlier acquisitions implemented under the Federal Acquisition Regulation (FAR). 21 

fnsz((ficient To Ej/eclive(r Jfanage fts S)'slems Engineering 2020 Contracts (OIG Report 

FAA revised its estimate t{H the SE-2020 contracts to $l.l billion, effective Nmember L 2015. 

l'l eFAST h. the Agency's preferred vehicle for small business procurements. offering a broad range of professional and 

support sen ices including research and development and engineering services. 20 Opportunities E.-rist j(>r FAA To Strengthen Its Award and On?rsight vf eFA,\'T Procurements (OlG Report No. 

ZA20!7046J. May 8. 2017. 2

i The Federal Acquisition Regulations S)stem is established fOr the codification and publication of uniform policies and 

procedures for acquisition h; a!! executive agencies. The Federal Acquisition Regulations System consists of the Federal 

Acquisition Regulation (FAR), \\·hich is the primar) document. and agenc) acquisition regulations that implement or 

supplement the FAR. 

8 
79 


Insert offset folio 17 here 25482.017

However, the gaps we have found in AMS policies and guidance are hindering 

effective implementation of major acquisition programs. For example: 

• FAA has not implemented a recommendation from our January 2016 report to 

incorporate modular contracting requirements into AMS guidance. Recommended 

by the Federal Chief Information Officer, modular contracting emphasizes 

acquiring information technology investments in contractual increments, each of 

which produces a measurable result towards delivering the functionality for the 

investment, which can help reduce cost and schedule risks in large-scale programs. 

• AMS also does not provide specific guidance to assist program managers in 

accepting large software intensive programs-such as the En Route Automation 

Modernization (ERAM) program that automated how controllers manage highaltitude traffic-which contributed to the acceptance of immature software and 

millions in increased development costs. 22 

In light of the organizational and program management changes FAA has made over 

the years, it is difficult to precisely determine how FAA's switch from the FAR to 

AMS has affected how it delivers acquisitions. However, FAA is currently reviewing 

industry best practices to determine how AMS can be improved. 

FAA IS MAKING PROGRESS WITH HIGH-PRIORITY NEXTGEN 

INVESTMENTS, BUT CHALLENGES REMAIN IN MANAGING RISKS 

AND DELIVERING BENEFITS 

Given the large scope ofF AA's NextGen effort, establishing investment priorities is 

key to maximizing near-term benefits and securing stakeholder involvement. FAA has 

made progress working \Vith industry in identifying and advancing investment 

priorities, such as new routes based on performance-based navigation (PBN). 

However, several risks remain to be addressed in delivering these identified priorities 

and achieving expected benefits. 

FAA Has Made Progress in Implementing High-Priority Investments 

FAA has successfully worked with industry to identify and launch key NextGen 

priorities. In 2013, FAA tasked the NextGen Advisory Committee (NAC) with 

reviewing FAA's NextGen plans and recommending priorities for investment. That 

same year, 23 the NAC identified four top priorities~ critical to delivering near-term 

benefits and advance NextGen: (1) advancing PBN, (2) improving access to closely 

spaced parallel runways (known as Multiple Runway Operations, or MRO), 

(3) enhancing airport surface operations, and (4) developing data communications for 

Weaknesses in Program ami Contract Contribute to [·."RAA! Delays and Put Other ,VextGen Initiatives at 

(OIG Report "o. AV20!2!79). September 20!2. 

The ~AC added the Data Communications program as its Hmrth priority in February 2014. 

9 
80 


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controllers and pilots. FAA and the NAC are in discussions to add a fifth priority-to 

focus on reducing congestion in the Northeast corridor. 

In response to the NAC's report, FAA collaborated with industry representatives to 

develop an implementation plan for capabilities in the four original priority areas. 

FAA has since made progress and reported that it completed about 93 percent of its 

milestones between October 1, 2014, and March 31, 2017. 

The following are some notable examples of FAA's progress: 

• MRO: FAA implemented Wake Recategorization (RECAT), a capability that 

safely reduces separation between aircraft on arrivals and departures, at 11 airports 

nationwide, including Hartsfield-Jackson Atlanta Intemational Airport, George 

Bush Houston Intercontinental Airport, and John F. Kennedy Intcmational 

Airport. 

• PBN: FAA fully deployed PBN procedures at the Northern Califomia Metroplex 

during the second calendar quarter of 2015, about 3 months ahead of schedule. 

FAA conducted a phased implementation of 44 routes covering the greater San 

Francisco Bay Area and Sacramento. 

• Airport Surface Operations: FAA reported early implementation of the System 

Wide Information Management Surface Visualization Tool at five Tenninal Radar 

Approach Control facilities. This system allows controllers to better monitor 

congestion and plan for changes on airport runways and taxiways. especially 

during inclement weather. 

• DataComm: FAA reported making strides with DataComm. implementing the 

capability for departure clearance at 3 key airport towers in 2015 and at a total of 

55 towers by December 2016. At the request of the NAC, FAA agreed to 

accelerate DataComm deployment ahead of the original schedule. To its credit. the 

Agency is implementing DataComm at specified towers across the Nation about 

30 months ahead of schedule. 

Yet, full implementation of all capabilities-and the realization of benefits-remains 

years away. Of the 156 milestones FAA reported as completed through March 2017, 

most were attributed to the implementation of Wake RECAT and DataComm at 

airport towers. Significant work remains to deploy new PBN procedures to capture 

airspace efficiencies and boost arrival rates, develop surface technologies to enhance 

capacity on crO\vded runways and taxiways, and install DataComm in the highaltitude environment to allow pilots and controllers to, among other things, reroute air 

traffic around bad weather. 

Significant Risks Remain That Could Impact Implementation and Slow 

Delivery of Benefits 

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To continue progress toward major program milestones, FAA will need to resolve key 

risk areas that will materially affect the delivery, capabilities, and benefits of its 

NcxtGcn priorities (sec table 2). 

Table 2. Key Risks to NextGen Priorities Implementation and Benefits 

Delivery 

Priority 

MRO 

PBN 

Key Risk Areas 

• Timely completion of safety analysis 

• Aircraft fleet mix at specific airports 

• Community outreach to reduce concerns about aircraft noise 

• Mixed equipage 

• Implementation of new automated controller tools to help controllers manage 

traffic in the vicinity of airport and limit the impacts of mixed equipage, beginning 

in 2019 

• Effective controller training and use of time based approaches at all air traffic 

______ facilities 

Surface 

Operations 

• Execution of the Terminal Flight Data Manager program for electronic flight strips 

and other surface management technologies 

• Complex systems integration issues across all phases of flight 

DataComm • Industry cooperation with purchasing and installing new avionics aircraft equipage 

All 

• Resolving avionics issues with over 700 Boeing 757 and 767 aircraft 

• Displaying information on controller displays at facilities that manage high altitude 

traffic beginning in 2019 

• Training for controllers and flight crews 

Priorities • Measurement and realization of benefits 

• Interdependencies between capabilities 

Source OIG analysis of FAA reports and studies 

Examples of key risk areas impacting potential schedules and benefits include the 

following: 

• Addressing community concerns and implementing controller tools for PBN. 

PBN has been delayed due to community concerns over aircraft noise. While 

regulations did not require FAA to fully assess the impact of aircraft noise. it 

could have anticipated this issue due to high public interest at other airports 

implementing similar procedures. This issue, along with others identified in FAA 

and industry reports-such as controllers· need for automated support tools to 

better manage aircraft in the vicinity of airports-poses a risk to PBN's long-term 

success. FAA does not plan to begin implementing new tools for controllers that 

manage traffic in the vicinity of aiJ1)0rts until the 2019 timeframe. 

• Modifying controller equipment and resolving avionics issues with 

DataComm. FAA is working to modify controller displays and computers so that 

controllers managing high-altitude traf1ic can begin to exchange datalink messages 

with pilots beginning in 2019. FAA and the airlines cannot reap the expected 

benefits of rerouting aircraft in bad weather until modifications to controller 

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82 


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displays and related equipment arc made and fully tested. Also, FAA and industry 

are working to resolve technical problems with over 700 Boeing 757 and 767 

aircraft avionics that cannot broadcast some datalink messages while airborne. 

FAA reports that over 2,800 aircraft out of about 7,000 U.S. commercial transport 

aircraft are now equipped to exchange DataComm messages. 

• Introducing and integrating electronic flight strips for controllers at airport 

towers. 24 Surface operations are critical to a more efficient NAS. because 

inefficiencies on the ground can negate efTiciencies gained in the air from new 

PBN routes and improved multiple runway operations. The centerpiece of FAA's 

surface efforts is the integration of Terminal Flight Data Manager, a new 

$795 million surface management system designed to introduce electronic flight 

strips into FAA towers and integrate other surface surveillance technologies into 

one efficient system. FAA plans call for the electronic flight strips to be installed 

at 89 airport towers between 2020 and 2028. According to FAA officials, risks to 

the program include evolving requirements, an aggressive schedule, and complex 

integration issues with diverse air traffic control systems used through all phases 

of flight. 25 Our work shows that the lessons learned from previous prototype 

efforts with electronic flight strips (and the resolution of technical issues, such as 

frozen screens) will be valuable in mitigating risks and speeding implementation 

of the new technology. 

Recognizing these risks with its priority areas, FAA recently adjusted its plans and 

established a 3-year rolling implementation plan that will be updated at the beginning 

of each fiscal year to focus on high-benefit. high-readiness capabilities. FAA and 

industry have also agreed on ways to increase communication on these issues. We are 

currently assessing FAA's process for managing the implementation risks for the four 

prioritized capabilities and plan to issue a report later this year. 

OTHER COUNTRIES' AVIATION SYSTEMS PROVIDE ALTERNATIVE 

STRUCTURES 

As Congress considers possible changes to FAA's structure, examining other nations' 

air traffic systems could provide a valuable frame of reference. This Committee asked 

our office to review how other countries operate, modernize, and finance their air 

navigation services and infrastructure and to compare these structures to FAA· s. In 

2015 we reported on our review of four nations-Canada, the United Kingdom, 

Germany, and France-and found that they had some common operational and 

l..f Electronic flight strips replace toda:y's paper flight strips with modern. real-time data-sharing. displays tOr tO\\Cr 

controllers. With today's paper strips. tower must ph)sica!ly hand otT a flight progress strip from controller to 

controller. whereas an electronic Yersion is distrihuted automaticall). reducing controller \vorkload and operational 

complexity. 

~ The Terminal flight Data Manager program will need to he full} integrated \Vith a wide range of systems that controllers 

use to manage tratlic. such as STARS for traftic in the\ icinity of the airport and ERAM fOr high-altitude traffic. 

12 
83 


Insert offset folio 21 here 25482.021

financing characteristics and also conducted smaller-scale modernization efforts. 26 

Ultimately, any change to FAA's stmcture will need to take into account several key 

factors, including the unique characteristics of the United States NAS and safety 

concerns. 

Other Nations' Systems Have Common Operational and Financing 

Characteristics 

The four countries we reviewed have separated their air traffic control functions from 

the safety oversight and regulatory functions. While safety and regulatory functions 

remain government-controlled, each nation has commercialized27 its air traffic control 

function into an air navigation service provider (ANSP) using various organizational 

structures. These structures include a private. not-for-profit, non-share corporation in 

Canada; a for-profit, public-private partnership in the United Kingdom; a 

government-owned limited liability company in Germany; and a government agency 

in France. 

According to ot11cials overseeing these systems, these countries commercialized their 

air traffic control functions to address issues such as rising national deficits, 

operational and cost inefficiencies, the government's inability to modernize its air 

transportation systems, and stagnant wage growth for government employees. While 

operations have been commercialized, the safety oversight and regulatory functions 

remain under the control of the respective governments and are separate from the 

ANSPs. 28 The foreign ANSPs are also financially self-supporting and finance their 

operations primarily through user fees. Users are charged fees for services such as 

navigation and surveillance activities in high-altitude and terminal environments, 

communications, and aeronautical and meteorological information. The ANSPs in 

Canada, Germany, and the United Kingdom also earned a small portion of their 

revenue from developing and selling aviation technology developed in-house, such as 

air traffic management systems. In addition, the ANSPs have the ability to finance 

their infrastructure and modernization efforts by issuing long-term bonds and other 

debt instruments, which are backed by the revenues earned by the ANSPs. 

Modernization Efforts in Other Countries Are Smaller in Size and Use 

Different Methods To Develop and Implement New Technologies 

Other key differences between FAA and foreign nations· air navigation structures 

pe1iain to how they undertake modemization efforts. Unlike FAA, the ANSPs do not 

There Are S'ign{fical/1 D(ffcrences Between FAA and Foreign Counlril?s' Processesj(Jr Operating Air .\'avigation S)·stems 

(010 Report No. AV2015084). September 2. 2015. 27 According to the International Ci\il Aviation Organization. "commercialization" is the ability of an organization to 

like a commercia! business. In discussions about air navigation services, the term is often used interchangeably with 

terms. including restructuring. privati/at ion. outsourcing. and corporatization. 

Under guidelines from the International Ci\il Aviation Organization. it is the responsibility of individual countries lO 

ensure the safCty of their aviation systems. In Europe. the Euwpean A\·iation Safety Administration (EASA} regulates and 

oversees all aspects of aviation safety. and European governments must ensure that operators in their n:spccti\e countries. 

comply \\ith EASA regulations. 

13 
84 


Insert offset folio 22 here 25482.022

embark on large modernization efforts or conduct extensive aviation research and 

development. Rather, they implement new technologies incrementally, using a variety 

of methods. For example, Nav Canada used a phased-in approach to develop and 

introduce a new system known as Controller/Pilot Data Link Communications 

(CPDLC). 29 

In lieu of developing modernization systems and software, three of the four ANSPs 

modify commercial-off-the-shelf products to meet their operational needs. For 

example, Nav Canada uses in-house staff to develop automation and other softwareintensive systems mostly by tailoring commercial products to fit their operation. In 

addition, all four ANSPs form joint ventures and other partnerships with private 

companies, such as Nav Canada's joint venture with a company to develop an ADS-B 

surveillance system, initially for use in the oceanic airspace. 

In addition, the United Kingdom, Germany, and France have joined other European 

countries in a large-scale effort to modernize and improve Europe's air navigation 

system to increase airspace capacity and overall efficiency. The associated 

modernization program-Single European Sky A TM Research, or SESAR-is 

similar to NextGen and is a public-private partnership intended to define and develop 

common aviation technologies for use across Europe. 

Additional Factors To Consider When Examining Possible Changes to 

FAA's Organizational Structure 

As Congress and other policy makers examine possible changes to FAA's 

organizational and financing structures, they may wish to consider several differences 

between the U.S. aviation system and other countries. These include the follovving: 

System Size and Complexity: The United States has the largest and most 

complex air transportation system in the world. A TO controls more than 2.5 times 

the airspace of the United Kingdom--the largest airspace of the four ANSPs we 

examined. The United States also has more operations than the total of all the 

foreign ANSPs we examined and has a larger general aviation community. To 

manage the U.S. airspace, FAA operates more air traffic facilities and employs 

more controllers than the foreign ANSPs combined (see table 3). 

2

° CPDI.C is used to supplement \Oice communication between pilots and controllers and provides henetits such as 

automating routine tasks and improYing safety by reducing \H)fk!oad and communication errors, 

14 
85 


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Table 3. Comparison of Air Navigation Service Providers 

Total 

Airspace 

Annual 

Movements (2011) 

Number of 

General Aviation 

Aircraft (2015) 

Number of 

Operational Air 

Traffic Controllers 

(2012) 

Number of Air 

Traffic Facilities 

ATO NATS NAV CANADA DSNA 

(United States) (United Kingdom) (Canada) 

75,110,000 km' 29,180,000 km' 18,000.000 km' 1.000,000 km2 

2, 106,689a 3,855,947 3,009,230 

210,030 19,924 36,440 34, 506 

18.001 1,480 1,689 3,964 

317 18 49 91 

Rules 

DFS 

394,000 km2 

3,061,000 

21,213 

1,716 

20 

a Data from 2010; b Instrument 

Source: O!G analysis of Civil 

Data Air Navigation Services Organization and Genera! Aviation Manufacturers Association 

• Capital Budgets: Given the differences in size and complexity, the capital 

budgets for ANSPs are significantly smaller than FAA's budget For 

example, FAA's Facilities and Equipment annual budget is billion, with 

several projects expected to cost billions of dollars to complete. Nav Canada's 

capital budget is approximately $120 million and it considers a 

acquisition to be $10 million. 

• Airport Funding: U.S. airports are funded through Federal programs, such as the 

Airport Improvement Program, and Passenger Facility However, as with 

the foreign ANSPs, airports in each of the four countlies we examined are 

generally self-suppotting, autonomous entities. ln the foreign ANSPs do 

not include airport development and maintenance costs in their user fee 

calculations. 

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• Aviation Research and Development: FAA conducts a wide range of aviation 

research in areas such as evaluating and testing NcxtGen concepts; conducting 

runway, fuel, and other safety analyses; and studying human factors in the air 

traffic control environment. However, none of the ANSPs we examined conduct 

the level of aviation research that FAA conducts or operates a technical 

development complex like FAA's Technical Center in Atlantic City, NJ. 

Regardless orthese differences, other nations' experiences in separating their aviation 

function-as well as studies we reviewed-have led to several lessons learned. These 

include the following: 

• Safety: Studies we reviewed, including a 2014 report commissioned by FAA, 30 

indicate that separating air navigation and safety/regulatory functions has not 

impacted safety. However. the report noted that if a government is planning to 

separate its safety oversight organization from an ANSP, it needs to establish a 

clear division of roles between the safety organization and the ANSP, ensure that a 

sufficient safety and regulatory workforce is in place. and verify that mechanisms 

are in place to properly fund the safety organization. 

• Transition Issues: Officials in the countries we visited noted that they had to 

resolve several transition issues to commercialize their air navigation functions, 

including determining which functions to transfer, the timing of the transition, and 

how the government would conduct safety oversight and work with the newly 

created entity. There were also transition issues for employees moving to the 

commercialized entity. For example, Nav Canada and its union officials noted that 

there were contentious labor-management relations for the first several years after 

the transition. 

• Financial Considerations: Separating the air traffic function from FAA would 

require resolving several financial issues, including determining which assets 

would be transferred to the new air tratiic entity, such as air traffic facilities and 

equipment, as well as the value of those assets and the air traflic system. Properly 

assessing the value of the air traffic control system and the associated assets will 

be important. According to the Auditor General of Canada, Transport Canada did 

not properly estimate the value of its air navigation system before transferring over 

to Nav Canada. This resulted in the government receiving significantly less for the 

system than what it was \Vorth. 31 

CONCLUSION 

Our work continues to demonstrate that while FAA has taken some action to 

implement the reform authorities Congress granted almost 2 decades ago, it has not 

w CAll International Structures. MITRE Corporation. October 2014. 31 Canada lhe Commercia!i::mion (~/the Air Xavigation ,~rstem. Office of the Auditor General or Canada. 

October 1997. 

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achieved the large-scale efficiencies, productivity enhancements, and cost savings 

intended for these reforms. Should Congress, the Administration, and aviation 

stakeholders decide to pursue different approaches to organizing and tinancing our 

Nation's air traffic control system, there arc several significant policy questions that 

would influence decisions, given the unique characteristics of the U.S. system. At the 

same time, many of the key risk areas and management challenges we have identified 

will persist, regardless of potential changes to fAA's structure. Ultimately, safety will 

continue to be the United States' and the Department's top priority in overseeing our 

National Airspace System, and strong controls and oversight on the part ofF AA will 

continue to be crucial to providing the public with a safe, efficient, and innovative 

transportation system. 

This concludes my prepared statement. I will be happy to answer any questions you or 

the other Members of the Committee may have. 

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Questions for the Record issued to 

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

"The Need to Reform FAA and Air Traffic Control to Build a 

2ls'-Ccntury Aviation System for America" 

Committee on Transportation and Infrastructure 

May 17,2017 

Questions issued by Hon. Bill Shuster and Hon. Frank A. La Biondo 

QUESTION re: NextGen business case benefits: 

There is a lot of confusion about what NextGen will deliver in terms of enhancing capacity 

and when this will be delivered. At the request of this Committee, the DOT OIG is currently 

reviewing fAA's most recent NextGen Business Case. What is the status of your review 

and do you have any preliminary observations on the benefits reported in the business case 

you can share with the Committee? 

ANSWER: 

Our review is ongoing, and we plan to report back to the Committee later this summer. 

FAA's July 2016 NextGen business case. which projects $161 billion in benefits by 2030, is 

driven by several assumptions related to the growth of air traffic, NextGen programs, and 

how quickly airspace users purchase and install new avionics. All of these assumptions add 

a high degree of uncertainty to the benefits estimate. However, the business case docs not 

present this uncertainty or consider alternate outcomes, such as if the traffic growth does not 

materialize as anticipated or NextGen projects are delayed or do not perfonn as expected. 

We have several preliminary observations about FAA's benefits estimate: 

• First, it is overly optimistic due to the use of aggressive assumptions and out-of-date 

schedules for key NextGen projects. For example, the business case assumes an air 

traffic controller automation tool (Terminal Sequencing and Spacing) will be fully 

deployed at 31 airports by 2019 to maximize the use of performance-based navigation 

procedures. I lowever, fAA is currently planning to deploy the new technology to only 

nine sites beginning in 2019 and extending through 2022. 

• Second, Time Based Flow Management (TBFM) makes up roughly $1 billion of the 

$2.7 billion estimate for already delivered benefits. However. our oftlce and an FAA 

study found that TBFM was not used consistently by controllers. limiting its benefits. 

TBFM has been challenging to implement because it represents an entirely new way to 

control tratlic (from miles-in-trail to time-based, a key tenet of NextGen). 

• Third, over half of the future benefits ($82 billion) are projected from anticipated 

improvements expected between 2020 and 2025, such as Automatic Dependent 

Surveillance-Broadcast In, which provides pilots the location of other aircraft. However, 

these improvements are still in the early stages of development without approved cost 

and schedule baselines or firm requirements, making their benefits much more uncertain. 
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Questions for the Record issued to 

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

"The Need to Reform FAA and Air Traffic Control to Build a 

21st-Century Aviation System for America'' 

Committee on Transportation and Infrastructure 

May 17,2017 

• Finally, two-thirds of the $2.7 billion in accrued benefits and over half of the $161 

billion in estimated total benefits are driven by passenger value of time. an economic 

measure of a passenger's value of efficient usc of their time. While passenger value of 

time is a commonly used measure for estimating benefits. some large airspace users have 

expressed concerns that FAA's reporting of combined benefits (e.g., passenger time plus 

fuel savings, etc.) in one amount masks the actual benefit amounts for airlines, making it 

seem like the airlines are receiving a more substantial return on their investment. 

QUESTION re: NAC prioritv benefits: 

FAA has reported progress in delivering capabilities to the NAS with the completion of !56 

milestones under NAC NextGen Priorities initiative through March 31, 2017. FAA selected 

these capabilities and locations based on high readiness and benefit. Does completing 

milestones translate to benefits'? 

ANSWER: 

Not necessarily. We acknowledge FAA's progress with completing milestones and taking 

steps toward measuring benefits. However, our recent work on FAA's progress in 

implementing the NAC NextGen priorities demonstrates that completing milestones does 

not necessarily translate into benefits. While FAA has received some benefits, not all 

projects have resulted in benefits as expected. For example, FAA reports completing the 

milestone for publishing new performance-based navigation procedures for the Northern 

California Metroplex (serving airports in San Francisco, Oakland, San Jose, and 

Sacramento), yet air traffic controllers did not consistently use the procedures as expected. 

Therefore, airspace users did not realize the expected benefits. To get a better handle on 

benefits, FAA and industry have formed the Joint Analysis Team (JAT) to specifically 

evaluate the benefits of NextGen capabilities, including PBN procedures. The .lA T reported 

that Wake RECAT -which allows the safe decrease in separation standards between certain 

aircraft on final approach-has resulted in more efficient atTivals at four locations; however, 

the program actually yielded negative benefits at Chicago Midway International Airport. 

We are currently assessing FAA's process for managing the implementation risks for the 

four prioritized capabilities and plan to issue a report in the coming months. 
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Testimony of .Joseph W. Brown 

President, Hartzell Propeller Inc. and COO of Tailwind Technologies 

1 Propeller Place, Piqua Ohio, 45356 I (937) 778-4200 

Committee on Transportation and Infrastructure Committee 

The Need to Reform FAA and Air Traffic Control to Build a 21" Century Aviation System 

for America 

2167 Rayburn House Office Building 

May 17,2017 

Introduction 

Chairman Shuster, Ranking Member DeFazio, distinguished members of the Committee: my 

name is Joe Brown, and today I appear before the committee representing three perspectives: 

businessman, private pilot and citizen. 

As a business person, I am deeply invested in the performance and future of the U.S aviation 

market and system. 

I serve as President of Hartzell Propeller. a 1 00-year-old Ohio-based company with a proud 

heritage. The company's origins link directly to the Wright brothers and their pioneering work in 

Dayton, Ohio. Robert Hartzell, following the advice of his friend and neighbor, Orville Wright, 

founded Hartzell Propeller in 1917 to manufacture walnut propellers for the Army Air Service--

what we now call the United States Air Force. 

Hartzell Propeller continues to design. certify and manufacture in rural Ohio. Situated in the 

small town of Piqua. our team of 300 multi-generational employees has earned a leading position 

in the global market. My brother and I own the company and have been partners for 25 years. 

We also own llartzell Engine Technologies. an aviation products company based in 

Montgomery, Alabama. that designs and manufactures starters, alternators, turbochargers, fuel 

pumps and cabin heaters for piston engine aircraft. The company employees 125 machinists. 

assemblers. engineers and technicians and is also the market leader in its product categories. 

I also serve as Chief Operating Officer of Tailwind Technologies, a holding company that my 

brother and I fonned in 2004 to expand our aviation business into the Commercial. Rotorcraft 

and Defense markets. Tailwind Technologies buys and grows companies; so far we've 

completed nine acquisitions around the U.S .. including companies based in Texas, Florida. 

Alabama, California. Michigan and Ohio. Accordingly. we have built a significant presence in 
91 


Insert offset folio 29 here 25482.029

the larger aerospace market. beyond general aviation. We have recently sold two aerospace 

companies to separate, strategic buyers who wanted to integrate our technology into their product 

portfolios. 

Aviation is more than a business interest. I am a pilot and fly 400 plus hours a year in the U.S. 

airspace system. I am in an airplane almost every week. typically multiple times per week, 

utilizing the full range of the ATC system. I am also a lifetime member of the Experimental 

Aircraft Association and Aircraft Owners and Pilots Association. a member of the Seaplane 

Pilots Association and of The Recreational Aviation Foundation. I also serve on the board of 

Experimental Aircraft Association and am a past chairman and current board member of the 

General Aviation Manufacturers Association. 

Based out of the municipal airport in Piqua. Ohio. our company operates a three-aircraft flight 

department that flies about 1.200 hours annually in support of Hartzell and Tailwind 

Technologies. Additionally. our company flying club operates three aircraft and has enabled 

dozens of employees to get their pilot's license and fly in the system. We also manage our local 

airport and provide hangar. fuel and maintenance services. 

I appreciate the opportunity to testify today about what I consider to be a crucial engine of the 

economy and one of the greatest products of representative democracy: the open and efficient 

United States airspace system. 

The Vast and High Functioning U.S. Airspace Svstem is the Ufeblood of Our Nation's 

Aviation Svstem 

Working with the FAA and industry, Congress, through a combination ofthoughtfui FAA 

authorization legislation and appropriations bills, and persistent protection of the freedom to fly 

in our national airspace, has facilitated the growth of an aviation market second to none. 8y that 

I mean the size, variety. demand and impacts of the U.S. aviation market is in a category alone--

nothing else in the world even comes close. 

The United States, compared to the world at-large, is aviation-centric in its transportation 

infrastructure and is the most robust market for aviation manufacturers and service providers. For 

example. there arc I 0 times more pilots in the United States than Canada. 

With approximately 5,000 public use airports. the U.S. Air Traffic Organization is responsible 

for about one-third of a lithe world's public airports. Though our country comprises about four 

percent of the world·s population. we have also built, under our expansive sovereign skies, 

another 14,000 private use airports. In this country, you can fly when you want, where you want. 

utilizing a vast array of scheduled service. on demand and private aviation solutions. 

Accordingly. U.S. aircraft producers and their supply chain have attained a scale and scope that 

leads the world markets. Our businesses and our customers exist because the people of the 
92 


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United States, the Congress and the FAA have made it possible for citizens to use the skies freely 

as commerce corridors and we do so in volumes that no other country can match. 

The jobs and continuing investment in the whole of the U.S. aviation system depend on a robust. 

stable and predictable climate for ALL U.S. airspace users. Users make the market and any 

change that impinges on users impinges on jobs. 

J;'or 580,000 Pilots Like Me, Our Air Traffic Control Svstem Works 

The potent combination of good federal governance. an etTective civil aviation authority and 

strong A TC systems not only show in the strength of the U.S. market, but they are fundamental 

factors in my typical flying day. [travel for work and fly myself to my destinations since our 

businesses arc near airports and most of our customers arc based at airports. 

I file a flight plan from an app on my smart phone and receive a text back of my expected route. 

This takes seconds and I can file in as little as five minutes before I depart, or as early as days 

before. The A TO has authorized secure access points and communications with a variety of 

private flight planning apps and any pilot with a phone or tablet can seamlessly engage with the 

ATC routing system. 

In today·s general aviation cockpit, that proposed route can be loaded to a tablet's moving map 

and the aircraft GPS navigator via Bluetooth with the push of a button. The seconds to file a plan 

leverage into effotiless flight planning in the cockpit. 

Once airborne, air traffic control knows who I am. where I am and where I am going before I 

even call them through a potent combination of ADS-B. radar and talented controllers. 

Thanks to GPS. my aircraft appears as a geo-referenced icon on my enroute charts and terminal 

procedure displayed on my moving map and I get NEXRAD weather depictions and other pilot 

advisories in the air. During the flight, I see traffic on my ADS-B enabled TCAS system, and as 

more aircraft continue to meet the ADS-B equipment mandate, pilots and controllers will all see 

each other with tremendous precision. This incredible safety feature of the air tratlic system is 

paced only by the rate of adoption by operators. 

On arrival, I can follow GPS guidance on Standard Arrival Procedures and request a GPS-based 

Wide Area Augmentation System or W AAS approach. with glideslope guidance, into most of 

the airports I choose, a safety enhancement that cannot be overstated. What this means to me is 

that I can fly to nearly 2,000 \VAAS enabled airports spread across this country to get to my 

customers, in foul weather, and by simply following GPS guidance. land exactly on the runway 

numbers with extraordinary precision. From my home base of Piqua, Ohio, (population 20,000) 

to, say, Olney, Texas, (population 3,000) to, perhaps. Albany. Georgia. (population 75,000) or to 

Teterboro, New Jersey. ( 14 miles from s'" Avenue and with 20 million metroplcx residents), the 
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NextGen features I use deliver me and the 50,000 other flights air traffic controllers manage each 

day to our destinations. 

Others Agree that Nextgen is Working and Delivering Real Benefits 

How good are the many deployed features ofNextGen within our vast airspace? The Chief Pilot 

of Boeing, an aviation mentor and one of the finest aviators I have ever had the opportunity to 

sec fly, made a personal observation to me that he prefers the 3.000 available W AAS approaches 

to an ILS option in every case. He considers them safer and more precise. He isn't alone in his 

praise for NextGen features. 

Steve Dickson, Senior Vice President for Flight Operations at Delta Airlines. credits NcxtGen 

Performance Based Navigation features with improving efficiency, saying. 'The benefit is at our 

major hub airports we arc seeing some significant reductions in taxi times for the last few years; 

that time is very valuable for our customers. For us as a business. it allows us better utilization 

out of our fixed infrastructure - runways. taxiways. gates, aircraft and we can put that time 

back into the schedule and use it to provide a better flight schedule for our customers .... To 

scale that capability across the whole system over the next several years will provide a huge 

bcnetit to our operation and to our customers ... 

Brian Quigley, Managing Director of flight Operations at United Airlines says of DataComm. 

"We've done some tests in Newark. Houston, and Dulles, and we like what we see. We've seen a 

reduction in the time it takes to communicate pretty critical information from the [air traffic 

controller] folks to our pilots.'' 

Jeff Martin, Executive Vice President of Operations at JetBlue says of ADS-B. "We are excited 

to say that the FAA is moving and our industry is moving and the benetits are starting to come 

our way. 

Air Line Pilots Association President Tim Canol! extol Is the safety benefits ofNextGen, 

remarking. ·'Pilots embrace all the NextGen additives. All three of the areas that we see benefits 

in- shared information, situational awareness. and access to decision-making tools are 

primarily safety enhancements. Now those safety enhancements go a long way to increasing our 

efficiency. But from a pilot's perspective, and really from the operators and air traffic control. 

the primary benefit is enhanced safety." 

The aviation community gets it-- from pro pilots. to air carriers. to private users, to the 

controllers that lead this symphony in the sky-- NextGen works and it is getting more powerful 

all the time. Importantly. the FAA uses the NextGen Advisory Committee (NAC) to guide 

priorities and execution of air transportation modernization. This committee, chaired by chief 

executives of airlines since its formation in 20 I 0. involves all stakeholders and has been a key 

part, along with effective congressional oversight, in driving success. 
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Some argue that an organizational model like NA V CANADA would improve A TC 

modernization outcomes. In a 2015 report. the Department of Transportation Inspector General 

said that in contrast to the United States, air navigation service providers the IG examined like 

Germany. France. Canada. and the United Kingdom. "do not embark on large modernization 

efforts or conduct extensive aviation research and development. Rather, they implement new 

technologies incrementally. using a variety of methods. such as purchasing commercial-off-theshelftechnologies:· The lG also found that ''NAY CANADA"s capital budget is approximately 

$120 million annually. and considers a large acquisition to be $10 million.'" 

In most cases, NAY CANADA has taken technology (GPS and RNP to name a few) invented by 

the FAA and deployed it. The challenge of modernizing the comprehensive U.S. ATC system 

doesn't gain very much by using NA V CANADA as a benchmark. The system needs and scope 

are totally different in each case. with NA V CANADA managing far less complexity. Different 

challenges require different solutions and ours are working well for our needs, thanks to FAA 

and its tremendous controller workforce. its research and development efforts, strong 

involvement from the industry and strong oversight by Congress. 

On Principle, The Proposal to Privatize A TC is Deeplv Troubling 

The sovereign skies of the United States belong to the people and ought to be managed by our 

duly elected representatives who balance our collective interests and adjudicate access. For 

decades. Congress has devised equitable solutions to challenges like rural access, commercial 

and general aviation user access, environmental impacts of noise and traffic, infrastructure build 

out and funding mechanisms. New challenges continue to arise as we work to integrate 

unmanned aerial systems and commercial space transportation into the National Airspace System 

with more new entrants coming. The FAA. working with Congress. has managed the safe 

integration of these new technologies into the NAS because they are chartered to serve a broader 

public purpose, even if that work is difficult and has to account for disruptive technology. FAA 

and Congress. working together. have been important contributors to the competitive advantages 

we enjoy in our aviation market place because they understand the benefits to the nation. It is 

hard to see an entity outside of government having these broader national purposes in mind. 

My concerns are heightened because some have referred to the proposed entity as a co-op of 

users. A co-op, by definition. is an autonomous association of entities united to meet their 

common economic interests. Are the public interests better served if Congress gives our wealth 

and skies to a small group of special interests, operating outside of democratic oversight. so that 

they can serve their own ends? 

Being a user of technology is not at all the same as being a developer and implementer of 

technology. The proposed ANSP co-op is akin to asserting that a brand new smart phone 

company, launched to compete with Apple, should be governed by a group of phone users who 

consume the most minutes. 
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Fundamentally. can this co-operative of special interests guarantee that it is capable of running 

the safest, busiest. and most complex airspace in the world, while simultaneously and radically 

increasing the pace and impact of modernization. while also assuring the American people that it 

will, first and foremost. serve the public good? 

The answer is. it can't. In my opinion. these challenges are in too much tension for a private 

solution to work and the pain of transition outweighs the imagined benefits. 

The ATC Privatization Proposal Has Risk and Uncertain Rewards 

There seems to be little doubt among government authorities thattransitioning the U.S. ATO and 

our sovereign skies from the domain of the people to special interests will take many years. The 

GAO agrees with that assessment. citing a MITRE study of foreign ANSP transitions. 

Notwithstanding that these other transitions were related to air trat1lc organizations a fraction of 

the size and complexity of the U.S., MITRE found that it took five-to-seven years to complete a 

transition. 

Researchers also found that in such a transition, there were financial risks to the user community 

and the taxpayer. even when the ANSP scale and scope was small. Since private ANSPs are 

largely fixed cost/variable revenue models, they are financially fragile. This has led to higher 

fees, reallocation of fees among users and in one case, a government bailout. Given the higher 

criticality of the air traffic control system to our nation's economy and transportation network, I 

worry that a newly privatized ANSP will be too big to fail on day one. keeping the taxpayer on 

the hook for any financial problems it may experience. 

Proponents oftransitioning the U.S. ATO to a co-op system also argue that the entity will 

facilitate the pace of modernization because it can borrow on its assets turned over by taxpayers 

in order to invest in new or emerging technology. It is hard to imagine something more 

economically hazardous to the American people than an ANSP acting as a venture capitalist, 

potentially competing with private companies and exposing its healthy balance sheet of(our) 

$20B in assets to high risk tech investments. 

And even without this risk, one should think long and hard about the costs and benefits of this 

kind of change. NextGcn is working; we have the safest. most diverse and complex air system in 

the world and it creates tremendous economic opportunity for the citizens of this nation. We do 

need to modernize the system and we are. As I business man, I consider risk/reward 

relationships in every deal that we do. I believe it is imprudent to take five-to-seven years to, at 

best, get the same car with a new paint job while also delaying progress on modernization and 

other pressing priorities we face right now. 
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A Sensible Alternative 

i\s a businessman and m·iationuser. I disagree with conclusion that the FAA air tratiic 

organization would benefit !l·om a lengthy and radical change. The FAA air traflic organization 

has considerable strengths but there arc weaknesses that need to be addressed. 

I think this is why I lind worthy of consideration the recommendations of the FAA· s 

Management Advisory Council (MAC). The MAC. which Mr. Rinaldi sits on. has offered a 

series of very good suggestions that could be implemented by building on the existing FAA 

structure. The FAA should not be subject to seq ucstration or a gowrnment shutdown. for 

example. and there should he other y;ays to E1cilitate better tlnancing and management of capital 

projects. As v.e haw in the NAC. 1 bel inc Congress and industry can work together to find 

some common ground and move fon\ard. 

Conclusion 

Chairman Shuster and Ranking Member DeFazio: thank you for the opportunity to talk about m; 

experience with the U.S. airspace system and the economy that it drives. I close with this: 

Th<: United States does indeed possess the safest most cost effective. most technically advanced 

air trartlc control system in the world. bar none. That is \vhy my company and our employe~;·s 

thrive \vith our pilot community making a market for us. That is vvhy so many people travel in 

commercial and on demand service every day. some 50.000 !lights per day. That is Y>hy. as 

citizens. we have the most comprehensiw and open aviation inli·astructurc on the planet. I 

commend all of the ATO stake holders for capitalizing on this national treasure and doing their 

jobs with such incredible expertise. and I thank in particular the controllers for moving us safe!) 

through the skies. Models like the NAC are working and \\e should look f(Jr opponunities to 

build on these examples and tackle the kind of challenges FAA ·s MAC has outlined. This year. 

as Hartzell Propeller celebrates its lOO'h anniversary. !look f(Jmard to working with all of you to 

maintain this leadership. 

I \vould he glad to answer any questions that you may have. 
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Governance of a U.S. ATC Corporation 

House Transportation & Infrastructure 

Committee 

May 17,2017 

Testimony of Robert W. Poole Jr. 

Director of Transportation Policy 

and Searle Freedom Trust Transportation Fellow 

Reason Foundation 

5737 Mesmer Avenue 

Los Angeles, CA 90230 

310-391-2245 
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2 

Chairman Shuster, Ranking Member DeFazio, and Members: 

I'm Robert Poole, Director of Transportation Policy and Searle Freedom Trust 

Transportation Fellow at Reason Foundation, a nonprofit think tank with offices in Los 

Angeles and Washington, DC. I received two engineering degrees from MIT and began 

my career at a large aerospace firm. I have been in the public policy business since 1978. 

Subject Matter Expertise 

I have studied the performance of the U.S. air traffic control system since before the 1981 

controllers' strike, which led to an invitation from the Reagan White House to brief the 

DOT Secretary and FAA Administrator on the idea of a nonprofit corporation as a way to 

rebuild the ATC system in the wake of the firing of PATCO controllers. My first policy 

paper that fleshed out the concept was commissioned by the Heritage Foundation in 

1982 1 and led to a peer-reviewed paper for the Transportation Research Board's journal 

in 1983.2 I advised the Air Transport Association on its ATC corporation proposal in 

1985. and have written a number of Reason Foundation policy studies on A TC reform in 

the intervening years. 

During the Clinton Administration, I advised both Vice President Gore's National 

Performance Review and DOT Secretary Pena's Executive Oversight Committee which 

developed the proposal for a U.S. Air Traffic Services (USATS) eorporation. 3 I also 

advised the subsequent Mineta Commission in 1997, which proposed what we might call 

almost-corporatization.4 In 200 l, I coauthored a detailed Reason Foundation proposal for 

a nonprofit A TC corporation governed by a board representing aviation stakeholders. 5 

That plan won the support of 12 retired FAA officials, including three former 

Administrators.6 

During the current decade, I have been a member of two working groups to develop 

consensus recommendations on ATC reform. The first was convened by the Business 

Roundtable, 20 II, because its CEO, Gov. John Engler. had concluded that our low-tech 

A TC system was an impediment to economic growth. It included f01mer FAA and DOT 

officials, as well as aviation researchers and consultants. The other working group was 

organized by the Eno Center for Transportation in 2013. and was co-chaired by former 

Sen. Byron Dorgan and former DOT Secretary Jim Burnley. Both of these groups ended 

up recommending that A TC be shifted from the FAA to an A TC corporation. I also serve 

on the National Aviation Studies Advisory Panel of the Government Accountability 

Office and am a long-time member of the Air Traffic Control Association (ATCA). 

1 Robert W. Poole, Jr.. "Air Traffic Control: the Private Sector Option.'· Heritage Foundation, October 1982 

'Robett W. Poole, Jr.. "Privatizing Air Traffic Control, Transportation Research Record, 1983 3 Executive Oversight Committee. Air Trajjic Control Corporation Study. Office of the Secretary. U.S. 

Department of Transportation, May 1994 4 Norman Y. Mineta, et al., Avoiding Aviation Gridlock & Reducing the Accident Rate, National Civil 

Aviation Review Commission, December 1997 5 Robert W. Poole, Jr. and Viggo Butler. "How to Corporatize Air Traffic Control, Reason Foundation, 

F cbruary 200 I 6 12 former FAA officials. "A Statement 

Reason Foundation, May I, 200 I tl}llr.;ccr£~•soJ:hQ.!:&.l·!~~S.!!iilill'!I_LV_(J~',2_f__£J1 
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3 

Over the years, I have met with senior officials of a number of the leading ATC 

corporations around the world, mostly at conferences of ATCA or of the Civil Air 

Navigation Services Organization (CANSO). I have also made site visits to the 

headquarters ofNav Canada and of Airways New Zealand, two of the most innovative 

and successful ATC corporations. 

The ATC Problems That Need to Be Solved 

As a participant in both the Business Roundtable and the Eno Center working groups, I 

agree with their assessment of the problems and with their conclusions that ATC is a 

high-tech 24/7 service business that is a poor fit for a tax-funded bureaucracy housed 

within a safety regulatory agency. This assessment was also made unanimously by the 

FAA Management Advisory Council in its January 2014 final report calling for the Air 

Traffic Organization to be separated from the FAA and the federal budget made selfsupporting from ATC fees and charges (as used by every developed country except the 

United States), and be regulated at arm's length by the FAA safety regulator, per ICAO 

policy. 

The three major categories of problem that corporatization would address arc: 

• Funding: uncertain, unstable, and poorly suited to paying for large-scale capital 

modernization of not just technology but also of antiquated facilities. 

• Governance: a system in which far too many legislative and executive branch 

agencies oversee the A TO, which leads it to focus more on its overseers than on 

its aviation customers. 

• Culture: an organizational culture that is risk-averse and status-quo-focused and 

therefore lags considerably behind its counterparts that have been corporatized 

over the past three decades. 

My focus today is limited to the second of these: governance. Although technology may 

someday allow for competition. air traffic control is basically a utility monopoly. We 

know of only three ways to deal with the monopoly problem of such entities. 

• If the utility is afor-profit, investor-owned company. the usual solution is 

economic regulation by an external public utility regulatory body. That is the 

situation ofNATS in the United Kingdom, one of the few for-profit ATC 

corporations (though partially government-owned). 

• A second approach is a government corporation, such as the Tennessee Valley 

Authority, one of the nation's largest electric utilities. Because such utilities are 

owned by the government, they arc presumed to be operating in the public interest 

and are not externally regulated (though that presumption is not always correct). 

Most of the world's 60 ATC corporations are government corporations. often with 

only one or two government ministers as the sole shareholders. 

• The third alternative is a non-profit corporation in which the customers are the 

owners. We have thousands of rural electricity and telecommunications user coops in this country. They operate as businesses, but any profits they make are used 

either to reduce the extent of bond issuance or to make it possible to reduce 

customer charges. This is essentially the Nav Canada model. 
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4 

Misunderstanding Stakeholder Governance 

The most misunderstood aspect of the ATC corporatization proposal adopted by this 

committee last February is the stakeholder board concept. It was intended to be a U.S. 

adaptation of the concept that has served so well at Nav Canada for the past 20 years: 

board members elected by the principal aviation stakeholders such that all are represented 

fairly in a body that manages the corporation in the best interests of a viable and costeffective A TC system for all of its customers and other stakeholders. But over the past 

year, this proposed stakeholder board has been described as ·'giving effective control of 

our public airspace to the major airlines:· Others have described it as a board "dominated 

by the major airlines." 

Needless to say, this characterization has led to serious concerns and opposition to A TC 

reform by many private pilots, small-city officials and their airport managers, and ruralstate legislators and their Members of Congress. I can understand their fears that a forprofit ATC entity controlled by major airlines might sec small-airport towers as less than 

essential. And if that is what was actually being proposed. I would be among the 

opponents. 

But the proposal under discussion is a non-profit. tcderally chartered corporation to 

which the federal government delegates the provision of A TC services. This is consistent 

with international aviation law, ICAO principles, and global practice. In a nonprofit, 

stakeholder co-op structure, there are no shareholders, and every stakeholder board 

member has a vote of equal value to that of every other member. 

Where the Corporation Proposal Came From 

Contrary to what some opponents imply. this proposal did not originate with the major 

airlines. The Business Roundtable (BRT) working group, which began in mid-20 II. had 

reached consensus on corporatization by April 2012. At that point, Gov. Engler and 

several working group members (including me) gave a briefing to senior officials of 

Airlines for America (A4A) at their oftices. The reception we got was cool. at best. I got 

the sense that no one there wanted to re-start the battles that had raged several times in 

the previous two decades over earlier proposals for either corporatization (1990s) or a 

shift to ATC user fees and revenue bonding (2000s). 

The BRT group went back to work. but held off on other stakeholder briefings in 2012, 

due to this non-enthusiastic reaction from one of the most important groups. But 

everything changed in spring 2013. The key event was the budget sequester. which 

imposed furloughs on controllers. closed the FAA Academy, and threatened the closure 

of 189 contract towers. In response, A4A, NATCA, and AOPA all requested new 

discussions with the BRT working group, and at a meeting in the BRT conference room 

in May 2013, leaders of all three groups told us that a nonprofit, stakeholder-governed 

corporation similar to Nav Canada was their preferred option. It was only after some 

further work by the BRT working group over the summer of 2013 that Gov. Engler and 
101 


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5 

several working group members briefed Chairman Shuster on its recommendations, and 

received an enthusiastic response. 

The Eno Center working group was launched that summer, initially without knowledge 

of what the BRT group had been doing. Eno brought together about 16 stakeholder 

organizations for monthly meetings from mid-2013 to mid-20 15. This broader group of 

stakeholders agreed on corporatization. but could not reach consensus between a 

government corporation model (as in Germany and New Zealand) and a private, 

nonprofit model as in Canada. so it concluded that both were workable options. 

I've summarized this history to demonstrate that the current push for A TC 

corporatization did not originate with the airlines; it originated with the working group 

created by Gov. Engler at Business Roundtable. That group included a former FAA 

Administrator, a former Chief Operating Officer of the FAA Air Traffic Organization, 

two former U.S. DOT senior officials, and several consultants. 

Nav Canada's Board as a Starting Point 

The stakeholder board concept has been used in partial form for A TC corporations in 

Switzerland and Thailand. But its largest and most successful application has been at Nav 

Canada. the world second-largest A TC provider. Nav Canada's model is tailored to the 

specifics of Canadian aviation. so I do not suggest that it be blindly copied. Still. if we 

want to use it as an inspiration. it"s important to understand what it is and how it works. 

First. Canada's enabling legislation defines four key ·'members'' of the aviation 

community, which are the ones that elect directors. Those four are commercial airlines. 

general and business aviation, unions. and the government. After those stakeholders 

select I 0 members. the board as a group elects four additional directors (to represent the 

flying public), with the CEO serving as the 15111 member. The board appoints its chair 

from among the directors by a vote of at least two-thirds. 

The composition ofNav Canada's board. as of20l4. was as follows: 7 

3 elected by Government of Canada 

• Former MP. British Columbia 

• Financial & management consultant 

• Former Sr. VP. Bell Canada 

4 elected by commercial airlines 

• Former Exec. VP Planning, Air Canada 

• Former CEO, Bradley Air Services 

• Former President, Transat Tours 

• Former COO. Air Canada 

2 elected by unions 

• Exec. Director. BC Nurses· Union 

• Partner, Denton's Canada 

7 "A Unique Structure. Built to Last." .Var Canada .Yews. Issue No.5, Summer 2014. pp. 7-IO 
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6 

I elected by general aviation 

• Former consultant. CBAA 

4 elected by stakeholder board 

• CEO, Barrett Diversified 

• Former Group VP, Enbridge Inc. 

• Former President. TSX Venture Exchange 

• Chairman of the Board. Canada Post 

CEO ofNav Canada 

None of these board members holds any paid position in any aviation company or 

organization; that is a requirement of the enabling legislation. Note also the wide range of 

business experience represented. Even among the four scats elected by commercial 

airlines, only two are retired from major carriers, one is retired from an air tours 

company. and the fourth is retired from a regional airline serving the far north. In 

addition to not being currently involved financially with aviation, the law requires that all 

Nav Canada board members have a legally enforceable fiduciary duty to the best interests 

of the company and its mission. 

A U.S. Adaptation of the Stakeholder Board 

The United States differs from Canada not only in being larger. but also in having a very 

large and diverse general and business aviation sector. This suggests that general and 

business aviation should elect more than one stakeholder seat on the ATC corporation's 

board. Likewise, given how important small-city and rural airports are in providing 

access to the National Airspace System, airports are a key stakeholder group that should 

also elect a board member. Taking these considerations into account, the 2001 Reason 

Foundation A TC corporatization study proposed the following adaptation of the Nav 

Canada governance model for the United States: 

Commercial Air Carriers (4) 

2 seats elected by major airlines (A4A) 

I seat elected by regional airlines (RAA) 

I seat elected by cargo airlines (CAA) 

General and Business Aviation (3) 

I seat elected by personal/recreational aviation (AOPA) 

I seat elected by business aviation (NBAA) 

I scat elected by commercial GA (NATA) 

Unions (I) 

I seat elected by the corporation's largest union (NATCA) 

Airports (I) 

I seat elected by the two airport associations (AAAE, ACI-NA) 

Federal Government (2) 

2 seats in view of governmental use of the NAS 

Those II members would select the CEO and three members to represent the flying 

public. The total board would then consist of 15 members. 
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7 

One caveat about this 200 I proposal is that it assumed that all aviation users of A TC that 

elected members of the board would pay some kind of A TC fees. giving them a direct 

stake-as paying customers--in the cost-effectiveness and productivity of the 

corporation. For small private planes, these could be simple annual registration fees like 

those Nav Canada charges piston-engine planes. Turbine-powered business aircraft 

would pay ICAO-type weight-distance charges, as they do everywhere else in the world 

except here. And commercial GA-air taxis, fractionals. and any others that provide air 

travel to paying customers-would of course pay the same weight-distance fees as other 

commercial carriers. 

This is not the only possible board structure, but in view of concerns of small-city and 

rural officials and their elected representatives. including airports and regional airlines as 

stakeholders that elect board members should make it clear that those portions of the 

National Airspace System will be fully represented. 

Some observers have criticized the stakeholder board concept as likely to be unworkable. 

considering all the battles fought out in Congress over the years by various aviation 

interest groups. In response, I offer two pieces of evidence to the contrary. First, in its 20 

years of existence. Nav Canada's governance model has worked very well. with the 

company achieving increased productivity and delivering better A TC services at lower 

cost in terms of the A TC fees paid by its customers. Second. in this country we have the 

ongoing example of the NcxtGen Advisory Committee NAC). Like a stakeholder board. 

it represents all the diverse aviation stakeholders in an effort to develop consensus 

recommendations on how the A TO can best spend the limited and uncertain funds it has 

for NextGen. Despite their different interests and concerns, the NAC has been able to 

work out consensus approaches to its tasks. and has earned widespread respect in doing 

so. 

Closing Thoughts on Access to the NAS 

Some of those expressing concern about possible loss of control towers at small-city and 

rural airpo1is assume that the ATC corporation would be making unilateral decisions 

about where ATC services will be provided. Those concerns are misplaced. First. 

Congress could specify in the enabling legislation that those airports meeting a 

reasonable benefit/cost test would be assured of getting tower services. 

Second. it is important to remember that the FAA would still be in charge of all aspects 

of aviation safety. The ATC corporation would propose new technologies and new 

procedures, but the FAA-operating then at arm's-length as the safety regulator-would 

have the obligation to approve or disapprove. In no way would the ATC corporation be 

establishing the rules of the air. 

Third, when considering the status quo of the A TO's current inadequate and 

unpredictable funding. we should understand that small airports are getting the short end 

of the stick. For example. despite a long waiting list of airports that have applied for a 

contract tower. FAA funding limitations have led to a moratorium on new contract 
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8 

towers sincefiscal year 2014. The moratorium was imposed following the 2013 

sequester. In addition. FAA continues to study possible revisions to its benefit/cost 

methodology for contract towers. Even if the moratorium were to be lifted next year or 

the year after. the FAA ·s ongoing triage-making painful decisions about what to invest 

in. based on recommendations from the NextGen Advisory Committee-means that lowactivity control towers will likely remain a low priority. 

A self-funded ATC corporation would be an improvement for small airports in at least 

two ways. First. thanks to its predictable user-fcc revenue stream. the corporation would 

be able to issue long-term revenue bonds to finance major facility renewal, including an 

overdue expansion of contract towers where justified. Second. the A TC corporation 

would likely move forward, as its self-funded counterparts in Europe are doing, with 

implementing remote-tower technology at airports of all sizes (rather than building evertaller and more-costly traditional towers). For low-activity airports, remote towers have 

the potential to reduce the cost of tower capability while maintaining or increasing the 

benefits. Thus, more airports will qualify by meeting the benefit/cost threshold. 

Chairman Shuster and Ranking Member DeFazio, this concludes my testimony. I am 

happy to answer questions here today. or by email in follow-ups to this hearing. 
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of 

President 

National Air Traffic Controllers Association, AFL-CIO (NATCA) 

May 17,2017 

Before 

The United States House of Representatives 

The Committee on Transportation and Infrastructure 

"The Need to Reform FAA and Air Traffic Control to Build a 

21st Century Aviation System for America" 

® 
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Thank you tt1r the opportunity to testify on behalf of the National Air Traffic Controllers 

Association. AFL-CIO (NATCA) about ··the Need to Reform FAA and Air Traftlc Control to 

Build a 21" Century Aviation System for America:· NATCA is the exclusive representative for 

nearly 20.000 employees. including the Federal Aviation Administration's (FAA) air traftic 

controllers. tra11ic management coordinators and specialists. ilight service station air tratlic 

controllers. stall support specialists. engineers and architects. and other aviation safety 

professionals. as well as Department of Defense (DOD) and Federal Contract Tower (FCT) air 

tratlic controllers. 

The U.S. National Airspace System (NAS) is the safest. most enicient. most complex. 

and most diverse system in the world. It is an economic engine that sustains over 12 million 

aviation-related jobs and contributes approximately $1.5 trillion annually to the l! .S. economy. 

or more than 5 percent of America's gross domestic product. The NAS requires a well-trained. 

highly qualified workforce of air traffic controllers to guide approximately 70.000 flights per day 

in the U.S. and ensure that over 900 million passengers a year arrive safely at their destinations. 

To operate effectively. these controllers must work rapidly and eftlciently under tremendous 

stress v,hile maintaining complete concentration. 

NATCA has been steadfast in its message: Change is necessary if the United States is 

going to remain the gold-standard for aviation. The status quo has not provided a stable. 

predictable funding stream to operate. modernize. and upgrade the NAS. 

I. ESTABLISHING A STABLE, PREDICTABLE FlJNDI;'IIG STREAM 

Although NATCA believes that change is necessary to ensure a stable. predictable 

funding stream for the NAS. we do not believe that there is only one viable solution. During the 

past 2 years. there have been a number of air trat11c control (ATC) rcf(mn proposals that have 

been offered as potential solutions to this problem. Although NATCA cannot support a reform 

model without considering all of its details. we dcJinitively can say that the status quo is 

unacceptable. We also oppose any model that would derive profit from operating the air trafllc 

control system. 

Without change, our nation risks falling behind the rest of the world and losing its status 

as the global leader in aviation. Globalization and innovation arc driving dramatic changes in the 

aviation industry and. sadly, America's current structure is not keeping up. We must remain 

vigilant. We cannot ignore the many near-term issues facing the FAA that must be addressed 

while we develop a long-term. comprehensive plan. 

To receive NA TCA · s consideration for support. any proposal must improve upon the 

status quo. without adopting a f(Jr-protltmodel. and-at minimum-meet NATCA ·s Four Core 

Principles for Reform: 

I. Any reform model must ensure that our members are fully protected in their employment 

relationship. It is crucial to maintain our members' pay and benc11ts. including retirement 
107 


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and health care, along with our negotiated agreements for their work rules, and 

indemnification fiJr our members fiJr acts within the scope of their employment. 

2. Safety and etTicicncy must remain the top priorities within the system. We cannot allow 

maintenance to lag or reduce stafting to save money. The NAS must be fully staffed to 

ensure both safety and clliciency. 

3. A stable. predictable funding stream must adequately support air traffic control services. 

starting. hiring and training. long-term modernization projects. preventative maintenance. 

and ongoing modernization to the physical inti·astructure. Stop-and-go funding crises 

slow the hiring and training process. which create staffing shortages. The lack of a stable 

funding stream also prevents timely implementation of NcxtGen modernization projects. 

4. Any reform model must also maintain a dynamic aviation system that continues to 

provide services to all segments of the aviation community, ti·om commercial passenger 

carriers and cargo haulers to business jets and to general aviation. from the major airports 

to those in small communities and rural America. We cannot emphasize enough hovv· 

important it is that a new system continues to provide services to the diverse users of the 

1\AS. The United States has a v·ibrant general aviation community that relics on us. At 

the same time. rural America· s economic success is connected to the access we create 

with our comprehensive NAS that serves even the most remote areas. 

While the U.S. vvorks on a long-term solution. we need to be mindful of the eJTccts that 

another round of sequestration cuts vvould have on the NAS. We all remember the disruptions 

that the system experienced in 20 I 3 related to sequestration. The FAA scaled down all 

modernization projects. The Agency looked at closing 238 air traf'tic control towers and tried to 

close 149 of them f(lr purely tinancial reasons. without regard to operational considerations or 

what was best for the NAS. FAA leadership considered reducing services at many airports across 

the country. The FAA halted air trai'tlc controller hiring for the full year. a decision that still 

contributes to the ongoing controller stafllng crisis. The FAA vvas forced to furlough air trafJlc 

controllers. causing rippling delays through our system. Further. the Agency went to a Jix-on-fail 

maintenance philosophy and stopped stockpiling critical palls for essential operational 

equipment. These decisions were made in order to meet the budget restrictions of sequestration. 

not for operational reasons or to ensure safety. 

Our 24/7 aviation system also has been challenged by 23 authorization extensions 

including a pmtial shutdo\\n prior to the passage of the FAA Mondernization and Ret(m11 Act of 

2012 (P.L. I 12-95). Since that bill's expiration. the NAS has also experienced three more 

extensions. In addition to the risked shutdowns as each extension expired. in the past live years 

FAA has experienced a partial shutdown. a complete government shutdown. as \veil as numerous 

threatened shutdmvns due to lapses or near-lapses in appropriations. 

The stop-and-go funding stream has caused damage to the system. some of which is 

difficult to reverse. For example. stop-and-go funding makes planning for long-term 

improvement and modernization projects diflicult. Stopping and restarting makes modernization 

projects more expensive. Some projects may need to start over ti·om ground zero. For instance. 
108 


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the April 2013 furloughs caused delays to modernization projects like En Route Automation 

Modernization (ERAM) that cost $6 million per month of delay. 

Without a stable, predictable funding stream, the NAS is in jeopardy offalling behind on 

efficiency, capacity, and most importantly, safety. As Congress and the White House work 

together to reauthorize the FAA, it is imperative that all stakeholders within the NAS work 

together to ensure that the United States remains the world leader in aviation. 

Air traffic controller staffing has been a concern for many years, but it reached a crisis 

level in 2015. Today, the FAA struggles to adequately staff many of its large, high-volume 

facilities, which service the busiest and most complex airspace. 

Stop-and-go funding for the FAA has made this problem worse, with sequestration 

forcing the FAA to suspend hiring and shutter its training Academy for most of2013. Despite 

some incremental progress since the controller staffing roundtable in December 2015, and the 

hearing on the same subject in June 2016, Certified Professional Controller (CPC) staffing at the 

FAA continues to decline and has now reached a 28-year low. As of March 18, 2017, the FAA 

only had 10,532 CPCs on board. That number is more than 2,300 CPCs short of the FAA's 

overall operational target of 12,896 CPCs. 

4 
109 


Insert offset folio 47 here 25482.047

In addition. more than one quarter of CPCs (approximately 3.000) are eligible to retire. 

There are more retirement eligible controllers than the FAA has people in the pipeline to replace 

them. The FAA hit its hiring goal last year for the first time in 8 years by lowering its target by 

nearly 400 controllers below maximum hiring capacity. but the FAA ·s hiring goal for this tiscal 

year still does not maximize the FAA Academy's maximum throughput. 

However. despite this 28-year low. the FAA has not hired all of the qualified experienced 

controller candidates who were intended to receive .. preferential consideration·· under the hiring 

provision included in the .. FAA Extension. Safety. and Security Act of2016 .. (Pub. L. No. 114-

190). We thank Congress for passing this legislation that remoYcd some of the bureaucratic redtape involved in the FA A's hiring process. It provided an expedited hiring process for 

experienced controllers. and n more streamlined process lbr hiring veterans and graduates of the 

FA/\ ·s Collegiate Training Institute (CTI) colleges and universities. 

NATCA helieves the FAA must continue to take a holistic. collaborative approach to 

resolving the staffing crisis. as it has done in the last year. We arc committed to working \Vith all 

stakeholders to develop a permanent. sustainable solution. In the interim. NA TCA would be 

deeply concerned with any action that could impede properly starting the NAS with CPCs. 

including potential luture furloughs or another closure of the F /\/\ Academy. 

As a result. we believe that Congress should exempt the FAA fl·om indiscriminate 

sequestration cuts. Any hiring freeze or furloughs that include air tralllc controllers could cripple 

the FAA and the NAS and have an immediate detrimental effect on capncity. meaning fewer 

planes in the sky and likely delays for your constituents who rely on air travel. Fewer flights 

would result in reduced revenues into the Airport and Airway Trust Fund. For the FAA. 

sequestration would cos\ the government more. rather than save money. 

In the past. NA TCA has also recommended the following solutions that would help 

allcYiatc the staffing shortage: 

I. The FAA should routinely post a vacancy announcement for experienced air traftic 

controllers and should continue to hire as many experienced controllers as are qualified. 

2. The FAA should post. at least annually. an all sources open announcement for nonexperienced candidates. many nfwhom will be military veterans. graduates from CTI 

schools. and other aYiation-related professionals. 

3. The F/\A should further streamline its hiring process. specifically easing the bottlenecks 

nnd bureaucratic delays in HR. security. and medical reviews. 

4. The F /\A should discontinue its usc nf finance-driven staffing numbers and replace them 

vvith the operationally derived CPC stafting targets. as reflected in its Priority Placement 

Tool, for all future Air Trat1ic Controller Workforce Plans. 
110 


Insert offset folio 48 here 25482.048

With regard to the last recommendation. the FAA ·s 2016 Air Traffic Controller 

Workf(xce Plan 1 (CWP) illustrates how the FAA continues to ignore the harsh reality of its 

stafllng crisis. 1'\A TCA opposes the CWP's headcount numbers and stafting ranges because they 

ignore the CPC stalling shortage. If endorsed through congressional action or adopted by the 

new administration. the CWP would allow the FAA to 10\y<,:r statling at many of its critical. highvolume facilities that are already short-slatTed. The CWP also ignores the CPC targets that were 

collaboratively developed by the FAA and NA TCA to meet the Agency's operational workload 

needs in each facility and to distribute controller stafllng appropriately based ontrafllc volume 

and complexity throughout the NAS. 

The CWP. which is developed on a yearly basis by FAA Financial Services. uses 

numbers that are inaccurate and misleading because they arc based on actual on-board numbers 

( .. headcount"). rather than using the operational staning targets developed by the FAA ·s Air 

Traffic Organization (ATO). Alongside CPCs. these headcount/actual-on-board numbers 

deceptively include developmental stage trainees (who have never been certified at any FAA air 

traffic control facility). as well as CPC-ITs (CPCs who reenter training at a new facility due to a 

transfer. but who arc not yet certified at that facility). This methodology does not account for the 

functional day-to-day operational needs of each facility when it comes to stalling all positions. as 

well as carrying out other functions that only CPCs can perfi:mn. such as training developmental 

controllers and serving as the controller-in-charge (ClC). 

Finally. the CWP's numbers are even more dubious because of the FAA ·s consistent 

practice of adjusting its definition of .. controllers .. within diflerent reports in order to manipulate 

current and projected staning levels. Sometimes it includes CPCs and CPC-ITs: other times it 

also includes developmental stage controllers. Such a practice is detrimental to the starting 

process as it creates a moving target f()r all parties who arc vvorking tovvard a resolution. 

Recently. NATCA and the FAA have started to cut through some of the bureaucratic redtape by collaboratively implementing a better transfer process for CPCs and a more efticicnl 

placement process for new hi1·cs. These nevv processes make it easier for CPCs to transfer from 

well-statlcd or lower activity facilities that arc better equipped to accept and train new academy 

graduates. to higher volume. more complex facilities that have the most dire stafling shortages. 

For years. the FAA had been placing many academy graduates/new hires into the most 

complex. highest volume Terminal Radar Approach Control facilities (TRACONs). This practice 

led to higher training failure rates and is not an optimal career-growth pipeline for controllers. 

NATCA consistently has maintained that employees assigned to the terminal option should begin 

their career at low volume terminal facilities. If they desire. they can then transfer to more 

complex facilities. culminating in their progression to the most complex. highest volume 

facilities. one~ they have more experience. Now that NA TCA and the FAA have collaboratively 

established CPC targets and processes. we have been able to more successfully implement a 

transfer policy that encourages career progression. This nevv. jointly developed transfer process 

1 The 2016 Air Traffic Controller Workforce Plan (CWP) is the most recent version available to 

the public. The 2017 CWP was due to Congress on March 31. 2017. 

6 
111 


Insert offset folio 49 here 25482.049

allows employees to transfer much more efficiently. It also ensures that new hires can be placed 

at lower level facilities where they have a much higher rate of certifying. 

However, there are still shortages that simply cannot be remedied by making it easier for 

people to transfer more expeditiously. NATCA and the FAA agree that the significant staffing 

needs at New York TRACON (N90) and Chicago TRACON (C90) require employees who meet 

the minimum qualifications for those facilities and who express a desire to transfer to those 

facilities be released within the shortest amount of time allowed under the transfer process (three 

months). Nevertheless, N90 and C90 are still in the most dire of the stafiing situations. 

As of May 2, 2017, N90 had a mere 132 CPCs, which is 94 CPCs short of the 

co!laboratively-developed operational staffing target of226 CPCs, or 58.4% of the target. N90 is 

also slated to lose another 13 CPCs on or before Sept. 30,2017. The FAA only has four 

partially-qualified developmental controllers (not yet fully qualified CPCs) at N90 who ffil!Y 

reach full certification within that same time period. Of the approximately 24 developmentals 

assigned to N90, including those who are partially qualified, the earliest any of them could reach 

full CPC level is-at best-15 to 18 months away. And historically, only about six to eight of 

those 20 will actually reach CPC status. So, at New York TRACON. the problem will get worse 

before it gets better. 

This staffing crisis at N90 also demonstrates why the FAA's continued use of actual onboard "headcount" numbers within its yearly CWP is flawed. None of the 24 developmental 

controllers at N90 are guaranteed to ever reach full CPC status, and yet the 132 CPCs on hand 

must dedicate a significant amount of time off-position training them. Although FAA's CWP 

actual-on-board headcount remains below its staffing range, it does make the facility appear to 

7 
112 


Insert offset folio 50 here 25482.050

be better slatTed than if the FAA used the AH)" s operational stafllng target it uses for employee 

transfers. 

The picture is not much brighter f()l' other large terminal facilities around the country. 

Atlanta TRACON (A80) has 63 CPCs. while the operational starting target is I 02 CPCs 

(61.8%). Chicago TRACON (C90) has 62 CPCs. while the operational staffing target is I 00 

CPCs (62.0%). Dallas TRACON (D I 0) has 59 CPCs. while the operational stalling target is 93 

CPCs (63.4%). And. finally. Los Angeles Tower (LAX) has 38 CPCs. while the operational 

stalTing target is 49 CPCs (70.3'Yo). 

The Next Generation Transportation System (NextGen) describes the primary. 

comprehensive modernization project that is shifting the FAA ii·om its current ground-based 

radar system to smarter. satellite-based aircraft tracking system and digital technologies. along 

with new procedures that will enable the FAA to guide and track aircrafi more precisely on more 

direct routes. NextGen is vital to preserving the United States· position as the world's leader in 

aviation. 

The FAA has ii·cquently been criticized for its management ofNextGen. Although it is 

true that the Agency is lagging behind in its effort to modernize the NAS. many of the FAA's 

detractors have not seen the full picture. NA TCA takes great pride in our role as a partner in 

developing and implementing important modernization projects in recent years. The FAA. 

NA TCA. and other aviation stakeholders have enjoyed a positive. productive. and collaborative 

relationship for nearly a decade. 

As a result of this collaboration. NcxtGcn is already producing efficiencies that enhance 

safety. reduce delays. save fuel. and reduce aircraft exhaust emissions. To date. NextGcn has 

delivered $2.7 billion in benefits. and the FAA has completed 103 commitments of the NextGcn 

and NextGen Advisory Committee's (NAC) PrioritiLation Plan. Recently. we have achieved 

several successes on NextGen projects including ERAM. DataComm. and Metroplex. But in 

order for all remaining NextGen projects to be successfully completed in a timely fashion and at 

the lowest possible cost to taxpayers. the FAA needs a stable. predictable funding stream. 

Without a stable and predictable funding stream. NextGen modernization programs will 

continue to be threatened by delays that will jeopardize their success. Congressional attacks on 

ollicial time would also severely cripple the FAA ·s ability to deliver NcxtGen technologies on 

time and under budget. as would any further starting reduction such as a hiring li'eeze or 

furloughs. 

ln2013. sequestration and the resulting April2013 furloughs. as well as the October 

2013 government shutdown, created needless delays in the development. design. and 

implementation of Next Gen. and increased costs in these key modernization programs. The 

shuttering and reactivation ofNextGcn programs not only delayed their progress. but also 

increased costs to American taxpayers. We cannot allow this stop-and-go funding uncertainty to 

undermine NextGen. 
113 


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For example. both ERAM and Metroplex experienced significant delays in 2013. as work 

was stopped on these key NextCien programs fi.1r several months. Originally. the waterfall 

schedules t(Jr ERAM and Metroplex were designed to complement each other. so that installation 

for one did not conflict with or negatively atkct installation for the other. However. because of 

this multi-month delay. the ERAM team was !(Jrccd to shuttle its vvatcrt~lll schedule. creating 

numerous. unnecessary conflicts with Metroplex schedules. which in turn further delayed both 

programs. 

Moreover. many of the controllers vvho were working as subject matter experts (SME) on 

the programs were forced to go back to their facilities while they were waiting for the FAA to 

restart the programs. However. when the FAA restarted the programs. some of the SMEs were 

unable to be re-released to resume their work due to poor staftlng levels at their facilities. This 

resulted in a significant loss of institutional knowledge. expenisc. and experience on these 

NextCien teams. 

D. IheL,\A.:..OsRar)i<flLc'\JSinglnfi:astnlClUr~ C:annotl3e_i\1aintgjned~\,\lithouta ~abJ.e~ 

j>regictabJ.e~Func!in~5tr~am: 

The FAA operates more than 300 air traffic control f~1cilities of varying ages and 

conditions. The FAA· s 20 Air Route Traftlc Control Centers (ARTCCs) located in the 

continental United States were built in the 1960s and arc more than 50 years old. The FAA's 

large. stand-alone TRACONs are. on average. 25 years old. In addition. the FAA has 132 

combined TRACOl\/Tov\ers. which average nearly 35 years old. Finally. the FAA has another 

131 stand-alone towers which average almost 30 years old. the oldest being 75 years old. 

The FAA has begun the process of addressing its aging infl·astructure through a 

combination of realignments. sustaining and maintaining some facilities. and replacing a handful 

of others. However. that process is hampered by the lack of a predictable funding stream that 

provides certainty. 

For example. the FAA is replacing Charlotte TRACON/T(mer (CLT). which was 

approximately 35 years old. The replacement cost is more than $113 million. Similarly. San 

Francisco Tower (SFO) was approximately 28 years old when it was replaced. with the total cost 

of that project running greater than $82 million. To replace Las Vegas Tower and Las Vegas 

TRACON. which were about 31 and 29 years old respectively. the FAA built one facility to 

replace two buildings. That project cost more than $110 million. Even for smaller facilities such 

as Wilkes-Barre. Pa .. TRACON/Tower (;\ VP) and Abilene. Texas TRACON/Tower (ABI). the 

replacement costs were approximately $23 million and $21 million respectively. 

These facility replacement costs arc expected to continue to rise with inflation as the 

FAA ·s facility infi·astructurc ages and it struggles to keep up with NextGen technological 

advancements and operational demands. The FAA needs a stable. predictable funding stream in 

order to adequately maintain and replace its aging inti·astructure in the coming years. 
114 


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II. :\!ATCA SlJI>PORTED THE 2016 AIRR ACT BECAUSE IT WOULD HAVE 

PROVIDED ASTABLE. PREDICTABLE FUNDING STREAM AND IT 

SATISFIED NATCA'S FOUR CORE PRINCIPLES FOR REFORM 

NA TCA supported the House Transportation and lnii·astructure Committee Chairman 

Rill Shuster"s proposal. H.R. 4441. the "Aviation Innovation. Reform & Reauthorization Act of 

20 16" (AIRR Act). which was introduced during the 114'h Congress. The AIRR Act was 

intended to reform the FAA b} separating the air tratlic control system operations from the 

FAA ·s regulatory and oversight activities. 

The AIRR Act would have created a not-for-profit. independent organization run by a 

board of stakeholders. In theory. this model could deliver results similar to those vve have seen in 

Canada. where ]';A V CANADA has proved itself to be a safe and innovative Air Navigation 

Service Provider over the past tvvo decades. We supported the AIRR Act because it dealt with 

the unstable. unpredictable status quo funding stream, did not establish a for-profit entity to 

provide air traffic control services. and addressed NATCA ·,Four Core Principle,. Specillcally. 

the 2016 AIRR Act would have: 

Protected 1'\ATCA ·s members in their employment relationship. including their 

rights and benc11ts. work rules. and negotiated agreements: 

Ensured that safety and etlicicncy remain the top priorities: 

Provided a stable. predictable fi.mding stream to adequately support air traf1ic 

control services. stalling, hiring and training. long-term modernization projects. 

preventative maintenance. and ongoing modernization to the physical 

infrastructure: and 

Maintained a dynamic aviation system that would cnntinue to provide services to 

all segments of the aviation community. ti·om commercial passenger carriers and 

cargo haulers to business jets and to general aviation. fi·om the major airports to 

those in small communities and rural America. 

NATC/\ \\ill carcti.dly revicvv and consider any future proposal that improves upon the 

unstable. unpredictable status quo and does not include a for-profit model. It is imperative that 

the FAA must be proper!) funded vv ith a stable. predictable ti.mding stream. 

Ill. A ROBUST, WELL-THOliGHT OliT TRANSITION PROCESS MUST 

ENSURE THAT THE WORKFORCE IS PROTECTED AND ATC SERVICES 

ARE MAINTAINED WITHOUT DEGRAI>ATION 

NATCA believes that any proposal must include a robust. detailed. and well-thought out 

transition process. This transition is necessary. not just for the workforce. but also for all aviation 

stakeholders. Without a robust transition process. America nms the risk of entering into a lameduck period in which the FAA scales back on resources before the transition is complete. The 

FAA must have a stable, predictable 1i.mding stream and clear policy priorities to continue 

performing its current mission. as well as during the transition to a new model. Failing to 

properly address these issues during transition could have a detrimental e1Teet on the users of the 

system and the workfi.>rce that will be expected to maintain the integrity of the largest and most 

10 
115 


Insert offset folio 53 here 25482.053

complex airspace system in the world. There is a significant concern that a haphazard transition 

process could lead to an inadequate hiring pipeline. personnel training constraints. and 

technological and infi·astructurc modernization delays. Additionally. retirement-eligible 

controllers (over 3.000 of the current 10.532 CPCs) might end their FAA service ahead of 

schedule if they fear the ramifications of an inadequate transition. or if the FAA's funding stream 

is not properly addressed during the period leading to and during the transition. 

IV. RECOMMENDATIONS & CONCLlJSION 

All aviation stakeholders must remain vigilant. While the U.S. National Airspace System 

remains the safest. most ef1icient. most complex. most diverse in the world, we cannot afford tu 

become complacent. We must always strive to improve not only the system. but the support 

mechanisms for the system. Below are NATCA ·s recommendations for FAA Reauthorization: 

I. ~ATCA is hyper-focused on the need f\1r a stable. predictable funding stream for the 

operation. maintenance. and improvement of the ~AS. And. while we do not believe 

there is a single solution to the problem. NATCA will consider supporting proposals that 

improve upon the unacceptable status quo and do not establish a for-profit model f()r 

operating the A TC system as long as they meet our four core principles. 

2. Congress should exempt the FAA from indiscriminate sequestration cuts. Any hiring 

fi"t:eze or furloughs that includ.: air traffic controllers could cripple the FAA and the NAS 

and have an immediate detrimental effect on capacity. meaning fewer planes in the sk;. 

and likely delays for your constituents \\ho rely on air travel. 

3. The FAA must continue to take a holistic. collaborative approach to resolving the staffing 

crisis: 

a. The FAA should routinely post a vacancy announcement for experienced air 

traftic controllers and should continue to hire as many experienced controllers as 

are qualified. 

b. The I·"AA should post. at least annually. an all sources open announcement f(lr 

non-experienced candidates. many of whom will be military veterans. graduates 

from CTI schools. and other aviation-related professionals. 

c. The FAA should further streamline its hiring process. specifically casing the 

bottlenecks and bureaucratic delays in HR. security. and medical reviews. 

d. The FAA should discontinue its use of finance-driven stalling numbers and 

replace them with the operationally derived CPC staning targets. as rellected in 

its Priority Placement Tool.!()!· all future Air Traffic Controller Workti.lrce Plans. 

We appreciate the opportunity to offer testimony on this important issue and look 

ti.mvard to working with the Committee and all aviation stakeholders to improve the system f(w 

the flying public. 

II 
116 


Insert offset folio 54 here 25482.054

The Need to Reform FAA and Air Traffic Control to Build a 21'' Century Aviation System 

for America 

Testimony of Dorothy Robyn 

House Committee on Transportation & Infrastructure 

May 17,2017 

Chairman Shuster, Ranking Member Defazio and distinguished members of the Committee. I 

appreciate the opportunity to testify this morning on reform of the U.S. air traffic control system. 

I have an MPP and Ph.D. in public policy from the University of California, Berkeley, and have 

spent more than three decades-in academia, government and consulting-working on economic 

and regulatory policy, much of that work focused on aviation, transportation and infrastructure. 

For the full eight years of the Clinton Administration. I served as a Special Assistant to the 

President for Economic Policy. on the staff of the White House National Economic Council. 

During President Clinton's second term. and after the Administration's proposal to corporatize 

air traffic control had failed to garner congressional support, 1 worked extensively on alternative 

options, culminating in the President's issuance in December 2000 of an executive order 

directing the FAA to establish the Air Traffic Organization as a performance-based entity 

separated internally from the FAA's regulatory function. After leaving the White House, I 

continued to work on aviation policy, tirst as a Guest Scholar at the Brookings Institution and 

then as an economic consultant with the Brattlc Group. I informally advised CSX CEO (and 

later Secretary of the Treasury) John Snow. the chair of the Air Traffic Services Subcommittee, 

which was created to serve as a board of directors for the ATO. I analyzed air traffic control 

financing and governance issues for the Department of Transportation's Office of Inspector 

General, 1 the White House Council of Economic Advisers.2 and Brookings• Hamilton Project 3 

I also worked on the first phase of an FAA-supported study of the total cost of flight delays 

before leaving the Brattle Group to join the Obama Administration. 

After five years as an Obama Administration official at the Department of Defense and the 

General Services Administration,4 in 2014. I reengaged in aviation policy as an independent 

analyst and a member of the Eno Center for Transportation's NextGen Working Group. I have 

written several opinion pieces on air traffic control reform,' and I coordinated with former 

1 Dorothy Robyn. "Give Price a Chance: Financing the Air Traffic Control System to Promote Efficiency," April 

2005 (unpublished); and "Proposal to Spin Off the FAA's Facilities and Equipment Activities: A Preliminary 

Analysis ofi.Jnintended Consequences.'' October 2006 (unpublished). 2 Dorothy Robyn in association with GRA. Inc .. "Reforming the Air Traffic Control System to Promote Efficiency 

and Reduce Delays.'' Prepared lor the Council of Economic Advisers. Brattle Group, October 2007. 3 Dorothy Robyn with support from Kevin Neels, "Air Support: Creating a Safer and :vtorc Reliable Air Trafllc 

Control System," Hamilton Project, Brookings Institution (July 2008); available at: 

http:/ lwvvw. brookings. edu/researchlpapers/2008/07/air~traffic~robvn. 

·'I served as the Deputy Under Secretary of Defense for Installations & Environment (2009-20!2) and (following 

the scandal at GSA) the Commissioner of GSA's Public Buildings Service (2012-2014). 5 See: ·'Alternative Governance Models for Air Traffic Control System: a User Coop<:rative 

Corporation, .. April 6. 2015: available at: !:!!1~0!!_~!J!!:QQI"!!l.~~i!21Qgi.t!.;s;gQ)SIJill~i!lli!Lillillclill.ll'£: 

1 
117 


Insert offset folio 55 here 25482.055

colleagues in the Clinton Administration on a letter in support of corporatization of air traffic 

control (sec Appendix). Most recently, a former Brattle Group colleague and I conducted an 

extensive analysis of satellite-based aircraft surveillance ('"space-based ADS-B"). Our report. 

released in January, identifies the potential economic benefits of this new capability and makes 

recommendations on how the FAA should think about its costs and benefits 6 

Background 

The United States has the busiest and safest airspace of any country. The ATO, made up of 

14.000 controllers and 20,000 engineers and other staff: orchestrates the safe transit of more than 

30.000 commercial flights a day-an extraordinary feat. I have worked with many I' AA 

analysts. engineers and managers over the years. and (like the federal employees I worked with 

at DoD and GSA) they are extremely talented and mission-driven. Although I have never 

worked alongside air traffic controllers. last year. I attended NATCA's annual safety conference, 

the culmination of which was the presentation of the Archie awards to controllers who had 

perlormcd extraordinary life-saving feats the prior year. Listening to the audio recordings of 

rock-steady controllers. as they calmed and guided general aviation pilots who had lost their way 

or were coping with a mechanical catastrophe. was an experience I will not soon target. 

Despite this talent pool. and the skill with which it manages the day-to-day operation of the air 

traffic control system, the A TO faces longstanding structural problems. In response to these 

problems. in 1995. the Clinton Administration proposed to transfer the air traffic control system 

to a wholly owned government corporation. the li.S. Air Traffic Services Corporation (USATS). 

which would be managed by a board of directors and a CEO. financed by user charges that could 

be leveraged to borrow from the Treasury or (potentially) private capital markets. and overseen 

by an independent safety regulator (the residual FAA). USATS was dead on arrival in Congress. 

however. with some Members saying it went too far and others saying it did not go far enough. 

At the time, only four countries-the UK, Germany. Australia and New Zealand-had moved 

their air traffic control system outside of the traditional government bureaucracy; now, some 60 

countries have done so. The United States is one of the few industrial nations that still provides 

air traffic control services out of a traditional government agency. 

The Problem: Air Traffic Control is a Business Trapped in a Regulatory Agency 

I describe the problems facing the ATO in detail in the Brookings Hamilton Project paper as well 

as my 2015 testimony before the House Aviation Subcommittee which drew heavily on that 

report 7 Let me distill my analysis down to three key points. 

https: /transportation .house.gov/uploadedflles/20 lS-03-24-robvn.pdf. 

2 
118 


Insert offset folio 56 here 25482.056

First, air traffic control is not an inherently governmental function. Although keeping planes 

safely separated is a complex and critical task, it is a purely operational process that follows 

well-established rules. Like running an airline or manufacturing a Boeing 787, air traffic control 

can be performed effectively by a non-governmental entity as long as it is subject to oversight by 

FAA safety regulators. whose job of setting and enforcing the rules is inherently governmental. 

Historically, the air traffic control operator and the safety regulator were seen as so closely 

linked that the former was assumed to be inherently governmental. We now know that is not the 

case, as evidenced by the dozens of countries that have opted to provide air traffic control 

services through a self-supporting. autonomous agency outside of the traditional government 

bureaucracy. In fact as discussed below, experts now call for the separation of the regulator 

from the operator in order to ensure system safety. 

Second, precisely because air traffic control system is commercial in nature, the federal 

government is poorly suited to running it. Blue-ribbon commissions have studied the FAA in 

depth for decades. and there is a broad consensus on the problem. Air traffic management is a 

2./17. technology-intensive sen·ice "business·· trapped in a regulatOI}' agency that is constrained 

by federal budge! rules. burdened by aflawedfunding mechanism. and micromanaged hy 

Congress and the Office of Management and Budget. 

To paraphrase James Carville. "lfs the incentives. stupid." Because it relies on appropriated 

funds. the FAA views Congress rather than aircraft operators- and the traveling public- as its 

customer. and Congress intervenes in decisions large and small. For example. Members 

concerned about the loss of jobs in their district have long blocked FAA plans to consolidate 

aging and inefficient facilities that would save hundreds of millions of dollars a year. 

The FAA's funding mechanism compounds the governance problem. Air traffic control is paid 

for largely through an ad valorem ticket tax on passengers rather than a cost-based charge on 

aircraft operators. whose scheduling decisions and operational practices determine the workload 

on the system. This indirect funding mechanism distorts aircraft operators· decisions and lessens 

the FAA's incentive to respond to the needs of its real customers. 

The budget process is another millstone around the A TO's neck. Because the federal 

government lacks a capital budget. the FAA cannot borrow against annual receipts to fl.md longterm investments in new technology and facilities 8 Nor can it finance promising new capabilities 

that have the potential to transform the delivery of air traffic control services as I discuss below 

using the example of space-based ADS-B. 

These problems are most evident in the FAA's long-running struggle to deploy new technology 

that would improve efficiency and make air travel safer. When it undertook to modernize the air 

traffic control system in I 98 I. the FAA estimated that the work would cost$ I2 billion and take a 

decade to complete. Thirty-six years and more than $56 billion later. many controllers still keep 

track of aircraft using paper strips. Outdated technology limits the capacity of the system. 

8 Having run GSA's Public Buildings Service and had DoD-wide management oversight of U.S. military bases. I 

have experienced firsthand the challenges of acquiring and maintaining large capital assets under the constraint of 

the federal government's requirement for up-rront funding of capital investments. See Dorothy Robyn, "Reforming 

Federal Procurement: The Case for Sensible Scoring," Brookings Institution. April29. 20!4; available at: 

3 
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contributing to flight delays and increased flight times. It also helps to explain why the FAA "s 

cost per unit of service has gone up by more than 66 percent since 1997. 

Third, the current arrangement is flawed on safety grounds. Historically, civil aviation authorities 

in most countries both operated and regulated air traffic controL leading to potential conflicts of 

interest. Safety experts worldwide. including the International Civil Aviation Organization. are 

unanimous in saying that the air traffic control regulator should be independent of the operation 

it regulates to avoid such conflicts. In fact, many of the countries that have spun ofT air traffic 

control have done so largely for safety reasons. The United States is one of the only industrial 

countries in which air traffic control is still both operated and regulated by the same agency. 

Although safety experts have long recommended it, independent regulatory oversight of the air 

traffic control operator is becoming even more important as we transition to the next generation 

of air traffic control technology. According to a 2007 joint statement by the late Alfred Kahn. 

former FAA Administrator Langhorne Bond. and seven other aviation experts, ·'as the ATO 

moves forward to implement the dramatic changes in technology and procedures inherent in the 

NcxtGen concept. .. [m)any decisions about increasing capacity by reducing aircraft spacing 

(thanks to new technologies and procedures) have important safety implications, and should be 

arrived at in a transparent manner. Arm's length separation cannot be accomplished as long as 

ATO operations and aviation safety regulation reside in the same governmentalunit.''9 

Far-Reaching Benefits of Corporatization and Cost-Based Pricing 

Although the creation of the ATO was a step in the right direction. it did not go tar enough. To 

cotTcct the A TO's problems. Congress needs to move the ATO out of the federal government 

and make it a stand-alone entity run by a CEO and a board of directors, with the FAA providing 

independent safety oversight. In addition. Congress should replace tax funding of the air traffic 

control system with cost-based prices on commercial and business aircraft. To minimize 

transactions costs and reflect their lower demand on the system, piston-engined aircraft, many of 

which operate out of separate and uncongested facilities, should pay a flat annual charge linked 

to aircraft size. 

These two changes would have far-reaching beneficial effects on the air traffic control system 

over time. First, the spin-off of the ATO would eliminate the potential conflict of interest by 

replacing the current arrangement, in which the FAA both operates and regulates the air traffic 

control system, with one in which the FAA provides independent, arm's length regulation of the 

system operator. As noted above, this long-needed change is becoming even more critical as the 

system shifts to satellite-based technology. which allows for closer spacing of aircraft. 

Second, the separation of the ATO from the FAA would clarify the missions of the two entities. 

The A TO is a large organization with a distinct. operational function. Making the A TO a standalone operational entity would help employees to see their job as that of a (safety-obsessed) 

service provider-a challenge currently. 

Allowing the FAA to focus exclusively on safety regulation should improve its performance as 

well. Realistically. the FAA will need to beef up its oversight of the air traffic control system 

once it can no longer rely on the A TO's (much larger) internal safety office, and transparency 

9 '"The Need for Fundamental Reform of Air Traffic Control." September 19. 2007. See: 

http:/ /reason.org/ftlesiair ~traffic control~ experts~ statement~ 2007.pdf 

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may require more, not less, interaction between the FAA and the A TO on NextGen, Such 

scenarios should not be cast in a negative light, however: the goal is to ensure the optimal 

tradeoff of safety and system capacity, not to constrain NextGen planners' in-box. 

Third, the ability to borrow money will allow the A TO to undertake capital investments sooner 

and assign some of the costs to fhture users, consistent with economic efficiency. At the same 

time, it will force the ATO to convince investors that its capital spending plan is sound, In this 

way, the capital markets will impose a healthy discipline that OMB and Congress cannot match. 

Fourth, adoption of a well-designed system of pricing (i.e .. user fees) will provide valuable 

market signals, incentivizing aircraft operators to use air traffic control capacity more efficiently, 

encouraging the ATO to offer services that best meet users' needs, and promoting innovation and 

long-term investment. Pricing will also facilitate customer involvement. by giving users an 

incentive to monitor ATO spending and the ATO an incentive to consult more closely with users. 

A "User Cooperative" versus a Government Corporation 

Although most countries have transferred responsibility for air traffic control to a government 

corporation, the Canadians created a different model: NAY CANADA is a private, non-profit 

corporation governed by a stakeholder-selected board; it is similar to the user-owned 

cooperatives seen in many sectors (e.g., insurance, agriculture and utilities), Since both 

approaches provide for independent safety regulation, the decision should come down to 

economic performance. In my view, it is not a close call: the NAY-CANADA model is superior 

to the government-corporation model in both theory and practice. 

In theory, NAY CANADA achieves an elegant alignment of incentives: because the board 

represents stakeholders, it governs the air traffic control system so as to keep costs low and 

invest in capital at the optimal leveL This simple design solution creates an incentive for 

efficient performance in the absence of competition, and it eliminates the incentive tor monopoly 

abuse. Although the government participates as a member of the board (and serves as an 

independent safety regulator), its involvement in the private system can otherwise be minimal. 

Beyond representing stakeholders. the board has a fiduciary responsibility to NAY CANADA 

Toward that end, while some board memhers have aviation expertise, others are selected for their 

knowledge or finance, human resources, law and other areas relevant to running a business. 

Having board members who are fiduciaries has been essential to NAY CANADA ·s success. 

NAY CANADA's 20-year track record is practical proof that its approach works. User charges 

are a third less in real terms than the ticket tax they replaced. The system is handling 50 percent 

more traffic with 30 percent fewer people. And it has fully modernized its equipment with half 

the prior level of capital expenditure and in fact now sells its hardware and software to other 

providers. Canadian air traffic controllers support NAY CANADA because it rewards 

productivity and involves controllers intimately in the technology modernization process. 

In contrast to NAY CAl\ADA, a government-corporation approach to air traffic control requires 

ongoing government involvement to achieve the same economic goals. Although this approach 

has worked well in many countries, the structure alone is no guarantee that a government 

corporation will not seek to abuse its monopoly power. The European Commission has imposed 

its own regulatory scheme to promote efficiency and discourage monopoly pricing on the part of 

Europe's national air traffic control providers, many of which are government corporations, 

5 
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An even bigger concern in this country may be the potential for unwarranted government 

involvement. Government corporations in the United States do not have the same degree of 

political insulation as those in other countries. !fa corporatized air traffic control system is to 

succeed, it must he shielded !rom unwarranted external intervention, and it seems doubtful that a 

government corporation could provide that bulwark. 

Had NAY CANADA existed in 1995, l suspect that it, rather than New Zealand's government 

corporation-the best model at the time-would have been the prototype for the Clinton 

Administration's USATS proposal. And in 2000, when the Clinton Administration designated 

tive outstanding business and management leaders, several of whom had no aviation expertise, 

tor appointment to the Air Traffic Services Subcommittee, it did so with an eye to Canada's 

nascent approach. I personally recruited John Snow because he was a corporate executive, 

trained as an economist. who understood network industries. 

An FAA Corporation: Fatally Flawed Twice Over 

Some people have called for transferring the FAA in its entirety to a government corporation 

(one variation of this proposal would transfer only those regulatory functions related to air traffic 

control). While the goal of giving both sides of the FAA greater tlexibility is laudable, this 

approach is t1awed in fundamental ways. First, by keeping the air traffic control operator and the 

regulator in the same organization. it fails to address the contlict-of-interest issue. Even more 

problematic, an FAA Corporation would corporatize the FAA ·s regulatory functions, which are 

inherently governmental. Air traffic control users. through their membership on the board of the 

corporation, would have some authority to oversee safety regulation-a clear conflict of interest. 

Moreover. the CEO and the board would be directly accountable to the Executive Branch and 

Congress for that portion of the corporation's funding devoted to regulatory oversight, which 

would significantly diminish the corporation's independence and tlexibility. 10 

Objections to "Privatization" 

Those who oppose the adoption of aNA V -CANADA model in the United States cite several 

reasons that the air traffic control operator should remain in the federal government (in either a 

government corporation or a traditional government agency). One reason is national security. A 

major concern is that the military conducts operations whose whereabouts cannot be broadcast 

without risk of compromising the government's objectives. But private contractors are alreadv 

responsible for carrying out essential air traffic control functions, such as automatic dependent 

surveillance-broadcast (ADS-B). the successor to radar surveillance. The procedures now in 

place to ensure that such operations are kept secret can easily move with the ATO when it 

transitions to a corporate structure. as long as the federal government retains an ·'appellate" 

function. 11 Moreover, in the event of war. under this committee's proposed legislation, DoD 

would take over the operation of the national airspace system (NAS), just as it would under 

current law. 

10 The FAA Corporation was one of the options examined as part of the Clinton Administration's six-month, DOTled interagency analysis of the air traffic control system. "Air Traffic Control Corporation Study,'· Report of the 

Executive Oversight Committee to the Secretary ofTransp01tation. May 1994. pp. 55-56. 1

' Currently, if, say. DoD has a disagreement with the private ADS-B provider. it can elevate the issue to ATO 

management. That ''appellate'' function needs to remain in the government--, -presumably in the residual FAA. 

6 
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To be sure, DoD has major equities in the NAS, and it will need assurances that the new 

structure will preserve current DoD-A TO arrangements and address potential risks and 

contingencies. However, aNA V -CANADA type of corporatization of the A TO could bring 

significant benefits to DoD. such as facilitating investment in military-run air traffic facilities and 

equipment that DoD lacks the capital budget to upgrade. In short. national security does not 

appear to be a reason to oppose ·'privatization." 

A second objection to "privatization·• has to do with the environment. The major concern seems 

to be that communities will have less ability to aflect decisions about where planes fly and the 

resulting noise impact. While aircraft noise is a genuine issue, particularly with the advent of 

performance-based navigation, the spinoff of the A TO would not change the underlying 

environmental law or policy. The National Environmental Policy Act would still apply, and the 

FAA would retain the (inherently governmental) responsibility tor approving new flight paths. 

revised air traffic control procedures and other changes with potential environmental impacts. 

Finally. some stakeholders have questioned whether the NAY-CANADA model is scalable to an 

aviation system as large and diverse as the one in this country. However, the U.S. air traffic 

control system is already large, and there is nothing about the Canadian approach that limits its 

scale. To the contrary, the larger and more complex the system. the more important it is to have a 

commercially driven operator, particularly one with built-in incentives tor efficiency. As tor 

"diversity," meaning the ability of small airports and the general aviation users who rely on them 

to access the air traffic network, as a non-profit corporation in which stakeholders are the 

·'owners," the A TO would treat access as a bottom-line goal (along with efficiency and safety). 

Satellite Surveillance 

Finally. let me briefly discuss a new air traffic control capability, space-based ADS-B. whose 

brief history illustrates the constraints that the ATO faces as a government agency. By way of 

background, although radar and (ground-based) ADS-8 track aircraft in real time, allowing 

planes to be separated by only 3-5 nautical miles, their coverage is limited to the airspace over 

land. In the airspace above oceans and remote land areas. which cover 70 percent of the earth, 

controllers must rely instead on infi·equent position reports trom the aircraft, which requires that 

planes be separated by 30-120 nautical miles. With space-based ADS-8, next-generation 

Iridium satellites equipped with ADS-8 receivers will take the place of ground-based 

infrastructure, making it possible to track airplanes with radar-like precision anywhere above the 

earth· s surface. 12 

Space-based ADS-8 is a potentially transformative technology that will allow for safer and more 

efficient use of the 70 percent of global airspace that lacks radar-type surveillance. In addition to 

allowing tor closer spacing of aircraft in high-traffic areas like the North Atlantic, space-based 

ADS-8 will be a valuable security asset, enabling DoD and U.S. intelligence agencies to monitor 

global traffic f1ows in real time and more easily land military aircraft in war zones and disaster 

areas that lack air traffic infrastructure. It will make lengthy search and rescue operations, such 

'' In January. SpaceX launched a rocket carrying the first ten Iridium NEXT satellites. and the others are due to be 

deployed over the next 18 months. In addition to Iridium, Global star plans to offer space-based ADS-13 service. 

Globalstars system (unlike Iridium's) will require aircraft to install additional equipment and will lack complete 

global coverage. 

7 
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as the one for Malaysian Airlines Flight 370. a thing of the past. 13 Over the longer term, spacebased ADS-B could even alter the current approach to air traffic control, allowing monopoly 

national providers. armed with a common, global air picture, to compete as well as collaborate. 

Jn 2010, in an effort to raise the capital to add ADS-B receivers to its next generation of 

satellites, Iridium asked the A TO to be the initial investor in a joint venture to provide spacebased ADS-Bas a service to individual air traffic control providers. As a traditional government 

agency. the ATO could not seriously entertain such a proposal. Lacking sucb a constraint, NAY 

CANADA pledged $150 million to become a 51 percent owner of the joint venture. Aireon, and 

the air traffic control providers in Ireland, Denmark and Italy committed to an additional $120 

million in equity, making Aireon 75.5 percent owned by foreign air traftic control providers. 

Iridium is an American success story. In 2000. the company survived a bankruptcy that almost 

led to the destruction of its 66-satellite network-an engineering marvel that uses Star Wars 

technology to link any two points on the planet. Since 2001. Iridium satellite phones have saved 

tens of thousands of lives and proved indispensable in war zones. disaster areas. and for 

hundreds of commercial and scientific uses in parts of the globe that are otherwise inaccessible. 

As Aireon writes a new chapter in the Iridium story, one wishes it were bolstering our country's 

once-unquestioned technological leadership in aviation and air tranic control; instead the Aireon 

board meets in Ottawa. 

Nor is it certain that the ATO will decide even to subscribe to space-based ADS-B as a customer. 

in part because of constraints it operates under. Although the charge f(Jr Aireon's service would 

be relatively modest. the A TO cannot pass the cost on to aircraft operators, as other air traffic 

control providers plan to do. And since the FAA's appropriations have been flat for five yearsa trend that is likely to continue-to take on a new commitment, the ATO must jettison an old 

one. Thus even if the A TO's benefit-cost analysis of space-based ADS-B is positive (an ongoing 

analysis whose result I do not presume to know), the budget and other constraints may limit the 

A TO's ability to take advantage of this potentially transf(mnative new capability. 14 

That concludes my statement. Thank you again for the opportunity to testify on this important 

issue. l look forward to answering any questions you have. 

11 If a commercial aircraft flying in oceanic airspace is reporting its position every 15 minutes (the current norm). the 

search area if the plane disappears is about 55.000 square kilometers. By contrast. with the 8-second update rate that 

space-based ADS-B will provide. that search area is only 4 square kilometers. 14 See Dorothy Robyn and Kevin Neels. ··warranted Surveillance: Satellite Launch Holds Promise for Air 

Traffic Control," January 17. 2017: available at: 

8 
124 


Insert offset folio 62 here 25482.062

7, 2016 

Members of the U.S. Senate 

Re: 

Administration Officials 

Dear Members U.S. 

We 

Appendix 

Former 

consideration to 

Aviation Administration's "-\ir 

ur<Duus:c~I would move the ATO to a non9 

at 

Vice President 

pursue air 

Two decades 
125 


Insert offset folio 63 here 25482.063

Controllers 

Federico Pena 

Norman Mineta* 

Gerald Baliles 

Governor 

Administration 

***Gotbaum 

Administration 

in 

1993-1997 

and 

also 

10 

,,..,,.,.t,nrP of structural 

Democrats 

Traffic 

We 

and Office of 

1993-2001 

Administration 

in the Clinton 

in the Obama 
126 


Insert offset folio 64 here 25482.064

-.f' 

February 1 0, 2016 

The Honorable Bill Shuster· Chairman 

Committee on Transpottation and Infrastructure 

U.S. House of Representatives 

Washington DC 20515 

Dear Chairman Shuster: 

We are writing to express NetJets Inc.'s support for the "Aviation Innovation, Reform, and 

Reauthorization Act," H.R. 4441, that you introduced in Congress last week. As you may know, our 

NetJets family of companies manages over 600 business jet aircraft in the United States alone, through a 

mixture of fractionally owned and wholly owned private aviation programs. We and our customers have 

a compelling interest in this Reauthorization. 

We believe that H.R. 4441 is a significant step in a new direction that will enable the aviation industry to 

embrace safety and efficiency. 

We welcome the opportunity to work further with you, Rep. LoBiondo, Chairman of the Aviation 

Subcommittee, other members of Congress, the FAA, and other industry leaders as the details of the FAA 

Reauthorization bill are debated and dmfted. 

Thank you, 

Ronald P. Brower 

Corporate Sccretaty 

~ Vice President, Corporate & Government Affairs 

NetJetslnc, 
127 


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S\\APA lirges House Pa;:;sagc of :\lRR Act http·/·\v\\w.pmewswire.comillt'\\.S-rclcasc:;ro,\~.>apa·urgeYhVuSI?'·passag_ 

SWAPA Urges House Passage of AIRR Act 

Pilots of Southwest Airlines support legislation to modernize FAA, improve aviation safety 

ancl efficiency 

25 Feb, 2016, 12:45 ET from Southwest Airlines Pilots' Association 

DALLAS, Feb. 25, 2016/PRNewswire-USNewswire/ --On behelf of the more than 8,000 pilots of 

Southwest Airlines, Captain Jon Weaks, President of the Southwest Airlines Pilots' Association 

(SWAPA), expressed his support today for H.R. 4441, the Aviation, Innovation, Reform and 

Reauthorization (AIRR) Act. 

Statement to be attributed to SWAPA President, Captain Jon Weaks: 

"For too long, the delays in upgrading our air traffic control technology have led to costly delays for 

passengers on the ground. As passed by the Committee, the AIRR Act will take bold and significant 

steps to separate the FAA's air traffic controllers from the federal bureaucracy that has deprived them 

of the tools necessary to best do their job. Freeing A TC from the FAA will allow the Agency to 

concentrate on its core mission of safety At the same time, the new ATC board laid out by the 

legislation will include a balance of interests from every segment of aviation, including pilot labor, 

which will focus on modernization and efficiency of the system. importantly under the AIRR Act, our air 

traffic contro!Jers will continue to be the best of the best, but \Nil/ do so with access to equipment and 

working conditions that once again lead the world 

The AIRR Act guides us towards modernization while taf<ing essential steps to increose safety. 

Importantly the AIRR Act includes a provision important to the aircraft mechanics of Southwest 

Airlines to provide greater oversight and accountability of foreign repair station employees. 

Addiriona!fy. the AIRR Act will promote harmonization with the international community on the 

shipment and storage of lithium-ion batteries, require risk assessment to address cockpit safety, and 

will include new science-based rest and duty rules for flight attendants. Specifically, SWAPA 

appreciates tho efforts of Representative Bob Gibbs to pass an amendment to ensure the ATC board 

created by the bill will include a balanced voice for pilot !oboe 

While we endorse this legislation, SWAPA would like to see additional improvements to the AIRR Act to 
128 


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S\\'APA Lrges House Passage of AlRR Act http·/. \I'WW .prnewswire.com 'news-reieascs.'swap<t·Urgcs-hous.::·pa>sJg .. 

ensure that all pilots with access to the National Airspace System are healthy and fit for duty. In 

particular, SWAPA would encourage the adoption of an amendment offered and withdrawn during 

committee markup by Rep. Ryan Costello to create an Aviation Rulemaking Committee to address Part 

135 pilot rest and duty rules. In addition, SWAPA supports inclusion of bipartisan legislation 

championed by Senators Jim lnhofe and Joe Manchin, and passed by the Senate Commerce 

Committee as a Monchin amendment in November. to reform third-class pilot medical certification. 

The professional pilots ofSWAPA are groteful for the efforts of the bipartisan House Transportation 

Committee leadership to improve this important legislation throughout Committee consideration. We 

look forward to working with Chairmen Shuster and LoBiondo as well as Ranking Members DeFaz;o 

and Larsen to further improve this legislation as it continues through the legislative process.'' 

Located in Dallas, Texas, the Southwest Airlines Pilots' Association (SWAPA) is a non-profit employee 

organization representing the more than 8,000 pilots of Southwest Airlines. SWAPA works to provide a 

secure and rewarding career for Southwest pilots and their families through negotiating contracts, 

defending contractual rights and actively promoting professionalism and safety. For more information 

on the Southwest Airlines Pilots1 Association, visit W\Nw.swapa.org 

SOURCE Southwest Airlines Pilots' Association 

RELATED LINKS 

http://wwvv.swapu.org 
129 


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Allied Pilots Association endorses A!RR ;\ct >Allied Pilots Association https: 'iv,,vw.ullicdpl!ob.orgiNews.·!DA IJ5iA!lil:d-Pilots~Association ... 

Allied Pilots Association endorses AIRR Act 

> Allied Pilots Association 

posted on 1\1arch 03,201614:54 

:FOR IMMEDIATE REI>EASE 

CONTACf: 

Captain Dennis Tajer 

847-902-8481 

Gregg Overman 

8!7-302-2250/817-312-3901 

ALLIED PILOTS ASSOCIATION ENDORSES AIRRACT 

FORT WORTH, Texas (March 3, 2016)- On behalf of the approximately 15,000 

pilots of American Airlines, Captain Keith Wilson, President of the Allied Pilots 

Association (APA), joins the presidents of the National Air Traffic Controllers 

Association and the Southwest Airlines Pilots' Association in calling for passage 

of the AYiation, Innovation, Reform and Reauthorization (AIRR) Act. 

According to Captain Wilson: 

"For decades, we have watched valuable taxpayer-supported resources used in 

well-intended efforts to modernize the FAA and the Air Traffic Control system. 

only to have those efforts thwarted or become obsolete at implementation due to 

the vagaries and inefficiencies of the federal funding mechanism. Separating the 

regulated from the regulators, while simultaneously providing a predictable and 

reliable revenue stream, will allow the U.S. National Airspace System to retain its 

emiable safety and efficiency record, and equip and train its Air Traffic 

Controllers to handle the challenges of the coming century, retaining the United 

States' role in global aYiation as the gold standard. Additionally, APA is pleased 

with the passage of Representative Bob Gibbs' amendment that assures a 

balanced pilot voice in future ATC governance. 

"The AIRR Act also addresses a mriety of important safety issues, such as 

accountability and m·ersight of foreign repair station employees, risk assessment 

requirements on cockpit safety regulations, harmonization "ith a global 
130 


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Allied Pilots Association endorses AIRR Act> Allied Pilots A:.:.ociation https:','wwv;..a!liedpilots.org-'l\ew:,iJD'4135 1

Allicd-Pilots-Associatlon ... 

standard of recent guidance to severely constrain the carriage of lithium-ion 

batteries on passenger aircraft and so on. 

"APA, however, notes that there is still work to be done, and the bill is a ways 

from passage and may not be in its final form. APA would like to see one level of 

safety in the arena of fatigue, flight and dnty time, to include cargo and Part 135 

operations. APA has previously applauded the Senate legislation introduced by 

Senators Jim Inhofe and Joe Manchin ('the Manchin Amendment') reforming 

third-class medical certification. 

"Finally, APA looks forward to continuing its work with !louse Transportation & 

Infrastructure Committee Chairman Bill Shuster, Ranking Member Peter 

DeFazio, Aviation Subcommittee Chairman Frank LoBiondo and Ranking 

Member Rick Larsen in their bipartisan efforts to reauthorize and modernize the 

FAA." 

Founded in 1963, the Allied Pilots Association- the largest independent pilol.> 

union in the United States- is headquartered in Fort Worth, Texas. APA 

represents the 15,000 pilots <if American Airlines, including several hundred 

pilots on .full-time military leave <if absence serving in the armed.fm·ces. The 

union's website is 

passenger airline. 

American Airlines is the world's largest 
131 


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Dear Brothers and Sisters, 

At 11:30 a.m. EST today, House Transportation and Infrastructure Committee Chairman 

Bill Shuster (R-PA-9) will unveil an FAA reauthorization bill at a press conference on 

Capitol Hill. NATCA received a copy of the bill and has given its language a complete 

and very rigorous review. We have looked at every single word and pored over every 

detail and proposal. We have specifically focused on what protects our members' rights. 

pay, benefits, and retirement, and what ensures the safety of the National Airspace 

System (NAS) while also addressing the current problem of providing a stable and 

predictable funding stream to operate and improve a 24/7 safety function. 

After extremely careful review, consideration, and deliberation, we have reached a 

decision: NATCA supports this bili. 

We applaud the very hard work that the Committee has done to think outside the box 

and come up with a comprehensive bill that addresses the concerns we have shared 

with them. While the legislation currently addresses NATCA's primary issues of concern, 

we want to emphasize that today is only the beginning stage of the legislative process. 

Part of that process will soon include a proposal by Committee Ranking Member Peter 

DeFazio (D-OR-4). The Ranking Member will propose an alternate model for ensuring a 

stable, predictable funding stream for the FAA, while at the same time protecting 

employees and ensuring the safety of the NAS. We appreciate the effort he and his staff 

have made and look forNard to giving that proposal's language the same complete and 

rigorous review. 

We want to assure you that we treat this decision with extraordinary care and precision. 

In reviewing this bill, we found that it is in alignment with all of our organization's policies, 

practices, and principles. We made sure that we could clearly see how this bill will 

protect the NAS and allow it to continue to grow. 

Last year, we told you- and stated publicly- that any proposed restructuring of the FAA 

and its funding mechanism through FAA reauthorization legislation must achieve these 

four things: 

1. Safety and efficiency must remain the top priorities; 

2. Stable, predictable funding must adequately support ait· traffic control services, 

staffing, hiring and training, long-term modernization projects, preventative 

maintenance, and ongoing modernization to the physical infrastructure: 

3. Robust and continued growth of the aviation system is ensured; and 

4. A dynamic aviation system that continues to provide services to all segments of 

the aviation community, from commercial passenger carriers and cargo haulers, 

to business jets, io general aviation, from the major airports to those in rural 

America. 

We can tell you that this bill achieves each of these four things. 

This legislation proposes a federally-chartered, not-for-profit corporation to operate the 

NAS. We want to be very clear on this point: this is NOT a for-profit model. As we've 
132 


Insert offset folio 70 here 25482.070

said throughout this process, that would be something we would oppose. Many voices in 

the public discussion of this issue, including the news media, will continue to use the 

word privatization to describe this bill. But to us, privatization has always meant a profit 

motive where safety is not the top priority. That definition does NOT fit this bill today. We 

support this bill because it does make safety the top priority. 

It is equally important that any proposed change does not harm our members. After 

carefully looking at the language, this bill does protect our workforce- including your pay, 

benefits, retirement, and collective bargaining rights. If this bill, as written today, 

becomes law, employees will be kept whole. 

Finally, we want to reiterate that this bill is just one step in the lawmaking process. As 

you all know. language in proposed legislation is often changed or amended at various 

points throughout the legislative process. We will continue to vigorously and carefully 

review this legislation at all times and push for its improvement. If at any time there are 

changes to this bill, we will immediately examine them to ensure the bill continues to 

align with our organization's policies, practices, and principles. We reserve the right to 

withhold our support if any changes cause the bill to violate our principles. 

We will continue to keep you informed on all developments as this process unfolds. 

In solidarity, 

Paul Rinaldi 

President 

Trish Gilbert 

Executive Vice President 
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Insert offset folio 71 here 25482.071

Founded 1977 

1200 (; ";trcct N\\, Suitt: 750, \\'n~hington. DC 2000) 

rclcplhmc: (202) 2~>3-7277 ht\.: (202) 20:.0-7727 

Statement for the Record 

"The Need to Reform FAA and Air Traffic Control to Build a 21st Century 

Aviation System for America" 

House Transportation and Infrastructure Committee 

Mike Perrone 

National President 

May 17,2017 

The Professional Aviation Safety Specialists. AFL-CIO (PASS) represents approximately 11,000 

Federal Aviation Administration (FAA) employees in five separate bargaining units throughout 

the United States and overseas. The largest PASS bargaining unit is comprised of employees 

trom the Air Traffic Organization (ATO). This bargaining unit includes systems specialists from 

Technical Operations who install, maintain, repair and certify the radar, navigation, 

communication and environmental systems making up the air traffic control system in our 

country; aeronautical infonnation professionals in Mission Suppot1 Services (MSS) who 

develop. maintain and support instrument flight procedures and a variety of aviation products 

that enhance industry perfonnance and eHicicncy in the airspace and on the ground; and Flight 

Inspection Services (FIS) pilots, mission specialists, operations staff and aircraft maintenance 

employees who are responsible for the airborne inspection of ground- and space-navigation 

systems to ensure the integrity and safety of the instrument procedures, airways and operational 

navigation systems that make up the National Airspace System (N AS). 

PASS appreciates the opportunity to present our views regarding issues related to refonn of the 

FAA. The United States has the safest and largest aviation system in the world, and the FAA 

employees represented by PASS ensure that it is operating safely and efficiently every day. 

PASS hopes to work together with members of Congress as they prepare to reauthorize the FAA. 

and to ensure that the U.S. air traffic control system remains an important and essential aspect of 

the federal government. 

Economic Impacts 

Commercial aviation is a cornerstone of the U.S. economy, accounting for more than 5 percent 

of the country's Gross Domestic Product. Aviation contributes $1.6 trillion in total economic 

activity and supports nearly II million jobs. 1 The NAS, which FAA employees design, install, 

certify, operate and maintain, safely t1ies over two million passengers to and from their 

destinations on approximately 23,000 commercial flights every day. which means 7,000 

1 Federal Aviation Admini~tration, Jhe Economic Impact o{Civil Aviation on flu! l/.S. Economy. p. 3, 0Jovcmbcr 

2016. Accessed via hU11~~~_\Y~\'~"'V::)}l~E9.Y:iljJ~J{l~J2uhl L~m_jons~ll!0-1i~!:'lQJ ~=~-:_c~1~~lO~}_i~"::l!:!2J2act-rcport Fl~ ALpdf. 
134 


Insert offset folio 72 here 25482.072

commercial aircraft are in the sky at any given timc2 This country's aviation system is clearly 

valuable both in terms of economic impact and services provided. It is obvious that such an asset 

should be properly funded and overseen. Privatizing the air traffic control system would not do 

either. 

Lapses in authorizations, govemment shutdowns and across-the-board sequestration cuts can 

cause major disruptions to FAA's air traffic and safety oversight operations. For example, in 

2011, fAA employees were affected by furloughs resulting from a lapse in authority when the 

short-term extension of FAA's authorization expired. Tn 2013, the impacts were even more 

dramatic when automatic funding cuts were imposed through the sequestration process. Flights 

across the country were delayed due to reduced maintenance and loss of system redundancy. 

Additionally, the two-week government shutdown in October 2013 prevented aviation safety 

inspectors from overseeing commercial and general aviation industries; manufachlring inspectors 

\Vere not reviewing aviation manufachlrers, facilities, training programs and equipment; and 

registration certificates were not issued for U.S. civil aircraft and ainncn. According to an 

estimate from Standard & Poor's, the government shutdown cost the economy $24 billion, 

including $3.! billion in lost government services. 

ft is vitally important that Congress adopt a comprehensive, long-tenn budget agreement to 

ensure that all critical safety functions of the FAA can be adequately funded. The FAA's cuJTent 

funding structure utilizes the Airport and Airway Trust Fund (AATF) along with a general fund 

appropriation. The AATF is primarily funded through excise taxes paid by passengers and 

should therefore be subject to oversight from the public sector. The general fund serves as a 

critical safety net for the air traffic control system and the flying public in times of national 

emergency and economic downturns. 

However, the committee· s previous proposal to rcfonn air traffic control created a system that 

would be entirely funded by user fees, which will be detennined by a board of directors made up 

of select users of the system. Turning fi.mding decisions over to a private corporation may subject 

the system to financial hardships. In the case of an economic downturn, it is unclear whether 

employees would lose their jobs or the aviation system would require a taxpayer bailout. For 

example. while proponents of privatization continue to cite Canada and the United Kingdom as 

air trat1ic control systems the United States should emulate, both systems faced serious financial 

issues in the period following the events of9!l1 when they experienced downturns in aviation 

tra!1ic. In the case of the Canadian model, user fees were hiked in order to cut costs while the 

United Kingdom model took several steps, including obtaining additional funds hom the 

government and implementing automatic price increases triggered by reductions in air trafJic. 

Stressing that such a corporation in this country could be considered "too big to fail," a 2016 

Government Accountability Office (GAO) report questioned whether the p1ivate corporation 

would resort to such drastic measures and the impact it would have on this country and the 

American economy. 

2 F(deral Aviation Administration, ''Air TrafTic by the 0iumhers," updated October 28. 20 l6. Accessed via 

Govcmrnent Accountability Office, Federol A\'iation Administration: Pre/iminm~J' Obs'crvations qlPotentia! Air 

Trqjfic Co!!lrol Restructu6ng Transition Issues, GA0-16-3R6R (\Vashington, D.C.: February 10, 2016), p. 5. 
135 


Insert offset folio 73 here 25482.073

In addition, the remaining safety functions of the FAA would still be subject to the 

appropriations process and vulnerable to the impacts of sequestration. As such, separating out the 

A TO does not f11lly address the FAA "s funding problem. There arc clearly other alternatives that 

allow the agency to remain a single unit. PASS will support measures to eliminate the draconian 

across-the-board cuts caused by sequestration but will not support any effort that will dismantle 

FAA ·s current structure through the creation of a private corporation. 

With regard to the issue of funding stability, it is imperative that the Congress make every effort 

to enact annual appropriations bills prior to the beginning of the fiscal year. However, the lack of 

a timely budget process is no reason to abandon the important and rigorous oversight and 

protections that arc provided to the FAA through the multi-year authorization and annual 

appropriations processes. PASS appreciates that the recently enacted FY 2017 appropriations bill 

included multi-year availability and an increase in transfer authority for the FAA's operations 

account. These additional tools will help the FAA better manage the transition between budget 

years and ensure that the agency can continue to hire critical safety staff throughout the year. 

Additionally, there is little evidence that privatization of the air tratllc control system is likely to 

make the system more efficient or less costly simply because it is transferred ti'om a 

governmental entity to a private non-profit corporation. Instead, the only significant change is 

that oversight of the services will move ultimately from the American people, and their elected 

representatives, to a small board under the influence of for-profit airlines. In fact, the 

Congressional Budget Office estimates that enacting last year's proposal to spin off air traftlc 

control functions from the FAA would increase net direct spending by $89 billion from 2017 to 

2026 and increase net deficits stemming from revenues and direct spending by about S l9.R 

billion over the same period.~ 

Congressional Oversight 

It is a fact that congressional oversight would be severely curtailed in a private air traffic control 

corporation. A corporate board of directors with built-in conl1icts of interest and zero 

congressional oversight or accountability is not the entity that should be responsible for dictating 

everything fi·om lees to staffing to modernization of the U.S. air traffic control system. The 

ability for stakeholders and members of Congress to work together on aviation-related issues bas 

been pivotal to the success of our system. In a private corporation. lawmakers will lose the right 

to provide input on funding, staffing, safety, training and numerous other areas in which 

congressional oversigbt is present today. 

Furthermore, congressional oversight helps ensure that the flying public has a voice when it 

comes to aviation-related issues. Today, constituents have the ability to contact their members of 

Congress when they have a concern related to the aviation system or air trat1ic. An important 

issue for many Americas relates to airplane noise and its impact on their daily lives. Under a 

privatized corporation, the flying public will lose an advocate when dealing with aviation-related 

issues pertaining not only to noise and other environmental issues but safety as well. For 

example, when taking into consideration the Canadian model, there have been petitions and 

4 Congressional Budget Office, H.R...!-441 Aviation!nnoration. Reform, and Rcauthori~athm Act of 2016 Cost 

Estimate (\Vashington. D.C.: March 9. 20 16). 
136 


Insert offset folio 74 here 25482.074

reports of the private company, Nav Canada, not being appropriately responsive regarding noise 

complaints 5 

In addition, many smaller airpmts across the country are dependent on congressional 

involvement and support in order to continue to operate. Under a private model, local cities and 

towns could be increasingly saddled with the costs of keeping their airports open and maintained 

properly. Americans in rural areas rely on their local, smaller airports for employment, 

commerce and transportation. Many of these smaller airports will not have a congressional 

advocate under a private model. It is feasible that a corporation would not focus on maintaining 

these facilities if they are not profitable, essentially shrinking this country's airspace 

Modernization of the System 

Proponents of air traffic control privatization often claim that a private corporation would allow 

the aviation system to modemi.ce at a more efficient rate. However, this argument ignores the 

very real progress the FAA is making through the Next Generation Air Transportation System 

(NextGen). In fact, since 2007, NextGen has delivered approximately S2. 7 billion in benefits to 

airlines and other users, and is estimated to deliverS 161 billion in benefits by 20306 In 2016 

alone, modernization improvements have translated in SJ. 75 billion in savings in passenger time 

and occupant safety, as well as reduced fuel and aircraft operating costs 7 

Modernization of the system is an essential function of the agency and progress includes 

installation of new systems and equipment, optimization of airspace and procedures, and 

continued upgrading and standardizing of automation and communication systems, The 

realization ofNextGen hinges on both air and ground investments, and the FAA cannot be 

successful without stakeholder buy-in and partnership. An air trat1ic control system separated 

from the rest of the FAA, nm by a private corporation with special interests, cannot guarantee 

that modernization work continues. These effmts may be all but lost. as no doubt modemization 

will be halted during the transition. 

There is also considerable concem about what would happen during the transition period when 

the federal agency is transferred to a private corporation. The transition from public to private 

governance in other countries took as many as seven years to complete-' Issues faced during the 

transition period would undoubtedly affect modemization efforts, but the impacts would not stop 

there. The affect would he wide ranging during the transition, from funding and financing 

concems to the separation of safety and regulatory functions to human capital issues. Quite 

simply, a prolonged transition period will detract from the mission of the agency, and what 

5 Sec: NAV-CANADA-!'\oisc over Toronto. 2012 petition started by T.A.0LG. (Toronto Aviation Noise Group) (sec 

also accessed via !)_llp_~.:f. ·.\~ ~Y._\~::ch~~~?.h'-~:9t:g/p.it}ay:-~3n;.t~L<}:: 

Jll~iS.~::_Q.Y:_~X:::_tDt~oD_!g. CBCNews. want answers at GTAA mcL'ting on Pearson flight noise during runway 

revamp, .. April 19,2017. 

(l Federal Aviation Administration. Updare to the Business Case for tlw :Vc.rt Generation Air Transportation ,~rstem. 

~- 2L July 2016. 

Lcttcr from Administrator Huena to Senator Thune, December 15. 2016. 

X Government Accountability Office, Federal Ariatiun Administrminn: Pri!liminm~v Ohsc1Tations of Potential ilir 

Trqfjic Control Restructuring Transition issues. GA0-16-386R (\Vashington, D.C.: February 10, 2016), p. lO. 

4 
137 


Insert offset folio 75 here 25482.075

should be the only focus, safety. The most important steps we can take are to continue with our 

modernization efforts, to grow onr airspace and allow for the introduction of new technology, all 

while ensuring the interests and safety of the !lying public. 

Agency Collaboration 

Privatization advocates call for the separation of the Air Traffic Organization (ATO) from the 

rest of the FAA. Essentially, this would require severing a major section of an organization, 

placing it in an entirely different structure, expecting it to still interact with the federal agency, 

but providing no plans or forethought on how this would be accomplished. Collaboration and 

interaction between every part of the FAA is essential to the success of our aviation system. 

Stripping the ATO fl·om the federal government will only strain communication and 

collaborative efforts and bring with it serious consequences. 

The ATO interacts daily with the entire agency, including the Office of Aviation Safety (AVS). 

The relationship between the ATO and AVS is a vital pm1 of operating a safe and efficient 

aviation system. Consistent and seamless communication is key to the continued safe operation 

of the system. ffthcrc is a deviation or problem with the system, A VS inspectors are able to 

interact quickly and share information with technicians, controllers and other air traffic control 

employees. If there is an ongoing investigation, air traffic control plays an impmtant role in 

providing infom1ation and access to data. [fthere is a system failure that requires an 

investigation or enforcement action, how would a private corporation investigatc'7 In addition, 

A VS would be required to oversee the new private entity, which is concerning considering that 

there are already a limited number of inspectors. lt is unclear how the remaining part of the FAA 

will be able to provide adequate oversight of the new corporation. 

The r AA and other federal agencies also share resources, facilities and infonnation. For 

instance, the FAA shares services and t~1cilities, including radars, with the Department of 

Defense (DoD). This requires sharing of critical information relevant to national security. ln the 

case of a national emergency or natural disaster, that sharing of resources and in fonnation would 

be critical. The FAA and DoD interact on a regular basis, including collaborating on NcxtGcn 

initiatives, safety and rulcmaking, and integration of unmanned aircraft systems (UAS). This 

level of collaboration would no doubt be altered under a private corporation. Even more 

conceming. with DoD contributing approximately 15 percent ofNAS services, it is not clear 

whether established air defense procedures could be tumed over to a non-govemmcntal 

organization.9 

Security also becomes a conccm under a privatized model. According to the GAO, many ofthe 

FAA's security fi.mctions arc integrated throughout the agency and coordinated with other 

government agencies. This sensitive infom1ation is related to terrorism concerns, cybcr security 

threats as well threats to the aviation system as a whole. This security and the coordination 

involved is essential to safety of the aviation system, and it is concerning whether that level of 

interaction is even possible with a non-governmental organization. 10 

9 Government Accountability Office, Air Tn4flc Control: Experts' and Stakeholders' Views on Key Issues to 

in a Potential Restructuring. GA0-17-131 (Washington. D.C.: October 2016), p. 18. 

!d. 
138 


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FAA Employees Must Remain Federal Employees 

Ensuring that the men and women who perform this vital work remain federal employees is of 

fundamental importance in maintaining a safe and efficient ~AS. These employees include 

Technical Operations systems specialists who install, maintain, repair and certify the complex 

systems that make up the NAS. These federal employees arc extensively and specifically trained 

on a variety of interconnected, specialized systems and equipment in order to fulfill the 

responsibility of protecting aviation safety. For example, system certification, the process in 

which a certificated FAA systems specialist checks and tests systems or equipment on a periodic 

basis in order to ensure that the systems or equipment can be safely returned to service and not 

negatively impact any aspect of the NAS, has been deemed inherently governmental by the 

FAA. 11 The FAA's certification process has been successful for decades and is a key clement in 

maintaining the safest and most efficient air transportation system in the world. At more than 340 

facilities nationwide with over 70,000 certifiable systems and equipment, FAA systems 

specialists are the only individuals with the clearance, authority, skill and expertise to perfom1 

this work to keep the system safe. 

In addition, Flight Inspection Services (FIS) professionals and aeronautical professionals in 

Mission Support Services (MSS) support pilots, air tral1ic controllers and aviation planners 

through the development and maintenance of all public instrument flight procedures and airways. 

These responsibilities include developing, maintaining and assuring the integrity and safety of 

flight procedures to suppm1 NextGen advancement in the NAS. The deYelopmcnt 

implementation, flight inspection and maintenance of flight procedures requires the proper 

interpretation of a complex series of computations, measurements and modeling standards, strict 

compliance with diverse criteria, extensive coordination with multiple stakeholders, and the 

frequent adaptation of procedures in a constantly evolving aviation environment. FAA specialists 

oversee the NAS in order to make sure everything aligns safely and is working efficiently, which 

should clearly remain a function of the federal government. Thanks to these employees and other 

safety professionals at the FAA, the United States enjoys the safest air traffic control system in 

the world. 

Without a doubt, cunent federal workers will face serious repercussions if stripped from the 

federal govcmmcnt. Privatization advocates claim that current FAA employees moved over to 

the private corporation would retain their same pay, health care and pension benefits but newly 

hired employees would be under different systems. This will no doubt create confusion and 

potentially result in serious workplace issues. Employees performing the same job, but with 

ditierent pay and benefits, will surely lead to low morale and possibly to problems in retaining 

and attracting skilled and talented employees. The transfer of pay, health care and pension 

systems arc all extremely complex issues that the AAlR Act failed to address, and ultimately 

raised more questions than answers. To make matters worse, the number of FAA employees 

eligible to retire continues to rise and, combined with the long training period for an employee to 

be able to fully pcrfonn fi.mctions, this brings forth additional concerns related to retention and 

recruitment cftorts. And it certainly bears mentioning that many of the impacted employees arc 

1 1 tv1anagcr. General Law Branch. AGC-11 0, memorandum to Manager. :\1aintcnancc Engineering Division. ASM1 00, "Contractor Certification of Navigational Systems in National Airspace System (~AS)," June 18. 199 L 
139 


Insert offset folio 77 here 25482.077

t(Jrmer military and committed to serving the public. If this country is going to continue as the 

aviation leader, it must have a strong ability to recruit and retain employees. 

Conclusion 

While proponents of privatization claim other countries have been successful, they fail to 

mention one very important fact: any country that has attempted privatization has been working 

with a t~1r smaller system and airspace. Consider that the U.S. airspace is over 75 million 

kilometers compared to J 8 million in Canada. Simply stated, there is no comparison between our 

airspace and that in foreign countries and the United States should not be used as a test case. 

Overhauling the entire aviation system by removing air traftic control from federal oversight and 

funding will be a serious setback for its development and growth. Our air traffic control system 

is a national public asset and PASS strongly believes it should remain in the public trust. The 

FAA's handling of air traffic control receives approval ratings of well over 80 percent trom the 

public. That same survey indicated that the majority of Americans do not believe the system 

should be privatized. 

Considering the economic contributions of the aviation system, and the thousands of American 

jobs it supports, this countty cannot gamble with the future and safety of our air traffic control 

system. The federal employees at the FAA represented by PASS are committed to ensuring the 

safety and efficiency of this count1y's aviation system. PASS asks that members of Congress 

work together to reauthorize the FAA while ensuring it remains a cohesive unit of federal 

employees. 

Alllancc for Aviation Across America, i\4t~jurity of Voters Oppo.'N! Priwlfi.:.ing the Air Traffic Con1rol.';_1'stem. 

{January 30- february 5, 20 17). Accessed via: llt!J?~;(~~:_!Y.~Y-?Y_i(!t_i_gnacr_g_:s5<~!11C(iC:?:.t~rg/i~~L~~-~~P.r_!_v~1~iy_i!_li~:~~-_p~1l);'. 
140 


Insert offset folio 78 here 25482.078

NBRR 

STATEMENT OF THE 

NATIONAL BUSINESS AVIATION ASSOCIATION 

ED BOLEN 

PRESIDENT AND CEO 

BEFORE 

THE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

U.S. HOUSE OF REPRESENTATIVES 

REGARDING 

"THE NEED TO REFORM FAA AND AIR TRAFFIC CONTROL TO BUILD A 

21ST CENTURY AVIATION SYSTEM FOR AMERICA" 

MAY 17,2017 
141 


Insert offset folio 79 here 25482.079

Chairman Shuster, Ranking Member DeFazio, and members of the Committee, on behalf of 

the National Business Aviation Association (NBAA), we are submitting testimony on the 

concept of handing our nation's air traffic control (ATC) system over to a private entity. 

Our aviation system is both dynamic and innovative, and is the largest, safest, most diverse 

and complex in the world. In the U.S., civil aviation supports 11.8 million jobs, $1.5 trillion 

in economic activity, and contributes 5.4% to gross domestic product 1 

Our world leadership in general aviation is undisputed -the industry contributes $219 billion 

in annual economic impact and 1.1 million jobs. 2 Both commercial and general aviation are 

clearly key drivers of our economy, and provide high-paying JObs to millions of Americans. 

Although America leads the world in aviation, we at NBAA understand that we cannot rest 

on our laurels. The work to continue toward the completion of a modernized, Next 

Generation, or "NextGen" aviation system has implications not just for the aviation 

community, but for all citizens. 

NBAA and its members are committed to a strong, world-leading ATC system; we stand at 

the forefront of promoting forward-looking policies, and emerging technologies, to ensure 

that our aviation system serves not only the needs of today's stakeholders, but those of 

tomorrow as well. 

Before directly addressing the topic of ATC privatization, I believe it would be useful to 

provide a reminder of what business aviation looks like, and how it serves America's 

citizens, companies and communities. 

Business aviation fosters economic development in small towns and rural areas. It helps 

businesses of all sizes to be efficient, productive and competitive no matter where they 

happen to be located. And, business aviation assists in our nation's humanitarian efforts. 

Every day, business aviation transports patients to treatment centers, reunites combat 

veterans with their families, and transports organs for transplants. 

NBAA's 11,000 member companies are part of this essential industry. They rely on business 

aircraft to meet some portion of their transportation challenges. Among the many ways our 

members use general aviation is to reach multiple locations in a single day, move 

equipment that may be too big to fit in an overhead bin, or too sensitive to fit in a cargo 

hold. They also use general aviation to reach thousands of towns not served by scheduled 

airline service. 

For example, one of NBAA's member companies, New Hampshire-based Antaya Science & 

Technology, is pioneering the development of a portable, proton-beam therapy device that 

can be transported to treat cancer patients located far from the large, specialist hospitals in 

America's major metropolitan areas. 

The company's pilot-founder, Dr. Timothy Antaya, relies on a business airplane, because his 

life-saving device requires very precise calibration, making it impossible to carry on an 

'Federal Aviation Administration (2014). The Economic Impact of Civil Aviation on the U.S. Economy: 

2 
142 


Insert offset folio 80 here 25482.080

airliner, or even over a bumpy road. He has said that, "Any mishandling, dropping or 

temperature extremes in transit would compromise the results" of the treatment his device 

provides. 

A second example of a company that relies on business aviation can be seen in Oregonbased Wilson Construction. The company's pilot-CEO, Don Wilson, uses a mix of aircraft to 

deliver electrical specialists and other employees to build and service power-distribution and 

transmission lines for utilities across the United States. The company's lines are often 

located in remote areas that have no airline service, and the business aircraft ensure that 

Don's employees can respond to power disruptions in real time, so that those towns remain 

on the nation's electric grid. 

A third demonstrative example of business aviation can be found in Schweitzer Engineering 

Laboratories, an employee-owned business located in Pullman, Washington. The company's 

founder, Dr. Ed Schweitzer, works with a team of engineers to develop computer systems, 

power-grid technologies and other leading-edge innovations. The company does business 

throughout the U.S., and in more than 100 countries around the world. 

Schweitzer could not compete in a global marketplace without business aviation, because it 

is often the only way the company's personnel can meet the real-time demands of servicing 

power grids and other infrastructure. 

As a fourth example of business aviation, consider the case of Dave MacNeil, who owns 

Illinois-based MacNeil Automotive, which produces custom-designed and precision-fit floor 

liners and other protective interior equipment for cars and trucks. 

Dave uses sophisticated tools to capture data and reverse engineer complex vehicle 

geometry. His sensitive measuring equipment will not fit in the overhead bin of an airliner, 

and it might be damaged if checked as baggage on a commercial flight, or sent to a 

destination through an overnight shipper. According to Dave, moving the equipment is as 

sensitive as "handling a bag of potato chips," so he must carry the tools aboard his airplane. 

These four companies, located in four distinctly different parts of the country, are among 

the many thousands of organizations that have business aviation at the heart of their 

operations. While they are very diverse companies, they all have a couple of things in 

common. They need airplanes, and access to the nation's aviation system, to conduct 

business. 

While the airlines serve fewer than 500 American airports, business aviation can access 

about 5,000. Ensuring that business aviation has continued access to those airports, and to 

the nation's airspace, will ensure that our industry remains an essential part of the nation's 

economy and transportation system, as it always has been. 

As we know, much of the debate over aviation system modernization is about increasing 

system efficiency, capacity and access which is a key focus for the companies like the ones I 

have mentioned here. This means that a critical part of retaining America's aviationleadership position, now and in the future, will be to continually look for ways to optimize 

the access, capacity and efficiency of our system for all stakeholders. Unfortunately, too 

often, that debate is being set aside in favor of a distracting discussion over whether we 

should privatize ATC. 

3 
143 


Insert offset folio 81 here 25482.081

As congress debates the future of America's aviation system, the entrepreneurs and 

companies in NBAA's membership, have very real concerns over this concept. 

The debate over ATC privatization is not new- the big commercial airlines have 

unsuccessfully sought to take control of the ATC system for nearly 30 years. In 1997, when 

new entrants began challenging legacy carriers, one of the new carriers sounded an alarm, 

saying, "The issue is not one of economic efficiency, but of economic power, economic 

domination, and economic control."3 New carriers felt the "endgame" of big legacy airlines 

was the takeover and control of the ATC system for their exclusive benefit. More recently, 

the CEO of a major airline complained that airlines "are not in control" of the ATC system, 

and this control is key to their success. 4 

That CEO's comment speaks to a reality proponents of ATC privatization don't want to talk 

about, which is that America's ATC system is, and will remain, a monopoly. The question on 

the table is, who will effectively control this monopoly, and for whose benefit? Last year 

during this debate, a member of this committee said H.R. 4441, which contained ATeprivatization among its provisions, was like giving a highway over to the truckers for them 

to decide who can drive on it and how much it was going to cost. 

It sounds absurd - however, that is what the airlines are seeking to do: wrest control of the 

nation's air traffic system away from the public's elected representatives and give it away, 

for free, to a private board. 

What can we expect to happen under this scenario? First, giving the airlines effective control 

of the ATC system will not make our system better, but instead will take away from real 

modernization. 

Consider, the example of ADS-B, a GPS-based surveillance technology that tracks aircraft 

using satellite-position data sent to ground stations. The U.S. has deployed the world's 

largest ADS-B network, and has already made use of the technology in areas such as the 

Gulf of Mexico. 

However, as of 2015, only six percent of commercial airliners were equipped with ADS-B 

capable transponders, which are required to fully utilize the GPS-based ATC system 5 The 

airlines also petitioned the FAA to delay equipping some aircraft with the required ADS-B 

transponders for five years, until 2025, and have resisted investments in NextGen 

technologies unless they are "capable of helping us grow." 6 

Another troubling aspect of a privatized ATC is the potential for significant access 

restrictions to airports and airspace. What makes the U.S. air transportation system so 

unique and special is that it serves all Americans, in communities large and small. 

3 National Civil Aviation Review Commission (1997) (testimony of Herb Kelleher) 

'

1 Remarks by President Trump in Meeting with the Aviation Industry. Retrieved February 9, 2017, from 

5 Esler, D. (2015, December 11). Global Advance Of ADS-B with ADS-B. Business & Commercial Aviation. Retrieved 

4 
144 


Insert offset folio 82 here 25482.082

That is very much at risk if we move to a private ATC system. One airline industry CEO 

recently said, "we also need to direct infrastructure improvements into the regions of the 

country where they'll produce the most benefits, like the Northeast Corridor. " 7 Again, we 

have a comment from an airline executive, which demonstrates how the current focus of our 

ATC system on serving all Americans will change to a system focused on serving the 

airlines' interests in the big, hub cities, if they gain effective control. 

The focus on commercial airline operations at large hub airports creates airport and airspace 

access restrictions for business aviation in countries with privatized ATC systems. In 

Australia, the private ATC operator explicitly prioritizes certain types of operations over 

others at major airports including Melbourne and Sydney. Canada severely restricted 

general aviation operations during recent runway construction at Toronto Pearson airport 

and is considering a future general aviation slot requirement. 

Across Europe, many airports in key business centers such as Frankfurt, London, Geneva 

and Zurich have restrictive slot requirements that make it difficult for business aviation to 

access airports. These examples demonstrate how shifting from a "first-come, first-served" 

policy for airport and airspace access, as is currently the case in the U.S., to a system 

effectively controlled by the airlines, places business aviation at a significant disadvantage. 

In addition to jeopardizing access for general aviation, proponents of privatization want to 

give power to a private board to determine who gets taxed, and in what amounts. John 

Marshall, the first Chief Justice of the Supreme Court, had it right when he famously wrote 

that the "power to tax is the power to destroy." Today, that authority resides with the 

American public's elected representatives. Congress should not abdicate, delegate or 

outsource its responsibility in the areas of aviation taxes and fees. 

Allowing a private board to control the taxes and fees that fund our ATC system leaves the 

traveling public and business aviation open to uncontrolled fee increases. 8 In Canada, 

travelers were forced to absorb a nearly 15-percent increase in Nav Canada fees when the 

global economic downturn created financial challenges for the privatized ATC system. 9 There 

was a similar situation in the United Kingdom, where taxpayers were forced to bail out the 

private ATC operator, UK NATS, amid system failures and management challenges. 10 

The big commercial airlines have already shown their ability to charge ever-increasing fees 

to customers for checked bags, seat assignments, flight changes and even overhead bin 

space. In 2016, airlines collected $6.8 billion worth of "ancillary fees" for baggage, 

changes/cancellations and early boarding. 11 

1

Hayes, R. Robin Hayes Address To International Aviation Club. Speech, Washington, DC. Retrieved from 

Fiorino, F. (2004, July 26). NavCanada To Increase Service Charges. Aviation Week & Space Technology. Retrieved 

from ".OC.~.oLI.'o02-"'.!CCI!.'-'.Ic.~o'-..".l.l.l.l.c'C-'....Ici, .. I0-'...'"1-1"-".1-"1"-.0~'-"'1-'.C.C.IC'-'=-"1o"'""o=C 

"Treanor, J. (2002, February 19). Fury at Byers bail out for air traffic. The Guardian. Retrieved from 

5 
145 


Insert offset folio 83 here 25482.083

Consumers in Canada have observed first-hand how shifting control of their ATC system to 

Nav Canada resulted in rapidly escalating airfares. The Canadian Airports Council found the 

base airfare at Canadian airports is 43-percent higher than at U.S. airports, and 

international flights from Canada are now the most expensive in the world. 12 The Senate of 

Canada investigated the situation and determined that Toronto Pearson is "the most 

expensive airport in the world at which to land a plane." 13 

There are also serious constitutional issues with giving away control of our nation's ATC 

system to a private entity beyond the reach of Congress, as illustrated by a recent report 

from the non-partisan Congressional Research Service, which found that allowing a nonprofit, privatized entity the authority to set user fees and establish air traffic flow controls 

may well be unconstitutional. 14 

There is precedent for such a finding: more than 80 years ago, in Carter v. Carter Coal Co., 

the Supreme Court held that delegating hour and wage standards to a private entity "is not 

even delegation to an official or an official body, presumptively disinterested, but to private 

persons whose interests may be and often are adverse to the interests of others in the 

same business."15 The Founding Fathers were right to be concerned with exactly what the 

airlines are proposing we cannot see how a private board will fairly govern our nation's 

ATC system. 

NBAA has been steadfast in its support and advancement of NextGen technologies that 

allow equal and fair access to airports and airspace for all aviation stakeholders. We also 

believe a streamlined certification process that advances safety and promotes innovation 

will allow the general aviation industry to thrive. However, we are strongly opposed to 

allowing the big airlines to gain effective control of our nation's ATC system at the expense 

of general aviation, the traveling public, and communities across the United States. 

When it comes to the notion of ATC privatization, there are many, troubling questions with 

no definitive answers. Companies and communities across the U.S., which rely on general 

aviation for business, civil services and a host of other needs, simply cannot risk turning 

over the system to a private board beyond the reach of Congress. With the challenges faced 

by other countries' privatized systems and unanswered constitutional questions, 

privatization is simply a distraction from the very real progress being made to modernize 

our nation's ATC system. 

But perhaps the most important question is the one I mentioned earlier: Our nation's 

aviation system -the world's best- is a monopoly; if the system is privatized, who will 

effectively control this monopoly, and for whose benefit? 

Concerns over the answer to that question have been raised by aviation groups, 

organizations on the political left and right, House members and Senators from both sides of 

the aisle, mayors from across the country, and a majority of American citizens. 

12 CONNECTING CANADA: An Aviation Policy Agenda Global Competitiveness and Economic Prosperity (Rep.). 

(2015, January). 

13 The Future of Canadian Air Travel: Toll Booth or Spark Plug (Rep.). (2012, June). 

14 Pasztor, A. (2015, May 12). Study Raises Questions About Efforts to Privatize Air-Traffic Control. Wall Street 

Journal. Retrieved from .!=: :-':c::: :/!v;_'h\'./ ·};jj. ::c (':I/ .0 r-::;c!~:; .t (2CC r::-c.i:2 .;-:-. -,.:,C~~~-::::::-;::j_'/ c::~;JJ'-I-a ir-~; (l ~.:i.:: -cor~:;-::)-

Carter Coal, 298 U.S. at 311 

6 
146 


Insert offset folio 84 here 25482.084

Let's set aside the many concerns over ATC privatization by setting aside the concept 

altogether. Let's seek targeted solutions to the FAA's identified challenges, so that we 

continue to be the world leader in aviation five, 10, and 25 years from now. 

Thank you. 

7 
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Insert offset folio 85 here 25482.085

5117!2017 Inspectors say a major Canad1an airline disaster IS 'likely' 1 National Observer 

Inspectors say a major Canadian airline 

disaster is 'likely' 

By in I April 3rd 2017 

Canadian federal aviation inspectors say budget cuts have increased the risk of a 

major aviation accident in the near future to the point where it is now "likely" to 

happen, according to a disturbing survey released today. 
148 


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5r17!2017 Inspectors say a major Canad1an a1rline disaster IS '!tkely' I NatiOnal Observer 

Cuts to have been eating away at its civil aviation flying program, 

·1, leading 81 per cent of 

licensed pilots surveyed to conclude that a "major aviation accident in the near 

future is likely:' 

"Having aviation inspectors who do not know how to fly the aircraft that they're 

inspecting, is like having a traffic cop who doesn't know how to drive a car," said 

Greg McConnell, national chair of the CFPA, which commissioned the survey by 

The association also blamed a new federal system that it says has left inspectors 

spending most of their time in offices reviewing paperwork, rather than being out in 

the field doing active inspections, and warned airports won't be subject to full safety 

assessments. 

The department said in an emailed response that "Canada has one of the safest 

aviation systems in the world" and that Transport Canada has a "robust, risk-based 

oversight program that allows the department to prioritize its resources strategically 

to areas that provide the greatest safety benefit" 

Department has seen $4.5m in civil aviation 

program cuts since 2008, says association 

Abacus surveyed 243 CFPA members March 14 to 22 who are aviation inspectors 

or investigators and licensed pilots with Transport Canada, the federal regulator 

which oversees the civil aviation program, and the the 

government agency that investigates accidents. 

It has been at least a year since a large majority, or 67 per cent, of pilot inspectors 

and investigators surveyed have flown an actual aircraft, the survey found. 

Further, one quarter reported that they have not flown an aircraft to keep their 

license current in the last four years, while seven in 10 reported that they 

sometimes or frequently were not trained for assigned tasks. 

Only 55 per cent had completed all mandatory training, according to the survey 

results. 

"Flying is a skill that atrophies," said McConnelL 
149 


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5/17/2017 Inspectors say a maJor Canadian airline d!saster 1s 'likely' 1 NatiOnal Observer 

"Today, the pace of technological change is as rapid in aviation as it is in any other 

walk of life. If our inspectors do not know how to fly the aircraft they're supposed to 

inspect, they simply will not know the aircraft are operating safely." 

The association's data shows that the civil aviation flying program has been cut 

from almost $8 million in 2008-09 to a low of $3.5 million in 2016-17, while flying 

hours have dropped from over 10,000 to just under 4,000 in this time period. 

The number of aircraft used in training has dropped as well, from 42 aircraft to 14 in 

this time period. 

The department suffered several rounds of fL 11-time equivalent job cuts during the 

Harper government, losing over 100 positions between 2009-10 and 2014-15. 

Transport Canada spokeswoman Natasha Gauthier wrote in an email that the 

department "continues to conduct scheduled and unscheduled inspections and 

certification activities" as well as review procedures and records, and interview 

employees "to ensure the company is following all applicable regulations." 

The department revised its flying program "to recognize the benefits of the latest 

simulator technology in training Canadian pilots," wrote Gauthier, allowing it to 

"focus more resources on direct inspection and oversight." 

Business aircraft oversight pulled, says CFPA 

Business aircraft have been removed from th·2 department's oversight program as 

of August 2016, the association said, while urban heliports on top of buildings like 

hospitals won't have scheduled inspections. 

As well, "all airports will no longer be subject to full safety assessments," the 

associated stated. "Instead, a Transport Canada inspection will now cover only one 

small part of an airport's safety plan." 

The Federal Aviation Administration of the United States "requires full inspections 

of airports annually," the association added. 

Transport Canada's Safety Management Syst<?ms, the association said, transfers 

responsibility for monitoring safety issues to the airlines, and burdens inspectors 

with paperwork, limiting their time inspecting aircraft. 
150 


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5/17/2017 Inspectors say a maJor Canadian a1rlme disaster 1S 'likely' j National Observer 

The survey found that 81 per cent saw this program as a barrier to fixing safety 

problems before they become accidents. 

The association said the department's reliance on the safety management systems 

is "at odds with international safety requirements" established by the United 

Nations headquartered in Montreal. 

"Transport Canada has allowed the skills and qualifications of its inspectorate to 

dwindle to dangerously low levels," the association stated. 

Last October, the Transportation Safety Board that the federal department 

left over three dozen key safety recommendc1tions outstanding for over two 

decades. 

The department said it would continue to promote the voluntary adoption of SMS 

and will publish updated guidance material tris year. 

"SMS does not replace all the other safety regulations," wrote Gauthier. "Nor does it 

not replace regular inspection activities undertaken to ensure regulatory 

compliance. Operators must still comply with all regulations and standards, and 

SMS adds an extra layer of protection." 

The department also pointed to other "training and licensing requirements" 

required of Canadian pilots. 

"The exemption from in-aircraft training provides an alternative means of 

compliance in a way that maintains a high standard of aviation safety. This practice 

conforms to international requirements and those of our partners." 

Canada appoints new permanent UN aviation 

rep 

Late Monday morning, Canada announced that it had 

representative to the ICAO, Martial Page. 

a new permanent 

"Canada and the International Civil Aviation Organization support safe, secure, and 

sustainable civil aviation for people around the world," said a statement published 

by Global Affairs Canada. 

Editor's note: Updated at 18:11 Eastern Time with comment from Transport Canada. 
151 


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House Committee on Transportation and Infrastructure 

The Need to Reform FAA and Air Traffic Control to Build a 21st Century Aviation System for America 

May 17,2017 

Statement of Helicopter Association International 

Chairman Shuster, Ranking Member DeFazio, and Members of the Committee, Helicopter Association 

International (HAl) thanks the committee for holding a hearing on the important issue of the n<Jtion's air 

traffic control (ATC). 

HAl supports ongoing efforts to modernize and increase efficiency at the FAA. Currently, the interests of 

all users of the Nationul Air>pace System have a voice through the regulatory process of the FAA as well 

as congressional oversight. Our current ATC system maintains the safety of the world's busiest airspace, 

while allowing for the advancement of important safety improvements and efficiencies benefiting all 

segments of the aviz;tion community. 

While HAl supports improvements to the FAA, we do not believe there is a need to fundamentally 

change the structure of air traffic control. HAl believes that the FAA should always strive toward 

improvement and sc:eking efficiencies. Yet we question why poHcymakers are looking at mJking such a 

wholesale change to a system that already works better and more safely than any other ATC program 

around the wor!d. Put simply, tt1e United States has the safest, most efficient system in the world; what 

are we trying to fix? 

One of the main justifications noted by proponents of ATC privatization is the lack of development and 

irnplementatron of Next Gen technology by the FAA. If this is true, then why not just privatize the Next 

Gen initiative and leave the world's best ATC system where it belongs, with the FAA. 

We a!so believe that removing ATC from FAA control rPpresents a serious risk to general aviatiOn 

Moving control of ATC to a privatized system that could be dominated by biased users could result in the 

steering of resources and investments toward airline-dominated airport hubs and initiatives at the 

expense of hundreds of other airports ::.erving general aviation and rural America. 

The helicopter industry takes comfort in the fact that our current ATC system is under the watchful eye 

of Congress and that globally recognized professionals conduct the FAA's daily ATC operations. The 

current system provides an appropriate level of focus on the unique needs of the helicopter industry, 

providing the necessJry funding and support for our operationol requirernents. ATC privatization could 

see the removal of thc:;e protections J:1d related support for our industry, as well as for the myriad 

elements of g~:neral avi:Jtion 

HAl and the helicopter industry are mujor benpfzlctors and support2rs of advancing NextGen mitiatives 

dnd the rmH!r.c: work conducted to modernize and increJsc: .t.\TC efficiency. Currently, trw intE~rests of all 

users of the National .\lrspJce Syst0m h3ve J voice through the r~?gulrltory process of the FAA JS 

congressional oversight. This allows for the advancernent of important safety improvements 

efficiencies bcncfitir\.:~ e-1!1 dVJJtion segments. HAl is det-:p!y concerned thut we would lose thdt voJcc, 

should pnvatiLdtion occur. 
152 


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In our current system, there are many examples of elements of aviation collaborating with the 

government to identify problems and provide solutions tho! adeptly meet the requirements of each 

concerned party. As just one example, in 2010, the helicopter industry operating in the Gulf of Mexico 

came together with Congress and the FAA to address a deficiency in safety and operational efficiency. 

The FAA lacked radar coverage and low level communications over the Gulf, and helicopters flying to 

offshore petroleum rigs could not take advantage of the efficiencies and safety provided through ATC 

operations. On days when weather conditions dropped to instrument flight rules (IFR) conditions, over 

90 percent of flights were cancelled due to the lack of ATC coverage, costing the petroleum industry 

significant dollars each day. 

To address this issue, in coordination with elected officials and the FAA, the helicopter industry provided 

over $100 million in-kind services to install NextGen ADS-B technology on oil rigs in the Gulf. HAl was 

there in 2010 to "flip the switch" activating the system. We are happy to report that in 2010 there were 

no reportable accidents on record for offshore helicopter operations in the Gulf and IFR operations 

became a routine event. 

HAl feels that this was accomplished through the industry's direct, unencumbered access to the FAA and 

congressional oversight. An ATC system controlled by a privatized board may not be as committed to 

providing such benefits to users operating outside the traditional, larger hub airports. 

Another aviction sector that could suffer a lack of services under a privatized ATC corporation is 

unmanned aircraft systems (UAS, or drones). The UAS industry is an innovative technology that will 

place new demands on ATC as UAS become ubiquitous in the National Airspace System. Since the FAA's 

drone registration opened in December 2015, operators registered 800,000 drones, compJred to a total 

of just over 300,000 traditional manned registered aircraft in the United States. 

These UAS will require additional ATC services as companies look to provide package deliveries, personal 

transport, and other services yet to be developed that are not oirport based. These business models are 

a fundamental paradigm shift from the conventional way airlines operate. HAl is concerned that a 

privatized ATC system dominated by users with a legacy business model may not dedicate the necessary 

resources to accommodate new and future users of the National Airspace System. 

On one concept, both sides of this argument agree: proponents and opponents of the ATC privatization 

proposal acknowledge that this new board has the potential to establish a monopoly. Proponents of this 

system point to the success of private utility companies providing services as a monopoly. 

However, private utilities are overseen by public utility commissions that approve their rate structures 

and serve as economic regulators that the public can petition if recourse is needed. The independent 

ATC corporation operating as monopoly will need an economic regulator akin to a public utility 

commission. However. our current ATC system aiready operates with sufficient oversight provided by 

Congress_ Adding adci:tional !uycrs of unnecessJry bureaucracy is wasteful and counter to the idea of 

improving efficiencies 

Supporters of ATC privatization have stated the need to secure stable financing for AfC More broadly, 

they argue that the government should not be operating what has become a 24/7 technology center. 

However, House and Senate appropriators have fulfiiled Fl\1\ funding at over 99 percent over the past 

five years; the recent FY 17 bill provided 103 percent of the budget request. 
153 


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The argument that government is incapable of efficient technology operations is weak when you 

consider the Global Positioning System operated by the U.S. Air Force, the National Security Agency, the 

National Atmospheric and Oceanic Administration. and a host of other state·of-the-art technology 

efforts in which the United States leads the world. In addition, to discount the ability of the FAA to 

effectively manage technology simply because they are a government entity disregards the FAA's record 

of providing world-class service to all airspace users. 

HAl applauds the dialogue and debate on this serious issue of privatization. We appreciate the 

leadership's willingness to listen to our perspective and consider our position. We stand ready to work 

with Congress and the administration to craft common-sense policies aimed at implementing NextGen 

technology in a safe, efficient, cost-effective manner. 
154 


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Written Statement 

Of 

Jeff Martin 

Executive Vice President Operations 

JetBiue Airways 

May 17, 2017 

The Need to Reform FAA and Air Traffic 

Control to Build a 21st Century Aviation 

System for America 

Before 

Committee on Transportation & Infrastructure 

United States House of Representatives 
155 


Insert offset folio 93 here 25482.093

Chairman Shuster, Ranking Member DeFazio, on beha~ of more than 20,000 crewmembers at JetBiue 

Airways, thank you for the opportunity to share JetBiue's perspective on modernization of our nation's 

Air Traffic Control (ATC) system and the need for ATC Reform. JetBiue strongly supports both 

objectives and appreciates the Committee's focus on the connection between them. 

In February. JetBiue celebrated the 17" anniversary of our first low-fare flight- Flight 1 from New 

York's John F. Kennedy International Airport to Fort Lauderdale. Over the past 17 years, JetBiue has 

matured and made a place for itself in what we all agree is a fiercely competitive industry, against a 

backdrop of incredible consolidation and change both domestically and abroad. In just 15 years, we've 

gone from a start-up to a Fortune 500 company with a brand recognized globally and hundreds of 

customer service accolades. 

The three big legacy airlines combine to control about 60% of the US market nationwide- which results 

in even higher concentration in some cities. Add in Southwest and that figure jumps to 80%. JetBiue. by 

contrast, is only a 5% carrier. Yet as a customer-service innovator and a market disruptor, JetBiue 

plays a critical role in ensuring the US airline industry remains competitive despite the consolidation of 

market share and market power in the hands of just four legacy airlines. 

From that first flight in 2000, JetBiue has grown to serve 101 cities across the United States, Caribbean 

and Latin America with more than 20,000 crewmembers providing award v~nning service to our 

customers every day. This month. JetBiue once again earned a top spot among Forbes' 'America's 

Best Employers of 2017." landing at No. 12 of 500 companies nationally and, for the third year, was 

named the best company to work for in the category of transportation and logistics. 

JetBiue still operates Flight 1 from JFK to Fort Lauderdale, along with more than 1,000 other daily 

flights. We may have started as the airline customers enjoyed taking from the Northeast to Florida, but 

JetBiue has rapidly evolved over the past decade and we are today a leading intemational airline. Our 

model has always been about entering markets where the incumbents charge high fares, offer limited 

service, or often both. and then stimulating traffic with affordable prices and best-in-class service. We 

discovered that not only were many domestic markets ready for this winning formula, but so too were a 

lot of international markets. In fact, nearly one third of JetBiue's network now extends to Canbbean and 

Latin American destinations. 

Unlike traditional hub-and-spoke airlines funneling passengers through hubs, nearly 90 percent of 

JetBiue customers fly nonstop from one JetBiue destination to another. JetBiue has six Focus CitiesNew York, Boston. Ft. Lauderdale, Orlando, Los Angeles/Long Beach and San Juan- providing awardwinning JetBiue experience to customers from Anchorage. Alaska to Lima. Peru. 

JetBiue has been a strong supporter of the FAA's Next Generation Air Traffic Control (NextGen) 

program from the start. Our former CEO, Dave Barger, served as the first Chairman of the FAA's 

NextGen Advisory Committee (NAC). bringing stakeholders from across the aviation spectrum together 

to collaborate and develop consensus recommendations on how best to implement NextGen's biggest 

challenges. Today. I represent JetBiue as an active member of the NAC and along with other Jet Blue 

leaders devote significant time and energy to NAC work on a local, national and global basis 

As the Members of this Committee are aware, NextGen has been a priority since 1t was 1ncluded in the 

Vision 100 FAA Reauthorization Act enacted in December 2003. Professionals at FAA and throughout 
156 


Insert offset folio 94 here 25482.094

the aviation industry have devoted countless hours to the cause, recognizing that NextGen can only be 

achieved by improvements to the variety of systems that are the backbone of today's complex air traffic 

control system. We appreciate the hard work of FAA employees, particularly the professional air traffic 

controllers, who we rely upon and partner with every day as they work toward our shared objective. 

Regrettably, their hard work has been stymied by the governance and funding structure of the FAA and 

as a result, operators in the system and the travelllg public continue to suffer. 

The United States has the best air traffic controllers and the safest skies in the world, but the equipment 

that supports ATC hasn't kept up with the fast pace of technology innovation. FAA's challenges with 

the timing. cost and implementation of NextGen programs has been well documented by the DOT 

Inspector General and other outside experts over the years. NextGen is not and has never been an all 

or nothing proposal we don't have to choose between being for it or against it. It's entirely 

appropriate for industry to be critical of FAA as NextGen implementation has faltered. just as we 

acknowledge and celebrate specific points of progress with NextGen as they occur. 

Implementation of Automatic Dependent Surveillance-Broadcast (ADS-B) presents one opportunity 

both to celebrate and express concern. JetBiue has long stood with other members of the airline 

industry in embracing ADS-B's potential for enhancing safety and increasing efficiency through reduced 

separation and increased traffic flow. In 2011. JetBiue and FAA signed a cost sharing agreement to 

equip 35 Airbus A320 aircraft with ADS-B in order to explore the benefit of more direct routing through 

the Gulf of Mexico Traditional ATC radar is limited in offshore areas so air traffic controllers cannot 

normally track aircraft continuously with the necessary precision to route them across the Gulf Using 

ground-based ADS-B receivers mstalled on offshore oil rigs. JetBiue has been able to fly between Fort 

Lauderdale to the West Coast- southern California and San Francisco- while avoiding thunderstorms and 

reducing emissions as a result of rnore direct routings 

FAA has mandated that airspace users purchase and install ADS-B Out avionics, the first stage of the 

program, by Dec 31, 2019 at an estimated cost of $1 billion to US airlines. In 2016. JetBiue 

announced plans to move forward with equipage of its fleet not only with ADS-B Out to connect with the 

FAA's ground based ADS-B system but also to install additional avioni::s to take advantage of 

enhanced surveillance capabilities with space-based ADS-B by early 2019. Hosted on satellites and 

providing coverage over oceanic and remote Oceanic airspace outside radar or other ground-based 

systems, we believe space-based ADS-8 will provide significant reduced oceanic separation benefit to 

JetBiue for flights in the Caribbean region outside of FAA's radar coverage area 

I have spoken publicly to emphasize the benefit we've seen from ADS-B in the Gulf of Mexico and tho 

potential for reduced separation and greater efficiency for our international flights, saying: 

"We're really anxious to see what ADS-B can bring to the offshore routes and developing even 

more. from Florida down to the Caribbean area and Puerto Rico. and putting more capab1l1ty in 

that airspace ·· 

Unfortunately, JetBiue's flights between South Florida and California that can take advantage of ADS-B 

in the Gulf account for just one percent of our total daily operations JetBiue and all airspace users will 

see even greater benefit of enhanced surveillance capabilities after users equip in 2020 if FAA can 

deliver reduced oceanic separation standards or other benefits, and present a path to decommission 

resulting ground-based radar redundancies 
157 


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JetBiue's decision to invest now in advanced space based communication, navigation and surveillance 

capabilities is also driven by the benefit we anticipate From work by Aireon, a joint venture of Iridium 

Communications and Nav Canada. Aireon will expand air traffic surveillance across the globe by 

installing ADS-B receivers on a network of Low Earth Orbit satellites world\Mde. Nav Canada is a 

partner in the joint venture and has signed a contract to be its first customer when the service becomes 

available in 2018. Air eon has signed contracts with ten 10 other Air Navigation Service Providers 

around the world. Unfortunately the FAA declined to participate in the joint venture and has not yet 

made a decision about oceanic services. While JetBiue is encouraged by and driven to invest in the 

potential for additional benefits of ADS-B, FAA's absence in the groundbreaking Aireon project raises 

serious concerns about the United States role in leading air traffic services and ATC technology and 

reinforces the need for ATC Reform. 

Another critical concern faced by all airlines is the FAA's shortage of air traffic controllers. These 

staffing shortages, especially in the congested northeast, have contributed to significant delays across 

the national air space system. Paul Rinaldi, President of the National Air Traffic Controllers 

Association, has testified before this Committee that while staffing has been a NATCA concern for 

years. it has now "reached a crisis". He attributes this to multiple factors, including the stop-and-go 

funding and FAA governance. He asserts that certrfred professional controller staffing at the FAA is at a 

28-year low at eighty-one percent of the operational target level, with a significant number of controllers 

now eligible to retire. NATCA has noted that N90. the New York TRACON, is in most critical need of 

more staffing. JetBiue's customers know this all too well 

As demonstrated by the comments above, JetBiue is deeply concerned with the progress of bringing 

NextGen and its benefits to the area that needs it most- the northeast Thus, while JetBiue supports 

and remains committed to FAA's work on NextGen, we and our customers know more must be done. 

In order for all users of the system to see real and meaningful benefits from NextGen and for the US to 

reclairn its ATC leadership role, we must reform the governance and funding of our Arr Traffic Control 

system. JetBiue supports separating ATC into a new non-governmental entity, freeing it to keep pace 

with the accelerating rate of change in the aviation industry. A more nimble and better funded ATC 

would be able to efficiently implement the dynamic components of NextGen, more efficiently address 

the complex staffing shortages and thus enhance safety, reduce aircraft delays and expand the 

efficiency of the National Airspace System for all of its users. 

Today, FAA is stymied by the increasingly unpredictable approp-iations process and cannot borrow 

against annual receipts to fund required long-term investments in new technology and facilities. When 

compared to Nav Canada's abilrty to invest in and benefit from programs like Aireon's enhanced 

surveillance space based ADS-8 receivers, we see an opportunity lost. 

Given JetBiue operates in some of the nation's most congested airspace, we have a particular interest 

in A TC Reform to facilitate NextGen progress. Today, nearly 70 percent of JetBiue flights operate at 

airports that are under an FAA ground delay or ground stop program nearly half of the time. This figure 

is staggering and unacceptable. To tinker with the status quo. with the same governance and fundrng 

limitations, is similarly unacceptable. That's why JetBiue supports ATC Reform 
158 


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Since the Vision 100 bill in 2003, there's been talk of "Bringing NextGen to Broadway" Tackling the 

challenges of airspace in the Northeast Corridor is complex but couldn't be more important Problems 

in the northeast cascade throughout the national airspace system every day. That's why JetBiue 

President and CEO Robin Hayes, in a speech to the International Aviation Club in 2015, said 

"We've seen real benefits from NextGen, but we need more alignment in this important 

transformation. We also need to direct infrastructure improvements into the regions of the 

country where they'll produce the most benefits, like the Northeast Corridor. The pace of change 

really needs to accelerate, especially in New York. which is the busiest air travel market in the 

country and has the most to gain from NextGen improvements." 

The new Chairman of the NextGen Advisory Committee, Fed Ex President and CEO Dave Bronczek, 

agrees In his opening comments at the NAG's February 22. 2017 meeting, he called for New York to 

be a priority, saying: 

"We cannot continue to, or even be perceived as continuing to focus solely on low hanging fruit 

avoiding the real challenges to NextGen. We have the right venue, the right people. the 

motivation, here and now, to tackle the big challenges and prove the benefits of NextGen. Ten 

years into the program, we cannot still be saying fixing New York is too hard." 

As an airline with more than two thirds of its flights at airports with FAA traffic programs in place almost 

half the time, JetBiue can attest to the impact delays in the northeast corridor have on the rest of the 

system. Our customers, the traveling public, deserve better. As Mr. Bronczek knows, whether it's for 

those who travel to or through the northeast corridor or those impacted by delays across the nation. it's 

long past time to bring NextGen to Broadway- for the benefit of all users of the system. 

We believe that the key to achieving the ATC modernization we all want is to separate the operation of 

our nation's ATC system from the safety and regulatory oversight functions of FAA. Our ATC funding 

and governance system is broken beyond repair within the constraints of government. The Committee 

has heard from other witnesses effectively advocating for ATC Reform at today's hearing. and JetBiue 

stands in support of their remarks. 

Mr Chairman. Congressman DeFazio, thank you for the opportunity to present JetBiue's views today. 

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441 G St. N.W. 

Washington, DC 20548 

May, 24, 2017 

U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

The Honorable Bill Shuster 

Chairman 

Committee on Transportation and Infrastructure 

House of Representatives 

Air Traffic Control: Information Relating to Committee's Recent Hearing on Reforms to 

FAA and the Nation's Aviation System 

Dear Mr. Chairman: 

I understand that during the committee's May, 17, 2017 hearing entitled "The Need to Reform 

FAA and Air Traffic Control to Build a 21" Century Aviation System for America", there was 

some discussion of GAO's work related to ( 1) the potential separation of the Federal Aviation 

Administration's (FAA) air traffic control operation and modernization responsibilities from its 

safety oversight responsibilities and (2) the implementation status of the Next Generation Air 

Transportation System (NextGen). Given GAO's responsibility to ensure that Congress has 

current, accurate, and complete information, we would like to take the opportunity to reiterate 

the relevant findings from our recent work in these two areas. A selected list of related GAO 

reports from 2005 through 2016 is provided in enclosure I. 

The first area we would like to address stems from legislation introduced in February 2016 to 

transfer air traffic control operations from FAA to a government-charted corporation. This move 

would effectively separate the nation's air traffic control and aviation safety oversight functions, 

both of which FAA currently oversees. We have not taken a position on the potential separation 

of the air traffic control system. We have, however, published two related reports, both of which 

focus primarily on selected experts' views of key issues surrounding a potential restructuring or 

separation of the air traffic control system. Our first report, published on February 10, 2016, 

conveyed the preliminary views of our selected experts, who had a wide range of expertise. 

On October 13, 2016, GAO published a final report entitled Air Traffic Control: Experts' and 

Stakeholders' Views on Key Issues to Consider in a Potential Restructuring (GA0-17-131), 

which, in addition to expert views, provided lessons learned from three countries' air traffic 

control transition experiences. Experts we interviewed said that many issues should be 

considered in a potential restructuring, including organizational management, funding and 

financing, and transition time and related costs. Furthermore, experts emphasized the 

importance of ensuring ongoing communications and coordination between the safety regulator 

and a new air traffic control entity should a restructuring occur. Lessons learned included 

implementing strategies to mitigate communication and coordination challenges. 

Second, we have long monitored FAA's efforts to modernize the nation's air traffic control 

system, including its implementation of the satellite-based NextGen program. In 1995 we placed 

FAA's air traffic control modernization program on GAO's High Risk List We define a high-risk 

program as one that is at high risk due to its vulnerabilities to fraud, waste, abuse, and 

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mismanagement, or is most in need of transformation. 1 For several years prior to 1995, our 

reviews of the modernization program found it to be consistently over budget and behind 

scheduled implementation. Because of FAA's efforts and progress made in addressing most of 

the root causes of its past problems and its commitment to sustaining progress in the future, we 

removed the air traffic control modernization program from the high risk list in 2009. FAA's 

modernization program was subsequently re-named NextGen, and formal development and 

implementation began in 2007. We have conducted numerous studies over the past decade to 

monitor the progress of NextGen implementation. 

Most recently, on November 17, 2016, we published a entitled Next Generation Air 

Transportation System: Information on Expenditures, and Cost Estimates, Fiscal 

Years 2004-2030 (GA0-17-241R). That report discussed, among other things, FAA's cost 

estimates for NextGen over the We reported that the cost of NextGen was estimated in 

2007 to be between $29 and billion, equally divided between FAA and the airline industry. 2 

We found that FAA's NextGen total cost estimates have evolved, but have not increased 

markedly since fiscal 2004. FAA's 2016 business case, for example, estimated the 

agency's total cost for at $20.6, which is within the range of the 2007 planning 

estimate of $15-$22 billion. The business case also estimated costs to the industry at 

$15.1 billion, which is also within the range of the original 2007 planning estimate. 

That same report also provided an on NextGen' s implementation status. We found that 

FAA anticipates major programs as planned by 2025, but that planned 

technology enhancements implementation of advanced applications are expected to extend 

beyond 2030. 3 According to FAA's 2016 plan, the aviation industry should be able to use at 

least some of !he available capabilities from the NextGen programs by 2020 and most of 

the capabilities by 2025. However, according to plan, some NextGen activities that FAA 

originally envisioned for the mid-term (2013-2018) have been deferred beyond 2030. FAA 

officials told us that the deferred activities are no longer needed or are not technically or 

operationally feasible. GAO has ongoing work looking at the status of FAA's implementation of 

NextGen and the challenges to completion of this phase of air traffic control modernization. We 

have briefed this Committee's majority and minority staff on this work and plan to issue our 

report in the summer of 2017. 

1 In 1990 GAO began reporting on government operations that we identified as 'high risk.' Since then, generally 

with the start of each new we have on the status to address Risk 

the High Risk List update was in That 

Risk areas. 

2 The estimates did not include costs to the Department of Defense or other federal agencies, only FAA and airline 

industry costs. 

3 The Future of the NAS, U.S. Department of Transportation, Federal Aviation Administration, (Washington, D.C: 

June 2016). 

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Should you or your staff have questions, please contact me at (202) 512-4803 or 

DillinghamG@gao.gov. 

Sincerely yours, 

Gerald L. Dillingham, Ph.D. 

Director, Physical Infrastructure Issues 

Enclosure- I 

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Enclosure 1: Selected GAO Reports and Testimonies Related to the Next Generation Air 

Transportation System (NextGen), 2005-2016 

Next Generation Air Transportation System: Information on Expenditures, Schedule, and Cost 

Estimates, Fiscal Years 2004-2030, GA0-17-241R (Washington, D.C.: Nov 17, 2016). 

Air Traffic Control: Experts' and Stakeholders' Views on Key Issues to Consider in a Potential 

Restructuring, GA0-17-131 (Washington D.C: Oct. 13, 2016). 

Aviation Finance: Observations on the Effects of Budget Uncertainty on FAA, GA0-16-198R 

(Washington, D.C.: November 19, 2015). 

Next Generation Air Transportation System: Improved Risk Analysis Could Strengthen FAA's 

Globallnteroperability Efforts, GA0-15-608 (Washington, D.C.: July 29, 2015). 

Air Traffic Control System: Selected Stakeholders' Perspectives on Operations, Maintenance, 

and Structure, GA0-14-770 (Washington D.C.: Sept. 12, 2014). 

National Airspace System: Improved Budgeting Could Help FAA Better Determine Future 

Operations and Maintenance Priorities, GA0-13-693 (Washington, D.C.: Aug. 22, 2013). 

Air Transportation System: FAA Has Made Some Progress in Midterm Implementation, but 

Ongoing Challenges Limit Expected Benefits, GA0-13-264, (Washington D.C .. Apr. 8, 2013). 

Air Traffic Control Modernization: Management Challenges Associated with Program Costs and 

Schedules Could Hinder NextGen Implementation, GA0-12-223 (Washington, D.C.: Feb. 16, 

2012). 

Next Generation Air Transportation: Collaborative Efforts with European Union Generally Mirror 

Effective Practices, but Near-Term Challenges Could Delay Implementation, GA0-12-48 

(Washington, D.C.: Nov. 3, 2011). 

Next Generation Air Transportation System: FAA's Metrics Can Be Used to Report on Status of 

Individual Programs, But Not of Overall NextGen Implementation or Outcomes, GA0-1 0-629 

(Washington, D.C .. July 27, 2010). 

Next Generation Air Transportation System: FAA Faces Challenges in Responding to Task 

Force Recommendations, GA0-10-188T (Washington D.C.: Oct. 28, 2009). 

Air Traffic Control: FAA Reports Progress in System Acquisitions, but Changes in Performance 

Measurement Could Improve Usefulness of Information. GA0-08-42 (Washington, D.C.: Dec. 

18, 2007). 

Next Generation Air Transportation System: Progress and Challenges Associated with the 

Transformation of the National Airspace System, GA0-07-25 (Washington, D.C.: Nov. 13, 

2006). 

Air Traffic Control: Characteristics and Performance of Selected International Air Navigation 

Service Providers and Lessons Learned from Their Commercialization, GA0-05-769 

(Washington, D.C.: July 29, 2005). 

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National Airspace System: Transformation Will Require Cultural Change, Balanced Funding 

Priorities, and Use of All Available Management Tools, GA0-06-154 (Washington, D.C. Oct.14, 

2005). 

National Airspace System: FAA Has Made Progress but Continues to Face Challenges in 

Acquiring Major Air Traffic Control Systems, GA0-05-331 (Washington, D.C .. June 10, 2005). 

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June 1, 2017 

The Honorable Bill Shuster 

Chairman, Transportation and Infrastructure Committee 

U.S. House of Representatives 

Washington, DC 20515 

Dear Chairman Shuster: 

Thank you for holding the and Infrastructure hearing titled "The Need to Reform 

FAA and Air Traffic Control to Build a Century Aviation System for America." American Airlines 

strongly supports your proposal to create an independent, not-for-profit entity that is equipped with the 

funding and flexibility to efficiently implement NextGen. We appreciate your dedication to transforming 

our nation's air traffic control system to become the gold standard for the world. 

It came to our attention that the Democratic Summary of Subject Matter that was distributed on May 

12, 2017, took out of context comments about a specific air traffic control NextGen program made by 

Tim Campbell, a former Senior Vice President of American Airlines. Tim Campbell's comments were not 

intended and should not be construed as evidence that the NextGen "blueprint" is working. Indeed, the 

fact remains that the industry has been implementation for more than 30 years, 

and we are still far from our goal of air traffic control system. Only by 

removing the air traffic control will we be able to make the longterm Capital expenditUreS nM"P«oo'"'Atn 
165 

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June 1, 2017 

The Honorable Bill Shuster 

Chairman 

House Transportation and Infrastructure Committee 

2165 Rayburn House Office Building 

Washington, DC 20515 

Dear Chairman Shuster: 

Thank you for holding a hearing on "The Need to Reform FAA and Air Traffic Control to 

Build o 21st Century Aviation Sv;;ti'J1l fnr.4meri.ra." United appreciates the opportunity to share our 

position on this important issue. 

United believes that transformational air traffic control (AT C) reform presents significant opportunities 

for modernizing our air traffic system, 

as communities and businesses across America. 

Sp<lcifkally, an in<ie>>ende;nt,non·p,rol'it C<>rporzotion should be created to operate the system, funded by 

user fees and governed by a board of stakeholders. The FAA should retain all safety regulation 

functions. With more predictable accountability enabled by this reform, ATC 

services could be provided mc>reefficie•ntlly and eft'ecl:ive;ly 1Nitile tllnhr>lding •wo;rlrl-d~'" <;>fPirv <.t.rul~rtk 

United is committed to putting the customer at the center of everything we do. We• are enCI)Urag<ld 

that ATC reform would improve the travel experience 

and enabling more direct flights which would further reduce fuel burn and emissions. ATC reform 

be a win-win for both our customers and employees operating in the system. 

Thank you for your efforts on critical issue. United looks forward to working with you to achieve this 

important goaL Please do not hesitate to contact me if you have any questions or would like more 

information. 

233 Sourh Wackerr Drive, Chicago, !L 60606 STAR ALLIANCE MEMBER