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FAA REAUTHORIZATION: AIR TRAFFIC CONTROL 

MODERNIZATION AND REFORM 

HEARING 

BEFORE THE

COMMITTEE ON COMMERCE, 

SCIENCE, AND TRANSPORTATION 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

MAY 19, 2015 

Printed for the use of the Committee on Commerce, Science, and Transportation 

( 

(II) 

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

JOHN THUNE, South Dakota, Chairman 

ROGER F. WICKER, Mississippi 

ROY BLUNT, Missouri 

MARCO RUBIO, Florida 

KELLY AYOTTE, New Hampshire 

TED CRUZ, Texas 

DEB FISCHER, Nebraska 

JERRY MORAN, Kansas 

DAN SULLIVAN, Alaska 

RON JOHNSON, Wisconsin 

DEAN HELLER, Nevada 

CORY GARDNER, Colorado 

STEVE DAINES, Montana 

BILL NELSON, Florida, Ranking 

MARIA CANTWELL, Washington 

CLAIRE MCCASKILL, Missouri 

AMY KLOBUCHAR, Minnesota 

RICHARD BLUMENTHAL, Connecticut 

BRIAN SCHATZ, Hawaii 

EDWARD MARKEY, Massachusetts 

CORY BOOKER, New Jersey 

TOM UDALL, New Mexico 

JOE MANCHIN III, West Virginia 

GARY PETERS, Michigan 

DAVID SCHWIETERT, Staff Director 

NICK ROSSI, Deputy Staff Director 

REBECCA SEIDEL, General Counsel 

JASON VAN BEEK, Deputy General Counsel 

KIM LIPSKY, Democratic Staff Director 

CHRIS DAY, Democratic Deputy Staff Director 

CLINT ODOM, Democratic General Counsel and Policy Director 

(III) 

C O N T E N T S 

Page 

Hearing held on May 19, 2015 ............................................................................... 1 

Statement of Senator Thune ................................................................................... 1 

Statement of Senator Nelson .................................................................................. 3 

Statement of Senator Wicker .................................................................................. 43 

Statement of Senator Peters ................................................................................... 46 

Statement of Senator Manchin ............................................................................... 49 

Statement of Senator Klobuchar ............................................................................ 51 

Statement of Senator Markey ................................................................................. 53 

Statement of Senator McCaskill ............................................................................. 55 

Statement of Senator Blumenthal .......................................................................... 58 

Statement of Senator Daines .................................................................................. 60 

WITNESSES

Hon. Michael P. Huerta, Administrator, Federal Aviation Administration ....... 4 

Prepared statement .......................................................................................... 6 

Hon. John Engler, President, Business Roundtable and former Governor, 

State of Michigan ................................................................................................. 9 

Prepared statement .......................................................................................... 10 

Hon. Byron Dorgan, Senior Policy Advisor, Arent Fox LLP and former U.S. 

Senator from North Dakota ................................................................................ 14 

Prepared statement .......................................................................................... 15 

Eno Center for Transportation NextGen Working Group—Statement of 

Principles for Air Traffic Control Reform ................................................... 19 

Jeffery A. Smisek, Chairman, President, and CEO, United Airlines .................. 21 

Prepared statement .......................................................................................... 23 

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

AFL–CIO (NATCA) .............................................................................................. 25 

Prepared statement .......................................................................................... 27 

Ed Bolen, President and CEO, National Business Aviation Association ............ 33 

Prepared statement .......................................................................................... 34 

APPENDIX

Mike Perrone, National President, Professional Aviation Safety Specialists, 

prepared statement .............................................................................................. 65 

Thomas L. Hendricks, President and CEO, National Air Transportation Association, prepared statement ................................................................................ 68 

Response to written questions submitted to Hon. Michael P. Huerta by: 

Hon. John Thune .............................................................................................. 69 

Hon. Roy Blunt ................................................................................................. 70 

Hon. Deb Fischer .............................................................................................. 71 

Hon. Richard Blumenthal ................................................................................ 72 

Hon. Brian Schatz ............................................................................................ 73 

Hon. Cory Booker ............................................................................................. 74 

Hon. Tom Udall ................................................................................................ 76 

Response to written questions submitted to Hon. John Engler by: 

Hon. John Thune .............................................................................................. 77 

Hon. Deb Fischer .............................................................................................. 78 

Hon. Bill Nelson ............................................................................................... 79 

Hon. Brain Schatz ............................................................................................ 81 

Response to written questions submitted to Hon. Byron Dorgan by: 

Hon. John Thune .............................................................................................. 81 

Hon. Deb Fischer .............................................................................................. 82 

Hon. Bill Nelson ............................................................................................... 83 

Hon. Brian Schatz ............................................................................................ 84 

Page

IV 

Response to written questions submitted to Jeffery A. Smisek by: 

Hon. John Thune .............................................................................................. 85 

Hon. Deb Fischer .............................................................................................. 87 

Hon. Bill Nelson ............................................................................................... 87 

Hon. Richard Blumenthal ................................................................................ 88 

Hon. Brian Schatz ............................................................................................ 89 

Hon. Cory Booker ............................................................................................. 89 

Response to written questions submitted to Paul M. Rinaldi by: 

Hon. Deb Fischer .............................................................................................. 89 

Hon. Bill Nelson ............................................................................................... 90 

Hon. Brian Schatz ............................................................................................ 90 

Hon. Cory Booker ............................................................................................. 92 

Response to written questions submitted to Ed Bolen by: 

Hon. Deb Fischer .............................................................................................. 92 

Hon. Brian Schatz ............................................................................................ 92 

(1) 

FAA REAUTHORIZATION: AIR TRAFFIC 

CONTROL MODERNIZATION AND REFORM 

TUESDAY, MAY 19, 2015 

U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. 

The Committee met, pursuant to notice, at 10 a.m. in Room SR– 

253, Russell Senate Office Building, Hon. John Thune, chairman of 

the Committee, presiding. 

Present: Senators Thune [presiding], Wicker, Blunt, Ayotte, 

Fischer, Moran, Heller, Gardner, Daines, Nelson, McCaskill, 

Klobuchar, Blumenthal, Schatz, Markey, Booker, Udall, Manchin, 

and Peters. 

OPENING STATEMENT OF HON. JOHN THUNE, 

U.S. SENATOR FROM SOUTH DAKOTA 

The CHAIRMAN. Today the Commerce Committee concludes its series of planned hearings on reauthorization of the Federal Aviation 

Administration with an examination of the Nation’s air traffic control system. 

Let me begin by thanking Aviation Subcommittee Chair Ayotte 

and Ranking Member Cantwell for taking us through several valuable hearings on the way to this full committee hearing. It has 

been a busy work period and a great deal of progress has been 

made, thanks to their efforts. 

The U.S. Air Traffic Control, or ATC, system involves thousands 

of dedicated air traffic controllers guiding tens of thousands of 

flights safely across the country on a daily basis. We can all be 

proud of the system’s safety record. 

At the same time, increasing demand, the need to improve efficiency, and changes in technology all underscore the need to modernize a system that is still radar-based and operated using concepts and procedures developed decades ago. 

Efforts to modernize ATC hardware and software have made 

some progress recently but the long view indicates modernization 

programs have often taken too much time and cost too much. 

We have stacks of reports from the DOT’s Office of Inspector 

General and the Government Accountability Office detailing the 

implementation delays and cost overruns that have plagued these 

efforts for decades and stymied leadership from multiple administrations. 

The most recent and visible initiative in this area is the Next 

Generation Air Transportation System, or NextGen. Before 

NextGen was given a name, the original goal was something called 

2 

‘‘Free Flight,’’ which was expected to result in a genuine transformation of the system away from air traffic control to air traffic 

management. 

Taking advantage of GPS for navigation and surveillance was at 

the heart of this idea. As initially envisioned, FAA would save 

money eliminating most radars and airspace operators would save 

time, money, and fuel by choosing their own direct routes. 

But more than 15 years after the FAA began talking about Free 

Flight, we still seem to be more than a decade away from anything 

resembling it. In fact, a recent study by the National Research 

Council concluded that NextGen currently seems to be more about 

incremental programs and improvements rather than a transformational change. 

Also, airlines and other operators in the system now feel burdened with the expense and effort of implementing changes that 

will not yield direct benefits for them for many years to come. 

This situation has led several stakeholders and policy makers to 

question whether the current ATC structure is best suited for the 

tasks at hand. Long-standing difficulties with modernization are 

just one reason to consider reform. 

The system’s reliance on annual transportation appropriations 

and the vagaries of the political process make long term planning 

for system capitalization and management of the agency’s footprint 

difficult and probably more costly. 

The FAA will always face challenges attracting and retaining the 

talent needed to drive major technological change when it must 

compete with cutting edge businesses in the private sector. 

To address these challenges, we must carefully consider if there 

is a better way to deliver ATC services for the traveling public and 

airspace users, and I am open to considering all ideas. 

FAA has a great record as a safety regulator, something that 

would certainly continue if air traffic control services were moved 

out of the FAA or government. 

Many countries around the world have undergone such transitions with success, and I look forward to hearing from our witnesses about what reform of our system might look like and how 

reform could serve the needs of all airspace users. 

To be sure, the matters we discuss today are just part of a larger 

effort on FAA reauthorization where we will address a host of other 

important issues. I am looking forward to working with Ranking 

Member Nelson, as well as Senators Ayotte and Cantwell, and 

other members of the Committee to advance such legislation. 

Last, I want to stress that our interests about ATC modernization are not focused only on the current leadership team at FAA. 

As I mentioned before, it seems clear there are structural limitations that have impeded success over the years. I suppose the key 

question is whether, if we were to build an air traffic control system from scratch today, we would necessarily conform to the old 

strictures or strike a better path. 

I look forward to this discussion, and now want to turn to my colleague, Senator Nelson, the Ranking Member, for his opening remarks. 

3 

STATEMENT OF HON. BILL NELSON, 

U.S. SENATOR FROM FLORIDA 

Senator NELSON. Thank you, Mr. Chairman. Senator Thune joins 

me to acknowledge the families of those lost on Colgan Air Flight 

3407. Your presence here is a reminder of how much is at stake 

with the safe operation of our aviation system, so thank you for 

being here. 

Obviously, we have the busiest, the most complex airspace in the 

world, and thanks to the hard work and the dedication of the FAA 

employees, we have an agency that is providing the safest, most efficient airspace in the world, yet the negative impacts of the uncertainty of the funding and the sequestration have led to widespread 

concern about the funding of Federal programs and the Federal operations. 

If you take a meat cleaver approach instead of the scalpel approach, the sequester forces irresponsible budget decisions in our 

domestic and defense programs. 

Some of you are going to suggest that the answer is to privatize 

the FAA and air traffic control. This Senator feels like we ought 

to get budget certainty and repeal sequestration. If we do not, the 

situation will worsen when additional budget cuts return in 2016. 

The FAA has faced unpredictability for too long. The last FAA 

bill took 4 years and involved 23 extensions and a partial FAA 

shutdown. The good news is that Senator Thune and I are working 

together, we are going to do anything possible to get this FAA reauthorization going. 

In the past, because of that uncertainty, because of that sequestration, the FAA has had to furlough employees, implement a hiring freeze, temporarily close their Academy, and halt a lot of the 

work that I have had the privilege of seeing with the Administrator 

on the NextGen programs. 

This has set the FAA back in its progress to advance air traffic 

control modernization. The conversation about moving air traffic 

control into private not-for-profit entities has impact far beyond 

you witnesses here today. 

Take, for example, the Department of Defense. They share a responsibility for controlling airspace with the FAA, and they have 

for more than 65 years. Today, the Department of Defense controls 

about 20 percent of our airspace for civilians as well as the military. 

FAA and DOD coordinate activities to ensure our military can 

train warfighters, test new concepts, equipment, and defend the 

Nation. Air defense right here in the continental U.S. 

No other country in the world has the defense assets of the U.S., 

and we must ensure that our defense interests are not harmed by 

removing the government from air traffic control, and I can tell you 

the Department of Defense has visited me, and they do not want 

any of this privatization. 

Look at the airlines. Even the airlines are not in agreement. Let 

me quote from a letter from Delta: ‘‘Rather than wasting months 

of collective energy only to find ourselves with a less efficient, less 

responsive, more bureaucratic-like, costlier new monopoly service 

provider, we should instead focus our efforts on achieving real reform in the next authorization that brings about tangible benefits 

4 

for operators and more importantly for the traveling public.’’ That 

is Delta. 

Since aviation is the backbone of our U.S. economy, we must 

prioritize air traffic control investments for the good of this country. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Nelson. We have a great 

panel today led off by the Honorable Michael Huerta, Administrator of the Federal Aviation Administration. He will be followed 

by the Honorable John Engler, who is currently the President of 

Business Roundtable, and of course, a former Governor. 

The Honorable Byron Dorgan, Senior Policy Analyst at Arent 

Fox, former colleague of ours from the other Dakota, and also a 

former member of this committee. 

Mr. Jeff Smisek, Chairman, President and CEO of United Airlines. Mr. Paul Rinaldi, President of the National Air Traffic Controllers Association, and Mr. Ed Bolen, President and CEO of the 

National Business Aviation Association here in Washington. 

A great panel, we look forward to hearing from all of you. We 

will start on my left and your right with the Administrator. Mr. 

Huerta, please proceed. 

STATEMENT OF HON. MICHAEL P. HUERTA, ADMINISTRATOR, 

FEDERAL AVIATION ADMINISTRATION 

Mr. HUERTA. Thank you. Chairman Thune, Ranking Member 

Nelson, members of the Committee, thank you for inviting me to 

speak today about the reauthorization of the FAA. 

The upcoming FAA reauthorization provides us with the opportunity to propel our system to the next level of safety and to foster 

the kind of innovative climate that has long been the hallmark of 

our proud aviation heritage. 

This reauthorization has provided a forum for many in industry 

and government to openly discuss possible changes in the governance structure of the FAA and to help us create the aviation system that will sustain our Nation’s economic growth well into the 

future. 

We are open to having this discussion, but we must all agree on 

the most important problems reauthorization should fix. In our 

view, those are budget instability and the lack of flexibility to execute our priorities. 

These challenges exist for the entire agency, not just for the air 

traffic control system and the NextGen organization, as some have 

suggested. In addition to finding agreement on the problem we are 

trying to solve, we should agree on finding ways to avoid unintended consequences. 

Our ability to deploy NextGen technologies and capabilities 

hinges on interdependencies and relationships within the agency. 

NextGen is more than installing technology in our air traffic facilities and on aircraft. It involves the close participation of our safety 

organization to ensure that the technology is safe and the controllers and pilots know how to use it safely. 

We believe that any decision about governance must take into account these issues so that we may best serve our nation and the 

flying public. 

5 

Some have argued for change saying the FAA has not delivered 

on air traffic modernization. I would argue that the FAA has already made major progress in modernizing our airspace system 

through NextGen. 

We completed the installation of a more powerful technology 

platform with our new high-altitude air traffic control system, 

known as ERAM. This system will accommodate the applications 

of NextGen and allow controllers to handle the expected increase 

in air traffic efficiently. 

Last year, we finished the coast to coast installation of the ADSB network that will enable satellite-based air traffic control. 

On a parallel track, through our collaboration with industry, we 

identified key priorities in implementing NextGen air traffic procedures. We now have more satellite-based procedures in our skies 

than traditional radar-based procedures. We have created new 

NextGen en routes above some of our busiest metropolitan areas, 

saving millions of dollars in fuel, decreasing carbon emissions, and 

cutting down on delays in each city. 

In addition to these improvements, we have set clear priorities 

on delivering more benefits in the next three years. These range 

from improved separation standards for heavy aircraft, better coordination of traffic on the airport surface, and streamlined departure clearances using data communications. NextGen has already yielded $1.6 billion in benefits to airlines 

and the traveling public. In the next 15 years, the changes we have 

already made will produce $11.5 billion in benefits. 

We recognize, however, that it is not enough to rely on projected 

benefits. That is why we go back and study the benefits that certain improvements have provided to users. 

For example, in Atlanta, we safely reduced weight separation 

standards to improve efficiency at the airport. Because of this 

change, Atlanta’s Hartsfield-Jackson International Airport has increased the number of planes that can land by up to 5 percent or 

about five planes more per hour. Delta Airlines is also saving up 

to two minutes of taxi time per flight. These improvements are saving them between $13 million to $18 million in operating costs annually. 

We are aware of the criticisms of the FAA’s implementation of 

NextGen. I would like to explain our approach. There are different 

theories about how to deploy technology in a complex operating environment. Some take the position that you should start from a 

wide ranging vision and work back from there in developing a 

range of scenarios. Others suggest mapping out the entire picture 

and only proceeding when you are sure of the end gain. 

Others say to take a more pragmatic approach, and this is the 

path the FAA has chosen, based on close consultation with industry. This approach, used by the Office of Management and Budget, 

closely matches investments with tangible benefits to airlines and 

passengers. 

We acknowledge that it requires up front investment, but we are 

careful not to strand programs in the middle of implementation. 

When dealing with widespread change in the dynamic airspace 

system, there is no margin for error. The system must transport 

750 million passengers every year with the highest levels of safety. 

6 

Any technology we implement must be reliable and safe from the 

outset. To achieve this high standard, we must remain nimble and 

we must have flexibility. 

Our aviation system is a valuable asset for the American public. 

We should use the upcoming reauthorization to provide the FAA 

with the tools necessary to meet the demands of the future and to 

minimize disruption to the progress we have already made with 

NextGen and our work to integrate new users into our airspace 

system. 

I thank you for the opportunity to appear before your committee 

today, and I am happy to take your questions. 

[The prepared statement of Mr. Huerta follows:] 

PREPARED STATEMENT OF HON. MICHAEL P. HUERTA, ADMINISTRATOR, 

FEDERAL AVIATION ADMINISTRATION

Chairman Thune, Ranking Member Nelson, Members of the Committee: 

Thank you for inviting me to speak with you today on the future direction of the 

FAA. The FAA has a tremendous opportunity to make a difference for stakeholders 

by laying the foundation for the National Airspace System (NAS) of the future. We 

are focusing our accomplishments on well-defined strategic priorities, including 

achieving the benefits of the Next Generation Air Transportation System (NextGen). 

In the context of FAA reauthorization and the future direction of the FAA, some 

members of the aviation community and of Congress have discussed making governance changes at the agency. The Administration welcomes the opportunity to evaluate any governance-related proposals and we look forward to having those discussions with Congress and stakeholders. We would anticipate, however, that any such 

proposal that might include a fundamental shift in current policy would need to be 

very clear in its identification of both the issue to be solved and a proposed mechanism to resolve it. While we would not support a fundamental change for the sake 

of change alone, we remain open-minded and welcome the chance to further engage 

with you on that subject. 

Further, with respect to reauthorization, some of the major challenges facing the 

FAA involve funding levels, funding stability, and flexibility. We believe that any 

governance-related proposals would need to address these issues while ensuring 

that our Nation continues to maintain the safest and most efficient airspace system 

today and in the future. 

The needs of the system and the aviation community it serves are evolving. New 

users, such as operators of unmanned aircraft systems and commercial space vehicles, are entering our Nation’s airspace with increasing frequency. As we invest in 

long-term modernization and recapitalization projects and build on the successes of 

NextGen, we also have to think about sustaining critical parts of our existing infrastructure, much of which is beyond its projected useful life. We have to address 

these challenges in a budget environment with a great degree of uncertainty. We 

are increasingly being asked to do more with less. 

In recent years, funding uncertainties resulting from sequestration, government 

shutdowns, and short-term reauthorization extensions have hindered the FAA’s ability to efficiently perform our mission and have impeded our ability to commit to 

long-term investments. The FAA has grappled with funding challenges by focusing 

and prioritizing its work, knowing that we cannot continue to provide all of the services we have in the past and understanding that safety cannot be compromised. 

We’re having discussions with our stakeholders about what we might be able to consider no longer doing, or do differently, through innovative business methods and 

technologies. We look forward to working with the aviation community and Congress to form consensus on the appropriate path for the future direction of the FAA. 

Looking ahead, the benefits that we continue to deliver through NextGen will enable a safe and efficient NAS of the future that will meet the needs of its users. 

NextGen is increasingly delivering benefits to system users, such as reduced fuel 

costs, reduced delays, reduced environmental impacts, and increased safety. In the 

midst of funding challenges, the agency has focused resources on leveraging available technologies to deliver near-term NextGen benefits. This strategy has paid off. 

For example, the FAA’s Metroplex program improves airspace efficiencies in major 

metropolitan areas, simplifying air traffic flows. In collaboration with the aviation 

industry, the FAA is working with 11 busy metropolitan areas where improved air 

7 

traffic performance could benefit not only the region but the entire national airspace. The FAA works with collaborative teams of air traffic controllers, airport officials, airline representatives, general aviation operators, other industry stakeholders, and community representatives to study, design, and implement comprehensive approaches for each Metroplex. Metroplex solutions include PerformanceBased Navigation (PBN) procedures that enable aircraft to fly more directly from 

departure to destination by using satellite signals and airspace redesign. The FAA 

has introduced into the NAS more than 7,000 PBN procedures. 

A recent example of the success of Metroplex is the 60 new routes into and out 

of Houston Metroplex airports that were launched last year. The initiative improved 

merging techniques that begin aligning planes hundreds of miles away. The preliminary data from the analysis of the Houston Metroplex implementation identified $6 

million in annual savings and a reduction of 400,000 fewer nautical miles flown 

each year, reducing carbon emissions by 20,000 metric tons and saving operators 

2 million gallons of fuel. That’s like taking more than 4,000 cars off the streets. 

In addition to focusing on near-term benefits, we continue to invest in new infrastructure to support precision satellite navigation; digital, networked communications; integrated weather information; and more. When the next generation transformation was in its infancy, the Government Accountability Office described the effort as ‘‘staggering.’’ When I joined the FAA team in 2010 as Deputy Administrator, 

I experienced that the program was already on its way to new levels. Today, I am 

proud to report the completion of a major milestone that will enable NextGen solutions. We’ve finished installing our new high altitude air traffic control system 

known as En Route Automation Modernization (ERAM), one of the largest automation changeovers in the history of the FAA. ERAM is fully operational at the 20 

FAA en-route centers across the continental United States. This network replaces 

the HOST computer system that had its roots in the 1960s. 

ERAM is the backbone of the Nation’s airspace system. More than simply a faster 

computer, this new system is a network of computers designed to know about your 

flight, where you plan to go and how you plan to get there, from the moment you 

enter the national airspace from anywhere in the country. ERAM’s flexible and expandable system design will accommodate en-route processing necessary for 

NextGen technologies such as Automatic Dependent Surveillance Broadcast (ADS– 

B) services, System Wide Information Management, and Data Communications. 

ERAM processes data from nearly three times the number of sensors as the legacy 

system. With this system in place, we’re able to make available new tools for our 

air traffic controllers including the ability to track more high altitude flights, which 

will result in more efficient routing, reducing fuel burn and improving the predictability of airline schedules. 

What we’ve achieved with ERAM was facilitated by introducing increased discipline and structure to the way we do business at the FAA. In 2012, we created 

a Program Management Organization to better manage the deployment of this and 

other technology. We also worked closely with our air traffic controllers, who provided feedback throughout the system development phases. The fact that we turned 

ERAM around, and that it is now operating nationwide, is a testament to what the 

FAA can accomplish as an agency when it sets milestones and pulls together to 

make fundamental changes. 

ERAM links with ADS–B, a more precise and efficient satellite-based alternative 

to radar that will revolutionize how we manage our Nation’s air traffic. ADS–B 

opens up new routes to air carriers and increases capacity. Last year, we completed 

nationwide deployment of the ADS–B ground stations. The FAA is currently providing nationwide broadcast services to equipped users. We are working closely with 

the entire aviation community, including general aviation operators, to work toward 

the mandatory ADS–B Out equipage by January 1, 2020 deadline. For aircraft with 

the additional equipment, which is not required by the 2020 deadline, ADS–B delivers traffic and weather information directly to the cockpit, giving the pilots more 

information and awareness. 

The success of NextGen is not the FAA’s alone. Collaboration with all stakeholders, including the aviation industry, our union members, and Congress, is key 

to its success and we can continue to leverage one another’s commitments to 

produce benefits. Last year, subject matter experts from the FAA met with aviation 

industry representatives to determine what high-benefit, high-readiness NextGen 

capabilities the FAA will be able to accomplish in the next one to three years, and 

what industry commitments are necessary for those activities to be successful. The 

FAA and the NextGen Advisory Committee (NAC) worked together to reach agreement on a joint implementation plan consisting of capabilities within four focus 

areas. Taken together, this plan will advance our navigation capabilities through 

PBN, increase capacity on parallel runways through Multiple Runway Operations, 

8 

1https://www.faa.gov/nextgen/equipadsb/ 

enhance airport surface operations through data sharing, and introduce Data Communications between cockpit and air traffic control. The plan identifies timelines, 

specific locations, and costs for each priority. These priorities leverage equipment 

that operators have already invested in for other capabilities. 

We hope the benefits that stakeholders are realizing in these areas will 

incentivize them to make larger NextGen investments. A prime example of the benefits already being achieved through this focused collaboration with industry is the 

more narrowly tailored and safely defined wake turbulence separation standards, 

which are based on the performance characteristics of aircraft and have been implemented at several major airports across the Nation. This Re-categorization of Wake 

Turbulence Separation Minima (RECAT) updates and decreases separation standards, which are primarily based on aircraft weight classes. Because of wake RECAT, 

FedEx can take advantage of a 13 percent increase in departure capacity at Memphis. Passenger carriers are seeing the benefit, too. At Atlanta’s Hartsfield-Jackson 

airport, Delta Airlines and FAA have found a one and one-half minute reduction in 

departure queue delays. Delta projects to save $14–19 million dollars in operating 

costs over a one-year period. 

The FAA will rely on the same high degree of collaboration with industry as we 

monitor our progress against the milestones in the plan. The agency is conducting 

internal meetings at least monthly to monitor progress against the plan, while the 

NAC will work with industry stakeholders to ensure their commitments are funded 

and met. Progress reports are provided publically through the NAC, and the FAA 

is reporting progress against the milestones on its NextGen Performance Snapshot 

website. To date the FAA has completed 17 of the plan’s milestones, including two 

that were finished ahead of schedule. Industry has also met its commitments. This 

is a significant beginning that demonstrates the great potential for future partnerships between the FAA and industry to move the NAS forward. 

Last year the FAA convened a call to action to engage the aviation industry in 

meeting the January 1, 2020 deadline to equip aircraft with ADS–B Out. FAA experts and industry leaders identified barriers delaying operators from equipping and 

formed the Equip 2020 working group to collaboratively resolve those issues. The 

goal of Equip 2020 is to ensure the fleet is equipped with technology to utilize the 

benefits of the ground ADS–B infrastructure. The collaborative aspect of the Equip 

2020 working group put the right stakeholders together to solve one of the general 

aviation (GA) community’s biggest barriers: cost of equipment. Low-cost equipment 

options are now available from manufacturers; those products and other available 

avionics are tracked in a database with suppliers’ equipment data and air carriers’ 

purchasing data. Analysis of these equipage trends will indicate potential risks to 

achieving compliance by the deadline so that we may adjust our efforts as necessary. To further assist GA owners determine their compliance options, the FAA 

has created an easy to navigate Equip ADS–B website 1 and will host information 

sessions across the country this year. We need to continue to ensure that users of 

the system make timely and necessary equipage investments to maximize the widespread deployment of NextGen. Government and industry have a shared responsibility to create the aviation system that will carry this Nation well into the 21st 

century. 

If you look objectively over the last five years, the FAA has made major progress 

on both completing NextGen’s foundation and expanding the delivery of NextGen 

benefits to the users of the system. Continuing to build the NAS of the future and 

accommodating new services will require difficult decisions. The aviation community 

is diverse and does not always see eye-to-eye. Nevertheless, I believe consensus on 

the future direction of the FAA is absolutely critical if we are going to resolve our 

long-term funding challenges. We need stable, predictable funding to effectively operate our air traffic control system, build on our investments in NextGen, and efficiently recapitalize our aging facilities. This would best be achieved with the passage of a long-term reauthorization bill. 

Chairman Thune, Ranking Member Nelson, I look forward to working with you 

and the Committee as we move forward toward a reauthorization bill. 

The CHAIRMAN. Thank you, Administrator Huerta. Mr. Engler? 

9 

STATEMENT OF HON. JOHN ENGLER, PRESIDENT, BUSINESS 

ROUNDTABLE AND FORMER GOVERNOR, STATE OF MICHIGAN 

Mr. ENGLER. Good morning, Mr. Chairman, committee members. 

Thanks for the opportunity to testify this morning. 

The Business Roundtable members include leaders of major U.S. 

aerospace companies. Every one of our members relies on air transportation as customers of cargo and passenger airlines. 

As the 20th century drew to a close, U.S. aviation set the standard for the world’s largest, safest, most technologically advanced 

system. Sadly, we have lost our preeminent position and our future 

leadership is in doubt. The U.S. air traffic system remains the 

world’s largest, the world’s safest, but it is not the most technologically advanced nor the world’s most cost effective. 

Our national air traffic control system relies on essentially the 

same technology, ground-based radar and voice radio transmission, 

as it did in the 1960s. Almost all of the FAA’s surveillance technology is still analog. 

Like many other stakeholders, we are concerned about the halting pace of the modernization represented by the FAA’s NextGen 

program. A National Academies report that was released this 

month clearly stated the problems, the original vision for NextGen 

is not what is being implemented today. Airlines are not motivated 

to spend money on equipment and training for NextGen. 

A modern innovative air traffic control system would offer tremendous benefits to the users of the airspace; more efficient flight 

paths, reduce fuel consumption and crew time, lower emissions and 

less noise pollution, global commercial leadership leading to expanded exports, and increase services to small community airports. 

What are the obstacles? Last year, FAA Administrator Huerta offered one explanation in a speech at the Aero Club of Washington, 

and I quote ‘‘There is simply no way the FAA can implement 

NextGen, recapitalize our aging infrastructure, and continue to 

provide our current level of services without making some serious 

tradeoffs,’’ something Senator Nelson referred to really in his opening comments. 

Administrator Huerta and I would agree, I believe, on this critical point, the current funding system clearly does not provide the 

needed resources, but a deeper problem is the broken budgetary 

process itself, which prevents the FAA from pursuing the kind of 

step by step technological improvement that is standard elsewhere, 

certainly in the business world. 

For an example of what works, look at AT&T and Verizon. In the 

years the U.S. Government has been talking about NextGen, four 

generations of cellular technology from powering a basic flip phone 

to 4G streaming video in today’s modern iPhone have been adopted. 

The FAA is trying to fund a $20 billion capital modernization effort out of annual and unpredictable cash flow. Most other transportation sectors issue long term revenue bonds to finance large 

capital modernization, but bonding is something the FAA cannot 

do. States do it. The private sector does it. The Federal Government does not. 

I convened at the Roundtable an expert group to help study this 

issue, including former FAA and Transportation Department offiVerDate Nov 24 2008 13:28 Jul 12, 2016 Jkt 075679 PO 00000 Frm 00013 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\20671.TXT JACKIE
10 

cials, knowledgeable aviation policy advisors. Their conclusion, the 

status quo is simply too costly and too inefficient. 

They identified the necessary elements of an alternative system—separation of the air traffic control operator from the regulator to improve transparency and accountability, and to further increase safety, an organizational structure that accounts for multiple objectives so that safety and access are valued along with cost 

efficiency. 

Governance of the air traffic control by a board appointed by 

stakeholders. A revenue structure that enables air traffic control to 

be fully self-supporting, without government financial support, and 

completely free of the Federal budgetary process. 

The ability for air traffic control to finance capital expenditures 

and accelerate modernization. Wage and benefit structures to protect employees, prevent disruption of employees’ reasonable career 

expectations, and preserve a collaborative culture. 

Over the last two decades, most other Western countries have restructured the way air traffic control is funded and governed, determining that it is a high tech service business, part of critical infrastructure that could be funded directly by its aviation users and 

customers. 

Separating air traffic control into an entity independent from the 

rest of the FAA is a manageable process. Tools and precedents 

exist for addressing the risks that come with any innovation, and 

a thorough planning process is, of course, necessary. 

In the end, I hope that you as the Senators responsible for the 

oversight of the FAA use the reauthorization process to put America on a trajectory to a modern air traffic control system that is 

again the gold standard for the world. 

Now is the time for decisive bipartisan action to restore America’s global leadership. The Business Roundtable looks forward to 

working with you to achieve these important goals. Thank you for 

the opportunity, members. 

[The prepared statement of Mr. Engler follows:] 

PREPARED STATEMENT OF HON. JOHN ENGLER, PRESIDENT, BUSINESS ROUNDTABLE

AND FORMER GOVERNOR, STATE OF MICHIGAN

Good morning, Chairman Thune, Senator Nelson. Thank you for the opportunity 

to join you this morning to testify on the operation and needed modernization of the 

Nation’s airspace. 

I’m pleased to speak on behalf of Business Roundtable, an association of more 

than 200 CEOs of major U.S. companies. Business Roundtable’s CEO members lead 

companies with $7.2 trillion in annual revenues and nearly 16 million employees. 

These companies comprise more than a quarter of the total market capitalization 

of U.S. stock markets and invest $190 billion annually in research and development—equal to 70 percent of U.S. private R&D spending. Our companies pay more 

than $230 billion in dividends to shareholders and generate more than $470 billion 

in sales for small and medium-sized businesses annually. 

Aviation is critically important to all members of Business Roundtable. Today, 

civil aviation in the United States accounts for 5.4 percent of our GDP, contributes 

$1.5 trillion in total economic activity each year, and supports 11.8 million jobs. 

Business Roundtable’s members include leaders of major U.S. aerospace companies, 

but more broadly, every one of our members relies on air transportation every day 

as customers of cargo and passenger airlines. For example, 30 to 40 percent of all 

daily airline passengers are making trips for business purposes. 

The CEOs of Business Roundtable are global leaders in their respective industries, and they recognize the value of American leadership in aviation. The United 

States was, of course, site of the Wright Brothers’ historic first powered flight in 

11 

a heavier-than-air vehicle. Commercial airlines developed in this nation, and so did 

air traffic control; begun initially by a nonprofit, federally chartered corporation, air 

traffic control was taken over by the Federal Government during the Great Depression. Following World War II, commercial and general aviation boomed in the 

United States. As the 20th century ended, our aviation system still set the standard 

as not only the world’s largest but also the world’s safest and most technologically 

advanced. 

Sadly, our preeminent position has been lost and our future leadership is in 

doubt. The U.S. air traffic system remains the world’s safest and the world’s largest. 

But it is not the most technologically advanced, nor the world’s most cost-effective. 

The Business Roundtable last year conducted an analysis that superimposed Canadian rates for air traffic control services on U.S. flight data, and preliminary results suggest that, in aggregate, the Canadians are delivering services for lower cost 

than the FAA today. Canada’s cost advantage may result partly due to a less-complex airspace than the United States’—and complexity drives cost—but one would 

expect that the larger-scale U.S. operation would also create its own efficiencies and 

lower costs. 

Unfortunately, neither business leaders nor the flying public can take the future 

health of U.S. aviation for granted. Challenges with the FAA’s provision of air traffic control services have existed for decades, but are now becoming more acute. FAA 

has failed to keep its equipment modernized for the entirety of its history, including 

during times of budgetary plenty. Our national air traffic control system relies on 

essentially the same technology—ground-based radar and voice radio transmission— 

as it did in the 1960s. FAA is operating Enroute Centers that are mostly over 50 

years old. Almost all of the FAA’s surveillance technology is still analog. And the 

FAA trains controllers now the same way it did more than 20 years ago. 

Like many other stakeholders, we are concerned about the slow and uncertain 

pace of the modernization effort represented by the Federal Aviation Administration’s NextGen program. Like you, we read the numerous reports by the Government Accountability Office and the Department of Transportation Inspector General 

documenting cost overruns and late delivery of new systems. The most recent report, from the National Academies, released at the beginning of this month was particularly damning when it said: 

• ‘‘The original vision for NextGen is not what is being implemented today.’’ 

• ‘‘This shift in focus has not been clear to all stakeholders.’’ 

• ‘‘Airlines are not motivated to spend money on equipment and training for 

NextGen.’’ 

• ‘‘Not all parts of the original vision will be achieved in the foreseeable future.’’ 

These reports identify underlying problems that have led stakeholders to question 

whether we have the best model—not just for delivering NextGen but also for the 

ongoing operation and management of what used to be the world’s most advanced 

air traffic control system. 

The fact that the FAA has been consistently behind when it comes to innovation 

isn’t just an inconvenience—it has real costs for the users of the airspace and the 

public at large. 

Airlines and independent aviation all bear significant costs because of less-thanoptimal routings and excessive block times. From the standpoint of airlines and 

other aircraft operators, reducing delays will mean important savings in fuel and 

crew time, their two largest operating costs. And with intelligent consolidation of 

air traffic control facilities, enabled by 21st-century technology, the unit cost of services will be reduced, yielding further cost savings for aircraft operators. Retiring 

many obsolete facilities and ground-based navigation aids will produce additional 

cost savings. 

These lost benefits for airlines and aircraft operators translate to unnecessary 

delays for shippers and travelers, including the huge numbers who are traveling 

every day on business. Advanced technologies and procedures would enable more 

planes to land and take off safely on existing runways, reducing delays. Likewise, 

more direct flight routes at the altitudes with the most favorable tailwinds will 

speed up flights and also reduce delays. Last year, President Obama estimated the 

potential reduction in airspace delays at 30 percent. Even if that number is a little 

high, I was glad to hear the president acknowledge the kinds of benefits a modernized system will provide. 

Unnecessary time flying in the air also means adverse environmental impacts. 

More direct routings and optimized flight paths will reduce aviation fuel consumption and thereby cut CO2 emissions. Shorter and more-precise landing paths (like 

12 

those implemented in Seattle) will reduce noise exposure around airports, which 

may make it easier to add critically needed runway capacity around the country. 

And, as I mentioned earlier, the FAA’s failure to keep its systems updated also 

means that the U.S. is no longer the global leader in aviation. A modernized air 

traffic control system would advance America’s global commercial leadership by expanding export opportunities. Overseas sale of technologies developed and deployed 

in the United States would allow highly innovative U.S. aerospace companies to expand their global market and increase domestic employment. 

In testimony last November before the House Transportation and Infrastructure 

Committee, I said that funding is the most obvious challenge facing the FAA. Last 

year’s sequester served as a wake-up call for aviation stakeholders, with its furloughs of controllers and the near-shutdown of 149 contract towers. And the current 

sequester law has seven more years to go. The FAA’s current annual budget for Facilities & Equipment is now $1 billion less than what it was projected to be five 

years ago. Alarmingly, a senior FAA official recently said the agency faces a $5 billion funding shortfall over the next seven years. With regard to NextGen, the FAA 

and stakeholders are currently engaging in triage, figuring out which few projects 

the agency can afford to pursue in the current highly uncertain funding environment. 

FAA Administrator Michael Huerta, in a speech last year at the Aero Club of 

Washington, said: ‘‘There is simply no way the FAA can implement NextGen, recapitalize our aging infrastructure, and continue to provide our current level of services 

without making some serious trade-offs.’’ The current funding system clearly does 

not provide the resources that are needed. 

But the heart of the problem is not simply a lack of resources, but the broken 

budgetary process itself. The provision of air traffic control services is a technologydriven enterprise. The Federal budgetary process prevents FAA from pursuing the 

kind of incremental technology refreshment that is standard procedure in technology driven enterprises. 

For an example of how this ought to work, look at two member companies of Business Roundtable: AT&T and Verizon. In the years we’ve been talking about 

NextGen, both have gone through four generations of cellular technology, from 

powering a basic flip phone to 4G streaming video in today’s modern iPhone. 

What the FAA is trying to do is to fund a $20 billion capital modernization effort 

out of annual and unpredictable cash flow. This makes no business sense, as my 

CEO membership would tell you. Most other transportation sectors issue long-term 

revenue bonds to finance large capital modernization—including airports, pipelines, 

railroads, and even bridges and interstate highways. But bonding is something the 

FAA cannot do. Our Federal Government simply does not have a capital budget. 

To accommodate the budget process, FAA does its developments in massive bundles. Infrequent updating leads to constant obsolescence and higher costs. Despite 

excellent contractor performance, systems are frequently out of date, even when 

they are newly delivered, because their specifications were designed so far in advance of delivery. Further, budgets and schedules are almost always exceeded. 

This inadequate budgetary process also causes FAA management to cater primarily to Congress and OMB as its customers, rather than to the more appropriate 

airspace users, passengers, and shippers. As a result, today’s FAA tends to be quite 

slow in responding to the needs of airspace users. Because of the slow development 

of procedures to allow for more direct routing, flights continue to follow waypoints 

located where bonfires guided aircraft in the early 20th century. 

Finally, the combination of the air traffic control operator and its regulator within 

the same government agency—as we have today—is not beneficial to safety and results in a confusion of roles and responsibilities, loss of transparency and accountability, and greater frustration for users when they try to make the system work. 

It has also created an organizational culture that resists innovation. As this month’s 

report by the National Academies observed: 

‘‘The FAA and the United States rightly pride themselves on a devotion to safety and an excellent safety record to match. At the same time, a conservative 

safety culture can affect how quickly process and technological change can happen—a challenge in an arena where technologies change rapidly. Such a culture 

may inhibit the adoption of new technologies or increased automation that could 

potentially result in net improvements in both safety and efficiency. A strong 

safety culture can make up for some limitations in an architecture. For example, while it is a good thing for controllers and pilots to be highly sensitive to 

close-calls, it would be better if the architecture and design precluded those 

near-misses from happening. Moreover, if the FAA is going to be held accountable for an extremely conservative safety culture—which has historically been 

13 

the case—then it should be recognized that such conservatism will understandably bias the agency away from innovation. Thus, there are risks associated 

with a safety culture as well, not least of which are opportunity costs due to 

not deploying improved (and potentially even safer) technology and procedures 

in the long run. In addition, excessive care regarding safety can result in the 

accumulation of technical debt—the deferral of significant refactoring and infrastructure refresh.’’ 

A few years ago, I convened an expert group to help Business Roundtable study 

this issue, including former FAA and Transportation Department officials and 

knowledgeable aviation policy advisers. These experts with government and privatesector experience identified the series of challenges that I’ve outlined here and principles that must form the basis for overcoming them. The status quo is simply too 

costly to continue. Any alternative should include: 

• Separation of the air traffic control operator from the regulator to improve 

transparency and accountability, and increase safety. 

• An organizational structure that accounts for multiple objectives so that safety 

and access are valued along with cost efficiency, and there is assurance against 

any value-leakage outside of the operation. 

• Governance of air traffic control by a board that is appointed by stakeholders 

(including users, employees and government interests) with a fiduciary duty to 

the operation. 

• A revenue structure that enables air traffic control to be fully self-supporting 

without government financial support and completely free of the Federal budgetary process. 

• Financing capability to enable air traffic control to finance its capital expenditures, accelerate its modernization and level out its cash outlays. 

• Wage and benefit structures that protect employees, prevent disruption of employees’ reasonable career expectations, and preserve a collaborative culture 

within air traffic control. 

Other countries have charted a similar course of action. Researchers have found 

that over the last two decades most other Western countries have restructured the 

way air traffic control is funded and governed—for example, in Australia, Canada, 

Germany, and the United Kingdom. In these and many other cases, the governments have decided that air traffic control is a high-tech service business that can 

be funded directly by its aviation users, who become customers, just as airlines are 

customers of airports. More than 50 countries have separated their air traffic control 

systems from their transport ministries, leading to arm’s-length regulation of air 

safety—just like that applied to airports, airlines, and all the other components of 

aviation. 

While the principles I’ve outlined are accepted in other countries, they would be 

major changes for U.S. air traffic control. They certainly require a full assessment 

of their feasibility for the U.S. system. We have been holding discussions with the 

principal stakeholders over the past year, working to answer these many questions. 

As business leaders, it’s particularly important to the Business Roundtable that the 

business case for any new structure be sound and well thought out. 

Spinning off air traffic control from the rest of the FAA and running it as a separate entity is not a particularly large or complex transaction for corporate America. 

Tools and precedents exist for managing the risks that come with any innovation. 

That doesn’t mean, however, that we don’t need a thorough planning process just 

as any one of the CEO members of Business Roundtable would use if they were pursuing a restructuring of this sort. 

In the end, I believe the greatest risk to our system is allowing the status quo 

to continue or pursuing more half-measures and calling them reform. We’ve been 

down that path. We cannot allow the fear of change to prevent us from doing what 

is needed. 

Instead, I hope that you, as the senators responsible for oversight of FAA, will 

use the reauthorization process to put America on the path to a modern air traffic 

control system and global leadership in aviation. Now is not the time for timidity, 

or minor reforms. Now is the time for decisive, bipartisan action to restore America’s leadership in aviation. Business Roundtable looks forward to working with you 

to achieve these important goals. 

The CHAIRMAN. Thank you, Governor Engler. Senator Dorgan? 

14 

STATEMENT OF HON. BYRON DORGAN, 

SENIOR POLICY ADVISOR, ARENT FOX LLP 

AND FORMER U.S. SENATOR FROM NORTH DAKOTA 

Senator DORGAN. Mr. Chairman, thank you for inviting me back 

to this committee. I served on this committee for 18 years, and no 

doubt badgered hundreds of witnesses, so maybe a turn about is 

fair play. 

For the past two years, I and former Transportation Secretary 

Jim Burnley have co-chaired a project at the Eno Center for Transportation looking at the subject of air traffic control and the structure of air traffic control. 

I was the Chairman of the Aviation Panel the last time we 

worked on reauthorizing the FAA, and I pulled up a headline from 

that moment where we finally succeeded, and it said ‘‘After five 

years of debate, 23 short-term extensions, and a partial shutdown, 

Congress approved the final version of the FAA bill.’’ 

My hope this time around is that your headline will be shorter 

and your conclusions bolder for this reason: aviation is one of the 

major arteries of the American economy, and the fact is, the issue 

of effective air traffic control is essential to that industry. 

I think we have now come to an intersection where we have to 

decide can we retain our leadership in developing the new technology and the Next Generation air traffic control system, can we 

retain our leadership with the current ATC structure. In my judgment, we cannot. 

A conclusion at the Eno Center for Transportation after 2 years 

of work with stakeholders from around the system was if we want 

to retain America’s leadership with the most advanced technology, 

moving from ground-based radar to Next Generation satellite guidance, which will be safer, faster, and more efficient, if we want to 

retain that, we are going to have to restructure the air traffic control function. 

Let me mention just a couple of facts. Number one, there is no 

question we have an impressive safety record in aviation in this 

country, particularly commercial aviation, even though there is still 

more to do. 

I know the families of the Colgan crash victims are in this room. 

I hope all of you get to know them, because over the years, they 

have played a very important role in continuing those safety improvement issues with the FAA. 

Number two, the air traffic controllers do a terrific job every day, 

steering 30,000 flights and two million people as they fly across 

this country. 

Number three, the people of the FAA work hard on these issues, 

including air traffic control and NextGen, but they necessarily 

work in the thick glue of bureaucracy, and frankly, that is hard to 

do with these kinds of challenges. 

Here is the key point. The key point is in order to create a new 

modern air traffic control system, you have to have stable funding. 

That is nearly impossible for the FAA at this point. In a time of 

congressional spending restraint, they cannot count on stable funding. In fact, they cannot even count on level funding. 

Take a look at the budget that just passed, in the facilities and equipment account. It is going to be $355 million below that which 

15 

was requested, and the lowest in 15 years. That is the F&E account at the FAA in the current budget. 

The fact is as much as we wish it would, the budget picture is 

not going to change. We are going to see more and more spending 

restraint. We are going to see the impact of sequestration, the impact of more layoffs, the on again/off again stop/start funding from 

continuing resolutions. That is what the FAA is confronted with. 

No one would or could build a major new technology project with 

those kinds of challenges. 

Here is the headline from last week in the Washington Post. I 

know it causes heartache in the agency: ‘‘FAA isn’t delivering what 

was promised in a $40 billion project.’’ It refers to the modernization of the ATC system. That is why change is needed. 

In our work at the Eno Center for Transportation, the consensus 

of the stakeholders was that we need to restructure to a government corporation or a non-profit organization that has bonding capability, stable funding, and the ability to plan and to control and 

finance the march to modernization. 

We have now reached the tipping point that requires, in my judgment, action by Congress. I am not the typical spokesperson that 

would normally come to this table and suggest that be the case. I 

am someone who normally would weigh in on the side of having 

the agency do it. 

In this case, there is not going to be stable funding to move this 

country toward the leadership necessary in the NextGen opportunity for air traffic control. 

I understand this is not easy. I understand it is a big lift, it has 

been discussed before, but it needs to be done now. A number of 

other countries have done this very successfully, and so can we. 

Finally, Mr. Chairman, we know the history, December 17, 1903, 

Orville and Wilbur Wright made the first flight. We learned to fly, 

then we flew the bonfires for guidance at night, then we flew to 

lights pointing in the sky for guidance, and then we flew to groundbased radar, and for 50 to 60 years, we have not changed. 

Now, we need to change. We need to do it quickly and effectively, 

and in my judgment, the only way that is going to happen is if we 

create some different structure, and I suggest a government corporation or non-profit organization to accomplish what all of us 

want to accomplish for this country. 

One final point. I know the word ‘‘privatization’’ has been used. 

I did not use it. There are other structural approaches including, 

as I said, government corporations and non-profit organizations 

that I think will solve the problem for this country and certainly 

insist the government retain and be a stakeholder in a new organization. 

Mr. Chairman, again, thank you for the invite. It is really a 

pleasure to be here and see all of you. 

[The prepared statement of Senator Dorgan follows:] 

PREPARED STATEMENT OF HON. BYRON DORGAN, SENIOR POLICY ADVISOR, ARENT

FOX LLP AND FORMER U.S. SENATOR FROM NORTH DAKOTA

Introduction 

The nation’s aviation system is part of the lifeblood of our economy, yet the system is facing rising demand, limited airport capacity, and aging navigation techVerDate Nov 24 2008 13:28 Jul 12, 2016 Jkt 075679 PO 00000 Frm 00019 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\20671.TXT JACKIE
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1For example, the recent Options for FAA Air Traffic Control Reform, an Hearing to the Subcommittee on Aviation of the Transportation and Infrastructure Committee of the U.S. House 

of Representatives on March 24, 2015. 2For example, Air Traffic Control System: Selected Stakeholders’ Perspectives on Operations, 

Modernization, and Structure (GAO–14–770), released on September 12, 2014. 3For example, Status of FAA’s Efforts to Operate and Modernize the National Airspace System, 

released on November 18, 2014. 4For example, President Reagan’s 1987 President’s Commission on Privatization looked at the 

issue of air traffic control governance. 

nology. The Federal Aviation Administration (FAA) has developed the Next Generation Air Transportation System (NextGen) in an effort to modernize the Nation’s air 

traffic control system. Once implemented, this system will continue to perpetuate 

safety standards and promote a more efficient, state-of-the-art satellite-based system. This system has the potential to safely facilitate economic growth, increase mobility, and provide the United States with the ability to keep pace with our international competitors. 

Recognizing the challenge of air traffic control modernization, the Eno Center for 

Transportation brought together key stakeholders, former policymakers, and academics into the Eno NextGen Working Group. I have had the honor to co-chair this 

working group with Former U.S. Secretary of Transportation Jim Burnley. This 

group gathered to discuss how to best accelerate airspace modernization and to analyze the institutional barriers that have contributed to the issues surrounding 

NextGen’s implementation. Our research detailed the history of air traffic control 

in the United States and the attempts that have been made to accelerate reformation. It also included an analysis of six different countries that have successfully reformed the way their air traffic control systems are governed and funded. 

Based on the goal of reforming air traffic control provision in the United States 

to effectively and efficiently implement NextGen and its accompanying benefits, and 

the research that has been conducted for the working group, we have proposed a 

set of guiding principles for air traffic control reform. These principles are meant 

to be a starting point for crafting legislative reform. 

The Need for Reform 

As has been widely discussed in Congressional hearings,1 by the Government Accountability Office (GAO),2 and the Office of the Inspector General (OIG),3 the 

NextGen program has experienced unstable Federal funding, which has led to implementation issues and increasing costs. These challenges have not only made the 

program more expensive for U.S. taxpayers, but have also created costs for the economy and compromised U.S. competitiveness. 

The FAA, like other Federal agencies, is subject to Federal procurement rules, 

which create additional challenges when it comes to managing large-scale projects 

such as NextGen. The inability of Federal agencies to issue bonds or other forms 

of long-term financing further exacerbates these challenges. Our study of the causes 

of these issues has highlighted the potential drawbacks of the existing governance 

and funding structures for delivering ATC services, suggesting that reform could 

substantially accelerate and improve NextGen deployment. 

These issues are not new. The FAA has consistently been slow to implement modernization plans and update the numerous systems that comprise U.S. ATC. This 

has catalyzed calls for the internal reorganization of FAA multiple times and has 

prompted many proposals to reform ATC governance and funding. Discussions of reform have been ongoing since the early 1980s.4

In 1994, following vice-president Al Gore’s National Partnership for Reinventing 

Government, a very detailed proposal to create a government corporation to provide 

ATC services in the United States was put forward by then Secretary of Transportation Federico Pen ̃ a, the Air Traffic Control Corporation Study. The following year, 

Representative Norman Mineta (D-Calif.) introduced a bill, HR 1441—United States 

Air Traffic Service Corporation Act, on April 6, 1995, which aimed to ‘‘provide for 

the transfer of operating responsibility for air traffic services currently provided by 

the Federal Aviation Administration on behalf of the United States to a separate 

corporate entity.’’ This proposed government corporation would have charged user 

fees to the airlines (in the form of weight and distances charges), would have had 

budget autonomy from Congress, would have had permission to issue bonds, and 

would have been subjected to distinct procurement procedures from the rest of the 

Federal Government. But, lacking support from the airlines, general aviation, and 

many members of Congress, this bill died in Committee. As it was in 1994, disagreement between stakeholders has been a constant theme in all efforts to reform ATC 

provision in this country. 

17 

5 National Civil Aviation Review Commission, Avoiding Aviation Gridlock: A Consensus for 

Change, released on September 10, 1997. 6 House Appropriations Committee, Fiscal Year 2016 Transportation, Housing and Urban Development Bill, released on April 28, 2015. 7 Air Traffic Management (April 30, 2015). ERAM achieves its ultimate milestone. Available 

at: http://www.airtrafficmanagement.net/2015/04/eram-achieves-its-ultimate-milestone/ 

8 International Civil Aviation Organization (2006). Document 9734—Safety Oversight Manual, 

Part A, 2nd edition. 9 European Parliament (2015). Fact Sheets on the European Union—Air Transport: Single European Sky. Available at: http://www.europarl.europa.eu/aboutparliament/en/displayFtu 

.html?ftuId=FTUl5.6.9.html 

Two years after introducing the bill to create a government corporation to provide 

ATC services in the U.S., Norman Mineta led a commission to study the issue. The 

conclusion of the ‘‘Mineta Commission’’ was that the FAA had ‘‘too many cooks’’ (including Congress, OMB, GAO, etc.) playing a role in ATC. The commission proposed 

a performance-based organization capable of charging user fees and issuing bonds.5

As a direct result of the Mineta’s commission, the Air Traffic Organization (ATO) 

was created as an arm of FAA in 2000. This new ATO took a step towards reforming governance, yet it ignored the Commission’s directive to reform ATC’s funding 

structure. 

The creation of the ATO did not solve most of the issues that have been identified, 

including the need for stable funding. The recent draft bill for USDOT funding for 

FY2016 is likely to increase challenges for NextGen deployment. While FAA’s budget was slightly increased, the Facilities & Equipment (F&E) portion of the FAA 

budget –FAA’s capital account, which funds both maintenance of existing infrastructure and modernization—was decreased by $100 million, reaching a 15-year low of 

$2.5 billion.6 With a significant amount of back maintenance needs on FAA’s legacy 

infrastructure, NextGen deployment will once again suffer if funding is cut. Within 

the current budgetary environment, it is hard to envision a scenario where these 

funding levels will have the potential for increase. Recently the FAA completed the 

deployment of the new En Route Automation Modernization (ERAM), a critical system that future NextGen developments will use. While this is a crucial step in the 

implementation of NextGen technology, it experienced cost overruns of $370 million. 

Of that $370 million, FAA Administrator Michael Huerta has noted that $40 million 

can be attributed to the budget sequester.7 With more potential sequesters looming 

in the horizon, passengers, carriers, and our national economy cannot afford to wait. 

International Experiences 

While the United States’ ATC system is operated by the Federal Government and 

financed through taxation, most other developed countries have departed from a 

system provided directly from the national government. In our research, we analyzed six peer countries. Three of the countries (Australia, Germany, and New Zealand) have created government corporations to provide ATC services. The other 

three (Canada, France, and the UK) all have unique structures: an independent 

non-profit user co-operative in Canada, a reformed government agency in France, 

and a public-private partnership in the United Kingdom. All six countries avoid relying on taxation to finance their operations and are instead funded by weight and 

distance fees charged to users of the airspace. 

These nations also have separated their ATC operation from safety regulation, 

which remains in governmental agencies. This separation eliminates an inherent 

conflict of interest that exists today with the FAA doing both jobs. The International 

Civil Aviation Organization (ICAO), the UN agency responsible for aviation safety, 

since the early 2000s has recommended that member states proceed with the separation of ATC provision and regulation.8 In addition, the European Union has also 

mandated separation for all its 27 members.9

Not only is separation recommended by ICAO, but this rationale has also been 

used before in the United States with the Atomic Energy Commission (AEC). Until 

1975, AEC performed research and development (R&D) for the nuclear industry, 

and also regulated the safety of the same industry. In order to eliminate this potential conflict of interest, in 1975 these functions were split into two separate entities: 

the Nuclear Regulatory Commission for safety regulation and the Energy Research 

and Development Administration (merged into the Department of Energy in 1977) 

for R&D. 

In recent discussions here in the United States, there have been concerns that 

non-governmental ATC provision could lead to increased costs to the airspace users, 

poor service, or unsafe operations. The experience of our peer countries demonstrates that commercialized providers have the ability to keep costs in check, upVerDate Nov 24 2008 13:28 Jul 12, 2016 Jkt 075679 PO 00000 Frm 00021 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\20671.TXT JACKIE
18 

10Government Accountability Office (2005). Air Traffic Control: Characteristics and Performance of Selected International Air Navigation Service Providers and Lessons Learned from their 

Commercialization (GAO–05–769); Oster, C. V. and Strong, J. S. (2007). Managing the Skies: 

Public Policy, Organization and Financing of Air Traffic Management. Ashgate. 

grade their systems without public funds, and improve safety.10 Some key factors 

that are essential to the success of these systems include reliable, independent 

sources of revenue; independent, but accountable, management; and direct stakeholder involvement. 

Principles for Air Traffic Control Reform 

The only way to solve the challenges associated with NextGen deployment is 

through transformational governance and funding reform at the FAA. Based on our 

research, the members of the Eno NextGen Working Group have agreed to a set of 

10 Principles for Air Traffic Control, which should be used as a starting point for 

crucial FAA reauthorization discussions. The 10 principles are: 

1. Promote growth and accommodate diversity in the national airspace system 

2. Ensure a coherent, stable, and predictable funding structure for air traffic 

control 

3. Establish a self-sustaining funding mechanism for air traffic control 

4. Enable an efficient procurement system for air traffic control modernization 

5. Enable bonding authority 

6. Include aviation stakeholders in the governance of the air traffic control provider 

7. Enhance and improve the Federal Aviation Administration’s role as the safety 

regulator 

8. Improve the certification processes at the Federal Aviation Administration 

9. Facilitate robust Research & Development for air traffic control 

10. Create and carefully implement a plan to ensure a seamless transition to a 

new system 

A complete description of each principle is included for the record. Also included 

in the record is a list of institutional and individual members of the Eno NextGen 

Working Group. 

The principles expressing the need for predictable and stable funding, and the 

need for a self-sustaining funding mechanism, are inspired by the need to ensure 

that the ATC provider is insulated from political whims. This is extremely important if we wish to avoid what happened in the 2013 government shutdown and the 

budget sequester. Air traffic control is a 24/7 technological service, the backbone of 

the aviation industry, and one of the most important industries in this country. It 

is imprudent to let such a service be subject to political and budgetary cycles. The 

current funding streams must be replaced by direct payments to the ATC provider, 

allowing users to pay for the services they receive. 

Furthermore, bonding authority is essential for more efficient investments in modernization efforts like NextGen. Trying to deploy multi-billion, multi-decade investments in technology with a budget that is appropriated year-by-year, like the FAA 

is subject to, is next to impossible. With bonding, backed by the ATC provider’s own 

stream revenues, better capital management will be possible. 

As for governance, principle number six highlights the need for more stakeholder 

involvement in the system’s governance. While the Management Advisory Council 

(MAC) has an important role in aiding the FAA, this should be taken a step further 

with stakeholders having a direct role in the governance of the system. This involvement would promote a balanced system that is more attentive to the stakeholders’ 

needs. This can provide a more effective way of prioritizing investments, but it 

would not mean that the Federal Government would be taken out of the picture. 

As the guarantor of the public interest, the Federal Government must maintain a 

role in governance. 

These principles are just an initial step to the creation of a better, more efficient 

ATC system. Congress and aviation stakeholders should take the opportunity of the 

momentum that has been created and come up with solutions that will allow U.S. 

ATC to reclaim its title as the gold standard of the world. 

Conclusion 

Congress has an opportunity during the upcoming FAA reauthorization to do 

something bold and transformational that will allow ATC in our country to enter 

into the 21st century. The time for small scale attempts to reform the FAA is over. 

19 

We need to do something big and transformational. Following the numerous discussions that we had during the work of the Eno NextGen Working Group, I have come 

to realize that full-throttle reform is the only way to solve the issues that have been 

identified throughout the decades. The logical conclusion of these discussions and 

the principles that we have put forward is that ATC provision should be spun off 

the FAA into a new independent entity. This new independent entity, which should 

be a government corporation or a non-profit organization that is fully outside the 

Federal Government, needs to have budget independence, needs to be funded by its 

users, and needs a governance structure that is responsive to the industry stakeholders. 

There has been some discussion about removing the entire FAA from DOT or even 

the government; this is an unworkable idea. Even without air traffic control, the 

FAA will have a very important role and essential governmental role as the safety 

regulator of our Nation’s aviation system—this is a critical public role. It is inconceivable that such a role could be handed over to an entity that is outside the direct 

control of the government, even if it is a government corporation. Moreover, this 

would not accomplish the critical separation of the operator from the safety regulator, in line with ICAO standards and the rest of the developed world. 

We should also use this opportunity to remove the inherent conflict of interest 

that exists in having the FAA both providing ATC and regulating ATC safety. No 

other agency within USDOT both operates and regulates a transportation service. 

For example, the Federal Railroad Administration regulates railways and issues 

grants, but does not manage train dispatching. The National Highway Traffic Safety 

Administration regulates the safety of motor vehicles, but does not set speed limits 

or control traffic lights. Separation allows each organization to focus on their core 

mission and avoid potential internal conflicts of interest. A new ATC organization 

could focus on serving customers without having broader regulatory responsibilities, 

and the FAA could focus on regulating ATC safety and the rest of the aviation industry, ensuring that the United States airspace continues to be the safest in the 

world. ICAO recommendations and our own experience in this country are very 

clear that separation of safety regulation from safety regulation is a worthy goal. 

Some have raised the question of ‘‘what problem’’ we are trying to solve. While 

it is true that the FAA has been making progress with NextGen, this progress is 

still far too slow compared to what is needed. The fact is that with the current budget and regulatory environment, only so much can be done. Only governance and 

funding reform, and the creation of a new independent entity to provide air traffic 

control services, will allow the NextGen effort to be significantly accelerated. After 

30 years of attempted reforms, there is now an opportunity to move forward and 

reform the U.S. ATC provision into a system more ready to deal with the challenges 

that the increase of air traffic in the next decades will bring. 

APPENDIX

ENO CENTER FOR TRANSPORTATION NEXTGEN WORKING GROUP—STATEMENT OF

PRINCIPLES FOR AIR TRAFFIC CONTROL REFORM

Principles for Air Traffic Control Reform 

1. Promote growth and accommodate diversity in the national airspace system 

Access to the national airspace system is crucial for the economy of the Nation 

as well as of many small communities around the country. General and business 

aviation represent an important share of the traffic in our airspace and make a vital 

contribution to the national economy. Both domestic and international air carriers 

depend on an efficient system, and government is also a critical user. Effective representation of all airspace users in the governance structure of the air traffic control 

provider is essential to ensure that stakeholders’ interests are safeguarded. Congress and the Federal Government should also continue to play a substantial role 

in promoting the growth of the entire aviation system to ensure that adequate capacity exists, delays are reduced, and access is maximized. 

2. Ensure a coherent, stable, and predictable funding structure for air traffic control 

The current funding mechanism for air traffic control provided by annual appropriations is not an effective mechanism for a highly technological and capital intensive service business. Air traffic control should be removed from the Federal budget 

process and should not be dependent on annual appropriations. This would insulate 

air traffic control from events like the budget sequester and Federal Government 

shutdown of 2013. 

20 

3. Establish a self-sustaining funding mechanism for air traffic control 

The current funding system, which is based on a mix of taxes and general revenues, should be replaced, to the extent possible, with direct payments to the air traffic control provider. This funding method would create a self-sustaining system and 

would be in line with international principles. It would also improve the link between the services provided and the revenues coming in, providing an incentive for 

efficiency. Additionally, allowing all sectors of aviation to be a part of its governance 

will allow them to be more engaged in the system’s modernization. 

4. Enable an efficient procurement system for air traffic control modernization 

Despite 1996 legislation to exempt the FAA from many Federal procurement 

rules, today’s FAA procurement system substantially mirrors that of the rest of the 

Federal Government and remains inefficient. These procurement rules and procedures are not effectively designed for the highly technological ATC system, and 

hinder the system’s modernization. Air traffic control modernization must include 

improvements to procurement processes. 

5. Enable bonding authority 

The air traffic control provider will need the ability to issue debt, including bonding authority to aid in long term financing of capital expenditures. The ability to 

issue bonds, backed by the user-based revenues streams, will ensure better capital 

planning and will help modernization efforts like NextGen to be more effectively 

managed and implemented. 

6. Include aviation stakeholders in the governance of the air traffic control provider 

Stakeholders must play a strong role in governance of the air traffic control provider in order for it to be responsive to the needs of its users and other aviation 

stakeholders. This involvement would promote a system that is more attentive to 

the stakeholders’ needs. This could be a more effective way of prioritizing investments. The Federal Government will have a role in the governance structure as a 

guarantor of the public interest. 

7. Enhance and improve the Federal Aviation Administration’s role as the safety regulator 

The United States has the safest airspace system in the world. The FAA should 

retain its role as the safety regulator of the airspace system after reform to ensure 

that it will continue to be the safest in the world. This will bring the FAA in line 

with the rest of the administrations within the U.S. Department of Transportation, 

which regulate safety but do not operate the services. In addition, existing rules and 

procedures should be reviewed, streamlined, and improved, including expediting 

safety regulatory procedures. Separation of provision of air traffic control services 

from safety regulation will also follow international recommendations, allowing each 

organization (the FAA and the air traffic control provider) to focus on their core responsibilities and avoid potential internal conflicts of interest. 

8. Improve the certification processes at the Federal Aviation Administration 

A critical component of FAA’s continuing role as government safety regulator is 

the certification and approval processes of aviation products, flight standards, and 

people. Effective and timely certification processes are essential for the industry and 

the Nation’s economy, and delays in the approval processes can be extremely costly 

and disruptive to the successful implementation of NextGen, third class medical reform, updating the existing general aviation fleet with modern equipment that will 

improve flight safety, among other concerns. Moreover, the current processes are 

unable to keep pace with the rapid advancements in technology and must be reformed, quickly, in order for the national aviation system to continue to be the best 

and safest in the world. The FAA culture, as well as the regulatory and certification 

processes, especially in the area of general aviation, need to evolve in order to better 

keep pace with changes in technology. 

9. Facilitate robust Research & Development for air traffic control 

The FAA, with the support of NASA, has sponsored laudable Research & Development (R&D) to improve the safety and efficiency of our skies. Like other areas within the agency, however, this work is constrained by Federal budget and procurement 

procedures that delay projects and increase their costs. R&D should be freed of such 

constraints. 

21 

10. Create and carefully implement a plan to ensure a seamless transition to a new 

system 

The transition to any new approach for financing and governance must be 

thoughtfully and meticulously implemented. Every effort must be made to avoid any 

adverse effects on the day-to-day functioning of the air traffic system during, or subsequent to, the transition. An important component is to provide as stable and secure a working environment for the employees of the agency as possible, including 

the continuity of the collective bargaining relationships and processes for employees 

who currently are represented. The transition in the financing should be done in 

a way that avoids any significant changes in the financial burdens of the users of 

the system. Sufficient time must be given to all stakeholders to prepare for the new 

operating environment. 

Disclaimer: While we succeeded in reaching a broad consensus on the need for air 

traffic control reform, as is often the case with an exercise like this, these principles, 

in whole or in part, may not necessarily represent the views of all who participated. 

MEMBERSHIP

Co-Chairs 

Former Senator Byron Dorgan 

Arent Fox LLP 

Former Secretary of Transportation Jim Burnley 

Venable LLP 

Membership Organizations 

Aerospace Industries Association 

Alaska Airlines 

Air Line Pilots Association 

Aircraft Owners and Pilots Association 

Airlines for America 

American Airlines 

Boeing 

Business Roundtable 

International Air Transport Association 

jetBlue 

L–3 Communications 

National Air Traffic Controllers Association 

National Business Aviation Association 

Reason Foundation 

U.S. Chamber of Commerce 

U.S. Travel Association 

Individuals 

Jim Coyne, Cassidy & Associates 

Steve Ditmeyer, Michigan State University 

Jack Fearnsides, MJF Strategies LLC 

Aaron Gellman, Former Director of Northwestern Univ. Transportation Center 

David Grizzle, Dazzle Partners LLC, Former COO, FAA’s ATO 

John Harman, Former Deputy Director, Office of Aviation Analysis, U.S. DOT 

Norman Mineta, Former Sec. of Commerce and Former Sec. of Transportation 

Eric Peterson, Transportation Policy Consultant 

Dorothy Robyn, Former Special Assistant to the President for Economic Policy 

The CHAIRMAN. Thank you, Senator Dorgan. Nice to have you 

back. We will now turn to Mr. Smisek. 

STATEMENT OF JEFFERY A. SMISEK, CHAIRMAN, PRESIDENT 

AND CEO, UNITED AIRLINES 

Mr. SMISEK. Thank you, Chairman Thune, Ranking Member Nelson, and members of the Committee for the opportunity to be here. 

The reform of our Nation’s air traffic control system is a critical 

issue for the users of the national airspace, for our passengers and 

22 

employees, and for the many stakeholders across the country who 

benefit from a healthy commercial aviation system. 

A4A, Airlines for America, for which I serve as Chairman, has 

dedicated a tremendous amount of resources, time, and attention 

to developing a rigorous, fact-based study of air traffic control reform, including a global survey of the best practices for operation 

of air navigation service providers. 

All of our work points to one conclusion: the American Air Traffic 

Control system needs complete transformation in order to modernize to meet the demands of the future, and the time for that 

transformation is now. We cannot continue with the status quo. 

Today, all users of the ATC system are beholden to a World War 

II era radar-based system that, while world class in safety, is inefficient and delay-ridden. For decades, policymakers and stakeholders have almost unanimously recognized the need for modernization. 

A long string of reports from Presidentially-appointed aviation 

commissions, the Department of Transportation Inspector General, 

the Government Accountability Office, and independent private 

sector experts have found the FAA’s progress delivering NextGen 

capabilities has not met expectations, calling into serious question 

the agency’s ability to deliver on its mission under the existing 

funding and governance structure. 

The problem is not the leadership or the workforce of the FAA. 

It is the funding and governance structure that we must fix. 

There are many countries around the world that have already 

successfully transformed their own air traffic control systems. A4A 

has done extensive benchmarking of the success of these models. 

Our analysis suggests the following six basic principles for success of a transformed air navigation service provider: one, separation of the ATC operations and the ATC safety regulation functions. Two, a non-profit corporation operating the ATC system with 

independent multi-stakeholder Board governance, free from political influence over decisionmaking. 

Three, a professional, effective management team of the ATC 

provider incentivized to pursue efficiencies without the numerous 

constraints imposed on government agencies. Four, a fair, selffunding user fee model based on the cost of ATC services, allowing 

for access to capital markets, and a steady predictable, reliable 

stream of funding that is not subject to governmental budgetary 

constraints. 

Five, the ability to manage assets and capital investments in a 

way that allows far greater speed to market of technological modernization, and six, transparency in user fees, so that users and 

their customers alike know what they are paying, allowing users 

full ability to recover costs. 

Under a transformed ATC system, the total of new user fees for 

airlines to pay for the new air traffic entity plus any new fee on 

airlines or their passengers to help fund the remaining functions 

of the FAA should not exceed the total tax burden on the airlines 

and their passengers today. 

With independent governance, operation and funding of a transformed ATC system, the FAA could then turn its full attention to 

what it does best, safety, regulation, and oversight. A transformed 

23 

1 A4A does not represent Delta Air Lines in this testimony. 

ATC system could continue to maintain safety as the utmost priority while creating efficiencies, delay reductions and environmental benefits from reduced fuel burn. 

The inefficiencies, delays and costs of the current ATC system 

will only grow over time, so there is no better time to transform 

the ATC system than now. 

We are capable of rising to this challenge, as have many other 

countries before us, if we conduct this transformation methodically 

and thoughtfully while giving proper consideration to transition 

issues and risk mitigation. 

The result of this transformation would be a modernized U.S. air 

navigation service provider that will better deliver the benefits that 

the users of the system, our employees, our passengers, and this 

great nation expect and deserve. 

Thank you. 

[The prepared statement of Mr. Smisek follows:] 

PREPARED STATEMENT OF JEFFERY A. SMISEK, CHAIRMAN, PRESIDENT AND CEO, 

UNITED AIRLINES

Chairman Thune and Ranking Member Nelson, I appreciate the opportunity to 

testify before the Committee today. I’m Jeff Smisek, and I am Chairman, President 

and CEO of United Airlines. I am testifying today as Chairman of the Board for 

our trade association, Airlines for America (A4A).1

As the Committee knows, the airline industry believes that fundamental reform 

presents significant opportunities for improving our air traffic system, providing real 

benefits to the users, air travelers, employees, communities and businesses across 

America. We did not come to this conclusion easily and we do not take the implications and risks of fundamental reform lightly. We have dedicated a tremendous 

amount of resources, time and attention to this topic, including a global survey of 

best practices for operation of national air navigation service providers. Our work 

leads us to the conclusion that the American air traffic control system needs complete 

transformation in order to modernize to meet the demands of the future, and the 

time for that transformation is now. 

Safety First 

At the outset, I would like to make it clear that this discussion takes place under 

the absolute premise that safety comes first. Under any and all scenarios, first and 

foremost, the FAA must remain and retain the role as a world-class safety regulator. Safety of operations is the bedrock principle by which each and every person 

in our industry lives, and transforming our ATC system will not change that in any 

manner. In fact, ATC transformation would reinforce safety as the primary mission 

and responsibility of the FAA, making it more of a traditional regulator versus the 

current system where FAA is both the operator and regulator of the air traffic services. 

Why is ATC reform important to passengers and consumers? 

For some context, A4A member carriers and their affiliates transport more than 

90 percent of all U.S. airline passenger and cargo traffic. In 2014, the U.S. airline 

industry averaged more than 2 million passengers and nearly 50,000 tons of cargo 

carried on 27,000 flights per day, providing economic benefits to communities 

throughout the United States. Today, all users of ATC are beholden to a World War 

II-era, radar-based system that, while safe, is inefficient and delay-ridden. As an example, when I joined the airline industry 20 years ago, a flight between DCA and 

EWR was scheduled for under one hour. Today, we must schedule that same flight 

for almost an hour and a half to account for ATC delays—more than twice the actual flying time. 

What is the problem we are trying to solve? 

For decades, policymakers and stakeholders have almost unanimously recognized 

the need to modernize our antiquated ATC system. There are many countries 

around the world that have already successfully transformed their own air traffic 

24 

control systems. It’s time for the U.S. to do the same. To their credit, FAA leadership has been attempting to modernize the ATC system for more than a decade, and 

we believe that Administrator Huerta, Deputy Administrator Whitaker, Assistant 

Administrator Bolton, and the teams they lead are working as hard and effectively 

as possible within their budget and organizational constraints to provide the safest 

air traffic system in the world. Indeed, the leadership and action they and the dedicated workforce of the FAA provided following the act of sabotage at the Aurora facility last September are worthy of praise. However, a string of reports from presidentially appointed aviation commissions, the Department of Transportation Inspector General, the Government Accountability Office, and independent private sector 

experts have found that the FAA’s progress delivering NextGen capabilities has not 

met expectations, calling into serious question the agency’s ability to deliver on its 

mission under the existing funding and governance structure. This was most recently emphasized in a National Research Council report that indicated FAA should 

‘reset expectations’ for NextGen. The problem is not the leadership or the workforce: 

it’s the funding and governance structure that we must fix. 

Too often, politics and budget constraints end up being the major influencers of 

how the system operates, which means all the users of the system are beholden to 

decisions not necessarily in the best interest of the system users. We believe an air 

traffic system that is accountable to stakeholders would operate more efficiently and 

effectively to the benefit of passengers and all users of the system. 

What is the solution? 

A4A has undertaken considerable research on various models of air traffic organizations around the world. In particular, we have done a thorough analysis to benchmark and assess the governance, financial and operational performance of the U.S., 

Canadian and European ATC models in order to make an informed comparison between our current system and those systems engaging in best practices outside the 

United States. Our evaluation reviewed the safety, predictability, efficiency, cost, 

productivity, customer service and NextGen implementation performance of each of 

the organizations. 

Our benchmarking and rigorous fact-based assessment of the governance, financial and operational performance of the U.S., Canadian and European ATC models 

suggests some basic principles for the success of a transformed air navigation service provider. There must be: 

(1) Separation of the ATC operations and ATC safety regulation functions; 

(2) A non-profit corporation operating the ATC system, with independent, multistakeholder board governance free from political influence over decision-making; 

(3) A professional, effective management team of the ATC provider, incentivized 

to pursue efficiencies without the constraints imposed on government agencies 

that hamper their ability to manage more nimbly and effectively; 

(4) A fair self-funding user fee model based on the cost of ATC services, free from 

the start and stop budget constraints that have resulted in sequester and furloughs of air traffic controllers, allowing for access to capital markets and a 

steady, predictable, reliable stream of funding that isn’t subject to governmental budgetary constraints; 

(5) The ability to manage assets and capital investments in a way that allows far 

greater speed to market of technological modernization; and, 

(6) Transparency in user fees so that users and their customers alike know what 

they are paying, allowing users full ability to recover costs. 

Commercial airlines, who are the primary and disproportionate funders of today’s 

system, believe that the total of new user fees for airlines to fund the new air traffic 

entity, plus any new fee on airlines or their passengers to help fund the remaining 

functions of the FAA, should not exceed the total tax burden on the airlines and 

their passengers today. 

These success factors lead to an effective operation because an independent ATC 

entity can operate with stable and predictable funding and governance certainty, 

subject to strong safety regulation and oversight by the FAA, which could then solely focus on its core function rather than playing the duel and conflicting roles of 

both operator and regulator. An organization that is accountable to stakeholders 

and users of the system will drive effective decision-making and efficient operations 

in order to capture the full benefits of the ATC system. 

Further, an independent ATC system will be far more likely to adapt quickly to 

keep pace with the constant evolution that is inherent in our industry. In aviation, 

change happens at 500 miles per hour, and many of the challenges, risks and opporVerDate Nov 24 2008 13:28 Jul 12, 2016 Jkt 075679 PO 00000 Frm 00028 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\20671.TXT JACKIE
25 

tunities we face tomorrow will be different than those we face today. We need an 

ATC system that is nimble, flexible, forward-looking and technologically advanced, 

with a freedom and ability to change that the current system simply does not have. 

Our work to date shows that a non-profit governance structure would deliver the 

greatest benefits for a transformed ATC system. This type of entity would continue 

to maintain safety as the utmost priority, while also creating significant efficiencies 

and improvements, delivering greater value for all users of the system, our employees, our passengers and the communities that depend on the services we provide. 

How do we transition? 

All stakeholders recognize transitioning from a government organization to an 

independent non-profit organization is a serious and complex undertaking that 

needs to be done in a methodical and thoughtful manner. 

The inefficiencies, delays and costs of the current ATC system will only grow over 

time, so there is no better time to transform the ATC than now. As part of our ongoing research, we are working on a detailed transition plan and policy principles 

for many of the unanswered questions that arise when you dig deeply into these 

issues. 

To those who suggest change carries too much risk, we would reply that the risk 

of doing nothing is higher. While our system is safe now, we are moving in the 

wrong direction. We are at a crossroads, with an opportunity to take advantage of 

the leadership of Congress and the stakeholder community to come together and 

transform our Nation’s ATC system in a way that will ensure that our country retains our global leadership. While there are indeed risks in making major changes, 

we believe the risks and transition issues can be mitigated. We are capable of rising 

to this challenge, as have many other countries before us. It would be a mistake 

to accept the status quo, just because progress will take effort. 

It is easy to get buried in the complexities and tangential questions that arise 

with the ATC reform debate. However, if you step back and look at the concept, it 

is really quite simple. We believe the air traffic service provider portion of the FAA 

should become a self-funding organization, independent of governmental interference, turned over to a non-profit entity governed and held accountable by a board 

of stakeholders. We believe that ATC services would operate more effectively and 

efficiently outside the control of government and the funding unpredictability and 

politicized decisions that come with it. With a predictable funding structure and direct operational transparency and accountability to users of the system, the modernized 

U.S. air navigation service provider would better benefit the users of the system, 

the employees of the system and the passengers they serve. 

We look forward to working together with the Committee. Thank you. 

The CHAIRMAN. Thank you, Mr. Smisek. Mr. Rinaldi? 

STATEMENT OF PAUL M. RINALDI, PRESIDENT, NATIONAL AIR 

TRAFFIC CONTROLLERS ASSOCIATION, AFL–CIO (NATCA) 

Mr. RINALDI. Mr. Chairman and Senators of the Committee, 

thank you for the opportunity to testify in front of you today at this 

important hearing to discuss the future of our aviation system. 

We all have a stake in the national airspace system, an economic 

engine for this country that contributes $1.5 trillion in gross domestic product and provides over 12 million American jobs. 

We invented aviation in this country. It is an American tradition. 

Over the last 100 years, we have dreamed, innovated, implemented 

the unbelievable in aviation. Currently, we run the largest, safest, 

most efficient, most complex, most diverse system in the world. Our 

system is incomparable, unequaled, and unrivaled by any other 

country. 

For example, the next largest airspace system to the United 

States is Canada. They run roughly 12 million operations a year. 

On average, the United States’ airspace system runs over 132 million operations a year. The United States’ airspace system and the 

26 

FAA is considered the gold standard in the world aviation community. 

Yet, the reality is in order to keep that honor, a change is needed. Currently, we face many challenges in responding to the given 

problems of an unstable, unpredictable funding stream, including 

but not limited to the inability to finance long term projects such 

as NextGen, the inability to grow the national airspace system for 

new users, the UAV community and commercial space, the inability to modernize our aging infrastructure. Currently, our 20 en 

route centers throughout the country are over 50 years old with no 

plan of replacing them. 

Currently, we are struggling to maintain our proper resources 

and staffing our busiest air traffic control facilities. Our certified 

air traffic controllers are at an all-time low. 

The upcoming FAA reauthorization bill must address the lack of 

a predictable, stable funding stream for our continuous hyper critical safety aviation operation. 

We understand that addressing the stop and go funding problems 

will lead to an examination of a potential structure change for the 

FAA. We believe it is time for a structure change. The current system is not dynamic enough to address the needs of air traffic control operations in the future. 

Any such change or reform must be carefully examined to prevent the unintended consequences of negatively affecting the safety 

and efficiency of our national airspace system. Every stakeholder 

in the national airspace system should work together to make sure 

the United States continues to be the global leader in aviation. 

Any reform must address the safety and efficiency of the national 

airspace system. It must be mission driven. It must have a process 

that provides a stable, predictable funding system to adequately 

support air traffic control services, staffing, hiring, training, longterm projects such as NextGen. Any change must allow for continued growth in our aviation system. Any change must be dynamic. 

The aviation system must continue to provide all services for all 

segments of the aviation community. Any change we make must be 

precision like so that we do not interrupt the day to day operation 

of the national airspace system. 

Our national airspace system is an American treasure. Aviation 

is uniquely an American tradition. We cannot continue to shortchange it. We are still currently recovering from the sequestration 

cuts of 2013. Another round of cuts set to take place this year will 

shrink our country’s aviation footprint forever. 

We need to make appropriate changes to secure a stable funding 

stream for aviation. We need to establish a proper governance 

structure for our national airspace system, a structure that is not 

laden with bureaucratic lines of business. A structure that is not 

burdened or marred with bureaucratic process. 

We need a dynamic structure that is nimble. We need a structure 

that will allow us to grow aviation in this country and not shrink 

it. We need a structure that will allow us to modernize our facilities, equipment, procedures, technology, in a realistic timeframe. 

We need a structure that will give us the competitive edge to ensure our future leadership in the global aviation community. 

27 

Mr. Chairman, I thank you for the opportunity to testify in front 

of you today. I look forward to answering any of your questions or 

any questions the Senators may have. Thank you. 

[The prepared statement of Mr. Rinaldi follows:] 

PREPARED STATEMENT OF PAUL M. RINALDI, PRESIDENT, NATIONAL AIR TRAFFIC

CONTROLLERS ASSOCIATION, AFL–CIO (NATCA) 

Introduction 

Chairman Thune, Senator Nelson, members of the Committee, thank you for inviting me to testify before you today on the reauthorization of the Federal Aviation 

Administration (FAA). 

The National Air Traffic Controllers Association (NATCA) is the exclusive representative of nearly 20,000 aviation safety professionals, including nearly 14,000 

air traffic controllers employed by the FAA, the Department of Defense (DOD), and 

the private sector in the FAA’s Federal Contract Tower program. In addition, 

NATCA represents FAA’s Alaska flight service station air traffic control specialists, 

engineers and architects, traffic management coordinators, Notice to Airmen 

(NOTAM) service, flight procedures specialists, aircraft certification professionals, 

agency operational support staff, aviation technical systems specialists, automation 

specialists, drug abatement employees, airports division, regional counsels, and personnel from FAA’s logistics, budget, finance, acquisitions, and information technology divisions. 

Air traffic controllers and other aviation safety professionals are dedicated to ensuring that our National Airspace System (NAS) is the safest and most efficient in 

the world. Every day, air traffic controllers handle over two million passengers traveling within the busiest and most complex airspace in the world, with roughly 5,000 

planes in the sky at any given moment. Domestic airlines served an estimated 756.3 

million passengers in 2014. In order to maintain that safety and efficiency, aviation 

safety professionals work to improve safety procedures, modernize the NAS, and implement new technology. We have professional controllers involved in nearly every 

FAA program related to modernization and Next Generation Air Transportation 

System (NextGen). 

The NAS is an integral part of our national infrastructure and an essential driver 

of our economy. Each and every day, millions of individuals and businesses in the 

U.S. economy rely on the services provided by our complex web of aviation routes. 

Aviation drives nearly 12 million jobs and contributes $1.5 trillion to the Nation’s 

economy. 

The FAA Needs a Stable, Predictable Funding Stream 

For years the FAA has been faced with an unstable, unpredictable funding 

stream, and each interruption has negatively affected all aspects of the FAA. The 

FAA has had to spread its resources thinly between fully staffing its 24/7 operation, 

modernizing the airspace, and performing the daily maintenance required to sustain 

an aging infrastructure. When sequestration cuts were implemented, the situation 

became even more dire. The FAA was forced to furlough its employees, including 

air traffic controllers, place preventative maintenance on hold, and consider closing 

Federal and contract towers, curtailing air traffic services in smaller markets. The 

cuts also prevented the FAA from hiring new trainees to replace the certified controllers who retired, adding stress to an already understaffed workforce. Sequestration cuts did not affect the FAA’s budget for Fiscal Years (FY) 2014 and 2015, but 

the cuts will return in FY 2016. 

The upcoming FAA Reauthorization bill must address the lack of a predictable, 

stable funding stream to support a safety-focused 24/7 operational system. We understand that addressing these stop-and-go funding problems may lead to an examination of potential structural changes for the FAA, but we implore this committee 

not to merely examine the structure of the FAA. Any change that fails to guarantee 

a stable, predictable funding stream could create new unintended consequences, 

without solving the true dilemma. 

As members of the aviation community, we must be precise in identifying current 

problems, and we must also work together to find solutions that create a predictable 

funding stream while maintaining the safety and efficiency of the system. 

NATCA looks forward to working with Congress and other stakeholders to determine a solution that provides a stable and predictable funding stream while also 

protecting the air traffic control system and its future growth. Details matter in this 

process. No system is like the United States’ National Airspace System, and no 

model used elsewhere in the world is perfect—certainly not perfect for a system as 

28 

large, complicated, and diverse as ours. Any new model must be mission-driven and 

must ensure robust, continued aviation sector growth throughout every segment of 

our industry and country. We must protect and strengthen the great national asset 

that is our air traffic control system. 

Existing Problems at the FAA 

The lack of a stable, predicable funding stream has led to serious problems at the 

FAA. We have all seen these issues, which have been especially serious over the last 

five years. We believe that problems for FAA are not caused by the failure of Congressional appropriators to provide sufficient funding to the system, rather they result from a broken process resulting in short-term funding bills, government shutdowns, partial FAA shutdowns, threatened government-wide and FAA specific shutdowns, sequestration, and 23 short-term authorization extensions to name a few. 

The NAS is held hostage by this unpredictable and unstable funding stream. 

FAA operations and redundancy: The lack of a stable, predictable funding stream 

means that the FAA has had to prioritize the basic maintenance and repairs that 

ensure current operations over maintaining safety redundancies and making improvements to the system. This is a slippery slope because, when stressed, the existing system cannot maintain its safety and efficiency without such redundancies and 

continual improvements. The 2013 government shutdown forced the FAA to halt important maintenance, and forced a fix-on-fail maintenance policy. Additionally, FAA 

working groups were unable to meet or travel during the shutdown, delaying implementation of new airspace and safety procedures. 

In the spring of 2013, the FAA made sequester cuts by delaying non-critical repairs and the requisition of new replacement parts. The FAA designated a list of 

56 airports and critical facilities. Any facility not on the list was subjected to a very 

strict requisition standard: a requisition would be granted only in extremely critical 

situations with a high potential to negatively affect safety or disrupt the expeditious 

flow of air traffic, have a high public visibility, or have the potential for creating 

a real and present danger to the flying public. Even a grounded aircraft or an offline facility without communications ability were not necessarily considered sufficient justifications. 

Staffing: The system has lost close to 1,000 air traffic controllers (6.2 percent of 

the workforce) between May 2013 and today, down to 13,902 from 14,793. This loss 

exacerbates an already tenuous staffing situation, in which 3,025 of 13,902 controllers are eligible to retire today. Of the 13,902 total controllers, 1,680 are still in 

training, meaning they have varying levels of independence controlling traffic. If the 

current situation continues unchecked, the NAS will see an increased number of inadequately staffed and even critically staffed facilities. Such facilities require controllers to work overtime to adequately cover all needed positions. In some cases, 

those facilities do not have the staffing, even with overtime, to open all of the necessary positions. Any further staffing reductions will likely have a detrimental and 

immediate effect on capacity, meaning fewer planes in the sky and greater potential 

for delays. 

For example, New York TRACON (N90) and Chicago TRACON (C90) present a 

unique problem. New hires who become FAA training academy graduates rarely, if 

ever, achieve full certification at these facilities, due to the complexity of their respective airspaces. As of May 1, 2015, N90 had 148 Certified Professional Controllers (CPCs), compared to 160 in 2010. Today, 53 are eligible to retire, meaning 

roughly 36 percent of N90s fully trained controllers could leave at any time. N90 

has five airspace areas, and as of May 1, 2015, 18 of the 37 CPCs (or 48 percent) 

who provide radar approach control services for Newark Airport are eligible to retire. It would not be possible to safely maintain the same number of operations per 

day into and out of Newark Airport if all 18 were to retire before anyone is trained 

to replace them. 

Due to the critical staffing levels, the controllers work six-day workweeks and are 

often held over for additional overtime. The workforce suffers from significant fatigue problems due to extended workdays and workweeks. The National Transportation Safety Board (NTSB) identified this as one of its highest priority safety concerns. Understaffing also hinders facilities throughout the country from deploying 

NextGen programs, procedures, and equipment. 

Hiring and training: Sequestration forced the FAA to cut its Operations budget, 

resulting in furloughs for FAA employees. Those cuts also led the FAA to institute 

a hiring freeze between March 2013 and December 2013. The FAA training academy 

in Oklahoma City was closed for most of 2013 as a result of sequestration, so the 

FAA has not been able to keep up with the pace of attrition. Even if the FAA hired 

at its maximum rate in 2015 and 2016, it will still not make up for the attrition 

seen in 2013 through 2016, and will not adequately staff our facilities in the near 

29 

term without a higher priority placed on training, and improvements in the placement and transfer processes. There is an estimated 25 percent failure rate at the 

Academy, and additional trainees fail once they are assigned to their facilities. 

Moreover, the Academy graduates who are successful in becoming CPCs take two 

to four years to progress through the on-the-job-training requirements. The combined effects of these constraints result in a shortage of fully certified air traffic controllers and negatively affects the FAA’s ability to train new hires, develop and implement modern technology, and efficiently control traffic. 

Once new hires graduate from the FAA Academy, the FAA’s flawed and inefficient 

employee placement and transfer process also presents challenges. Many facilities 

are in desperate need of qualified transfers, and many employees want to transfer 

to higher level facilities that need additional staffing. Historically, the FAA has 

placed air traffic control trainees from the Academy into higher level facilities, 

which typically have a higher failure rate than the nationwide average of 25 percent. This works against the FAA’s efforts to efficiently hire, train and retain new 

controllers. Fully certified controllers should be encouraged to transfer to the most 

important and critically staffed facilities in the NAS. Their path to do so should be 

eased while new trainees backfill positions at lower activity facilities. 

Modernization delays: Air traffic controllers and NATCA are working closely with 

the FAA to fully realize the benefits of NextGen modernization projects. We have 

made significant strides recently, including the complete implementation of En 

Route Automation Modernization (ERAM), which became fully operational at the 

final air route traffic control center at the end of March 2015. Terminal Automation 

Modernization and Replacement (TAMR) and Standard Terminal Automation Replacement System (STARS) equipment were successfully implemented at multiple 

facilities throughout the country in 2014 (21 facilities are scheduled for installations 

in 2015, and 90 facilities through 2018). 

Last year, the FAA implemented 61 new procedures in the Houston area and 77 

in North Texas as part of the growing Optimization of Airspace and Procedures in 

the Metroplex (OAPM) project. The System Wide Information Management (SWIM) 

Visualization Tool (SVT) is a new product that was installed last year at Southern 

California TRACON (SCT). It provides surface situational awareness to controllers, 

traffic management specialists, and frontline managers, and allows them access to 

airport surface data that was previously unavailable outside of a tower cab. 

NextGen is already having beneficial effects on air travel in our nation, yet we 

cannot overlook the difficulties that interruptions in the funding stream have created for these modernization projects. Lack of a stable funding stream makes planning for multi-year projects almost impossible. As a result, we have seen significant 

delays and inefficiencies in modernization. For example, ERAM, which was scheduled to fully replace the old system in August 2014 at 20 FAA Air Route Traffic 

Control Centers nationwide, was pushed back to March 2015 due to the April 2013 

furloughs. That delay cost more than $42 million. Likewise, the sequester furloughs 

and government shutdown significantly slowed the progress of the OAPM project at 

nine test sites across the country. Final implementation at the Houston test site had 

been scheduled for December 2013. Implementation and its associated benefits were 

delayed until May 2014 due to the furloughs. 

The FAA is making progress on NextGen, and has successfully reached significant 

milestones, but the funding stream needs to be addressed to prevent further time 

and financial overruns. We have made progress, but all of our successes will be delayed and more expensive as long as the funding stream remains unstable and unpredictable. As you know, stop-and-start funding impedes the FAA’s ability to properly staff collaborative workgroups tasked with the design, testing, and implementation of new technologies and procedures. These recent successes are important, but 

we cannot forget that each of them faced numerous setbacks due to uncertain funding. The NAS is a 24/7 operation, and the aviation safety professionals at the FAA 

must continue to run that system while simultaneously working on research, development, testing, and the implementation of technology modernization. 

Potential tower closures, reduced hours of operation, and loss of towers: Funding 

shortages threaten services to rural and small communities that benefit from the 

business that air service brings. When sequestration cuts were initially announced, 

the FAA was prepared to close towers and even released a list of over 230 towers 

under consideration for closure. Ultimately the FAA was able to avoid tower closures, but closures could once again become a necessity. General aviation, military 

exercises, and flight school services at these airports would be at risk, and we would 

see a reduction in services for airlines, commercial interests, and private pilots who 

rely on towers at smaller airports for air traffic services and for secondary services 

like pilot training. 

30 

Sequestration budget caps or cuts could potentially lead to another significant 

consequence. More than 100 of the Federal Contract Towers (FCT) throughout the 

country could be closed. This would affect general aviation and rural communities 

that depend on the services those towers provide. While funding for the FCT program is currently moving through the appropriations process, we are concerned that 

future sequestration cuts could ultimately shut down many of the towers. Employees at FAA facilities would see their workload increase dramatically because FAA 

facilities would have to take over the services that many of the FCTs currently provide. This would add stress just as those FAA facilities face reduced staffing due 

to sequestration cuts and the resultant furloughs. Contract towers also provide crucial support to our Nation’s military and private enterprises. For example, one of 

only two Apache helicopter maintenance units in the country is located at Lone Star 

Executive Airport in Texas. 

Physical infrastructure: The FAA cannot keep up with replacing its outdated infrastructure and technology at current budget levels. The average age of facilities 

in the NAS is 50 years, and FAA officials have testified that the agency already 

struggles with the maintenance of existing infrastructure. The FAA recognizes that 

it cannot expect all aging infrastructure to be replaced simultaneously, even though 

many facilities were originally built at the same time. 

The 2013 government shutdown disrupted the maintenance of NAS infrastructure, at which point many projects were delayed due to the furlough of FAA employees, including engineers, architects, and aircraft certification and airport division 

employees. Safety-related equipment modifications to aircraft, as well as engineering and testing services were also threatened, negatively affecting maintenance to 

infrastructure as well as the FAA’s modernization efforts. With 70 percent of the 

technical workforce furloughed, important projects were delayed at some of the Nation’s busiest airports. 

The air traffic control tower at Tampa International Airport (TPA) provides an enlightening example. At a recent hearing of the Transportation, Housing, and Urban 

Development (THUD) Subcommittee of the U.S. House of Representatives Committee on Appropriations, Rep. Jolly of Florida highlighted the current condition of 

NAS facilities across the country. The Congressman noted that TPA is about to ‘‘fall 

over the cliff’’ in terms of its expected lifespan. New, modern equipment is unable 

to fit into the aging tower, and its condition is declining rapidly. This creates obvious challenges for the FAA, as the agency must choose between the pressure to 

modernize and the immediate need to repair and maintain facilities such as TPA. 

Broad Core Principles 

A discussion on reform must take place in a well-reasoned and rational manner. 

Rushing into any structural changes could lead to unintended consequences. Change 

for the sake of change that does not guarantee a stable, predictable funding stream 

does nothing more than create a different bureaucracy. NATCA will oppose any 

overhaul that creates a private, for-profit entity to oversee air traffic control services. That would simply create a new funding problem in place of the old one. Any 

reform must ultimately ensure the following: 

1. Safety and efficiency must remain the top priorities; 

2. Stable, predictable funding must adequately support air 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 continues to provide services to all segments of the 

aviation community, from commercial passenger carriers and cargo haulers, to 

business jets, to general aviation, from the major airports to those in rural 

America. 

It is critical that the specifics of any reform are vetted among all stakeholders, 

and NATCA will not commit to any concepts in a vacuum. Not only do the principles 

of reform need to be sufficient to meet the needs of the NAS, but so do the details 

of any overhaul. We are concerned that the transition to a new system could cause 

disruptions in service that could negatively affect aviation as an economic engine. 

It is especially important that any transition is well planned and thoughtfully designed in order to limit any disruptions—there simply cannot be a disruption in 

services during a transition. The transition period must also be sufficient. Change 

cannot be made by flipping a switch. Given the National Airspace System’s 24/7 activities, any transition, no matter how small, must be seamless and deliberate. 

NATCA will support nothing less. 

31 

Proposed Models Being Discussed in Public Domain 

Over the years, NATCA, other industry stakeholders, and this Committee have 

observed that funding challenges have become the norm. Year-to-year, the FAA has 

experienced continuous challenges and faced significant problems because of a lack 

of a predictable funding stream. As a result, stakeholders, think tanks, and others 

have been looking at alternative funding and structural models that could address 

these funding problems. Here are some of those alternatives, followed by a brief description of each and a discussion regarding their advantages and disadvantages. 

• Status Quo Model: In this model, the FAA would remain as is with the same 

funding and structure. Governance would remain within the U.S. Department 

of Transportation (DOT). 

• Enhanced Status Quo Model: In this model, governance would remain within 

the U.S. Department of Transportation (DOT), but changes would be needed to 

address the manner in which the FAA is funded without changing it structurally. 

• Government Corporation or Independent Agency: This model would pull the 

FAA, in whole or in part, out of the Department of Transportation, and create 

a government corporation or independent agency. The government corporation 

model would require a Governing Board that includes stakeholders and government officials. This model would leave air traffic control functions within the 

government, but would remove them from the DOT. 

• Not-For-Profit Model: This model would require a Governing Board with stakeholders and government officials. An example of this would be NavCanada, 

whose board has three directors elected by the government of Canada. In this 

model, safety oversight and regulatory functions would remain within the FAA. 

Findings & Analysis 

Below are some key points on the potential structural models that have been discussed for the FAA, and the effects these changes would have on air traffic control. 

NATCA will not endorse a particular system without knowing all of the details and 

ensuring a seamless transition. 

Status Quo Model 

Simply restructuring the FAA should not be an option because it does not solve 

the funding problems. The FAA has been restructured numerous times, and with 

each restructuring we have seen increased bureaucracy. Restructuring has created 

more overhead and non-operations jobs, effectively increasing the time to get results. One example of this is in the procurement process. The FAA is exempt from 

the normal government procurement process, but has developed its own bureaucratic process that mirrors the rest of government. Unfortunately, this process is inappropriately slow and complicated for a system that needs new technology as 

quickly as possible. 

Enhanced Status Quo Model 

For this model to succeed the FAA must have multi-year appropriations and longterm authorization, budget flexibility, mandatory funding for FAA employees, and 

no disruptions to operations, modernization efforts, and other safety related services. 

Government Corporation/Independent Agency Model 

There is no profit motive in this model, and the national interest would be preserved without risk. This model could be funded in a manner similar to the Aviation 

Trust Fund, which would fund a system that supports operations, training, and 

modernization, with the benefit of a leaner bureaucracy and fewer obstacles to implement changes. 

A significant benefit of this model is the potential for an alternative funding process, meaning that politics would be less likely to interfere with the safety and efficiency of operations. Several additional methods could be utilized to generate revenue, such as raising funds through public-private partnerships that use lease-backs 

of facilities. Consolidation and realignment, when properly designed, could save 

money, and technology could be updated more efficiently without compromising the 

safety of the system. This model could also encourage innovation from within the 

organization, as has happened in other non-profit Air Navigation Service Providers 

(ANSPs). 

One concern is that a different funding model could be a deterrent to General 

Aviation (GA), which is sensitive to changes in services and generally uses facilities 

that have lower traffic volume. 

32 

Not-for-Profit Model 

The positive aspects of this model include it being single-mission focused, allowing 

for a more streamlined procurement process, greater flexibility for technology development and less bureaucracy than the current FAA. 

The cons include requiring a long transition period to create a not-for-profit 

model. This model may also very difficult to apply to our NAS because the U.S. system is so diverse and complex. 

This model also poses risks regarding the protection of the greater good. A notfor-profit model must still be cost-conscious and may be forced to diminish services 

to rural areas because they do not offer high returns. This would only be a problem 

for a model completely separate from the government, however; any model that is 

maintained within the government can be insulated from these types of concerns. 

The NAS is a national asset that is essential to communities that rely on air traffic services, and it benefits even those who do not fly. There is a national interest 

in maintaining aviation growth, and not only in those areas where profits can be 

made. 

NATCA absolutely opposes any model that derives profit from air traffic control 

services, and we will not support a model that allows the operations to become a 

driver for profit. There are several reasons why air traffic control services should 

not become profit-driven. First, it could lead to compromising necessary operational 

redundancies to increase profit margins. Cutting corners to save costs could ultimately compromise safety. A profit-driven system would likely cut services to rural 

communities because of the lack of returns for shareholders. A profit-driven system 

might also be an impediment for our General Aviation (GA) sector, which is very 

sensitive to changes in services or increased costs. 

In addition to the dangers of creating a profit motive, a for-profit model would 

be logistically difficult to create. There would inevitably be a lengthy transition period to turn the current FAA into a for-profit entity, and the transfer of assets 

would be a complicated process as well. 

Other Air Navigation Services Providers (ANSPs) 

As this discussion has progressed, many stakeholders have sought to examine how 

other ANSPs are structured, and how well they deliver air traffic control services. 

• NavCanada in Canada: This privately owned, not-for-profit company established in 1996 controls the operations of the air traffic control system in Canada. Its revenue source is user fees. The advantage of this system is its singlemission focus that prioritizes efficiency. However, NavCanada had a difficult 

and lengthy transition period. While there may be benefits to the Canadian 

model, NATCA is uncertain if that model is scalable to the size, complexity, and 

diversity of our airspace. For example, the U.S. controls 132 million flights annually (2012), compared to 12 million in Canada in an area a fraction of the 

size of our NAS. The U.S. has 21 centers, compared to seven in Canada, and 

315 towers compared to 42. According to Airport Council International’s Top 30 

Busiest Airports in the world (based on aircraft movements), the U.S. currently 

has eight of the top 10 busiest airports in the world, and 15 in the top 30. Canada has one: Toronto, which comes in at number 16. 

We are not just concerned about the scalability for the ANSP, but also for the 

Civil Aviation Authority that would be left behind to conduct the governmental 

safety and regulatory oversight of the ANSP and the NAS as a whole. Additionally, a seamless transition would be more complex in the U.S. due to the size 

of our system compared to that of Canada. 

• NATS in the UK: This private, for-profit corporation includes the government 

in a public-private partnership. However, the profit motive remains. A December 2014 large-scale failure caused delays and cancellations. Some have attributed that incident to cost-cutting efforts that have delayed upgrades. In addition, in the fall of 2014, NATS lost a bid to provide air traffic services for 

Gatwick Airport in the UK. Instead, the airport agreed to contract air traffic 

services to the German ANSP (described below). 

• Deutsche Flugsicherung in Germany: In Germany, the government controls air 

traffic services, which were transferred to a state-owned corporation, called 

Deutsche Flugsicherung (DFS), in 1993. The system is funded through user 

fees, which are sufficient enough to cover operations and modernization efforts. 

Likewise, DFS improved productivity and operational efficiency through investments in facilities and equipment. At the time of air traffic services’ transfer 

to DFS, Germany’s Federal budget constrained efforts to modernize the air traffic control infrastructure. 

33 

Conclusion 

Many in Congress, as well as several key stakeholders, including the FAA, agree 

that interruptions to the funding stream are detrimental to the operations of the 

NAS. The status quo is unacceptable, and something must be done to ensure continuity of funding. 

NATCA believes the U.S. must have a mission-driven model. We cannot lose sight 

of the fact that any new model will need to continue running the safest, most efficient, most diverse, and most complex airspace in the world. Safety and efficiency 

are our top priorities, and any proposed changes cannot jeopardize them. 

While considering possible reforms, we must protect and strengthen this national 

asset; our National Airspace System is a treasure. We must continue to create an 

environment that encourages the growth of the aviation sector, allowing the integration of new users, new innovation, and new technology, while continuing to maintain our global leadership. There is much at stake. We must find the path that improves the system without causing unintended consequences that set us back. The 

U.S. has always led the world in aviation, and we must continue to do so 

NATCA appreciates the opportunity to appear before the Committee and participate in this dialogue. 

The CHAIRMAN. Thank you, Mr. Rinaldi. Mr. Bolen? 

STATEMENT OF ED BOLEN, PRESIDENT AND CEO, 

NATIONAL BUSINESS AVIATION ASSOCIATION 

Mr. BOLEN. Thank you, Mr. Chairman, members of the Committee. General aviation is an important American industry. It represents over $200 billion to our economy and it employs over a million workers. 

Business aviation in the United States fosters economic development in small towns and rural communities. It helps companies of 

all sizes be efficient and productive, and it helps with our humanitarian efforts, whether it is responding to forest fires, flooding, or 

getting transplant organs to treatment. 

NBAA is honored to be here today. We represent over 10,000 

member companies, companies of all sizes, companies in all types 

of industry. We also represent hospitals, universities, and non-profits. 

Eighty-five percent of NBAA’s members are small and mid-sized 

companies. They generally are operating out of small towns and 

secondary markets. They are generally flying either from or to an 

airport with no commercial service. 

Business aviation is fundamental to the economy of small towns 

and mid-sized communities in the United States. 

Typical of our membership is Schweitzer Engineering out of Pullman, Washington. Schweitzer is a high tech engineering company 

located in a community with very little commercial service. It is 

able to compete effectively in the international market because it 

has access to business aviation. Mr. Chairman, every member of 

this committee has a company like Schweitzer in a community like 

Pullman. 

Just as a matter of perspective, there are fewer than 500 communities in the United States with any type of scheduled airline service. There are 5,000 communities in the United States that rely on 

business aviation for economic support. 

The FAA reauthorization bill has a lot to do with communities 

like Pullman and companies like Schweitzer. Why do I say that? 

Because the airspace above our heads belongs to the American public. It does not belong to any one stakeholder or any industry segVerDate Nov 24 2008 13:28 Jul 12, 2016 Jkt 075679 PO 00000 Frm 00037 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\20671.TXT JACKIE
34 

ment. Our Nation’s air transportation system serves and must continue to serve all Americans across this vast country of ours. 

The fundamental question of reauthorization is who is going to 

ensure that our public airspace serves the public’s benefit. Will it 

be the public’s duly elected officials or will it be some combination 

of self interested parties. 

For decades, suggestions have been made that Congress wash its 

hands of the air traffic control system, give over to other parties 

taxing authority and the authority to determine who can access 

airports and airspace. This has been something that has been 

pushed since long before NextGen was a concept, and long before 

sequestration. 

These interests have been wanting the sweeping authority to determine who gets taxed what and who can fly where and when. 

Mr. Chairman, the power to tax has been called the power to destroy. Today, that authority appropriately resides with elected officials, so, too, the power to ensure non-discriminatory access to airports and airspace. 

Congress should not advocate, relegate, delegate, or outsource its 

authority over taxes and access. In fact, the Congressional Research Service recently said to do so may well be unconstitutional. 

Currently, the United States has by all empirical measures the 

largest, the safest, the most efficient, the most complex, and the 

most diverse air transportation system in the world, but the business aviation community is not content with the status quo. No 

American should be. 

Being the best today does not mean we will be the best tomorrow. In fact, complacence is our enemy. That is why the business 

aviation community has been active and outspoken in its support 

for NextGen. In fact, no industry segment has done more. Our 

members have invested in technology, and we urge Congress to do 

the same. 

Serious problems do exist with the NextGen program. To date, 

programs have been delayed, implementation of operational benefits has been slow, and we still have a lot of work to do in terms 

of certifying technologies. 

It is time for us to focus like a laser on those problems. It is time 

for us to not be distracted from what we need to do. We need to 

use this FAA reauthorization bill to make sure that we are making 

NextGen a reality, to make sure we are improving the certification 

and approval process, to make sure we are protecting our Nation’s 

system of airports, to make sure we are certifying, implementing, 

and integrating in a safe way UAVs. 

There is a lot of work to be done. NBAA and its member companies look forward to working closely with you to do it. Let’s just 

never forget that the public airspace should serve the public’s benefit. 

[The prepared statement of Mr. Bolen follows:] 

PREPARED STATEMENT OF ED BOLEN, PRESIDENT AND CEO, 

NATIONAL BUSINESS AVIATION ASSOCIATION

Chairman Thune, Ranking Member Nelson and members of this committee, thank 

you for inviting me to testify here today. My name is Ed Bolen, and I’m the President and CEO of the National Business Aviation Association. 

35 

NBAA and its Members commend you for your continued focus on a priority of 

national importance–reauthorization of the Federal Aviation Administration. 

As we know, the outcome of this debate will have implications for all aviation segments, including the thousands of companies that rely on a general aviation airplane to do business in small communities all over this vast country of ours. 

Business aviation is an important engine in our Nation’s economy and a vital link 

in our transportation system. 

Business aviation fosters economic development in small towns and rural communities. 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 flies organs for 

transplants. 

NBAA is proud to represent more than 10,000 American members who rely on 

the use of general aviation aircraft to meet some portion of their transportation 

challenges. 

Our members are businesses of all sizes, and also hospitals, universities, and 

other non-profit entities. Eighty-five percent of our members are small and mid-size 

businesses, most of which are located in secondary and tertiary communities. They 

use a range of aircraft for business purposes, including pistons, turboprops and business jets. Most of these aircraft begin or end their flights at airports with no scheduled airline service. 

I think it’s useful to provide four examples of our members, from the four corners 

of America, to illustrate what business aviation looks like. 

Let me first point to Manitoba, a family-owned metals-recycling company located 

in Lancaster, NY. The company’s third-generation CEO, Richard Shine, started 

using business aviation to help his company survive when the local manufacturers 

that provided scrap metal to Manitoba disappeared. 

Richard put business aviation to use for his company. In a typical day, he would 

fly out of Niagara Falls Airport to be in two or three cities each day to meet with 

prospective metal suppliers. 

Over the decades, Manitoba’s reliance on the airplane hasn’t changed. Richard reports that, ‘‘Today as much as ever, I rely on my airplane, and my ability to reliably 

access several airports each week, to get outside my region and generate the metals 

I need to stay in business. If special interests are allowed to control my access to 

airspace and airports, I’m in jeopardy of losing the business.’’ 

A similar story to Richard’s is that of entrepreneur Brad Pierce, the President of 

Orlando-based Restaurant Equipment World, a family-owned company founded by 

Brad’s father. 

Brad has said that his company’s airplane has been instrumental in expanding 

the growth of his business. He uses it week in and week out, flying to visit customers throughout the Southeast, and as far away as California, making stops all 

along the way. 

For this kind of business model to work, it is absolutely essential for Brad to have 

access to airspace and airports, at a reasonable cost. 

‘‘If our aviation system was turned over to special interests that could control how 

much I pay to access the system, and when and where I was allowed to fly, it would 

destroy my business,’’ Brad has said. ‘‘We cannot let that happen.’’ 

A third illustrative example of what business aviation looks like can be found in 

the story of Dr. Michael Gregory, the chairman and founder of a business called Apogee Physicians, an Arizona-based firm that uses a business airplane to provide doctors to medically underserved communities spanning four time zones. The towns 

served by Apogee’s doctors include Grants Pass, OR; Marion, IL; and Thomasville, 

GA. 

Dr. Gregory often calls his airplane ‘‘a lifeline’’ to the communities where his doctors are located. ‘‘But in order to be able to get doctors to patients on a real-time 

basis, I must have reliable access to airports and airspace,’’ he adds. ‘‘If our aviation 

system were changed so that I couldn’t access any town, at any time, I wouldn’t be 

able to quickly get my doctors to those who need their life-saving treatments.’’ 

A fourth 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 all across 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. 

36 

Manitoba Recycling, Restaurant Equipment World, Apogee Medical Physicians, 

Schweitzer Engineering, and countless other companies like these are located in 

small and mid-size towns far away from the major metropolitan areas. In those 

towns, such companies are vital to job creation and economic activity. 

In fact, studies have shown that general aviation contributes to the creation of more than a million jobs in the U.S., and more than $200 billion in economic activity each year. 

The reason for this economic success story is largely due to the ability of business 

aviation to access small community airports. The airlines serve fewer than 500 airports in the U.S., but business aviation can access about 5,000 airports. 

Access to airports, and to the Nation’s airspace, is what creates all those jobs, generates all that economic activity, and helps make America’s aviation system work 

for all Americans. 

During the FAA Reauthorization process, it is critical that Congress keep in mind 

that the airspace above our heads belongs to the American public. It doesn’t belong 

to any private company, or group of companies. It doesn’t belong to any segment 

of the aviation industry, or even the aviation industry itself. The airspace above our 

heads belongs to the American public, and it should be operated for the public’s benefit. 

The question on the table—perhaps the fundamental question in this reauthorization debate—is who is going to ensure that our public airspace is operated for the 

public’s benefit? 

Will it be the public’s elected representatives or will it be some combination of 

self-interested parties? 

In the past, some of the parties pushing Congress for major changes have wanted 

for themselves the sweeping authority to determine: (1) who gets taxed, and in what 

amounts; and (2) who will have access to airports and airspace, and who will get 

shut out. 

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. So, too, does the 

power to ensure non-discriminatory access to airports and airspace. 

Congress should not abdicate, relegate, delegate or outsource its responsibility in 

the areas of aviation taxes and fees. Nor should it abdicate or delegate its responsibility to ensure non-discriminatory access to airports and airspace. 

In fact, the Congressional Research Service recently wrote that giving a non-profit, privatized air traffic control corporation the authority to set user fees and establish air traffic flow controls may well be unconstitutional. 

Let’s face it: It is difficult to see how a combination of self-interested industry representatives would really exercise taxation and access authority in a way that best 

serves the public, rather than their best commercial self-interest. 

During this reauthorization debate, let’s not get distracted from the hard work 

that needs to be done. Today, America has, by all empirical measures, the largest, 

safest, most efficient, most complex and most diverse air transportation system in 

the world. 

But the business aviation community is not content with the status quo. No 

American should be. Being the best today is no guarantee you will be the best tomorrow. And having the world’s strongest air traffic system is in the best interest 

of all Americans. Complacency is our enemy. 

That is why business aviation has been an active and outspoken champion of 

NextGen. No industry segment has done more than business aviation to make 

NextGen a reality. We want and need the benefits of increased capacity, enhanced 

safety and a reduced environmental footprint. We are investing in NextGen equipment and we are asking Congress to do the same. 

We know challenges need to be addressed. There are NextGen programs that are 

delayed, operational benefits that are slow to be implemented and decommissioning 

of legacy equipment that has been deferred. We desperately need to streamline our 

certification and approval process. All of this increases funding pressures. 

Let’s get about the serious work of fixing these problems, and making NextGen 

a reality, so that all Americans—including those in small towns and rural communities—can continue to receive the benefit of their public airspace. 

Congress does not need to turn over its power to tax to do that. With regard to 

taxes, it is important to note that while no industry likes paying taxes, or wants 

to pay anymore taxes than necessary, the general aviation community has always 

said that the fuel tax mechanism is the perfect mechanism for our community to 

contribute funding for our Nation’s air transportation system. 

The general aviation fuel taxes are easy to pay and difficult to avoid. They require 

users to pay before they fly, not after the fact. They are progressive in nature, and 

37 

closely approximate one’s use of the system. They create a constant incentive to invest in fuel-efficient technologies and fly fuel-efficient routes. Finally, they do not 

require a bureaucracy of agents, collectors and auditors to administer. 

The authority over taxes and access to airspace and airports belongs to Congress, 

and it is an authority that should not be abdicated or delegated. Communities of 

all sizes in every corner of the country are depending on you to retain your oversight 

authority in the areas of taxes and access, to ensure that the public airspace benefits the public. 

Mr. Chairman, in closing, I’d like to provide our basic guiding principles for FAA 

reauthorization, which we request the Committee consider as it works to develop 

legislation. Those are as follows: 

• Make NextGen a reality. NextGen is our plan to retain our world leadership position in air traffic management; the question is, how do we make it a reality? 

That question is central to the reauthorization process. Unfortunately, the challenges are significant—NextGen is not simply a matter of ‘‘flipping a switch,’’ 

as some would have you believe. Make no mistake about it: no one is content 

with the clarity, pace or cost of the transition to NextGen to date—we need to 

do better. 

• Keep Congressional control over taxes, fees and charges. For the people who have 

to pay them, mandatory taxes, fees and charges are all the same. Proposals may 

be put forward that would effectively take authority to fund our aviation system 

and put it in the hands of nonelected officials. A dialogue about finding a new 

governance structure may be appropriate, but the composition and scope of its 

authority matters. Congress must retain authority over taxes, fees and charges. 

This is not a responsibility that can be transferred, delegated or outsourced. 

• No user fees. As the members of this subcommittee know, the general aviation 

community, including business aviation, pays a fuel tax to fund its use of the 

aviation system. This mechanism is an unmatched proxy for system use, because the more often you fly, and the longer distances you fly, the larger your 

aircraft, and the more fuel you burn, the more taxes you pay. The fuel tax is 

also highly efficient: paying at the pump means full compliance, without a collection bureaucracy—a ‘‘SKY–R–S’’—needed to administer fees or charges. The 

fuel tax also covers all of the air traffic control services, including those for 

flight safety, that are needed in a typical flight. We don’t want to promote a 

disincentive for people to use safety services. Simply put, anything that could 

be done through a user fee, the fuel tax can do better. For all these reasons 

and more, Congress has repeatedly written to the current and previous Administrations in opposition to per-flight user fees, and should continue to oppose 

them. 

• Ensure predictable, affordable access to airspace and airports. The inherent 

value of business aviation is the ability of companies to fly where they need to, 

when they need to. Things that impede our access to airports and airspace have 

the potential to do great harm. Business aviation must have continued access 

to our Nation’s airports and airspace. As we have learned in Australia and 

other parts of the world, this is not something that can be taken for granted. 

• Protect the privacy of those in flight. The Automatic Dependent Surveillance– 

Broadcast (ADS–B) technology, a cornerstone of the FAA’s satellite-based 

NextGen system, does not currently include needed protections for operators’ 

privacy and security. While NBAA has long promoted the development of ADS– 

B, we have consistently pointed out that, in transitioning to satellite-based 

navigation and surveillance, we must ensure that it makes accommodations for 

privacy. 

When it comes to ADS–B, we continue to believe that people should not have 

to surrender their privacy and security just because they travel on a general 

aviation aircraft. This committee was integral in protecting these rights previously, and we respectfully request that these privacy protections be addressed 

in the pending 2015 FAA Reauthorization bill as well. 

• Protect our airport system. Our national system of airports was created to provide communities with access to a safe and adequate public system. We must 

ensure that our system of airports meets national objectives, including economic 

growth, defense, emergency readiness, law enforcement, postal delivery and 

other priorities. 

Unfortunately, in certain regions of the country, attempts are being made to 

close important airports, even when Federal investments and assistance have 

been provided to ensure these airports meet national economic and other priorities. We support giving the Secretary of Transportation sufficient discretion to 

38 

allow an airport to remain open for purposes of protecting or advancing civil 

aviation interests of the United States, if standard conditions become unenforceable. Simply put, we must continue supporting facilities, at the Federal level, 

as part of a single, national aviation-transportation system. 

We strongly believe that airports should be good neighbors and should work 

with communities to maintain a balance between the needs of aviation, the environment and the surrounding residences. However, over the years, attempts 

have been made to create new restrictions and impediments for aviation users 

through airport curfews and other local initiatives to restrict access to airports. 

We must be vigilant in stopping ongoing attempts from local interests to compromise the national nature of our aviation system. 

• Improve the certification and approval process. The approval process can be 

cumbersome, unnecessarily taking up time and resources. The FAA should constantly look for ways to keep or improve safety, while adopting more efficient, 

effective business-like processes. 

• Ensure the safe introduction and integration of new aviation technologies. NBAA 

would also like to take this opportunity to commend the U.S. Department of 

Transportation (DOT) and FAA on their recent release of a notice of proposed 

rulemaking toward adopting a regulatory framework governing the commercial 

operation of small, unmanned aircraft systems (s-UAS) weighing less than 55 

lbs. 

The FAA has taken a good first step in releasing these initial guidelines to provide a much-needed regulatory structure for these operations. We urge the 

Committee to work closely with the DOT, FAA and the UAS industry as they 

work to integrate UAS into the national airspace system in a thoughtful, deliberative process focused on ensuring the safety and security of all aviation stakeholders. 

• Ensure continuity of government aviation services. Aviation aircraft and parts 

cannot be produced, financed, bought or sold without the written approval of the 

Federal Government. When the FAA Registry Office was shuttered in the 2013 

government shutdown, it significantly impacted much of America’s general aviation industry, including thousands of businesses that use general aviation aircraft for parts delivery, customer visits, aircraft repairs, fuels sales, hanger construction and aircraft brokerage activities. 

We urge the Committee to include language in the pending FAA reauthorization 

legislation, which would ensure that the important aviation safety and security 

functions of the FAA Registry Office are protected from any future government 

shutdowns. 

I look forward to responding to any questions the Committee may have. Thank 

you. 

The CHAIRMAN. Thank you, Mr. Bolen. You are a very efficient 

panel. Everybody came pretty close to the five minute rule, even 

our former colleague managed to adhere pretty closely to that. 

[Laughter.] 

The CHAIRMAN. I have a couple of quick questions for Mr. Huerta 

a little bit off topic, but I need to ask him, because over the weekend there were these media reports that indicated a security researcher claim to have temporarily taken control of an engine on 

a passenger aircraft by hacking into the inflight entertainment system. 

If true, this would certainly be a very disturbing incident. What 

has been the FAA’s response to this matter, and do you feel the 

FAA is well equipped to analyze these types of threats against the 

flight control systems on passenger aircraft? 

Mr. HUERTA. First, with respect to the specific incident, we are 

cooperating with the FBI in their investigation. They are working 

on that. 

As it relates to the larger question, cyber, this is something that 

is an ever evolving threat, and something that we are looking very 

39 

carefully at and that we are taking very seriously, not only in the 

operation of our system but also in the manufacture of aircraft. 

That means we are working closely with the manufacturers to 

understand how the threat morphs, how it evolves, how it changes, 

and how do we stay ahead of it, by having as we have always had 

many layers of security and control over access to critical systems 

within the aircraft. 

I will say that I think cyber is and will continue to be a very significant challenge not just in aviation but in any technology based 

sector, and it is something that we have to work cooperatively 

across government and industry to ensure that we are staying 

ahead of. 

The CHAIRMAN. That incident over the weekend is still being investigated? 

Mr. HUERTA. Yes, sir. 

The CHAIRMAN. There is nothing to report about that at this 

time? 

Mr. HUERTA. That is correct. 

The CHAIRMAN. There is a recent report by the National Academies that noted it would require a significant effort for the FAA 

to attract, develop, and retain the work force talent to deal with 

cybersecurity challenges going forward. 

When you talk about that issue and the agency’s efforts, how do 

you deal with the limitations the government faces in competing 

against private sector employers in some of these fields? 

Mr. HUERTA. Well, a factor we always need to consider is do we 

offer a competitive job and do we offer competitive compensation 

for that. For us, that is a combination of ensuring that we are casting the broadest possible net, but I think it is also important to 

point out that while we do operate within the government environment, there is a significant portion of our applicant pool and our 

work force generally who is interested in coming to work for the 

FAA because of their belief in the mission and their belief in public 

service. 

It is a very competitive environment that is out there. We are 

never going to pay the top salaries that top technology companies 

pay. Our focus is on how we can ensure that we have an orderly 

process for promoting and retaining people and how we sell the job 

itself. 

The CHAIRMAN. This committee, of course, is very interested and 

concerned with cybersecurity as it relates to ATC and NextGen. We 

will continue, I am sure, to be in touch with you on that subject. 

I want to turn back to the subject at hand today. Mr. Rinaldi, 

you spoke about how the status quo with regard to funding is not 

an acceptable situation. Can you assess among the options that 

have been put forward how some of those reform options provide 

for more stable funding for the ATC system than the current government model? 

Mr. RINALDI. Thank you, Mr. Chairman. We have been studying 

probably for the last 18 months some of the other countries, and 

when they broke off the air traffic control services from the government entity, and some of them have done very well and some are 

still struggling. 

40 

What we are looking at is to make sure that we have a stable, 

predictable funding stream, and then if we are going to change the 

structure, the one thing that we know for sure we do not want is 

a system that is for profit. It would just put another barrier, another hurdle in front of us to actually provide the safest and most 

efficient system in the world. 

The CHAIRMAN. There has been a lot of discussion in the context 

of reform, about what is happening to the north of us in Canada 

as a model for comparison. Understanding there would be some reluctance to simply copy their model reform effort, I am curious to 

know what aspects of the Canadian air traffic control system your 

members find most appealing. 

Mr. RINALDI. I was up there last week visiting in Ottawa and 

looking at their technical center. I think the unique thing they do 

is they have a true collaboration from the position out in developing their NextGen technology. They have the air traffic controller, the engineer, and the manufacturer working together from 

the conceptual stage all the way through to training, implementation, and deployment within their facilities. 

What that does is save time and money, and they actually are 

developing probably the best equipment out there, and they are 

selling it around the world, and they are doing it in 30 months to 

a 3-year timeframe, when we have to look much longer down the 

road because of our procurement process in this country. 

The CHAIRMAN. This will be for Governor Engler, Senator Dorgan, and Mr. Smisek. In the context of an independent ATC services provider, some of you have referenced a preference one way or 

the other or at least suggested several different models. 

Can you speak to the differences between a Federal corporation, 

a federally chartered non-profit corporation, and what might be the 

pros and cons of each approach? 

Mr. ENGLER. We convened a group of experts to look at this. 

Their kind of consensus was that probably a non-profit corporation 

outside the government allowed for maximizing your shareholder 

participation, including some of the benefits Mr. Rinaldi just spoke 

up, speeding it up. 

One of the things that also would happen is the ability to get 

that bonding authority. We really are talking about NextGen as a 

capital project. If a Governor were doing this or Senator Peters 

when he is back in Michigan, we would have bonded the project 

and done it in a fairly short period of time, and then you would 

be continuously improving. 

The nimbleness of the corporation, in the entity, that would seem 

to be—we have not endorsed a specific approach, but I would say 

kind of the people we have consulted with tend to rely on that nonprofit corporation with the shareholder management, if you will. 

We think that gets you the most bang for your buck. 

I also think over time it gets us back out on the innovation leading edge where we are simply not today. 

Senator DORGAN. Mr. Chairman, we have submitted to you a 

fairly substantial document that the Eno Center for Transportation, Jim Burnley and myself, and the other folks that were involved produced. It describes a series of different approaches with 

41 

strengths and weaknesses of each, and also describes in some detail what other countries have done. 

I think what Governor Engler indicated is the most important 

point, and that is the stability of funding for a project of this type 

is essential. I served in the Congress 30 years. There is a lot I do 

not know, but I do know this, in a time of spending restraint, in 

a time of sequestration, in a time of multiple continuing resolutions 

and all the things that are coming at us, there will not be stable 

funding for this type of project in the future unless it comes 

through a bonding capability and another type of organization. 

It is important to note that I do not support something that does 

not have the government as a stakeholder. I support and believe 

that this project will not get done for the country the way we want 

to see it getting done, to regain our leadership, unless we decide 

to do it in a different structure. 

To do that then allows us stable funding through bonding capability and so on, with the input of all the key stakeholders, including the government. 

The CHAIRMAN. Mr. Smisek, do you have anything to add? 

Mr. SMISEK. Thank you, Mr. Chairman. Airlines for America supports a non-profit corporation for a number of reasons. First of all, 

a user fee structure, as Senator Dorgan and Governor Engler have 

mentioned, would provide a stable stream of funding that could be 

funded, so there could be rational infrastructure investments made, 

and assurance of funding and stability. 

Second, this would be governed by a Board of Directors comprised of stakeholders, representatives, for example, from the Department of Defense, the U.S. Government, general aviation, commercial air carriers, air cargo carriers, NATCA, and union representatives, so the stakeholders would be present and would govern, but they would have fiduciary duties to the enterprise. 

They would not be employees of the government or employees of 

the airlines or employees of the unions, but rather would have fiduciary duties dedicated to the mission and safety of the air traffic 

control system. 

Also, the efficiencies that would be driven from a non-profit corporation, we have very good evidence of that from Canada. That 

would provide funding as well for excellent and stable and professional management. 

You mentioned the ability, as Administrator Huerta mentioned, 

to attract and retain an excellent work force, including 

cybersecurity experts, which are quite important in any enterprise, 

and that enterprise would also be free of the political influences 

that so bedevils the FAA and its ability to modernize today. 

The CHAIRMAN. Thank you, Mr. Smisek. Senator Nelson followed 

by Senator Wicker. 

Senator NELSON. Thank you, Mr. Chairman. I want to follow up 

on your introduction of the question of the cyber attack. Part of 

what we are looking to do in this Next Generation is we are going 

to do air traffic control off satellites. You could be a lot more efficient. You can have awareness right from the cockpit of the other 

airlines around. There is not only the cost of transitioning from the 

ground-based radar, there is the question of the backup of the 

ground-based radar. 

42 

What happens if there were a cyber attack on the GPS that shut 

it down, Mr. Smisek, on the arrangement that you are talking 

about, who would bear the cost of that back up of the ground based 

radar, since that is the less efficient operation? 

Mr. SMISEK. Senator Nelson, I am certainly not an expert on 

cybersecurity, but it is necessary in any enterprise, the enterprise 

we are talking about or any enterprise, to have very expert investments in cybersecurity. 

It is a risk and no doubt a growing risk as we become the Internet of all things. Certainly an attack on the GPS system would not 

simply affect the air traffic control system, it would affect the Department of Defense, it would affect everything. 

Senator NELSON. Right. In the private corporation, who would 

bear that cost? 

Mr. SMISEK. If as a result of concerns that were sufficiently material to the ability of someone to bring down the GPS system, of 

which I certainly have no knowledge at all, and if it were determined there would be a required back up, then that would also be 

the responsibility of the non-profit corporation, because it would be 

responsible for operating the system, as would NavCanada or anyone else. 

I am not actually familiar with whether Canada has retained a 

back up radar system. Perhaps Mr. Rinaldi would know that. 

Senator NELSON. You are saying the private corporation would in 

fact retain the ground based radar as a backup system? 

Mr. SMISEK. I am not saying that, sir, because I do not know 

whether that would be necessary based upon the robustness of the 

technology itself. 

Senator NELSON. That is one of the costs. Mr. Administrator, 

why is DOD weighing in on this so heavily, that they are concerned 

about this privatization? Can you speculate how privatization 

would impact the relationship with DOD, and would you be able 

to interact with a private entity or non-profit corporation in the 

same way that you have existing opportunities to interact with 

DOD? 

Mr. HUERTA. Senator Nelson, I can certainly speak about the relationship and the working procedures we have with the Department of Defense as they exist today. They are an important partner 

in the provision of air traffic control services, and they control certain airspace in the country, we control certain airspace in the 

country, and we have a shared responsibility for efficient and effective management of the safety of the air traffic control system. 

We often take advantage of the airspace they use exclusively during peak travel periods to accommodate additional traffic loads. We 

work collaboratively with them to ensure they have access to airspace they need for their mission requirements and for training. 

Senator NELSON. I understand you work collaboratively with 

them. Why do you think they are weighing in so vigorously? 

Mr. HUERTA. I cannot speak to why they are weighing in, but I 

think what it ultimately depends on is what would be the structure 

in an alternative model under which they would interact with their 

partners in the air traffic system. 

It would strike me that there would be a way to build protocols, 

but it is entirely dependent on what structure would be selected. 

43 

Senator NELSON. Mr. Bolen, why are the general aviation business manufacturers so concerned about this? You represent folks 

like Embraer, Gulfstream on the G–5, Cessna, et cetera. Why are 

they so concerned about this? 

Mr. BOLEN. As I mentioned earlier, 85 percent of NBAA members are small and mid-sized companies. They are flying into and 

out of airports with little or no commercial airline service. They are 

concerned about their access to airports and airspace, and they are 

concerned about ensuring their access is safe, it is predictable, and 

it is affordable. 

I think one of the questions that came up earlier was about financing the system, and what we heard is one of the plans for the 

future is to have bonding authority, which is a euphuism for borrowing. 

The reality is that today, our current system generates through 

taxes a largely, but not entirely self-sufficient, system. We do that 

through a combination of user fees and taxes plus a general fund 

contribution that then fully funds the FAA. 

The question on the table is if we pull the general fund contribution out, then we will have a situation where all of those industry 

contributions do not equal the amount we have today. Thus, we can 

either raise the taxes to get to that amount, we can cut the system 

to get to the amount, or as you have heard, we can go borrow the 

money. Borrowing money comes at a cost, that has to be serviced, 

and prolonged borrowing ends up creating an interest nightmare. 

There are issues here that need to be addressed. What we want 

to do is make sure that all the small towns, the rural communities, 

the secondary and tertiary markets around the United States, are 

able to have business aviation located in their communities and 

being able to access the airports and airspace in the major markets 

where those companies need to go as well. 

Senator NELSON. Thank you. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Nelson. Senator Wicker? 

STATEMENT OF HON. ROGER F. WICKER, 

U.S. SENATOR FROM MISSISSIPPI 

Senator WICKER. Thank you. Senator Dorgan, let me just begin. 

Is every witness here a part of this working group? 

Senator DORGAN. No. 

Senator WICKER. I think this is an excellent report, so kudos to 

the authors. Would you do this for me, because in reading through, 

I think at some point there needs to be a page where the owners 

take ownership of this, and I do not see that. We checked the 

website and found a number of people. Would you provide that for 

the record? Would you do that, sir? 

Senator DORGAN. I would be happy to do that. 

[The information referred to follows:] 

44 

Co-Chairs 

Former Senator Byron Dorgan 

Arent Fox LLP 

Former Secretary of Transportation Jim Burnley 

Venable LLP 

Membership Organizations 

Aerospace Industries Association 

Alaska Airlines 

Air Line Pilots Association 

Aircraft Owners and Pilots Association 

Airlines for America 

American Airlines 

Boeing 

Business Roundtable 

International Air Transport Association 

National Air Traffic Controllers Association 

Reason Foundation 

U.S. Chamber of Commerce 

U.S. Travel Association 

Individuals 

Jim Coyne, Cassidy & Associates 

Steve Ditmeyer, Michigan State University 

Jack Fearnsides, MJF Strategies LLC 

Aaron Gellman, Former Director of Northwestern Univ. Transportation Center 

David Grizzle, Dazzle Partners LLC, Former COO, FAA’s ATO 

John Harman, Former Deputy Director, Office of Aviation Analysis, U.S. DOT 

Norman Mineta, Former Sec. of Commerce and Former Sec. of Transportation 

Eric Peterson, Transportation Policy Consultant 

Dorothy Robyn, Former Special Assistant to the President for Economic Policy 

Senator WICKER. Mr. Bolen, are you part of this working group? 

Mr. BOLEN. We were part of the working group but we did not 

feel our concerns were being reflected, so we are no longer part of 

that. 

Senator WICKER. I think that is probably accurate to say. There 

are three options that involve some major structural change, 100 

percent government-owned Federal corporation, second, independent non-profit organization, and third, private for-profit corporation. 

The fourth option sort of basically tells Congress that we ought 

to do our job, get the funding straight and make sure that it is reliable and steady. The fourth option would reform the system’s funding stream while maintaining the system’s current governance 

structure. 

It goes on to say that this option could alleviate transition issues 

that are a concern with a completely new governance structure. 

Would it be fair to say that your organization is more in tune 

with that fourth option? 


519LIST1.eps
45 

Mr. BOLEN. We have studied various structures around the 

world. We have looked at Australia, New Zealand, England, Canada. In none of these markets do we see a robust business aviation 

community that is providing economic development in small towns 

and rural communities. 

We have seen serious access issues. In Australia, for example, 

business aviation is not allowed access to airspace in Melbourne or 

Sydney on an equal basis at all. We end up waiting sometimes 

three, four, and five hours on the tarmac waiting to get access. 

I was on a panel recently with the head of the Irish Air Traffic 

Control System, and he said you just have to understand, you are 

not going to get equal access, that is just part of the natural selection process. 

As we looked at NATS in the United Kingdom, we saw that after 

an economic downturn, that privatized group needed a bail-out 

from the taxpayers. 

When we looked at Canada, we saw they have instituted user 

charges which are very problematic, while continuing fuel taxes. 

What we have seen as we have looked around is a lot of fundamental problems with some of the different structures. We want to 

make sure that in the United States, we are identifying problems 

and we are finding targeted solutions to them. To simply say we 

are going to pull air traffic out and we are going to give an independent board borrowing authority leaves a lot of concerns about 

our ability to safely, predictably, and affordably access airspace and 

airports. 

Senator WICKER. You are saying the United States is unique in 

that we have the 5,000 communities that rely on business aviation, 

as you mentioned in your prepared remarks, and access will not be 

the same if we go to one of these three structural changes? Is that 

part of your concern? 

Mr. BOLEN. Yes. Our study of the systems around the world that 

have taken this action have raised serious access and affordability 

concerns. 

Senator WICKER. Senator Dorgan, it sounds like he has a good 

point there. 

Senator DORGAN. It depends on who is listening. As Ed Bolen 

knows, I spoke on the floor of the Senate a number of times about 

general aviation and its importance to this country. I think it is 

very important. 

The question, I think, before this committee is are we in fact 

going to have the latest technology, Next Generation system, built 

and completed in this country to allow us to fly more safely, more 

efficiently. The answer in my judgment is without a change in 

structure, we are not going to get there. 

I understand there are lots of interests that are opposed to this. 

I am going to give you a list of everyone who participated, which 

were the best academicians and stakeholders from around the 

country. You cannot reach everyone because everyone has their 

own set of interests they bring to these issues. 

As I mentioned to you, this is a heavy lift, which I understand. 

We did not put before you a pattern with all the specifics for important reasons. We would not have gotten agreement on a specific 

pattern with all the specifics in it. 

46 

Mark Twain was once asked if he would engage in a debate, and 

he said oh, yes, if I can take the negative side. They said we have 

not told you the subject. Oh, he said, the negative side takes no 

preparation. 

I understand this is controversial. I will make one point, if I 

might. Mr. Huerta came to our organization as well. He was not 

a participant, but we invited him. I have great respect for him. I 

have and you have as well been through a lot of folks that have 

run the FAA. I have great respect for him. That is why we invited 

him to hear his vision as well. 

All of us should want the same thing. The question is not the 

endpoint. The question is what is the route to get to that endpoint. 

There will not be stable funding in a time of spending restraints 

for the next 10 years, which will probably include sequester, probably include furloughs, and probably include a budget as we saw 

this year that cuts $365 million out of the facilities and equipment 

account of this organization even as they are trying to climb this 

hill of modernization. That does not work and will not work. 

Senator WICKER. A stunning indictment which very well may be 

correct. One quick point, Mr. Chairman. Mr. Huerta, several weeks 

ago, I guess it was April 14—goodness, time flies. You appeared before the full committee on a similar topic, FAA reauthorization. 

A number of us asked questions for the record, particularly with 

regard to the Contract Tower Program. We are still awaiting those 

details, and I look forward to receiving answers to those QFRs, 

sooner rather than later. 

Mr. HUERTA. Absolutely, sir. I think we are actually trying to 

schedule a staff briefing to go over the methodology that we discussed at that hearing. 

Senator WICKER. OK. If we could have squeezed those questions 

in at the time, you could have answered them right on the spot. 

Do your best and see if you can get those answers to us. Thank 

you. 

The CHAIRMAN. Thank you, Senator Wicker. Senator Peters followed by Senator Manchin. 

STATEMENT OF HON. GARY PETERS, 

U.S. SENATOR FROM MICHIGAN 

Senator PETERS. Thank you, Mr. Chairman. Thank you to the 

panel for your testimony today. 

Governor Engler, it is good to see you. Governor Engler and I 

served together in the state, he was the Governor and I was the 

State Senator. I recall you coming before me when I was on the finance committee then in testimony. Here we are again, in just a 

different capacity. It is great to see you again. 

I would like really to pick up briefly on Senator Wicker’s comment. It is interesting as I have heard the testimony from the panelists here and concerns about funding and sequester, budget, and 

that fourth option that he mentioned. It seems to me ultimately it 

falls back on Congress, that we are not doing our job here in providing the resources necessary to implement NextGen and other 

types of reforms. 

The proposals that are put before us to privatize are because we 

are not doing our job here. Perhaps that is what our focus needs 

47 

to be, to do our job, making sure the FAA has the resources necessary to continue to go forward. 

Having said that, Mr. Smisek, I have a question for you. I understand the second largest air carrier in the United States is Delta 

Air Lines, which has a major presence in my state of Michigan. It 

is a major hub for them, as well as a very large employer in the 

state of Michigan. 

They have declined to endorse the A4A position that you have 

been advocating for today. Delta Air Lines suggests that the current system can become more efficient and deliver substantial benefits through improved collaboration efforts between the FAA and 

aviation stakeholders. 

Delta fears that separating the ATC system from the FAA would 

lead to certain operational risks and pitfalls that they outlined, 

such as organizational disruption, the creation of additional structural separation, bureaucratic silos between the ATC system and 

the FAA safety experts, unforeseen costs that will accompany the 

transition to a new organization, and the loss of expert personnel 

and institutional knowledge. 

A long list of concerns that Delta Air Lines has expressed. Could 

you please maybe comment on some of those concerns, and do you 

agree that some of those risks are indeed ones we need to consider 

here as a panel? 

Mr. SMISEK. I would be happy to, Senator. As you can imagine, 

Airlines for America, like Congress, we do not always get unanimity. However, on this issue, we do have unanimity except for 

one member, and that member has expressed its concerns. 

I will say I think our colleagues at Delta have no evidence that 

the FAA can become more efficient or can deliver effective services 

compared to a non-profit enterprise. I think NavCanada is a perfect 

example of that. NavCanada today has the best technology probably in the world. 

I think Mr. Rinaldi would agree with me. They have brought 

down the costs of the system to the users by 30 percent. They are 

a model of safety, and they are selling their technology to third 

parties because they are so adept at working collaboratively with 

the unions, working collaboratively with experts, attracting and retaining experts. I would say that lacks evidence. 

In terms of risks of transition, of course there are risks of transition. There are risks in anything large. As Senator Dorgan has 

said, this is a heavy lift. This is something that needs to be done. 

What we know is what we have today does not work. We have 

candidly little to no confidence that there will be a stream of stable 

funding for modernization of the air traffic control system or the 

ability of the FAA to attract and retain qualified people to implement it or a change in how the FAA operates with respect to stakeholders in terms of collaboration. 

I think this Nation should reach for greatness, and I think this 

is an opportunity to do so. What we know is it does not work, and 

I believe if we just keep doing the same thing we have been doing 

for all these years and expect a different result, we will get what 

we deserve. 

Senator PETERS. Administrator Huerta, under the Eno Center 

proposal, ATC is spun off, as we have heard, potentially into a new 

48 

independent entity outside of government. However, the Eno Center also says that ‘‘The government must maintain a role in governance of the system since the FAA is ultimately the guarantor of the 

public interest.’’ 

Administrator Huerta, it is the role of the FAA obviously to put 

safety of the traveling public first. Are you concerned this priority 

might be diminished if the FAA were to only play a small part in 

a multi-stakeholder model of governance that has been envisioned 

by some of the members? 

Mr. HUERTA. I would envision there would be a couple of different roles. First and foremost, there is the question of who oversees the safety of the air traffic system. Under our current structure today, we have an independent safety organization within our 

aviation safety structure that provides safety oversight of the air 

traffic control system. 

With respect to some of the other questions that have been 

raised by the panel relating to access to the system or ensuring the 

public interest, I think those are all questions that would need to 

be carefully considered by this committee, and would need to be reflected, should there be a change in the governance model, in whatever structure is put in place to ensure all those perspectives are 

reflected. 

Senator PETERS. Governor Engler? 

Mr. ENGLER. I think it is very clear, certainly in the expanded 

testimony I have submitted, that the FAA remains the regulator. 

In fact, I think you get better regulation by separating—right now 

we have an inherent conflict, they are both the rulemaker and the 

regulator. They are judge and jury. They make the rules and they 

assess their efficacy. 

I think the separation actually allows them to do their job very, 

very effectively as they do in a lot of areas. I think there is a benefit in many respects to that, and I do not think there has ever 

been a suggestion that somehow safety—we are talking about the 

air traffic control system itself, the operation of it, the vision for 

it, the leadership, all of that has to come back. 

The other thing the FAA can contribute, which I think Mr. 

Smisek is better equipped to comment than I—we need a more effective way for the FAA to modernize its own procedures. Now they 

would be able to focus on that and get up to date on things where 

it does help improve the way we fly, the way airlines can manage 

operations. 

In some cases, I think there are examples of literally rules being 

months if not years behind, so the ability to have a separation, division of labor, I think actually is one of what I believe to be the 

benefits of this idea. 

I would suggest also, as I think you have pointed out in your 

question, it is moving to—somebody said government corporation, 

we have suggested a non-profit corporation, but it is far different 

than a private enterprise being set up, a stock company, for example. 

Senator PETERS. Thank you. 

49 

STATEMENT OF HON. JOE MANCHIN, 

U.S. SENATOR FROM WEST VIRGINIA 

Senator MANCHIN. First, I want to thank all of you for your attendance today. I think we need to look at the size of what we are 

dealing with here. I have heard all of you, your statements, and 

your thoughts and beliefs in what we should be doing. I have heard 

basically we have the safest system in the world, and I heard it 

does not work, so conflicting statements coming from you all. It 

does not work, but it is the safest in the world. 

When you start looking at the size, let’s look at Canada. Canada 

has 42 towers and seven centers. France, 86 towers, five centers. 

Germany, 16 towers, four centers. Mexico, 58 towers, four centers. 

The United Kingdom, 16 towers and two centers. The United 

States of America, 512 towers, 21 centers. They do not even come 

close. You can put everybody in the world and they do not come 

close to us. 

How are we saying the system does not work and we are not able 

to maintain a system that is the safest in the world, and it is the 

most used in the world? 

Let me give you my little state of West Virginia. They told us if 

you deregulate, it is going to improve air service in rural West Virginia. We were told that. I remember that back in the 1970s and 

1980s. Jennings Randolph was a pioneer at that time. I think, Senator Dorgan, you remember Senator Randolph. 

We have 122 airports in West Virginia, 86 of them are little private strips here and there, 36 are public, only seven have commercial flights, and only seven of them have towers. 

Our ability to move people in West Virginia has been tremendously diminished because of the relevance of what is going on. 

I am just looking at the situation of where we are supposed to 

be improving a system by privatizing, and in some cases, I have 

been all for privatization. I am also for public/private partnerships. 

We have contract towers, that still come under the purview, I believe, of the FAA, but they are in a private stream, if you will. That 

seems to have worked in West Virginia. Our towers would have 

been eliminated. We would have only had two towers. Five would 

have been gone. 

I am looking at everything, how I am going to go home and explain that we are really making the system better, and then we 

start charging, if it was not for private aviation, if it was not for 

the business aviation that is going on today, we would be out of 

communication completely. Some of our little towns would not have 

any industry whatsoever because they could not go back and forth. 

With that, I would just say, Senator Dorgan, if we take Congress 

out of the equation and spin off the air traffic control system to 

some non-governmental organization, how would that speak for 

rural America? 

Senator DORGAN. Senator, no one is suggesting that the government not be a stakeholder in whatever is proposed. I do not support privatization. I told you what I do support and why. 

I spent a lot of time on this committee holding up signs talking 

about how you could fly twice as far for half the price under deregulation. You are talking about a different subject. That subject 

has nothing to do—you and I agree on that subject, it has nothing 

50 

to do with the question of how you move airplanes from one part 

of the world to another, how to fly from one airport to another, and 

whether we are going to continue to use a World War II groundbased radar system or whether we are going to move to a different 

type of system using modern technology. 

This is not a question of what is. It is a question of what will 

be. There is no conflict by saying this is an unbelievably safe system, there is no conflict in saying that, and also observing that we 

are not moving as rapidly as some others are and as rapidly as we 

need to move in order to embrace the new technology and retain 

America’s leadership in an area that is very important. 

I met with the Europeans and others on this subject because the 

world is moving in this direction. The question is how fast will we 

move and will we retain our leadership. In my judgment, there will 

not be funding to do it in the public sector, and I believe, therefore, 

we have to find a new structure, but not one in which the government is not a stakeholder. 

Senator MANCHIN. I believe sooner or later we are going to have 

to get a budget that works for this country, based on priorities and 

based on our values. We have not done that because of the political 

toxicity of this place we call ‘‘Washington.’’ 

It has to change sooner or later or we are going to hit the wall 

and we are going to have to get into it, and it cannot be picking 

and choosing what side of the fence you are on. 

The thing I would say is there have been reports, the Congressional Research Service highlighted some potential constitutional 

concerns of what we are talking about. One of my biggest concerns 

is delegation of taxing authority to an unelected, unaccountable 

Board of Directors that will have unfettered authority to adjust 

user fees and levy new taxes. 

One of the strongest arguments being made for privatizing or incorporating our air traffic control system, is it would allow it to be 

financially self-sustaining, free from the political forces that often 

drive Federal appropriations. 

I would just ask any of you here in the business arena, do you 

think it is legal and appropriate for Congress to relinquish our constitutional authority to levy taxes? 

Mr. SMISEK. If I could jump in, sir. I do not purport to be an expert on constitutional law, but I believe it is very difficult to judge 

the constitutionality of a structure that does not exist and legislation that has not been drafted. 

The user fee structure that we have been talking about is designed to cover the costs of the system, and only the costs of the 

system, and to have an appropriate reserve fund. For example, if 

there were reductions in travel caused by an economic—— 

Senator MANCHIN. I do not have a problem with that. 

Mr. SMISEK. In terms of the issues of general aviation, for example, in Canada, and it could be done here, general aviation is 

charging an annual fee sort of like the sticker you put on your car, 

registration fee, a very simple process. There is no intent to use the 

user fee structure to change the proportion of funding the airlines 

today disproportionately pay, and the airlines are certainly not proposing to change that, because we see the vast—even though it 

would be philosophically the appropriate thing to do, we see enorVerDate Nov 24 2008 13:28 Jul 12, 2016 Jkt 075679 PO 00000 Frm 00054 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\20671.TXT JACKIE
51 

mous efficiencies that could be driven from a non-profit corporation 

with clear stakeholders of interest involved, particularly the government, the Department of Defense. Of course, we would have to 

have that. 

Senator MANCHIN. Mr. Bolen? 

Mr. BOLEN. The amount of money being generated today from industry is less than what the FAA costs. It seems to me as we go 

forward we are going to have to make decisions on whether we are 

going to raise industry taxes, and you can call them user fees, you 

can call them rates, you can call these charges, or taxes, it does not 

matter, it is all the same thing—forced payments from the industry 

to fund the system which have to go up or the size of the system 

has to come down, or as has been discussed, we can borrow the 

money. We can give bonding authority. 

I think if we are going to do that, we would need to know pretty 

clearly what are we going to borrow, what are we going to get for 

it, when is it going to be available, how are we going to pay that 

back, and who is going to pay that back. 

As I said before, the authority to tax was said by the First Chief 

Justice of the Supreme Court to be the power to destroy, and we 

are very concerned about that. 

We have heard some of the press announcements that have been 

made in the past about people who have suggested that, and the 

goal of cost shifting has been part of that. It remains a concern. 

Senator BLUNT [presiding]. The gentleman’s time has expired. 

Ms. Klobuchar followed by Mr. Schatz, Mr. Booker, and Mr. Markey. 

STATEMENT OF HON. AMY KLOBUCHAR, 

U.S. SENATOR FROM MINNESOTA 

Senator KLOBUCHAR. Thank you very much, Senator Blunt. 

Thank you. Welcome back, Senator Dorgan. It is good to see you. 

I actually was at the Canadian Embassy last night with the premier of Ontario and talking about some of their funding, and Senator Blunt and I have been in Canada talking about how they have 

handled transportation projects. 

I will be honest, our focus has been a bit more on highways and 

bridges and how they have been able to have the private sector finance those projects over the long haul, and have some stake, that 

they are still publicly owned in the end. 

Could you tell me, those of you who are experts on how this 

works with a model with air traffic control, if it is the same model, 

and how they do this in Canada with the FAA? Obviously, there 

are concerns that some of my colleagues have expressed about the 

effect this would have on smaller airports, on public safety, and 

other things. 

I wonder how NavCanada compares to what they have done with 

their roads and bridges and some of that, which I found a pretty 

interesting model to look at. 

Mr. Rinaldi? 

Mr. RINALDI. Thank you, Senator. I will not call myself an expert 

on this, but I have been researching with NavCanada, along with 

the U.K. and the Australia system. 

52 

As far as what I know of the NavCanada system, they have no 

really reduced services. That would be one of the things I would be 

deeply concerned about. They moved out of Transport Canada, 

which was their government structure in the early 1990s. They 

started to transition about 1994, and it took about 5 years to go 

through a full transition. It was a big transition that they actually 

went through, and then stood up their corporation of NavCanada. 

They established an user fee of all the users in the system. 

Senator KLOBUCHAR. Someone else brought up the Delta letter. 

They talked about a tax increase in the provision of service, cost 

increases, airports look to make up for lost airport and airway trust 

fund money. Again, this is a different model, but in Canada. Any 

comments on that? Anyone? 

Mr. SMISEK. I could speak to the U.S. The amount of money that 

is raised from the tax structure today pays for the entire traffic 

control system, and contributes additional monies to the operation 

of the FAA, and we would not propose that would change. 

I think the 15 year average of the general fund contribution to the entire FAA today is around $3 billion, so that with the user 

fees to run the system initially, there would be certainty with the 

current level of taxation, a portion of it replaced by user fees, a portion of it retained by Congress. There would be money that would 

continue to be contributed to the FAA, whether that would go into 

the AIP or the general fund—— 

Senator KLOBUCHAR. In this reformed system, would the users be 

willing to pay more? 

Mr. SMISEK. I think certainly from the U.S. airline industry, as 

you know, Senator, we are one of the most heavily taxed industries 

today. We are taxed more than alcohol and tobacco, which are sins, 

and we are not a sin. 

We would suggest that perhaps taxation not be increased. I believe over time, personally I believe over time, based on the 

NavCanada model, that the user fees would actually go down because of the efficiencies, and for example, in Canada, they have 

gone down by 30 percent. 

Mr. BOLEN. Senator, I think from a business aviation perspective, the business aviation community looks dramatically different 

in Canada than it does in the United States. While they have some 

large companies up there, they do not have a lot of the small and 

mid-sized companies operating out of the small and mid-sized communities that we do in the United States. 

As Paul mentioned, they do have both user fees and a fuel tax 

up there, so it is a double tax situation. It is also fundamentally 

different because in addition to privatizing air traffic control, they 

also have privatized airports, which have their own associated 

costs. For a lot of different reasons, we do not believe it is an apples to apples comparison. 

Senator KLOBUCHAR. How would smaller airports fare under this 

model? I guess I would ask the same thing of Senator Dorgan and 

Governor Engler, just because they are a little familiar with those 

in their previous lives in their states. 

Mr. BOLEN. From my perspective, quickly, we are very concerned 

about that access to those airports and airspace. Today, I received 

a letter from the Fargo Jet Center, which obviously has an awful 

53 

lot of general aviation operations, they are very concerned that we 

not copy that model. 

What we hear from our members who operate in Canada is a lot 

of concern about the way it works up there with regard to paying 

the user fees as opposed to the fuel taxes. It is not nearly as efficient. It creates a costly administrative burden, and they think it 

has harmed business aviation. 

Senator KLOBUCHAR. Governor Engler and Senator Dorgan? 

Mr. ENGLER. One of the arguments I would make perhaps goes 

in the opposite direction, that today we have technology that would 

allow for more remote airport access services to these smaller airports that we cannot get fully deployed. We are running behind on 

that. That would be a benefit. 

As I look at this, do we like what we have and are we confident 

we can make it a lot better if we stay the course, and if we want 

to change, what would that entail. We are getting into some of the 

debate about what might be in a bill, but I think the questions that 

are being asked are able to be responded to both by some of the 

work that the Eno Center has done and other reports we have 

looked at. 

Senator KLOBUCHAR. Senator Dorgan? 

Senator DORGAN. I think Mr. Bolen is concerned about the uncertainty, and I understand that. My interest is not in creating a system, and we have offered an approach here that does not have a 

lot of specifics, we are simply describing why we think we need a 

structure. 

I have no interest in injuring business aviation, general aviation, 

or small airports. 

One of the principal issues here is every major airport in this 

country has bonding authority, and in every one of your communities, if you have a major airport, they are bonding for investment 

and so on. 

I think one of the significant issues here is to give a new structure bonding capability to be able to build the system in a robust 

way, and we have explicitly not described an user fee or structure 

system beyond that, and I think Mr. Bolen—I fully understand his 

point. I do not have any interest in seeing a system that is going 

to injure general aviation, business aviation, or small airports, or 

access to airports for that matter. 

Senator KLOBUCHAR. Thank you. 

Senator BLUNT. Senator Markey followed by Senator McCaskill. 

STATEMENT OF HON. EDWARD MARKEY, 

U.S. SENATOR FROM MASSACHUSETTS 

Senator MARKEY. Thank you, Mr. Chairman, very much. It is 

good to see the great Byron Dorgan back at Congress. 

Last month, along with Ranking Member Nelson, Senators Cantwell, Booker, Blumenthal, I sent a letter to the Department of 

Transportation asking about airlines’ ability to engage in personalized pricing. 

Personalized pricing is a practice that would allow an airline to 

charge different prices to consumers that are trying to buy the 

same seat on the same flight at the same time. The difference in 

54 

air fare would be based on personal information that the airline 

has collected about the passenger. 

I am, and the other members are deeply concerned that if airlines are allowed to engage in personalized pricing, they could discriminate amongst consumers, charging customers different prices 

based on zip codes, income levels, marital status, or other characteristics. 

What if, for example, airlines using consumer zip code information offered special fares to consumers who live in more affluent zip 

codes to entice them to travel more frequently while failing to provide these same discounts in lower income areas? 

Mr. Huerta, the FAA publicly refused last year to determine 

whether price discrimination based on income level, marital status, 

or trip purposes would constitute unreasonable discrimination. I 

believe that practice is discrimination. What can you tell the Committee today? Will the FAA revisit that determination? 

Mr. HUERTA. First of all, Senator, to clarify, economic regulation 

and oversight is an authority held in the Office of the Secretary at 

DOT, not in the FAA. We can certainly get you a response for the 

record. 

Senator MARKEY. I think that is important for the Committee. 

[The following response was supplied to the Committee:] 

On August 6, 2014, the U.S. Department of Transportation approved the International Air Transport Association (IATA) Resolution 787. The Department’s approval did not include permission for airlines to engage in personalized pricing, nor 

did it endorse or approve a business model that would require consumers to divulge 

personal information in order to shop for airfares. Rather, it was contingent on 

stringent privacy protections, including a requirement that consumers’ ability to 

shop anonymously must not otherwise be undermined. Further, the order stated 

that the implementation of any data standard that asks a passenger to voluntarily 

supply personal information is subject to the airline’s privacy policy. Failure of an 

entity to follow its privacy policy for the sharing and storing of personal information 

is a violation of the statutory prohibition against unfair and deceptive practices and 

unfair methods of competition. 

Senator MARKEY. Mr. Smisek, your airline, would you discriminate based upon income status or marital status or trip purpose? 

Mr. SMISEK. Sir, if what you are describing is a new distribution 

capability at IATA, which is a technological advance for the ability 

of airlines to offer to third parties additional services that the customers cannot get today, I do not view that—not only do I not view 

it as discriminatory, I view it as pro-consumer. 

Senator MARKEY. What I am asking you is are you going to use 

marital status—— 

Mr. SMISEK. No, sir. We have no desire or intent of doing anything like that. What the new distribution capability is to do, for 

example, if you are a premiere member at United Airlines buying 

through a third party site, today, if you bought directly from us, 

directly on www.united.com, you would be able to get an economy 

plus seat for free, but if you are buying through a third party, we 

do not know your loyalty status because of the technology in existence today, and we are not able to offer that ability to upgrade for 

free, which requires you to book through the third party and come 

back to www.united.com and get your upgrade. 

55 

Senator MARKEY. All I am really trying to clarify is that you will 

not be using income status or marital status, zip code information 

in any way to make any of these—— 

Mr. SMISEK. Senator, United Airlines has no desire to discriminate against anyone. 

Senator MARKEY. That is very helpful. Thank you, sir. We have 

heard recent reports about cybersecurity threats that air travelers 

face. One security researcher claimed to hack into the airline’s control systems through the entertainment system, changing the direction of the plane. 

I am concerned about recent claims that the Wi-Fi on planes 

lacks basic security and that makes it easy for hackers to spy on 

customers using the network. 

Let me first ask about hacking into airplane controls. I know 

Chairman Thune earlier asked Administrator Huerta about the 

FAA’s efforts, so let me turn to you again, Mr. Smisek. What is 

American Airlines doing to prevent hacking into the vital controls 

of your airlines? 

Mr. SMISEK. Sir, I am not sure what American Airlines is doing, 

but I will tell you that United Airlines is—obviously, any form of 

cybersecurity issue is of great concern to us, sir. 

I will say we are cooperating with the FBI because of an allegation with respect to one of our aircraft was involved. We are unaware of whether or not this is possible. The original equipment 

manufacturers, at least from what I understand, have stated this 

is not possible today. However, I think what we need is as an industry to take any threat seriously. There are clear firewalls between a Wi-Fi system and any kind of control of the airplane. 

Senator MARKEY. Has United taken efforts to secure the wireless—— 

Mr. SMISEK. Absolutely, we have. 

Senator MARKEY. Are your customers protected against data 

breaches while they are using the United Wi-Fi system? 

Mr. SMISEK. We provide the most robust protections that we can, 

sir, but I will tell you based upon data breaches of corporations 

worldwide, allegations of the Chinese military involvement, I do 

not think anybody can honestly—— 

Senator MARKEY. I am only talking about someone in the plane 

at 30,000 feet using your Wi-Fi system. Are those consumers on 

that plane protected against data hacking? 

Mr. SMISEK. We have protected them to the best of our ability, 

sir, and we have robust protections particularly with respect to the 

flight safety of the aircraft. 

Senator MARKEY. And the data protection of the customers? 

Mr. SMISEK. Yes, sir; as best we can. 

Senator MARKEY. Thank you. 

The CHAIRMAN [presiding]. Thank you, Senator Markey. Senator 

McCaskill? 

STATEMENT OF HON. CLAIRE MCCASKILL, 

U.S. SENATOR FROM MISSOURI 

Senator MCCASKILL. Thank you. It is not clear to me how much 

of this is money and how much of this is management. Does anybody want to put a percentage on which is which? Is 90 percent of 

56 

this a lack of stable funding and 10 percent management? What do 

you think, Governor Engler? 

Mr. ENGLER. I will take a shot at it because I do not think it is 

knowable, but going to the National Academies’ report, which I 

think is objective, and you know, smart people that Congress mandated to look at this, they raised a lot of management questions. 

Management is kind of strategic thought leadership, where are we 

going, what is the architecture. 

It is that kind of management of a process and the design, and 

then money, I think there is no question. I would say it is 50/50. 

Senator MCCASKILL. It is interesting. I do not know how we ensure we get better management by just changing the structure. 

Look at the U.S. Postal Service. Look at Amtrak. These are all examples of things we have done that are structures where we have 

tried to do something other than the traditional ‘‘this is an inherently government function and the government is going to do it.’’ 

Mr. ENGLER. I would say look at FedEx. 

Senator MCCASKILL. Those are privatized for-profits. Are we advocating going to for-profits? 

Mr. ENGLER. No. 

Senator MCCASKILL. If that is the case, my rural airports are totally hosed. 

Mr. ENGLER. No. We are not saying that, but I think the private 

non-profit corporation in my mind, when I look at some of the decisions that were made in other countries and how they have approached it, to me, they offer the kind of flexibility. 

Remember, the FAA is still a rule setter here. They are still the 

boss, but now, in the hands of a private company—one of the 

things on the funding side, Mr. Bolen said bonding, you know, is 

a euphemism for borrowing, of course it is. The markets today, you 

can borrow capital at almost no cost, anybody would do this and 

just go build it. You get tremendous savings by being able to make 

your investment now. 

You could probably do the build out, I do not know, in three 

years, would it be all done? 

Senator MCCASKILL. Should we do this? I am listening to you 

and I am hearing highways. We are all thinking about highways 

right now. 

Mr. ENGLER. I am with you, I did that as a Governor. 

Senator MCCASKILL. We do not have a bill and the highway 

funding runs out in about 10 minutes, we still do not have a hearing or a bill on highway funding. Should we do this for our highway system? Should we go to a not-for-profit organization for our 

highway system? What about our waterways? What about locks 

and dams? Should we go to a not-for-profit corporation for that? 

Mr. ENGLER. Some of the port authorities are actually maybe 

analogous to that. Indiana did it on highways. Ohio has done something similar. We have certainly done it on bridges in some cases. 

The Mackinac Bridge is run by an authority, actually. 

Senator MCCASKILL. It seems to me that if we could do better on 

the funding part, if we would all acknowledge that in fact bonding 

is debt, but we need to do it for our infrastructure or we need to 

do something for our infrastructure. We are short-changing our 

57 

country in a dramatic fashion when it comes to infrastructure, and 

that includes our airways. 

That is the majority of the problem. I am skeptical and I know 

Senator Dorgan shares some of my skepticism because he was in 

a front row seat as I have tried to be about turning over inherently 

government functions to private corporations because he did 

groundbreaking hearings on some of the abuses in Iraq with the 

contracting we did for inherently government functions that went 

badly awry and wasted billions of dollars. 

I just do not think a new structure is the silver bullet. I am open 

to this. I do not mean to sound like this is a terrible idea, but it 

seems to me that what we are trying to do is put a Band-Aid on 

a cancer which is the inability of Congress to step up to the plate 

and do the mandated hard job of finding the resources to fund infrastructure. 

Mr. ENGLER. If you will indulge me for 10 seconds, I will tell you, 

I got into this initially by looking at how it is that we can explain 

to the Federal Government that there is a better way to do capital 

budgeting, and I do not want to get us off on that track. 

I believe strongly there ought to be a capital budget at the Federal level, but absent that, are there ways to think about how you 

solve big critical infrastructure questions, and this is a discrete 

one, and if we had funded this when we first started talking 

NextGen, bonded for it and built it, it would have been all done, 

we would have been using it. 

We talked to the Administration about this when TARP was 

being talked about. Hey, let’s get this done, you could have it done 

by the time you are running for re-election. That was not an option 

they chose. The Secretary of Transportation and both parties in the 

past have supported this, the Administration and both parties have 

supported this. There is a lot of history here. 

I think this one lends itself, and I would like to see the Committee seriously consider it and then validate a concept, which I 

think you have astutely jumped ahead, and are there other applications, you bet. I think there are a ton of them. 

Senator MCCASKILL. It would become irrelevant. 

Senator DORGAN. If I might just respond briefly, you asked a 

question that is really important about the issue of management 

versus funding. I will admit that I think there are management 

issues and have been for some long time, and I have been watching 

as Chair of the Aviation Subcommittee and other venues what is 

happening for a long time. 

I think were it not for the funding issue, I probably would not 

be at this table with this message. I honestly think it is naı ̈ve to 

believe that the funding issue is going to change and that somehow 

the Congress, who this year, by the way, is going to cut $365 million from the facilities and equipment account of Mr. Huerta. 

It is unbelievable to me. That will probably be magnified by another sequestration and maybe a couple of continuing resolutions 

and who knows. You cannot build what we want to build for this 

country and retain leadership opportunities in this critical area of 

technology of air traffic control with this approach. 

That is why I have come to the conclusion that we need restructuring of the type I described. 

58 

Senator MCCASKILL. Thank you. 

The CHAIRMAN. Thank you, Senator McCaskill. Senator 

Blumenthal has returned, so he is up next, followed by Senator 

Daines. 

STATEMENT OF HON. RICHARD BLUMENTHAL, 

U.S. SENATOR FROM CONNECTICUT 

Senator BLUMENTHAL. Thanks, Mr. Chairman. Thanks for having 

this series of excellent hearings and to all of you who are before 

us today. The chairman mentioned earlier that you were a very efficient panel, and you are also a very distinguished and informative 

one, and I want to thank you for being here. 

I was interested as a rider of Amtrak as well as a flier in some 

of the reports last week in the wake of the Philadelphia tragedy 

about potential price-gouging among airlines, and the derailment 

obviously was a horrific event, and I know you join me in expressing our sympathies to all the loved ones and all who were affected. 

I wonder, Mr. Smisek, as an executive for United Airlines, can 

you confirm whether these reports are valid, whether they have 

been exaggerated, if the FTC were to look at these fares, what 

would they conclude? I just want to mention that a $2,309 flight from D.C. to 

LaGuardia would be an example of potential price gouging, and I 

want to advise that I am not asking you because I am pointing to 

United Airlines in any way or form as potentially one responsible 

or accountable. I am just asking you as an informed airline executive. 

Mr. SMISEK. Thank you. I would be happy to respond. Let me express my condolences to the families and loved ones of those killed 

in that terrible tragedy of Amtrak. 

Absolutely not, sir, speaking for United Airlines, we would never 

take advantage of an opportunity like that, if you viewed it as an 

opportunity. No one would do that. 

It is true that as people book closer into a flight, the ticket prices 

tend to go up because that inventory, as you know, evaporates 

every time a flight takes off without someone in that seat. That inventory disappears. Therefore, that inventory is priced more toward last minute business travelers who tend to have a willingness 

to pay more because they are traveling on business. 

When you have a tragedy such as Amtrak, you have a sudden 

rush of demand for the very few remaining seats in those high inventory buckets; those prices are high, but we would never raise 

prices in connection with a tragedy. 

Senator BLUMENTHAL. You would attribute any increase in prices 

to just—— 

Mr. SMISEK. Those are last minute fares in an open inventory reserved for business travelers, for people booking at the last minute. 

What we saw was certainly a surge in demand for tickets, and the 

only available inventory was the last minute business inventory. 

Senator BLUMENTHAL. Mr. Rinaldi, did you have a comment? 

Mr. RINALDI. On the ticketing? No. 

Senator BLUMENTHAL. I would join you in the strong feeling that 

that kind of price gouging would be utterly reprehensible, and if 

there is any indication, certainly I will call on the FTC to invesVerDate Nov 24 2008 13:28 Jul 12, 2016 Jkt 075679 PO 00000 Frm 00062 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\20671.TXT JACKIE
59 

tigate promptly, as perhaps this committee would have a role as 

well. 

Mr. SMISEK. Sir, I would join you in that call. 

Senator BLUMENTHAL. Thank you. Speaking of that derailment 

and the aftermath when rail transportation was stopped, I think 

we saw in the reaction among passengers in rushing to the airlines 

that the lack of adequate rail transportation has an impact on the 

airlines. These systems are all interconnected. The present air 

transportation system can become so congested that it simply cannot serve all of the riders who are diverted from rail. 

I would ask the panel whether you have any observations on the 

importance of rail in assuring adequate and efficient airline transportation, simply in providing a necessary link that relieves the 

congestion in the airlines. 

Mr. HUERTA. Senator, certainly from our standpoint as an agency 

of the Transportation Department, we work very closely with our 

colleagues across all of the modal agencies to ensure that we have 

connections and linkages, and that the system is being appropriately managed as a total system. 

One of the things that we have been very focused on is how do 

we link modes of transportation together, and a lot of that as you 

well know is rail access to airports to ensure that there is a seamless transportation network that spans many modes of transportation, but clearly, there is a relationship. 

Senator BLUMENTHAL. Finally, I have one last question for 

maybe Governor Engler and Senator Dorgan. The need for investment in these systems seems so apparent, even obvious to us, and 

we have a virtually full room here. 

The public still does not seem to be mobilized, and this Congress 

seems to be divided. Do you have some advice based on your political wisdom and experience on how we do better to raise awareness 

and generate support? Obviously, both of you have long-standing 

experience. 

Mr. ENGLER. Privatization is tough, but I do have one observation, that it makes little sense to try to build railroads in the desert 

in California when we have a Northeast Corridor that we truly 

ought to make the premiere showcase corridor for passenger rail 

and separate passenger rail from freight rail on the Corridor, 

maybe bringing in some of the ambitions in other parts of the country while we fix the corridor that matters the most would be my 

thought on that. 

I would also suggest the subsidization costs of different modes, 

one of the things you heard from Mr. Smisek and I think maybe 

everyone on the panel today, air has been pretty good about paying 

its own way, and has been pretty heavily taxed. That is not necessarily the case with rail and transportation, while states have 

been willing to raise fuel taxes, we know that form of tax is coming 

to an end at some point, and there is a need for a solution. 

I am hoping that we can get, Senator, into the broader question 

of tax reform and buy ourselves maybe a few years while we sort 

out how we are actually going to fund highways and bridges and 

reconstruction in the country. That is a big unmet need. 

Senator DORGAN. You know, I do not know that I can offer you 

much advice except to say we have painted ourselves into a fiscal 

60 

policy corner. We have a dozen years or more that we have not 

paid for and we have so much—I chaired the appropriations panel 

on energy and water, we had $60 billion of authorized water 

projects, and $2 billion a year appropriations. This stuff does not 

add up. 

It is true in transportation. It is true in a wide range of areas 

of infrastructure. 

I just think we have to do better on fiscal policy and make investments in the country if we are going to have the kind of country we want in the future. 

Senator BLUMENTHAL. Thank you. I want to thank all of you 

again, and Mr. Rinaldi, I want to thank the extraordinary work by 

our air controllers across the country, most especially in Connecticut. I met with a number of them earlier today. They are often 

unappreciated and unclaimed heroes of our air transportation system, so thank you for being here today. 

Mr. RINALDI. Highly trained, highly skilled professionals and 

they love their job. 

Senator BLUMENTHAL. Thank you. Thanks, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Blumenthal. Senator 

Daines? 

STATEMENT OF HON. STEVE DAINES, 

U.S. SENATOR FROM MONTANA 

Senator DAINES. Thank you, Mr. Chairman. I have some questions that relate to rural America. The Chairman represents South 

Dakota. I have the privilege of representing the state of Montana. 

For states like ours, connectivity is so important to grow our economies. 

Broadband connectivity has allowed us to build world class technology companies now that are close to fly fishing streams and 

mountain ranges, and it is the way to attract and retain some of 

the best talent in the world, and frankly, to build great companies. 

The other part of connectivity is air service. It is a requirement 

to build a world class company to have accessibility to good air 

services. 

For Administrator Huerta, as you continue to examine potential 

air traffic control modernization reforms, I would strongly encourage you to first focus on rural community interests when considering any changes. 

As we look at our states, not only do we have the ability to grow 

great technology companies now because of the quality of life, but 

also a lot of our energy deposits, our future energy sources, are 

going to be in places that are a long way away from urban areas. 

Certainly Senator Dorgan sees that in North Dakota, and I see 

that in Montana and other places. 

Programs like Essential Air Service, the Contract Tower Program, and the Airport Improvement Program are critical to rural 

states like Montana. In fact, the Montana airports are very concerned. We are hearing that the proposed changes to air traffic control will harm the AIP program specifically. I encourage you to undertake consultation with all stakeholders. 

61 

What specific remedies, Administrator Huerta, can the FAA provide to rural airports as it considers reforming the air traffic control program? 

Mr. HUERTA. Senator, I think you have asked a very important 

question. It is something that as we have this longer term discussion of investment and structure that everyone understand that the 

aviation system, and the grant program, and the aviation structure 

of the United States has always been about achieving twin objectives. 

First, to have an efficient system that serves the largest number 

of passengers, and second, to provide a level of access to communities throughout the country. 

In previous reauthorizations, that has always been a matter of 

great debate, as you well know, between members of Congress 

about how to achieve that balance. 

That challenge and issue does not go away under any structure, 

nor does any structure alone deal with what those issues are. What 

you are raising is an important public policy question of where we 

as a nation are going with respect to ensuring a highly efficient 

system and the ability to invest in modernization of that system 

while at the same time ensuring some level of access. 

That debate, I think, is foundational to what we need to be looking at in a reauthorization, and we need to answer that question 

before we can really answer the question of what is the best structure that enables us to get there. 

There are other questions as well in terms of how we capitalize, 

how we pay for what we are looking for, and longer term, how we 

ensure that we are keeping those twin objectives in balance. 

Senator DAINES. Let me go to a similar issue. I was part of building a great technology company in Montana, and we had a great 

airport, the Bozeman Airport, the busiest airport in Montana, in 

fact. I ran the Asia Pacific division of the company from Bozeman, 

Montana. I am bouncing across the water thanks to connectivity 

with airlines. 

I want to step back and ask Mr. Smisek, as you look at global 

systems, with a great airline like United Airlines, in the air traffic 

control systems used by other countries, what do you see from 

some of these countries, something we can learn to apply best practices, improvements in our systems going forward here that will 

make the U.S. system better? 

I realize there are scalability questions, if we look at North 

America and the United States’ air space, but can you share some 

comments that you might want to interject in the record here of 

how we can make our system better based on what other countries 

are doing? 

Mr. SMISEK. I would be happy to, Senator. Thank you. What we 

are looking for in this opportunity is to provide technological improvements that will improve throughput, reduce the time that 

travelers sit on a runway waiting to take off, reduce the incidences 

of circling airports waiting to land, reduce congestion, reduce fuel 

burn. 

We believe the technology is absolutely scalable. Let’s use 

NavCanada. I think NavCanada is one of the best in the world, 

and I believe Mr. Rinaldi would agree they have the most advanced 

62 

technology, the most productive workforce, the happiest air traffic 

controllers. I think those are all true things. 

[Laughter.] 

Mr. SMISEK. Even happier than yours and they are pretty happy, 

and by the way, someone mentioned these were the unsung heroes. 

We sing their praises daily because we deal with them daily and 

they are very professional and expert. 

Getting back to NavCanada, it is indeed smaller, but air transport is handled by sector, and you know from your own history, 

technology scales magnificently. I think there are tremendous opportunities. 

As we fly around the world, there are some systems that are better than others. There are some foreign countries that handle it 

well and others that do not. We are very focused on not only maintaining where we are and where we are in safety for sure, but improving the efficiency of this system because this system—even 

though we are a global carrier, this system disproportionately affects our operational reliability, our customer satisfaction, our fuel 

burn. 

If we get it right, and we have the opportunity to get it right, 

we can have a huge step forward in the efficiency of the system, 

in the value of the system to the United States, the economy, and 

to consumers. 

This is a tremendous opportunity for us, and this is the system 

we focus on the most because this is where we actually have not 

only a vast majority of our assets and our flights, but also this is 

an opportunity for the United States of America, where we are citizens, and United Airlines is a citizen of the United States, to provide the best air traffic control system in the world. 

Senator DAINES. I am out of time. I will say for the flying public, 

go on something like Flight Aware and see all the traffic in the air 

at any given time across the United States. It is humbling. Grateful for what we have here. The number you used, Mr. Rinaldi, 130 

million? 

Mr. RINALDI. Yes, 132 million. 

Senator DAINES. These are impressive numbers, and it always 

keeps us aware of the importance of the system today. 

Mr. RINALDI. Just one second to address your first question, if I 

may. Status quo, we have a lot of talk about rural America and the 

airports, I think status quo is one of our biggest concerns for rural 

America and the airports. 

If you look at what the FAA tried to do under sequester in 2013, 

they looked at 238 air traffic control towers, they shut them down 

because they did not have funding. The majority of those were contract towers, but also were FAA towers, the majority of them are 

in rural America. That is one of our biggest concerns, about status 

quo. 

Senator DAINES. Thank you for looking out for rural America, I 

appreciate that. 

The CHAIRMAN. I thank the Senator from Montana for looking 

out for rural America. I think he and I would probably both agree 

that at the end of this we would like to see more direct flights to 

and from South Dakota and Montana. Is that right? 

[Laughter.] 

63 

Senator DAINES. Very much so, Mr. Chairman. I associate myself 

with your comments. 

The CHAIRMAN. I think we have run out of questioners. I do appreciate very much the panel’s great remarks today. Different perspectives. This is really kind of the Senate’s first foray into this 

issue of reform, and obviously we have to figure out a way as we 

move toward reauthorization of doing what is best. 

I think we have the same goal in mind, and as was pointed out, 

sometimes maybe slightly different perspectives about how best to 

get there. I do think one of the things that was raised, stability of 

funding, is an important one. I think that is something in the current budgetary environment that we find ourselves in today as increasingly challenging. 

I think there is an openness to look at models that might better 

cope with that issue as well as some of the other issues that were 

raised today. 

Thank you all very much, and the hearing record will stay open 

for 2 weeks for members to submit questions, and if you could respond in a timely way to those questions, it will be most appreciated. 

This hearing is adjourned. 

[Whereupon, at 12 p.m., the hearing was adjourned.] 

(65) 

1 Congressional Research Service, memorandum to the Honorable Peter A. DeFazio, Ranking 

Member of the Committee on Transportation and Infrastructure, ‘‘Analysis of Constitutional 

Continued 

A P P E N D I X 

PREPARED STATEMENT OF MIKE PERRONE, NATIONAL PRESIDENT, 

PROFESSIONAL AVIATION SAFETY SPECIALISTS

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 from 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 information professionals in Mission Support Services (MSS) who develop, 

maintain and support instrument flight procedures and a variety of aviation products that enhance industry performance and efficiency 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 (NAS). 

PASS appreciates the opportunity to present our views regarding issues related 

to reform of the FAA. The following statement includes PASS’s position that a lack 

of a stable, consistent funding stream is a significant issue currently facing the 

FAA; the importance of ensuring the FAA remains a cohesive unit of Federal employees; and our concerns with privatizing any portion of the air traffic control system that is the world’s standard. 

Commercial aviation contributes more than $1.5 trillion to the U.S. economy each 

year in addition to providing over 11 million jobs. As Congress considers legislation 

to reauthorize the agency, addressing a stable funding stream for the FAA should 

be a priority. In April 2013, when sequestration took effect, impacts were felt 

throughout the NAS. Flights across the country were delayed as a result of reduced 

maintenance and loss of system redundancy; cutbacks in funding for spare parts impacted the repair and maintenance of air traffic control equipment; aviation safety 

inspectors were prevented from overseeing commercial and general aviation industries; manufacturing inspectors were not inspecting aviation mechanics, facilities, 

training programs and equipment; and registration certificates were not issued for 

U.S. civil aircraft and airmen. Furthermore, training was suspended at the FAA 

Academy in Oklahoma City, forcing employees to fall behind on training essential 

to performing their jobs to the best of their ability. The FAA is just now recovering 

from the impacts of the 2013 sequestration. 

While PASS recognizes that FAA funding must be addressed and that this may 

involve some restructuring, we are concerned that any major overhaul of the FAA 

that privatizes any functions or services either through a for-profit or not-for-profit 

company has the potential to negatively impact agency operations. Our country has 

the safest and largest aviation system in the world and it defies logic to believe that 

major changes to this intricate system will not at a minimum present major challenges. With any structural changes, unintended consequences and unforeseen circumstances are inevitable, which is a gamble this country should be unwilling to 

take. 

Another concern regarding privatization of air traffic control services is whether 

it is legal. The Congressional Research Service (CRS) released an analysis on April 

10, 2015, specifically noting that the establishment of a private, non-profit corporation to provide air traffic control services may raise specific and consequential constitutional issues.1 More definitively, the CRS concluded that such a corporation 

66 

Issues Arising from a Proposal to Authorize a Federally Chartered Private Corporation to Provide Air Traffic Control Services,’’ April 10, 2015. 2Manager, General Law Branch, AGC–110, memorandum to Manager, Maintenance Engineering Division, ASM–100, ‘‘Contractor Certification of Navigational Systems in National Airspace System (NAS),’’ June 18, 1991. 

may be constitutionally suspect because of potential violations of the nondelegation 

doctrine, Fifth Amendment Due Process issues and infringements on the executive 

power. Essentially, the construction of a privatized model threatens to subject the 

structure of the public’s air traffic system to legal questioning and wrangling, which 

could ultimately lead to its unraveling. This is not a risk worth taking. 

In addition, progress in NAS modernization has been made over the past several 

years and changing the structure at this point could threaten that progress at a 

time when modernization is essential. While proponents of privatization point to 

lack of progress with the Next Generation Air Transportation System (NextGen) as 

a reason to privatize the Air Traffic Organization (ATO), PASS points to the variety 

of accomplishments and milestones successfully reached by the agency in establishing a stable platform for full modernization. Advancements are continuing in the 

following areas, among others: 

• Installation of new systems and equipment, including the En Route Automation 

Modernization System (ERAM), which has been implemented at all 20 en route 

centers. 

• Optimization of Airspace and Procedures in the Metroplex (OAPM) to promote 

greater efficiency throughout the country in Texas; Memphis; the Washington, 

D.C., region; New York/Philadelphia and Boston; Central and Southern Florida; 

Southern and Northern California; Chicago and Cleveland/Detroit; Seattle; Denver; Las Vegas; and Phoenix. 

• Integration into the NAS of more than 14,000 Performance-Based Navigation 

(PBN) procedures, including 713 Required Navigation Performance (RNP) procedures. 

• Continued upgrading and standardizing of terminal automation by transitioning 

to the Standard Terminal Automation Replacement (STARS) platform at more 

than 150 Terminal Radar Approach Control (TRACON) facilities throughout the 

country. 

• Advancing data and voice communications capabilities, with Data Communications clearance trials currently taking place with plans for deployment at 56 airports starting in 2016. 

• Continued work on the NAS Voice System, which will further the advancement 

of voice communication capabilities and allows the transfer of voice services 

from one facility to another. 

• Ongoing collaboration between the FAA and stakeholders as well as operators 

to prioritize implementation of NextGen initiatives and smooth the transition. 

Ensuing that the men and women who perform this vital work remain Federal 

employees is of fundamental importance in maintaining a safe and efficient NAS. 

These employees include Technical Operations systems specialists who install, 

maintain, repair and certify the complex systems that make up the NAS. These Federal employees are 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.2 The FAA’s certification process has 

been successful for decades and is a key element 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 perform 

this work to keep the system safe. 

PASS also points to last year’s incident in Chicago as further proof of the essential work of these Federal employees. Just over two weeks after a fire was deliberately started by a contract employee targeting vital aviation communications systems and equipment at the Chicago Air Route Traffic Control Center, the facility 

reopened for full operations thanks to the tireless efforts of FAA employees. On the 

day of the incident, systems specialists and other safety professionals at the FAA 

launched into action providing whatever assistance necessary to address the full loss 

67 

3Department of Transportation, ‘‘DOT Order 3910.1D: Drug and Alcohol-Free Departmental 

Workplace Program,’’ Appendix A, p. A–1, October 1, 2010. 

of communications at the Center. Across the region, in Cleveland, Indianapolis, 

Kansas City and Minneapolis, systems specialists quickly ensured backup systems 

responded and air traffic remained safe. In the days that followed, in Chicago and 

other locations, Federal employees went above and beyond to make sure the aviation system remained safe and functional. 

In addition, Flight Inspection Services (FIS) professionals and aeronautical professionals in Mission Support Services (MSS) support pilots, air traffic 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 support 

NextGen advancement in the NAS. The development, 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. 

Proponents of privatization consistently point to models in other countries as 

sources of inspiration for this country to emulate. PASS warns against making such 

comparisons as no aviation system can compare in size and scope to that which is 

operating in this country. These models operate at a fraction of the size in terms 

of number of travelers and overall size of their airspace, with the United States surpassing any other country in terms of air traffic control operations and management. There really is no comparing this country’s aviation system with any other 

aviation system in the world. 

Finally, there are some proposals related to FAA reform that include separating 

the Air Traffic Organization (ATO) from the other lines of business within the FAA. 

This is a concerning proposition since the ATO Safety Management System (SMS) 

is inextricably intertwined with the agency’s other lines of business. For example, 

communication and sharing of information and resources within the agency, including between the ATO and the Office of Aviation Safety (AVS), are essential to allow 

the agency to seamlessly perform work necessary to ensure safety every step of the 

way. It is likely that the requirement that the FAA’s safety office interact with a 

private corporation concerning regulation of air traffic control will create bureaucratic dysfunction, delays and unexpected costs. Furthermore, proponents have not 

indicated how the remaining parts of the FAA would be funded, and PASS is concerned that support and funding of the remaining Federal agency could be placed 

at risk if the ATO is a separate entity. The FAA must remain one cohesive unit 

in order to allow all FAA employees to continue working together for the benefit of 

the world’s foremost aviation system. 

The United States stands at the forefront of the aviation world. Our country’s air 

traffic control system is an important and extremely valuable public asset that is 

critical to our Nation’s economy. Today’s FAA employees are proud, dedicated and 

focused on the public good when they perform their jobs. They have been rightfully 

classified by the U.S. Department of Transportation as ‘‘safety critical’’ because the 

duties they perform ‘‘have a direct and immediate impact on public health and safety, the protection of life and property. These positions require the highest degree 

of trust and confidence.’’ 3 FAA employees, as government employees, answer only 

to their customers, their only stockholders: the American people. 

There is no debate that sequestration, operating under multiple continuing resolutions, 23 FAA reauthorization extensions during the last reauthorization cycle, and 

government shutdowns resulted in negative impacts on the NAS that resonated nationwide. PASS asks that members of Congress work together to consider funding 

alternatives that provide a stable, long-term funding stream for the agency, including allowing the FAA the flexibility to transfer funds among accounts as needed, advanced appropriations or a multiyear budget cycle. Other solutions may involve removing the FAA from the appropriations process. With this, the funding mechanisms currently supporting the FAA would likely require revisions to ensure an adequate funding stream. 

PASS thanks the Committee for considering our views, and we look forward to 

working with the Committee on the FAA reauthorization legislation. 

68 

PREPARED STATEMENT OF THOMAS L. HENDRICKS, PRESIDENT AND CEO, 

NATIONAL AIR TRANSPORTATION ASSOCIATION

Chairman Thune, Ranking Member Nelson, members of the Commerce Committee, thank you for the opportunity to submit comments for the record on the 

Committee’s review of air traffic control reform. My name is Thomas L. Hendricks 

and I serve as President and CEO of the National Air Transportation Association 

(NATA). 

NATA represents the interests of the general aviation business community before 

the Congress as well as federal, state and local government agencies. Representing 

nearly 2,300 aviation businesses, NATA’s member companies provide a broad range 

of services to general aviation, the airlines and the military. Our members range 

in size from large companies with international presence to smaller, single-location 

operators that depend exclusively on general aviation for their livelihood. Smaller 

companies account for the majority of NATA’s membership and most of our members have fewer than 40 employees and are designated as small businesses by the 

U.S. Small Business Administration. 

We understand the major reauthorization issue the Committee must address this 

year is whether and how we might alter the FAA’s organization and funding stream. 

This is certainly an appropriate discussion to have in light of the recent sequesters, 

government shutdown and criticisms of the FAA’s modernization plans. As the Committee looks at this very important issue, NATA shares many of the core reauthorization principles outlined by FAA Administrator Huerta—particularly the need to 

maintain our system’s excellent safety record. I have had the opportunity to captain 

passenger aircraft all over the world and I can tell you that there is no air traffic 

control system in the world that compares with ours, and certainly nowhere else in 

the world that compares with the challenges of managing the airspace in the U.S. 

northeast corridor. While we should support the injection of more private sector 

practices into the FAA, it is important how we manage any changes to the agency 

in order to maintain a stable, safe and efficient system that protects access for all 

users of our system. We should begin by determining whether the issues identified 

as needing reform can be addressed within the current construct. 

NATA believes the Committee should build on its excellent work begun in the last 

reauthorization and continue to assist the agency toward a more efficient operating 

structure. We believe it is possible to develop and deploy cutting-edge technology 

within the government structure and this is already occurring at the FAA. But, like 

other stakeholders, we believe more remains to be done. As Administrator Huerta 

has noted, the FAA must continue to foster a culture of innovation and efficiency. 

So if the question is whether the agency can efficiently deploy and certify cuttingedge technology, then let us provide the agency with the flexibility it needs in order 

to make that happen. 

In a discussion I had with one of the leading proponents of an alternative ATC 

structure, I identified another government agency that develops and deploys cutting 

edge technologies. The response was a horrified, ‘‘The FAA could never manage programs that way, it can’t fire people!’’ While somewhat humorous, it begs a larger 

question. Will an alternative air traffic control structure really be able to operate 

more efficiently? Compensation is the number one driver of air traffic control costs 

and of the approximately 35,000 employees that would presumably move to a new 

air traffic control organization, are they the ones from where efficiencies will be derived? Or will it inadvertently create a situation where costs will not in fact be controlled and the travelling public saddled with new and ever increasing fees? 

One of the benefits of the current authorization/appropriations process is the 

agency’s accountability to the taxpayer. I cannot think of any government agency 

that does not want its money without strings from Congress and I have never 

known an era where government spending was not described as ‘‘constrained.’’ 

When pressed for what is not being funded in modernization, the grudging response 

is that new technology is being deployed and that is certainly something to which 

I can personally attest as a user of the system. Of course, industry is then told the 

central issue is not modernization funding today but in the future while also being 

reminded that other aspects of the FAA suffer as a result of budgetary tradeoffs. 

NATA believes that before accepting this at face value, one must ask—is the agency 

doing everything it can to operate at its most efficient? If not, what additional authorities does it need to achieve that goal? 

Certainly, the FAA, as well as other agencies of the Federal Government that depend on discretionary funding, has been impacted by the budget impasses between 

Congress and the Administration. Experience tells us though that there is a limit 

to which discretionary spending can be reduced. In fact, it was the inability to bring 

to the House floor a transportation appropriation bill that resulted in the Ryan-MurVerDate Nov 24 2008 13:28 Jul 12, 2016 Jkt 075679 PO 00000 Frm 00072 Fmt 6601 Sfmt 6621 S:\GPO\DOCS\20671.TXT JACKIE
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ray budget deal that has provided us with stable FAA funding for the past few Fiscal Years. A user-fee funded agency is not necessarily exempt from sequestration. 

So again, should the Congress consider changes to the current funding stream or 

instead provide the agency with a clear, unambiguous exemption from the impacts 

of sequestration and government shutdowns? 

Further, we cannot underestimate the potential impact of separating air traffic 

from the agency’s safety functions. Administrator Huerta recently observed that 

breaking down stovepipes means close interaction between the operations and safety 

functions of FAA. Turning the FAA’s safety organization into a solely regulatory 

body, including overseeing operational standards, creates potential unintended consequences that might undermine many of the efficiencies that would come from a 

new air traffic control structure. 

Finally, we must discuss the potential risks to America’s general aviation community, including the investment and jobs created by the members of NATA. Recently, 

eight general aviation associations, including NATA, unveiled a new industry-wide 

study detailing the economic contributions of general aviation to the Nation. That 

study, conducted by PricewaterhouseCoopers, determined that general aviation supports 1.1 million total jobs and supplies $219 billion in total economic output in the 

United States. 

Reform to the FAA’s management structure and funding could put that investment and those jobs at risk. We understand that our Nation’s air traffic control system was not built primarily with the general aviation fleet in mind. While we do 

not challenge what drives the construct of the system, it is certainly the one within 

which general aviation must operate and requires us to be a voice at the table of 

any discussion and not just a sole voice, but rather one that includes the many segments of our industry. 

Just as important is general aviation’s contribution to the system’s operation. 

Clearly, general aviation is an incremental user of a system built for other users. 

We cannot think of a more efficient method for capturing general aviation’s use of 

the system than the current system of excise taxes. What we fear is what transpired 

in Canada, the collection of new user fees while still being saddled with old taxes— 

double taxation. And we cannot have it both ways, claiming the current discretionary funding situation drives this debate while not acknowledging how difficult 

it will be to pull those revenues out of the current budget construct. 

If we eventually conclude the challenges to the agency cannot be addressed in its 

current construct, then we urge the Committee to be very deliberate in what comes 

next. NATA cannot support any de facto ‘‘leap of faith’’ proposals that would put 

general aviation’s fate in the hands of undefined management structures or leave 

unresolved its contribution to the system. We are particularly concerned by Business Roundtable’s corporatization proposal—what we view as a classic example of 

logrolling. Entirely funded via user fees and controlled in perpetuity by a board of 

industry insiders, general aviation would find itself in constant peril and the travelling public paying ever increasing fees. 

Chairman Thune, Ranking Member Nelson, members of the Committee, thank 

you for your consideration of our views. While maintaining the status quo risks our 

Nation’s supremacy in aviation, it is equally true that radical change to the FAA’s 

management structure and funding poses equal risks, including to the safe and stable nature of the world’s best air traffic control system. We look forward to working 

with the Committee and assisting the agency toward a more efficient operating 

structure. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN THUNE TO

HON. MICHAEL P. HUERTA

Question 1. Administrator Huerta, the National Research Council’s recent report 

on NextGen recommended that expectations be reset for NextGen along with a number of other recommended improvements. How is FAA responding to this report? Do 

you agree with the findings? 

Answer. The Next Generation Air Transportation System (NextGen) was envisioned as a complex modernization effort that was necessary for the Nation to maintain the safest and most efficient air transportation system possible for generations 

to come, adaptable to growing demand by increasing capacity and reducing delays. 

It is important to remember that the NextGen vision examined by the National Research Council (NRC) was a multi-agency view of the future including both operational and research partners. As such, it included both near and mid-term expectations as well longer term—stretch goals to serve as a basis for advanced research. 

The FAA’s commitment to that vision, as an implementing agency, is found in the 

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FAA’s NextGen Plans and the Mid-Term Concept we produced to which we are still 

substantially aligned. 

The FAA’s NextGen implementation objectives are delivering benefits through improvements that include saving time and fuel, and reducing emissions. The improvements deployed by NextGen to date have already delivered nearly $1.6 billion in 

benefits by upgrading our infrastructure, creating more efficient procedures, and delivering advanced technologies. In addition, NextGen has made significant progress 

in areas such as infrastructure, surveillance, navigation, information, separation 

standards, and decision support tools. 

The FAA is responding to this report by continuing to work closely with industry 

to achieve high standards, remain nimble, and have flexibility. We will also continue 

to work with our cross-government partners on their implementations and research 

that extend and refine the far-term expectations. 

Question 2. As we consider potential air traffic control reforms, we are examining 

a host of studies indicating safety and service have not been negatively affected by 

separating air traffic control services from direct government control in other countries. As part of a possible transition in the U.S., what are some of the key issues 

you believe should be addressed? 

Answer. Congress’ consideration of a new FAA governance structure raises many 

important issues that would need to be addressed to best ensure that the Nation’s 

and public’s interests would continue to be served, and that the U.S. would retain 

its global leadership in aviation, operating the world’s safest, most diverse, most 

complex, and most efficient aviation system. 

Studies on the transition from one type of governance to another in other nations 

indicate that it could take years to effectively and totally separate air traffic control 

functions. This could prove even more challenging in the U.S. given the size and 

complexity of our aviation sector compared to other nations. Some of the complexity 

of a transition would involve defining new processes, roles, and responsibilities that 

may have not been included in establishing legislation. 

In evaluating whether to depart from the existing air traffic control service model 

and what a new model would look like, while not exhaustive, some of the issues that 

would need to be addressed include: 

• Funding issues including how the existing mix of taxes and revenues would be 

divided between a new entity and the remaining FAA; the transition to a user 

fee structure; the charges that general aviation (GA) would pay; source and 

structure of airport funding; and dealing with budget instability and uncertainty for the residual FAA. 

• Safety oversight of a new entity and integration of new entrants in the national 

airspace 

• Governance of the new entity and roles of stakeholders on oversight boards, if 

any 

• Maintaining security and linkages with the Department of Defense and Department of Homeland Security 

• Retaining a global leadership position in aviation 

• Ensuring good stewardship of the environment 

• Determining appropriate roles and responsibilities in the development of 

NextGen 

• Assigning capital liabilities and assets between the FAA and a new entity 

• Development of new processes (e.g., new air traffic route development) that currently require coordination between air traffic and regulatory functions 

• Determining the employee and labor protections associated with a new entity 

• Establishing new offices for any functions that would be required in both the 

FAA and the new entity (e.g., human resources) 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. ROY BLUNT TO

HON. MICHAEL P. HUERTA

Question. The FAA has indicated it has made great progress on NextGen over the 

last several years. However, according to the National Academy of Sciences report 

released on May 1, 2015 (very recently), it identifies many areas where the FAA 

is not delivering the promised benefits of NextGen to users of the air traffic system. 

Specifically, the report states ‘the original vision for NextGen is not what is being 

implemented today. Can you explain the large discrepancy between what the FAA 

is publicly saying on NextGen compared to the National Academies report? 

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Answer. The original NextGen vision, Concept of Operations for the Next Generation Air Transportation System, was published in 2007. It is important to remember 

that this NextGen vision examined by the NRC was a multi-agency view of the future including both operational and research partners. As such, it included both 

near and mid-term expectations as well the longer term—stretch goals-to serve as 

a basis for advanced research. The FAA’s commitment to that vision, as an implementing agency, has been found in the FAA’s NextGen Plans and the Mid-Term 

concept to which we are still substantially aligned. Throughout this process, the 

FAA has engaged a broad cross section of stakeholders to include airlines, airports, 

business aviation, general aviation, other government agencies, and academia. We 

have engaged our stakeholders in numerous workgroups and committees to collaborate on high-priority, high-value improvements. 

Some of our most recent collaboration with our stakeholders are: 

• NextGen Priorities Plan. A collaborative plan with the NextGen Advisory Committee, delivered to Congress in October, lays out milestones for delivering benefits in the one-to three-year timeframe. This provides early-benefit, high-readiness capabilities to airspace users. The priorities are improvements in Performance Based Navigation, Data Communications, surface and multiple runway operations. We have completed 27 of 27 commitments so far. This builds on previous collaborative efforts with the aviation industry. 

• Global Harmonization: The FAA has worked collaboratively with partners 

worldwide to ensure that NextGen capabilities won’t stop at our borders. Interoperability and standards setting have been a focus of NextGen planning and 

implementation. 

• Interagency Planning: We work with other agencies, including the Departments 

of Defense and Commerce, as well as the National Aeronautics and Space Administration, through our Interagency Planning Office (and before that, through 

the JPDO, which established the original vision for NextGen). We work with 

our cross-government partners on their implementations and their research 

that extend and refine the far-term expectations. 

In some cases, we have decided to adjust our plans as the needs of the airspace 

have evolved. In addition, flexibility has been necessary because not all technologies 

and improvements mature at the same time. 

Finally, a significant challenge has been funding. The cost differential between 

what we designed NextGen to achieve and the funding we actually received has 

been $3 billion since 2011. A modernization with this many moving parts requires 

stable and predictable funding, as well as a long-term plan with the flexibility to 

make incremental updates to adjust to advances in technology and the latest priorities of our industry. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. DEB FISCHER TO

HON. MICHAEL P. HUERTA

Question 1. I have read the concerns expressed by the general aviation community 

regarding ‘‘commercialization’’ or ‘‘privatization’’ of the air traffic control (ATC) system. Do you believe there is a way for us to reform this system to ensure safety, 

efficiency, and innovation, while protecting the concerns of general aviation? 

Answer. 

• The general aviation (GA) sector in the United States has breadth and scope 

unparalleled elsewhere in the world. It is part of what makes the U.S. aviation 

sector so dynamic. Certainly one set of the issues involved in separating the air 

traffic organization (ATO) from the FAA involves the GA community, such as 

how much GA contributes to funding a new model, and the impact of an FAA 

structural change on services to the GA community and access to airspace. 

• The Administration has not proposed governance changes to air traffic control, 

and we are not in a position to endorse an approach to resolve these issues. 

There may be a number of approaches to consider in evaluating these issues 

ranging from the composition of the new entity’s board to Congress legislatively 

setting a GA fee and service structure. However, financial independence and viability for the new entity would necessitate authority and flexibility to change 

fees and services, so legislation would need to provide a compromise that preserves GA interests as much as possible while ensuring viability of the new entity. If Congress decides it wants FAA to change how air traffic services are provided, then we will need to work carefully with the GA community as well as 

72 

other stakeholders to design a system the continues to ensure safety, efficiency, 

and innovation. 

Question 2. As you know, reforms to the ATC system have been considered by the 

FAA and Congress previously. In 2007, the FAA released a cost allocation study 

that helped determine the factors that drive the costs of providing air traffic control 

services and the allocation of those costs to various users. This 2007 study was used 

to support policy development for alternative ATC proposals. As we consider reforms 

to the ATC system in the upcoming FAA reauthorization, can you please commit 

to providing the Committee with an updated version of the ATC cost allocation 

study? 

Answer. Cost allocations are often quite complex and require policy decisions. As 

such, any future study should be preceded by substantive discussions with stakeholders. As the assumptions and choices underlying various cost allocation methodologies are reflected in the results, studies designed to reflect different choices 

would be needed to inform the use of the studies’ results. It would be premature 

to pursue an updated study without input on key assumptions. 

Question 3. Administrator Huerta, a recent report by the National Research Council found that the FAA is not delivering what it promised with regard to NextGen. 

Given the National Research Council’s findings, and the real benefits to aviation 

businesses and passengers from moving to the NextGen system, do you agree that 

private-sector oriented reforms to our ATC system would help to advance NextGen 

technology? 

Answer. 

• Our ability to deploy NextGen technologies and capabilities depends on sufficient funding and commitment from government and service providers, and effective internal collaboration as well as with industry to ensure milestones and 

goals are met, implemented, and sustained. 

• There are a wide variety of air traffic management models in different countries 

around the world ranging from government owned to fully privatized. I am not 

aware of any clear data that shows that one particular model is better than another to achieve the necessary modernization of air traffic systems. Running a 

Fortune-500-size complex enterprise, operating 24 hours a day while undertaking one of the largest, most sophisticated infrastructure projects in the last 

few decades in modernizing the national airspace system would prove daunting 

whether in the private or public sector. 

• The success of NextGen deployment hinges on interdependencies and relationships within the agency. NextGen is more than installing technology in our air 

traffic facilities and on aircraft—it involves the close participation of our safety 

organization to ensure that the technology is safe and that controllers and pilots 

know how to use it safely. It requires training and equipage within the aviation 

sector. Therefore, we believe that any decision about changes to governance 

must take into account these issues. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. RICHARD BLUMENTHAL TO

HON. MICHAEL P. HUERTA

Question. I am a proud sponsor of S. 911, the Saracini Aviation Safety Act of 

2015, which would require airlines to install secondary barriers on most commercial 

aircraft. These barriers would prevent access to the flight deck of the aircraft. The 

legislation is named in honor of Victor J. Saracini, a pilot killed when terrorists hijacked United Flight 175 on September 11, 2001. The FAA has encouraged and 

issued guidance on secondary barriers, but the FAA has not mandated their installation. Does the FAA already have the authority to mandate secondary barriers? If 

so, what prevents the FAA from requiring that commercial airlines install physical 

secondary barriers, considering the threats we face in aviation? 

Answer. Yes, the FAA already has the legal authority necessary to require secondary barriers. However, such a step would require a rulemaking. 

Since passenger-carrying aircraft already have reinforced cockpit doors, a requirement put into place as a result of the September 11 attacks, it is unlikely that the 

benefit of mitigating the very small remaining risk with a secondary cockpit door 

or other secondary barrier would outweigh the high cost of requiring secondary barriers across the commercial fleet. 

73 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. BRIAN SCHATZ TO

HON. MICHAEL P. HUERTA

Question 1. Last year, a radar facility in Aurora, Illinois was knocked offline, exposing a serious vulnerability in our air traffic operations. This outage led to the 

cancellation of nearly 2,000 flights at a major international hub airport and delays 

across the country, exposing a lack of redundancy in the system. The FAA must also 

be prepared to deal with natural disasters. Since 1980, the U.S. has experienced 151 

severe weather disasters. In these situations, it is vital that air traffic services are 

restored as quickly as possible to support response and recovery efforts, as well as 

to resume commercial flights. How does the FAA typically respond to man-made and 

natural disaster events to ensure the continuity of air traffic operations? What 

redundancies are built in place to ensure that the system infrastructure is reliable 

in the event of an emergency? 

Answer. Driven by lessons learned from real world incidents and numerous exercises over the years, the FAA has developed and repeatedly and successfully used 

a multi-layered approach to respond to and rapidly recover from disasters, supporting the safety and efficiency of the Nation’s air traffic operations to the maximum extent practicable. 

Operations Contingency Plans: The FAA has implemented a requirement for all 

of its Air Traffic Control (ATC) facilities, including all tower, Terminal Radar Approach Control (TRACON), and Air Route Traffic Control Center (ARTCC) facilities 

to maintain Operations Contingency Plans (OCP). These OCPs, which were executed 

during the September 2014 Chicago ARTCC/ZAU incident, are intended to focus actions to maintain the continuity of affected air traffic services and operations to the 

maximum extent practicable when the capabilities of a given facility (or facilities) 

are at risk, degraded, or disrupted. 

Communication and Collaborative Decision Making: The FAA utilizes daily a robust traffic flow and communication capability that is orchestrated at the national 

level at the agency’s Air Traffic Control System Command Center (ATCSCC), 

leveraging input from FAA facilities, airlines and other aviation operators flying in 

airspace. This capability enables the FAA to quickly coordinate and carry out traffic 

management initiatives to optimize the flow of air traffic within the NAS due to demand or external factors such as a man-made or natural disaster. 

Systems Resiliency: The ATO maintains a wide spanning national infrastructure—to include facilities, air navigation services systems and automation, and the 

supporting power and environmental equipment. Throughout this infrastructure, 

the FAA has integrated various resiliency design elements based on risk analyses. 

Where additional redundancies are required, geographic diversity of systems are implemented to provide backup or overlapping coverage. 

Continuity and Disaster Response Exercises: The FAA regularly participates in a 

broad spectrum of continuity and disaster response exercises at the Federal, State, 

and local levels, in which the agency validates and identifies gaps in its ability to 

sustain air traffic operations in the NAS, as well as contribute to interagency efforts 

to save lives, protect critical infrastructure, and safeguard property. 

Question 1a. Does the FAA have a goal of how quickly it will restore air traffic 

control services following such an event? 

Answer. Following the September 2014 temporary loss of the Chicago ARTCC/ 

ZAU cited by Senator Schatz, the FAA established new aviation system restoration 

targets of a) within 24 hours after a major disruptive incident, recovering to 90 percent of normal full capacity for the affected major airport; and b) within 96 hours 

after a major disruptive incident, recovery to 90 percent of normal full capacity for 

the affected en route airspace. 

Question 1b. What challenges does the FAA face in adequately preparing for catastrophic events? What steps need to be taken to enhance system resiliency? 

Answer. Following the September 24 ZAU incident, the agency evaluated the 

basic resiliency of its air navigation services infrastructure as part of the 90-day 

after-action review. While recommendations have been made during the initial review, the FAA is continuing this resiliency effort to more broadly quantify and address possible resiliency improvements. The resiliency characteristics of the FAA’s 

current air navigation services regime ensure safe operations following any given 

disruptive incident. However, the FAA’s new system recovery targets will necessitate resiliency improvements at key facilities, which will, in turn, require future 

capital investments. Any funding for further resiliency enhancements will be competing with other capital expenditure needs. 

Question 2. Currently, air traffic control operations are covered by the Airport and 

Airway Trust Fund plus General Fund appropriations. At a minimum, those federVerDate Nov 24 2008 13:28 Jul 12, 2016 Jkt 075679 PO 00000 Frm 00077 Fmt 6601 Sfmt 6621 S:\GPO\DOCS\20671.TXT JACKIE
74 

ally appropriated funds would have to be replaced under a privatized or corporatized 

model. It is not realistic to assume that efficiency improvements alone would be 

enough to make up for the loss of these funds, and funds raised through bonds 

would result in debt that would eventually have to be serviced. 

Answer. In the context of FAA reauthorization and the future direction of the 

FAA, some members of the aviation community and of Congress have discussed 

making governance changes at the agency. 

Question 2a. If the air traffic control system is moved to a separate, self-funding 

entity, what model would you propose to generate sufficient funds to cover the cost 

of operations? 

Answer. The Administration welcomes the opportunity to evaluate any governance-related proposals and we look forward to having those discussions with Congress and stakeholders. 

Further, with respect to reauthorization, some of the major challenges facing the 

FAA involve funding levels, funding stability, and flexibility. We believe that any 

governance-related proposals would need to address these issues while ensuring 

that our Nation continues to maintain the safest and most efficient airspace system 

today and in the future. 

Question 2b. Would it lead to cuts to air traffic controller costs (by reducing salaries, benefits, and pensions), raise user fees, or both? 

Answer. We believe that any FAA reauthorization, whether it includes structural 

change or not, needs to address two key challenges facing the agency: 

Reauthorization should provide budget stability including a greater ability to 

plan and commit resources over the long-term. Budget stability will help ensure 

our strong participation in the global aviation community and demonstrate our 

commitment to aviation. 

Reauthorization should allow for management flexibility for making business 

decisions regarding the size, scope, and types of air traffic management services 

and infrastructure. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. CORY BOOKER TO

HON. MICHAEL P. HUERTA

Question 1. I applaud FAA’s work on moving forward multiple NextGen technologies, including En Route Automation Modernization and Automatic Dependent 

Surveillance-Broadcast. However, the FAA Inspector General and industry stakeholders have been critical of delays and cost overruns in the implementation of 

NextGen programs. Can you explain how FAA has addressed these criticisms? How 

can the FAA foster innovation in this area to move implementation forward faster? 

Answer. Over the past few years, the FAA has put in place a stronger, more efficient, and more effective leadership model for continuous program improvement. 

Our efforts, which began with an internal organizational realignment and the designation of a Chief NextGen Officer, continue with incorporation of lessons learned 

to improve program management processes and robust, proactive stakeholder engagement. 

NextGen’s success has been characterized by four fundamental approaches that 

will continue to guide our progress: 

• Executing programs to support the infrastructure of NextGen 

• Delivering capabilities to benefit users of the National Airspace System (NAS) 

• Advancing collaboration with partners in the aviation community 

• Examining work done and renewing goals to ensure the initiative remains on 

the right track 

We have in place a comprehensive, cross-agency portfolio approach to program implementation that recognizes NextGen as an integrated effort rather than a series 

of independent programs. This approach provides a sound framework of milestones 

and governance driven investment decisions aligned with NextGen strategy, monitors NextGen development and deployment progress, and ensures collaboration and 

coordination across FAA lines of business. 

We have made improvements to the NAS Enterprise Architecture that explicitly 

identify how and when decision points will impact the delivery of NextGen products. 

Case-by-case analyses are also carried out to fully understand the relative size, 

breadth and scope of impacts across programs. 

75 

We have developed and refined criteria and processes for identifying high-priority 

program decisions, which are documented in the NAS Integrated Systems Engineering Framework (ISEF). 

Collaborating with our aviation community stakeholders through forums like the 

NextGen Advisory Committee (NAC) has improved industry’s understanding of the 

complexity involved in implementing NextGen programs. Our recent work in developing the NextGen Priorities Joint Implementation Plan has created an environment 

of mutual understanding of respective challenges. The FAA collaborated with the 

aviation industry through the NAC in response to a request from the House of Representatives Committee on Transportation and Infrastructure, Subcommittee on 

Aviation, to develop a plan to implement a number of high-priority NextGen capabilities that will provide significant near-term benefits to NAS users. The plan’s 

foundation was earlier NAC work, which recommended the FAA focus on NextGen 

capabilities in four areas: Multiple Runway Operations, Performance Based Navigation, Surface Operations and Data Communications. Throughout 2014, FAA subject 

matter experts met with aviation industry representatives to determine what the 

FAA is able to accomplish over the next one to three years in the four focus areas 

and what industry commitments are necessary for those activities to be successful. 

These meetings enabled the FAA and industry to reach agreement on all of the 

‘‘high priority, high readiness’’ capabilities that the NAC has recommended, with the 

FAA committing to specific site implementation plans and industry ensuring operator preparedness in order to take full advantage of NextGen benefits. Both the 

FAA and industry are meeting their Plan commitments and continue close collaboration to solve barriers to effective implementation. The FAA has completed all the 

scheduled commitments due to date, three of which were completed early. 

Question 2. In your January 2015 FACT3 report, FAA concluded in the New Jersey-New York area airspace that, ‘‘while the ongoing airspace redesign effort and 

NextGen enhancements will help to improve efficiency and flexibility, FAA sees 

strong evidence that additional runways may be the best long-term solution to meet 

future demand for intercity travel to and from the NYC area.’’ If new runway construction at these airports is unlikely to commence in the near future, what else can 

we do to address this untenable situation before 2030, if NextGen and the airspace 

redesign are not solutions on their own? 

Answer. There are many contributing factors to the flight delay challenges in the 

NYC area: high demand, tightly coupled traffic flows, complex airspace and limited 

capacity. As a result, there is no single solution that will address the expanse of 

operational complexities in the NYC area. Rather, a suite of solutions working in 

concert is required, including deploying NextGen technologies, airspace redesign, 

airport capacity enhancement, and slot management. 

NextGen is delivering benefits and will continue to do so as new technologies for 

both pilots and air traffic controllers are deployed throughout the region. Improvements prior to 2030 include tools to de-conflict and streamline traffic flows, improve 

predictability, and make more efficient use of existing airport and airspace capacities. 

Restructuring the New Jersey-New York area airspace will support and maximize 

the benefits of NextGen improvements in the NYC area. Airspace Redesign efforts 

in the New Jersey-New York area airspace have already delivered benefits in efficiency, flexibility, and delay reduction. The FAA suspended further implementation 

of the Airspace Redesign in May 2013 due to funding constraints that limited the 

FAA’s ability to further integrate airspace to the extent envisioned. FAA plans to 

tailor a solution that will best meet the unique operational and safety needs in the 

NJ–NY area airspace, leveraging the successful Metroplex model. 

The January 2015 FACT3 (Future Airport Capacity Task) report notes that taxiway and gate constraints can be common causes of delays and inefficiencies. Improvements are in progress to address these issues in the NYC area, including reconfiguration of the Central Terminal Building at LGA, and the ongoing JFK runway construction is intended to provide high-speed taxiways and accommodate larger aircraft. Although more incremental than new runways, these improvements are 

achievable in the nearer term and will help to make more efficient use of the existing airfield. The FAA also continues to support more than a dozen reliever airports 

as well as secondary commercial service airports in the greater New York metropolitan area, including airports in both New York and New Jersey. 

Nevertheless, the number of runways at JFK, EWR, and LGA will remain a limiting factor when accommodating long-term NYC area demand. Additional runway 

capacity is needed, and for this reason the PANY&NJ undertook a comprehensive 

System Capacity Study for the NY metropolitan area. In the interim, passenger capacity is improving as airlines increasingly use larger aircraft with more seats that 

are more fuel and cost-effective in addition to needing fewer flights to accommodate 

76 

the same or growing number of passengers. However, if new or enhanced runway 

capacity cannot be achieved, then the NYC airports may have to continue to rely 

on techniques to address severe congestion-related delays such as slot management 

currently in effect under temporary Orders limiting operations at JFK, EWR, and 

LGA. The FAA recently published a Notice of Proposed Rulemaking (public comment period closed on May 8, 2015) intended to provide a longer-term and comprehensive approach to slot management at these airports. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. TOM UDALL TO

HON. MICHAEL P. HUERTA

Question 1. Flight paths and air traffic can be controversial issues locally. While 

I believe that NextGen has value, I am concerned about how it will impact local 

communities. 

I strongly urge the FAA to make sure it is working with local residents to keep 

them informed of changes to the air traffic control system and the impact these may 

have on their communities. This is an area where pre-emptive communication goes 

a long way. 

What outreach activities with local communities does your agency currently engage in for NextGen? Do you feel these are sufficient? Are there any other efforts 

underway? 

Answer. The FAA has been focused on the implementation of the foundational 

programs that will enable full NextGen capabilities. For example, we recently completed the ground infrastructure that supports ADS–B and the replacement of the 

En Route and Terminal automation systems that are the backbone of the air traffic 

control system. With the foundational work nearing completion, we are transitioning 

to the implementation of transformational tools and capabilities that will provide 

the full benefit of NextGen. 

From the perspective of local community impact, implementing the NextGen 

foundational infrastructure such as the replacement of automation systems like 

ERAM was transparent from a local community perspective. However, as we continue to implement new procedures and new technology, we fully recognize the need 

for stakeholder outreach and local community engagement. For example, during 

Metroplex projects, local communities are provided information on process and 

progress during the various stages of each project. 

During the first two phases (study and design) of each Metroplex project, the leading FAA project teams communicate with airports and stakeholders via monthly or 

quarterly meetings. These meetings inform the stakeholders and allow them to communicate information to local communities as necessary. During the third phase 

(evaluation), affected communities are updated directly through environmental 

workshops, during which local stakeholders are able to provide input. The public response is gauged to determine the frequency and location of additional workshops 

to meet community and project needs. In the implementation phase, news stories 

announce related activity, and during the final phase (post-implementation), benefits stories are developed by the FAA. Based on recommendations from stakeholders 

through the NextGen Advisory Council, the FAA is strengthening its outreach and 

education activities by developing a formal outreach process that engages airports 

and communities from the beginning of a project. 

Question 2. The Department of Defense has expressed concerns about how a possible new air traffic organization entity would coordinate services with DOD and ensure that national security remained a top priority. New Mexico has two air force 

bases and a missile range. I am concerned about the impact any reform could have 

on our local operations. How do the FAA and DOD currently coordinate? How might 

that interaction work best between two government agencies? 

Answer. Under current authority, the FAA Administrator is obligated, among 

other things, to consider the requirements of national defense, regulate civil and 

military operations in the airspace, and consult with the Secretary of Defense to establish areas in the airspace determined necessary in the interest of national defense. 

Over the years, an extensive, complex network was established for civil/military 

coordination and cooperation, which facilitates problem resolution at the appropriate 

level as required. The network operates effectively through agreements and the exchange and interaction of personnel. 

The DOD is focused on ensuring that military services have sufficient airspace to 

meet military, training, and test and evaluation requirements for peacetime, contingency, and wartime operations. Airspace designated for military purposes, when not 

required by the DOD, is made available to the FAA for civil use. DOD cooperates 

77 

with the FAA for the effective and efficient management of the National Airspace 

System. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN THUNE TO

HON. JOHN ENGLER

Question 1. As you may know, a legal memorandum by the Congressional Research Service was recently made public that outlined certain constitutional concerns with separating the Air Traffic Organization from the FAA. What is your assessment of the legal issues that might arise from making a transition to a new governance structure, and how might they be addressed? 

Answer. The memo raised important concerns that should be addressed in any enabling legislation. However, it appears the authors of the memo were unclear on a 

central concept related to the creation of a new, not-for-profit entity to operate the 

air traffic control system. That is that the new ATC entity should be required perform air traffic control services in accordance with performance standards and other 

rules and regulations promulgated from time to time by the FAA. The new entity 

would not set the regulations; it would apply the regulations that are promulgated 

by the FAA just as airlines apply the regulations of the FAA with respect to the 

use of electronic devices on board. The new entity’s conduct falls squarely within 

the ‘‘ministerial’’ exception to the private non-delegation doctrine. 

Similarly, the new entity would not have enforcement power. When there are infractions, the new entity would report the infraction to the FAA, which would then 

decide if and how enforcement is undertaken. 

Finally, as is a common practice with government-sanction monopolies (like electric utilities), all of its fee assessments would be appealable to the DOT or some 

other governmental entity. 

Question 2. How might a new air traffic control organization finance and acquire 

the billions of dollars of existing air traffic control facilities, infrastructure, and 

equipment? Why would a new model be better than the way the government currently finances such facilities? 

Answer. As far as transferring existing assets to the new entity, the enabling legislation will need to determine whether the new entity should pay a fee to acquire 

the assets and, if so, who should set that fee. The Secretary of Transportation may 

be best positioned to make such an assessment. 

As for financing of future facilities, infrastructure and equipment, the new entity 

would possess many advantages over the current system. 

Today, the Federal Government finances multi-year capital investment programs 

through annual appropriations. This model is not followed by most state governments nor by the private sector, and for good reason. When massive programs, 

which are predicated on a particular long-term funding expectation, collide with inconsistent and unpredictable Federal appropriations, as illustrated by the recent sequester, the result is a jagged mismatch of funding and program needs in every single year and a constant acceleration and then dead-stop of program implementation. 

And there is no room or budget authority to buffer this mismatch with funds from 

the operating budget, which is already overextended keeping obsolete systems operational. The FAA’s top priority will always be to maintain and operate the current 

system. That is why systems being installed today incorporate technology specified 

a decade ago, and these will already be outdated when NextGen comes fully online, 

hopefully in 2025. 

Under the proposed model, technology investments would be guided by an organization that is committed to consistent, incremental technology improvements. Technology development would be predictably financed—because the entity would be 

able to issue bonds in the capital markets—with assurance that all systems would 

be compatible and incorporate proven state-of-the-art technology. 

Question 3. How does a standalone, commercialized air traffic control model address concerns about funding stability, continuity of operations, and the confidence 

among users regarding prospects for accelerating NextGen benefits in a way that 

cannot be achieved by more reforms within the government? 

Answer. As noted in my previous response, the current system is unpredictable. 

The new funding system would be designed to be inherently stable. It would be 

funded by user fees to cover operating and financing costs, and capital expenditures 

would be funded through bonds issued in the capital markets. This would enable 

new technology, such as NextGen, to be more quickly built-out and delivered at a 

predictable date. 

78 

Question 4. What are the implications of reform for smaller rural airports, which 

may or may not have any commercial air service? Why is reform beneficial for small 

and rural communities? 

Answer. Under the current system, smaller and rural airports are the first to see 

services cut when budgets are tight. For example, under the recent sequestration, 

in March 2013 FAA proposed to close 149 contract towers which were providing air 

traffic control services to smaller and rural airports. While Congress acted to avert 

the closures in special legislation, the fact remains that in a tight budget, these are 

the first services likely to be cut—not because they are unimportant, but their closure is simply a quick way to generate cash. 

Under a potential not-for-profit operator of the new system, as discussed in the 

hearing, the new entity would have multiple bottom lines defined in the enabling 

legislation. Profitability should not be the only bottom line. One of those missions 

should be to maintain and expand access to air traffic control services. This could 

be easily achieved under the new model. A commitment to remote tower technology 

(currently outside the budget capability of the FAA) and other technical innovations 

would increase operational capacity, stimulate economic development, and improve 

safety for smaller and rural airports across the country. 

The new proposed model is a boon for small communities. 

Question 5. Approximately how long might the transition to a new air traffic control model take? What are some of the lessons learned from the transition experience in other countries around the world to ensure smooth and seamless transition? 

Answer. We expect a transition would need to be built into enabling legislation 

that might last for two years, with distinct milestones to be achieved during the 

transition period. The transition could be handled largely the way a major corporation would handle the spin-off of a major division. The most important aspect would 

be to identify the new leadership and exactly which assets would transfer to the 

new entity. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. DEB FISCHER TO

HON. JOHN ENGLER

Question 1. I have read the concerns expressed by the general aviation community 

regarding ‘‘commercialization’’ or ‘‘privatization’’ of the air traffic control (ATC) system. Do you believe there is a way for us to reform this system to ensure safety, 

efficiency, and innovation, while protecting the concerns of general aviation? 

Answer. Yes, and we would support doing so. Business Roundtable does not support privatization of the system as that word is generally understood. Specifically, 

the creation of a for-profit corporation to run the system would be detrimental to 

users, particularly to the general aviation sector. That is why the proposal under 

discussion is to create a federally-chartered not-for-profit entity to operate the system, with FAA continuing to regulate the system, ensuring safety. This separation 

of operation and regulation into two separate entities is now considered a best practice internationally for maintaining the safety of air navigation systems. The enabling legislation for this new, not-for-profit entity, should ensure that one of its core 

missions is to maintain and expand access to air traffic control services—not limit 

those services to those with the greatest ability to pay. Further, we believe there 

are ways the legislation could ensure that general aviation does not see a significant 

change in the overall amount of financial support it is required to provide to maintain the ATC system. Finally, general aviation should also be represented on the 

board governing the new entity, ensuring that this mission is achieved, and the board 

should be designed to ensure that no one user group—including airlines—would be 

represented by a majority of the board. 

Question 2. In your written testimony, you noted that the U.S. has lost its global 

leadership in aviation because we are falling behind when it comes to our air traffic 

control system and the technology we use. Can you provide the committee with 

some examples of how technology has advanced in private sector oriented ATC systems? 

Answer. The Canadian system, the second-largest air traffic control system in the 

world which is operated by a not-for-profit corporation, NavCanada, provides the 

best example. Touch-screen automated route tracking technology developed by 

NavCanada is now sold around the world, while U.S. controllers are still printing 

paper strips inserted in little plastic holders passed from controller to controller to 

keep track of each plane in the sky. Also, NavCanada is a principal investor and 

lead strategic partner in the Aireon satellite-based ADS–B technology, which the 

FAA has not been able to afford to embrace. NavCanada, like U.S. corporations that 

are technology-driven service enterprises, value incremental technology improveVerDate Nov 24 2008 13:28 Jul 12, 2016 Jkt 075679 PO 00000 Frm 00082 Fmt 6601 Sfmt 6621 S:\GPO\DOCS\20671.TXT JACKIE
79 

ment. Because of the nature of the U.S. Federal procurement system, the FAA is 

stuck making generational leaps every twenty to thirty years, and those leaps tend 

to fall short of the mark. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. BILL NELSON TO

HON. JOHN ENGLER

Question 1. How would a new entity ensure that there is continued service to 

small communities and rural areas? 

Answer. Under the current system, smaller and rural airports are the first to see 

services cut when budgets are tight. For example, under the recent sequestration, 

in March 2013 FAA proposed to close 149 contract towers which were providing air 

traffic control services to smaller and rural airports. While Congress acted to avert 

the closures in special legislation, the fact remains that in a tight budget, these are 

the first services likely to be cut—not because they are unimportant, but their closure is simply a quick way to generate cash. 

Under a potential not-for-profit operator of the new system, as discussed in the 

hearing, the new entity would have multiple bottom lines defined in the enabling 

legislation. Profitability should not be the only bottom line. One of those missions 

should be to maintain and expand access to air traffic control services. This could 

be easily achieved under the new model. A commitment to remote tower technology 

(currently outside the budget capability of the FAA) and other technical innovations 

would increase operational capacity, stimulate economic development, and improve 

safety for smaller and rural airports across the country. 

The new proposed model is a boon for small communities. 

Question 2. A recent report by Congressional Research Service (CRS) indicated 

that the creation of a private non-profit corporation with the ability to set user fees, 

appoint leaders, and control the national airspace may be unconstitutional. How do 

you respond to those findings? 

Answer. The memo raised important concerns that should be addressed in any enabling legislation. However, it appears the authors of the memo were unclear on a 

central concept related to the creation of a new, not-for-profit entity to operate the 

air traffic control system. That is that the new ATC entity would be required to perform air traffic control services in accordance with performance standards and other 

rules and regulations promulgated from time to time by the FAA. The new entity 

would not set the regulations; it would apply the regulations that are promulgated 

by the FAA just as airlines apply the regulations of the FAA with respect to the 

use of electronic devices on board. The new entity’s conduct falls squarely within 

the ‘‘ministerial’’ exception to the private non-delegation doctrine. 

Similarly, the new entity would not have enforcement power. When there are infractions, the new entity would report the infraction to the FAA, which would then 

decide if and how enforcement is undertaken. 

Finally, as is a common practice with government-sanctioned monopolies (like 

electric utilities), all of its fee assessments would be appealable to the DOT or some 

other governmental entity. 

Question 3. Congress is actively involved in exercising oversight to ensure that the 

U.S. air traffic control system is the safest in the world. What degree of oversight 

do you envision Congress exercising under your proposal? 

Answer. As noted in my response to the previous question, the FAA would retain 

responsibility for insuring the safety of the airspace and, as a government agency, 

be accountable to Congress. What is being proposed is that a non-profit entity provide air traffic control services, regulated by the FAA. This would meet international standards for the separation of the operator from the regulator, eliminating 

the conflict of interest inherent to the current government-run structure. 

Question 4. What would be the role of Congress in setting user fees? If there is 

no role for Congress, how can we be assured that the Board will not assess fees in 

a manner that functionally limits access to certain users or groups? 

Answer. While the new non-profit entity would set user fees for air traffic control 

services, there should be a mechanism in any enabling legislation that would allow 

users to appeal to the Secretary of Transportation or another appropriate government entity if the fees are unreasonable. Further, Congress may find it appropriate 

to exempt certain user groups—such as noncommercial general aviation—from paying user fees. 

Question 5. The national airspace is a national asset; will the Board be obligated 

to ensure that all users continue to have access to it? 

80 

Answer. As noted in my earlier responses, the new non-profit entity would be responsible for providing air traffic control services, regulated by the FAA. Any enabling legislation should make clear that the new entity not be able to discriminate 

in its provision of services based upon whether a given aircraft is a small private 

plane or a Boeing 747 operated by a major airline. 

Question 6. What is the amount of Federal funding that you believe would be required to stand up a new air traffic control entity? At what point would this new 

entity be self-sustaining? How long would Federal funding for air traffic control be 

required and how much funding do you anticipate would be required? 

Answer. The new entity should set user fees so that it is self-sustaining as soon 

as any congressionally mandated transition period is complete. 

Question 7. Congress was very concerned by proposed contract tower closures in 

the wake of sequestration. We worked hard to ensure that towers would remain 

open, in spite of funding challenges. Wouldn’t a new entity most likely consolidate 

towers (and, therefore, close towers) to save costs? 

Answer. No. Please see my response to your first question. 

Question 8. Under your proposal, would the new entity be required to buy air traffic control facilities and assets from the FAA? If so, with what funds? Would it be 

responsible for disposing of properties that are no longer needed and any remediation required to do so? 

Answer. As far as transferring existing assets to the new entity, the enabling legislation will need to determine whether the new entity should pay a fee to acquire 

the assets and, if so, who should set that fee. The Secretary of Transportation may 

be best positioned to make such an assessment. If a purchase price is required, the 

new entity will have more than adequate borrowing capacity at very attractive rates 

for paying such purchase price. 

Question 9. Does your proposal contemplate annual funding for airport development grants? What amount do you anticipate being available each year? Would that 

funding come from user fees or another source of funding? 

Answer. Enabling legislation would need to ensure that Airport Improvement 

Grants remain funded at the current level. We believe this can be achieved largely 

through continuing the Federal Government’s current average contribution from the 

general fund to FAA and AIP. 

Question 9a. Would the new ATO entity, under your proposal, follow Federal acquisition practices? If not, what acquisition practices would be followed to ensure 

that there was fair and open competition? 

Question 9b. Would there be a process for unsuccessful bidders to protest contract 

awards? What forum would have jurisdiction over such claims? 

Question 9c. The FAA must comply with Presidential directives, constitutional 

standards, public laws, and DOT Secretary Policy Statements to promote, expand, 

and aggressively provide procurement opportunities for small businesses, small 

businesses owned by socially and economically disadvantaged individuals, womenowned small businesses, and service-disabled veteran owned small businesses. 

Would a private entity follow those same principles and adopt similar set-asides to 

encourage small business development and contract awards to businesses owned by 

women, service-disabled veterans, and socially and economically-disadvantaged individuals? Would the new entity follow Buy American preferences? 

Answer. One of the greatest benefits of this proposal is to get the air traffic control system out from under the current Federal acquisition process, which is badly 

broken. The Canadian system, the second-largest air traffic control system in the 

world which is operated by a not-for-profit corporation, NavCanada, provides the 

best example. Touch-screen automated route tracking technology developed by 

NavCanada is now sold around the world, while U.S. controllers are still printing 

paper strips inserted in little plastic holders passed from controller to controller to 

keep track of each plane in the sky. Also, NavCanada is a principal investor and 

lead strategic partner in the Aireon satellite-based ADS–B technology, which the 

FAA has not been able to afford to embrace. NavCanada, like U.S. corporations that 

are technology-driven service enterprises, value incremental technology improvement. Because of the nature of the U.S. Federal procurement system, the FAA is 

stuck making generational leaps every twenty to thirty years, and those leaps tend 

to fall short of the mark. 

81 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. BRAIN SCHATZ TO

HON. JOHN ENGLER

Question 1. Currently, air traffic control operations are covered by the Airport and 

Airway Trust Fund plus General Fund appropriations. At a minimum, those federally appropriated funds would have to be replaced under a privatized or corporatized 

model. It is not realistic to assume that efficiency improvements alone would be 

enough to make up for the loss of these funds, and funds raised through bonds 

would result in debt that would eventually have to be serviced. 

If the air traffic control system is moved to a separate, self-funding entity, what 

model would you propose to generate sufficient funds to cover the cost of operations? 

Question 1a. Would it lead to cuts to air traffic controller costs (by reducing salaries, benefits, and pensions), raise user fees, or both? 

Answer. The new non-profit entity would be funded by user fees to cover operating and financing costs and capital expenditures would be funded through bonds 

issued in the capital markets. This would enable new technology, such as NextGen, 

to be more quickly built-out and delivered at a predictable date. The Canadians are 

the best example of another system that has followed this model. Efficiencies delivered under this model have enabled them to better compensate employees and deliver higher-tech services while reducing real user fees over time. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN THUNE TO

HON. BYRON DORGAN

Question 1. Senator Dorgan, some argue that a significant air traffic control reform effort is not necessary and that government-focused changes are sufficient to 

improve the air traffic control system. But more than 15 years ago, Congress made 

a substantial change that gave the FAA broad relief from Federal personnel and 

procurement rules. What are the major impediments that have prevented the FAA 

from utilizing these authorities to achieve faster progress on NextGen’s programs? 

Answer. What we found through our work with the Eno Center for Transportation 

NextGen Working Group was that while the FAA was given the authority to be exempt from Federal personnel and procurement rules, in practice the FAA did not 

take advantage of this authority. A GAO report from 2003 (‘‘National Airspace System: Reauthorizing FAA Provides Opportunities and Options to Address Challenges’’) concluded that this was both because the FAA improperly managed implementation, and also because other government agencies with oversight roles acted 

as a barrier to full implementation. 

Question 2. As you may know, a legal memorandum by the Congressional Research Service was recently made public that outlined certain constitutional concerns with separating the Air Traffic Organization from the FAA. What is your assessment of the legal issues that might arise from making a transition to a new governance structure, and how might they be addressed? 

Answer. The CRS memorandum is based on the premise that the new entity 

would be ‘‘establishing air traffic control procedures, similar to those currently existing in FAA Order JO7110.65V’’. This would mean that the new entity would be 

making the rules, while simultaneously operating the system. This, however, is not 

what has been proposed. What I, and stakeholders proposing bold reform, envision 

for a reform air traffic control system, is that the new system will be comprised of 

two entities. The first entity would be the new provider, which will operate the system. The second entity would be the FAA, which will regulate the operator from a 

safety standpoint. We do not want a system where the new regulator creates its own 

rules. The rule-making process is a governmental prerogative and should remain so. 

It will always be necessary to ensure that any new governance structure complies 

with all legal issues, and these should not be taken lightly. But compliance can certainly be accomplished within a reformed air traffic control structure, including the 

ones we have proposed. 

Question 3. How might a new air traffic control organization finance and acquire 

the billions of dollars of existing air traffic control facilities, infrastructure, and 

equipment? Why would that model be better than the way the government currently 

finances such facilities? 

Answer. This new organization would finance itself, similar to airports. It would 

issue bonds that would be paid over time by the revenues it would collect from its 

customers. This model would be a significant improvement to the one currently in 

place. This new entity would allow capital planning over several years, instead of 

the current system where the FAA relies on annual appropriations from Congress 

that may or may not come in time, and are unpredictable in times of fiscal conVerDate Nov 24 2008 13:28 Jul 12, 2016 Jkt 075679 PO 00000 Frm 00085 Fmt 6601 Sfmt 6621 S:\GPO\DOCS\20671.TXT JACKIE
82 

straint. For example, FAA recently finished the deployment of a long awaited new 

computer system, the En Route Automation Modernization (ERAM), which replaced 

the 40-year old HOST system. ERAM was $370 million over budget, from which $40 

million can be attributed to the budget sequester. With proper capital planning, 

those costs overruns due to budget uncertainty will be less likely to happen. 

Additionally, this model would be better for at least one other reason. The current 

model depends on annual Congressional appropriations, which creates an incentive 

for the FAA to only request funding for projects that are most likely to get funded, 

regardless of their effectiveness in improving safety or efficiency. In a new model 

like what we envision, where the stakeholders have a strong role in governing the 

system, projects would be chosen not be chosen because they are more likely to be 

funded by Congress, but because it would they make sense to the national airspace 

system and its users to implement those projects. 

Question 4. How does a standalone, commercialized air traffic control model address concerns about funding stability, continuity of operations, and the confidence 

among users regarding prospects for accelerating NextGen benefits in a way that 

cannot be achieved by more reforms within the government? 

Answer. As the Mineta Commission stated in 1997, the FAA has ‘‘too many 

cooks’’—USDOT, White House, Congress, etc.—making accountability and authority 

‘‘too diffused to run a 24 hour-a-day, high technology, rapidly changing operating 

system for a major commercial industry’’. That is unlikely to change if air traffic 

control remains part of FAA. By being a standalone entity, regardless if a government corporation or a nonprofit organization model is selected, the air traffic control 

provider will have the ability to focus on its core mission of providing safe, efficient, 

and cost-effective, air traffic control to commercial airlines, as well as business and 

general aviation, instead of having to dedicate a significant portion of its resources 

to please all these ‘‘cooks’’. 

Question 5. Approximately how long might the transition to a new air traffic control model take? What are some of the lessons learned from the transition experience in other countries around the world to ensure smooth and seamless transition? 

Answer. How the transition takes place and how long it takes must be negotiated 

between the different parties involved, including the new provider, the FAA, and 

Congress. Three things that should be thoroughly considered beforehand are 1) 

whether the FAA has a safety regulation structure in place to effectively oversee 

the safety of the safety, 2) how to transition from financing from the Airport and 

Airway Trust Fund to user fees (in Canada, for example, user fees were imposed 

after two years), and 3) how employees are moved from Federal workers to the new 

entity. 

Lessons from other countries show us that we need to ensure that all relevant 

parties are involved in the transition process. Everyone will have different expectations as to what the system should look like after it is created. That is why the 

stakeholder involvement we propose for the governance of the system is so important. By having users governing the system, the transition can be made smoother. 

For example, in the Eno NextGen Working Group Final Report we discuss the 

case of Canada. In this case, the main transition issues identified regarded the culture change required of the management cadre inherited from government and in 

the high wage expectations of certain labor groups. The first issue resulted from differences in the new corporate culture at NAV CANADA, which as an independent 

company was different from the government institution it replaced. Negotiated retirements and layoffs, along with the ability for some employees to return to the 

public sector, helped ameliorate this problem. As for the demand for salary increases, this was a result of a number of years without them under Transport Canada, the government agency that was responsible for air traffic control, much like 

the FAA is today in the United States. In fact, one of the reasons unions were in 

support of the move to a non-profit model was because their salaries had been frozen for a number of years. When NAV CANADA was created, unions began demanding salary increases to make up for those years. The good financial situation 

of NAV CANADA following its creation allowed for deals to eventually be reached 

with the unions. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. DEB FISCHER TO

HON. BYRON DORGAN

Question 1. I have read the concerns expressed by the general aviation community 

regarding ‘‘commercialization’’ or ‘‘privatization’’ of the air traffic control (ATC) system. Do you believe there is a way for us to reform this system to ensure safety, 

efficiency, and innovation, while protecting the concerns of general aviation? 

83 

Answer. Yes, I do believe that is possible. First of all, both the Federal Government and general aviation will play a role in the governance of the air traffic control 

provider, protecting the public interest, namely of those communities where general 

aviation is essential. As we envision a governance system where no single stakeholder will have the majority, the presence of general aviation and the Federal Government will help shape the development of the air traffic control system going forward. The FAA and Congress could also intervene, where necessary, by regulating 

the air traffic control provider and mandating certain minimum requirements of operation that it must comply with. 

Moreover, an independent air traffic control provider would likely be better suited 

to offer new technologies that would increase services available to general aviation 

users. For example, the independent Swedish air traffic control provider is already 

operating ‘‘remote towers,’’ where a tower in an airport control traffic in more than 

one airport, using high-definition cameras and other technologies to offer these services remotely. The Irish and German systems have also recently awarded contracts 

to implement remote towers in their countries. This technology allows air traffic 

control services to be offered where it would otherwise be uneconomical to offer 

them (hundreds of airports around the Nation do not have any sort of air traffic 

control built on site). The FAA is testing this technology in Virginia in a pilot 

project, but many of these types of FAA pilot projects never leave the prototype 

stage, either because the FAA lacks the resources or the nimbleness to implement 

them. With an independent provider, it is more likely that such innovations could 

be offered that could ultimately expand services available to smaller and rural communities. 

Question 2. Senator, in your written testimony you compared the FAA’s ATC system to the Federal Railroad Administration, noting that the FRA does not provide 

dispatching services for freight and passenger trains, but has a core mission of focusing on safety. Could you explain how, not only efficiency and innovation, but 

most importantly the mission of safety might be compromised due to our current 

ATC system? 

Answer. First of all, we have to thank the men and women at the FAA that made 

the current national airspace system the safest in the world. This is a tremendous 

achievement that should never be downplayed. However, we should not rest on our 

laurels, we should make sure that we are able to maintain and improve these amazing levels of safety going forward. 

One way in which other countries have done so is by separating the provision of 

air traffic control from its safety regulation. This has shown to improve accountability, eliminate conflicts of interest by having the same entity regulating itself, allowing both the provider and the safety regulator to focus on their core mission. In 

fact, ICAO, the UN agency for international aviation, has, since the early 2000s, recommended this functional separation as a way to improve safety outcomes. A recent 

study commissioned by the FAA and produced by MITRE, concluded that ‘‘the separation of the [ATC provider] from the CAA [Civil Aviation Authority] was reasonably successful’’ and that ‘‘MITRE did not discover any views that the system prior 

to separation was preferred.’’ An increased focus on safety, from both regulator and 

the ATC provider, was found to be one benefit that the separation provided. By creating a standalone ATC provider, while retaining the FAA as the safety regulator, 

we would be achieving this very important goal of separating these two functions. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. BILL NELSON TO

HON. BYRON DORGAN

Question 1. Would a non-governmental air traffic control provider ensure that 

there is continued service and access to small communities and rural areas? 

Answer. Under all circumstances, any air traffic control structure in the U.S. 

would need the Federal Government to play a role in the governance of the air traffic control provider. The Federal Government has and will continue to have a role 

as the guarantor of the public interest. As such, such critical decisions as removing 

service from certain communities would most likely have to be made with agreement of the Federal Government. The FAA and Congress could also intervene, 

where necessary, by regulating the air traffic control provider and mandating certain minimum requirements of operation that it must comply with. 

Moreover, an independent air traffic control provider would likely be better suited 

to offer new technologies that would increase service in small communities. For example, the independent Swedish air traffic control provider is already operating ‘‘remote towers’’, where a tower in an airport control traffic in more than one airport, 

using high-definition cameras and other technologies to offer these services reVerDate Nov 24 2008 13:28 Jul 12, 2016 Jkt 075679 PO 00000 Frm 00087 Fmt 6601 Sfmt 6621 S:\GPO\DOCS\20671.TXT JACKIE
84 

motely. The Irish and Germany systems have also recently awarded contracts to implement remote towers in their countries. This technology allows air traffic control 

services to be offered where it would otherwise be uneconomical to offer them (hundreds of airports around the Nation do not have any sort of air traffic control built 

on site). The FAA is testing this technology in Virginia in a pilot project, but many 

of these types of FAA pilot projects never leave the prototype stage, either because 

the FAA lacks the resources or the nimbleness to implement them. With an independent provider, it is more likely that such innovations could be offered that could 

ultimately expand access to smaller and rural communities. 

Question 2. The United States has historically treated the airspace as a national 

asset, ensuring access to communities of all sizes and all users. Do you believe the 

air space should continue to be treated as a public resource? If so, how would you 

ensure that all users continue to have equal access to the airspace if air navigation 

service resources are no longer allocated by an impartial, governmental entity? 

Answer. We have numerous types of ‘‘public resources’’ in this country. Few, however, are managed and regulated by government entities. Most essential public resources, such as water, communications, or electricity, are managed and put into the 

market by private entities. Governments regulate these providers to ensure access 

to communities of all sizes and users. The national airspace is one of the few public 

resources that is not only regulated by the government, but also managed by government—with the very same entity both regulating and managing operation. This 

is highly unusual in this country and around the world. 

A non-governmental national airspace provider would continue to be regulated by 

the government to ensure access to airspace, which would be guaranteed just as it 

is today; FAA would regulate airmen and airplanes, and make the rules to say who 

can and cannot access the airspace. It would also regulate the air traffic control provider, who would have to provide the services for anyone that is certified to access 

controlled airspace. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. BRIAN SCHATZ TO

HON. BYRON DORGAN

Question 1. Currently, air traffic control operations are covered by the Airport and 

Airway Trust Fund plus General Fund appropriations. At a minimum, those federally appropriated funds would have to be replaced under a privatized or corporatized 

model. It is not realistic to assume that efficiency improvements alone would be 

enough to make up for the loss of these funds, and funds raised through bonds 

would result in debt that would eventually have to be serviced. 

If the air traffic control system is moved to a separate, self-funding entity, what 

model would you propose to generate sufficient funds to cover the cost of operations? 

Answer. The new provider would be able to fund itself by charging airspace users, 

like airlines, directly. This would replace the current system, where the users are 

not charged directly. Instead, the current system is funded by indirect taxes (like 

the jet fuel tax) and by the passengers, who pay the 7.5 percent ticket tax, among 

others. Some Federal funds would still be required to enable the parts of FAA that 

would remain in the Federal Government—everything except the air traffic control 

system—to function. This would include, at a minimum, all safety regulation as well 

as the Airport Improvement Program. According to our working group’s analysis of 

air traffic control systems around the world, fees levied on airspace users by the 

new provider would be sufficient to cover the costs of the system including any debt 

necessary for future expansion and technology upgrades. 

This move to direct payments would bring a number of benefits. First, it would 

ensure that the air traffic control providers would have a stable and predictable 

funding stream. Second, there will be a connection between the cost of providing air 

traffic control and the fees the airlines have to pay. For example, today four airplanes carrying 200 people in total might pay as much (depending on the ticket 

prices) to the system as one airplane carrying the same 200 people, but naturally 

the cost to control four airplanes is much higher than controlling a single one. By 

moving into a system where costs are aligned with user fees, there is an incentive 

for efficiency, for both the air traffic control provider and the airlines. 

While Eno’s working group has not proposed any specifics about the user fees, including what amounts should be charged, we do not go into this blindly, not is this 

an experiment. ICAO, the UN agency for international aviation, has a set of guidelines for air traffic control fees that all developed countries but the U.S. already follow (in fact, the U.S. even has similar user fees in the case of overflights, i.e., flights 

that do not land or depart in the U.S., like a Toronto—Mexico City flight, e.g). These 

guidelines state, for example, that any charging scheme should be simple, transVerDate Nov 24 2008 13:28 Jul 12, 2016 Jkt 075679 PO 00000 Frm 00088 Fmt 6601 Sfmt 6621 S:\GPO\DOCS\20671.TXT JACKIE
85 

parent, and equitable among airspace users. While ICAO principles must be adapted 

to the U.S. situation and legislation, they offer a starting point for what they should 

look like. 

Question 1a. Would it lead to cuts to air traffic controller costs (by reducing salaries, benefits, and pensions), raise user fees, or both? 

Answer. We cannot say with certainty what would happen to labor or fees. With 

respect to labor, given increasing instability of Congressional funding, there is no 

guarantee that salaries benefits or pensions would not be reduced even if FAA remains under government control. However, the experience in Canada has been that, 

in general, the employees of the new non-profit provider have been satisfied with 

the transition and are typically happier working there than they were when they 

were government employees. Regarding fees, experiences in other countries have 

shown us that the independent air traffic control providers are better at improving 

efficiency, namely by adapting new technologies faster than governmental entities, 

allowing fees to be kept in check. In the case of Canada, for example, fees are today 

5 percent lower than they were in 2004, while inflation increased by more than 20 

percent during the same period. Because the new entity is governed directly by 

users of the system, they have a strong incentive to keep fees in check and ensure 

that their employees happy. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN THUNE TO

JEFFERY A. SMISEK

Question 1. How does a standalone, commercialized air traffic control model address concerns about funding stability, continuity of operations, and the confidence 

among users regarding prospects for accelerating NextGen benefits in a way that 

cannot be achieved by more reforms within the government? 

Answer. Chairman Thune, Airlines for America (A4A) does not believe the FAA 

has the best possible governance and funding structure to deliver the most efficient 

and modern air traffic control (ATC) system that the American consumers deserve. 

A government agency funded by taxes and subject to the annual budget process 

comes with far too many constraints and uncertainty to efficiently deliver ATC services and particularly the NextGen advances that the system requires. 

There is an abundant amount of independent and insightful information on FAA’s 

NextGen progress and efforts. In June 2014 the Assistant Inspector General for 

Aviation Audits at the U.S. Department of Transportation testified before the Commerce, Science and Transportation Committee stating— 

‘‘Since the effort began almost a decade ago, we [DOT IG] have reported on 

longstanding challenges and barriers that have limited FAA’s progress in delivering NextGen capabilities, such as the Agency’s inability to set realistic plans, 

budgets, and expectations, and clearly identify benefits for stakeholders.’’ 

In May 2015 the National Academies of Sciences, Engineering and Medicine put 

out a congressionally mandated report on NextGen. A small excerpt from that release is below— 

‘‘The original vision for the Next Generation Air Transportation System is not 

what is being implemented today, and the Federal Aviation Administration 

should ‘‘reset expectations’’ for the program meant to modernize and transform 

the national airspace, says a new congressionally mandated report from the National Research Council. 

NextGen, as the system is known, was designed to overhaul the U.S. air transportation system through procedural and technological improvements, including 

the use of newer technologies such as precision satellite navigation systems and 

a digital communications infrastructure, to increase capacity, reduce delays, and 

improve safety. Instead, NextGen today is a set of incremental changes that primarily emphasizes replacing aging equipment and systems. Although progress 

has provided some new capabilities and a foundation for further evolution, not 

all parts of the original vision will be achieved in the foreseeable future. The 

report says that FAA should realign stakeholder expectations by qualifying the 

early vision in a way that clearly articulates the new realities.’’ 

Most recently, in August 2015, the U.S. Department of Transportation’s Office of 

Inspector General (IG) reported that delays and cost overruns continue to plague 

the FAA’s transition to NextGen. Focusing on the FAA’s deployment of automation 

tools to optimize benefits of performance-based navigation (PBN) the IG report 

noted that, ‘‘FAA has not provided basic support to encourage its use, and additional 

enhancements are still required to further optimize PBN.’’ The IG also concluded 

86 

that the FAA is still ‘‘several years away’’ from deploying new controller technology 

to manage airport arrivals. 

Recognizing the need to ‘reset expectations’, A4A sought to benchmark and do a 

fact-based assessment of the governance, financial and operational performance of 

the U.S., Canadian and European ATC models. A4A’s analysis suggests some basic 

principles for success in any Air Navigation Service Provider (ANSP). There must 

be: 

(1) Separation of the ATC operations from ATC safety regulation, in which a new, 

independent ANSP directs ATC operations and future ATC investment decisions, and safety regulation is provided by the Federal Government through 

a performance-based oversight system; 

(2) Independent, multi-stakeholder board governance free from political influence 

over decision-making; 

(3) A professional, effective management team of the ATC provider, incentivized 

to pursue safety and efficiencies without the constraints imposed on government agencies that hamper their ability to manage more nimbly and effectively; 

(4) A fair, self-funding user fee model based on the cost of ATC services allowing 

for access to capital markets and a steady, predictable and reliable stream of 

funding that is not subject to governmental budgetary constraints such as 

those that have recently resulted in sequester and furloughs of air traffic controllers; 

(5) The ability to manage assets and capital investments in a way that enables 

far greater speed to market of technological modernization; and 

(6) Transparency in user fees so that users and their customers alike know what 

they are paying, allowing users full ability to recover costs. 

These success factors would lead to an effective operation because an independent 

ANSP would then operate with long-term funding and governance certainty, subject 

of course to strong safety regulation and oversight by the FAA. This new ANSP organization would be accountable to stakeholders and users of the system, driving 

effective decision making, long-term investments and efficient operations to capture 

the full benefits of the ATC system. Based on our analysis and the principles noted 

above, it is A4A’s position that a nongovernmental, nonprofit type governance structure for air traffic control—with the FAA retaining the role of safety regulator— 

would deliver the greatest benefits for a reformed ANSP because such a structure 

would continue to put safety first, while driving value for all stakeholders, including 

the traveling public. 

Recent events have made clear that the current ATC system, while safe, is not 

without its own operational vulnerabilities that can lead to public failures. In late 

2014, a fire set by a contract worker at the Federal Chicago Air Route Traffic Control Center snarled flights in the Midwest for an extended period of time. In August 

2015, a glitch in a software upgrade at an FAA facility in Leesburg, VA canceled 

and delayed hundreds of flights throughout the Washington, D.C. metropolitan region. 

The risk of doing nothing is high and working within the existing governmental 

system will not yield the necessary changes needed to modernize the U.S. ATC system. We cannot afford the status quo of a safe system that does not meet the ever 

growing and changing demands of our diverse aviation system. By following the 

principles described above we can achieve a U.S. ATC system that is both incredibly 

safe and greatly more efficient. 

Question 2. One goal of efforts to modernize the air traffic control system has been 

to leverage technology to consolidate aging and costly air traffic control facilities. 

What are some of the efficiencies that you would expect a corporatized air navigation service provider would be able to achieve with respect to facility consolidation 

versus a government provider? 

Answer. Predicting or forecasting specific changes to the system at this time is 

nearly impossible. A4A proposes that there be a two-year moratorium on significant 

changes to service levels after a new ANSP assumes responsibility for ATC. The 

new ANSP will need to initially work through transition issues and develop a dayto-day understanding of all the assets. 

In the longer-term, for any assets owned by the ANSP, the entity should have the 

ability to dispose, replace or consolidate those assets as appropriate to deliver more 

effective and efficient services without politically driven restrictions. However, the 

FAA should retain safety oversight to review the ANSP’s safety assessment of any 

proposed changes and should have the ability to intervene for safety reasons only. 

87 

There should also be a notice and comment process for any facility closure or significant changes in service level, and facility realignment should be undertaken through 

a data-driven process in collaboration with the ANSP’s labor unions. 

Question 3. Among the international Air Navigation Service Providers that you 

have examined, were any going through a modernization effort similar to NextGen 

when they were separated from the safety regulator? How, if at all, would a transition to a new air traffic control governance model impact NextGen implementation? 

Answer. A4A is advocating for an entirely new U.S. ANSP that takes the best attributes of established international models and effectively adapts them to create an 

ANSP that works for the complex U.S. system and its unique operating environment. 

Directly comparing this undertaking to another country’s experience creates an 

‘‘apples to oranges’’ scenario. However, there are international examples of complex 

airspace with a diverse set of users where ATC reform has been successful, and the 

sector-based approach to air traffic control, coupled with the use of modern technology, make the business inherently scalable. 

Please see answer to Question 1 for NextGen implementation information. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. DEB FISCHER TO

JEFFERY A. SMISEK

Question 1. I have read the concerns expressed by the general aviation community 

regarding ‘‘commercialization’’ or ‘‘privatization’’ of the air traffic control (ATC) system. Do you believe there is a way for us to reform this system to ensure safety, 

efficiency, and innovation, while protecting the concerns of general aviation? 

Answer. Yes. It is the A4A position that a nongovernmental, nonprofit governance 

structure for air traffic control—with the FAA retaining the role of safety regulator—would deliver the greatest benefits for a reformed ANSP because such a 

structure would continue to put safety first, while driving value for all stakeholders, 

including general aviation and the traveling public. A more modern and efficiently 

run entity making decisions that benefit and are accountable to the users of the system will benefit all stakeholders. 

Question 2. As the CEO of a major airline, can you please provide the committee 

with some examples of the challenges your company faces due to the inability of our 

current ATC system to keep up with the speed of innovation by private airlines? 

Can you also provide examples of how business is enhanced by private sector-oriented ATC systems in other nations? 

Answer. From United’s perspective, the best example I can give is that when I 

started in the industry in the mid-1990s, a flight from Reagan National to our hub 

in Newark was booked for 54 minutes. Now that same flight is booked for 84 minutes to account for delays resulting from our antiquated air ATC system. Airlines 

and our customers have also recently been plagued by major failings of the government-run ATC system. For example, in late 2014 a fire set by a contract worker 

at the Federal Chicago Air Route Traffic Control Center snarled flights in the Midwest for an extended period of time. In August 2015, a glitch in a software upgrade 

at an FAA facility in Leesburg, VA canceled and delayed hundreds of flights 

throughout the Washington, DC metropolitan region. 

It is the A4A position that a nongovernmental, nonprofit type governance structure for air traffic control—with the FAA retaining the role of safety regulator— 

would deliver the greatest benefits for a reformed ANSP because such a structure 

would continue to put safety first, while driving value for all stakeholders, including 

general aviation and the traveling public. A more modern and efficiently run entity 

making decisions that benefit and are accountable to the users of the system will 

benefit all stakeholders. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. BILL NELSON TO

JEFFERY A. SMISEK

Question 1. How would a non-governmental air traffic control provider ensure that 

there is continued service and access to small communities and rural areas? 

Answer. United Airlines, like most carriers serves small communities and rural 

areas. Passengers and revenue from these communities help sustain our service networks, so we are committed to seeing this service continue as part of transformational reform. Making the air traffic control (ATC) system more efficient will 

make the entire U.S. aviation system healthier. In turn, when the system is 

healthy, airlines do well, and when airlines are doing well, we invest in our people, 

88 

products and new service. Fixing the system will transform how we operate today. 

We believe that will be a plus for smaller communities. 

Question 2. The United States has historically treated the airspace as a national 

asset, ensuring access to communities of all sizes and all users. Do you believe the 

air space should continue to be treated as a public resource? If so, how would you 

ensure that all users continue to have equal access to the airspace if air navigation 

service resources are no longer allocated by an impartial, governmental entity? 

Answer. An ATC system that is responsive to the users of the system is good for 

all stakeholders and most importantly the traveling public. A primary advantage of 

ATC reform is the opportunity for the ATC organization to provide services that are 

more focused and responsive to the wide cross-section of system users. Specifically, 

any new air navigation service provider should be run by a Board of Directors nominated by entities that represent various stakeholders. A well-functioning Board of 

Directors with consultation from all users is critical to the success of any new 

ANSP. 

Question 3. In your testimony on behalf of Airlines for America, you indicate that 

the airline industry believes fundamental reform is necessary. But your written 

statement specifically notes that Delta Air Lines is not represented by your testimony. Further, Delta submitted extensive comments for the record, outlining significant concerns about the negative consequences that would result from wholesale removal of Air Traffic Control from the FAA. Can you explain the significant difference of opinion among our country’s largest airlines? 

Answer. The majority of A4A’s members support transformational reform. 

Question 4. In the past, airlines have disagreed over the tax structure applicable 

to the industry. Most notably, a major battle erupted in the mid-1990s as legacy airlines sought to shift costs to low cost carriers through tax changes. In the wake of 

the September 11 attacks, airlines disagreed about the amount and structure of the 

new security fee imposed to fund the TSA and other security initiatives. A new system of user fees is likely to be imposed if air traffic control is privatized. How can 

we be assured the airlines will avoid the ugly disagreements of the past? 

Answer. The majority of A4A’s members now support transformational reform and 

recommend that the new ANSP’s Board of Directors establish fees under a charging 

structure that is consistent with well-established international models and International Civil Aviation Organization (ICAO) charging principles. 

Question 5. The operations of cargo airlines differ substantially from those of passenger airlines. They have different needs and impose a different burden on the air 

traffic control system, largely because most cargo airlines operate during nighttime 

hours. Likewise, cargo airlines support the costs of the system with unique taxes 

on air cargo. Do cargo airlines endorse the position to which you have testified here 

today? Do they agree that fundamental change is necessary—likely including a new 

system of user fees? 

Answer. The majority of A4A’s members support transformational reform and recommend that the new ANSP’s Board of Directors establish fees under a charging 

structure that is consistent with well-established international models and International Civil Aviation Organization (ICAO) charging principles. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. RICHARD BLUMENTHAL TO

JEFFERY A. SMISEK

Question. I am a proud sponsor of S. 911, the Saracini Aviation Safety Act of 

2015, which would require airlines to install secondary barriers on most commercial 

aircraft. These barriers would prevent access to the flight deck of the aircraft. The 

legislation is named in honor of Victor J. Saracini, a pilot killed when terrorists hijacked United Flight 175 on September 11, 2001. The FAA has encouraged and 

issued guidance on secondary barriers, but the FAA has not mandated their installation. What steps has United Airlines taken to install secondary barriers? Would 

those efforts prevent the type of hijacking we saw on United Flight 175? 

Answer. We oppose Federal legislation to mandate secondary barriers on commercial aircraft. The U.S. airline industry remains committed to a multi-layered, dynamic and risk-based security system. Prior to the installation of fortified cockpit 

doors after 9/11, United Airlines voluntarily installed secondary barriers on some of 

our aircraft, however United and the industry believe that the decision about whether to install secondary barriers should be left to individual carriers. Resources spent 

to provide additional security for our passengers and crew should be dedicated based 

on areas of highest risk and in accordance with a multi-layered, dynamic approach 

to security. 

89 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. BRIAN SCHATZ TO

JEFFERY A. SMISEK

Question 1. Currently, air traffic control operations are covered by the Airport and 

Airway Trust Fund plus General Fund appropriations. At a minimum, those federally appropriated funds would have to be replaced under a privatized or corporatized 

model. It is not realistic to assume that efficiency improvements alone would be 

enough to make up for the loss of these funds, and funds raised through bonds 

would result in debt that would eventually have to be serviced. 

If the air traffic control system is moved to a separate, self-funding entity, what 

model would you propose to generate sufficient funds to cover the cost of operations? 

Answer. A4A recommends that the new ANSP’s Board of Directors establish fees 

under a charging structure that is consistent with well-established international 

models and International Civil Aviation Organization (ICAO) charging principles to 

pay for the operations of the new ANSP. 

Question 1a. Would it lead to cuts to air traffic controller costs (by reducing salaries, benefits, and pensions), raise user fees, or both? 

Answer. Employees transferred to the new ANSP should be ‘‘held harmless’’ financially in the transfer. Compensation and benefits, including accumulated pension 

benefits, should remain the same and carry over, intact, to the new organization. 

Existing labor union representation and collective bargaining agreements should 

carry over to the new ANSP, with an arbitration process to resolve modifications 

necessary to account for the new ANSP being a commercial entity rather than a 

government agency. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. CORY BOOKER TO

JEFFERY A. SMISEK

Question. Your written testimony advocates for transformational reform of the air 

traffic control system and acknowledges that the Congressional process to achieve 

transformational reform is complex with lots of business risks. If Congress were to 

embrace some form of transformational reform, how would this impact the regular 

air traveler at Newark Liberty Airport, for instance? Will they notice a difference? 

How long would it take? 

Answer. An ATC system that is responsive to the users of the system is good for 

all stakeholders and the traveling public especially those traveling through large 

hub airports like Newark. We have the safest ATC system in the world. We should 

also be striving to be the most efficient and most modern. General agreement has 

existed for years that we cannot continue to run the ATC system the same way as 

it has been since the 1950s and expect different results. A string of reports from 

presidentially appointed aviation commissions, the Department of Transportation 

Inspector General, the Government Accountability Office and independent private 

sector experts indicates that the FAA’s ATC modernization efforts have been 

plagued by significant cost overruns and delays and call into question the ability 

of the FAA, under the existing funding and governance structure, to deliver the results that travelers, operators and the general public in the United States require. 

The best example I can give is that when I started in the industry in the mid1990s, a flight from Reagan National to Newark was booked for 54 minutes. Now 

that same flight is booked for 84 minutes to account for delays resulting from our 

antiquated air ATC system. A more efficient system will benefit all travelers including those at large hub airports like Newark. 

We recommend a four year transition process that involves stakeholders working 

with the USG to ensure a safe and efficient transition, with the least disruption possible being the guiding principle. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. DEB FISCHER TO

PAUL M. RINALDI

Question. I have read the concerns expressed by the general aviation community 

regarding ‘‘commercialization’’ or ‘‘privatization’’ of the air traffic control (ATC) system. Do you believe there is a way for us to reform this system to ensure safety, 

efficiency, and innovation, while protecting the concerns of general aviation? 

Answer. Many foreign nations have successfully separated the operation and regulation of their aviation system into an air navigations service provider and a civil 

aviation administration respectively. In September 2015, the DOT Inspector General 

did a report comparing the systems in the Canada, United Kingdom, Germany, and 

France. Report No. AV–2015–084. Citing a MITRE Study commissioned by the FAA, 

90 

dated October 2014, the DOT IG wrote, ‘‘Studies we reviewed, including a recent 

report commissioned by the FAA, indicated that separating air navigation and safety/regulatory functions has not impacted safety.’’ The DOT IG noted that the United 

States has the largest, most complex air transportation system in the world and has 

the most operations and a larger general aviation community than any of the foreign ANSPs. Any reform must preserve that size, complexity, and diversity. General 

aviation can continue to thrive in a new system as long as it ensures that there 

are no new financial barriers for non-commercial flight and flight schools and by ensuring that we maintain the current first come, first served model rather than a 

best equipped, best served model. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. BILL NELSON TO

PAUL M. RINALDI

Question. At the hearing you seemed to express openness to restructuring the current ATC system along the lines of the private, not-for-profit, NavCanada model. 

After NavCanada split off from the government agency Transport Canada, new air 

traffic control hires were no longer provided the same benefits package that existing 

air traffic controllers received, instead receiving a weaker pension. In the aviation 

world, airlines have negotiated these so-called ‘‘B Scales’’ for a number of their employee unions, with fewer benefits provided for new workers. Are NATCA members 

and leadership concerned that privatizing the air traffic control will lead to the creation of a two tiered benefit system for controllers? 

Answer. NATCA is concerned about the possibility of reduced pay and benefits in 

a reform plan that would take air traffic control operations outside of the Federal 

Government. But, we are confident that H.R. 4441 provides for very strong protections for employee rights, pay, and benefits, as well as union rights to negotiate over 

wages, hours, and other terms and conditions of employment, including benefits. In 

order for NATCA to support any reform it must contain protections for employees 

and collective bargaining. Ranking Member DeFazio praised the labor code in the 

Chairman’s bill as extremely workforce friendly. 

Specifically, H.R. 4441 provides that employees on the date of transfer would 

have the option of retaining their Federal employee retirement plan (either Civil 

Service Retirement System or Federal Employee Retirement System, as currently 

applicable) and Federal Employee Health Benefit Plan. The employer would be required to pay the government’s share to both programs and employees would receive 

credit for service with the corporation toward their retirement calculation. A new 

plan for the employer would be subject to negotiations and if NATCA and the employer could not reach agreement it would be subject to mediation and ultimately 

binding third-party arbitration, the same way other subjects of bargaining would be 

resolved under the bill’s provisions. We are confident that under this system we 

would be able to successfully negotiate fair pay and benefits for our membership, 

both current and future. 

Presently, Federal employees are subject to an A-scale, B-scale, C-scale, and Dscale for the purposes of retirement, if you consider the A-scale CSRS, B-scale 

FERS, C-scale FERS–RAE, and D-scale FERS–FRAE. This does not include CSRSoffset or other even smaller pools of retirement programs. When these plans 

changed there was no duty to bargain nor binding arbitration; employees and their 

representatives were not part of the process, yet each provided for higher employee 

contributions and/or reduced benefits. 

Under the Canadian system, the A-scale provides for a higher pension calculation, 

but a significant employee contribution. While the B-scale provides for a lower pension calculation, it also includes a 100 percent employer funded contribution, saving 

employees approximately 9 percent that they had previously had to contribute to 

their own retirement. It is definitely not a clear-cut case of reduced benefits, if employees contribute that 9 percent to a personal retirement-investment account, even 

though the pension calculation itself is lower. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. BRIAN SCHATZ TO

PAUL M. RINALDI

Question 1. As you mentioned in your testimony, increasing hiring efforts this 

year and next year will not make up for the attrition in the air traffic controller 

workforce since 2013, unless training and placement processes are made a higher 

priority. 

In the context of FAA reauthorization, what will be required to ensure facilities 

are adequately staffed with people who have the necessary levels of experience? 

91 

Answer. NATCA has consistently stated that the status quo is unacceptable when 

it comes to funding and air traffic controller staffing. There are many reasons that 

controller staffing has reached crisis level and, as a result, NATCA believes that the 

FAA must take a holistic, collaborative approach to resolve its critical staffing 

issues. The first step is for Congress to pass an FAA Reauthorization bill that provides for the kind of stable, predicable funding that is necessary. 

As for short-term staffing solutions, one option that NATCA supports is the passage of H.R. 5292 (The Air Traffic Controller Hiring Improvement Act of 2016), 

which would help ease some of the FAA’s hiring and staffing problems. NATCA supports a continuously open vacancy announcement and preferential consideration for 

certified controllers with at least 52 consecutive weeks of experience involving the 

active separation of air traffic for the FAA, DOD, within the Federal Contract Tower 

program, and H.R. 5292 provides an avenue for such a program. NATCA also supports the reduction and/or removal of the bureaucratic red tape that has plagued 

the FAA’s hiring, placement, and transfer processes for years. 

In addition to these changes, NATCA supports Congress’s adoption of the FAA 

and NATCA’s jointly-developed certified professional controller (CPC) staffing target 

numbers as opposed to the FAA’s flawed Controller Workforce Plan (CWP) staffing 

numbers, which counts a brand new developmental trainee as equal to a 20 year 

plus veteran CPC when measuring facility staffing levels. In essence, the CWP is 

misleading because it uses finance numbers rather than operations numbers for assessing the FAA’s current staffing situation by lumping together CPCs with other 

controllers who are not yet fully certified. Adopting the FAA and NATCA’s jointly 

developed staffing numbers is critical to ensure that each facility is staffed with controllers who have the necessary levels of experience. Otherwise, it will appear as 

if the FAA has fixed some of its staffing issues in certain critical facilities when, 

in fact, the Agency merely flooded the facility with developmental trainees fresh out 

of the Academy. 

Question 2. Currently, air traffic control operations are covered by the Airport and 

Airway Trust Fund plus General Fund appropriations. At a minimum, those federally appropriated funds would have to be replaced under a privatized or corporatized 

model. It is not realistic to assume that efficiency improvements alone would be 

enough to make up for the loss of these funds, and funds raised through bonds 

would result in debt that would eventually have to be serviced. 

a. If the air traffic control system is moved to a separate, self-funding entity, what 

model would you propose to generate sufficient funds to cover the cost of operations? 

b. Would it lead to cuts to air traffic controller costs (by reducing salaries, benefits, and pensions), raise user fees, or both? 

Answer. NATCA has made clear that it does not support any one particular reform model over another, but that any proposed FAA reform model must accomplish 

the following four things: (1) ensure that NATCA’s bargaining unit employees are 

fully protected; (2) retain safety and efficiency as top priorities; (3) provide for a stable and predictable funding stream that adequately supports air traffic control services, staffing, hiring and training, long-term modernization, preventative maintenance, and ongoing modernization to infrastructure; and (4) maintain 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 

and general aviation, at all major airports and small airports in rural areas. In its 

current form, House T&I Committee Chairman Bill Shuster’s long-term FAA Reauthorization legislation (AIRR Act) addresses these four primary issues of concern. 

The International Civil Aviation Organization (ICAO) weight and distance model 

that has been adopted in most nations would provide the backbone for any funding 

scheme, however NATCA is agnostic with regard to applying any particular rates 

or fees to the different segments of the aviation community. 

NATCA does not and would not support any solution to providing stable predicable funding that would come at the expense of employee salaries, benefits, or pensions. The AIRR Act preserves negotiated agreements including pay and benefits, 

and provides that current Federal employees who transfer to the corporation would 

be eligible to remain in the Federal Employee Health Benefit Plan and the Civil 

Service Retirement System or Federal Employee Retirement System, as applicable. 

Employees newly hired by the corporation and transferring employees who elect to 

do so, would participate in plans negotiated by NATCA and provided to corporation 

employees. The protection of current employees’ benefits and the ability for NATCA 

to be involved in the collective bargaining process to negotiate benefits for corporation employees is critical to our support of any reform legislation. 

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RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. CORY BOOKER TO

PAUL M. RINALDI

Question. You reference in your written testimony that NavCanada had a ‘‘difficult and lengthy transition period.’’ From an air traffic controllers’ perspective, 

what were the difficulties, how might these be exacerbated by the complexity of the 

U.S. airspace, and how were they overcome? 

Answer. In October 2014, MITRE Corp. released a report summarizing the governance, autonomy, structure, and funding of the Civil Aviation Authority (CAA) in 

six countries and discussed any lessons learned from their separation from the Air 

Navigation Service Provider (ANSP). The study included the United Kingdom, Canada, New Zealand, Australia, France, and Germany. 

In the section regarding transition, the study found: 

Three particular lessons learned and associated recommendations were repeatedly expressed: operate the CAA and the ANSP as functionally separate units 

for a few years prior to complete separation, use that time to develop and review comprehensive written regulations that will form the foundation for the relationship between the CAA and the ANSP, and establish a clear understanding 

as to the broader division of roles and responsibilities between the CAA and the 

ANSP. 

Each of these other nations is quite different than the U.S. National Airspace System, in terms of size, density, complexity, traffic diversity, and other factors, so none 

of the other nations’ transitions can be directly comparable. A successful transition 

will require the appropriate amount of time for the regulatory FAA and the new 

air traffic entity to establish appropriate boundaries and procedures. When NATCA 

received a briefing by the MITRE report authors, we learned that too short a transition period could actually lead to a longer period of time before the new entity and 

the regulator are successful. 

NavCanada’s transition was particularly difficult because it was required to purchase the air navigation system from the government. To do so, the newly formed 

corporation had to take on considerable debt. Then, in the aftermath of the terrorist 

attacks of September 11, 2001, it faced an immediate traffic and revenue decline of 

10 percent resulting in a C$145 million shortfall in 2002 and an anticipated cumulative shortfall of C$360 from 2002–2005, making debt service extremely difficult. 

NavCanada was forced to undergo financial restructuring in order to generate cash 

flow to support operations and required capital spending. The AIRR Act does not 

require the new ATC Corporation to purchase the assets from the FAA, which would 

make the transition significantly easier and prevent significant air traffic downturns 

from immediately affecting the corporation’s ability to be successful. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. DEB FISCHER TO

ED BOLEN

Question. I have read the concerns expressed by the general aviation community 

regarding ‘‘commercialization’’ or ‘‘privatization’’ of the air traffic control (ATC) system. Do you believe there is a way for us to reform this system to ensure safety, 

efficiency, and innovation, while protecting the concerns of general aviation? 

Answer. Our airspace belongs to the American public. It does not belong to any 

private company, or group of companies. It doesn’t belong to any segment of the 

aviation industry, or even the aviation industry itself. The airspace belongs to the 

American public, and it should be operated for the public’s benefit. We stand by our 

oral and written testimonies given and submitted to the Committee on May 19, 

2015. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. BRIAN SCHATZ TO

ED BOLEN

Question 1. Currently, air traffic control operations are covered by the Airport and 

Airway Trust Fund plus General Fund appropriations. At a minimum, those federally appropriated funds would have to be replaced under a privatized or corporatized 

model. It is not realistic to assume that efficiency improvements alone would be 

enough to make up for the loss of these funds, and funds raised through bonds 

would result in debt that would eventually have to be serviced. 

If the air traffic control system is moved to a separate, self-funding entity, what 

model would you propose to generate sufficient funds to cover the cost of operations? 

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Question 1a. Would it lead to cuts to air traffic controller costs (by reducing salaries, benefits, and pensions), raise user fees, or both? 

Answer. As you said, in today’s system, we have trust fund and general fund monies that make up the FAA budget. If you restructure FAA and move to a privatized 

or corporatized model, the general fund money goes away. Users are then left with 

three options to fund the system: cut costs; increase taxes, fees and charges for 

users; or borrow money which will increase costs to users since the debt needs to 

be serviced. Sequestration has shown us that cutting costs is difficult and can affect 

service to small and rural communities. Increasing taxes, fees, and charges or borrowing money increases costs for the users of the system and no stakeholder has 

said they will pay more. 

As a result, we believe costs will go up for the users and service to small, rural 

and mid-sized communities throughout the country will be cut and/or severely decreased. 

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