FY 2008 Budget In Brief 
FY 2008 Budget In Brief 

Table of Contents 

Message from the Administrator........................................................................................................................... 1 

We’ve Changed Our Look ..................................................................................................................................... 4 

We Are The FAA ...................................................................................................................................................... 6 

Building For The Future On Our Past.................................................................................................................... 9 

Overview Of FY 2008 Budget.............................................................................................................................. 10 

Preparing For The Future — NextGen ................................................................................................................ 13 

Facts & Figures.......................................................................................................................................................... 16 

 Air Traffic Organization.................................................................................................................... 16 

 Safety & Operations.......................................................................................................................... 16 

 Research, Engineering, and Development....................................................................................... 16 

 Grants-in-Aid for Airports ................................................................................................................ 16 

 Capital Programs............................................................................................................................... 16 

 Comparison of Old and New Accounts........................................................................................... 17 

 Personnel Resource Summary ........................................................................................................... 18 

 Airport and Airway Trust Fund......................................................................................................... 19 

i 
FY 2008 Budget In Brief 

Message from the Administrator 

Marion C. Blakey

Safety is our primary concern. Our efforts, in 

concert with those of our stake holders, to improve operations have led to the safest period in 

aviation safety. At the same time, the demand 

for FAA services has never been greater. We 

oversee about 50,000 flights per day. In 1995, 

the system supported about 545 million passengers. In 2005, it was 739 million. Forecasts call 

for one billion passengers annually by 2015. 

Given the anticipated growth — not only in terms 

of passengers, but in the number of aircraft as 

well — we know that our services must adapt to 

meet the demand. We also know that the complexity of the future operating environment—

with evolving fleet mixes, new aircraft, technology, and the environmental constraints—must be 

approached in partnership with our customers. 

The preparation for these changes already is 

well under way. The federal government’s commitment to being ready for the future is gathered 

in one vision, the Next Generation Air Transportation System (NextGen). This budget demonstrates a long-term commitment to NextGen, not 

as pie-in-the-sky vision, but as embodied by tangible systems, processes, and management energy that will lead us to the future. 

The budget request also emphasizes our need for 

a stable funding source that is based on our costs 

and the services we provide. Most of FAA’s current funding comes from the Airport and Airway 

Trust Fund, which in turn is funded primarily 

through ticket taxes (and other taxes to lesser 

extents). All of these taxes are scheduled to expire in September 2007, which coincides with the 

end of the current authorization for FAA programs under Vision 100. 

As it stands, there is no link between FAA’s 

budget and the actual cost to provide service. 

Since 2000, low-cost carriers and other factors 

have changed the business of aviation. The airlines also are favoring smaller jets. With the 

number of passengers increasing and the number 

of jets to carry them also on the rise, this portends for a greater workload. Even general 

aviation activity is increasing and shifting toward 

high-performance jet aircraft, which increases 

FAA workload without a commensurate increase 

in revenue. The bottom line is that there is no 

connection between revenue and workload. 

After consultation with our stakeholders, we have 

developed a reauthorization proposal for FAA 

that will be released in February 2007. It proposes a stable, cost-based funding structure to 

ensure that our costs and revenues are better 

aligned and that our stakeholders are treated 

equitably. It also maintains a well-supported 

general fund contribution for “public good” services and provides strong incentives for FAA to 

continue to control costs and meet demand efficiently, via ongoing stakeholder consultation. 

This new reauthorization proposal will support 

the other major themes of this budget request by 

maintaining safety, building capacity, and facilitating the modernization of the system into 

NextGen, while helping FAA continue its momentum of operating more like a business. This 

budget request reflects the proposal’s modified 

account structure that matches FAA’s costs to appropriate funding sources. 

In FY 2008, several capital programs directly 

support the NextGen concept by creating new, 

transformational capabilities. The technology 

includes Automatic Dependent SurveillanceBroadcast, the next generation surveillance technology; and System-Wide Information Management, which will provide a broad range of realtime information to users of the National Airspace 

System. The FY 2008 budget would also fund 
FY 2008 Budget In Brief 

2 

NextGen demonstrations and infrastructure engineering activities, critical to identifying early implementation opportunities and reducing programmatic risks. Most of this funding would be 

used to demonstrate and refine the concept of 

trajectory based operations. When operational, 

this concept will allow flights to follow their preferred and most fuel-efficient routes. 

We are also requesting funding for about 30 

capital programs that create a platform for, or 

enable, future capabilities. Examples of these 

contributor programs include: En Route Automation Modernization; the Wide Area Augmentation 

System, which augments the Global Positioning 

System signal for aviation uses; Airport Surface 

Detection Equipment-Model X, which reduces runway incursions; and the Next Generation Air/

Ground Communications System, which modernizes air-to-ground communications infrastructure. 

These investments are necessary to modernize the 

foundation of the NAS, allowing the eventual 

integration of a full complement of advanced air 

traffic management tools. 

We have incorporated cost control and improved 

management initiatives in all aspects of our 

agency through the FAA Flight Plan, the President’s Management Agenda (PMA), the Program 

Assessment Rating Tool (PART) reviews, and being responsive to our stakeholders. 

The FAA has aggressively searched for ways to 

become more efficient and to deliver better service at a lower cost. We completed the largest 

non-military A-76 competition in federal government history, which is projected to save over $2.2 

billion by 2015. We’re making headway with 

air traffic control procedures as well. The recent 

implementation of Domestic Reduced Vertical 

Separation Minimum (DRVSM) created an additional six layers of cruise levels at higher altitudes. These enable jets to operate at more efficient cruising altitudes and increases system capacity while doing so. DRVSM is projected to 

yield savings of more than $13.4 billion from FY 

2005 through FY 2016 for our customers. Administratively, in our largest operational Line of 

Business, we streamlined operations and eliminated five layers of upper management since 

2003. We also instituted productivity improvement targets for the controller workforce that we 

continue to meet. 

The budget request furthers this momentum as we 

pursue other opportunities to maximize efficiencies and control costs ... including labor costs. 

The majority of our operational costs come from 

personnel – about two-thirds of our entire 

budget. Our contract negotiations with the controllers union reflected our constant effort to control costs. 

The FAA is doing more than ever to manage itself 

responsibly and it is paying off. At the same 

time, the airline industry continues to face financial uncertainty. While some air carriers remain 

under bankruptcy protection, most air carriers 

continue to reform their high cost structures, reduce in-house staff, renegotiate more favorable 

labor agreements, and use more outside repair 

stations. Frankly, we believe it would be highly 

irresponsible to cut our safety efforts at this point 

in time. 

The budget request puts us on firm ground in 

critical areas that matter most: safety and 

staffing. As always, passenger safety continues 

to be our number one priority. Our goal for FY 

2008 will be to enhance safety through better 

oversight and operational and research 

programs. This includes a request to increase our 

safety workforce by 330 and an additional 30 

operational support staff in FY 2008. 

As outlined in the update to the Congressional 

report, A Plan For the Future: The FAA's 10-Year 

Strategy for the Air Traffic Control Workforce, 

almost three-quarters of the controllers hired 

after the 1981 PATCO strike will reach 

retirement age over the next decade. Steps to 

keep the system moving smoothly already are 

under way. We need to maintain a continuous 

pipeline of recruits and trainees because it takes 

several years of on-the-job training for 

developmental controllers to achieve certified 

professional controller (CPC) status. Our FY 

2008 budget request funds the hiring of 1,420 

new controllers in FY 2008. These new hires will 

be offset by expected losses of 1,276 

controllers, resulting in a net increase of 144. 
FY 2008 Budget In Brief 

3 

Our FY 2008 budget request for Grants-in-Aid 

to Airports is $2.75 billion. With the additional 

tools in our reauthorization proposal, this level, 

when combined with programmatic changes we 

recommend for AIP and passenger facility 

charge reauthorization, FAA will be able to fund 

high priority safety, capacity, and security 

projects. 

Without question, we must prepare for the future, 

and the future begins with responsible capital 

investments. Given the vital role aviation plays in 

the Nation’s economy, and the need to prepare 

for the future, our budget request and reauthorization proposal are designed to support America’s growing demand for aviation services. 
FY 2008 Budget In Brief 

4 

WE’VE CHANGED OUR LOOK

FAA has prepared this budget request in a new 

account structure that aligns with FAA’s lines of 

business and the reauthorization proposal currently under review by the Administration. 

Under FAA's current tax structure, which expires 

on September 30, 2007, there is no direct relationship between the taxes paid by users and the 

air traffic control services provided by FAA. The 

rapid growth of low-cost carriers and continued 

pressure on ticket prices has made the stability of 

the current tax structure unpredictable. Since 

the current tax structure is primarily based on the 

price of a ticket, FAA collects much more in taxes 

from a full plane rather than from a nearly 

empty plane of the same size. However, FAA’s 

cost in moving that plane through the NAS is the 

same. The reauthorization legislation that will be 

transmitted in early 2007 reforms the system’s 

financing structure to tie costs to revenues, enable 

the development of the Next Generation Air 

Transportation System (NextGen), avoid delays 

and increase safety. The FAA aims to create a 

direct relationship between revenue collected 

and services received, providing FAA with a stable revenue stream and creating incentives to 

make the system more efficient and responsive to 

user needs. 

The reauthorization proposal transforms FAA's 

excise tax financing system into a cost-based 

system that recovers the cost of providing air 

traffic control services to commercial aviation 

operators through user fees and the costs of providing air traffic services to general aviation operators through a fuel tax beginning in 2009. 

User fees allow aviation users to pay directly for 

the services that FAA provides in managing the 

use of the national airspace, and enable users 

to better gauge the actual costs of their requirements of the system. This structure encourages 

FAA to control costs and continue to operate like 

a business, and makes air traffic management 

more efficient and responsive to user needs. 

Under the proposal, FAA would have the authority to collect the user fees that directly offset the 

cost of FAA’s operations from commercial aviation users; expenditure of the available fees 

would be affirmed in the appropriations process. 

Both turbine and piston general aviation users 

would continue to pay a fuel tax. Both user fees 

and fuel tax rates would be calibrated based on 

the costs that the users impose on the system. The 

FAA would also be able to charge all users a fee 

for operating in the Nation's most congested airspace. A general fund component of FAA’s 

budget would be maintained to cover activities 

that benefit the public good like safety oversight 

functions and public use of the airspace. Finally, 

FAA’s airport grants program would continue to 

be funded by fuel taxes. 

The 2008 Budget assumes FAA will implement its 

new financing mechanism starting in 2009 and 

that other elements of the reauthorization will be 

effective in 2008. 

Improvements are evident in other aspects of the 

budget as well. Most notably, this request reflects FAA’s continued progress in integrating the 

budget and performance through the Flight Plan, 

Business Plans, and other strategic planning and 

performance measurement. We are beginning to 

use cost accounting data to improve our decisionmaking and look forward to incorporating it even 

more in future submissions. 

The following table highlights the proposed new 

The Agency’s Budget Aligns With Pending Reauthorization Proposal 
FY 2008 Budget In Brief 

5 

account structure, and relationship to current accounts: 

FY 2008 Budget by Funding Sources 

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

Safety & Operations Air Traffic

Organization

Research,

Engineering, and

Development

Grants-n-Aid for

Airports

Trust Fund General Fund Total

FY 20061 FY 2007 FY 2007 FY 2008

ACCOUNTS

ACTUAL CR LEVEL PRES. BUDGET REQUEST

Operations2 $8,104,140 $8,104,140 $8,366,000

 General ($2,618,550) ($2,618,550) ($2,921,000)

 AATF ($5,485,590) ($5,485,590) ($5,445,000)

 FSS A-76 Competition (non-add) ($148,500)

Facilities & Equipment2 $2,555,200 $2,480,955 $2,503,000

Safety & Operations3 $1,879,453

 General ($1,207,859)

 AATF ($671,594)

Air Traffic Organization3 $9,307,896

 General ($1,393,380)

 AATF ($7,914,516)

Research, Engineering4

& Development $136,620 $131,297 $130,000 $140,000

General ($17,133)

AATF ($122,867)

Grants in Aid for Airports:

 (Obligation Limitation) $4,138,654 $3,515,000 $4,307,000 $2,750,000

 Rescission ($1,067,754) ($1,582,000)

TOTAL: $13,866,860 $14,231,392 $13,724,000 $14,077,349

 [Mandatory] $3,070,900 $3,515,000 $2,725,000 $2,750,000

 [Discretionary] $10,795,960 $10,716,392 $10,999,000 $11,327,349

1

FY 2006 reflects 1% across-the-board rescission and hurricane supplemental funding for $40.6M in Facilities

 and Equipment per P.L. 109-148.

5

 CR levels estimated in accordance with P.L. 109-838

4

 Funding sources for Research, Engineering, & Development account change from the Airport and Airway Trust Fund in FYs 

BUDGET AUTHORITY BY APPROPRIATIONS ACCOUNT

($000)

2

 Starting in FY 2008, this account will no longer receive appropriations. Funding will go to the new Safety & Operations and 

3

 New account starting in FY 2008. Includes both traditional Operations and Facilities & Equipment funds.
FY 2008 Budget In Brief 

6 

WE ARE THE FAA 

FAA -- Like A Business with a Public 

Mission 

At FAA, “acting more like a business” isn’t just a 

slogan. We’re engaging in a comprehensive 

pay-for-performance program, consolidating 

operations, improving internal financial management, and increasing benefits to our customers. 

Our beacon will always be our mission – to provide the safest, most efficient aerospace system 

in the world. Our bottom line is results for our 

stakeholders, including the taxpayer and traveling public. 

The transformation over the past four years has 

been steady and relentless, as we’ve embraced 

the vision of the President’s Management Agenda 

(PMA) and its aggressive strategy to improve 

management throughout the federal government. 

The evolution of the PMA complements the strategic vision of our Flight Plan. It contains a number 

of management performance measures, including 

a cost control performance measure requiring 

each organization to contribute cost efficiencies 

that save money or avoid costs for the agency. 

Through the Flight Plan and PMA, we’ve made 

dramatic gains in human capital, competitive 

sourcing and consolidations, financial performance -- including containing and cutting costs; 

and, ultimately accountability to the bottom line 

of our customers. 

What may be our most difficult challenge is upon 

us. Our proposed financing of Air Traffic Services 

– in part directly by our user community – will 

radically reform the way FAA is funded. It will 

also increase the scrutiny, and therefore the 

transparency, of our services. Providing better 

links between the costs of services being provided and amounts paid by service beneficiaries 

is critical. This budget request embarks the 

agency on this path, and we are ready for the 

challenge. 

Pay-for-Performance — Human Capital Reform 

Personnel reform for the agency, granted in 

1998, is starting to bear fruit, with conversion 

from the traditional GS-Schedule pay system to 

pay for performance. Accountability for results is 

systemic throughout our organization, with 80 

percent of our employees on the pay-forperformance system, including our executives. 

Flight Plan performance targets must be 

achieved before annual pay raises are calculated. Executives and managers have a good 

deal of discretion in rewarding high-performing 

employees, and incentives are present to ensure 

quality work and innovation are rewarded. 

In December 2003, we renegotiated costly 

Memorandums of Understanding (MOUs) with 

various bargaining units. At the same time, we’ve 

strengthened the management approval processes for future MOUs. 

We also continue to apply effective management 

and financial principles on a new contract with 

our air traffic controllers. Our recent contract 

negotiations with the controllers union reflected 

our constant effort to control costs. 

Where Safety, Accountability and Innovation Come First 
FY 2008 Budget In Brief 

7 

Major Competitive Sourcing, Consolidations & 

Asset Management Efforts 

In October 2005, we completed the largest nonmilitary A-76 competition in history. The first two 

years will see cost savings of $66.4 million in FY 

2007 and an additional $51.7 million in FY 

2008, for a cumulative savings of $184 million 

by the end of FY 2008. Our network of automated flight service stations, which provide 

weather guidance and other assistance to the 

pilots of small airplanes, will be reduced from 58 

to 20 in the fourth quarter of FY 2007. The contract not only saves money, it also commits the 

vendor to modernize and improve the flight services we provide to general aviation pilots. In 

addition, the employees who left Federal service 

as a result of this transition were given offers to 

work for Lockheed Martin, the successful bidder 

of the contract. 

In FY 2006, the Air Traffic Organization (ATO) 

began its Service Area Consolidation effort to 

consolidate its administrative and staff support 

functions from nine service areas to three. This 

will allow us to provide better service to customers while saving an estimated $360 to $460 million over the next ten years. In FY 2008, we anticipate savings of $29 million from Service Area 

Consolidation. Also in FY 2006, FAA completed 

the consolidation of eleven accounting offices. 

Annual payroll savings alone from this consolidation are estimated to be $3.5 million. With regard to cancellation of Instrument Flight Procedures (IFPs), a total of 750 procedures have 

been eliminated over the last two years. The 

breakout is 560 non-directional beacon "NDB" 

and 190 "Other" procedures. Finally, we eliminated over 199 navigational aids within the last 

year. 

In FY 2005, we began centralizing responsibilities for real property management into a Real 

Estate Management System (REMS). The FAA is 

the lead for the Department of Transportation, 

since we have 99 percent of the real property 

assets; thus, being the linchpin for the Department 

to reach “green” on this initiative. 

Improved Financial Management Performance 

We’re making significant strides in improving our 

financial management. The Government Accountability Office removed us from its high-risk list in 

2005, a particular accomplishment since FAA 

Financial Management had been a high-risk item 

since 1999. We also received, for the third year 

in a row, the Association of Government Accountants’ prestigious Certificate of Excellence in Accountability Reporting (CEAR) for our 2005 Performance and Accountability Report. 

A major focus for the entire agency is controlling 

costs. Our strategic and budget planning goals 

are more closely aligned than ever, and they 

both include explicit cost savings initiatives. 

We have improved oversight and control of 

costs, and today over 90 percent of major programs are within 10 percent of budget and are 

on schedule. We are committed to disciplined 

investment analysis reviews by FAA’s Joint Resources Council and independent review of contracts over $10 million by the agency’s Chief Financial Officer. 

Slowing Growth of Labor Costs -- We know 

that labor costs drive a significant share of our 

budget, and we are slowing the rate of growth in 

labor costs, such as in our controller negotiations, 

or back-filling positions with new employees at 

lower pay grades when possible. We’re also 

increasing workforce productivity in several 

ways: 

We are on track to achieve cost efficiencies of 

10 percent by FY 2010 in controller staff costs 

through productivity improvements. Our budget 

request assumes we will achieve controller productivity improvements of two percent in both FYs 

2007 and 2008. 

Through proactive management of our worker’s 

compensation caseload we’ve slowed the growth 

of this program, which has resulted in $5.5 million 

in avoided costs in FY 2005 and $7 million in FY 

2006. For example, we now follow up on all 

newly filed claims to ensure the employee returned to work as soon as practical following a 

work related injury or sickness. In addition, the 

ATO has taken steps to bring back employees 

who have been on workman compensation rolls 

for more than one year. In FY 2007, this effort is 

expected to yield an additional $7 million in 

avoided costs. 

Over the last several years, ATO reduced its 

overhead expenses by cutting multiple levels of 
FY 2008 Budget In Brief 

8 

senior management, reducing its executive ranks 

by 20 percent. In addition to the Service Area 

Consolidation noted above, ATO has used Activity Value Analysis to help streamline its operations, and eliminate and consolidate administrative staffs and support functions. Since FY 2003, 

the ATO non-safety workforce was reduced by 

16 percent. In FYs 2005 and 2006, this reduction 

resulted in a savings of over $84 million that carries forward to the future. The long-term value of 

this downsizing exceeds $100 million per year. 

Smarter Capital Investment Choices -- A capital 

investment team was created in 2004 to review 

financial and performance data. The team completes an evaluation of baseline performance 

and includes associated variances, obligations, 

schedule milestones and earned value management (EVM) data. EVM will provide an early 

warning for potential and actual variances as 

well as help the program manager develop corrective actions. During the past year, 73 projects 

or programs were reviewed, prompting the team 

to restructure 10 projects and terminate 3 programs. These changes resulted in $460 million in 

lifecycle savings to FAA. 

Integrating Budget & Performance – The main 

objective of the PMA budget and performance 

integration initiative is to build FAA’s budget in a 

way that quantifies what the agency is doing. 

The goal is to show how increases or decreases in 

our budget affect those activities and drive performance, and how the activities across the six 

goal areas work together. The initiative uses performance measures to track program viability, 

which is one of six criteria to reach “green” status 

on the PMA report card. 

Throughout the agency, resources are focused on 

tracking efficiency measures. As our Cost Accounting System (CAS) data improves with the 

expansion to all of our Lines of Business, we will 

be able to capitalize on timely analysis of how 

well we’re doing, or where we need to improve. 

Among the efficiency measures developed to 

track progress are measures for each program 

assessed through a Program Assessment Rating 

Tool (PART) review, examples of these include: 

• ATO is tracking its overhead rate, comparing 

non-facility labor dollars to total labor dollars. Targets have been established and provide a compass for future decision-making. 

• ATO has determined a cost per controlled 

flight and utilizes that metric to determine 

efficiency in handling Instrument Flight Rule 

flights. 

• The Airport Improvement Program (AIP) is 

making best practice improvements throughout its regions based upon its evaluation of 

its efficiency measure of grant administration 

dollars divided by grants. 

Our results are not only marked by cost savings 

and increased capacity in the system, but by an 

enviable safety record that makes us a model for 

aviation safety practices throughout the world. 

We keep in front of us the beacon of our mission, 

and will allow nothing to divert us from our 

course. 
FY 2008 Budget In Brief 

9 

BUILDING FOR THE FUTURE 

ON OUR PAST

Accomplishments — The Past Year in Review 

With a workforce of 44,865 and an annual 

budget of $14.3 billion in FY 2006, FAA operates and maintains the most complex air traffic 

control system in the world. More than half of the 

world’s air traffic is managed by FAA controllers. 

We conduct research to improve aviation safety 

and efficiency, and provide grants to improve 

almost 3,400 eligible public-use airports in the 

United States. FAA also regulates commercial 

space launch activities to ensure public safety. 

Administrator Marion C. Blakey led FAA to a 

number of significant accomplishments in FY 

2006, including: 

• The Office of Aviation Safety was successfully certified to the prestigious International 

Organization for Standardization 

ISO9001:2000 quality management standard covering multiple aviation safety services, including national and international 

sites encompassing 6,462 employees. FAA is 

the largest Federal business to achieve this 

world-class registration. 

• Commissioning four new runways—in St. 

Louis, Atlanta, Cincinnati, and Minneapolis/St. 

Paul—adding 1.67 percent (or 655,000 

takeoffs and landings) in new capacity. These 

new runways will help FAA manage increased demands on the system while working to minimize delays and congestion. We 

are now planning for six new runway projects, which will further increase capacity. 

• Developing a legislative proposal for a new 

system for financing the FAA in the future. 

The excise taxes that go to the Airport and 

Airway Trust Fund are set to expire in FY 

2007. 

• Maintaining 97 percent of critical acquisitions 

on schedule and 100 percent on budget. 

• Hiring over 1,100 new controllers and releasing an updated Air Traffic Controller 

Workforce Plan designed to address anticipated retirement and replacement of air 

traffic controllers over the coming decade. 

The revised document outlines the agency’s 

plans to hire more than 11,800 new air traffic controllers over the next 10 years. 

• Introducing the Airspace Flow Program, which 

is designed to greatly reduce the number of 

flight delays and bring an estimated $900 

million in cost savings to the airlines and the 

flying public. 

• Issuing new common Federal launch safety 

standards designed to create consistent, integrated space launch rules for the nation. 

• Initiating the Strategic Sourcing for the Acquisition of Various Equipment and Supplies 

(SAVES) program in FY 2006 to implement 

best practices from the private sector in the 

procurement of administrative supplies, 

equipment, and IT hardware. This initiative is 

expected to achieve $5 million in savings 

annually. 

• Enhancing capacity for our customers with the use 

of Domestic Reduced Vertical Separation Minimum, Required Navigation Performance, and 

Advanced Technologies and Oceanic Procedures. 
FY 2008 Budget In Brief 

10 

FY 2008 Request by Goal—$ in millions 

The FAA mission is to promote aviation safety 

and mobility by building, maintaining, and operating the Nation’s air traffic control system; overseeing commercial and general aviation safety 

through regulation and inspection; and providing 

support to improve the capacity and safety of 

our airports. The FY 2008 budget request of 

$14.1 billion reflects the Administration’s commitment to increase the performance and capacity 

of our aviation system and is directly related to 

the agency’s Flight Plan 2006-2010. 

The FY 2008 budget 

requests $1.9 billion 

for FAA Safety and 

Operations. Most of 

the funds requested for 

Safety and Operations in FY 2008 support the goal of maintaining and increasing 

aviation safety, reflecting the President’s commitment in this area. 

Other significant 

amounts support mobility and security. 

Safety – The request includes $9.4 billion to inspect aircraft and ensure the safety of flight 

procedures. This includes an increase of $16 

million to hire and train 1,420 air traffic controllers, resulting in a net gain of 144 controllers; $8 

million to expand the Air Transportation Oversight System, $4.8 million for new aviation safety 

requirements; and $5.7 million for future aviation 

safety initiatives. The request supports continued 

development of the ATO, which was formed in FY 

2004 to improve the delivery of air traffic services by adopting "best business-like" practices. 

It also includes funding for operating and maintaining the air traffic control system, developing 

a replacement air traffic data and telecommunications system, commercial space transportation, 

and a share of agency overhead support costs. 

In FY 2008, FAA will continue working to reduce 

the precursors of aircraft accidents in response to 

the recommendations in OMB’s PART review of 

Air Traffic Services conducted in FY 2003, and to 

the Office of Inspector General’s (OIG’s) Aviation 

Safety Management Challenge for FY 2006. In 

FY 2006, for the fifth year in a row, serious runway incursions decreased. To 

better map movements on the 

ground and in the air, the 

agency deployed 8 Airport 

Surface Detection Equipment 

Model X systems and plans to 

deploy 19 more at airports 

between FY 2007 and FY 

2009. While FAA met its target for operational errors, 

reducing them further as traffic continues to increase remains one of the agency’s top 

priorities. To address this challenge, FAA will 

continue to concentrate on outreach, awareness, 

technology, and improved procedures and infrastructure. 

General Aviation (GA) fatal accidents trended 

significantly lower in FY 2006 compared to the 

previous year. The FAA worked with various 

members of the GA Community during the year, 

including aeromedical evacuation and charter 

services, to focus education and training efforts 

on night landings, weather, and other areas of 

concern. Personal, agricultural, and amateurbuilt operations showed especially sharp improvements. 

OVERVIEW OF FY 2008 BUDGET
FY 2008 Budget In Brief 

11 

The FY 2008 budget request for FAA includes 

$9.4 billion to meet our safety goals. These include our targets to reduce U.S. commercial air 

carrier fatal accidents to below 0.010 per 

100,000 departures in FY 2008, and to reduce 

all general aviation fatal accidents to no more 

than 325 in FY 2008. The request also supports 

FAA's efforts to reduce the most serious runway 

incursions to a rate of 0.509 per million operations. It provides funding for inspecting aircraft, 

certifying new equipment, and ensuring the 

safety of flight procedures and the competence of airmen and 

women. It also includes funding for 

additional air traffic 

controllers to prepare 

for the projected 

surge in retirements 

over the next decade, 

and to ensure that 

adequate staffing is 

available and fully 

trained to perform this 

critical safety function. 

Reduced Congestion ‐ The aviation industry is 

responsible for moving people and products, and 

it contributes approximately $640 billion to our 

economy. Over two million people a day travel 

on our Nation's airlines and more than one-third of 

the value of all goods is moved by air. Air travel 

exceeded pre-9/11 levels in FY 2006, and is on 

track to reach more than one billion passengers 

by 2015. By FY 2008, air carrier, commuter, and 

air taxi operations are anticipated to increase 8.3

percent from FY 2004. We cannot afford to reduce our commitment to investing in the Nation's 

air traffic control system and our airports. 

The request includes $3.6 billion to improve air 

traffic efficiency by various means, including improving the flow of air traffic through better airspace design. 

To achieve an on-time arrival rate of 88.0 percent 

of flights in FY 2008, and to increase average 

daily capacity at major airports, FAA requests 

$3.6 billion, primarily for FAA’s ATO and Safety/

Operations Capital Accounts and Airport Improvement Grants. This includes funding to replace obsolete radars and to continue automating terminal 

control facilities and $53.1 million for oceanic 

automation to improve flight route flexibility. Programs that will form the core of the Next Generation Air Transportation System (NextGen) are also 

funded, including $21.3 million to develop an 

internet-like System-Wide Information Management network, and $85.7 million to continue implementing Automatic Dependent Surveillance 

Broadcast technology throughout the National Airspace System. The Joint Planning and Development Office (JPDO), 

a multi-agency task 

force assembled to 

address future capacity needs, is 

charged with overseeing the NextGen 

project. $14.3 million is included in FY 

2008 Research, Engineering and Development (RE&D) funding to support the 

JPDO. The FY 2008 

Airport Improvement 

Program request includes $1.3 billion 

aimed at enhancing 

capacity, largely through the building and maintaining of runways. The FY 2004 PART review for 

the Airport Improvement Grants program affirmed that this program is well managed and 

effective in providing support to airport authorities for moving people and goods. 

Global Connectivity – The request includes $78 

million to expand the agency’s international leadership role and to help improve safety. FAA will 

expand its training and technical assistance programs that help civil aviation authorities meet international standards, as well as promoting seamless global operations. 

FAA will continue to promote increased external 

funding for training and technical assistance programs that help civil aviation authorities around 

the world meet international safety standards. 

FAA will also continue to work with its international 

partners and the International Civil Aviation Authority to harmonize global technological standards, and to expand the use of global satellite 

navigation systems. 
FY 2008 Budget In Brief 

12 

Environmental Stewardship – The request includes $354 million to continue the agency’s commitment to manage aviation’s growth in an environmentally-sound manner and has an aggressive 

plan to accomplish this through mitigation, operational measurements and standards. 

The budget request includes $248 million to ensure that the number of people in the United 

States who are exposed to significant aircraft 

noise levels ‐ a Day/Night Average Sound Level 

(DNL) of 65 decibels or more ‐ continues to decline. FAA will address the environmental impacts of airport projects, primarily aircraft noise. 

FAA will also provide expertise and funding to 

assist in abating the impacts of aircraft noise in 

neighborhoods surrounding airports by purchasing land, relocating persons and businesses, 

soundproofing residential homes or buildings 

used for educational and medical purposes, purchasing noise barriers and monitors, and researching new noise prediction and abatement 

models and new technologies. 

Regulatory factors at the local, State, and Federal levels are also considered in the decisionmaking process. FAA funds pollution prevention; 

complies with occupational safety, health and 

environmental regulations; promotes good energy management practices; and conducts environmental impact analyses. 

Security, Preparedness, and Response - While 

NAS security is critical to the security of the flying 

public, most of the $246 million requested focuses on enhancing the security of its personnel, 

facilities, and communications. 

FAA ensures the operability of the national airspace through the facilities, equipment and personnel of the air traffic control system, which is 

essential to the rapid recovery of transportation 

services in the event of a national crisis. Additionally, the budget request includes funding to 

continue upgrading and accrediting facilities, 

procure and implement additional security systems, and upgrade the Command and Control 

Communications equipment. 

Organizational Excellence - The request includes $384 million, which funds activities for two 

primary sets of goals: The President’s Management Agenda initiatives and the Flight Plan Organizational Excellence performance targets. 

FY 2008 Request by Goal

$ in millions

Safety, $9,393

67%

Organizational Excellence, $384

Security, Preparedness & 3%

Response, $246

2%

Global Connectivity, $78

1%

Environmental Stewardship, 

$354

3%

Reduce Congestion,

$3,623

26%
FY 2008 Budget In Brief 

13 

PREPARING FOR THE FUTURE — 

NEXTGEN

Preparing for 2015 

In 2004 the Bush Administration launched the 

Next Generation Air Transportation system – 

NextGen. NextGen represents an unprecedented 

collaboration between government and industry. 

Involving four cabinet level departments, Transportation, Commerce, Defense, Homeland Security, and NASA, the FAA, and the White House 

Office of Science and Technology, NextGen is 

about developing the national aviation transportation system of the future. It envisions a system 

that is far more efficient and scalable in order to 

meet expected future demands in capacity and 

handle the wide range of new aircraft and aviation business models. 

NextGen represents a long term and continuing 

transformation of the National Air Transportation 

System and covers a period of nearly two decades. However, to achieve benefits in improved 

capacity and in the management and efficiency 

of air traffic in the nearer term, and certainly by 

2015, certain key NextGen investments in new 

technologies and capabilities need to be made 

now. 

Two critical investment areas that will form much 

of the technological foundation for NextGen are 

Satellite Based Navigation and Network Enabled 

Operations. These will form the basis for applications and capabilities that will lead to a more 

scalable and flexible air transportation system. 

ADS-B, which stands for Automatic Dependent 

Surveillance Broadcast, is a critical part of developing our initial capabilities in satellite based 

control and navigation. ADS-B allows an aircraft to continuously transmit its location, speed 

and altitude to other planes, pilots, and controllers. And it does it with more accuracy than today’s radar. In practical terms, ADS-B will give 

real-time cockpit displays of traffic information, 

both on the ground and in the air, to all users, 

throughout the system. ADS-B has been tested in 

Alaska, and in the areas where it has been in 

use, the accident rate for ADS-B equipped aircraft has dropped substantially. 

Perhaps the most significant aspect of NextGen is 

the level of interagency alignment and collaboration that has been achieved. Rarely in government have so many different government organizations worked so well and so closely together. 

Working with all of the JPDO’s partner agencies, 

critical research, investment, and deployment 

plans are being aligned. This is a challenging 

undertaking, but essential if NextGen is to provide the benefits to our traffic system and our 

national economy. 

Aviation and aerospace in both primary and related industries make up as much as nine percent 

of America’s Gross Domestic Product and at the 

same time represent the fastest growing source 

for technological exports. However, if America is 

to retain its leadership in this industry, if it is to 

assure the smooth flow of passengers and cargo 

to support our economy, then NextGen needs to 

be a part of our future. 

Another key capability is network enabled operations. Through the System Wide Information 

Management Program and working with our 

partner agencies, the JPDO is setting the stage 

for a major change in the way air traffic data is 

shared throughout the system. This is a joint 

agency initiative that involves not only shared 

information on aircraft position and intent, but 

also weather and security information. The impact of this emerging technological capability 

will be a dramatic improvement to manage air 
FY 2008 Budget In Brief 

14 

traffic, better forecast weather conditions, and 

deal with security concerns. 

The future of NextGen is being defined in two 

key products – The Enterprise Architecture and 

the Concept of Operations. Both of these documents, developed jointly by the member agencies 

and with substantial industry involvement will be 

ready in mid 2007. These tools explain how the 

system will work and in particular provide a description of the development and deployment of 

the essential NextGen capabilities. They are 

definitional documents and provide the framework for the future of America’s Air Transportation System. 

The FY 2008 budget would 

also fund NextGen demonstrations and infrastructure 

engineering activities, critical 

to identifying early implementation opportunities and 

reducing programmatic risks. Most of this funding would be used to demonstrate and refine the 

concept of trajectory based operations. When 

operational, this concept will allow flights to follow their preferred and most fuel-efficient routes. 

The following tables illustrate NextGen funding, 

along with NextGen contributor programs: 

NextGen Programs 

($ in Thousands) 

NextGen Transformational Programs 

FY 2007 

President's 

Budget Request 

FY 2008 

President's 

Budget Request

System-Wide Information Management 24,000 20,800

ADS-B NAS Wide Implementation 80,000 85,000

NextGen Network Enabled Weather 0 7,000

NextGen Data Communications 0 7,400

NextGen Demonstrations and Infrastructure Development 0 50,000

NAS Voice Switch 1,000 3,000

Total NextGen Transformational Programs 105,000 173,200

 

NextGen Contributor Programs 

ATDP - Runway Incursion Reduction Program (RIRP) 8,000 5,000

ATDP - System Capacity, Planning, and Improvements 5,500 6,500

ATDP - Operations Concept Validation 3,000 3,000

ATDP - NAS Weather Requirements & Programs 800 1,000

ATDP - Airspace Management Lab 4,000 4,000

ATDP - Airspace Redesign 2,800 5,000

ATDP - Wake Turbulence 1,000 3,000

ATDP - Local Area Augmentation System (LAAS) 0 1,000

Safe Flight - Alaska Capstone 16,800 15,000

Next-Generation VHF A/G Communication System (NEXCOM) 25,000 30,400

Traffic Management Advisor (TMA) 37,600 15,400

En Route Automation Modernization (eRAM) 375,000 368,000

En Route Communications Gateway (ECG) 4,200 4,000

Air Traffic Management (ATM) - TFM Modernization 43,800 53,500

Collaborative Air Traffic Management Technologies 32,900 34,800

Integrated Terminal Weather System (ITWS) 20,200 12,400

FAA Telecommunications Infrastructure 28,000 8,500

Advanced Technologies and Oceanic Procedures (ATOP) 30,900 52,800

Note: Levels do not include funds requested for Independent Operations Test and Evaluation (OT&E) 
FY 2008 Budget In Brief 

15 

 

FY 2007 

President's 

 Budget Request 

FY 2008 

President's 

 Budget Request

Corridor Integrated Weather System (CIWS) 0 2,100

Airport Surface Detection Equipment (ASDE-X) 57,100 37,900

Advanced Facility Planning 2,000 5,000

Wide Area Augmentation System for GPS (WAAS) 108,900 105,900

Distance Measuring Equipment (DME) 5,000 5,000

Instrument Approach Procedures Automation (IAPA) 9,300 17,800

Aircraft Related Equipment Program 11,000 9,800

Aviation Safety Analysis System (ASAS) 14,500 16,900

System Approach for Safety Oversight (SASO) 17,300 11,300

Aviation Safety Knowledge Management Environment (ASKME) 4,600 4,000

Systems Engineering & Technical Assistance 24,400 26,200

Transition Engineering Services (NISC) 24,000 10,000

NAS Spectrum Engineering Sustained Support 1,200 2,900

Center for Advanced Aviation System Development (CAASD) 70,000 74,200

Total for NextGen Contributor Programs 988,800 952,300

 

Total NextGen Transformational and Contributor 

Projects 1,093,800 1,125,500

NextGen RE&D Contributor Programs 

 

FY 2007 

President's 

 Budget Request 

FY 2008 

President's 

 Budget Request

Environment and Energy 16,008 15,469

Weather Program – Safety 19,545 16,888

Unmanned Aircraft System 1,200 3,310

Joint Program and Development Office 18,100 14,321

Wake Turbulence 3,066 10,755

Air Traffic Control/Technical Operations Human Factors - 1,000

Flight Deck/Maintenance/System Integration Human Factors - 1,000

Total NextGen RE&D Contributor Programs 57,919 62,743

Total NextGen Transformational and Contributor 

Programs 1,151,719 1,188,243
FY 2008 Budget In Brief 

16 

FACTS & FIGURES

FY 2008 Budget

Air Traffic Organization: The FY 2008 

budget request $ 9.3 billion for the Air Traffic Organization (ATO) account. This account 

provides funds for the operation, maintenance, communications, and logistical support 

of the air traffic control and air navigation 

systems. 

Safety & Operations: The FY 2008 budget 

requests $1.9 billion for the Safety & Operations account. This account provides funds 

for the administrative and managerial costs 

for the FAA’s regulatory, international, medical, engineering and development programs 

as well as policy oversight and overall management functions. 

Research, Engineering, and Development: 

The budget requests $140 million, including 

$91.3 million for continued research on aviation safety issues. The remaining research 

funding is for reduced congestion and environmental issues, including $14.3 million for 

the Joint Planning and Development Office. 

Grants-in-Aid for Airports: The budget request includes $2.75 billion for planning and 

development of the Nation's airports, including grants for security, safety, capacity, and 

noise-reduction projects. Funding also includes $80.7 million for administrative expenses, $10 million for Airport Cooperative 

Research, and $18.7 million for airport technology research. 

Federal Aviation Administration 

Capital Programs

(Dollars in Millions)

Safety

Wide Area Augmentation System 116

Airport Surface Detection Equipment - Model X 38

Safety Database and Computer Systems 32

Safe Flight 21 17

Advanced Technology 10

Other (including mission support) 47

Personnel compensation, benefits, and travel 79

Reduced Congestion

Automatic Dependent Surveillance-Broadcast (ADS-B) 

implementation 86

Traffic Management Advisor 15

Oceanic Automation 53

En Route Automation 382

Terminal Automation 40

Terminal Digital Radar 20

Improve Weather Systems 29

Improve Communications 98

Infrastructure Improvements 319

Other (including mission support) 454

Personnel compensation, benefits, and travel 324

Global Connectivity

Visual Navaids-Replace VASI with PAPI 3

Personnel compensation, benefits, and travel 1

Environmental Stewardship

NAS Facilities OSHA Standards 26

Replace Fuel Tanks 6

Hazardous Materials Clean-Up 18

Personnel compensation, benefits, and travel 12

Security and Emergency Response

Facility Risk Management 22

NAS Recovery Communications 10

Information Security 11

Logical Access Control 7

Personnel compensation, benefits, and travel 11

Organizational Excellence

Telecommunications Infrastructure 9

Other 134

Personnel compensation, benefits, and travel 33

Total 2,462
FY 2008 Budget In Brief 

17 

Below are tables comparing budgets for Fiscal Years 2006 through 2008 in the old and new account 

structure. 

Comparison of FYs 2006-2008 Budgets - Old Versus New Accounts

($ in millions)

Old Accounts

FY 2006 

Enacted

FY 2007 

CR Level1

FY 2007 

Request

FY 2008 

Request

2007-2008 

Change

Operations 8,104 8,104 8,366 8,726 4.3%

Facilities and Equipment 2,555 2,481 2,503 2,462 -1.7%

Research, Engineering & 

Development 137 131 130 140 7.7%

Airport Improvement Program 

(Obligation Limitation) 3,515 3,515 2,750 2,750 0.0%

FAA Total 14,310 14,231 13,749 14,077 2.4%

New Accounts

FY 2006 

Enacted

FY 2007 

CR Level1

FY 2007 

Request

FY 2008 

Request

2007-2008 

Change

Safety & Operations 1,520 1,531 1,789 1,879 5.1%

 [Capital Programs] 114 125 127 118 -7.1%

 [Salaries & Expenses] 1,406 1,406 1,662 1,761 6.0%

ATO 9,140 9,055 9,080 9,308 2.5%

 [Capital Programs] 2,441 2,356 2,376 2,343 -1.4%

 [Salaries & Expenses] 6,698 6,698 6,704 6,965 3.9%

Research, Engineering & 

Development 137 131 130 140 7.7%

Airport Improvement Program 

(Obligation Limitation) 3,515 3,515 2,750 2,750 0.0%

FAA Total 14,310 14,231 13,749 14,077 2.4%

1

 CR Levels estimated in accordance with P.L. 109-383.
FY 2008 Budget In Brief 

18 

1 FY 2006 and FY 2007 staffing numbers for the Air Traffic Organization have been adjusted from the levels shown in the FY 2007 President's Budget. These adjustments result from ATO's zero-based review completed in the second quarter of FY 2006 and reflect impacts 

from the FY 2006 government-wide rescission and unfunded pay raise. 

2 Starting in FY 2008, this account will no longer receive new appropriations. New funding will go to the new Safety & Operations and 

ATO accounts. 

3 New account starting in FY 2008. Includes both traditional Operations and Facilities & Equipment funds. 

4 Research, Engineering, & Development account changes from being funded by the AATF in FYs 2006-07 to General Fund in FY 2008. 

PERSONNEL RESOURCE -- SUMMARY

TOTAL FULL-TIME EQUIVALENTS

FY 20061 FY 2007 FY 20071 FY 2008

ACTUAL CR LEVEL PRES. BUDGET REQUEST

DIRECT FUNDED BY APPROPRIATION

Operations2 39,394 39,876 40,046

Aviation Insurance Revolving Fund 4 5 5

Facilities & Equipment2 2,832 2,884 2,884

Safety & Operations3 9,416

Aviation Insurance Revolving Fund 5

Air Traffic Organization3

Salaries & Expenses 30,739

Capital Programs 2,792

Research, Engineering & Development4 255 298 298 298

Grants-in-Aid for Airports 492 518 554 540

SUBTOTAL, DIRECT FUNDED 42,977 43,581 43,787 43,790

REIMBURSEMENTS/ALLOCATIONS

Operations 99 120 120

Facilities & Equipment 19 55 55

Safety & Operations 20

Air Traffic Organization

Salaries & Expenses 104

Capital Programs 55

Grants-in-Aid for Airports 2 4 4 4

Administrative Services Franchise Fund 1,251 1,251 1,397 1,428

SUBTOTAL, REIMBURSE./ALLOC. 1,371 1,430 1,576 1,611

TOTAL FTEs 44,348 45,011 45,363 45,401
FY 2008 Budget In Brief 

19 

Airport and Airway Trust Fund 

Section 9502 of Title 26, U.S. Code, provides for amounts equivalent to the funds received in the Treasury for 

the passenger ticket tax and certain other taxes paid by airport and airway users to be transferred to the Airport and Airway Trust Fund. In turn, appropriations are authorized from this fund to meet the obligations for 

Airport Improvement grants, Safety & Operation, Air Traffic Organization, Research, Engineering and Development, payment to Air Carriers and the Research and Innovative Technology Administration. 

 

Status of Funds (in millions of dollars) 

Identification code: 20-8103-0-7-402 

FY 2006 

Actual 

FY 2007 

Estimate 

FY 2008 

Request 

Balance, start of year: 

0100 Uninvested balance.................................................................. 11,290 10,336 10,159

0199 Total balance, start of year....................................................... 11,290 10,336 10,159

Cash Income during the year: 

 Current law: 

 Receipts 

1280 Aviation excise taxes [021-00-810310-0] .................................. 10,590 11,426 12,094

 Offsetting receipts (intragovernmental): 

1200 Interest: Airport and airway trust fund [021-00-810320-0] ....... 495 495 478

 Offsetting collections: 

1281 Grants-in-aid for airports [021-12-8106-0] ................................ 1 1 1

1282 Facilities and equipment [021-12-8107-0]................................. 107 193 50

1283 Research, engineering and development(021-12-8108-0) ......... 1 16 

1299 Income under present law........................................................ 11,194 12,131 12,623

3299 Total cash income ................................................................... 11,194 12,131 12,623

Cash outgo during year: 

Current law 

4500 Payments to air carriers [021-12-8304-0]................................. -64 -41 -23

4501 Trust fund share of FAA operations [021-12-8104-0]................. -5,486 -5,486 -8,709

4502 Grants-in-aid for airports [021-12-8106-0] ................................ -3,842 -3,822 -3,712

4503 Facilities and equipment [021-12-8107-0] ................................ -2,614 -2,775 -1,622

4504 Research, engineering and development [021-12-8108-0]......... -142 -184 -88

4599 Outgo under current law (-) ..................................................... -12,148 -12,308 -14,154

6599 Total Cash outgo (-) ............................................................... 12,148 12,308 14,154

Unexpended balance, end of year: 

8799 Total balance, end of year........................................................ 10,336 10,159 8,628

 Commitments against unexpended balance, end of year 

9801 Obligated balance (-) ............................................................... -7,582 -6,459 -3,878

9802 Unobligated balance (-)............................................................ -981 -1,694 -1,616

 Total commitments .................................................................. -8,563 -8,153 -5,494

 Uncommitted Balance, end of year ........................................... 1,773 2,006 3,134