Testimony 

Before the Committee on Commerce, 

Science, and Transportation, U.S. Senate

United States General Accounting Office 

GAO

For Release on Delivery 

Expected at 9:30 a.m. EDT 

Thursday, April 10, 2003 FEDERAL AVIATION 

ADMINISTRATION 

Reauthorization Provides 

Opportunities to Address 

Key Agency Challenges 

Statement of Gerald L. Dillingham 

Director, Civil Aviation Issues 

GAO-03-653T 
Increasing capacity and service in the national airspace system poses several 

challenges. While airports currently receive enough funding to cover FAA’s 

estimate of their planned capital development costs, a declining surplus in 

the trust fund that helps to support development and the need to spend up to 

$5 billion over the next 5 years for security-related capital improvements 

make the financial outlook for the next 5 to 8 years uncertain. Runway 

development, the principal means of increasing capacity, is now taking 10 to 

14 years to complete, in large part because of time-consuming environmental 

reviews and community concerns. Providing air service for small 

communities is also becoming more difficult as costs increase and passenger 

ticket revenues decline. Intermodal alternatives may hold promise. 

Efforts to improve the efficiency of the national airspace system by 

modernizing the air traffic control system face challenges despite actions 

taken by the Congress and the administration to eliminate the cost overruns, 

schedule delays, and performance shortfalls that have plagued FAA's 

modernization efforts. Overall, FAA is improving its management of the air 

traffic modernization program and has implemented some systems, but key 

projects continue to experience problems. 

To enhance aviation safety, FAA and the aviation industry have undertaken 

an initiative to reduce the fatal accident rate, and FAA is working to 

strengthen its safety inspections of airlines’ operations. Interagency 

coordination of aviation safety and aviation security activities has emerged 

as a challenge with the transfer of aviation security responsibilities from 

FAA to the Transportation Security Administration. 

FAA faces challenges in implementing controls over its costs. Although it 

has partially implemented a new cost accounting system that enables it to 

track 70 percent of its air traffic services costs, this system lacks internal 

controls over $3.1 billion in labor costs, according to the Department of 

Transportation’s Inspector General. Congressional oversight is important to 

ensure that FAA implements controls and spends its resources effectively. 

Increasing Capacity through Runway Construction 

Much has changed since the 

Wendell H. Ford Aviation 

Investment and Reform Act for the 

21st Century (AIR-21) reauthorized 

the Federal Aviation 

Administration’s (FAA) programs 3 

years ago. At that time, air traffic 

was increasing, and concerns about 

congestion and flight delays were 

paramount. Since then, the 

downturn in the nation’s economy, 

the terrorist attacks of September 

11, 2001, and, most recently, the 

war in Iraq have taken a heavy toll 

on aviation. Analysts nonetheless 

expect the demand for air travel to 

rebound, and the nation’s aviation 

system must be ready to 

accommodate the projected growth 

safely and securely. 

The current reauthorization of 

FAA’s programs provides an 

opportunity for the Congress and 

the administration to focus on 

challenges in increasing aviation 

capacity, efficiency, and safety and 

in controlling aviation program 

costs. 

This testimony does not contain 

recommendations. However, GAO 

reports containing relevant 

recommendations are listed among 

the Related GAO Products 

following the testimony. 

www.gao.gov/cgi-bin/getrpt?GAO-03-653T.

To view the full report, including the scope 

and methodology, click on the link above. 

For more information, contact Gerald L. 

Dillingham at (202) 512-2834 or 

dillinghamg@gao.gov. 

Highlights of GAO-03-653T, a testimony 

before the Senate Committee on 

Commerce, Science, and Transportation 

April 10, 2003

FEDERAL AVIATION ADMINISTRATION 

Reauthorization Provides Opportunities 

to Address Key Agency Challenges 
Page 1 GAO-03-653T FAA Reauthorization 

Mr. Chairman and Members of the Committee: 

We are here today to discuss the reauthorization of federal aviation 

programs and issues relevant to ensuring the safe and efficient operation 

of the national airspace system.1

 Much has changed since the Wendell H. 

Ford Aviation Investment and Reform Act for the 21st Century (AIR-21) 

reauthorized the Federal Aviation Administration’s (FAA) programs 3 

years ago. At that time, as you know, air traffic was increasing, and 

concerns about congestion and flight delays were paramount. Since then, 

the downturn in the nation’s economy, the terrorist attacks of September 

11, 2001, and, most recently, the war in Iraq have taken a heavy toll on 

aviation. Flights that were once filled are now being canceled for lack of 

business, and major air carriers are in serious financial difficulty. 

Furthermore, as the federal budget deficit has increased, competition for 

federal resources has intensified. Analysts nonetheless expect the demand 

for air travel to rebound, and the nation’s aviation system must be ready to 

accommodate the projected growth safely and securely. The current 

slowdown in the economy and in the aviation industry has created a 

window of opportunity to prepare for this growth without the pressures of 

congestion and flight delays. My statement today focuses on the 

challenges that the Congress, the administration, and FAA face in 

increasing aviation capacity, efficiency, and safety, and maintaining 

controls over costs. My statement is based primarily on our published 

reports, as well as our ongoing work for this Committee discussed in the 

scope and methodology section at the end of the statement. 

In summary: 

• Increasing capacity and service in the national airspace system poses 

several challenges for the Congress and the administration during this 

reauthorization process. Chief among them is deciding how much of 

airports’ planned capital development should be funded to increase 

capacity and service, as well as improve the efficiency and safety of the 

national airspace system. Funds for airports’ capital development have 

increased over the last 5 years, in part because of increases in the federal 

grant funding provided to airports under the Airport Improvement 

Program. Current funding levels are sufficient to cover much of the 

estimated cost of planned capital development. However, future funding 

 1

See the Aviation Investment and Revitalization Vision Act, a Senate bill to reauthorize 

federal aviation programs and the administration’s draft reauthorization proposal, the 

Centennial of Flight Aviation Authorization Act, or “Flight 100.” 
Page 2 GAO-03-653T FAA Reauthorization 

levels may be affected by changes in the allocation of Airport 

Improvement Program grant funds and by projected decreases in the 

Airport and Airway Trust Fund, which supports the Airport Improvement 

Program and other FAA accounts. Other challenges include building 

runways expeditiously to increase capacity and providing air service to 

small communities. Runway development now takes 10 to 14 years, 

primarily because of time-consuming environmental reviews and 

community concerns. Two federal programs, the Essential Air Service and 

the Small Community Air Service Development Pilot programs, help bring 

air service to small communities, but the costs of this service are 

increasing while passenger ticket revenues are declining. The 

administration is proposing an approach to streamline the environmental 

reviews required for runway development, and intermodal alternatives, 

such as rail or bus service, could provide access to the national air 

transportation system for some small communities. 

• Efforts to improve the efficiency of the national airspace system by 

modernizing its principal component, the air traffic control system, face 

ongoing challenges despite actions taken by the Congress and the 

administration to eliminate the cost overruns, schedule delays, and 

performance shortfalls that have plagued FAA’s air traffic modernization 

program and led us to designate this program as high risk. These actions 

include granting FAA acquisition and human capital flexibilities in 1996 

and creating a new, three-component structure to improve the oversight, 

management, and operation of the air traffic control system in 2000. Our 

work has shown that FAA has responded to these actions to varying 

degrees, but more remains to be done. Overall, FAA is improving its 

management of the air traffic modernization program and has 

implemented some systems, but key projects continue to experience cost, 

schedule, and performance problems. Additionally, FAA has used its 

acquisition flexibilities to establish an acquisition management system and 

its human capital flexibilities to fully or partially implement human capital 

reform initiatives. The acquisition management system has provided FAA 

with a structured management approach for selecting and controlling its 

investments, and the human capital reform initiatives are affording 

opportunities for FAA to manage its workforce more efficiently. However, 

in implementing both of these reforms, FAA has not yet incorporated 

important processes or elements for evaluating the results of its efforts, 

modifying these efforts as necessary, and holding its managers 

accountable. Finally, one of the three components of the new structure for 

improving the performance of the air traffic control system has been 

implemented. The oversight component, the Air Traffic Services 

Subcommittee, has been meeting since January 2001 and emphasizing 

performance management, but without the management and operating 
Page 3 GAO-03-653T FAA Reauthorization 

components, the new structure is not yet functioning as intended. 

Completing the implementation of, and continuing to improve, these 

efforts will be important to enhancing the efficiency of the air traffic 

control system. 

• Important steps have been taken to enhance aviation safety, but some 

challenges remain. Safer Skies, an initiative designed by FAA and the 

aviation industry to reduce the nation’s fatal aviation accident rate by 80 

percent by 2007, is the centerpiece of these efforts to improve aviation 

safety. This initiative began in 1998, and many preventive actions are 

under way but have not yet been fully implemented. Another key effort to 

improve aviation safety is FAA’s Air Transportation Oversight System, 

which was redesigned to provide more effective inspections of the nation’s 

airline operations. In reporting on this system in 1999, we noted that it 

incorporated important features to ensure that airlines have systems to 

control risks and prevent accidents, but that it had encountered startup 

problems with data collection and program guidance.2

 Many of these 

problems were not yet fully resolved when the Department of 

Transportation’s Inspector General reported on the inspection system last 

year.3

 Finally, because of the often vital link between aviation safety and 

aviation security, it will be critical for FAA to ensure that aviation safety is 

maintained as the Department of Homeland Security’s Transportation 

Security Administration implements new security enhancements. 

• With the decline in revenues to the Airport and Airway Trust Fund—the 

principal source of funding for most of FAA’s operations, facilities and 

equipment, and grant programs—it is especially important that FAA 

control or reduce costs, run its programs efficiently, and detect and 

prevent fraudulent activities. FAA, however, faces challenges in 

implementing controls over its costs. For example, during fiscal year 2000, 

weaknesses in the internal controls over FAA’s purchase card program 

contributed to $5.4 million in improper purchases by FAA employees and 

over $630,000 in purchases that were considered wasteful or questionable. 

In addition, FAA has partially implemented a new cost accounting system 

that enables it to track 70 percent of its air traffic services costs; however, 

according to the Department of Transportation’s Inspector General, this 

 2

U.S. General Accounting Office, Aviation Safety: FAA’s New Inspection System Offers 

Promise, but Problems Need to Be Addressed, GAO/RCED-99-183 (Washington, D.C.: June 

28, 1999). 

3

U.S. Department of Transportation, Office of Inspector General, Report on the Air 

Transportation Oversight System: Federal Aviation Administration, AV-2002-088 

(Washington, D.C.: Apr. 8, 2002). 
Page 4 GAO-03-653T FAA Reauthorization 

system lacks internal controls over $3.1 billion in labor costs. The 

Inspector General further noted that a portion of this system, if 

implemented as designed, could provide workforce data that would be 

helpful in determining how many controllers are needed and where. These 

data would assist FAA in planning for the anticipated retirement of large 

numbers of air traffic controllers in the near and long term. 

During this reauthorization period, the Congress and the administration 

face several key challenges in attempting to increase the capacity of the 

national airspace system and expand service to small communities. These 

challenges include determining (1) how much airport capital development 

is needed, (2) how that development will be funded, (3) how assistance for 

enhancing air service to small communities will be provided, and (4) how 

the current process for enhancing capacity, particularly the runway 

development process, can be expedited. 

FAA and the Airport Council International (ACI), an organization 

representing the airport industry, have developed two different estimates 

of airports’ planned capital development costs that are based on two 

different sets of projects. According to FAA’s estimate, which includes 

only projects that are eligible for Airport Improvement Program (AIP) 

grants, such as runways, taxiways, and noise mitigation and noise 

reduction efforts, the total cost of airport development will be about $46 

billion, or over $9 billion per year, for 2001 through 2005. FAA’s estimate is 

based on the agency’s National Plan of Integrated Airport Systems, which 

FAA published in August 2002. ACI’s estimate includes all of the projects 

in FAA’s estimate, plus other planned airport capital projects that may or 

may not be eligible for AIP grants. Projects that are not eligible for AIP 

funding include parking garages, hangars, and expansions of commercial 

space in terminals. ACI estimates a total cost of almost $75 billion, or 

nearly $15 billion per year, for 2002 through 2006. Neither ACI’s nor FAA’s 

estimate includes funding for the terminal modification projects that are 

needed to accommodate the new explosives detection systems required to 

screen checked baggage. ACI estimates that these projects will cost about 

$3 billion to $5 billion over the next 5 years. 

Although there is a difference of $6 billion a year between FAA’s and ACI’s 

estimates of planned development costs, both estimates cover projects for 

every type of airport. As table 1 indicates, the estimates are identical for all 

but the large- and medium-hub airports, which are responsible for 

transporting about 90 percent of the traveling public. For these airports, 

Efforts to Increase 

Aviation Capacity and 

Service Face Funding 

and Other Challenges 

FAA and the Airport 

Industry Have Developed 

Different Estimates of 

Airports’ Planned Capital 

Development Costs 
Page 5 GAO-03-653T FAA Reauthorization 

ACI’s estimate of planned development costs is about twice as large as 

FAA’s. As the Congress moves forward with reauthorizing FAA’s 

programs, it will have to determine what level of planned capital 

development is appropriate to increase the capacity, efficiency, and safety 

of the national airspace system. 

Table 1: Average Annual Planned Development Costs Estimated by FAA and ACI, 

by Airport Type, 2001-2006 

Dollars in millions 

 Estimated average annual costs 

Airport type Number of airports FAA ACI

Large hub 31 $4,855 $8,554

Medium hub 37 1,073 3,109

Small hub 71 675 675

Nonhub 280 807 807

Other commercial 

service 124 142 142

Reliever 260 526 526

General aviation 2,558 1,167 1,167

Total 3,364 $9,245 $14,980

Source: FAA and ACI. 

Over the past 5 years, the ability of airports—especially smaller airports—

to fund their capital development projects has improved, in part because 

AIR-21 increased both the total amount of funding for AIP grants and the 

proportion of AIP funding that went to smaller airports. In 1998, we 

reported that large- and medium-hub airports could fund about 79 percent 

of their planned capital development and smaller airports could fund 

about 52 percent of their planned capital development if they continued to 

receive funding at prior years’ levels. In 2003, the funding ability of both 

groups of airports increased. As shown in figure 1, large- and medium-hub 

airports could fund about 80 percent of their planned capital development, 

an increase of 1 percentage point, while smaller airports could fund about 

73 percent of their planned capital development, an increase of 21 

percentage points, assuming the continuation of prior years’ funding 

levels.4

 4

Over the past 5 years, the amount of funding available to airports for planned capital 

development ranged from about $7 billion to $13 billion annually. 

Airports’ Ability to Fund 

Planned Capital 

Development Has 

Improved 
Page 6 GAO-03-653T FAA Reauthorization 

Figure 1: Ability of Smaller and Larger Airports to Fund Estimated Planned Capital 

Development in 1998 and 2003 

The primary reason why smaller airports are able to fund 73 percent of 

their planned development in 2003, rather than the 52 percent we reported 

in 1998, is that they have benefited significantly from the increases in AIP 

grants, which are a larger source of funding for smaller airports than for 

larger airports. In addition, smaller airports have received an increasing 

share of AIP grants because of statutorily required changes in the 

distribution of AIP grants. For example, in AIR-21, the Congress increased 

the funding for two grant categories that primarily or exclusively benefit 

smaller airports—the state apportionment fund and the small airport 

fund—and created general aviation entitlement grants, which also benefit 

smaller airports. The Senate’s and the administration’s reauthorization 

proposals continue to support increases in the amount of AIP grant 

funding awarded to smaller airports. In spite of the progress that has been 

made, over 25 percent of planned capital development is not funded. The 
Page 7 GAO-03-653T FAA Reauthorization 

Congress needs to be mindful of this situation as it considers 

reauthorization issues. 

The use of AIP grants to fund new airport security requirements and 

additional decreases in the Airport and Airway Trust Fund’s5

 revenues 

could affect the future ability of airports to fund their planned capital 

development. In recent fiscal years, airports obtained most of their funding 

for planned capital development from bonds, AIP grants, and passenger 

facility charges.6

 Because the Trust Fund is the source of funding for AIP 

grants, its financial condition is important to the ability of airports to fund 

capital development, and decreases in its revenues could reduce the 

amount of funding for airport planned capital development. Reductions in 

AIP grant funds would have the greatest effect on smaller airports, which 

derive most of their planned capital development funding from AIP grants, 

whereas large- and medium-hub airports derive most of their funding from 

bonds. 

According to FAA officials, FAA plans to allocate the same amount of AIP 

grant funds for new security projects at airports in fiscal year 2003 as it 

allocated in fiscal year 2002—$561 million. As we reported in October 

2002,7

 the use of AIP grants for security projects reduced the funding 

available for other airport development projects, such as projects to bring 

airports up to FAA’s design standards and reconstruction projects, and 

caused FAA to defer three letter-of-intent payments totaling $28 million to 

three airports until fiscal year 2003 or later.8

 Among the key 

reauthorization issues facing the Congress are how the funding needs for 

capacity and security projects will be balanced and how the new security 

requirements, including the terminal modification projects that are 

expected to cost $3 billion to $5 billion, will be funded. 

 5

The Airport and Airway Trust Fund was established by the Airport and Airway Revenue 

Act of 1970 (P.L. 91-258) to aid in funding the development of a nationwide airport and 

airway system and to fund FAA investments in air traffic control facilities. The Trust Fund 

is supported by a number of excise taxes, including taxes on passenger tickets, fuel, and 

cargo. 

6

Under the Passenger Facility Charge program, airports with FAA’s approval may charge 

passengers up to $4.50 for boarding airplanes at their facilities. 

7

U.S. General Accounting Office, Airport Finance: Using Airport Grant Funds for 

Security Projects, GAO-03-27 (Washington, D.C.: Oct. 15, 2002). 

8

Letters of intent represent a nonbonding commitment from FAA to provide multiyear 

funding to an airport beyond the current AIP authorization period. 

Changes in the Use of AIP 

Grants and Additional 

Decreases in Trust Fund 

Revenue Could Affect 

Airports’ Future Funding 

Ability 

Continued Use of AIP Grant 

Funds for Security Projects 

Would Reduce Funding for 

Capacity Projects 
Page 8 GAO-03-653T FAA Reauthorization 

The future ability of airports to fund planned capital development may be 

affected by uncertainties surrounding the condition of the Trust Fund. As 

you know, the Trust Fund is the source of funding not only for AIP grants 

but also for other FAA accounts, including facilities and equipment; 

research, engineering, and development; and most operations. Revenues 

to the Trust Fund come from several types of taxes, including passenger 

ticket and fuel taxes. Although projections made in November 2002 

indicate that the Trust Fund will be able to meet its traditional obligations 

over the next 10 years, the financial outlook for the next 5 to 8 years is 

uncertain, in part, because passenger traffic has decreased with the 

slowdown in the economy. Current estimates indicate that between fiscal 

year 2003 and fiscal year 2007, the Trust Fund’s 2002 uncommitted balance 

of about $4.8 billion will decline by about $4 billion, leaving a balance of 

less than a billion dollars. In addition, if revenues fall short of current 

projections, the Trust Fund’s uncommitted balance may be zero. Under 

this scenario, AIP grants and other FAA accounts supported by the Trust 

Fund could potentially receive less funding, and the Congress and the 

administration would have to decide how to offset the potential decreases. 

As figure 2 shows, from 1999 through 2002, revenues to the Trust Fund 

have declined, while expenditures from the fund have increased. Revenues 

fell from about $11 billion in 1999 to almost $10 billion in 2002, a decrease 

of almost 10 percent. During the same period, expenditures increased from 

about $8 billion to about $12 billion, an increase of about 47 percent. As a 

result, the uncommitted balance (surplus) has fallen by nearly 35 percent, 

from $7 billion in 1999 to almost $5 billion in 2002. 

Additional Declines in Airport 

and Airway Trust Fund 

Revenue Could Also Affect 

Amount of AIP Grant Funds 

Available for Future Capital 

Development 
Page 9 GAO-03-653T FAA Reauthorization 

Figure 2: Financial Condition of the Airport and Airway Trust Fund 

The major reason for the decline in Trust Fund revenues was a drop in 

passenger ticket tax revenues, which fell by nearly $1.2 billion from 1999 

to 2002. The increase in Trust Fund expenditures from 1999 through 2002, 

amounting to almost $4 billion, can be attributed primarily to increases in 

funding for FAA operations and AIP grants, which accounted for about 47 

percent and about 34 percent of the total increase, respectively. 

In addition, the administration is proposing actions that would further 

reduce the Trust Fund balance over the next several years. Specifically, 

the President’s fiscal year 2004 budget request would increase the 

percentage of FAA operations funded by the Trust Fund from 75 percent9

to 79 percent. The decrease in Trust Fund revenues and increase in Trust 

Fund expenditures presents an issue that the Congress may want to 

address as it moves forward with the reauthorization process. 

 9

This was the average for 1998 through 2002. 
Page 10 GAO-03-653T FAA Reauthorization 

While there is a general consensus that building runways is one of the 

most effective ways to increase capacity in the national airspace system, 

resolving the challenges associated with planning and building runways is 

an important issue that is directly related to enhancing capacity. In 

December 2002, FAA published the most recent version of its Operational 

Evolution Plan, a 10-year plan to increase the capacity and efficiency of 

the national airspace system, primarily by building runways.10 Figure 3 

illustrates how capacity will be increased at one airport through runway 

construction. 

 10In addition to runways, the plan addresses capacity enhancements designed to make 

more efficient use of the airspace. 

Resolving Challenges to 

Runway Development 

Remains an Important 

Issue 
Page 11 GAO-03-653T FAA Reauthorization 

Figure 3: Increasing Airport Capacity through Runway Development 

If successfully carried out, FAA’s Operational Evolution Plan would 

substantially increase capacity and improve efficiency. However, FAA 

faces several challenges in implementing the plan. First, the success of the 

plan depends on adequate funding and on the consensus of FAA’s aviation 
Page 12 GAO-03-653T FAA Reauthorization 

industry partners. Yet according to the most recent version of the plan, the 

timing and implementation of some activities may be in jeopardy because 

of the current economic situation and the uncertain viability of some 

industry participants. For example, the plan calls for the airline industry to 

invest $11 billion in new equipment for aircraft. FAA is currently reviewing 

the ability of the airlines to make this investment. Second, as noted, the 

plan relies heavily on runway development to increase capacity, but the 

most recent version of the plan reports mixed results in building new 

runways. While the plan indicates that one new runway will be built during 

the next 10 years, it points out that another runway has been canceled and 

the construction of six additional runways has been delayed because of 

local situations. 

In January 2003, we reported that airports spent about 10 years planning 

and building recently completed runways and expect to spend about 14 

years on runways that are not yet completed.11 We also reported that 

several external factors affect how much time is spent planning and 

building runways, and several airports with unfinished runway projects 

identified significant challenges that had delayed the completion of their 

projects. While many airports believed that completing the environmental 

review phase was a significant challenge and is an issue that warrants 

immediate attention, airports also faced obstacles that some said were as 

onerous as the environmental review phase. They identified significant 

challenges in reaching agreement with community interest groups during 

the planning phase and in mitigating the potential impact of aircraft noise 

on the surrounding community. Although there may be no single solution 

to resolving all of the issues involved in planning and building runways, 

the federal government and airport authorities are taking some action. For 

example, the Senate’s and the administration’s reauthorization proposals 

call for streamlining the environmental review of transportation 

infrastructure projects. 

Recognizing that building new runways is not always a practicable way to 

increase capacity at some airports, we identified three alternatives to 

building runways in our December 2001 report:12

 11U.S. General Accounting Office, Aviation Infrastructure: Challenges Related to Building 

Runways and Actions to Address Them, GAO-03-164 (Washington, D.C.: Jan. 30, 2003). 

12U.S. General Accounting Office, National Airspace System: Long-term Capacity 

Planning Needed Despite Recent Reduction in Flight Delays, GAO-02-185 (Washington, 

D.C.: Dec. 14, 2001). 
Page 13 GAO-03-653T FAA Reauthorization 

• Find ways to manage and distribute demand within the system’s existing 

capacity at busy airports such as LaGuardia, by, for example, limiting the 

number of takeoffs and landings during peak periods or limiting the ability 

of general aviation aircraft to use especially congested airports (under 

current law, all aircraft have equal access to even the largest airports). 

Airports are restricted in using pricing to reflect the scarcity and 

congestion of airspace. 

• Add capacity by using nearby airports that have available capacity. 

• Examine other modes of intercity travel, such as high-speed rail, where 

metropolitan areas are relatively close, to form an integrated, intermodal 

transportation network. 

Accordingly, we recommended that the Department of Transportation 

(DOT) begin a more extensive evaluation of initiatives, including 

intermodal solutions and a dialogue with transportation stakeholders, as a 

basis for developing a comprehensive blueprint for addressing the nation’s 

long-term transportation needs. DOT has recognized the need for more 

and better long-range planning on the potential use of such measures and 

agreed with our recommendation. The Department’s evaluation efforts are 

in the beginning stages. The current hiatus in air traffic growth creates an 

opportunity for the development of long-term transportation plans. 

While the need for greater capacity is a vital issue for some large- and 

medium-hub airports, the primary issue at other airports that serve small 

communities is to obtain or retain commercial air service. The 

reauthorization process provides an opportunity for the Congress to 

clarify the federal strategy for helping small communities acquire the 

commercial air service they desire. Currently, the challenges that small 

communities have long faced in obtaining or retaining commercial air 

service are increasing as many U.S. airlines try to stem unprecedented 

financial losses through numerous cost-cutting measures, including 

reducing or eliminating service in some markets. Small communities feel 

such losses disproportionately because they may have service from only 

one or two airlines. For them, reductions can mean no air service at all. 

The Essential Air Service (EAS) program, authorized under the Airline 

Deregulation Act of 1978, guarantees that small communities served 

before deregulation will continue to receive a certain level of scheduled air 

service. Its costs have more than tripled since fiscal year 1995, and 

indications are that without changes to the program, the demand for 

Federal Programs to Help 

Small Communities 

Improve Air Service Face 

Budgetary Pressures and 

Questions about Their 

Effectiveness 
Page 14 GAO-03-653T FAA Reauthorization 

subsidies will soon exceed the program’s $113 million appropriation for 

fiscal year 2003. At the same time, aggregate passenger levels at EASsubsidized airports continue to fall. Often fewer than 10 percent of a 

community’s potential passengers use the subsidized local service; the rest 

choose to drive to their destination or drive to a larger airport that offers 

lower fares or more frequent service to more destinations. In 2000, the 

median number of passengers on each EAS-subsidized flight was three. 

The administration’s budget proposal for fiscal year 2004 would 

substantially reduce the federal subsidy for small community air service 

and require communities that wish to retain the service to help subsidize 

it. Specifically, the budget proposal would reduce federal EAS funding 

from $133 million in 2003 to $50 million in 2004, alter the eligibility criteria 

for funding, and require nonfederal matching funds. Consistent with its 

budget proposal, the administration’s reauthorization proposal would 

restructure the EAS program to direct its resources to the small 

communities with the greatest need to maintain access to national air 

transportation service. The Senate bill proposes to reauthorize funding for 

the program at current levels. 

The Small Community Air Service Development Pilot Program, authorized 

as part of AIR-21, provides grants to communities to enhance local air 

service. In fiscal year 2002, 180 communities requested over $142 million 

in air service development grants, and $20 million was appropriated. In 

March 2003, we reported that the program funded some innovative 

approaches.13 For example, Mobile, Alabama, received about $450,000 to 

provide ground-handling services to an airline, and Caspar, Wyoming, 

received $500,000 to purchase and lease back an aircraft to an airline to 

ensure service to the community. The program also funded the same types 

of projects that many small communities have undertaken in recent years, 

such as evaluations of marketing activities and the use of financial 

incentives to encourage airlines to either start or enhance service. 

According to our analysis of similar approaches used by about 100 small 

communities, financial incentives offered the most promise for attracting 

new or additional service. However, the additional service typically ended 

with the incentives. The sustainability of such improvements in air service 

over the longer term appeared to depend on the community’s size and 

ability to demonstrate a commitment to that air service, either by 

 13U.S. General Accounting Office, Commercial Aviation: Issues Regarding Federal 

Assistance for Enhancing Air Service to Small Communities, GAO-03-540T (Washington, 

D.C.: Mar. 11, 2003). 
Page 15 GAO-03-653T FAA Reauthorization 

providing a profitable passenger base or through direct financial 

assistance. As you know, the administration’s fiscal year 2004 budget 

proposal would eliminate the funding for this pilot program. It is too soon 

to determine how effective the various types of initiatives funded through 

this program might prove to be. Other options for making the national air 

transportation system more accessible to small communities might include 

intermodal initiatives such as those we proposed as alternatives to runway 

development. 

Improving the efficiency of the air traffic control system will be important 

to accommodate the expected return to pre-September 11 air traffic levels. 

Efforts to achieve this improvement pose continuing challenges, as FAA 

attempts to put acquisition management and human capital reforms in 

place and establish an effective oversight and organizational structure to 

help ensure that resources are spent cost-effectively and improvements 

are realized. 

To increase the safety, capacity, and efficiency of the national airspace 

system, FAA undertook a major effort in 1981 to modernize and replace 

aging air traffic control equipment. This effort, which includes major 

projects in such areas as communications, surveillance, navigation, and 

weather, has been plagued by cost overruns, schedule delays, and 

performance shortfalls. As a result, we designated FAA’s air traffic 

modernization program as high risk in 1995, and we continue to designate 

it as such.14 Figure 4 combines our and the DOT Inspector General’s 

analysis of FAA’s progress in meeting cost and schedule goals for selected 

air traffic control projects—the Standard Terminal Automation 

Replacement System (STARS), Wide Area Augmentation System (WAAS), 

Next-Generation Air/Ground Communication (NEXCOM), free flight, Local 

Area Augmentation System (LAAS), and Integrated Terminal Weather 

System (ITWS). 

 14U.S. General Accounting Office, High-Risk Series: An Update, GAO-03-119 (Washington, 

D.C.: Jan. 2003). 

Efforts to Improve the 

Efficiency of the Air 

Traffic Control 

System Face Ongoing 

Challenges 

FAA’s Air Traffic 

Modernization Remains 

High Risk 
Page 16 GAO-03-653T FAA Reauthorization 

Figure 4: Status of Selected FAA Air Traffic Control Projects 

FAA is making progress in managing the air traffic control modernization 

effort and has implemented some key projects. For example, the agency 

has replaced the automated color display equipment used by air traffic 

controllers to control traffic in some facilities (Display System 

Replacement); installed the initial phase of the computer that receives, 

processes, and tracks aircraft movement throughout the airspace system 

(HOST computer); and implemented some free flight technologies that are 

expected to allow for more efficient use of the system by improving 

operations in various segments of flight. Figure 5 shows an FAA 

representative using the Display System Replacement to monitor and 

handle air traffic. 
Page 17 GAO-03-653T FAA Reauthorization 

Figure 5: Air Traffic Controller 

However, other key projects continue to experience cost, schedule, and 

performance problems. The Inspector General has reported that the costs 

of five acquisitions have grown by $3 billion—the equivalent of 1 year’s 

budget for the modernization program—and the delay in completing these 

acquisitions has ranged from 3 to 5 years.15 Problems in implementing the 

Standard Terminal Automation Replacement System are indicative of the 

problems that have plagued the modernization program. Since September 

1996, FAA has been developing the STARS project to replace the outdated 

 15These five programs are the Wide Area Augmentation System, Standard Terminal 

Automation Replacement System, Airport Surveillance Radar-11, Weather and Radar 

Processor, and Operational, Supportability, and Implementation System. See U.S. 

Department of Transportation, Office of Inspector General, Reauthorization of the Federal 

Aviation Administration, CC-2003-058 (Washington, D.C.: Feb. 12, 2003). 
Page 18 GAO-03-653T FAA Reauthorization 

computer equipment that air traffic controllers currently use in some 

facilities to control air traffic within 5 to 50 nautical miles of an airport. 

The current program presently bears little resemblance to the program 

envisioned in 1996. Initially FAA anticipated very little software 

development, planned to install STARS in 172 facilities at a cost of $940 

million, and expected implementation to begin in 1998 and end in 2005. In 

1999, FAA modified its acquisition approach (from off-the-shelf software 

to a combination of customized and off-the-shelf software) and increased 

to 188 the number of facilities scheduled to receive STARS. Then the 

agency concluded that it did not have adequate funding to deploy STARS 

to 188 facilities, and in March 2002, it received approval to deploy STARS 

at 74 facilities that had frequent equipment failures, were new, or had the 

digital radar needed to operate STARS. 

FAA does not yet know to what extent its estimate of STARS’s remaining 

development costs is reliable because, as we reported in January 2003, 

FAA lacks accurate, valid, current data on the STARS program’s remaining 

costs and progress.16 Without such data, FAA is limited in its ability to 

effectively oversee the contractor’s performance and reliably estimate 

future costs. Although FAA has adopted clear procurement management 

policies and procedures, it did not consistently apply this guidance in 

managing the STARS contract. For example, the development cost 

estimate is based on the contractor’s projections, which FAA had not yet 

independently analyzed as its guidance directs. We made several 

recommendations to improve the management of STARS and subsequent 

terminal modernization programs and to provide the Congress with more 

reliable information for oversight. FAA agreed with our recommendations 

and is implementing them. 

As part of its procurement reforms, FAA introduced an acquisition 

management system in 1996 to reduce the time and cost to deploy new 

products and services. In 1999, we reported that this system provided a 

structured management approach for selecting and controlling 

investments, but still had weaknesses, such as incomplete data on 

projects’ costs, schedule, benefits, performance, and risks, that limited 

 16U.S. General Accounting Office, National Airspace System: Better Cost Data Could 

Improve FAA’s Management of the Standard Terminal Automation Replacement System, 

GAO-03-343 (Washington, D.C.: Jan. 31, 2003). 

Acquisition Management 

System Is in Place, but 

Weaknesses Limit FAA’s 

Ability to Manage Its 

Investments Effectively 
Page 19 GAO-03-653T FAA Reauthorization 

FAA’s ability to manage its investments effectively. We made several 

recommendations to address these weaknesses and FAA has made 

changes to better manage its investments. We have since found that FAA is 

overseeing investment risk and capturing key information from the 

investment selection process in a management information system and is 

also developing guidance for validating costs, benefits, and risks. 

However, FAA is not yet incorporating actual costs from related system 

development efforts in its processes for estimating the costs of new 

projects. Moreover, FAA has not yet implemented processes for evaluating 

projects after implementation in order to identify lessons learned and 

improve the investment management process. These weaknesses have 

impeded FAA’s ability to manage its investments effectively and make 

sound decisions about continuing, modifying, or canceling projects. 

Because its acquisition reform effort is not complete, major projects 

continue to face challenges that could affect their costs, schedule, and 

performance. 

In response to claims by FAA that burdensome governmentwide human 

capital rules impeded its ability to hire, train, and deploy personnel, the 

Congress exempted FAA from many federal laws17 governing human 

capital, and the agency began implementing sweeping human capital 

reforms in 1996.18 These reforms addressed three broad areas: (1) 

compensation and performance management, (2) workforce management, 

and (3) labor and employee relations. Figure 6 summarizes our analysis of 

FAA’s progress in implementing initiatives in each of these areas. 

 17This is a result of 1995 legislation that granted FAA broad exemptions from laws 

governing federal civilian personnel management found in title 5 of the United States Code. 

18U.S. General Accounting Office, Human Capital Management: FAA’s Reform Effort 

Requires a More Strategic Approach, GAO-03-156 (Washington, D.C.: Feb. 3, 2003). 

Human Capital Reform 

Initiatives Do Not 

Incorporate Elements 

Important for Effective 

Management 
Page 20 GAO-03-653T FAA Reauthorization 

Figure 6: Implementation Status of Selected FAA Personnel Reform Initiatives 

While FAA has fully or partially implemented the initiatives in each of its 

three broad reform areas, it has not fully incorporated elements that are 

important to effective human capital management into its overall reform 

effort. These elements include data collection and analysis, performance 

goals and measures, and links between reform goals and program goals. 

Furthermore, as we reported in February 2003, FAA has not developed 

specific steps and time frames for building these missing elements into its 

human capital management and for using these elements to evaluate the 

effects of its personnel reform initiatives, make strategic improvements, 

and hold the agency’s leadership accountable. 

In 2000, AIR-21 and an executive order established a new structure to 

accelerate the modernization and improve the performance of the air 

traffic control system. This structure was to consist of (1) a five-member 

board, called the Air Traffic Services Subcommittee (Subcommittee), to 

oversee the air traffic control system, (2) a chief operating officer to 

manage the air traffic control system, and (3) a new performance-based 

organization, to be known as the Air Traffic Organization, to operate the 

air traffic control system. Under the act, the Subcommittee provides 

oversight by, among other things, reviewing and approving strategic plans, 

large contracts, and budget requests for the air traffic control system. 

The Subcommittee has been meeting since January 2001, but a chief 

operating officer has not yet been appointed, and FAA is waiting for an 

New Structure for 

Improving the 

Performance of the Air 

Traffic Control System Has 

Not Been Fully 

Implemented 
Page 21 GAO-03-653T FAA Reauthorization 

appointment before putting the new air traffic organization in place. To 

date, the Subcommittee has focused on bringing performance 

management, accountability, and a more businesslike structure to the air 

traffic control system, and it has taken some specific actions, including 

reviewing and approving performance metrics, a budget, and three large 

procurements that FAA initiated. However, without a chief operating 

officer or a performance-based organization, the new structure is not 

functioning as intended. 

FAA and other stakeholders have suggested reasons for the difficulties in 

implementing the new structure and have proposed changes to AIR-21 that 

they believe would address these reasons. For example, they have noted 

that the Subcommittee’s authority to approve the budget request for the 

air traffic control system challenges the administration’s prerogative to 

submit a budget request reflecting its priorities, and they have cited 

uncertainties in the responsibilities and reporting relationships of the chief 

operating officer, the FAA Administrator, and the Subcommittee that, they 

say, have made it difficult to hire a chief operating officer. To address 

these issues, the administration’s reauthorization proposal would (1) 

eliminate the Subcommittee’s approval authority, making the 

Subcommittee an advisory body, and (2) designate the FAA Administrator 

as the chair of the Subcommittee, thereby strengthening the 

Administrator’s authority over, and accountability for the performance of, 

the chief operating officer. While these changes would eliminate the 

challenge that the Subcommittee’s approval authority poses to the 

administration’s prerogatives; would clarify the lines of authority between 

the chief operating officer, the FAA Administrator, and the Subcommittee; 

and could make it easier to hire a chief operating officer, they would also 

limit the power of the Subcommittee. The Senate’s reauthorization 

proposal would also designate the FAA Administrator as the chair of the 

Subcommittee, but it would retain the Subcommittee’s approval authority. 

The merits of these and other proposed changes depend, in large part, on 

the extent to which approval authority is viewed as necessary or desirable 

to bring about improvements in the performance of the air traffic control 

system. 
Page 22 GAO-03-653T FAA Reauthorization 

Safety has always been and continues to be FAA’s highest priority. FAA 

has taken a number of important steps to improve aviation safety; 

however, its planning and implementation could sometimes be more 

effective. In addition, with the transfer of most aviation security 

responsibilities to the Transportation Security Administration (TSA), FAA 

faces the challenge of maintaining close coordination with TSA to ensure 

that aircraft safety is maintained as TSA implements new security 

enhancements. 

Reducing fatal aviation accidents is key to improving aviation safety. 

FAA’s centerpiece for reaching this goal is Safer Skies, an initiative that 

dates back to 1998, when FAA and aviation industry representatives 

worked together to identify the major causes of fatal accidents and to 

design and implement actions to prevent future accidents. Safer Skies is 

intended to reduce the fatal accident rate for commercial aviation by 80 

percent and to reduce the number of fatal accidents for general aviation to 

350 a year by 2007.19 Because many preventive actions have not yet been 

fully implemented, it may be too early to assess their effectiveness. 

Achieving the initiative’s goals will require FAA to systematically 

implement preventive actions, such as requiring additional safety 

inspections of aircraft, and to maintain good data to monitor the progress 

of these actions and evaluate their effectiveness. As of February 2003, 44 

preventive actions had been undertaken—of which 16 are completed and 

28 are under way, according to FAA. 

 19Commercial aviation includes both large air carrier operations and smaller commuter 

operations. General aviation includes a wide variety of aircraft, ranging from corporate jets 

to small piston-engine aircraft as well as helicopters, gliders, and aircraft used in 

operations such as firefighting and agricultural spraying. 

FAA Is Implementing 

Safety Initiatives and 

Faces New 

Challenges in 

Ensuring That 

Security 

Enhancements 

Maintain Aircraft 

Safety 

FAA and Industry Have 

Taken Actions to Reduce 

the Fatal Accident Rate 
Page 23 GAO-03-653T FAA Reauthorization 

Improving the effectiveness of FAA’s inspections of airline operations is 

key to improving aviation safety. The FAA Administrator has noted that 

perhaps the greatest support the agency can provide to the industry is a 

robust safety oversight role that will not waver in difficult times. FAA’s 

new inspection program, the Air Transportation Oversight System, is 

central to this oversight role. This program, which was implemented in 

1998, aims to ensure not only that airlines comply with FAA’s safety 

requirements but also that they have operating systems to control risks 

and prevent accidents. Figure 7 shows an FAA inspector inspecting an 

aircraft for compliance with FAA’s safety requirements. 

Figure 7: FAA Safety Inspection in Progress 

Source: FAA. 

We reported in 1999 that FAA had not completed many critical steps, such 

as developing guidance for inspectors and creating databases to use in 

prioritizing inspection resources, before implementing the new inspection 

system in 1998.20 As a result, the agency’s ability to conduct effective 

 20 U.S. General Accounting Office, Aviation Safety: FAA’s New Inspection System Offers 

Promise, but Problems Need to Be Addressed, GAO/RCED-99-183 (Washington, D.C.: June 

28, 1999). 

FAA’s New Safety 

Inspection System Offers 

Promise, but Problems 

Still Need to Be Addressed 
Page 24 GAO-03-653T FAA Reauthorization 

inspections remains limited. FAA has begun to address some of the 

problems that we identified with the guidance and the databases. 

However, according to a 2002 review by the DOT Inspector General, many 

of the problems that we identified persist, and the program’s 

implementation remains inconsistent because FAA has not established 

strong oversight and accountability procedures.21 This situation limits 

FAA’s ability to conduct more systematic, structured inspections; analyze 

the resulting data to identify safety trends; and target its resources to the 

greatest aviation safety risks. 

Some key efforts under way to improve aviation security require 

interagency coordination between FAA and TSA because they could also 

affect aircraft safety. While TSA is responsible for most issues related to 

aviation security, FAA retains responsibility for those related to aviation 

safety, including approving the initial aircraft design, structural 

modifications, and procedures for emergency evacuation and the 

transportation of hazardous cargo.22 For example, strengthening cockpit 

doors to increase cockpit security during flights was one of the 

government’s earliest responses to the September 11 terrorist attacks. 

Because the modifications could increase the weight of the doors and 

change the way they are attached to the aircraft, FAA has been certifying 

these modifications to ensure that they will not cause decompression 

during flight or affect the aircraft’s structural integrity. In addition, new 

security procedures require that the cockpit door remain locked during 

flight and that access to the cockpit be restricted to the flight crew. As a 

result, senior flight attendants will no longer carry keys to the cockpit, and 

FAA is approving changes to the procedures for rescuing the flight crew in 

an emergency. 

FAA is also responsible for the safe transport of dangerous materials 

onboard aircraft. Dangerous goods are chemical (including infectious) 

substances (or anything containing such substances) that pose a threat to 

public safety or the environment during transportation. When these goods 

are properly packaged, labeled, and stowed onboard, they can be 

 21U.S. Department of Transportation, Office of Inspector General, Report on the Air 

Transportation Oversight System: Federal Aviation Administration, AV-2002-088 

(Washington, D.C.: Apr. 8, 2002). 

22FAA has responsibility for maintaining the security of its air traffic control facilities and 

computer systems. 

Aviation Safety and 

Security Require Close 

Coordination between FAA 

and TSA 
Page 25 GAO-03-653T FAA Reauthorization 

transported safely, but when they are not, they can pose significant threats 

to people and property. TSA is responsible for screening all passengers 

and property, including cargo, that will be carried aboard an aircraft. If, 

during the screening of passengers or baggage, TSA discovers dangerous 

goods that are not properly packaged or labeled, TSA will need to 

coordinate and share information with FAA, which is responsible for 

enforcing any regulatory violations. 

In addition, aircraft crashes could fall under the jurisdiction of either FAA 

or TSA, depending on whether they were the results of accidents (FAA) or 

deliberate acts (TSA). It will be important for the two agencies to work 

together closely during the initial stages of crash investigations. To 

facilitate coordination on these and other security issues that affect 

aviation safety, TSA and FAA signed a memorandum of agreement on 

February 28, 2003. In addition, on March 4, 2003, the Secretary of 

Transportation agreed to assign a senior official within the Office of the 

Secretary to serve as DOT’s primary liaison to TSA. It is important that 

both FAA and TSA remain committed to coordinating closely on safety 

and security issues and that congressional oversight ensures that the 

memorandum of agreement is implemented. 

As the administration and the Congress focus on increasing aviation 

capacity, efficiency, and safety, they do so in an extremely challenging 

fiscal environment—the federal budget deficit has increased and 

competition for federal resources has intensified. Moreover, as we 

mentioned previously in this statement, revenues to the aviation Trust 

Fund, which is the source of funding for most of FAA’s operations, 

facilities and equipment, and grant programs, have declined in recent 

years while outlays have increased. It is, therefore, especially important 

that FAA control or reduce costs, run its programs efficiently, and detect 

and prevent fraudulent activities. We and DOT’s Inspector General have 

reported that improvements are needed in these areas. 

For example, in March 2003, we reported that weaknesses in FAA’s 

purchase card23 controls resulted in instances of improper, wasteful, and 

 23As of January 2002, over 8,000 FAA employees (17 percent of its workforce) had been 

issued commercial purchase cards. In fiscal year 2001, FAA made over 364,000 purchases 

using these cards. 

FAA Faces Challenges 

in Implementing 

Controls over Its 

Costs 
Page 26 GAO-03-653T FAA Reauthorization 

questionable purchases, as well as missing and stolen assets.24 These 

internal control weaknesses included inadequate segregation of duties 

(i.e., the cardholder requested the purchase, placed the order, and picked 

up or received the goods without any other review or approval), lax 

supervisory review and approval, missing purchase documents, inadequate 

training, and insufficient program monitoring activities, all of which 

created an environment vulnerable to fraud, waste, and abuse. During 

fiscal year 2000, these weaknesses contributed to $5.4 million in improper 

purchases by FAA employees and over $630,000 in purchases that were 

considered wasteful or questionable because they were missing a receipt 

to show what was actually purchased. To reduce the likelihood of 

improper and wasteful purchases, we recommended a number of actions 

to strengthen the internal controls over FAA’s purchase card program, 

such as developing detailed procedures that specify the type and extent of 

review or approval that is expected. FAA agreed with our 

recommendations. 

In addition, DOT’s Inspector General reported in January 2003 that FAA 

needs to contain increases in its operating costs and improve its internal 

controls over costs.25 Over the past 6 years, FAA’s operations budget, 

which is 73 percent personnel costs, increased by over 41 percent, from 

$5.3 billion in fiscal year 1998 to $7.5 billion in fiscal year 2003. The 

Inspector General noted that FAA has made extensive use of its human 

capital flexibilities to substantially increase salaries, but has done little to 

reduce operating costs. FAA has improved its ability to track its costs by 

partially implementing a new cost accounting system that the Congress 

directed it to develop in 1996. The new system, which FAA expects to be 

fully operational by the end of 2003, now tracks 70 percent of the 

personnel, overhead, and other costs related to air traffic services. 

However, DOT’s Inspector General has reported problems with the labor 

distribution system, which is part of the cost accounting system and is 

used to account for and distribute air traffic controller labor costs of about 

$3.1 billion annually to specific facilities and functions. The Inspector 

General noted that the system omitted important internal controls needed 

to ensure that the time worked by air traffic controllers would be 

 24U.S. General Accounting Office, FAA Purchase Cards: Weak Controls Resulted in 

Instances of Improper and Wasteful Purchases and Missing Assets, GAO-03-405

(Washington, D.C.: Mar. 21, 2003). 

25Department of Transportation, Office of Inspector General, DOT’s Top Management 

Challenges (Washington, D.C.: Jan. 21, 2003).
Page 27 GAO-03-653T FAA Reauthorization 

accurately recorded in the accounting system and paid from the proper 

account. The Inspector General brought these deficiencies to the attention 

of FAA, and the Administrator agreed to correct them. The Inspector 

General further noted that the system as designed could provide 

workforce data that would help determine how many controllers are 

needed and where. These data would assist FAA in planning for the 

anticipated retirement of large numbers of air traffic controllers in the 

near and long term. 26 Congressional oversight is important to ensure that 

FAA follows through and corrects the problems that we and the Inspector 

General have identified so that FAA can spend its resources on projects 

and services that will provide the greatest return on the public’s 

investment. 

This statement is based primarily on issued reports that are listed under 

Related GAO Products. However, the sections on the Airport and Airway 

Trust Fund and the Air Traffic Services Subcommittee reflect our ongoing 

work for this Committee. As a result, the results of this work that we 

discuss in this testimony are still preliminary. 

To assess the current and projected financial status of the Airport and 

Airway Trust Fund, we obtained financial data from FAA and interviewed 

FAA officials familiar with the information. To assess the status of efforts 

to implement the new structure established under AIR-21 to improve the 

oversight, management, and operation of the air traffic control system, we 

analyzed the legislation and related executive order, the administration’s 

reauthorization proposal, and the first report of the Air Traffic Services 

Subcommittee. We also interviewed officials from FAA, the Air Traffic 

Services Subcommittee, and aviation industry organizations. We 

performed our work in accordance with generally accepted government 

auditing standards. 

 26U.S. General Accounting Office, Air Traffic Control: FAA Needs to Better Prepare for 

Impending Wave of Controller Attrition, GAO-02-591 (Washington, D.C.: June 14, 2002). 

Scope and 

Methodology 
Page 28 GAO-03-653T FAA Reauthorization 

For further information on this testimony, please contact Gerald 

Dillingham at (202) 512-2834. Individuals making key contributions to this 

testimony include Tammy Conquest, Howard Cott, Elizabeth Eisenstadt, 

Edward Laughlin, Belva Martin, Maren McAvoy, John W. Shumann, Teresa 

Spisak, and Richard Swayze.

Contact Information 
Page 29 GAO-03-653T FAA Reauthorization 

FAA Purchase Cards: Weak Controls Resulted in Instances of Improper 

and Wasteful Purchases and Missing Assets. GAO-03-405. Washington, 

D.C.: March 21, 2003. 

Commercial Aviation: Issues Regarding Federal Assistance for 

Enhancing Air Service to Small Communities. GAO-03-540T. 

Washington, D.C.: March 11, 2003. 

Airport Finance: Past Funding Levels May Not Be Sufficient to Cover 

Airports’ Planned Capital Development. GAO-03-497T. Washington, D.C.: 

February 25, 2003. 

National Airspace System: Reauthorizing FAA Provides Opportunities 

and Options to Address Challenges. GAO-03-473T. Washington, D.C.: 

February 12, 2003. 

Aviation Finance: Implementation of General Aviation Entitlement 

Grants. GAO-03-347. Washington, D.C.: February 11, 2003. 

Human Capital Management: FAA’s Reform Effort Requires a More 

Strategic Approach. GAO-03-156. Washington, D.C.: February 3, 2003. 

National Airspace System: Better Cost Data Could Improve FAA’s 

Management of the Standard Terminal Automation Replacement 

System. GAO-03-343. Washington, D.C.: January 31, 2003. 

Aviation Infrastructure: Challenges Related to Building Runways and 

Actions to Address Them. GAO-03-164. Washington, D.C.: January 30, 

2003. 

Aviation Safety: Undeclared Shipments of Dangerous Goods and DOT’s 

Enforcement Approach. GAO-03-22. Washington, D.C.: January 10, 2003. 

High-Risk Series: An Update. GAO-03-119. Washington, D.C.: January 

2003. 

Air Traffic Control: Impact of Revised Personnel Relocation Policies Is 

Uncertain. GAO-03-141. Washington, D.C.: October 31, 2002. 

Airport Finance: Using Airport Grant Funds for Security Projects Has 

Affected Some Development Projects. GAO-03-27. Washington, D.C.: 

October 15, 2002. 

Related GAO Products 
Page 30 GAO-03-653T FAA Reauthorization 

National Airspace System: Status of FAA’s Standard Terminal 

Automation Replacement System. GAO-02-1071. Washington, D.C.: 

September 17, 2002. 

Options to Enhance the Long-term Viability of the Essential Air Service 

Program. GAO-02-997R. Washington, D.C.: August 30, 2002. 

Air Traffic Control: FAA Needs to Better Prepare for Impending Wave of 

Controller Attrition. GAO-02-591. Washington, D.C.: June 14, 2002. 

Aviation Finance: Distribution of Airport Grant Funds Complied with 

Statutory Requirements. GAO-02-283. Washington, D.C.: April 30, 2002. 

Department of Transportation, Transportation Security 

Administration: Aviation Security Infrastructure Fees. GAO-02-484R. 

Washington, D.C.: March 11, 2002. 

Applying Agreed-upon Procedures: Airport and Airway Trust Fund 

Excise Taxes. GAO-02-380R. Washington, D.C.: February 15, 2002. 

National Airspace System: Long-Term Capacity Planning Needed 

Despite Recent Reduction in Flight Delays. GAO-02-185. Washington, 

D.C.: December 14, 2001. 

National Airspace System: Free Flight Tools Show Promise, but 

Implementation Challenges Remain. GAO-01-932. Washington, D.C.: 

August 31, 2001. 

Air Traffic Control: Role of FAA’s Modernization Program in Reducing 

Delays and Congestion. GAO-01-725T. Washington, D.C.: May 10, 2001. 

Aviation Safety: Safer Skies Initiative Has Taken Initial Steps to Reduce 

Accident Rates by 2007. GAO/RCED-00-111. Washington, D.C.: June 30, 

2000. 

National Airspace System: Problems Plaguing the Wide Area 

Augmentation System and FAA’s Actions to Address Them. GAO/TRCED-00-229. Washington, D.C.: June 29, 2000. 

National Airspace System: Persistent Problems in FAA’s New 

Navigation System Highlight Need for Periodic Reevaluation. 

GAO/RCED/AIMD-00-130. Washington, D.C.: June 12, 2000. 
Page 31 GAO-03-653T FAA Reauthorization 

Federal Aviation Administration: Challenges in Modernizing the 

Agency. GAO/T-RCED/AIMD-00-87. Washington, D.C.: February 3, 2000. 

Air Traffic Control: Status of FAA’s Implementation of the Display 

System Replacement Project. GAO/T-RCED-00-19. Washington, D.C.: 

October 11, 1999. 

Aviation Safety: FAA’s New Inspection System Offers Promise, but 

Problems Need to Be Addressed. GAO/RCED-99-183. Washington, D.C.: 

June 28, 1999. 

General Aviation Airports: Oversight and Funding. GAO/T-RCED-99-214. 

Washington, D.C.: June 9, 1999. 

Passenger Facility Charges: Program Implementation and the Potential 

Effects of Proposed Changes. GAO/RCED-99-138. Washington, D.C.: May 

19, 1999. 

Airport Improvement Program: Analysis of Discretionary Spending for 

Fiscal Years 1996-98. GAO/RCED-99-160R. Washington, D.C.: May 18, 

1999. 

Air Traffic Control: FAA’s Modernization Investment Management 

Approach Could Be Strengthened. GAO/RCED/AIMD-99-88. Washington, 

D.C.: April 30, 1999. 

Air Traffic Control: Observations on FAA’s Air Traffic Control 

Modernization Program. GAO/T-RCED/AIMD-99-137. Washington, D.C.: 

March 25, 1999. 

Federal Aviation Administration: Financial Management Issues. 

GAO/T-AIMD-99-122. Washington, D.C.: March 18, 1999. 

Airport Financing: Smaller Airports Face Future Funding Shortfalls. 

GAO/T-RCED-99-96. Washington, D.C.: February 22, 1999. 

Airport Financing: Annual Funding As Much As $3 Billion Less Than 

Planned Development. GAO/T-RCED-99-84. Washington, D.C.: February 

10, 1999. 

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