Civil Aviation Growth in the 21st Century

Meeting Capacity and Environmental Challenges

September 2010

September 2010

Civil Aviation Growth in the 21st Century:

Meeting Capacity and Environmental Challenges

Civil aviation has always played a vital role in the health of the world’s economy and the 

well-being of its inhabitants. It facilitates commerce and connects families, friends and 

cultures across borders and oceans the way no other mode of travel can. Civil aviation is 

also vital to global humanitarian missions, bringing lifesaving equipment and personnel to 

disaster zones around the world. 

By competitive necessity, the companies that make aircraft, engines and aircraft parts have 

always been on the cutting edge of technological developments that make their products 

safer and more fuel efficient. Civil aviation manufacturers not only design the planes that 

fill our skies, they design and build the air traffic management infrastructure used around 

the world to monitor, guide and communicate with hundreds of thousands of aircraft. The 

global economy cannot grow without a safe and efficient civil aviation industry. 

And yet, there are serious challenges to civil aviation’s continued contributions toward 

economic success and cultural connectivity. Looming capacity constraints and growing 

concern over aviation’s contribution to climate change have the potential to clip civil 

aviation’s wings if not addressed.

The AIA paper herein lays out the fundamental challenge of sustainable aviation growth and 

offers recommendations to safely expand capacity while simultaneously reducing aviation’s 

carbon footprint. The civil aviation industry is firmly committed to the synergistic goals of 

growth and environmental stewardship, but industry cannot do it alone. Governments must 

commit the necessary resources to implement 21st century air traffic management systems 

that complement and enhance private sector efforts. 

We strongly believe that the policy recommendations offered here can make the skies safer 

and cleaner while responding to the demands of 21st century air transportation.

Sincerely,

Marion C. Blakey

President and Chief Executive Officer

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iv

Executive Summary

The U.S. civil aviation industry is a keystone of the U.S. economy whose success and 

strength has always been tied to global economic productivity. The global recession of the 

past few years has reduced demand for leisure and business travel and the shipment of justin-time goods. Many of our national aviation system’s limitations—so obvious just a few 

years ago—have been masked by the economic slowdown. Delays are down. Carbon dioxide 

emissions from aircraft engines are 10 percent lower today than they were five years ago. 

However, as the global economy recovers, these limitations will resurface and overwhelm 

our national aviation infrastructure unless significant improvements are made.

Full economic recovery requires a strong civil aviation sector. Airspace capacity must 

meet rising demand. As civil aviation grows to meet that demand, it must do so in an 

environmentally sustainable way. There is general agreement that transforming our 

decades-old radar control system to the satellite-based Next Generation Air Transportation 

System (NextGen) will add capacity and dramatically improve system efficiency. It is 

also widely accepted that improved capacity and efficiency will produce economic and 

environmental benefits. 

While the push for an expedited implementation and roll-out of NextGen is ongoing, 

hurdles remain. Funding for the required technology remains a vigorously debated issue. 

The transition period during which the NextGen system is brought online also presents a 

unique set of challenges, including what to do with legacy infrastructure once NextGen 

is fully implemented. Global implications also come into play, as other nations are also 

developing transformational air traffic management systems. All of these systems must be 

woven together to provide a seamless, global system based on compatible technology, 

standards and procedures.

Given these opportunities and challenges, AIA supports eight key recommendations and 

policy initiatives designed to maximize the potential benefits engendered by a vibrant civil 

aviation industry. Most focus on strategies that would fully deploy NextGen as quickly and 

economically as possible. Some of these recommendations are not new, but need renewed 

attention. 

Cash for carbon. One unifying policy initiative that has the potential to simultaneously 

accelerate NextGen while reducing aviation’s carbon footprint is the “cash for carbon” 

program. Developed by the FAA, the proposed program would provide grants or loans for 

NextGen equipage, in exchange for carbon-neutral growth (CNG) and other environmental 

commitments.

Address the impending issue of FAA ground infrastructure consolidation and 

modernization. Congress needs to establish a mechanism that allows for the consolidation 

of FAA facilities in a fair and rational way. While consolidation has raised concerns over 

potential air traffic controller job losses, the FAA does not envision the transition to 

NextGen requiring fewer controllers.
v

Ensure solid integration of the requirements of the National Environmental Policy Act 

with NextGen-related airspace redesigns. The FAA must develop strategies to integrate 

NEPA review into the NextGen implementation planning process, thereby making these 

important environmental reviews less costly and time-consuming.

Extend Airport Improvement Program grant eligibility to cover NextGen enabled 

approaches. Allowing AIP funds to apply to the development of new approaches employing 

NextGen technologies and procedures could significantly reduce expenditures on noise 

mitigation projects, while simultaneously accelerating NextGen deployment. This would 

further incentivize aircraft equipage and provide environmental benefits, and it has the 

potential to increase aircraft and passenger throughput, thereby generating additional 

airport revenue.

Expand the FAA’s Organization Designation Authorization program to include 

designers and installers of Performance-Based Navigation procedures. Thousands of 

PBN procedures must be installed as part of NextGen’s deployment, yet the FAA lacks 

the resources to design and install all these procedures. Consequently, there is a need to 

enlist the support of third parties who specialize in the design and deployment of PBN 

procedures.

Ensure that the U.S. civil aviation industry has a significant voice in NextGen/SESAR 

harmonization. The United States and Europe must collaborate on the technical and 

operational standards for their respective ATM modernization programs. Further, to achieve 

real progress on interoperability, industry must have a prominent role in the process and 

one that extends beyond technical matters.

Encourage international forums such as the International Civil Aviation Organization 

to create comprehensive, global environmental standards. To mitigate conflict over 

differing regional priorities and preferences, and remove the possibility of duplicative 

levies, fees and taxes on CO2 emissions, the global civil aviation community must 

work through the International Civil Aviation Organization (ICAO) to develop a single, 

comprehensive global approach to reduce civil aviation emissions that will drive the global 

industry to carbon neutral growth from 2020 (CNG 2020+).

Foster partnerships between industry and government across multiple technology 

areas that would help the industry achieve carbon-neutral growth by 2020. The U.S. 

government should actively augment the civil aviation industry’s efforts to reach CNG 

2020+ by continuing to make targeted, meaningful investments in the areas of aircraft 

engine design, airframe design and the development of sustainable alternatives to jet fuel. 

The future of civil aviation depends on the entire industry—manufacturers and operators 

alike—advancing technologies and procedures that will allow aircraft to operate in a more 

efficient and environmentally-friendly way, without compromising the outstanding safety 

record the industry has built for itself. In order to achieve that goal, timely and targeted 

contributions are required from every stakeholder that benefits directly or indirectly from a 

safe, efficient and environmentally responsible air transportation system. 

1

1 US Census Bureau, Merchandise Trade Exports/Imports Quarterly 2009

Introduction

Civil aviation underpins the world’s social and economic infrastructure. As a vital component 

of the global transportation system and a major source of employment, civil aviation provides 

countless travelers and workers with a better way of life on a daily basis. Looking forward, 

such benefits will multiply dramatically as air transportation services respond to strengthening 

demand from around the world. However, creating an environment that fosters growth and 

employment, with all the benefits of a thriving aviation system, first requires addressing a 

number of key industry challenges. Safely expanding the capacity of our national airspace 

system and addressing growing environmental and energy concerns are the two most 

significant challenges facing the U.S. civil aviation industry today. This report will establish 

the relevant impact of each challenge and make policy recommendations that will ensure the 

least interruption to the growth of this important sector.

While both of these challenges pose unique technological, financial, regulatory and political 

hurdles, they are, in fact, inextricably linked. Modernizing the nation’s air transportation 

system so it can safely and efficiently accommodate greater numbers of aircraft—including 

both manned and, increasingly, unmanned systems—is also vital to reducing the 

environmental impact and energy use of civil aviation and ultimately realizing the goal of 

a broad coalition of aviation stakeholders of carbon-neutral 

growth from 2020 and beyond (CNG 2020+). Indeed, growing 

pressure to reduce carbon dioxide (CO2) emissions, oxides of 

nitrogen (NOx) emissions and noise associated with aircraft 

operations is one of several compelling rationales for investing 

in air traffic management (ATM) modernization. 

The imperative to overcome capacity and environmental 

challenges could not be stronger for the U.S. civil aviation 

industry, a vital contributor to the nation’s economy. In the 

most recent economic impact survey published in December 

2009, the Federal Aviation Administration (FAA) found that 

the sale of goods and services tied directly or indirectly to civil 

aviation constituted $1.3 trillion, or about 5.6 percent of the nation’s total gross domestic 

product (GDP). Moreover, the industry sustains nearly 12 million jobs, including many highskilled, high-technology positions. The U.S. civil aviation manufacturing industry remains the 

single largest contributor to the nation’s balance of trade, exporting $70.5B and importing 

$22.2B in relevant products in 2009, for a net surplus of $48.3B.1
2

As strategically important as the industry is to the United States now, it will become 

even more significant as demand for air travel increases and international competition 

intensifies. Despite flagging air travel in the wake of the 2008 financial crisis and a global 

recession that persisted throughout 2009, long-range forecasts from a wide spectrum of 

sources indicate robust demand for air travel over the next two decades. Some regions 

of the world will fare better than others, as changing wealth demographics and the 

build-out of aviation infrastructure in emerging markets make air travel more accessible 

to greater numbers of individuals. Even in mature markets like the United States and 

Europe, moderate but consistent growth in air travel demand is projected. These mature 

markets also have the persistent need to recapitalize aging fleets with newer, more 

fuel-efficient aircraft, generating replacement demand on top of growth for fleet 

expansion. 

Worldwide growth in demand for aviation goods and services will not be limited to 

the large commercial transport sector. As the global economy recovers and a number 

of new aircraft models enter the market, demand for general aviation products—from 

the large-cabin, global business jet to the single-engine piston-powered aircraft—

should slowly and steadily improve. 

Regulatory policies and other initiatives that seek to address the substantial but 

surmountable hurdles posed by an aging, ground-based air traffic management 

system and increasingly stringent environmental standards will help foster the health 

and competitiveness of the U.S. civil aviation industry. This will ensure the nation can 

capitalize on projected growth in demand for aviation products and related services over 

the coming years. 
NextGen is the 

satellite-based 

communications, 

navigation and 

surveillance system 

(CNS) that will 

integrate performancebased navigation 

(PBN) routes and 

procedures like 

tailored arrivals and 

departures, required 

navigation procedures 

(RNP), Area Navigation 

(RNAV), Continuous 

Descent Arrivals (CDA), 

and 4-Dimensional 

Trajectories (4DT). 

3

“More than a single system, NextGen is 

a portfolio of technology, equipment, 

procedures and policies aimed at 

facilitating the largest airspace 

transformation in the history of 

aviation.”

– the late William DeCota, former Aviation 

Department Director, The Port Authority of 

New York and New Jersey 

2 Test sites located in Alaska, the Houston / Gulf of Mexico region, Louisville, KY, and Philadelphia, PA.

Capacity and the Importance of NextGen

The United States’ ability to safely and efficiently handle more aircraft of all types will 

not be achieved through incremental modernization but by a significant transformation 

of the U.S. national airspace system. The FAA’s Next Generation Air Transportation System 

(NextGen) is the program to achieve that transformation. 

Under development for a number of 

years, NextGen will move the nation 

from reliance on an aging, radar-based 

system of air traffic control to a satellitebased system of air traffic management. 

By leveraging Global Positioning 

System (GPS) technology—along with 

breakthroughs in everything from weather 

forecasting to data networking to digital 

communications—the NextGen system 

will ultimately enable new procedures that will allow more aircraft to fly closer together on 

more direct routes. The safer, more efficient use of airspace through NextGen will reduce 

delays and provide significant economic and environmental benefits through reduced carbon 

emissions, fuel consumption and noise. 

A fundamental enabling technology of NextGen is Automatic 

Dependent Surveillance-Broadcast (ADS-B), which uses GPS 

technology to pinpoint an aircraft’s precise location and 

constantly broadcast that information and other critical data 

(altitude and air speed, for example) to nearby aircraft and air 

traffic controllers. With ADS-B, for the first time, both pilots and 

controllers will see the same real-time displays of air traffic. This 

breakthrough in the provision of common, situational awareness 

in the cockpit and the control tower will enhance safety and 

enable more efficient use of airspace. 

ADS-B is undergoing a phased implementation. Installation 

of 794 ADS-B ground-based transmitters—largely achieving 

coverage throughout the continental United States—has a 

contracted completion date of 2013. The project is currently 

on schedule and under budget. The operational system is being 

deployed on a limited basis around the nation, with four test 

sites in geographically diverse areas with unique airspace 

environments demonstrating the service.2 Operators in these 

regions are already reporting significant, tangible benefits 

directly attributable to the system, including fuel cost savings 

and reduced delays.
4

3 Gerald L. Dillingham, Ph.D., Government Accountability Office (GAO), House Transportation and Infrastructure Subcommittee 

on Aviation. “Hearing on ATC Modernization and NextGen: Near-Term Achievable Goals.” Testimony given May 20, 2009

4 This effectively covers all large commercial transports, business jets and turboprops, but largely excludes the lower-end, pistonpowered portion of the general aviation fleet that does not tend to use the more complex airspace.

For the full benefits of ADS-B to be realized in a given area, however, a “critical mass” of 

operators must be equipped with the capability.3 For example, proximate spacing is only 

possible if all aircraft have improved position reporting, as an aircraft not equipped with 

ADS-B would be “invisible” to the traffic receiver of another aircraft. Not surprisingly, the 

timing and financing of the equipage of aircraft with ADS-B capability is a core concern of 

both the FAA and aircraft operators, including airlines and the general aviation community, 

as well as equipment manufacturers. 

The Equipage Challenge

The FAA estimates its own costs associated with full implementation of ADS-B and the 

broader NextGen architecture by 2025 will total between $15B and $22B. The agency also 

acknowledges an additional $14B to $20B will likely be incurred by the airlines and other 

users of the national airspace system who must retrofit their aircraft to make them NextGen 

compatible. Leading avionics manufacturers and other industry players believe the FAA’s 

equipage estimates are too high. Industry experts have estimated the cost to equip the 

entire civil aviation fleet of commercial and general aviation aircraft with ADS-B will be 

significantly less than $12B. Moreover, these estimates could drop substantially once mass 

production of the required equipment is achieved. Whether the final price to equip is under 

$12B or over $20B, it is clearly a sizable investment for an airline industry that continues 

to struggle to return to profitability and for a general aviation community that counts 

individual aircraft owner-operators who fly recreationally among its core constituency. 

In the near-term, aircraft equipage for ADS-B and other NextGen technologies will remain 

largely voluntary, with individual airlines and system users conducting internal cost-benefit 

analyses to support or reject the business case for investment. But because the maximum 

potential value of the system can only be realized for all operators and the public with full 

deployment and equipage, this fragmented, individualized approach will ultimately give 

way to a full equipage mandate. 

In March 2010, the FAA issued a final rule to require installation of ADS-B “Out” equipment 

by 2020 for all aircraft flying in Class A, B and C airspace.4 ADS-B “Out” refers to 

equipment that allows the broadcast of information from the aircraft to ground stations 

and aircraft equipped with complementary receiving equipment, known as ADS-B “In.” 

Because ADS-B “In” capability provides additional user benefits—equipped aircraft will 

eventually be able to self-separate—but adds substantially to the cost of equipage, the 

FAA has thus far chosen not to mandate its installation. 

While the FAA mandate of ADS-B “Out” effectively settles the timing of the equipage 

issue, it leaves the more contentious issue of how to fund the build-out of the airborne 

component of the system unresolved. The user community remains divided, with 

some airlines already moving aggressively to equip their fleets and others making 

public declarations that the costs of the system clearly precede the benefits by years. 

Nevertheless, government support for equipage—either through direct funding or by some 

other, more creative financial incentives—would obviously be welcomed by the majority of 

the user community. 
5

 The relevant technical workforce includes systems specialists, electronics technicians and computer specialists who install, 

maintain, repair, and certify the hardware and software that comprise the air traffic control system. 

“We must make sure that 

interoperability is the order

of the day.” 

– J. Randolph Babbitt, 

FAA Administrator 

5

The Infrastructure Challenge

The FAA has yet to provide a plan for the disposal of legacy air traffic management infrastructure once 

NextGen is fully implemented. Such a plan is vital to realizing the full efficiencies of the new system. It is 

also essential to reduce the overall cost to the government, which must maintain both systems until the 

old one can be decommissioned. 

The issue of facilities consolidation and closure is nearly always a politically sensitive one, since 

the rationalization of assets and infrastructure in other sectors often portends job losses and other 

potentially negative impacts on local economies. But in the case of our national aviation infrastructure, 

many believe as NexGen is implemented and system capacity doubles or triples, the same or an even 

larger number of air traffic controllers and technical employees5 will be needed. Moreover, the economic 

case for FAA facilities rationalization is compelling, as the cost of operating redundant systems beyond 

what is necessary to ensure a safe transition to NextGen will be increasingly prohibitive to FAA, drawing 

resources from other pressing aviation safety and infrastructure needs and further burdening the 

taxpayer. 

The Department of Defense (DOD) has a process used to close excess military installations and realign 

assets to reduce its overall operations and maintenance budget and achieve efficiencies mandated 

by both the department and Congress. The process removes politics from the equation by using an 

independent panel of experts whose only criterion for deciding what bases to close or realign is military 

need. Its recommendations are binding unless Congress passes a joint resolution of disapproval.

DOD has used this approach several times, and for the most part it has been widely regarded as a 

successful, apolitical and objective approach to facilities consolidation. Although Congress has not 

yet seen the need to legislate a mechanism to rationalize FAA facilities and resources, agency funding 

constraints and the growing imperative to realize the full efficiencies of NextGen may be the impetus to 

address the issue.

The International Harmonization Challenge

NextGen will be international in scope, ultimately 

necessitating harmonization with other air traffic 

management systems around the world. The 

importance of harmonization and coordination on ATM 

modernization programs, particularly between the United 

States and Europe, cannot be overstated. The regions 

constitute the world’s two most complex and congested 

airspace blocks and there is significant traffic between the two continents.

To extend the full benefits of NextGen to international operations requires a seamless, global 

system, using compatible equipment and procedures. To achieve such a harmonized system, 

the FAA is working with various organizations in Europe to address the issue of interoperability 

between NextGen and its European counterpart, the Single European Sky Air Traffic Management 

Research (SESAR) program. The International Civil Aviation Organization (ICAO) has a forum 

dedicated to NextGen/SESAR harmonization, reflecting the importance of the issue to the 

international aviation community. 
6

Though the NextGen and SESAR systems need not be identical, harmonization through the 

development of common technical and operational standards will ensure that similarly equipped 

aircraft can safely fly in both systems, a concern obviously paramount to both operators 

and regulators. Harmonization is also a critical issue for the manufacturing base who will 

ultimately build out the ground and airborne components of the new systems. Manufacturers 

of advanced communications, navigation and surveillance systems and other components 

that form the backbone of ATM modernization programs would clearly benefit from being able 

to offer solutions that meet the requirements of both systems, increasing the total size of 

their addressable market and driving down costs. Ensuring interoperability between the two 

systems will remove yet another obstacle cited by operators to moving forward with equipage. 

Manufacturers will likewise be able to design and produce systems compatible with both 

programs, which may offer economies of scale that should ultimately drive down the overall 

cost of equipage. 

On the other hand, the cost of delaying the critical issue of harmonization could be substantial, 

stalling modernization efforts on both sides of the Atlantic, with negative impacts around 

the globe. Aircraft operators will be reluctant to retrofit aircraft with new systems without 

the assurance they will work safely and seamlessly across both systems. This will forestall the 

realization of capacity and environmental benefits expected from the deployment of both 

systems and further burden airspace managers, operators and manufacturers alike.

A Memorandum of Cooperation (MOC) in civil aviation research and development (R&D) was 

signed in June 2010 between the FAA and the European Commission (EC) in response to 

the user community’s demands for additional coordination in the area of NextGen/SESAR 

interoperability. Considering the comparable goals of both programs, airspace users are 

especially keen to avoid costly duplication of airborne equipment. In order to facilitate 

interoperability between both future ATM systems, the MOC establishes a binding framework for 

meaningful technical cooperation in this area. 

While nearly all relevant parties agree on the importance of harmonization, the proverbial 

“devil is in the details.” NextGen and SESAR may be working towards strategic alignment, 

but on a tactical level, there remain significant disconnects between the two programs. For 

example, there is a five-year gap between the NextGen and SESAR implementation timelines, 

with the latter targeting an earlier date of 2020 for full operation and NextGen slated for full 

deployment in 2025. This gap has a cascading effect on other important milestones like ADS-B 
7

6 For aircraft already in operation, Europe is allowing an extra three years for retrofit. The FAA mandate for equipage by 2020 

covers all aircraft, both new deliveries and those in the existing installed base.

“Out” equipage. Europe has put in place regulations requiring all new aircraft operating in its 

airspace to be ADS-B “Out” equipped by 2015, five years earlier than the FAA mandate.6 Under 

this scenario, U.S. carriers operating to and from Europe would be forced to equip early, with 

potentially less sophisticated technology. 

The differences between the two systems extend well beyond timelines and equipage mandates. 

On a fundamental level, NextGen is a more comprehensive program designed to improve the 

“curb-to-curb” air travel experience by covering the areas of capacity, safety, security and 

environment. SESAR addresses these areas, but is more narrowly-focused on “gate-to-gate” 

activity. 

Moreover, the U.S. has two and a half times as many general aviation aircraft as the rest of the 

world combined. This presents a unique challenge in terms of equipage mandates as many of 

these aircraft operate exclusively in clear weather, away from congested airspace and without 

the need for sophisticated instrumentation. This distinctive feature of the U.S. national airspace 

system amplifies the other variances between the United States and Europe, which include 

different technology and procedural preferences, implementation and adoption rates. 

Not since the transition from visual to instrument flying has the timing and coordination of new 

technology implementation been more important. Even if all satellite navigation and surveillance 

systems around the world had identical standards and were installed at the same time, the 

challenge of equipping more than 28,000 commercial aircraft—and many multiples of that in 

the general aviation community—would still be daunting. Accomplishing that monumental 

task when systems like NextGen and SESAR have different standards and installation mandates 

becomes exponentially more complex and significantly more expensive. 

Potential Lessons from Reduced Vertical Separation Minimina (RVSM)

There is, however, precedent for successful harmonization and implementation of a smallerscale airspace modernization-related initiative from which relevant stakeholders in the NextGen/SESAR process may derive some “lessons learned.” With the advent of more sophisticated 

aircraft equipment—including advanced air data computers and autopilots which enable aircraft to maintain a set altitude with more precision—ICAO proposed in the mid-1990s that the 

standard vertical separation required between aircraft flying at levels between FL290 (29,000 

feet) and FL410 (41,000 feet) be reduced from 2,000 feet to 1,000 feet. Between 1997 and 

2008, there was an internationally coordinated rollout of RVSM. The result has been that operators around the world went to RVSM on time, seamlessly, and with significant capacity and 

environmental improvements.
8

“Today we have taken a major step 

forward by committing to a global 

cap on our emissions in 2020. After 

this date, aviation’s emissions will 

not grow even as demand increases. 

Airlines are the first global industry 

to make such a bold commitment.” 

– Giovanni Bisignani, 

IATA Director General and CEO 

7 Data provided by the Air Transport Action Group, May 2009

The Safety Benefits of NextGen

NextGen is a comprehensive overhaul of the nation’s air traffic management system. As 

such, it poses significant opportunities to improve upon the excellent safety record of 

the industry. As NextGen is implemented, government and industry must systematically 

manage the inherent risks associated with introducing new technology into an existing 

operating system. There are opportunities to greatly improve safety through more reliable 

and accurate technology, better operational procedures, and the use of information—

particularly regarding weather conditions—as NextGen expands our capacity and efficiency. 

For example, the improved navigational, surveillance, and communications capabilities—

all of which improve pilot and controller situational awareness—can be leveraged to 

reduce vertical, lateral and in-trail separation standards while also improving the level of 

safety provided today. Similarly, airport surface management systems, that will be part 

of NextGen, will inherently enhance surface safety while simultaneously improving the 

efficiency of surface movements of aircraft and ground vehicles at airports. The FAA will 

need to put mechanisms and processes in place that will ensure these safety enhancements 

are part of the upfront design and deployment.

Aviation and the Environment: 

Towards Cleaner, Quieter Skies

Environmental concerns related to civil aviation typically fall into one of two major 

categories: emissions and noise. While noise and NOx are generally thought of as “local” 

environmental issues—and CO2 and other greenhouse gas (GHG) emissions more “global”—

all are complex and all have at one time or another engendered intense international 

discussions. Emissions—particularly CO2, a major contributor to climate change—has 

attracted global attention in recent years. Efforts to reduce CO2 emissions 

require as a first step an effective way to quantify and monitor its presence. 

In the end, both noise and emissions are equally challenging to address from 

both a technological and political perspective. 

While the science around civil aviation’s role in global climate change 

continues to evolve, it is widely accepted by industry participants and 

environmental stakeholders alike that the sector globally contributes 

a relatively modest two percent of total man-made carbon emissions. 

Nevertheless, the aviation industry in 2009 voluntarily set for itself the 

ambitious goal of CNG 2020+, demonstrating a strong commitment to 

environmental stewardship.7

Achieving such an aggressive goal for reduced emissions demands a multi-faceted approach 

that covers four key areas: more fuel-efficient operational practices; more efficient ATM 

systems like NextGen and SESAR; technological improvements in aircraft fuel efficiency, 

including new engine, airframe and alternative fuel technologies; and market-based 

mechanisms, such as carbon trading schemes and other, more innovative approaches. 
9

Operational Improvements and ATM Modernization 

While many airlines have long-standing operating policies and procedures with the objective 

of conserving fuel, record high oil prices during the spring and summer of 2008 prompted 

even more aggressive adoption of such approaches. Operational changes that reduce aircraft 

fuel burn and associated emissions include: taxiing on one engine when weather permits; 

using super tugs on the ground to reposition aircraft in lieu of powering up an engine when 

feasible; the redistribution of belly cargo to change weight-and-balance to improve fuel 

performance; and the use of ground power to provide electricity and air conditioning to the 

aircraft when parked, rather than using the aircraft’s auxiliary power unit (APU). 

The use of more sophisticated flight-planning software has helped reduce en route fuel 

consumption and enabled airlines to avoid burning extra fuel while awaiting a gate. 

Some airlines have added life vests on certain domestic routes, adding modest weight but 

ultimately generating fuel burn and emissions reductions by enabling more direct overwater routings. Other airlines have deployed decision-support tools that provide pilots with 

coordinated speed adjustments, allowing more evenly spaced landings and fuel efficient 

continuous decent arrivals (CDAs). 

Environmental Benefits of NextGen

While all of these operational and procedural changes can add up to sizable reductions 

in emissions, the system-wide operational improvements ultimately afforded by NextGen 

will take emissions and noise reduction to a new level. By fostering more efficient aircraft 

operations through all phases of flight, literally from gate to gate, FAA analyses indicate 

that full implementation of NextGen could reduce aircraft GHG emissions up to 12 percent 

by 2025—the equivalent of taking 2.2 million cars off the road for one year.8 

NextGen also offers promise in addressing noise, the other pressing environmental issue 

associated with aircraft operations. The precision of the technology that allows for CDAs and 

required navigation performance (RNP) departures and arrivals enables flight routing along 

precise ground paths that minimize an aircraft’s noise signature on takeoffs and descents. 

8 Figure cited by Dr. Gerald L. Dillingham in May 2008 testimony before the House Transportation and Infrastructure 

Subcommittee on Aviation.
“[The problem is] the bureaucracy 

and red tape surrounding the 

administration of NEPA. Current 

application of the environmental 

review process at FAA makes it 

practically impossible to implement 

meaningful change—even if that 

change improves the quality of the 

environment.” 

– Lorraine Bolsinger, 

GE Aviation Systems President and CEO

10

The Role of the NEPA Process

The environmental benefits of NextGen—including both reduced emissions and noise—

are obvious and compelling, but require innovative policy solutions to embedded 

obstacles before those benefits can be fully realized. The redesign of terminal 

airspace by the FAA—which is necessary to accommodate CDAs, tailored arrivals and 

quieter RNP and area navigation (RNAV) departures—requires compliance with the 

National Environmental Policy Act (NEPA). NEPA is effectively the nation’s charter 

for considering potential environmental impacts before an action is implemented. 

It requires consideration of lower-impact alternatives and it stipulates disclosure of 

environmental information for all federal agency actions with the potential to impact 

the human or natural environment. Public and other government agency involvement 

is required in the process and concerns raised by the public or other agencies must be 

addressed prior to any federal agency reaching a decision on a proposed action. 

The level of environmental review required to comply with NEPA has been established 

by the President’s Council on Environmental Quality (CEQ) and falls into four general 

categories: emergency procedures, categorical exclusion, environmental assessment 

(EA) and environmental impact statement (EIS). Emergency procedures cover highly 

exceptional circumstances where immediate action may be taken by the FAA (or any 

other federal agency) without first meeting NEPA requirements. With the exception of 

a Temporary Flight Restriction, airspacerelated actions typically do not fall within 

the emergency procedures category. 

The FAA also possesses the authority 

to determine that actions involving 

the establishment, modification, or 

application of airspace and air traffic 

procedures fall under what is known as 

a “categorical exclusion,” sometimes 

referred to as CATEX. With this authority, 

the FAA can determine—based on past 

experience with similar actions—that 

the airspace redesign in question does 

not have an adverse impact on the 

environment, thereby limiting the need for a more time-consuming environmental 

review as long as there are no extraordinary circumstances. The FAA’s experience with 

airspace redesigns indicates that, while there may be overall environmental benefits, 

there are typically potentially negative impacts to some areas that must be assessed. 

Moreover, most airspace redesigns have historically not been aimed at reducing noise 

and emissions, but rather at alleviating air traffic congestion. Improving safety and 

efficiency, while limiting environmental impacts, has been the primary driver. In short, 

the FAA has been appropriately judicious in its use of CATEX for airspace redesigns.

More often than not, airspace redesigns require an EA—which applies to a project or 

proposal not initially thought to have the potential to cause significant environmental 
9 Data provided by the Air Transport Action Group, May 2009

11

impact—or an EIS, for proposals that do rise to the level of a major federal action with 

the potential to cause significant environmental impact. An EIS thus requires a detailed 

assessment of environmental impacts, consideration of reasonable alternatives to the 

proposed action and extensive public involvement. EAs require reviews by other agencies, 

as well as public comment, but they are significantly less time-consuming and less costly 

than the lengthier EIS. Every EA must result in a “finding of no significant impact” (FONSI); 

otherwise, the more detailed EIS will be required to move forward with the project. 

Based on 2009 data, the average duration of NEPA reviews for FAA actions involving EAs 

was 1.5 years. The duration for NEPA reviews involving EISs was four to five years. The 

costs of such reviews can also be substantial, depending on the type of NEPA review and 

the complexity of the proposal. The EA submitted for the Houston Area Air Traffic System 

redesign, for example, took 1.2 years for approval at a cost of roughly $1M. In contrast, 

the EIS required for the proposed New York/New Jersey/Philadelphia Metropolitan Airspace 

Redesign Project took eight years and cost $17M.9 In some cases, congressional input can 

result in additional options to the proposed action being considered, thereby increasing the 

number of public meetings and extending the length of the review process. 

While industry stakeholders in NextGen implementation agree on the importance of the 

NEPA process, many are frustrated with the time-consuming and costly nature of the reviews 

and consider it a major impediment to the timely rollout of the system. Given the volume 

of expected airspace redesigns required to maximize the benefits of the system, and the 

potential for NextGen-related NEPA reviews to strain FAA resources, industry would like to 

see additional efforts to expedite the process. 

Technology Developments

Technological breakthroughs in airframe and engine design can also spur the development of more 

environmentally-friendly aircraft. Indeed, the aircraft entering today’s fleet that constitute the 

cutting edge of both airframe technology and engine design are 70 percent more fuel efficient than 

40 years ago, a remarkable testament to the innovation of the civil aviation manufacturing base 

and its responsiveness to its customer community. 

Industry continues to work on new propulsion solutions that afford both cleaner and quieter 

aircraft engines and new airframe concepts using new designs and materials that will make aircraft 

lighter, quieter and more environmentally-friendly. This work is being pursued both internally at 

individual companies—Boeing, Bombardier, GE, Pratt & Whitney, and Honeywell, among others—

and in collaboration with various government agencies like the FAA, DOD and NASA. 
“The FAA is contracting with the 

aviation community to aggressively 

meet critical environmental and 

energy goals...The CLEEN program 

is a central piece of the NextGen air 

traffic modernization environmental 

strategy.”

– J. Randolph Babbitt, 

FAA Administrator 

12

One such collaborative effort between industry and government is the FAA’s Continuous 

Lower Energy, Emissions and Noise (CLEEN) program, which was created to help industry 

develop and demonstrate new technologies to meet a set of environmental goals, 

including: the reduction of fuel burn by 33 percent, which will also reduce CO2 emissions; 

the reduction of landing and takeoff NOx emissions by 60 percent relative to 2004 ICAO 

standards; the reduction of noise levels by 32 decibels relative to the current noise 

standard; and the increased use of more sustainable jet fuels, with transition strategies 

that do not require significant aircraft or engine modification. 

The FAA recently awarded $125M in contracts 

to five companies—including Boeing, GE, 

Honeywell, Pratt & Whitney, and Rolls-Royce 

North America—all of whom will commit 

internal R&D funding that matches or exceeds 

that provided by the FAA to advance a number 

of relevant technologies. CLEEN is ultimately 

aimed at projects and technologies that could 

be introduced into aircraft as early as 2015. 

Boeing’s work on the CLEEN program focuses 

on the development of adaptive wing trailing edges, which would allow an aircraft’s 

wing configuration to be optimized for different phases of flight, not just cruise. The 

technology could also enable quieter takeoffs and landings. Pratt & Whitney will match its 

CLEEN funding to support ongoing development of its geared turbofan technology, which 

has already been selected as the powerplant of choice for several new aircraft platforms, 

including the Mitsubishi Regional Jet (MRJ) and the Bombardier CSeries. The engine, 

scheduled to enter service in 2013, is expected to provide double-digit improvements in 

fuel efficiency and emissions with a 50 percent reduction in noise over today’s engines. 

GE will also direct some of its CLEEN funding at existing engine technology development 

programs, including the new CFMI LEAP-X engine for narrowbody aircraft, and a nextgeneration engine for regional and business jets. GE projects the development of a new 

core for both engines will offer up to 16 percent better fuel efficiency than its best engines 

in service today. GE will also match additional CLEEN funding to support demonstrations 

of advanced Flight Management System–Air Traffic Management (FMS-ATM) technology in 

partnership with Alaska Airlines. The technology can enable aircraft to fly more optimum 

trajectories that result in less fuel burn, emissions and noise. 

GE is also pursuing open rotor engine designs, as it did in the 1980s. The company believes 

open rotor technology has the ability to reduce fuel burn by 26 percent over current 

generation conventional engines. But the designs still pose significant noise and aircraft 

integration challenges. GE will use CLEEN funding to support blade aero-acoustic and pitch 

change mechanism research to find solutions to these noise issues. 
13

In addition to breakthroughs in engine technology, new airframe 

technology—particularly the development and use of advanced 

composite materials—promise significant environmental benefits. 

The use of composites in aerostructures has grown significantly 

over the last 10 years, as confidence in the technology has grown 

and manufacturing methods have improved. With the design of 

the 787, Boeing has ushered in a potential sea-change in the use 

of composites for future aircraft, replacing traditional aluminum 

alloys with carbon-fiber and other advanced composite materials 

in critical applications including the fuselage and wings. The chief 

environmental benefit of the latest generation of composites is 

that they offer similar strength of traditional metallic materials like 

aluminum, but with significant weight savings. Reduced aircraft 

weight translates into less fuel burn and fewer emissions over the same route of flight. 

There will doubtless be further breakthroughs in engine and airframe designs—and the 

development and incorporation of new, lightweight materials—that will help the civil 

aviation industry reach its ambitious environmental targets. However, another, relatively 

new area of technology development—one focused on the creation and use of sustainable 

alternatives to traditional jet fuel—may hold even more promise in dramatically reducing 

the amount of CO2 and other emissions generated by aircraft. 

The Promise of Sustainable Biofuels

Fuel is one of the largest operating expenses incurred by the aviation 

industry and the volatility of crude oil prices makes it particularly 

challenging for large airline operators to manage and budget for 

this critical cost component. The development of sustainable, secure 

biofuels—produced from renewable, globally abundant biological 

resources rather than traditional fossil fuels like coal, oil and natural 

gas—may reduce the industry’s exposure to oil price fluctuations and 

have far-reaching environmental benefits, while at the same time 

enhancing U.S. energy security. And due to the lack of alternative 

propulsion sources, aviation—unique among transportation modes—has 

a clear need for biofuels development.

Biofuels are generally derived from feedstocks from one of two key sources: plants with high 

sugar content (corn and sugar cane, for example) and plants that are rich in bio-derived oils 

(including soybeans, algae and other less well-known species like jatropha and camelina). 

Biofuels produced from the first source of feedstocks, including ethanol, are generally referred 

to as first-generation biofuels and they tend to be ill-suited for high-performance applications 

like aviation. On the other hand, second-generation biofuels made from bio-derived oil can be 

converted through chemical processes to make high-quality jet and diesel fuel.

Aircraft Operational Costs

Percent Materials by Weight
“We’re dealing with technologies that 

can contribute on a significant level to 

achieving carbon neutral growth—it’s 

happening and it’s happening now.” 

– Richard Altman, Commercial Aviation Alternative 

Fuels Initiative (CAAFI) Executive Director

14

Another important distinction between 

first- and second-generation biofuels is 

that the former rely on food crop sources 

and raise potentially contentious issues of 

land resource allocation, impact on food 

prices and local environmental concerns. In 

contrast, many second-generation biofuels 

have the potential to be grown in a range of 

locations—from salt water to arid desert climates—and can be derived from sources that 

do not directly compete for resources with food supplies. 

While biofuels are not entirely carbon-neutral, over their lifecycle they have the potential 

to reduce CO2 emissions by up to 85 percent over conventional jet fuel depending on the 

feedstock selected and processing methodology. Because they contain fewer impurities, 

they also have the ability to reduce other emissions like sulfur dioxide and soot that have 

local air quality impacts.

While each of the second-generation biofuels being researched and demonstrated for 

aviation use has the potential to deliver “greener” and potentially less expensive fuel in 

sufficiently large quantities, it is unlikely aviation will rely on just one type of feedstock. 

The best alternative fuel will likely depend on location (chiefly, geographic proximity to a 

particular feedstock) and the availability of processing technology. However, a diversified 

supply base may be a substantial positive for the airline industry, offering a fuel source 

with significantly less price volatility than jet fuel. 

It will take many years, more investment in R&D and scaling up of production and refinery 

capacity before biofuels can completely supplant traditional, kerosene-based jet fuel for 

large scale use in civil aviation. Public policy initiatives aimed at growers, processors and 

end users are important in enabling this nascent industry to commercialize at the rate 

needed to enable the industry to meet its aggressive CO2 reduction goals. But airlines are 

already showing signs of commitment to advancing their development. Nearly 20 major 

carriers—including several of the United States’ largest passenger and cargo airlines—have 

entered into nonbinding purchasing commitments with producers of alternative fuels. 

Assuming successful development, production and certification of these fuels—including 

biofuels derived from camelina oils and other feedstocks as well as other synthetic fuels—

the airlines would then enter into more formal contractual arrangements to source at least 

a portion of their fleet fuel requirements from these suppliers. 

Most experts agree that airlines would only need to transition 1 to 1.5 percent of their 

total fuel consumption to biofuels in order for biofuels to attain commercial viability, 

the point at which there is estimated to be sufficient demand to entice suppliers to make 

necessary investments in scalability and infrastructure to meet airline needs. On the latter 

point, one of the most attractive aspects of aviation applications for biofuels is that the 

distribution system for transporting fuel from its original source to the fuel tank of an 
10 Data provided by the Air Transport Action Group, May 2009

12 The U.S. General Accountability Office report. International Climate Change Programs: Lessons Learned from the European 

Union’s Emissions Trading Scheme and the Kyoto Protocol’s Clean Development Mechanism discusses three main lessons that 

can be learned from the ETS scheme: 1) accurate emissions data is needed to set effective caps; 2) trading programs should 

influence technology investment; 3) the method of allocating allowances has economic effects. 

11 April, 1999, IPCC Special Report, “Aviation and the Global Atmosphere”, chapter 10.4.5.

15

aircraft is much smaller and infinitely less complex than the fuel distribution system for 

other modes of transportation. For example, there are nearly 162,000 retail gas stations 

in the United States, whereas roughly 35 airports handle more than 90 percent of the 

world’s airline operations. In short, the integration of biofuels into the aviation system is 

substantially easier than it would be for a less centralized public fuel delivery system.10 

Market-Based Mechanisms 

The use of market- or economic-based solutions like “cap-and-trade” to address environmental 

issues has been discussed for many years. In theory, the cap-and-trade approach appears 

simple and effective—and, therefore, highly attractive. It is an environmental policy whereby 

the government sets an annual cap on CO2 emissions, then creates a financial market in which 

companies can trade permits to emit those gases. The concept is based on the fundamental 

premise that businesses that can cut their emissions most cheaply will be incentivized to do 

so and will sell their permits to businesses that cannot.

Cap and trade, like all market mechanisms, is intended to provide operators an economic 

incentive to be more energy efficient. Civil aviation has not needed an artificial market 

incentive because fuel efficiency has always been a first tier market motivation. In fact, 

in its 1999 Special Report, “Aviation and the Global Atmosphere,” the United Nations’ 

Intergovernmental Panel on Climate Change (IPCC) said that while some economic instruments 

could successfully contribute to enhanced fuel efficiencies, “[t]here is uncertainty about the 

appropriate level at which any environmental levy should be set.”11 That is why the global 

aviation industry has steadfastly maintained that the first three pillars of environmental 

improvements—technology, operational efficiency and ATM improvements—must be pursued 

before market measures are put in place for civil aviation.

In practice, cap-and-trade schemes have proven far more complicated and their overall 

effectiveness in achieving the goal of reducing CO2 emissions remains questionable. 

The European Union (EU) instituted an Emissions Trading Scheme (ETS) in 2005 that 

remains the most comprehensive CO2 trading program in the world—covering roughly 

12,000 installations primarily in the power generation, iron and steel, glass and cement 

manufacturing industries, representing approximately 40 percent of total EU CO2

emissions—but its efficacy has yet to be proven. According to a 2008 report by the 

Government Accountability Office (GAO), Phase I of ETS was to establish a robust market for 

carbon emissions allowances, but the initial supply of allowances exceeded demand, which 

resulted in a price collapse. Moreover, a lack of baseline emissions data makes it impossible 

to know if emissions have actually been reduced by Phase I implementation.12 In short, 

the question of whether ETS is achieving its overall environmental objectives has yet to be 

definitively answered. 

In the United States, cap-and-trade approaches are further complicated by domestic 

political considerations, with lawmakers struggling to balance environmental goals with a 
“The unilateral extension of the 

EU ETS to international aviation is 

contrary to international law both as an 

extraterritorial action and an improper 

tax or charge. It also clearly stands in 

the way of an appropriate and effective 

global solution.”

– Nancy Young, 

ATA Vice President, Environmental Affairs

16

13 The actual agreement took effect in March 2008. It replaced and superseded previous open skies agreements between the 

United States and individual European countries.

desire to protect and promote nationally or locally important industries like coal and avoid 

driving energy prices higher for the public. In the end, a comprehensive climate bill failed 

to advance in 2010 and cap-and-trade has fallen out of favor among many lawmakers on 

both sides of the political spectrum. 

The Problem with Regional Solutions to Climate Change

Further adding to the complexity of the environmental issue is a myriad of organizations 

at the domestic, regional and international levels involved in the shaping of aviation 

environmental policies and regulations. As aviation environmental policy continues to 

evolve, it is becoming increasingly clear that a patchwork of regional schemes is ill-suited 

to addressing this inherently global industry. The current situation with the European 

Union’s ETS perhaps best exemplifies the problems with regional approaches to mitigating 

the environmental impact of aircraft operations. 

As noted, the ETS is the most expansive carbon trading program in existence today; and 

in 2008, the European Union voted to further expand its coverage to aviation. Although 

the expansion does not take effect until 2012, its anticipated negative economic impact 

on foreign air carriers has already provoked one lawsuit and more are sure to follow. 

The measure will impose a cap on aircraft emissions in EU airspace and penalize aircraft 

operators that exceed their allowance, regardless of the operators’ country of origin. 

Moreover, airlines will have to buy allowances for the carbon emitted during the entire 

distance of flights that land or take off in the European Union. Airlines object to the plan, 

arguing that on a flight from Los Angeles to London, for example, the majority of the 

emissions would occur outside EU airspace. Equally worrisome is the fact that there are 

no protections against a multitude of levies from other countries—including the European 

Union’s own individual member states—on the same emissions. 

The EU ETS clearly poses a financial threat to U.S. airlines that, following the conclusion of 

the initial EU-U.S. Open Skies agreement in 2007, have dramatically increased their flights 

to and from Europe.13 The United States Air Transport Association (ATA) estimates that U.S. 

airlines would pay several billion dollars in carbon credits in 2012 under the scheme. 

The ATA and three of its member airlines have challenged the legality 

of the unilateral extension of the EU ETS to international aviation, 

arguing that it violates international law as established by the Chicago 

Convention, along with the Kyoto Protocol and the terms of the U.S.-

EU Open Skies agreement. The suit, originally filed in the United 

Kingdom in December 2009, has been referred by the English High 

Court of Justice to the European Court of Justice (ECJ). The ATA and 

individual airlines serving as plaintiffs in the case consider the referral 

a small victory, as the ECJ has the authority to rule on the Europe-wide 

directive. Regardless of the ultimate outcome of the case, the issues 

it raises provide perhaps the most compelling rationale for a global 

approach to aviation emissions monitoring. 
17

Key Recommendations and Policy Initiatives

The challenges associated with modernizing airspace and addressing increasingly stringent 

global environmental concerns offer few simple or obvious solutions. There are, however, 

a number of actions that can be taken by government and industry stakeholders and 

policymakers—some small and tactical in nature, others more substantial and strategic—

that hold significant promise in helping position the U.S. civil aviation industry for a 

bright, sustainable future. At the same time, the flying public will enjoy the benefits of 

a substantially improved air travel experience, with fewer delays and other costly and 

inconvenient travel disruptions. The general public will reap the benefits of the improved 

system, too, in the form of safer, cleaner, quieter skies.

1. Design and implement a “cash for carbon” program to fund aircraft equipage. 

Historically, less than a quarter of total funding for FAA operations comes from 

federal tax dollars. The nation’s aviation infrastructure and related R&D is funded 

almost entirely by the users of the system, in the form or taxes and fees levied on 

passengers, fuel and freight. These monies are placed into the Aviation Trust Fund, 

which are then distributed in support of relevant capital improvements, including 

air traffic control facilities and equipment and FAA operations. However, even 

as NextGen effectively puts aviation infrastructure into the cockpit, the FAA and 

Congress have not acted on calls for spending federal dollars on aircraft equipage. 

Manufacturers and many operators generally favor federal funding for equipage, 

particularly in light of clear acknowledgements by the government that early 

equipage will accelerate NextGen and bring substantial economic and environmental 

benefits to all Americans. 

For a variety of reasons, the issue of NextGen funding may require a more pragmatic 

approach, including a deviation from past assumptions about the appropriate mix 

between government and private sector funding for transportation infrastructure 

and the mechanisms for financing such investments. On a practical level, the 

FAA is already fiscally constrained, bearing much of the cost to fund the groundbased infrastructure required for NextGen. Having the FAA directly and exclusively 

fund the airborne segment of the system seems unlikely, given government-wide 

budgetary pressures and the dire need to keep the agency on track with investments 

in the critical ground segment of the system. On the other hand, to ask the user 

community—including financially-challenged airlines and a general aviation 

community still buffeted by the impact of economic recession—to bear the burden 

of airborne equipage is also impractical. Clearly, the equipage funding issue needs 

more creative approaches that balance the concerns and constraints of government 

and industry. 
18

One such creative approach is the so-called “cash for carbon” concept, in recognition 

of the significant environmental benefits associated with NextGen. “Cash for carbon” 

is fundamentally a contract between government and industry, with both parties held 

accountable to measurable commitments. For operators, such commitments would 

include reduced CO2 emissions. For the FAA, progress might be measured through 

achievement of agreed metrics for improved system performance, or the completion of 

certain milestones such as specific airspace redesigns or air traffic controller training. 

Though the concept is still evolving at FAA—and relevant stakeholders continue to 

provide input to help shape the program—“cash for carbon” funding would likely 

support three key objectives: aircraft equipage, prioritized airspace redesigns and 

additional R&D activities under the CLEEN program. 

With respect to aircraft equipage—the largest and most important component of the 

program—“cash for carbon” could fund ADS-B In/Out, RNP and RNAV equipment for 

the airline industry, plus an additional 22,000 “high-end” general aviation platforms, 

including business jets and pressurized turboprops which typically operate in the same 

airspace with large commercial transports. The funding could come from government 

grants, government-backed loans, simple loans or a combination of the three. The 

administration’s recently announced “Transportation Infrastructure Bank” proposal 

would be an excellent source of funding for the “cash for carbon” initiative. Industry 

estimates that the equipment noted above could be purchased and installed over 

a four-year period beginning in 2012 for a cost of roughly $6B. The president’s 

infrastructure bank is a six year initiative that would be front loaded. Such a plan 

would be ideal for funding NextGen-enabling infrastructure as the economic and 

environmental benefits would be almost immediate and would help pay for later 

investments. Ideally, an infrastructure bank construct would dedicate NextGen related 

funds to the FAA for distribution based on specific criteria. 

In order to receive grants or loans from the transportation infrastructure bank, 

operators would have to sign on to the aviation industry’s commitment to CNG 

2020+. For those operators who fail to achieve CNG 2020+, the program would 

require repayment of grant money, higher interest rates on loan repayments and/

or the purchase of carbon offsets. As noted, the FAA would also have measurable 

responsibilities under the program, as investments in aircraft equipage will not yield 

operational or environmental benefits without corresponding investments by the FAA 

in ground infrastructure, airspace redesigns and other key implementation milestones. 

Under the “cash for carbon” program, the FAA would also continue to pursue airspace 

redesign projects that will further enhance the financial and environmental benefits 

of equipage for operators. Likewise, the agency would use a portion of the program’s 

funding to enhance its CLEEN program. By continuing to fund cutting-edge R&D in 

quieter, more environmentally-friendly engines, airframe designs and alternative fuels, 

the FAA will complement its investment in NextGen and help industry move closer to 

CNG 2020+. 
19

While the “cash for carbon” program would ultimately be voluntary, it addresses 

a number of operator concerns regarding the costs and benefits of equipage and 

aligns the goals of ATM modernization and environmental stewardship. Initial 

reaction from key groups representing the U.S. civil aviation industry—including 

aircraft equipment manufacturers and most operators—has been generally positive.

One potential shortcoming of the “cash for carbon” program is its lack of funding 

for the general aviation piston fleet. A significant number of operators in this 

category are individual recreational pilots, for whom the financial benefits of 

equipage are not especially strong and the environmental benefits on an individual 

aircraft basis do not appear significant. Nevertheless, the added safety margins 

afforded by ADS-B and PBN procedures may be especially compelling to these pilots, 

particularly those operating in marginal VFR flying conditions. An expansive ADS-B 

trial and demonstration program involving general aviation pilots in Alaska—notorious 

for its harsh flying conditions in terms of both weather and terrain—has shown dramatic 

improvements in safety. The FAA-sponsored program known as “Capstone” involved 

testing a suite of advanced avionics, including ADS-B, in the Yukon-Kuskokwim 

Region of Alaska. A 2004 study by MITRE and the University of Alaska found that, 

during the four-year period from 2000 to 2004, the rate of accidents for Capstoneequipped aircraft was reduced by 47 percent. 

As manufacturers work to make affordable ADS-B equipment tailored to the lowerend of the general aviation market, more individual owner-operators will make the 

investment, not just to improve safety, but also to receive better air traffic control 

coverage and service. Moreover, insurance premiums—a significant component of 

individual aircraft ownership costs—may be driven down across the industry as the 

new equipment proliferates. 

2. Establish a mechanism for addressing the issue of FAA ground infrastructure 

consolidation and modernization. 

Congress needs to establish a mechanism to consolidate FAA facilities. Depoliticizing the process will ensure the best possible outcome for the agency, the 

user community and the flying public. Expediting the removal of redundant systems 

and facilities will establish an appropriate architecture for investments in NextGen. 

Concern about potential air traffic controller job losses has been one of the primary 

stumbling blocks in past efforts to establish an independent commission for FAA 

facilities consolidation. However, the agency does not envision the transition to 

NextGen requiring fewer controllers. Rather, the same number of controllers (albeit 

in potentially fewer physical facilities) would be better equipped through NextGen 

infrastructure to handle more air traffic. With the potential for NextGen to add 

capacity to accommodate significant increases in traffic, there may, in fact, be a net 

increase in controllers, even as new technology allows them to perform their vital 

jobs more efficiently and with even greater safety margins. 
14 Figures provided by the FAA and cover expenditures through December 2009. 

20

“It’s absolutely imperative that we 

find a way to help FAA streamline its 

environmental review process. We must 

find a way to expedite environmental 

approval for navigation procedures that 

provide clearly defined environmental 

benefits based on clearly defined 

metrics.” 

– Lorraine Bolsinger, 

GE Aviation Systems President and CEO

3. Better integrate the NEPA process for NextGen-related airspace redesigns. 

The FAA must develop strategies to integrate NEPA review into the 

NextGen implementation planning process, thereby making these 

important environmental reviews less time-consuming and less costly. 

As part of that effort, the agency should continue to develop enhanced 

modeling tools specifically designed to support environmental impact 

analyses, including the Aviation Environmental Design Tool (AEDT) that 

is currently in beta testing. AEDT should ultimately replace existing 

tools that are focused on analyzing one emission type (noise or air) and 

facilitate evaluating trade-offs among all emissions produced by airspace 

alternatives at the national, regional and local level.

Top priority should be given to ongoing efforts by the FAA’s Office 

of Environment & Energy (AEE) to review the agency’s current NEPA 

practices and documentation to identify areas for improvement. Recommendations 

for improvement should be implemented quickly and focused on combining 

effective environmental review with reducing overall NEPA analysis time and level 

of required documentation. 

Efforts to further fast-track the NEPA process and move towards cleaner and 

quieter skies could potentially be facilitated by increased National Aeronautics and 

Space Administration (NASA) involvement. There is clearly a need for continued 

research on the health effects of noise and emissions from aircraft. As the nation’s 

lead agency in civil aeronautics R&D, NASA maintains an Airspace Systems Program 

(ASP) that performs relevant, foundational research in support of NextGen-related 

efficiency and environmental objectives. The excellent work of the ASP could have 

real, positive and immediate impacts on the civil aviation industry if it could more 

directly support FAA in the NEPA process. 

4. Extend Airport Improvement Program (AIP) grant eligibility to cover the 

development of RNAV, RNP and other NextGen technology-enabled approaches. 

The Airport Improvement Program (AIP) provides federal grants to airports, with 

funding typically limited to construction projects (runways, taxiways and aprons, 

for example) and expenditures on safety, emergency or snow removal equipment. 

The FAA has also spent over $5B in AIP funds since 1982 on the study and 

implementation of noise compatibility projects, including home and business 

soundproofing, land acquisition and noise monitors.14 This raises a potentially 

compelling economic argument for allowing AIP funds to cover the development 

of new approaches employing NextGen technologies and procedures, including 

RNAV, RNP and ground-based augmentation system (GBAS) approaches. Many of 

these procedures can be designed to avoid noise-sensitive areas and CDAs are 

significantly quieter than standard approaches. Using AIP funds for new approach 

development could reduce expenditures on physical noise mitigation projects, 

while simultaneously accelerating NextGen deployment.

If airports can partner with tenants to build more efficient approaches and 

departures, it will not only further incentivize aircraft equipage and provide 
21

“This is an important milestone in the 

deployment of RNP in the U.S. ... FAA 

and operators agree that this technology 

can provide significant environmental 

and economic benefits. The task before 

us now is to work together to integrate 

and deploy these advanced navigation 

procedures into the national airspace.”

– Steve Forte,

GE Naverus, General Manager

environmental benefits in the form of reduced noise and emissions, it has the 

potential to increase aircraft and passenger throughput, thereby generating 

additional revenue for the airport. The economic benefits of a more efficient, better 

served airport extend well beyond the airport perimeter to the broader community. 

Whether a business is looking to relocate its corporate headquarters or an airline 

is seeking to expand its service, the efficiency of the airport in question plays a 

critical role in the decision.

5. Expand the FAA’s Organization Designation Authorization (ODA) program to 

include designers and installers of PBN procedures.

Under the Organization Designation Authorization (ODA) program, the FAA has the 

ability to delegate a number of its statutorily-authorized functions to qualified, 

third-party organizations. ODA status has been generally limited to aircraft and 

related equipment manufacturers, air carriers, repair stations and other maintenance 

organizations. The ODA program does not extend to firms that design and install 

PBN procedures. 

However, because NextGen implementation is predicated on the installation of 

literally thousands of PBN procedures and the FAA lacks the resources to design 

and install these procedures in a timely fashion on its own, the agency recognized 

the need to enlist the support of third parties who specialize in the design and 

deployment of PBN procedures.

In September 2009, GE Naverus and Jeppesen—both leaders 

in the development and certification of PBN procedures 

around the world—were granted approval by the FAA to 

design and validate RNP flight paths under what is known 

as an Other Transaction Agreement (OTA). While the OTA 

does not allow the same latitude and responsibilities as an 

ODA, it does effectively engage the private sector in the 

development of navigation procedures.

Even with the assistance of capable third parties, the FAA 

still faces a daunting task in installing thousands of PBN 

procedures needed throughout the nation for full NextGen 

implementation. For this reason, extending full ODA status 

to qualified companies is still a worthy policy objective. Although the existing OTA 

process allows the FAA to contract with individual providers, it is a lengthy process 

undertaken only on a case-by-case basis. For example, the FAA-GE Naverus OTA took 

three years to produce its first public RNP approach. 

As a matter of policy, the busiest corridors and airports should receive top priority 

when it comes to installing and certifying RNAV and PBN procedures, a seemingly 

obvious recommendation, but one that is still not strictly adhered to as the buildout of the system moves forward. Finally, consistent with the recommendation 

above, contracting with third party PBN providers using AIP funds should be 

permitted. 
15 The JPDO is the central organization that coordinates the NextGen efforts of the Departments of Transportation, Defense, 

Homeland Security, Commerce, FAA, NASA and the White House Office of Science and Technology Policy

16 RTCA’s recommendations are used by the FAA as a basis for policy, program and regulatory decisions and by the private sector 

as a basis for development, investment and other business decisions.

22

“Both programs [NextGen and SESAR] aim 

to expand airspace capacity, ensure safety, 

protect the environment and improve 

service for aviation customers. Problems 

faced by the aviation industry require a 

global interoperability solution.”

– Nigel Makins, 

EUROCONTROL, SESAR-NextGen Liaison 

6. Ensure industry has significant involvement in addressing NextGen/SESAR 

harmonization challenges. 

Civil aviation is an inherently international enterprise, with its global reach 

continuing to grow as new markets for aviation products and services emerge and 

as new players seeking to address those markets increase. Long-term solutions to 

the industry’s most pressing problems must therefore be predicated on increased 

international cooperation. 

In the area of ATM modernization, it is vital that the United States and Europe 

continue to work together to harmonize technical and operational standards for 

their respective programs—NextGen and SESAR—as expeditiously as possible. 

While other high-growth regions of the world, particularly the Middle East and 

China, should be monitored and consulted on ATM modernization initiatives, it is 

highly likely that the United States and European Union efforts will set the pace 

for ATM improvements worldwide.

The recently signed Memorandum of Cooperation (MOC) between the FAA and the 

European Commission is a positive step in fostering government-to-government 

coordination in the area of NextGen/SESAR harmonization. The efforts extending 

from this MOC need to focus not just on technical cooperation, 

but also on finding practical solutions to bridge the gap between 

the programs’ respective implementation and equipage timelines. 

Moreover, for real progress to be made on interoperability, 

industry must have a more prominent role in the process and 

that role needs to extend beyond technical matters. The FAA and 

the Joint Planning and Development Office (JPDO) have created 

the NextGen Institute Management Council, an organization of 

industry and private sector aviation leaders, to support NextGen 

development and have formally engaged industry specialists to 

look at NextGen plans over the years. The JPDO, in particular, 

has been responsible for managing public-private partnerships—along with 

being the primary forum for coordinating the efforts of multiple government 

stakeholders—with the explicit goal of bringing NextGen online by 2025.15

However, the scope of the input from these industry representatives has often 

been confined to technical matters and the formal rulemaking process. In contrast, 

SESAR planning has been a government-industry partnership from the outset, with 

industry providing significant input on matters of program structure and timing, 

not just technical standards. 

The FAA has recently taken strides to more actively engage U.S. industry, most 

notably through the creation of a government-industry task force by RTCA, a notfor-profit corporation that functions as a Federal Advisory Committee (FAC) to the 

FAA.16 In January 2009, the FAA asked RTCA to form a group called Task Force 5 and 

charged it with making consensus-based recommendations pertaining to NextGen. 

The recommendations ultimately made by the task force—which included broad 
23

industry representation covering both operators and manufacturers—pertained to a 

number of technical, operational and programmatic issues.

Ideally, a well-coordinated, cross-Atlantic, government/industry panel designed to 

review NextGen/SESAR implementation plans would ensure milestones, standards 

and mandates are harmonized and practical. This will ensure that neither operators 

nor manufacturers have to contend with two different sets of standards. Creating 

trans-Atlantic harmonization is especially vital, given that operators and air traffic 

management organizations throughout the rest of the world will look to the United 

States and Europe for leadership and guidance as they move to equip their own 

aircraft and upgrade or create their own aviation infrastructure. 

7. Better leverage international forums like ICAO to create comprehensive global 

environmental standards. 

As essential as international cooperation is in the area of ATM modernization and 

capacity enhancements, it is perhaps even more important in addressing growing 

environmental concerns. Regional schemes to monitor and enforce aviation 

emissions like the European Union’s ETS are almost universally opposed by the 

broader international aviation community and have become emblematic of the 

problems associated with a fragmented system. 

ICAO has a long history of leading and coordinating industry-wide efforts to improve 

civil aviation’s environmental stewardship, including noise and NOx reduction, so 

the United States should support ICAO’s role in coordinating international policy 

that moves the industry to CNG 2020+. 

Likewise, the International Air Transport Association (IATA) would constitute an 

ideal partner for ICAO and the industry, acting as overall system administrator. In 

other words, ICAO would establish the global framework for CO2 reduction, and 

IATA would be responsible for collecting and reporting global fuel burn data. This 

division of responsibility plays to the strengths of each organization, both of which 

are long-standing, trusted players in the international civil aviation policy and 

operations community. 

Should this global sectoral approach to reduce aviation’s CO2 emissions include 

revenue-generating market measures, all or a significant portion of the fees paid by 

the airlines should be repatriated to the civil aviation industry, where the revenues 

can be used to fund ATM modernization programs, along with research into new 

airframe, engine and alternative fuel technologies.
17 Estimate provided by CAAFI.

24

8. Continue to foster deeper, broader partnerships between industry and 

government across multiple technology areas that have the ability to help the 

U.S. civil aviation industry achieve CNG 2020+. 

Cooperation in fundamental R&D between relevant government agencies and 

industry has enabled significant breakthroughs in civil aviation dating back to the 

earliest days of flight. The government can augment industry’s efforts to reach CNG 

2020+ by continuing to make targeted investments in the areas of aircraft engine 

design, airframe design and the development of sustainable alternatives to jet 

fuel. 

The FAA’s CLEEN program is an excellent example of such targeted investments, 

with industry partners advancing technology breakthroughs that could be 

incorporated in aircraft platforms in less than five years. NASA’s Environmentally 

Responsible Aviation (ERA) project is a similar effort, though it generally targets 

technologies that are slightly less mature, with an eye towards concepts that 

could be operational by 2025. The ERA program is focused primarily on the testing 

of unconventional aircraft configurations that feature reduced drag and reduced 

noise around airports, the development of composite structural concepts to reduce 

weight and improve fuel burn, and the testing of advanced, fuel-flexible combustor 

technologies that reduce engine NOx emissions. NASA is collaborating with the 

FAA and other federal agencies, airframe and engine manufacturers, and academic 

institutions on the ERA project. 

Another area that seems especially promising for advancing the goal of CNG 

2020+—given already impressive levels of cross-agency and governmentindustry cooperation—is alternative fuels research. The U.S. Air Force has been 

an important player in the development and use of alternative fuels and it has 

the potential to be a vital partner to the U.S. civil aviation industry in terms 

of advancing the commercial viability of biofuels. As the largest user of jet fuel 

within DOD, consuming roughly 2.4 billion gallons per year, the Air Force aims 

to have all aircraft in its current inventory—from fighters to tankers—certified 

to fly using alternative fuels by the end of 2012. The service has been especially 

aggressive in testing new biofuel blends. In March 2010, it successfully flew 

one of its A-10 jets using a combination of fuel derived from camelina oil and 

conventional jet fuel. The camelina plant is one of many feedstocks being 

investigated by the Air Force, which hopes to source 50 percent of its domestic 

aviation fuel from an alternative blend by 2016. 

While the Air Force is DOD’s leading user of jet fuel, its annual consumption is 

dwarfed by that of the U.S. civil aviation industry, which consumes roughly 10 

times that of the service.17 The Air Force is sharing its experience in alternative 

fuels—gleaned not just through recent demonstration flights, but through years 

of laboratory, rig and component testing—by closely cooperating with industry as 

part of the Commercial Aviation Alternative Fuels Initiative (CAAFI). 
”This recognition is a strong 

endorsement of CAAFI’s innovative 

public-private partnership and 

recognizes the tremendous joint 

effort leading to significant 

advancements for alternative jet 

fuels this past year.”

– Nancy LoBue, 

FAA Deputy Assistant Administrator for 

Policy, Planning and Environment

25

Since its founding in 2006, CAAFI has emerged as the focal point for collaboration 

between airlines, aircraft and engine manufacturers, relevant government agencies 

and energy producers in the area of alternative fuels. The organization’s sponsors 

include the FAA, along with three trade associations—AIA, ATA and the Airports 

Council International of North America (ACI-NA)—but its collaborative reach 

extends well beyond this important subset of sponsors, to include stakeholders 

from all corners of the international civil aviation industry. Over the last two years, 

CAAFI completed certification and qualification work that led to the approval of 

a new specification for alternative jet fuel that will facilitate near-term approval 

of a variety of sustainable plant-based biofuels.The organization has also been 

instrumental in creating unified R&D roadmaps to help inform investment decisions 

by both government entities and the private sector. 

In recognition of these and other key accomplishments, CAAFI was 

awarded the 2010 Air Transport World Joseph S. Murphy Industry 

Service Award, an honor bestowed on an individual or organization 

that has performed outstanding service benefiting commercial air 

travel. 

Building on the groundbreaking work of CAAFI, the recently launched 

“Farm to Fly” effort involves the airline industry (through ATA), 

Boeing and the U.S. Department of Agriculture (USDA), which 

serves as the lead agency within the U.S. government on feedstock 

development, production systems and other relevant areas. The 

initiative is an example of a unique industry-government partnership 

that epitomizes the type of cooperation that holds promise in moving 

industry towards CNG 2020+ while serving another important government objective. 

The three organizations plan to use regional opportunities and pilot programs to 

identify ways to meet the mutual goals of advancing sustainable aviation biofuels 

and promoting U.S. rural economic development. 

The ambitious goal of CNG 2020+ will only be achieved if government and industry 

can continue to work together, rationalizing financial investments and pooling 

technical expertise. The foundations for successful cooperation are already in 

place through programs like CLEEN, forums like CAAFI and initiatives like “Farm 

to Fly.” Building upon these strong foundations will enable future technological 

breakthroughs—from revolutionary engine and airframe designs to commercially 

viable biofuels—that firmly establish the civil aviation industry as the global 

benchmark for safe, environmentally-responsible transportation. 

27

Summary 

The companies that manufacture and service the aircraft that traverse our skies—from 

the largest platform designer to the smallest subcomponent supplier—have always been 

on the cutting edge of technological breakthroughs focused on making their products 

safer and more fuel-efficient. Their customers and the flying public have demanded 

nothing less; industry has always responded. The future of civil aviation depends on the 

entire industry—manufacturers and operators alike—continuing a steadfast commitment 

to advancing technologies and procedures that will allow aircraft to operate in a more 

efficient and environmentally-friendly way, without compromising the outstanding safety 

record the industry has built for itself. Clearly, modernizing the ATM infrastructure is a 

foundational objective that supports the complementary goals of safety, efficiency and 

environmental stewardship. The sooner a modernized ATM system is in place, the sooner 

every stakeholder—from the individual traveler to the global environment—will reap the 

far-reaching economic and environmental benefits of NextGen. 

But a steadfast commitment from industry is not enough. Government stakeholders at 

home and abroad must serve as partners to industry in achieving these critical goals. From 

harmonization of systems, standards and regulations, to financial support for equipage 

and foundational R&D in a wide range of technology areas, government involvement is an 

integral piece of the puzzle in meeting the capacity and environmental challenges facing 

the aviation community. 
Glossary of Acronyms and Terms

28

4DT 4-Dimensional Trajectories

ACI-NA Airports Council International of North America 

ADS-B Automatic Dependent Surveillance-Broadcast 

AEDT Aviation Environmental Design Tool 

AEE Office of Environment & Energy (FAA)

AIA Aerospace Industries Association

AIP Airport Improvement Program 

APU auxiliary power unit 

ASP Airspace Systems Program (NASA)

ATA Air Transport Association

ATM air traffic management

CAAFI Commercial Aviation Alternative Fuels Initiative

CATEX categorical exclusion

CDA Conintuous Descent Arrival

CEQ Council on Environmental Quality 

CLEEN Continuous Lower Energy, Emissions and Noise program

CNG 2020+ carbon neutral growth from 2020 and beyond

CNS communications, navigation and surveillance 

CO2 carbon dioxide

DOD Department of Defense

EA environmental assessment

EC European Commission 

ECJ European Court of Justice 

EIS environmental impact statement

ERA Environmentally Responsible Aviation program

ETS Emission Trading Scheme

EU European Union

FAA Federal Aviation Administration

FAC Federal Advisory Committee

FMS-ATM Flight Management System–Air Traffic Management 

FONSI finding of no significant [environmental] impact

GAO Government Accountability Office 
Glossary of Acronyms and Terms (continued)

29

GBAS ground-based augmentation system

GDP Gross Domestic Product

GHG greenhouse gas(es)

GPS Global Positioning System

IATA International Air Transport Association 

ICAO International Civil Aviation Organization

JPDO Joint Planning and Development Office 

MOC Memorandum of Cooperation

MRJ Mitsubishi Regional Jet

NASA National Aeronautics and Space Administration 

NEPA National Environmental Policy Act

NextGen Next Generation Air Transportation System 

NOx oxides of nitrogen

ODA Organization Designation Authorization 

OTA Other Transaction Agreement

PBN performance-based navigation

R&D research & development

RNAV Area Navigation

RNP required navigation procedures

RVSM Reduced Vertical Separation Minima

SESAR Single European Sky Air Traffic Management Research 

SSR Secondary Surveillance Radar

USAF United States Air Force

USDA United States Department of Agriculture