National Airspace System: Experts' Views on Improving the U.S. Air Traffic Control Modernization Program
Published: 2005-04-13T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In 1981, the Federal Aviation Administration (FAA) began a program to modernize the national airspace system and a primary component, the air traffic control (ATC) system. The ATC component of this program, which is designed to replace aging equipment and accommodate predicted growth in air traffic, has had difficulty for more than two decades in meeting cost, schedule, and performance targets. The performance-based Air Traffic Organization (ATO) was created in February 2004 to improve the management of the modernization effort. On October 7, 2004, GAO hosted a panel to discuss attempts to address the ATC modernization program's persistent problems. Participants discussed the factors that they believed have affected FAA's ability to acquire new ATC systems. Participants also identified steps that FAA's ATO could take in the short term to address these factors, as well as longer term steps that could be taken to improve the modernization program's chances of success and help the ATO achieve its mission. The participants included domestic and foreign aviation experts from industry, government, private think tanks, and academia. They are recognized for their expertise in aviation safety, economics, and engineering; transportation research and policy; and government and private-sector management.
section_title: What GAO Found
paragraphs: What Participants Said: Overall, the participants identified cultural, technical, and budgetary factors that, in their view, have affected the progress of ATC modernization. To address these factors, they proposed what one participant termed a "two-pronged" approach--simultaneously taking care of "the here and now" and building a "viable future" for the ATO. Cultural and Technical Factors Have Impeded ATC Modernization: According to participants, the key cultural factor impeding modernization has been resistance to change. Such resistance is a characteristic of FAA personnel at all levels, participants said, and management, in the experience of some, is more resistant than employees who may fear that new technologies will threaten their jobs. The key technical factor affecting modernization, participants said, has been a shortfall in the technical expertise needed to design, develop, or manage complex air traffic systems. Without the technical proficiency to "scrub" project proposals for potential problems early and to oversee the contractors who implement its modernization projects, they said, FAA has to rely on the contractors, whose interests differ from its own. Budgetary Factors Have Constrained ATC Modernization: The most immediate budgetary constraint, participants said, is the multibillion-dollar shortfall that FAA is projecting between available revenues and modernization needs over the next 4 years. Participants also identified features of the federal budget process as constraints, noting, for example, that the federal budget cycle is too long and inflexible to meet the needs of a dynamic ATC system that requires much more managerial freedom and short-term decision making. They further noted that the budget process is influenced by the political process, and that the funding for capital projects is sometimes spread out over so many years that technologies are out of date by the time they are deployed. Annual funding uncertainties discourage strategic and capital planning, they said, and the budget fails to show priorities and relationships among proposed investments. Short-term and Longer Term Changes Could Promote Success: Participants suggested that the ATO could facilitate cultural transformation by creating a vision and strategy that would unite stakeholders and by assembling project teams with different skills and interests whose members could forge common organizational interests by working together to solve common technology development problems. To help offset technical inadequacies, the participants suggested that the ATO could consult an advisory board, identify and consider purchasing needed technologies that other countries have developed, and hire more skilled engineers to provide in-house expertise. To address budgetary constraints, participants suggested, among other short-term steps, reducing spending to match revenues and developing strategies for presenting FAA's budget request more clearly to Congress. Longer term suggestions included giving the ATO the predictable funding and decision-making authority it needs to carry out a "sensible" capital investment plan.

section_title: Letter
paragraphs: In 1981, the Federal Aviation Administration (FAA) began what it initially  envisioned as a 10-year modernization program to upgrade and replace the  national airspace system’s (NAS) facilities and equipment to meet  projected increases in traffic volumes, enhance the system’s margin of  safety, and increase the efficiency of the air traffic control (ATC) system—a  principal component of the NAS. Through the ATC component of this  modernization program, FAA planned to acquire a vast network of radar,  navigation, communications, and information processing systems that  would enhance aviation safety and accommodate predicted growth in air  traffic in the NAS. However, the program has proved to be more  challenging than anticipated, in terms of both technology and management,  and FAA’s efforts to achieve desired improvements in performance have  typically taken longer and cost more than anticipated. As a result, planned  improvements in safety and capacity have been delayed, and the costs,  both of maintaining existing technologies and of replacing outdated ATC  systems and infrastructure, have grown. FAA no longer sees its  modernization program as a multiyear initiative with a defined end; rather,  it now sees the program as an ongoing investment in technological  advances designed to improve aviation safety and capacity. To date, FAA  has spent $43.5 billion on NAS modernization, and it expects to spend an  additional $9.6 billion through 2009, primarily to upgrade and replace ATC  facilities and equipment. Of the $43.5 billion spent thus far, about $25.1  billion, or 58 percent, has gone to ATC upgrades and replacements,  according to FAA.
To improve FAA’s management of the modernization program, Congress, in  1995, gave the agency acquisition and human capital flexibilities, which  FAA has largely implemented. According to our most recent work, FAA  has made important progress and improvements in its acquisition of major  systems, but the modernization program remains challenging and some  problems have persisted. In 2000, Congress and the administration took  further steps to improve the modernization program’s management.  Through legislation and an executive order, they laid the foundation for a  new, three-component structure, including an oversight body, called the Air  Traffic Services Subcommittee; a Chief Operating Officer; and the Air  Traffic Organization (ATO), a performance-based organization to manage  FAA’s ATC investments and operations. In February 2004, FAA merged its  Office of Air Traffic Services, Office of Research and Acquisitions, and Free  Flight Program Office to create the ATO. The new organizational structure  sought to break some of the existing “stovepipes” and bring together the  key organizational units responsible for, among other things, ATC  modernization.
The terrorist attacks of September 11, 2001, temporarily reduced airport  congestion, but a number of factors—including a drop in air traffic in the  years following the attacks, the economic slowdown, and an increase in  businesses’ use of low-cost carriers—led to a significant decline in airline  ticket tax receipts and in the Aviation Trust Fund, where the receipts are  deposited. Today, air traffic has rebounded to near pre-September 11 levels  and congestion is increasing, but the Aviation Trust Fund balance appears  to be smaller than expected. For fiscal year 2005, for example, FAA  reduced its original estimate of this fund balance by nearly $3.5 billion, and  the agency is reviewing its estimates for future years.
The House Committees on Government Reform and Transportation and  Infrastructure asked us to conduct a comprehensive review of the NAS  modernization program’s ATC modernization effort, the performance-based  organizational initiatives resulting in the creation of the ATO, and the  funding challenges that the changed budget situation poses for the  modernization program. As part of our efforts to respond to the  committees’ request, which we plan to address through two separate  ongoing studies, we convened a panel of international aviation experts and  asked them the following questions:     What factors have affected the schedule, cost, and performance of FAA’s  ATC modernization program, and what steps could the ATO take in the  short term to address these factors?
How have federal budget constraints affected ATC modernization, and  what steps could the ATO take in the short term to address these  constraints?
What steps could FAA take in the longer term to improve the  modernization program’s chances of success and help the ATO achieve  its mission?
This report summarizes the panelists’ responses to these and related  questions that arose during the panel discussions.
The panel consisted of foreign and domestic aviation experts from industry,  government, private think tanks, and academia. Their fields of expertise  included aviation safety, economics, and engineering; transportation  research and policy; and government and private-sector management.  Former FAA officials and current executives of the air traffic organizations  in Canada and the United Kingdom were among the experts, as was the  chairman of EUROCONTROL’s Performance Review Commission. In  addition, the Chief Operating Officer (COO) of the ATO presented an initial  briefing on the status of and plans for the ATO. He responded to questions  but did not remain for the panel discussion. (See app. I for a list of the  panelists.)
The panelists convened at the National Academies Keck Center in  Washington, D.C., on October 7, 2004, after reviewing background  materials and discussion questions that we provided in advance. The  background materials included reports by GAO, the Department of  Transportation’s Office of Inspector General (DOT/IG), FAA, and other  government organizations; industry publications; studies supporting and  opposing the corporatization of air traffic services; and a comparative  Performance Review Commission report. information from some of our issued reports and work in progress, in the  italicized text at the end of each major section of this report. (See Related  GAO Products at the end of this report for a list, by topic, of reports,  testimonies, and other products we have issued in recent years on topics  related to those discussed by the panel.) Otherwise, this report summarizes  the collective discussion by topic and does not necessarily represent the  views of any individual panelist, GAO, or the National Academies. We did  not verify the panelists’ statements, although we did ask the panelists, in  some instances, to clarify certain details. See appendix II for GAO contacts  and staff acknowledgments.
subsections: section_title: Limitations and Qualifications
paragraphs: The discussion summarized in this report should be interpreted in the  context of two key limitations and qualifications.
First, the panel was only an initial step in a possible long-term, evolving  effort to develop and sustain discussion on ATC modernization. As such, it  brought together generalists, rather than specialists, to address broad  themes and consider how to organize a more comprehensive approach.  Because our scope was limited, we could not include a large number of  leading experts, institutions, and networks involved in specialized efforts.  Furthermore, although many points of view were represented, the panel  was not representative of all potential stakeholders.
Second, even though we, in cooperation with the National Academies,  conducted preliminary research and heard from national experts in their  fields, a day’s conversation cannot represent the current practice in this  vast arena. More thought, discussion, and research are needed to develop  greater agreement on what we really know, what needs to be done, and  how to do it.
These two key limitations and qualifications provide contextual  boundaries. Nevertheless, the panel provided a rich dialogue on ATC  modernization, and the panelists developed strong messages in responding  to each of the three questions. Those messages are highlighted below.
section_title: Panelists Identified Cultural and Technical Factors That Have Affected ATC Modernization and Suggested Short-term Steps to Address Them
paragraphs: The panelists attributed many of the ATC modernization program’s chronic  problems to cultural and technical factors. In particular, they cited  resistance to change at all levels within the agency and insufficient  technical expertise as key factors impeding modernization. They identified  multiple, currently available options for addressing these factors.
subsections: section_title: Panelists Cited Resistance to Change as a Key Cultural Factor Impeding Modernization
paragraphs: very resistant” to having private organizations, rather than FAA, develop  new procedures and systems for FAA to approve and institute.
Several panelists saw resistance to change as a consequence of federal  employment—of the security that comes from having a regular paycheck,  cost-of-living pay increases, and protections against layoffs. A government  organization is insulated from the economic pressures that the private  sector faces, one of the panelists indicated. In his view, federal employees  do not have the firsthand experience with layoffs and business failures to  understand, as private aviation industry employees do, why improvements  to the ATC system’s efficiency are needed to help revitalize the struggling  aviation industry.
Other panelists emphasized the reluctance of management to change.  According to a panelist with experience in restructuring a foreign air traffic  organization, the senior and middle managers could not or would not  adjust to the change and had to be let go within the first 2 years. The other  employees also had difficulty adjusting and were still adjusting in some  respects, he said, but getting management on the right page was the real  challenge. Another panelist emphasized that cultural change starts at the  top and questioned why the ATO’s new COO had, according to the  panelist’s count, replaced only two top managers in the ATO and simply  reassigned other managers. Still another panelist suggested that cultural  change within the ATO alone would not be sufficient to ensure the ATO’s  success, because so much of the ATO’s fate depends on other  organizations, including FAA, DOT, the Office of Management and Budget  (OMB), and Congress.
A number of panelists described the air traffic controllers’ union as also  resistant to change. According to one panelist, for example, the union  delayed the adoption of technologies such as the User Request Evaluation  Tool (URET) because some controllers saw them as a threat to its  membership. Another panelist cited the union’s long-term opposition to  the implementation of a software program that tracks productivity—a key  measure for a performance-based organization. The union is “very  political,” several panelists asserted, and one panelist charged that it was  “hindering the progress” of a performance-based organization.
Resistance to change can be an issue outside FAA as well as within it,  panelists noted. For example, one panelist questioned how much support  the ATO was getting from DOT, OMB, and congressional committees for  changing “some extremely entrenched political fiefdoms.” Another panelist  said that he had found the congressional authorizing committees amenable  to changes, but the appropriators liked things the way they were.
section_title: Panelists Suggested Steps That the ATO Could Take in the Short Term to Address Cultural Impediments to Modernization
paragraphs: what is expected of them, how they fit into the strategy, and what the  vision is for their organization.
In addition to having a vision, another panelist said, it is important for  the ATO to tie that vision to the user constituency, not confine it to the  agency. FAA cannot do everything alone from the inside, because  airplanes and airports, for example, need to be equipped with the  technologies that will help realize the vision.
Employing a team concept could help overcome resistance to the  implementation of new technologies, according to another panelist.  Putting engineers, finance people, controllers, and electronic  technologists together, all on the same team, he said, could unite them  as they moved through the stages of implementation. Therefore, when  the time comes to field a technology, the focus would be on getting it up  and running and operating safely—not, the panelist implied, on  obstructing its implementation because it might threaten jobs.
A change in management’s approach could go a long way toward  overcoming controllers’ and other employees’ resistance to change, one  panelist noted. One foreign air traffic organization changed its whole  approach to the unions and the staff, started talking to them as people,  and began executing “participative working” programs, according to the  panelist. Union representatives and managers take the same courses  together and address issues of affordability together, he said, and, as a  result, controllers’ pay has increased, costs have dropped, and  productivity has risen. The key to these positive results, he said, is  psychological change—managers have stopped seeing employees as a  problem and have started to see them as part of the solution.
According to other panelists, however, people find it very difficult to  change, and the only way to bring about a cultural transformation is to  replace those who resist change, either by allowing them to retire or by  hiring others to take their places. In the corporate world, one panelist  observed, a new executive brings in a new management team to support  a cultural turnaround. The new team is then loyal to the new executive.  In the view of this panelist, the COO’s hiring of only two new managers  and reassignment of other managers would not be sufficient to turn the  ATO’s culture around. Another panelist further noted that an executive  in the private sector replaced the top 200 people in his organization to  achieve the transformation he was seeking.
section_title: Panelists Said FAA Personnel Lack Technical Expertise Needed to Develop Complex Systems and Oversee Contractors Effectively
paragraphs: Technical as well as cultural factors have impeded ATC modernization,  according to several of the panelists. In the words of one speaker, FAA does  not have “the engineering technical capability to deal with an extremely  complex, highly nonlinear adaptive system that's got technical safety risk  as a key technical parameter.” According to another panelist, FAA does not  apply rigorous systems engineering expertise early in nonadvocate  technical reviews of project proposals to scrub them for potential issues.  As a result, a number of FAA’s programs—including complex ones such as  the Wide Area Augmentation System (WAAS), as well as more  “straightforward” ones such as the Standard Terminal Automation  Replacement System (STARS) and the Next-Generation Air-to-Ground  Communications System (NEXCOM)—had fundamental system  engineering technical issues that were not identified early in the program.  The risks were not mitigated, and the programs experienced significant  cost growth and schedule increases. “The system engineering organization  in FAA is nothing more than a process organization,” another panelist said.  “The power resides with the program manager. It doesn’t matter what the  systems engineering people do, their job is to keep doing plans and  processes. They think that meetings are products.” good job, but who certainly have a different motivation from FAA. As this  panelist put it, FAA lacks a rudder, in a technical sense, for modernization.
section_title: Panelists Suggested Steps That the ATO Could Take in the Short Term to Address Insufficient Technical Expertise
paragraphs: To help address its lack of technical expertise, panelists suggested, the ATO  could obtain advice from an independent board or information from other  countries on technologies that they have already adopted. The panelists  proposed some immediate steps that the ATO could take to address this  deficiency, including the following:  A technical advisory board made up of system engineers could review  proposals for FAA and demand the kinds of data and tests needed to  scrub the proposals and identify any big roadblocks.
Hiring skilled engineers instead of relying on contractors might enable  the ATO to develop systems more economically and efficiently, one  panelist suggested. This panelist described how a foreign air traffic  services organization develops new ATC systems in-house and seldom  uses contractors. It now utilizes its engineers to build systems rather  than manage contractors. As a result, he said, it is now developing the  systems it needs faster and at less cost.
Maximizing the use of commercial inputs was the recommendation of  another panelist, who said that FAA needs to get out of the business of  designing systems. According to him, most companies no longer  develop their own large, complex systems; instead, they get other  people to do that for them in the private sector. Another panelist also  emphasized the availability of technical expertise in the private sector.  However, according to a third panelist, commercial systems have a  shorter economic service life than the systems that FAA designs.
The ATO could profitably take advantage of the experiences of other  countries’ air traffic organizations, which are technically as good as FAA  ever was or ever will be, one panelist said. He maintained that the ATO  should institute “a fundamental requirement and a cultural expectation”  that it will review existing technologies before it buys or tries to develop  its own. With a multibillion-dollar budget for software and other  information technology, he said, the ATO has ample opportunity to save  money.
In his opening remarks and in responding to panelists’ questions, the  ATO’s COO made a number of observations on FAA’s culture. He also  noted that FAA plans to train or hire people with needed skills to address  shortfalls in technical expertise. The following summarizes some of his  key observations on FAA’s culture and provides additional information  from previous GAO reports and work in progress on how FAA is  addressing some of the cultural and technical factors panelists identified  as affecting ATC modernization: Recognizing that cultural factors can play a critical role in an  organization’s success, the ATO has initiated organizational changes  that are designed to create a foundation for cultural change and deliver  benefits to customers efficiently. For example, the ATO  established collaborative teams of technical experts and ATC system   reorganized air traffic services and the research and acquisition  organization along functional lines of business to bring stakeholders  together and integrate goals, as well as reward cooperation by linking  investments to operations;    reduced layers of management from 11 to 7 to help address the  hierarchical nature of the organization; and  conducted an organizationwide activity value analysis to determine  the full range of activities that ATO headquarters is engaged in, the  value customers place on those activities, and the potential for  conducting any of those activities more effectively and efficiently. indicating a desire to improve the flow of information within the agency  by sending a large number of detailed e-mails in response to a call for  recommendations to improve internal communications.
In the past, according to the ATO’s COO, FAA’s management culture was  “intensely hierarchical, risk averse,” and “reactionary.” But now, he  said, FAA is attempting to foster “results-focused, proactive and  innovative behavior.” Changing the agency’s leadership model is also  designed, he said, to replace a “personality-driven culture” with a  sustainable, stable, viable organization that can make rational decisions  that transcend changes in political leadership.
The ATO is trying to better align FAA’s priorities and stakeholders’  interests by developing a strategy map that captures the outputs desired  by the ATO’s owners and customers, along with the outputs that must be  achieved. Called the Strategic Management Process, this effort borrows  heavily from a private-sector model and uses the ATO’s strategic goals  and objectives to drive investment decisions. According to FAA, the  strategy map will enable owners and customers to clearly understand  both the services that the ATO is providing and the effects of products in  development on those services. As a result, FAA says, future budgetary  conversations will revolve around the desired level of service, instead of  focusing on a product, as past discussions typically did. According to  FAA, the Strategic Management Process will ensure linkage between  FAA’s operating and capital budgets.
To become a “performance-based organization” and identify customer  groups and their service needs, the ATO created “value-based”  performance metrics; that is, it defined its performance in terms of  customers’ needs and connected efforts to satisfy those needs with cost.  Ultimately, the ATO wants to know how much every unit of output costs  so that it can allocate and compare costs and measure productivity.  Thus, each organizational unit and facility is developing applicable  metrics for performance so that the ATO can compare costs, identify  factors that affect costs, and use this information to improve  performance. For example, each en route facility is determining its  hourly cost to control flights. The ATO can then compare and analyze  these costs to identify positive and negative factors affecting  performance and productivity. plan is a response to a congressional mandate, based on a  recommendation we made in 2002, that FAA develop a plan for  addressing an impending wave of controller retirements and deal with  productivity issues.
section_title: Panelists Said Funding Shortfall and Features of the Federal Budget Process Affect ATC Modernization and Suggested Short-term Steps to Address Them
paragraphs: The panelists identified and discussed the impact of funding constraints  and the federal budget process on ATC modernization. In their view, the  most immediate issue is a critical shortage of funds to meet the current  modernization program’s plans and users’ demands. Additionally, they said,  the federal budget process is slow, inflexible, and influenced by the  political process; annual appropriations are uncertain and discourage  planning; and the budget fails to show investment priorities and  relationships between FAA’s capital and operating budgets. The panelists  suggested a number of steps that the ATO could currently take to address  these challenges.
subsections: section_title: With Funding Shortfall, Flight Delays May Gradually Increase, Panelists Said
paragraphs: Panelists viewed the ATO’s apparent fiscal shortfall—which one panelist  said would amount to a 20 percent deficit in 4 years—as a severe challenge.  In terms of operations, the panelist said, this deficit was more likely to have  a gradual than an immediately catastrophic onset. He did not expect to see  major system outages but predicted, instead, “a slow but sure increase in  delays.” However, as another panelist said, if the ATO did not carefully  analyze demand and determine how that demand could be served, the ATO  would find itself facing what a third panelist referred to as a “perfect  storm,” reiterating a term the ATO itself has used.
Severe reductions in the funding for ATC modernization, if required to  address the currently projected shortfall, could exacerbate what one  panelist described as the government’s traditional underfunding of the ATC  system’s capital requirements. According to this panelist, the government  undercapitalizes any complex, rapidly evolving operational system,  including the ATC system, and overestimates the economic service lives of  information technology investments. Whereas the government typically  assumes such investments will last for 15 years, he said, a 7-year estimate  would be more reasonable. showing large deficits. They suggested, for example, that FAA and DOT  officials might be unwilling to publicly release data that could raise  questions about their management.
section_title: Funding Air Traffic Services through the Budget Process Is Slow and Inflexible, Some Panelists Said
paragraphs: Several panelists maintained that the federal budget cycle is too long and  inflexible to meet the needs of an ATC system. According to one panelist, it  is “impossible” to run the U.S. ATC system within the classic federal  structure. Such a “dramatic,” “dynamic” system requires “more managerial  freedom, much more day-to-day, week-to-week, month-to-month decision- making,” he said. The federal budget process freezes plans for the system  12 or 18 months in advance, but for an ATC system to succeed, “you’ve got  to be 12 or 18 days ahead.”
The budget procedure requiring that capital investments be funded out of  annual appropriations means that major acquisitions generally take many  years to implement and projects may continue to be implemented even  after they have outlived their usefulness. Particularly when annual  appropriations fall short, panelists noted, projects’ development and  deployment may be delayed and their costs may increase with time.  Furthermore, until the acquisitions are completed, the benefits of the new  technologies are deferred, aging equipment may pose risks to users, and  outdated software may require costly upgrades. By the time the  acquisitions are fully deployed, panelists said, they may be out of date.
section_title: Panelists Described the Effects of the Political Process on the Federal Budget
paragraphs: technology as New York, despite resource constraints and major  differences in air traffic demand.
The political process influences budget decisions in the administration as  well as in Congress, some panelists said. According to one panelist,  Congress has generally supported FAA’s modernization program, but  funding difficulties have ensued because the budget is consolidated and  there are always pressures on it. Other panelists added that the ATO would  have difficulty “deliver the bad news”—that is, publishing a business  plan that projects deficit scenarios—unless revenue increases are  forthcoming. According to this panelist, OMB would deny any requests for  increased funding and would, instead, tell the ATO to find another way of  doing business.
section_title: Panelists Said Uncertain Annual Funding Discourages Effective Planning
paragraphs: Panelists noted that funding from annual appropriations is uncertain, and  that this uncertainty is incompatible with strategic and capital planning.  The amount of money available for appropriation each year cannot be  predetermined, one panelist said, and the size of the appropriation may  vary from year to year. This uncertainty focuses attention on which  technology will receive the funding (the inputs) rather than on what  improvements in safety or capacity the technology is supposed to deliver  (the outputs), he said. In debating whether this investment or that  investment should receive funding, planners have lost sight of the big  picture, he suggested, and the ATO has spent most of its capital investment  dollars on sustaining and maintaining existing systems. Only about 14  percent of its expenditures, he recalled, were for flight enhancement. “Who  anywhere would have a capital investment plan that was predominantly  about standing still?” he asked.
Another panelist also considered the federal budget process incompatible  with strategic planning. In his words, “it is absolutely a problem at FAA”  that “budget drives strategy and strategy does not drive budget.” Although  FAA is good at forecasting demand, he said, it does not evaluate “the  anatomy of demand” and determine how that demand will be served.  Panelists noted, for example, that the number of regional jets, low-fare  airlines, and unmanned aerial vehicles are increasing, but FAA has not  developed a business model or plans for managing the increased air traffic.
Congress,” one panelist said, rather than integrated, organized, and  periodically revised. Another panelist observed that FAA asks for more  than it can get and then carries the difference over from year to year,  creating “a bow wave” of unfunded requests for capital projects that it  seldom reduces. Furthermore, as a third panelist pointed out, the budget  process establishes incentives for unrealistic planning:  Project managers  first overpromise capabilities and underestimate costs to increase the  chances that new projects will be accepted. Then, after projects are  accepted, they overestimate costs because they assume their requests will  be cut. Although managers could include options in their budget  submissions to indicate what could be accomplished at different funding  levels, they do not do so because they assume items identified as options  will be cut. Finally, managers are reluctant to revise ongoing projects  because they do not want to be seen as fickle. By contrast, another panelist  said, a private company that operates under a board of directors and  obtains revenue from customers does not have incentives to play budget  games to get projects approved. “Your money is your own money,” he said.
section_title: Some Panelists Believed That the Federal Budget Fails to Show Priorities and Relationships
paragraphs: Some panelists criticized the federal budget for failing to show priorities  and relationships among proposed investments. In the budget, one panelist  said, “everything is as important as everything else.” Another panelist  observed that the budget sets no capital investment priorities. According to  a third panelist, a line item budget tears apart a highly layered,  interdependent system and does not reveal synergies between projects.  Then, when the budget request goes to Congress, he said, “you have no  opportunity to try to explain to anybody the interconnections of these  programs.” As a result, when the appropriators decide not to fund a project,  they may not understand how their decision will affect other projects. firewall discourages analyses of life-cycle costs and may lead, in some  instances, to investments in technologies that end up in a warehouse  because the ATO cannot afford to operate them. Similarly, another panelist  observed that the separation of capital and operating costs in FAA’s  accounting system makes it difficult to see the implications of capital  investment decisions for operating costs, even though “everything we put  in the field winds up increasing the ops budget.” Furthermore, as another  panelist noted, the firewall makes it difficult to see the relationship  between software replacement (capital) and maintenance (operating)  costs. Thus, decisions to postpone purchases of new or upgraded software  may save capital investment costs, but rising maintenance requirements  may increase operating costs. Eventually, he said, the maintenance costs  may “far exceed” the replacement costs.
Finally, other panelists said, the budget is not integrated to show what  investments buy in terms of productivity, safety, or environmental benefits,  and FAA’s capital budget fails to show the impact of investments on the  country. This can lead to mismatches—that is, to funding projects that will  provide limited benefits for users.
section_title: Panelists Identified Short- term Steps within the Budget Process and Other Steps That the ATO Could Take under Its Existing Authorities to Address Budget Constraints
paragraphs: While recognizing the magnitude of the ATO’s projected funding shortfall  over the next few years, the panelists identified a number of steps that the  ATO could take to address its current financial situation. These steps  included accepting the budget process as it is and reducing spending to  match revenues, developing strategies for presenting the ATO’s budget  request more clearly to Congress, implementing regulatory and procedural  changes to allow the use of existing cost-saving technologies, contracting  with the private sector to provide certain air traffic services, and obtaining  information on other countries’ ATC technologies and on international  technical standards.
subsections: section_title: Short-term Steps within the Budget Process
paragraphs: realistically be funded and to review and cut its programs in light of the  current budget constraints.
This panelist also recommended looking at longer term alternatives to  annual appropriations that are available within the government and  work well for other organizations, such as “working capital accounts  and all kinds of industrial funding schemes.”
Another panelist encouraged the ATO to focus its capital investment on  avoiding outages—that is, on replacing equipment that would otherwise  fail. This panelist also said that FAA needs a customer-oriented business  strategy and a business plan.
One panelist, who observed that operating costs account for about  three-quarters of the ATO’s total costs, suggested that the upcoming  wave of air traffic controller retirements would create “an opportunity  to redistribute and even to trim the work force in some areas,” as well as  reduce personnel costs by offering incentives for early retirement.
Improving controllers’ productivity would be another way to save  money, a fourth panelist said, but he characterized his suggestion as  “touch the third rail of aviation politics.”
Another panelist emphasized the importance of starting to plan now to  accommodate the airplanes that are being bought today to provide  service for the next generation, which he variously estimated at 20, 30,  or 40 years.
For example, one panelist said that the ATO needed to understand the  interconnections between ATC systems and break the big picture into  nuggets so that it could clarify for the appropriators why they should not  break apart the ATO’s capital investment plan and selectively fund only  some components.
Another panelist maintained that the ATO could mitigate the effects of  the firewall between its capital and operating budgets by modifying its  budget submissions to show the future cost implications of current  investment decisions.
section_title: Steps outside the Budget Process under Current Authorities
paragraphs: Several panelists identified options outside the budget process that the  ATO could pursue under its current authorities. They said, for example,  that the ATO could pursue procedural and regulatory changes that would  take advantage of existing technologies to increase capacity, pilot test  contracts with the private sector to provide certain air traffic services, and  obtain information on technologies and procedures developed in other  countries that could be used in the United States.
Regulatory and Procedural Changes Could Allow the Use of  Existing Technologies to Enhance Capacity and Efficiency Several panelists discussed the potential benefits of a more widespread use  of a concept called area navigation (RNAV), which allows operators of  properly equipped aircraft to use onboard navigation capabilities to fly  desired flight paths without requiring direct flight over ground-based  navigation aids. This provides for more direct routing, avoiding suboptimal  routes prescribed by conventional “highways in the sky” that are defined by  point-to-point flying over ground-based navigation aids. The RNAV concept  and a major new method for exploiting it, called required navigation  performance (RNP), permit flight in any airspace as long as aircraft have  been certified to meet the required accuracy level for navigation  performance. RNAV and RNP hold promise for saving system users time  and money—largely by reducing flight times and fuel consumption by  allowing users to fly shorter routes or avoid bad weather. In addition, RNAV  and RNP could potentially increase the capacity of the ATC system to  handle air traffic by reducing the required distance (separation) between  aircraft equipped with advanced navigation capabilities if the aircraft can  safely operate closer to one another than FAA’s regulations currently allow. able to use these capabilities to their full potential in the United States  because FAA has not approved procedures for its use. However, the airlines  are “crying for” FAA to approve RNP, one of the panelists said, because  aircraft equipped with RNP capabilities could then fly alternative rolling,  moving routes to avoid weather delays. Service would improve for  travelers, and the airlines would avoid the substantial costs of delays, he  said. Implementing RNP could also eventually lower the ATO’s costs,  another panelist said, since RNP does not require any ground equipment.
RNP technologies have been installed on larger aircraft for so long that  some aircraft equipped with the technologies have already been retired to  the desert, one panelist said. In addition, pilots have been trained to use the  technologies, and the technologies are already being used in some other  countries, including Canada, where a private airline company (West Jet)  developed implementation procedures in collaboration with the Canadian  ATC regulatory agency and the Canadian air traffic management  organization.
As a first step toward obtaining FAA’s approval of procedures for using  RNP, a panelist said, the ATO could make policy announcements to set a  tone and direction. These announcements would enlist the user  community’s support at little or no cost to the ATO, give the ATO an early  success, and help tie customers to the ATO’s mission. However, he also  cautioned, it would be important for FAA to implement RNP in a way that  did not “disenfranchise” general aviation interests and regional carriers  whose aircraft are not already equipped with RNP technologies.
Two panelists expressed concerns about the government’s approach to  regulating the use of onboard navigation equipment and the associated  procedures needed to implement RNP. According to one of these panelists,  FAA has “the wrong conceptual framework” for developing regulations to  implement new procedures. Its current approach is disproportionate, he  said, because it establishes the same safety standards for aircraft of all  sizes. “We can’t keep treating airplanes that need 100 cubic miles of  airspace the same from a cost and benefit point of view as airplanes that  need a quarter cubic mile of airspace,” he said. In his view, FAA needs to  revise its approach to assessing and balancing risks. He maintained that the  role of regulatory management on the evolution of the ATC system has  been underestimated and called for significant investment in understanding  risk management.
The other panelist who expressed concerns about the government’s  regulatory approach argued that navigational technology is evolving and  shifting from ground-based to cockpit-based systems. He maintained that  “you’ve got to get aircraft closer and closer together to be able to increase  capacity,” and said that the government should allow the ATO to change its  policies on aircraft separation to permit “the technology that exists on  airplanes today to do the job.” He suggested that the private sector could  assume the cost of capitalizing the equipment, but “the government’s got to  allow that technology to be used, and it hasn’t.”
Although one panelist emphasized the importance of conducting thorough  technical evaluations of RNP to identify any roadblocks to its use, the  panelists generally considered it a highly promising, low-cost option for the  ATO to improve service. One panelist recommended that the ATO create  incentives, such as the right to fly in preferred airspace, for users that equip  their aircraft with RNP technologies, to lower the ATO’s costs. determined in its favor. The panelists, who generally assumed that the  private sector could provide flight service station services and other air  traffic services more efficiently than the government, suggested that if  contracting for flight service station services proved to be effective, FAA  could contract for other air traffic services, such as oceanic, night, en  route, or airways facilities services. The A-76 process would then serve not  only as a way of saving money but also as “a pilot program for how things  could get done,” one panelist said. In the view of another panelist, ongoing  government oversight would ensure the safety of contracted operations,  and “staged outsourcing” of the NAS’s functions might build confidence in  the private sector’s ability to provide air traffic services safely and  efficiently.
Obtaining Information on Other Countries’ ATC Technologies and  on International Technical Standards Could Help the ATO Save  Costs Obtaining information on technologies and procedures that other countries  have already developed could help the ATO control costs, as well as help  compensate for its lack of technical expertise, panelists noted. “We should  be using and sharing” the technologies that have already been invented,  one panelist said. According to his organization, the air navigation service  business worldwide spends $3 billion to $4 billion a year on writing code  for air traffic management software, and “at least half of that” is writing  code for “something that’s already been invented and…works just fine  somewhere else.” on the systems that are already running in countries, their performance,  and their cost.
Sharing information on technical standards with international  organizations could also help the ATO avoid costly investments in  technologies whose standards were incompatible with those of other  countries. A shared vision is crucial for a globally based air traffic system,  one panelist said. If every country or continent had its own technical  standards—a North American switch, a European switch, a South  American switch, and an Australian switch, for example—an international  system could not function effectively.
The following provides additional information from the ATO’s COO and  from previous GAO reports and work in progress on how FAA is  addressing some of the funding shortfalls and features of the federal  budget process that panelists identified as affecting ATC modernization:  The ATO’s COO believes that good financial management means linking  FAA’s capital and operating budgets. Previously, FAA developed separate  capital (Facilities and Equipment) and operating (Operations) budgets.  But the ATO recognizes that capital expenditures directly affect  operating costs over time, and therefore the two budgets must be  developed together. Creating this linkage is important for the ATO to  respond to concerns expressed by its owners and customers as well as to  address internal issues, such as training, staffing, pay disparities, and  infrastructure. Using the Strategic Management Process to drive budget  decisions will help to ensure the establishment and maintenance of a  linkage between the capital and operating budgets. financial management systems it has been putting in place. As steps  toward that goal, the ATO expects everyone to learn the difference between  cost and cash flow and get a better handle on unit costs as better cost  accounting data become available. To gain a more complete  understanding of its costs, FAA is revising its cost accounting practices  and changing from a cash flow to a total cost business model for the ATO,  and the ATO is developing management training in cost accounting and  budgeting. Moreover, FAA plans to finish putting a new cost accounting  system in place by 2006 that will allow it to assign, track, and better  control costs.
In the fall of 2004, FAA updated its cost estimates in light of OMB’s  revenue projections for the next 4 years and arrived at a cumulative  shortfall for the period of $5 billion for the operating budget and $3.2  billion for the capital budget. According to FAA, a business plan that the  ATO was preparing at that time will show, when completed, how large a  funding gap the ATO faces and how far it will have to go to address that  gap. Whatever the exact size of the gap may be, FAA says that it is  prepared to identify and eliminate redundancies in the NAS and to  review its long-term ATC modernization priorities.
FAA has already taken some steps to control the costs of ATC  modernization. For example, it has adopted the phased approach to  implementing new ATC systems that it used under Free Flight Phase 1,  called “build a little, test a little.” This approach relies on the early and  ongoing investment of stakeholders, who review the progress of new  projects regularly and identify critical omissions and “no go” items that  would prevent a system from operating as intended. Reviews of three  projects with cost, schedule, and performance issues that our reports had  identified—the Local Area Augmentation System, Controller-Pilot Data  Link Communications, and Next-Generation Air-to-Ground  Communications System—led FAA to reduce the funding for them in  FAA’s fiscal year 2005 budget request. The ATO says it plans to continue  this phased approach to acquiring new systems. customers that do equip. Now, during the first phase, FAA is  implementing the redesign at very high altitudes. In January 2005, FAA  doubled the airspace routes between 29,000 feet and 41,000 feet by  spacing aircraft 1,000 feet apart instead of 2,000 feet. The procedure,  invisible to passengers, is called Reduced Vertical Separation Minimum  and is expected to save airlines $400 million in fuel costs during the first  year. As technology allows, FAA says, more flight altitude levels will be  added. Currently, FAA is implementing a number of improvements to  airspace and procedures using RNP. In addition, according to FAA, five  airports are developing RNP-based procedures in partnership with  airlines that favor RNP.
section_title: Panelists Suggested Structural Changes to Improve the ATO’s Chances of Success over Time
paragraphs: While recognizing that the ATO could make some progress in addressing its  cultural, technical, and budgetary challenges under its current authorities,  the panelists generally agreed that structural changes would increase the  ATO’s chances of success. These changes, which would give the ATO a  more predictable source of funding and greater decision-making authority,  would generally require legislative action and take time to implement. To  give the ATO a more predictable source of funding, panelists suggested that  it be authorized to establish and manage user fees, rather than rely on  appropriated tax receipts, and that it be allowed to issue revenue bonds  backed by these fees. To give the ATO greater decision-making authority,  panelists proposed restructuring it to streamline and strengthen its  management and provide its managers with the tools needed to address its  challenges. These changes would allow the ATO to implement a “sensible”  capital investment program; hire the technical expertise it needs; achieve  cost efficiencies; and offer better, more responsive service. Additionally,  panelists said, restructuring could resolve the conflict of interest inherent  in FAA’s dual responsibility as the regulator and the operator of air traffic  services.
subsections: section_title: Some Panelists Considered the Steps Taken to Create a Performance-Based Air Traffic Organization Insufficient for Its Success
paragraphs: When Congress authorized the ATO’s creation and generally implemented  the Mineta Commission’s organizational recommendations without  implementing its funding recommendations, it produced an anomaly—that  is, an organization charged with becoming performance-based but deprived  of the means to transform itself, according to one panelist. Other panelists  also portrayed the ATO as an organization that is charged with operating  like a business but is not provided with the management tools available to a  business. In their view, the ATO’s chances for success are limited because  the COO is being asked to turn the organization around without being given  the tools to do so. One panelist, who said he was skeptical about the ATO’s  ability to act like a business when it is not really one, suggested that it was  only at the margins that the creators of the ATO had replicated a business.  According to him, the ATO is still largely a government organization and  therefore remains subject to most governmental constraints.
section_title: Panelists Said a User Fee System Would Give the ATO a More Predictable Source of Funding and Link Air Traffic Services with Demand
paragraphs: Replacing airline ticket taxes with a user fee and allowing the ATO, rather  than Congress, to manage the collected fees is a step that many panelists  considered essential for the ATO’s success. While recognizing that such a  fee would be controversial, since the costs for most users would likely  increase, the panelists maintained that it would produce a more  predictable, reliable funding stream than the annual appropriations  process. and helps preclude spending for “gold-plated things that don't affect the  true performance of the system and drive the costs up completely  unnecessarily.” Without a direct connection to the users and their mission,  another panelist said, “evolution takes very unintended and very  undesirable paths over long periods of time.” As long as the customers are  not directly paying the bills and providing the resources, still another  panelist maintained, “it’s going to be very hard to bring about real change”  and make the ATO “a customer-driven, customer-servicing organization.  The ones who pay the bills are the ones you respond to and serve,” he  concluded.
While panelists generally favored a user fee system, they cautioned care in  proposing and implementing one. As one panelist said, the fee question,  once raised, would be all-consuming and would require the expenditure of  political capital. In his view, it was critical that the ATO wait to achieve  some successes before seeking a user fee system. Another panelist called  for figuring out “not only what problem we’re solving, but what problems  we might be likely to create,” and noted that the government would have to  consider what it was incentivizing through user fees. For example, if the fee  was based on weight, he said, it might “incentivize even smaller planes and  more planes,” thereby increasing demands on the ATC system’s capacity.  Another issue that would have to be worked out, is how the common costs  of air traffic services (e.g., the costs of activities in the ATC system  operated by the Department of the Air Force) should be allocated— whether users should pay only for the incremental costs of the services  they use, as most users would argue, or whether some cross-subsidies  should continue. Another panelist pointed out that implementing a user fee  alone would not guarantee efficiency, because the air traffic services  provider could simply raise the fee when costs increased and the users  would have to pay, since the service is a monopoly. Some method of  controlling costs would have to be built into the system, he said.
Most panelists correctly assumed that legislation would be required to  institute a user fee system. Specifically, a user fee system could be  implemented in a government or a public-private type of air traffic services  organization. However, one panelist cautioned, it would be “fatal” to  implement the fee in any way that did not make the ATO financially  independent of Congress. Once the airlines and general aviation users  started to pay a fee to finance the ATO, then the ATO should be held  accountable to them, he said, and “FAA should not be getting approval from  government to spend its budget.”
section_title: Panelists Said Borrowing Authority Would Provide the Funding for Efficient Capital Investment
paragraphs: Revenue bonding based on a new user fee stream would create an  “alternative to capital starvation,” one panelist said. Even if the user fee  stream initially produced no more revenue than the airlines are now paying  in aviation-related taxes, he said, the ATO could reap a “transition  dividend” during the first 5 or 10 years after the bonds are issued, limiting  its annual outlays to the debt service on the bonds. To facilitate the airlines’  recovery, he suggested, the ATO could cut what the airlines pay and “still  have a robust modernization program being financed by the revenue  bonds.” He characterized this strategy as “money that’s lying on the  sidewalk waiting to be picked up” and saw it as an opportunity to buy some  new equipment in bulk and get it installed before it becomes obsolete. Such  a “sensible” approach would not be possible with annual appropriations, he  said.
section_title: Further Organizational Restructuring Could Streamline and Strengthen the ATO’s Management
paragraphs: Panelists maintained that the ATO’s organizational placement, combined  with its dependence on Congress for funding, limits the COO’s ability to  make decisions and take actions. The COO is not a Chief Executive Officer,  as one of the panelists observed. Instead, he reports to his “owners”—who  include the FAA Administrator and the DOT Secretary, who in turn receive  direction from the administration (the President and OMB Director) and  Congress. oversight authority, making the subcommittee purely advisory.  Consequently, he said, there is no oversight group that is expected to  provide constructive criticism of FAA, and FAA does not get “the kind of  constructive advice that you might hope for.” According to a third panelist,  Europe’s Performance Review Commission provides such constructive  advice for EUROCONTROL, the European air traffic management  organization. The commission serves as a panel of independent advisers  and costs about $2.5 million a year, he said, and “it’s well worth the  investment.”
According to several panelists, the ATO’s COO lacks the management tools  that would be available to a private-sector CEO. His ability to plan  modernization projects, set program priorities, and implement new  technologies is constrained because the FAA Administrator, DOT  Secretary, and OMB Director can revise his budget request and Congress  can make further changes in the ATO’s budget. In addition, the 20-year  vision of the Joint Planning and Development Office (JPDO) is at odds  with the ATO, according to one panelist, because it looks forward to the  ATC system of 2025, rather than helping the ATO address its immediate  funding needs. Other panelists observed that the controllers’ union  influences management’s decisions.
The COO lacks key financial data needed to determine, analyze, and  manage the ATO’s costs. When he was “parachuted” into the ATO, as one  panelist put it, he did not have the numbers he needed to know where the  ATO stood because FAA did not maintain basic information on the costs  and value of existing systems, reducing the ATO’s potential to be data  driven. As a result, he spent most of his first year overseeing the  implementation of a cost accounting system and collecting other key data. their performance is constrained because their terms of employment and  compensation are based largely on negotiated agreements rather than on  performance. In addition, salary caps limit FAA’s ability to pay for technical  expertise.
section_title: Restructuring Could Resolve the Conflict of Interest Inherent in FAA’s Dual Role as the Regulator and the Operator of Air Traffic Services
paragraphs: As one panelist observed at the end of the panel, the ATO’s creation did not  address the structural conflict of interest that exists because FAA is both  the regulator and the operator of air traffic services. “We didn’t have arms  length regulation of air traffic control in FAA,” he said, “and the ATO didn’t  do anything to accomplish that.” Another panelist noted that when his  country restructured its air traffic organization, it immediately eliminated  the same structural conflict of interest, and “overnight” the regulator  became more effective and the operator’s safety performance “significantly  improved.” According to the first panelist, other countries that have  reorganized their air traffic organizations have also instituted arms’ length  regulation if they did not have it already. “We remain one of the few places  that somehow thinks that self-regulation is a good idea, in spite of sort of  overwhelming evidence in lots of arenas that it's not a very good idea,” he  said.
The following is additional information from the ATO’s COO and from  previous GAO reports and work in progress that indicates how FAA is  addressing some of the structural changes that panelists proposed to  improve the ATO’s success over time:  In addition to the business plan that the ATO is developing to guide and  improve its operations and financial management, FAA has worked to  develop three longer term planning documents. First, it has published its  Flight Plan for 2005 through 2009, a multiyear strategic effort that sets a  5-year course for FAA in the areas of safety, capacity, international  leadership, and organizational excellence. Second, it has developed a  rolling 10-year effort, called the Operational Evolution Plan (OEP),  through which FAA plans to increase the capacity of the NAS by one- third. Finally, FAA is participating in a multiagency effort, sponsored by  the JPDO, to develop a national plan for aviation in 2025 and beyond.  Both the OEP and the JPDO’s plan are designed to meet the Flight Plan’s  commitment to help the NAS flow smoothly and meet future needs.  According to FAA, the Vice President of the Operations Planning Service  Unit in the ATO is also the Director of the JPDO, helping to ensure  integration of near-term and long-term planning.
According to the ATO’s COO, the restructuring of U.S. air traffic services  that has taken place thus far, through the establishment of a performance- based air traffic organization, constitutes “the first building block” of the  longer term effort to transform the aviation system envisioned in the  JPDO’s 20-year plan. According to the COO, this vision of the U.S.  aviation system will incorporate both technologies and processes.  However, he acknowledged that the ATO has not yet connected this long- term vision with the financial and other challenges it currently faces. He  said that his goal is to establish an organization that can execute the  long-term vision and manage not only its finances but also its future— an organization that can, in effect, ensure the viability of the long-term  vision. Over time, he said, he plans to expand the OEP to include a  strategy and the JPDO’s long-term vision, thereby “tie the vision to  the viability of the future.” The OEP will then be “not just a set of  projects,” but a project plan with a vision and a strategy that goes out 20  years. But given the current budget constraints, he conceded, the path to  that goal is not clear.
In March 2004, FAA created the Air Traffic Safety Oversight Service  (AOV), under FAA’s Office of Aviation Safety. This step established  separate reporting relationships for the ATO, which is responsible for  managing the ATC system, and for the AOV, which is responsible for  ensuring the safety of changes to air traffic standards and procedures.  The establishment of the AOV responds directly to a recommendation by  the 1997 National Civil Aviation Review Commission that safety  oversight of FAA’s traffic function be provided by a separate part of the  agency. Although both organizations remain within FAA, under the FAA  Administrator, they are less closely joined than they were previously.  Hence, this step is a positive move toward providing “arm’s length”  safety oversight, although it does not go as far as placing the two  organizations in separate federal agencies or removing one of the  agencies from the federal government altogether.
section_title: Concluding Observations
paragraphs: At our request, the panelists concluded the panel with their parting  thoughts on the day’s discussion, including any advice they had for FAA or  for Congress. Overall, the panelists were united in their desire for the ATO  to succeed, but they generally agreed that its opportunities for success  were constrained within a government system. For many, the steps taken  thus far to create a performance-based organization were insufficient, in  large part because the ATO lacks control over its revenues and funding  priorities, and the ATO still had a long way to go to achieve its goals.
Some panelists stressed the importance of progressing by small steps  within the existing system, at least for the time being. Such small steps  might include obtaining good performance and cost information, scoping  programs in accordance with current budget projections, contracting out  some air traffic services, and obtaining outside expertise from systems  engineers and other technical and management experts. It was critical, one  panelist said, for the ATO to “have some small early practical successes” to  enlist the political support of the user community and help tie the  customers to the ATO’s mission.
Other panelists focused on the obstacles within the system that they  believed would impede or prevent success. Among the obstacles they cited  were the counterproductive incentives inherent in the budget process, the  government’s refusal to allow new air traffic technologies to be used, and  opposition to organizational and technological change. It was important,  one panelist said, to overcome this opposition by describing “the difference  between how things are and how they might be.” Descriptions of  accomplishments elsewhere, together with actions to implement whatever  safeguards and regulatory framework might be necessary, could perhaps  make the argument for change “compelling,” he said.
Still other panelists looked to the future, calling for international technical  benchmarks to promote efficient development, business models that take  into account operational trends (e.g., the growing market share of regional  jets and low-fare airlines) and incentives to help users overcome cost  barriers to acquiring new technologies. As one panelist said, “we have to  target the future mix of real operations that we’re really going to see, not  build the world’s most perfect system from 1956.”
Despite their reservations about the ATO’s potential for success as a  government organization, the panelists generally agreed that stakeholders  should not “allow the concept of privatization to be the enemy of moving  forward with the ATO,” as one panelist said, or “sacrifice the good for the  better” in the words of another. Instead, taking a two-pronged approach— telling people “what’s to be done now to get results” and telling them “that  they have an obligation to build for the future”—would be the best way, in  the view of most panelists, for the ATO to meet its immediate and longer  term challenges.
section_title: GAO Panel Members
paragraphs: Clinton V. Oster, Jr. (Panel Moderator)  Professor of Public and Environmental Affairs, School of Public and Environmental Affairs, Indiana University  Anthony J. Broderick  Independent Consultant  Former FAA Associate Administrator for Regulation and Certification  Steven R. Bussolari  Assistant Division Head, Tactical Systems Division  Manager, Air Traffic Control System Group, Lincoln Laboratory,  John W. Crichton  President and CEO, NAV Canada  George L. Donahue  Director, The Center for Air Transportation Systems Research, George  Former FAA Associate Administrator for Research and Acquisition John J. Fearnsides  Professor of Public Policy, George Mason University  Chief Strategist and Partner of MJF Strategies Xavier Fron  Head, Performance Review Commission, EUROCONTROL  Richard Golaszweski  Executive Vice President, Gellman Research Associates (GRA), Inc.
Ian Hall  Director of Operations, National Air Traffic Services, United Kingdom Thomas Imrich  Chief Pilot, Research, Boeing Commercial Aircraft  Satish C. Mohleji  Principal Engineer, Center for Advanced Aviation System Development,  The MITRE Corp.
Robert W. Poole, Jr.  Director of Transportation Studies, Reason Foundation  Michael Powderly  President, Airspace Solutions  John A. Sorensen  Chief Executive Officer, Seagull Technology, Inc.
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Elizabeth Eisenstadt, Brandon  Haller, Bert Japikse, Maren McAvoy, Beverly Norwood, and Richard Scott  made key contributions to this special product.
section_title: Related GAO Products
subsections: section_title: Cultural and Technical Factors
paragraphs: Air Traffic Control: FAA Needs to Ensure Better Coordination When  Approving Air Traffic Control Systems. GAO-05-11. Washington, D.C.:  November 17, 2004.
Air Traffic Control: FAA’s Acquisition Management Has Improved, but  Policies and Oversight Need Strengthening to Help Ensure Results. GAO-05-23. Washington, D.C.: November 12, 2004.
Air Traffic Control: System Management Capabilities Improved, but  More Can Be Done to Institutionalize Improvements. GAO-04-901.  Washington, D.C.: August 20, 2004.
Information Technology: FAA Has Many Investment Management  Capabilities in Place, but More Oversight of Operational Systems Is  Needed. GAO-04-822. Washington, D.C.: August 20, 2004.
Federal Aviation Administration: Plan Still Needed to Meet Challenges to  Effectively Managing Air Traffic Controller Workforce. GAO-04-887T.  Washington, D.C.: June 15, 2004.
Air Traffic Control: FAA’s Modernization Efforts--Past, Present, and  Future. GAO-04-227T. Washington, D.C.: October 30, 2003.
National Airspace System: Current Efforts and Proposed Changes to  Improve Performance of FAA’s Air Traffic Control System. GAO-03-542.  Washington, D.C.: May 30, 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.
National Airspace System: Status of FAA’s Standard Terminal  Automation Replacement System. GAO-02-1071. Washington, D.C.:  September 17, 2002.
National Airspace System: FAA’s Approach to Its New Communications  System Appears Prudent, but Challenges Remain. GAO-02-710.  Washington, D.C.: July 15, 2002.
Air Traffic Control: FAA Needs to Better Prepare for Impending Wave of  Controller Attrition. GAO-02-591. Washington, D.C.: June 14, 2002.
Air Traffic Control: Role of FAA’s Modernization Program in Reducing  Delays and Congestion. GAO-01-725T. Washington, D.C.: May 10, 2001.
National Airspace System: Problems Plaguing the Wide Area  Augmentation System and FAA’s Actions to Address Them. GAO/T-RCED-00-229. Washington, D.C.: June 29, 2000.
Aviation Acquisition: A Comprehensive Strategy Is Needed for Cultural  Change at FAA. GAO/RCED-96-159. Washington, D.C.: August 22, 1996.
section_title: Budgetary Factors
paragraphs: FAA Budget Policies and Practices. GAO-04-841R. Washington, D.C.:  July 2, 2004.
Air Traffic Control: FAA’s Modernization Efforts--Past, Present, and  Future. GAO-04-227T. Washington, D.C.: October 30, 2003.
National Airspace System: Current Efforts and Proposed Changes to  Improve Performance of FAA’s Air Traffic Control System. GAO-03-542.  Washington, D.C.: May 30, 2003.
National Airspace System: Reauthorizing FAA Provides Opportunities  and Options to Address Challenges. GAO-03-473T. Washington, D.C.:  February 12, 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.
National Airspace System: FAA’s Approach to Its New Communications  System Appears Prudent, but Challenges Remain. GAO-02-710.  Washington, D.C.: July 15, 2002.
National Airspace System: Free Flight Tools Show Promise, but  Implementation Challenges Remain. GAO-01-932. Washington, D.C.:  August 31, 2001.
section_title: Structural Issues
paragraphs: Federal Aviation Administration: Challenges for Transforming Into a  High-Performing Organization. GAO-04-770T. Washington, D.C.: May 18,  2004.
National Airspace System: Current Efforts and Proposed Changes to  Improve Performance of FAA’s Air Traffic Control System. GAO-03-542.  Washington, D.C.: May 30, 2003.