Next Generation Air Transportation System: FAA Has Made Some Progress in Implementation, but Delays Threaten to Impact Costs and Benefits
Published: 2011-10-05T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: This testimony discusses the current progress toward implementing the Next Generation Air Transportation System (NextGen). NextGen will impact nearly every aspect of air transportation and will transform the way in which the air transportation system operates today. It will do so, in part, by (1) using satellite-based surveillance as opposed to ground-based radars, (2) using performance-based navigation instead of cumbersome step-by-step procedures, (3) replacing routine voice communications with data transmissions, and (4) organizing and merging the disjointed data that pilots, controllers, airports, airlines, and others currently rely on to operate the system. The Federal Aviation Administration (FAA) has been planning and developing NextGen since 2003, and is now implementing near-term (through 2012) and mid-term (through 2018) capabilities. Over the years, concerns have been raised by the Congress and other stakeholders that despite years of effort and billions of dollars spent, FAA has not made sufficient progress in deploying systems and producing benefits. In past reports, we have made a number of recommendations to FAA to address delays in development and acquisitions, improve its processes, and focus on accountability and performance. Others have also made recommendations to FAA to improve its implementation of NextGen. For example, the Department of Transportation's Office of the Inspector General recently made recommendations regarding specific NextGen programs, and the NextGen Midterm Implementation Task Force--whose creation was requested by FAA--resulted in consensus recommendations from industry on specific capabilities FAA should prioritize. Over the last 2 years, FAA has taken several steps and instituted many changes to address several of these issues. This statement today discusses (1) the results of NextGen programs and improvements to date and (2) ongoing issues that will affect NextGen implementation. This statement today is based on our NextGen-related reports and testimonies over the last 2 years; ongoing work for this subcommittee that includes our analysis of selected NextGen acquisitions and our analysis of FAA's efforts to harmonize NextGen with air traffic control modernization efforts in Europe; our review of FAA's 2025 Strategic Plan, 2011 NextGen Implementation Plan, 2012 Budget Submission, and other documents; and selected program updates from FAA officials.
section_title: What GAO Found
paragraphs: In summary, FAA has improved its efforts to implement NextGen and is continuing its work to address critical issues that we, stakeholders, and others have identified over the years. In some areas, FAA has implemented NextGen capabilities that have demonstrated measurable benefits for system users, such as fuel savings. FAA has also made progress in streamlining its processes, improving its capacity to develop new flight procedures, and focusing its efforts on specific procedures that are needed in key metropolitan areas. Furthermore, we found that several NextGen-related acquisitions are generally on time and on budget. However, some acquisitions have been delayed, which has impacted the timelines of other dependent systems, and the potential exists for other acquisitions to also encounter delays. These delays have resulted in increased costs and reduced benefits. Going forward, FAA must focus on delivering systems and capabilities in a timely fashion to maintain its credibility with industry stakeholders, whose adoption of key technologies is crucial to NextGen's success. FAA must also continue to monitor how delays will affect international harmonization issues, focus on human factors issues, streamline environmental approvals, mitigate environmental impacts, and focus on improving management and governance.

section_title: Letter
paragraphs: I appreciate the opportunity to testify before you today on the current  progress toward implementing the Next Generation Air Transportation  System (NextGen). NextGen will impact nearly every aspect of air  transportation and will transform the way in which the air transportation  system operates today. It will do so, in part, by using satellite-based surveillance as opposed to ground-based radars, using performance-based navigation instead of cumbersome step- organizing and merging the disjointed data that pilots, controllers,  by-step procedures,  replacing routine voice communications with data transmissions, and  airports, airlines, and others currently rely on to operate the system.
The Federal Aviation Administration (FAA) has been planning and  developing NextGen since 2003, and is now implementing near-term  (through 2012) and mid-term (through 2018) capabilities. Over the years,  concerns have been raised by the Congress and other stakeholders that  despite years of effort and billions of dollars spent, FAA has not made  sufficient progress in deploying systems and producing benefits. In past  reports, we have made a number of recommendations to FAA to address  delays in development and acquisitions, improve its processes, and focus  on accountability and performance. Others have also made  recommendations to FAA to improve its implementation of NextGen. For  example, the Department of Transportation’s Office of the Inspector  General recently made recommendations regarding specific NextGen  programs, and the NextGen Midterm Implementation Task Force—whose  creation was requested by FAA—resulted in consensus  recommendations from industry on specific capabilities FAA should  prioritize. Over the last 2 years, FAA has taken several steps and  instituted many changes to address several of these issues.
My statement today discusses (1) the results of NextGen programs and  improvements to date and (2) ongoing issues that will affect NextGen  implementation. This statement today is based on our NextGen-related  reports and testimonies over the last 2 years; ongoing work for this  subcommittee that includes our analysis of selected NextGen acquisitions  and our analysis of FAA’s efforts to harmonize NextGen with air traffic  control modernization efforts in Europe; our review of FAA’s 2025  Strategic Plan, 2011 NextGen Implementation Plan, 2012 Budget  Submission, and other documents; and selected program updates from  FAA officials. The GAO reports cited in this statement contain more  detailed explanations of the methods used to conduct our work. We  performed our work in accordance with generally accepted government  auditing standards.
In summary, FAA has improved its efforts to implement NextGen and is  continuing its work to address critical issues that we, stakeholders, and  others have identified over the years. In some areas, FAA has  implemented NextGen capabilities that have demonstrated measurable  benefits for system users, such as fuel savings. FAA has also made  progress in streamlining its processes, improving its capacity to develop  new flight procedures, and focusing its efforts on specific procedures that  are needed in key metropolitan areas. Furthermore, we found that several  NextGen-related acquisitions are generally on time and on budget.  However, some acquisitions have been delayed, which has impacted the  timelines of other dependent systems, and the potential exists for other  acquisitions to also encounter delays. These delays have resulted in  increased costs and reduced benefits. Going forward, FAA must focus on  delivering systems and capabilities in a timely fashion to maintain its  credibility with industry stakeholders, whose adoption of key technologies  is crucial to NextGen’s success. FAA must also continue to monitor how  delays will affect international harmonization issues, focus on human  factors issues, streamline environmental approvals, mitigate  environmental impacts, and focus on improving management and  governance.
subsections: section_title: FAA Has Implemented Aspects of NextGen That Have Produced Measurable Benefits, but Delays Threaten to Increase Costs and Impact Overall Implementation
paragraphs: FAA has made progress in several areas to improve its implementation of  NextGen. FAA has set performance goals for NextGen through 2018,  including goals to improve the throughput of air traffic at key airports by  12 percent over 2009 levels, reduce delays by 27 percent from 2009  levels, and achieve a 5 percent reduction in average taxi-time at key  airports. The setting of NextGen performance goals is a positive step, but  much work remains in identifying measurable and reasonable  performance metrics and targets for specific NextGen activities.
FAA has undertaken a number of NextGen initiatives to improve system  efficiency. For example, FAA has begun work to streamline its procedure  approval processes—including its environmental reviews of new  procedures—and has expanded its capacity to develop new performance- based navigation routes and procedures. In 2010, FAA produced over  200 performance-based navigation routes and procedures, exceeding its  goal of 112. FAA reports thousands of gallons of fuel savings from the  performance-based navigation routes in operation at Atlanta and the  continuous descents being used into Los Angeles and San Francisco.  However, aircraft operators have complained that FAA has not produced  the most useful or beneficial routes and procedures to date. To address  these concerns, FAA has undertaken thorough reviews in a number of  areas. FAA has completed initial work to identify improvements needed in  the airspace in Washington, D.C.; North Texas; Charlotte, North Carolina;  Northern California; and Houston, Texas—focusing on routes and  procedures that will produce benefits for operators. While the specific  benefits from this work are not yet fully known, FAA expects to achieve  measurable reductions in miles flown, fuel burn, and emissions from  these actions. In addition, airport surface management capabilities—such  as shared surface surveillance data and new techniques to manage the  movement of aircraft on the ground—installed in Boston and New York  have saved thousands of gallons of fuel and thousands of hours of taxi- out time, according to FAA.
With respect to the continuing implementation of NextGen systems and  capabilities, our ongoing work has preliminarily found that some key  NextGen-related programs are generally proceeding on time and on  budget (see table 1).
Some key acquisitions may soon encounter delays, which can increase  overall acquisition costs, as well as costs to maintain current systems. For  example, delays in implementing the ERAM program is projected to  increase costs by $330 million, as well as an estimated $7 to $10 million  per month in additional costs to continue maintaining the system that  ERAM was meant to replace. Moreover, due to the integrated nature of  NextGen, many of its component systems are mutually dependent on one  or more other systems. For example, ERAM is critical to the delivery of  ADS-B because ADS-B requires the use of some ERAM functions. ERAM  is also pivotal to the on-time implementation of two other key NextGen  acquisitions—Data Communications and SWIM. In part due to ERAM’s  delay, FAA pushed the Data Communications program’s start date from  September 2011 to February 2012, plans to revise the original SWIM- segment 1 cost and schedule plan, and delayed the SWIM-segment 2  start date from 2010 to December 2012. The long-term result of this  decision is not yet known but it could delay certain SWIM capabilities and  hinder the progress of other capabilities that depend, in turn, on the  system integration that SWIM is intended to provide. Thus, looking more  broadly, the implementation of NextGen—both in the midterm (through  2018) and in the long term (beyond 2018)—will be affected by how well  FAA manages program interdependencies.
Delays in program implementation, as described above, and budget  constraints have also affected FAA’s capital budget planning. The  Administration has proposed reducing FAA’s capital budget by a total of  $2.8 billion, or 20 percent, for fiscal years 2012 through 2015 largely due  to governmentwide budget constraints. Most of this proposed reduction is  on NextGen and NextGen-related spending, as reflected in FAA’s revised  5-year Capital Investment Plan for fiscal years 2012 through 2016.  Congress has not completed FAA’s appropriation for fiscal year 2012, but  current House and Senate appropriation bills propose to fund the agency  near or above 2011 levels. FAA will have to balance its priorities to  ensure that NextGen implementation stays on course while also  sustaining the current infrastructure—which is needed to prevent failures  and maintain the reliability and efficiency of current operations.
section_title: FAA Faces Several Ongoing Issues That Will Affect NextGen Implementation
paragraphs: To maintain credibility with aircraft operators that NextGen will be  implemented, FAA must deliver systems and capabilities on time so that  operators have incentives to invest in the avionics that will enable  NextGen to operate as planned. As we have previously reported, a past  FAA program’s cancellation contributed to skepticism about FAA’s  commitment to follow through with its plans. That industry skepticism,  which we have found lingers today, could delay the time when significant  NextGen benefits—such as increased capacity and more direct, fuel- saving routing—are realized. A number of NextGen benefits depend upon  having a critical mass of properly equipped aircraft. Reaching that critical  mass is a significant challenge because the first aircraft operators to  equip will not obtain a return on their investment until many other  operators also equip.
Stakeholders have proposed various equipage incentives. For example,  one such proposal is for a private equity fund, backed by federal  guarantees, to provide loans or other financial assistance to operators to  help them equip, with payback of the loans dependent on FAA meeting its  schedule commitments to implement capabilities that will produce  benefits for operators. In addition, the NextGen Advisory Committee has  begun to identify the specific avionics requirements for particular NextGen  capabilities through the midterm, as well as identifying who—in terms of  which parts of the fleet operating in which regions—should be targeted for  additional incentives to equip.
Our past and ongoing work examining aspects of NextGen have  highlighted several other challenges facing FAA in achieving timely and  successful implementation. For this statement, we would like to highlight  a few specific areas: the potential effect of program delays on  international harmonization efforts, the need for FAA to ensure that it  addresses human factors and workforce training issues to successfully  transition to a new air transportation system, the need for FAA to continue  to address potential environmental impacts, and the need for FAA to  improve the management and governance of NextGen.
Effect of delays on FAA’s ability to collaborate with Europe.
Delays to NextGen programs, and potential reductions in the budget  for NextGen activities, could delay the schedule for harmonization  with Europe’s air traffic management modernization efforts and the  realization of these benefits. FAA officials indicated that the need to  address funding reductions takes precedence over previously agreed  upon schedules, including those previously coordinated with Europe.  For example, FAA officials responsible for navigation systems told us  that FAA is restructuring plans for its ground-based augmentation  system (GBAS) because of potential funding reductions. While final  investment decisions concerning GBAS have yet to be made, these  officials said that FAA might have to stop its work on GBAS while  Europe continues its GBAS development, with the result that Europe  may have an operational GBAS, while FAA does not. A delay in  implementing GBAS would require FAA to continue using the current  instrument landing system which does not provide the benefits of  GBAS, according to these officials. Such a situation could again fuel  stakeholder skepticism about whether FAA will follow through with its  commitment to implementing NextGen, and in turn, increase airlines’  hesitancy to equip with NextGen technologies.
Need to address human factors and training issues. Under  NextGen, pilots and air traffic controllers will rely to a greater extent  on automation, which will change their roles and responsibilities in  ways that will necessitate an understanding of the human factors  issues involved and require that training be provided on the new  automated systems. FAA and the National Aeronautics and Space  Administration (NASA)—the primary agencies responsible for  integrating human factors issues into NextGen—must ensure that  human factors issues are addressed so that controllers, pilots, and  others will operate NextGen components in a safe and efficient  manner. Failure to do so could delay implementation of NextGen. We  recently reported that FAA has not fully integrated human factors into  the development of some aviation systems. For example, we noted  that controllers involved in the initial operations capabilities tests of  ERAM at an air traffic control center in Salt Lake City found using the  system cumbersome, confusing, and difficult to navigate, thus  indicating that FAA did not adequately involve controllers who operate  the system in the system’s early development. In response to our  recommendations in that report, FAA has created a cross-agency  coordination plan in cooperation with NASA that establishes focus  areas for human factors research, inventories existing facilities for  research, and capitalizes on past and current research of all NextGen  issues. In addition to integrating human factors research into NextGen  systems, FAA and NASA will have to identify and develop the training  necessary to address controllers’ and pilots’ changing roles, and have  this training in place before NextGen is fully realized (when some  aircraft will be equipped with NextGen systems and others will not).
Need to address environmental impacts of NextGen. Another  challenge to implementing NextGen is expediting environmental  reviews and developing strategies to address the environmental  impacts of NextGen. As we stated in our recent report on  environmental impacts at airports, with the changes in aircraft flight  paths that will accompany NextGen efforts, some communities that  were previously unaffected or minimally affected by aircraft noise will  be exposed to increased noise levels. These levels could trigger the  need for environmental reviews, as well as raise community concerns.  Our report found that addressing environmental impacts can delay the  implementation of operational changes, and indicated that a  systematic approach to addressing these impacts and the resulting  community concerns may help reduce such delays. To its credit, FAA  has been working to develop procedures for streamlining  environmental review processes that affect NextGen activities.
Need to improve management and governance. FAA has  embarked on an initiative to restructure a number of organizations  within the agency. We have previously reported on problems with  FAA’s management and oversight of NextGen acquisitions and  implementation. Specifically, FAA plans to abolish and merge a  number of committees to improve decision making and reduce time  requirements of senior FAA executives. It also plans to make the  NextGen organization the responsibility of the Deputy Administrator  and to create a new head of program management for NextGen- related programs to ensure improved oversight of NextGen  implementation. Further, the Air Traffic Organization will be divided  into two branches: operations and NextGen program management.  Operations will focus on the day-to-day management of the national  air space and the program management branch will be responsible for  developing and implementing programs while working with operations  to ensure proper integration. While elimination of duplicative  committees and focus on accountability for NextGen implementation  is a positive step, it remains to be seen whether this latest  reorganization will produce the desired results.
Chairman Petri, Ranking Member Costello, and Members of the  Subcommittee, this concludes my prepared statement. I would be  pleased to answer any questions that you may have at this time.
section_title: GAO Contact and Staff Acknowledgments
paragraphs: For further information on this testimony, please contact Gerald L.  Dillingham, Ph.D. at (202) 512-2834 or dillinghamg@gao.gov. In addition,  contact points for our Offices of Congressional Relations and Public  Affairs may be found on the last page of this statement. Individuals  making key contributions to this testimony include Paul Aussendorf, Maria  Edelstein, Heather Krause, Ed Laughlin, and Andrew Von Ah (Assistant  Directors); Colin Fallon, Bert Japikse, Ed Menoche, and Dominic  Nadarski.
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