Next Generation Air Transportation System: FAA Faces Implementation Challenges
Published: 2012-09-12T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: To prepare for forecasted air traffic growth, FAA is planning for and implementing NextGen in partnership with other federal agencies and the aviation industry. NextGen is a complex undertaking that requires acquiring new integrated air traffic control systems; developing new flight procedures, standards, and regulations; and creating and maintaining supporting infrastructure to create a more automated aircraft-centered, satellite-based air transportation system. GAO has made recommendations to address delays in NextGen's acquisitions, improve FAA's processes, and focus on accountability and performance, which FAA is implementing.
This statement discusses five key challenges that GAO and others have previously identified that affect NextGen implementation, as well as steps FAA has taken to address these challenges. These challenges are (1) delivering and demonstrating NextGens near-term benefits; (2) developing a cost-effective mechanism to encourage operators to equip with NextGen technologies; (3) maintaining timely delivery of acquisitions; (4) clearly defining NextGen leadership roles and responsibilities; and (5) balancing the needs of the current radar-based systems and NextGen systems through the transition. This statement is based on GAOs previous reports and testimonies, ongoing work for the committee, and updates on FAAs responses to these challenges through a review of FAA documents and interviews with FAA officials.
section_title: What GAO Found
paragraphs: Delivering and demonstrating the Next Generation Air Transportation System's (NextGen) benefits : The Federal Aviation Administration (FAA) must deliver capabilities that provide aircraft operators with a return on their investments in NextGen avionics to convince operators to continue making equipment investments. However, operators have expressed concerns that FAA has not produced the navigational procedures needed to achieve benefits from existing avionics, such as reduced fuel burn and flight time. To help produce more beneficial procedures, FAA is, among other things, involving air traffic controllers and other stakeholders in the design of new procedures.
Encouraging acquisition of NextGen equipage : For some technologies, realizing NextGen benefits requires a critical mass of properly equipped aircraft. Reaching that critical mass is a significant challenge because the first aircraft operators to purchase and install NextGen avionics will not obtain a return on their investment until many other operators are similarly equipped. FAA has begun to solicit industry input about how to design and implement a public-private financing program for equipment but has yet to make decisions about how to incentivize the airline operators' transition to NextGen.
Maintaining timely delivery of key systems : NextGen has significantly increased the number, cost, and complexity of FAA's acquisition programs, which must remain on time and within budget, particularly given current budget constraints and the interdependencies of many NextGen-related acquisitions. While these acquisitions are generally proceeding on time and within budget, previous challenges with the En Route Automation Modernization (ERAM) program--a critical program for NextGen--illustrate how delays can increase the costs and schedules of other acquisitions as well as the maintenance costs of the system that is meant to be replaced. Overall, NextGen implementation will be affected by how well FAA manages program interdependencies.
Clearly defining NextGen leadership roles and responsibilities : Although FAA has made organizational changes to increase visibility and accountability for NextGen, it has not made management changes called for by the FAA Modernization and Reform Act of 2012. According to FAA, those changes will not occur until a permanent FAA Administrator is in place. Further, FAA has not clearly defined the relationships among the Deputy Administrator (responsible for NextGen implementation and also the current Acting Administrator); the new Chief NextGen Officer position; and the Director of the Joint Planning and Development Office (responsible for NextGen planning and coordination).
Managing the transition to the NextGen system : Particularly in light of constrained budget resources, FAA will have to balance its priorities to help ensure that NextGen implementation stays on course while sustaining the current legacy infrastructure that will continue to be the core of the national airspace system for a number of years. For example, while FAA has an initial plan to consolidate facilities, the agency will need to keep long-term plans in mind so that it does not invest unnecessarily in facilities that may not be needed for NextGen.

section_title: Letter
paragraphs: I appreciate the opportunity to testify today on progress toward  implementing the Next Generation Air Transportation System (NextGen).  The Federal Aviation Administration (FAA) predicts that, by 2025, the  annual number of airline passengers in the United States will increase  from about 700 million to about 1 billion per year and that the daily  number of flights will increase from about 80,000 to more than 95,000. If  FAA’s predictions hold true, today’s air transportation system will be  strained under such demands, especially on some routes to and from hub  airports and major cities. Accordingly, FAA, other federal agencies, and  aviation industry stakeholders have worked in partnership to develop a  plan for NextGen. NextGen is an enormously complex undertaking that  requires acquiring new integrated air traffic control systems; developing  new flight procedures, standards, and regulations; and creating and  maintaining supporting infrastructure to create a modern air transportation  system that relies on satellite-based surveillance and navigation and  network-centric operations. NextGen is intended to increase air  transportation system efficiency and capacity while maintaining its safety.
Vision 100—Century of Aviation Reauthorization Act, Pub. L. No. 108-176, §§ 709-710,  117 Stat. 2490, 2582-2585 (2003). as a means to respond to industry skepticism about FAA’s ability to  implement NextGen, build support for long-term NextGen investments,  and more immediately address inefficiencies and delays in the current air  traffic control system. In past reports, we have made a number of  recommendations to FAA to address delays in NextGen’s development  and acquisitions, improve FAA’s processes, and focus on accountability  and performance. Over the last 2 years, FAA has taken several steps and  instituted a number of changes to address these issues.
My statement highlights five key challenges that we and others have  previously identified that affect NextGen’s implementation, as well as  steps FAA has taken to address these challenges. These challenges are delivering and demonstrating NextGen’s near-term benefits; developing a cost-effective mechanism to encourage operators to  equip with NextGen technologies; maintaining timely delivery of acquisitions; clearly defining NextGen leadership roles and responsibilities; and balancing the needs of the current radar-based system as well as the  NextGen system through the transition.
This statement is based primarily on our previous reports and  testimonies and on ongoing work for this subcommittee that includes  challenges associated with near-term NextGen implementation and FAA’s  efforts to transition from the current air traffic control system to the  NextGen system. We updated information on FAA’s responses to the five  challenges that we discuss through a review of FAA documents and  interviews with FAA officials. The GAO reports cited in this statement  contain more detailed explanations of the methods used to conduct our  work. We conducted all of our work in accordance with generally  accepted government auditing standards.
subsections: section_title: FAA Is Taking Steps to Address Challenges in Delivering and Demonstrating NextGen’s Benefits
subsections: section_title: Delivering NextGen Benefits
paragraphs: FAA must deliver systems, procedures, and capabilities that provide  operators with a return on their investments in NextGen avionics in order  to convince operators to continue making such equipment investments.  For example, a large percentage of the current fleet is equipped to fly  more precise performance-based navigation (PBN) procedures, such as  following precise routes that use the Global Positioning System or glide  descent paths, which can save the operators money through reduced fuel  burn and flight time. However, aircraft operators have expressed  concerns that FAA has not produced the most useful or beneficial PBN  routes and procedures to date. As a means to leverage existing  technology, provide immediate benefit to the industry, and in response to  the RTCA Midterm Implementation Task Force’s (Task Force)  recommendations, FAA began an initiative to better use PBN procedures  to resolve airspace problems in and provide benefits to areas around  busy airports, known as “metroplexes.” This initiative, the Optimization of  Airspace and Procedures in the Metroplex (Metroplex), is under way in  eight metropolitan areas across the country and planning is under way for  other areas (see fig. 1).
FAA is working to design its Metroplex and other PBN initiatives to avoid  some of the challenges that have limited the use and, in turn, potential  benefits of existing PBN procedures. For example, FAA has found that  some PBN procedures developed without air traffic controllers’  involvement have been used infrequently, if at all, because of problems  with the procedure design or other challenges. In response, FAA has  worked to include stakeholders, such as air traffic controllers and airlines,  in the study and design of new PBN procedures. For example, FAA  included airlines and local air traffic controllers in the design of PBN  procedures under the Metroplex and Greener Skies over Seattle  initiatives. This inclusion, according to stakeholders involved, should help  to ensure that the new PBN procedures can be used by local controllers  and produce quantifiable benefits to aircraft operators. Greener Skies  also formally involved local airports in the PBN procedure development  process to help avoid adverse environmental—largely noise-related— community impacts. As we have previously reported, effective outreach to  affected stakeholders can help anticipate and address potential  community concerns—particularly with regard to noise. If not  addressed, these concerns can delay efforts to use airspace more  efficiently.
Many of FAA’s near-term improvement efforts have focused on  developing new PBN procedures rather than on other near-term  improvements recommended by the Task Force, such as airborne or  surface traffic-management improvements. Following up on the Task  Force’s work, the NextGen Advisory Committee (NAC) made recommendations in May 2012 to help FAA identify and prioritize  improvements—including and in addition to PBN procedures—that could  provide near-term benefits. FAA is assessing the extent to which it can  make these other improvements in later rounds of the Metroplex initiative.
In the meantime, the agency has turned its attention to expanding or  developing some of these improvements—including the air-traffic- management tools that allow for the sequencing of planes—at some of  the facilities that are the focus of ongoing Metroplex efforts. Generally,  these efforts are still in the planning phase. Figure 2 shows the  complexity of merging or sequencing traffic that is approaching an airport  using PBN procedures, such as precision Required Navigation  Performance (RNP) turns and optimized profile descents (OPD). This  complexity can be mitigated with the use of new airborne traffic  management tools. Given the integrated nature of near-term NextGen  improvements, it will be important for FAA to determine how its Metroplex  initiative and airborne and surface traffic management improvements—as  well as other improvements prioritized by the NAC—will be implemented  and will work together so that the full benefits of these improvements can  be realized.
In addition, although FAA has made progress in developing new PBN  procedures with its Metroplex and other PBN initiatives, much work  remains to be done to improve the overall process for amending and  implementing PBN procedures. According to FAA, the current process for  implementing or amending flight procedures consists of a bundle of  interconnected, overlapping, and sometimes competing processes,  which, on occasion, results in the implementation of low or no-benefit  flight procedures that have to be reworked or amended. Likewise, RTCA  has recommended that FAA address problems with what it has termed  FAA’s inefficient processes for validating and certifying new technologies,  which are critical steps in the process for allowing the use of new  procedures. We have also expressed concerns about the time and  human resources required for the validation and certification processes  and have identified these processes as a significant risk to the timely and  cost-effective implementation of NextGen. To address these challenges,  FAA has undertaken a Navigation Lean (NAV Lean) project to streamline  the implementation process for flight procedures. The agency anticipates  this project will be mostly in place by the end of 2015.work for this committee that further explores issues and challenges  associated with near-term NextGen implementation.
section_title: Demonstrating NextGen Benefits
paragraphs: As we have previously reported, FAA should regularly provide  stakeholders, interested parties, Congress, and the American people with  a clear picture of where NextGen’s implementation stands, and whether  the capabilities being implemented are resulting in positive outcomes and  improved performance for operators and passengers. We have  recommended that FAA develop a timeline and action plan to work with  industry and federal partner agencies to develop an agreed-upon list of  outcome-based performance metrics, as well as goals for NextGen  broadly and specific NextGen improvement areas. In addition, the FAA  Modernization and Reform Act of 2012 requires FAA to report on  measures of the agency’s progress in implementing NextGen capabilities  and operational results. In 2011, the NAC recommended that FAA adopt  a set of performance metrics to address operational changes affecting  capacity, efficiency, predictability, and access. In addition, the NAC has  continued to work on outcome-based metrics to inform the public about  the overall status of NextGen implementation and the program’s  contribution to national aviation policy goals. To date, FAA has  established metrics for five of its key performance areas—capacity,  efficiency, predictability, environment, and safety—but metrics for the  three other key performance areas—access, equity, and flexibility—are  still preliminary. FAA has also 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 in order to reduce delays by 27  percent from 2009 levels, and achieve a 5 percent reduction in average  taxi-time at key airports.
Developing metrics and NextGen performance goals are positive steps,  but much work remains, including finalizing agency targets for specific  improvement areas and making a link between NextGen performance  goals and metrics and NextGen improvements. For example, public  information about FAA’s near-term plans for implementing additional  capabilities lacks specifics about the timing and locations of  implementation. According to RTCA, a lack of published information with  specific implementation dates and locations for NextGen capabilities is an  obstacle to incentivizing airlines to equip their aircraft with additional  NextGen avionics. Without a clearer picture of the return on investment— and the progress being made—aircraft operators may be hesitant to  make business and operational decisions necessary to fully realize  NextGen benefits. Measuring performance of near-term NextGen  improvements will be critical for FAA management and stakeholders to  assess various impacts, make investment decisions, and monitor  NextGen progress. We will report on this issue in more detail as part of  our ongoing near-term NextGen implementation work for this committee.
section_title: FAA Is Working to Identify and Develop a Cost-effective Mechanism to Encourage Operators to Equip with NextGen Technologies
paragraphs: While some operational improvements can be made with existing aircraft  equipment, realizing more significant NextGen benefits requires a critical  mass of properly equipped aircraft. Reaching that critical mass is a  significant challenge because the first aircraft operators to purchase and  install NextGen-capable technologies will not obtain a return on the  investment until many other operators are similarly equipped. FAA  estimates that NextGen avionics needed on aircraft to realize significant  midterm NextGen capabilities will cost private operators about $5 billion  to $7 billion through 2020. For example, according to the RTCA, it would  cost from $150,000 to $650,000 to equip a regional jet with an RNP  package, which is one of the technologies that allows for precision  approaches.
The FAA Modernization and Reform Act authorized the creation of a  program to facilitate public-private financing, such as loan guarantees and  other credit assistance tools, for equipping general aviation and  commercial aircraft with NextGen technologies. According to FAA, the  goal for an equipage program would be to encourage deployment of  NextGen-capable aircraft sooner than would have occurred without such  funding assistance in place. FAA is soliciting industry input about how to  design and implement such a program but has yet to decide on how to  incentivize this transition. Although authorized, no funding has been  appropriated to establish a public-private financing program. According to  FAA, it is working to understand what options exist for establishing a  program even if it receives no appropriations toward the program.
section_title: FAA Faces Challenges in Maintaining Timely Delivery of Key Acquisitions
paragraphs: NextGen has significantly increased the number, cost, and complexity of  FAA’s acquisition programs, and it is imperative that these programs  remain on time and within budget, particularly given current budget  constraints and the interdependencies of many NextGen-acquisitions. In  February 2012, we reported that most of the key NextGen-related  acquisition programs were generally proceeding on time and on budget.See appendix I for the current cost and schedule performance of select  baselined NextGen and related acquisition programs. However, delays  with the En Route Automation Modernization (ERAM) program—a critical  program for NextGen—illustrate how delays can affect overall acquisition  and maintenance costs as well as time frames for other programs. As we  previously reported, ERAM’s schedule delays and cost increase of $330  million over 4 years were associated with unanticipated risks associated with operational complexities at the  selected sites,  insufficient testing to identify software issues before deployment at  key sites,  insufficient communication between the program office and field sites,  and  insufficient stakeholder involvement during system development and  deployment.
The delays with ERAM added an estimated $18 million per year to the  costs of maintaining the system that ERAM was meant to replace.  Additionally, ERAM is important to the on-time implementation of two  other key NextGen acquisitions—Data Communications (Data Comm)  and System Wide Information Management (SWIM). In part because of  ERAM’s delay, FAA pushed the Data Comm program’s start date from  September 2011 to May 2012, revised the original plan for the first  segment of SWIM to mitigate the impact of ERAM delays on the SWIM  program, and delayed the start date for segment 2A of SWIM from 2010  to July 2012. Looking more broadly, the implementation of NextGen— both in the midterm (through 2020) and in the long term (beyond 2020)— will be affected by how well FAA manages program interdependencies.
section_title: NextGen Organizational Structure Has Undergone Changes, but Leadership Roles and Responsibilities Remain Unclear
paragraphs: As we have previously reported, industry stakeholders have expressed  concerns about the fragmentation of authority and lack of accountability  for NextGen, two factors that could delay its implementation. We have  also found that programs can be implemented most efficiently when  managers are empowered to make critical decisions and are held  accountable for results. To ensure accountability for NextGen results,  several stakeholders have suggested that an office is needed that would  report directly to the FAA Administrator or the Secretary of  Transportation. Stakeholders have also cited challenges with coordinating  implementation of NextGen capabilities across FAA lines of business.  With multiple FAA lines of business responsible for various NextGen  activities, including offices within FAA’s Air Traffic Organization (ATO)  and outside ATO, coordination and integration is vital since delays in  actions required from several offices could prevent or delay NextGen  benefits. FAA has made organizational changes in the past in an effort to  address these concerns.
Beginning in 2011, FAA made additional changes to its NextGen  organizational structure to address these long-standing issues.  Specifically, FAA reorganized the structure of the office responsible for  carrying out NextGen implementation, moving the office from within the  ATO to under FAA’s Deputy Administrator (who is currently serving as the  Acting Administrator). According to FAA, this change increased  NextGen’s visibility within and outside the agency and created a direct  line of authority and responsibility for NextGen. However, in February  2012, the FAA Modernization and Reform Act designated that the  Director of the Joint Planning and Development Office (JPDO)—who is  responsible for NextGen planning and coordination—report directly to the  FAA Administrator and created a new leadership position—the Chief  NextGen Officer—who will also report directly to the Administrator. The  Chief NextGen Officer position has not yet been filled. FAA has not yet  made the organizational changes called for by the act or clearly defined  the relationships among the Deputy Administrator, Chief NextGen Officer,  and JPDO director. According to FAA, no organizational changes will be  made until the agency has a permanent FAA Administrator in place.
FAA also reorganized its NextGen efforts around its “Ideas to In-Service  Management” (I2I) process. According to FAA, the I2I will support  enterprise-level, cross-program management in bringing capabilities into  the national airspace system and will formalize collaboration among  NextGen program offices, ATO, and other relevant FAA organizations  such as Aviation Safety. Within ATO, a new Program Management Office  has been established to improve oversight of ATO’s NextGen  implementation efforts. According to FAA, by combining acquisition  program managers into one organization, ATO will ensure more  coordinated program management throughout the full life cycle of  NextGen acquisitions. While an increased focus on accountability for  NextGen implementation is a positive step, it remains to be seen whether  this latest reorganization will produce the desired results without a  clarification of NextGen leadership roles and the fulfillment of all the  necessary leadership positions. As we have previously reported,  leadership is a critical element of success for large-scale systems  integration efforts like NextGen.
section_title: FAA Faces Challenges in Balancing the Needs of the Current and NextGen Systems and Addressing Infrastructure and Operational Issues That Transcend NextGen
paragraphs: Particularly in light of constrained budget resources, FAA will have to  balance its priorities to help ensure that NextGen implementation stays on  course. Sustaining the current legacy infrastructure remains critical, as it  will continue to be the core of the national airspace system for a number  of years, and some of its components will be part of NextGen. For  example, while FAA transitions to satellite-based surveillance through the  deployment of Automatic Dependent Surveillance-Broadcast (ADS-B)  technology, the agency expects to continue to operate and maintain  current radar technology through at least 2020. At that time, FAA is  scheduled to make decisions about which radars the agency will  decommission and which will be maintained as the back-up system for  ADS-B. If either ADS-B’s deployment or airlines’ efforts to equip with this  technology should slip, then FAA may have to maintain and operate some  of its radars longer than expected. We have ongoing work for this  committee that is further exploring how FAA is preparing for the transition  to NextGen and balancing the demands of the legacy and NextGen  systems, including potential implications for the legacy systems and FAA  budgets if NextGen implementation is delayed.
In addition, to fully realize NextGen’s capabilities, reconfiguring facilities  that handle air traffic control will be required. FAA recently approved an  initial plan to consolidate en route centers and terminal radar approach- control facilities (TRACONs) into large, integrated facilities over the next  two decades. However, FAA has yet to make key decisions, such as  where to build the first integrated facility. These decisions could affect  future consolidation plans. While FAA develops its facilities plan, it faces  the immediate task of maintaining and repairing existing facilities so that  the current air-traffic control system continues to operate safely and  reliably during the expected 20-year transition. According to FAA, in 2011,  65 percent of its terminal facilities and 74 percent of its en route facilities  were in either poor or fair condition with a total deferred maintenance  backlog of $310 million for these facilities. Once FAA develops and  implements a facility consolidation plan, it can identify which legacy  facilities to continue to repair and maintain and, in doing so, potentially  reduce overall facility repair and maintenance costs. FAA has  acknowledged the need to keep long-term plans in mind so that it does  not invest unnecessarily in facilities that will not be used for NextGen.
Moreover, although NextGen is projected to keep delays at many airports  from getting worse than would be expected without these improvements,  NextGen alone is not likely to sufficiently expand the capacity of the  national airspace system. For example, FAA’s NextGen modeling  indicates that even if all ongoing and planned NextGen technologies are  implemented, 14 airports—including some of the 35 busiest—may not be  able to meet the projected increases in demand (fig. 3). The  transformation to NextGen will also depend on the ability of airports to  handle greater capacity. For example, decisions regarding using existing  capacity more efficiently include certifying and approving standards for  using closely spaced parallel runways. At some airports, policies may  need to be developed to address situations where demand exceeds  capacity (e.g., pricing, administrative rules, service priorities, and so  forth). Planning infrastructure projects to increase capacity, such as  building additional runways, can be a lengthy process and will require  substantial advance planning and safety and cost analyses. Also, the  improved efficiency in runway and airspace use that should result from  some NextGen technologies may exacerbate capacity constraints in other  areas, such as taxiways, terminal gates, or parking areas. Finally,  increasing capacity must be handled within the context of limiting  increases in emissions and noise that can affect the communities around  airports.
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 Heather Krause and Ed  Laughlin (Assistant Directors), Jessica Bryant-Bertail, Bert Japikse,  Delwen Jones, Molly Laster, Dominic Nadarski, and Melissa Swearingen.
section_title: Appendix I: Selected Baselined NextGen and Related Programs Cost and Schedule Performance as of July 2012
subsections: section_title: Start date June 2003
paragraphs: According to FAA, this difference is the result of additional work added to the ADS-B program  baseline in March 2011 and includes congressional earmarks of $9.3 million in fiscal 2008 and $6.8  million in fiscal year 2009 as well as an additional $15 million held in reserve to mitigate potential  automation risks. In addition, the Colorado Wide Area Multilateration Phase II was added to the  program ($13.6 million).
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