Aviation: Status of DOT's Actions to Address the Future of Aviation Advisory Committee's Recommendations
Released: 2013-07-25T00:00:00

Letter

Background

The U.S. aerospace industry contributes to the nation’s economic health and national security. The industry’s wide-ranging activities—including aircraft manufacturing and commercial aviation—make it a major contributor to U.S. economic growth. DOT and the FAA (an administration of DOT) each play a policy and regulatory role in aviation, with DOT involved in consumer and economic issues, such as licensing airlines and reviewing applications for antitrust immunity between airlines, and FAA’s overseeing the safety of civil aviation. To inform these efforts, various administrations and Congresses have periodically established committees or commissions comprised of external stakeholders to provide recommendations for DOT and FAA, as well as other agencies involved in aviation, to consider in their implementation of aviation policy. For example, in 1996, President Clinton established the White House Commission on Aviation Safety and Security, which provided 57 recommendations in the areas of safety, air traffic control, security, and accident response. In 2001, Congress established the Commission on the Future of the United States Aerospace Industry to study issues associated with the future of this industry in the global economy, and to recommend potential actions by the federal government to support the maintenance of a robust aerospace industry in the 21st century.

In contrast to these two efforts, the FAAC was established as a federal advisory committee, subject to the Federal Advisory Committee Act (FACA). Federal advisory committees exist throughout the executive branch of the federal government, providing input and advice to agencies in a variety of ways, such as preparing reports and developing recommendations. GAO has noted that advisory committees can be effective tools for agencies to gather input on topics of interest by informing agency leaders about issues of importance to the agencies’ missions, consolidating input from multiple sources, and providing input at a relatively low cost. While an advisory group’s input or recommendations may form the basis for a federal agency’s decisions or policies, other factors may play a role in determining what action an agency ultimately takes. Because such groups are by design advisory, agencies are not required to implement their advice or recommendations.

On April 16, 2010, Secretary Ray LaHood chartered the FAAC for a one- year term and asked the DOT Assistant Secretary for Aviation and International Affairs to lead the effort. The FAAC was directed to provide information, advice, and recommendations to the Secretary on ensuring the competitiveness of the U.S. aviation industry and its capability to address the evolving transportation needs, challenges, and opportunities of the global economy. The FAAC was comprised of a cross-section of aviation stakeholders. During its first meeting, the Secretary asked the FAAC to develop consensus-based recommendations that could be acted upon immediately or in the near future, with tangible results. He also stated that the FAAC should remain cognizant of the tools that DOT and FAA could use to implement the recommendations, such as the federal rulemaking process, proposing legislation to Congress, and recommending compliance measures for industry. The FAAC established subcommittees to develop recommendations in the five areas specified in the FAAC charter: environment, financing, competitiveness and viability, labor and workforce, and safety. The subcommittees met multiple times over the course of 2010, and the full FAAC briefed the Secretary on its 23 recommendations on December 15, 2010, with a final report outlining the recommendations and their underlying rationale released on April 11, 2011.

The Secretary publicly emphasized that the FAAC recommendations would not “sit on a shelf,” and DOT established a process to implement the recommendations. DOT officials stated that the Office of Aviation and International Affairs has led DOT’s work on addressing the FAAC recommendations and has provided periodic updates to FAAC members. Each recommendation was assigned to an “owner”—DOT or FAA staff— some of whom were already conducting work relevant to the recommendation. DOT officials also noted that some of the recommendations with multiple subactions have more than one owner. DOT staff collaborated with recommendation owners to create a “smart sheet” for addressing each FAAC recommendation. This document provided information on interim goals, or actions that must occur to reach the final goal; beneficiaries and allies of the recommendation; and potential challenges. The owners were not required to update these documents as time progressed. DOT officials stated that for about a year after the FAAC report was released, DOT’s Office of Aviation and International Affairs had regular status meetings with the recommendation owners to ascertain their progress, and recommendation owners then reported progress periodically to DOT officials. DOT periodically updates a website on the status of the FAAC recommendations. During the course of our review, we noted that some of the recommendations had not been updated for over one year; however, DOT updated the status of all of the recommendations on its website in June 2013.

DOT and FAA Officials Believe That Seven of the Selected Recommendations Are Addressed and That Three Are In Progress

DOT and FAA have taken actions on the 10 FAAC recommendations we reviewed. DOT and FAA officials noted that 3 of the 10 recommendations we reviewed—sustainable alternative fuels, global competitiveness, and a harmonized approach to carbon dioxide emission reductions—continue to be addressed as part of long-term efforts. For example, DOT officials noted that addressing the global competitiveness recommendation is tied to long-term policy efforts with no timetable for conclusion, such as negotiating agreements with other countries to reduce the barriers for U.S. carriers interested in serving markets in those countries. While officials stated that DOT and FAA have addressed the other seven recommendations, they highlighted ongoing work on issues related to some of these recommendations. For example, FAA officials noted they have addressed the recommendation to accelerate investment and installation of NextGen equipment on aircraft because they are working to develop a program to provide financial incentives and operational benefits to operators that install NextGen equipment early. However, the officials added that they are still working to determine what the program will entail, including soliciting input from aircraft operators and potential private partners to determine how to establish an incentive program that operators want to participate in. They also noted that the appropriations requirements for a credit program have not yet been met. For additional details on actions DOT and FAA have taken on the recommendations, see section 1 of this report.

FAAC Members Acknowledge DOT’s Actions but Believe That More Work Remains in Responding to the Selected Recommendations

FAAC members acknowledged DOT and FAA efforts to address the 10 recommendations selected for our work; however, a majority of the FAAC subcommittee members believe more work remains to fully address 9 of the 10 recommendations. See table 2 for a summary of the recommendations as well as their status according to DOT and the FAAC subcommittee members we interviewed.

Similar to DOT and FAA officials, FAAC members stated that some recommendations may not be fully addressed due to the recommendation’s being linked to ongoing or long-term efforts. For example, FAAC members noted that DOT and FAA efforts to address the sustainable alternative fuels recommendation require collaborating across many agencies, such as the Department of Energy (DOE), the United States Department of Agriculture (USDA), and the Environmental Protection Agency (EPA), and a continued, long-term federal focus. In some cases, FAAC members stated that DOT and FAA should continue their current efforts to address the recommendations; but some FAAC members felt that DOT and FAA should take additional actions to address certain recommendations. For example, five of the six finance FAAC subcommittee members stated that the recommendation to fund accelerated NextGen equipage of aircraft was not addressed, and two suggested that the department take additional steps to collaborate with industry to design an incentive program and develop a stronger business case for airlines to invest in equipping early. Conversely, five of the seven subcommittee members believe that the department’s actions addressed the recommendation on science, technology, engineering, and mathematics (STEM) education. For additional details on FAAC members’ perspectives on the DOT and FAA actions to address the recommendations, see section 1 of this report.

While DOT is not required to monitor or report on the status of the FAAC recommendations, 13 of the 17 FAAC members generally agreed that the department should continue monitoring and reporting on the recommendations’ status, with some adding that this ensures continued focus on their implementation. On the other hand, two FAAC members stated that DOT should continue reporting only on certain recommendations, such as recommendations that would be implemented over the long term or recommendations it has not addressed. Another FAAC member stated that DOT and FAA should ensure that efforts to address the recommendations become ingrained into the daily work of agency staff, rather than DOT’s and FAA’s viewing them as a separate effort. The remaining FAAC member stated that DOT should reassess whether it makes sense to continue or close out the effort, adding that as time passes, the recommendations may become irrelevant or unlikely to be addressed. DOT officials told us that for ongoing recommendations, they will continue work on these recommendations and are determining the extent to which it will continue reporting on the status of the recommendations. However, DOT has not yet established a time frame for when it might make such a decision.

Resource Constraints and Stakeholder Collaboration Were Most Frequently Cited as Implementation Challenges for the Selected Recommendations

Resource constraints and the need to collaborate with multiple stakeholders were cited most frequently by DOT and FAA officials, as well as by FAAC members, as implementation challenges. Specifically, DOT and FAA officials or FAAC members identified resource constraints, such as limited funding for programs or staff, as a challenge in implementing 6 of the 10 FAAC recommendations that we reviewed. These 6 include the recommendations pertaining to sustainable fuels, carbon dioxide emission reductions, reviewing eligibility criteria for the Airport Improvement and Passenger Facility Charge Programs, STEM education, predictive safety risk-discovery capability, and prioritizing rulemaking. Agency officials and committee members also explained how constrained resources might affect progress in addressing these recommendations. For example, when discussing the recommendation that DOT and FAA establish a harmonized approach for aviation carbon dioxide emission reductions, FAA officials told us that resource constraints could hamper their ability to conduct necessary research and participate in international forums designed to foster discussion on harmonized regulatory approaches. However, DOT and FAA officials also outlined their methods for operating within these constraints. For example, while noting that funding and limited resources pose challenges to maintaining long-term STEM efforts, officials stated that the agencies work to leverage resources through stakeholder partnerships. In addition, DOT and FAA officials or FAAC members identified challenges in collaborating with and gaining the consensus of a number of stakeholders for four recommendations, those related to sustainable fuels, carbon dioxide emission reductions, global competitiveness, and STEM education. These recommendations range in the type of involvement needed both within and outside DOT and FAA. For example, six of the seven FAAC labor and workforce subcommittee members we interviewed recognized DOT’s ongoing efforts on STEM issues require that DOT maintain the participation of outside groups, such as other agencies, industry, and other stakeholders.

However, each recommendation also had unique challenges. For example, with respect to the recommendation that the agencies ensure that safety data submitted by air carriers and other stakeholders is protected from public disclosure, FAAC members noted that despite legal protections provided by recent legislation, industry concerns remain regarding the disclosure of safety data during legal proceedings. FAA officials have recognized that such concerns could limit the implementation of FAA efforts to promote safety management systems, which depend upon the open sharing of safety information among aviation stakeholders. In addition, DOT and FAA officials noted that in some cases they took actions to address the recommendation, but factors beyond DOT’s control, such as the need for legislative action, affected DOT’s ability to fully implement the recommendation. For example, while the agency supported a provision that would have extended the alternative minimum tax exemption for all private activity bonds, including airport private-activity bonds—as recommended by the FAAC—this provision did not become law. Agency officials view this recommendation as addressed since any further action would require legislative action, and there is not currently a legislative vehicle for this provision.

Section 1 of this report includes the 10 recommendations in our review, detailed discussions of DOT and FAA completed or planned actions to address each of the 10 FAAC recommendations, FAAC members’ assessment of DOT and FAA progress, and challenges to implementing each recommendation.

Agency Comments

We provided DOT with a draft of this report for their review and comment. DOT responded by email and provided technical clarifications, which we incorporated into the report as appropriate.

We are sending copies of this report to appropriate congressional committees, the Secretary of Transportation, and interested parties. This report will also be available at no charge on the GAO website at http://www.gao.gov.

Should you or your staff have questions concerning this report, please contact me at (202) 512-2834 or dillinghamg@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributors to this report are listed in appendix III.

Section 1: Selected FAAC Recommendations and DOT’s and FAA’s Actions to Address Them

This section presents the 10 FAAC recommendations we reviewed and includes detail on DOT and FAA actions to address the recommendations, FAAC members’ assessment of DOT and FAA progress on the recommendations, and challenges in implementing each recommendation. Also, we numbered these recommendations for reporting purposes, but these numbers do not align with the numbers assigned to these recommendations in the FAAC report.

1. FAAC Recommendation— Sustainable Alternative Fuels

Issue Overview

environmental and cost analysis; funding certification and qualification testing to inform efforts by the standard-setting organization ASTM International; and enabling government and aviation industry coordination. FAA officials told us FAA does not have authority or funding to provide financial incentives for development and deployment of alternative aviation fuels. However, other federal agencies—such as the Internal Revenue Service, USDA, and DOE—have administered programs that provide numerous incentives, including subsidies through tax credits, to produce feedstocks, and refine and use biofuels. In its report, the FAAC stated that the aviation industry has unique fuel requirements and is well-positioned to be a national and international leader in the use of sustainable renewable alternative fuels.

The FAAC recommended that DOT exercise strong national leadership to promote and display U.S. aviation as a first user of sustainable alternative fuels and provide increased support for FAA’s work on alternative fuels. The FAAC discussed four specific areas in supporting its recommendation.

DOT’s and FAA’s Actions to Address Recommendation

Table 4 provides a summary of the FAAC recommendation and underlying rationale, and DOT’s and FAA’s actions to address it, as of June 2013.

FAAC recommendation—alternative fuels Ensure accepted environmental criteria for alternative fuels, domestically and internationally—The DOT/FAA should develop and execute a plan, working with government, industry, and other relevant domestic stakeholders to develop and confirm environmental criteria, including associated life-cycle analysis protocols, for aviation alternative fuels. The DOT/FAA should also work to facilitate international acceptance of these criteria so the benefits of alternative aviation fuels can be available domestically and internationally.

DOT/FAA actions As of May 2013, FAA had six on-going efforts—some of which are through one of its Centers of Excellence and the John A. Volpe National Transportation Systems Center—that focus on environmental impacts, economic impacts, feasibility, and sustainability of alternative jet fuels, among other things. FAA also collaborates with other Federal agencies—including DOD, EPA, and DOE—on domestic efforts to develop life-cycle analysis protocols. CAAFI stakeholders are currently examining how CO emissions would differ under different policies and regulatory assumptions, including those under EPA’s RFS2 program and the European Union’s renewable energy directive. FAA follows international efforts and shares best practices with the United Nation’s International Civil Aviation Organization (ICAO) and other countries. For example, FAA has formal agreements to cooperate with Australia, Brazil, Germany, and Spain on issues related to alternative aviation fuels.

DOT’s and FAA’s Planned Actions

gallons of petroleum jet fuel with alternative jet fuel by 2018 and to achieve carbon neutral growth by 2020 (baseline year of 2005)—are several years or more away. Because of the long-term nature of this effort, officials told us they plan to continue FAA’s research and collaboration with other agencies, industry groups, and other countries.

FAAC Members’ Assessment of DOT’s and FAA’s Progress

All five of the FAAC environmental subcommittee members we interviewed expressed support for FAA’s actions to address this recommendation, adding that fully addressing this recommendation will require a long-term, ongoing effort and collaboration with a number of parties. For example, some subcommittee members identified additional actions that they think FAA or the federal government should take in response to this recommendation. Two subcommittee members noted the need for an increased federal focus on supporting the deployment and commercial viability of alternative fuels through tax incentives, public- private partnerships, direct support, or other means to encourage industry to invest its capital. One subcommittee member stated that while DOT or FAA may not have the statutory authority to provide incentives to accelerate development and deployment, they should explore their authority to support additional deployment activities. In our discussions with FAA officials on this issue, they stated that FAA has not sought direct authority for these activities because they believe that it is a wiser use of federal resources to use existing federal support mechanisms that are funded by USDA and DOE. Another subcommittee member stated that more overall federal funding is needed for research on conversion technology and getting through the fuel approval process, and that the research projects that receive federal funding should be focused specifically on producing the data needed for fuel approval, rather than addressing broader issues. In addition, this subcommittee member stated that FAA should increase its outreach and collaboration with other groups such as the Sustainable Aviation Fuel Users Group, the Sustainable Aviation Biofuels for Brazil effort, and the Midwest Aviation Sustainable Biofuels Initiative. According to FAA officials, the agency is engaged in the latter two initiatives.

Challenges in Implementing the Recommendation

Resource constraints. FAA officials and two of the subcommittee members stated that resources, specifically funding for the programs and staff time to work on the projects, pose a challenge in addressing this recommendation. Subcommittee members raised concerns about budget uncertainty affecting the agencies’ abilities to support long- term efforts in this area.

Scalable, affordable, and sustainable fuel supply. FAA officials and two subcommittee members also pointed out the challenges related to scalability—that is, being able to produce sufficient quantities of alternative aviation fuel at a reasonable price. FAA officials noted that building a sustainable supply chain would be a challenge. However, officials said that the production activities by USDA, DOE, and DOD could help establish the market, and the programs at DOE, EPA, and USDA should help lower costs and make commercialization possible. FAA officials added that more time, continued funding, and political support will help them achieve their goals.

Uncertainties inherent in new fuels technologies. According to FAA officials, part of the underlying challenge of developing a sustainable supply chain is the limited financial investment by private industry due, in part, to risk associated with uncertainties. Such uncertainties include the ability of alternative fuels to compete with petroleum and the effects of possible future regulatory changes, such as the sustainability of tax credits, grants, or loan guarantees that support the development and commercialization of alternative jet fuel, factors which are not under FAA’s authority.

Collaboration with many stakeholders. Three subcommittee members identified challenges related to the need to collaborate with many stakeholders on this recommendation. For example, a subcommittee member also noted the need to collaborate with non- aviation stakeholders, such as agriculture-financing representatives, while two other members highlighted that work on this recommendation is a multi-agency process.

We recently began work in this area examining the progress made in developing alternative jet fuels in the United States, as well as the key challenges that exist and federal efforts that should be taken to address those challenges. We plan to report the results of our work in 2014.

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Biofuels: Potential Effects and Challenges of Required Increases in Production and Use. GAO-09-446. Washington, D.C.: August 25, 2009.

Aviation and Climate Change: Aircraft Emissions Expected to Grow, but Technological and Operational Improvements and Government Policies Can Help Control Emissions. GAO-09-554. Washington, D.C.: June 8, 2009.

Aviation and the Environment: NextGen and Research and Development Are Keys to Reducing Emissions and Their Impact on Health and Climate. GAO-08-706T. Washington, D.C.: May 6, 2008.

2. FAAC Recommendation— Harmonized Approach to CO2 Reduction

Issue Overview

As previously noted, commercial aviation’s contribution to greenhouse gas emissions is reported to be relatively small, but is forecasted to grow, with carbon dioxide (CO The 1997 Kyoto Protocol, an international agreement to minimize the adverse effects of climate change, stated that greenhouse gases from aviation fuels should be limited or reduced, and that such efforts should be conducted through ICAO. In 2010, the ICAO Assembly agreed upon the following goals: achieve a global annual average fuel efficiency improvement rate of 2 percent until 2020 and pursue an aspirational global fuel efficiency improvement rate of 2 percent per year from 2021 to 2050; and achieve global carbon-neutral growth from 2020 onward. emissions and aircraft emissions certification procedures. and set another explicit goal to halve CO reductions and DOT’s and FAA’s actions to address it, as of June 2013.

DOT’s and FAA’s Planned Actions

FAA officials stated that addressing this recommendation is a long-term effort and noted their ongoing efforts in this area. For example, FAA officials noted that continued domestic and international coordination are required to address this recommendation. FAA officials said implementing its Reduction Plan will continue to require sustained collaboration with partner agencies such as the National Aeronautics and Space Administration and the aviation industry. FAA officials said they would advocate that countries’ reduction plans be updated on a triennial basis and would plan to update the U.S. Reduction Plan in 2015 and triennially afterward, if requested by future ICAO agreements. Officials also told us that they will participate in discussions on market-based measures at the upcoming ICAO Assembly meeting in September 2013.

FAAC Members’ Assessment of DOT’s and FAA’s Progress

All five of the FAAC environmental subcommittee members told us that the recommendation was not fully addressed, noting that work in this area was ongoing and that FAA should continue their involvement in ICAO’s ongoing efforts.

Challenges in Implementing the Recommendation

baseline, but said that they have adopted this goal because it is consistent with the U.S. government’s commitment made during the 2009 round of U.N. negotiations on climate change (the Copenhagen Accord) and reflects the position that the United States, Mexico, and Canada jointly took prior to the ICAO Assembly meeting in 2010.

Resource constraints. FAA officials and a FAAC member told us that sustained federal financial support will be necessary to achieve the technical and operational improvements that are expected to result in emissions reductions consistent with ICAO and FAA goals. For example, resource constraints at the agency could hamper efforts to implement NextGen within the expected time frames; conduct necessary research and development of new technologies, including sustainable alternative jet fuels; and participate in the work and discussions at ICAO and other forums.

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NextGen Air Transportation System: FAA Has Made Some Progress in Midterm Implementation, but Ongoing Challenges Limit Expected Benefits. GAO-13-264. Washington, D.C.: April 8, 2013.

Aviation and Climate Change: Aircraft Emissions Expected to Grow, but Technological and Operational Improvements and Government Policies Can Help Control Emissions. GAO-09-554. Washington, D.C.: June 8, 2009.

International Climate Change Programs: Lessons Learned from the European Union’s Emissions Trading Scheme and the Kyoto Protocol’s Clean Development Mechanism. GAO-09-151. Washington, D.C.: November 18, 2008.

Aviation and the Environment: NextGen and Research and Development Are Keys to Reducing Emissions and Their Impact on Health and Climate. GAO-08-706T. Washington, D.C.: May 6, 2008.

Aviation and the Environment: Strategic Framework Needed to Address Challenges Posed by Aircraft Emissions. GAO-03-252. Washington, D.C.: February 28, 2003.

3. FAAC Recommendation— Support Extending the Alternative Minimum Tax Exemption

Issue Overview

Municipal bond proceeds are a significant funding source for airports’ capital development. Municipal bonds for airports are generally classified as private activity bonds, since the bond proceeds are used for private business purposes. The private activity bonds for airports are tax-exempt (also known as “qualified” private activity bonds). However, qualified private activity bonds are subject to restrictions that do not apply to governmental bonds. Among these restrictions, the interest income from qualified private activity bonds is included in income when calculating the alternative minimum tax (AMT), whereas the interest on governmental bonds is not. A bondholder whose total income reached the level subject to the AMT would have to pay tax on the interest earned from airport qualified private activity bonds.

AMT in 2009 and 2010, and allowed for the refinancing of some private activity bonds into non-AMT debt.

DOT’s and FAA’s Actions to Address Recommendation

Table 6 provides a summary of the FAAC recommendation to support extending the AMT exemption and DOT’s and FAA’s actions to address it, as of June 2013.

FAA officials told us that any further action on extending the AMT exemption to private activity bonds would require legislative action, and there is not currently a legislative vehicle for this provision. As a result, DOT does not plan to take any additional actions and considers the recommendation to be closed.

FAAC Members’ Assessment of DOT’s and FAA’s Progress

subcommittee member did not think that an AMT exemption should be included in legislation without a cost-benefit analysis.

Challenges in Implementing the Recommendation

Mixed perspectives on the appropriateness of the AMT exemption. FAA may face challenges encouraging congressional action on this recommendation due to mixed perspectives on the appropriateness of tax-exemptions for bond financing. Our prior work has shown the importance of determining the economic efficiency of applying preferential tax treatment to selected investments. High- level analyses of the AMT exemption have shown it leads to a loss of federal revenue, but data specific to airports is limited. However, FAA and industry stakeholders counter that exempting airport private activity bonds has led to significant savings. FAA conducted an analysis of the financial impact of the AMT exemption in the American Recovery and Reinvestment Act of 2009, and stated that the exemption resulted in significant savings for airports, increased capital investment, and increased employment. Our tax expenditure guide provides useful resources for evaluating the efficiency of applying preferential tax treatment to selected investments, and could assist Congress as it considers these provisions.

Legislative change. As previously noted, any further action on extending the AMT exemption to private activity bonds will require legislative action. One FAAC subcommittee member noted that airport stakeholders may face challenges in lobbying for such an exemption given their limited financial resources and lack of natural alliances with other industries that previously received an exemption from the AMT.

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Tax Expenditures: Background and Evaluation Criteria and Questions. GAO-13-167SP. Washington, D.C.: November 29, 2012.

Tax Policy: Tax-Exempt Status of Certain Bonds Merits Reconsideration, and Apparent Noncompliance with Issuance Cost Limitations Should Be Addressed. GAO-08-364. Washington, D.C.: February 15, 2008.

Airport Finance: Observations on Planned Airport Development Costs and Funding Levels and the Administration’s Proposed Changes in the Airport Improvement Program. GAO-07-885. Washington, D.C.: June 29, 2007.

4. FAAC Recommendation— Funding Accelerated NextGen Equipage of Aircraft

Issue Overview

FAA is transforming the nation’s ground-based air-traffic control system to an air-traffic management system using satellite-based navigation and other technology. This transformation is referred to as NextGen. NextGen is intended to enhance airspace safety, reduce delays, save fuel, and reduce carbon dioxide emissions and other adverse environmental impacts.

While some operational improvements can be made with existing aircraft equipment, realizing more significant benefits of NextGen necessitates additional investment by airlines in new technologies to establish a critical mass of properly equipped aircraft. However, GAO and others have noted that a variety of disincentives may deter operators from investing early in NextGen equipment. For example, we have reported that aircraft operators may be hesitant to make investments in equipment if they do not have confidence that FAA will deliver the systems, procedures, and capabilities to realize the benefits from their investments. In addition, the FAAC report identified challenges for FAA to overcome in encouraging operators to equip early, including: (1) prior instances in which operators equipped aircraft but received little or no benefit because the FAA did not implement quickly enough the necessary procedures or approvals to enable operators to derive benefits from the equipment; and (2) the business case may be weak for individual operators to purchase and install equipment early, with costs far exceeding expected direct benefits to users.

The FAAC noted that accelerated deployment of NextGen could lead to capacity, efficiency, environmental, and safety benefits. It also emphasized the need to overcome challenges in encouraging operators to equip early by providing some form of public financing to incentivize equipage. One FAAC finance subcommittee member formally dissented to this recommendation and questioned the need for public financing of airline equipment, citing a lack of evidence that the benefits gained from equipment investments would not be sufficient to encourage industry adoption without government subsidies.

DOT’s and FAA’s Actions to Address Recommendation

Table 7 provides a summary of the FAAC recommendation to accelerate investment and installation of NextGen equipment on aircraft and FAA’s actions to address it, as of June 2013.

Section 1: Selected FAAC Recommendations and DOT’s and FAA’s Actions to Address Them Section 1: Selected FAAC Recommendations and DOT’s and FAA’s Actions to Address Them prioritization criteria at a national level, joint investment priorities, and location and timing of capability implementation.

DOT’s and FAA’s Planned Actions

FAA officials stated FAA has addressed this recommendation, with the help of the authority granted in the FAA Modernization and Reform Act. Officials noted that they are still working to determine what the program will entail, including soliciting input from aircraft operators and potential private partners to determine how to establish an incentive program that operators want to participate in. In addition, the appropriations requirements for a loan guarantee program has not yet been met. FAA officials also noted that they are considering how to administer the loan guarantee program and FAA may need to issue a contract for an external group to fulfill this role; however, FAA currently does not have funding to do so.

FAAC Members’ Assessment of DOT’s and FAA’s Progress

officials noted that while they have been focused on possibly establishing a loan guarantee program given the mandate to maximize private investment and a lack of funding for a different type of program, they have solicited input from industry on ideas for other incentive programs that would maximize private investment and have not received any specific suggestions.

Challenges in Implementing the Recommendation

operators to equip, with two subcommittee members noting that sequestration has introduced an additional level of uncertainty into NextGen implementation time frames. In April 2013, we noted that stakeholders, including RTCA and the NextGen Advisory Committee, have stressed the need for additional information to understand the potential direct costs, benefits, and return on investments that might be realized from technological and equipage investments. While FAA’s NextGen plans include some examples of benefits, RTCA reported in 2011 that available FAA plans do not include sufficient information for airlines making investment decisions such as forecast benefits by either location or usage, or the proportion of the local fleet that is currently equipped. We noted that without greater certainty on when and where NextGen improvements are planned, airlines and others are unlikely to invest in the equipment, staffing, and training needed to help achieve the full benefits of NextGen implementation. We recommended FAA assure that NextGen planning documents provide stakeholders information on how and when operational improvements are expected to achieve NextGen goals and targets. In June 2013, DOT concurred with our recommendation and stated that it has efforts underway to better integrate various NextGen plans to provide more of this type of information.

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NextGen Air Transportation System: FAA Has Made Some Progress in Midterm Implementation, but Ongoing Challenges Limit Expected Benefits. GAO-13-264. Washington, D.C.: April 8, 2013.

Next Generation Air Transportation System: FAA Faces Implementation Challenges. GAO-12-1011T. Washington, D.C.: September 12, 2012.

Next Generation Air Transportation System: FAA Has Made Some Progress in Implementation, but Delays Threaten to Impact Costs and Benefits. GAO-12-141T. Washington, D.C.: October 5, 2011.

Next Generation Air Transportation System: Challenges with Partner Agency and FAA Coordination Continue, and Efforts to Integrate Near-, Mid-, and Long-term Activities Are Ongoing. GAO-10-649T. Washington, D.C.: April 21, 2010.

Next Generation Air Transportation System: FAA Faces Challenges in Responding to Task Force Recommendations. GAO-10-188T. Washington, D.C.: October 28, 2009.

Next Generation Air Transportation System: Progress and Challenges Associated with the Transformation of the National Airspace System. GAO-07-25. Washington, D.C.: November 13, 2006.

5. FAAC Recommendation— Review Criteria for the Airport Improvement Program and Passenger Facility Charge Program Related to NextGen

Issue Overview

up to $4.50 for every boarded passenger at commercial airports. Airports can use this funding for FAA-approved projects related to enhancing airport safety, capacity, security, noise compatibility, and for enhancing competition among airlines. Project eligibility is almost identical between AIP and the PFC program except that airports may use PFC funding for repaying bonds and for airline waiting areas and gates that generally are not eligible for AIP grants because they are considered revenue producing for airlines.

In its report, the FAAC noted interest among the aviation community in broadening AIP and PFC eligibility criteria to support aviation infrastructure projects, including those related to NextGen—FAA’s initiative to transform the nation’s ground-based air-traffic control system to an air-traffic management system using satellite-based navigation and other advanced technology. However, the FAAC noted that current regulations do not generally allow AIP or PFC funds to be used for NextGen-related projects.

DOT’s and FAA’s Actions to Address Recommendation

Table 8 provides a summary of the FAAC recommendation to assess AIP and PFC eligibility criteria for NextGen projects and FAA’s actions to address it, as of June 2013.

DOT’s and FAA’s Planned Actions

Although FAA officials told us they consider this recommendation addressed, they said that they continue to track other potential NextGen- related projects that could be recommended for funding through AIP and PFC. As noted in table 8, DOT’s June 2013 update on the status of this recommendation stated that for the next FAA authorization, FAA is considering recommending a pilot program to permit states to fund installation of ADS-B ground stations to provide airborne surveillance coverage.

FAAC Members’ Assessment of DOT’s and FAA’s Progress

Four of the six FAAC finance subcommittee members felt that the recommendation was not fully addressed. Of the two remaining subcommittee members, one did not feel that he had enough information about DOT’s actions on the recommendation to determine whether it was fully addressed, while the other said that the recommendation with respect to AIP was addressed, but it was unclear what action DOT had taken with respect to the PFC program. Two of the subcommittee members, including one that did not provide an opinion on the status of the recommendation, stated that FAA’s approach to the recommendation was very narrow and that the FAAC envisioned a broader review to determine how to expand the scope of the AIP and PFC programs. One of these subcommittee members stated FAA should have had additional meetings with airport representatives after the FAAC completed its work to explore options for rewriting the AIP and PFC program. Another subcommittee member stated that discussions related to AIP and PFC should reflect the context of the FAAC’s recommendation to commission an independent study of federal aviation taxes and fees, which we did not examine as part of this report. Two subcommittee members noted the need to address funding issues, which are discussed in the challenges section.

Challenges in Implementing this Recommendation

permit states to fund installation of ADS-B ground stations—a key NextGen technology—which could potentially expand the use of PFC funds.

Limited funding. FAA officials and two subcommittee members stated that airports are struggling to address their immediate needs with the existing AIP and PFC funds, making it difficult to expand use of these funds to include NextGen projects. Appropriations for AIP have been flat—roughly $3.5 billion for fiscal years 2005 through 2011—and are reduced under current authorized levels to be $3.35 billion from fiscal year 2012 through fiscal year 2015. In addition, a recent statute allowed DOT to transfer funds from AIP to avoid air traffic controllers’ furloughs and reduce the impacts of other reductions. With respect to PFC, two subcommittee members noted that the PFC has not been increased. (The PFC has remained capped at $4.50 since 2000.) As we have noted, airports have long sought to increase the PFC cap, arguing that the fee cap has not been adjusted for inflation, while airlines counter that raising the PFC inhibits demand for air travel. One subcommittee member stated that expanding AIP and PFC eligibility to include additional costs would require a significant study to determine the most appropriate use of the funds.

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Transportation: Alternative Methods for Collecting Airport Passenger Facility Charges. GAO-13-262R. Washington, D.C.: February 14, 2013.

Airport Noise Grants: FAA Needs to Better Ensure Project Eligibility and Improve Strategic Goal and Performance Measures. GAO-12-890. Washington, D.C.: September 12, 2012.

Airport Improvement Program. GAO-07-885. Washington, D.C.: June 29, 2007.

6. FAAC Recommendation— Promote Global Competitiveness

Issue Overview

Ongoing growth in the demand for international air travel presents opportunities for expansion for U.S. carriers. However, we previously found that U.S. carriers’ ability to establish new routes can be limited by the policies of foreign governments. Preferential treatment of national airlines restricts U.S. carriers’ access to possibly large international markets. Other impediments to entry to foreign markets include barriers, such as slot restrictions, that limit the potential for service by U.S. carriers.

DOT has taken steps to address restrictive market access policies. In 1992, DOT launched an initiative to enter into new “Open Skies” agreements with foreign countries. Open Skies agreements remove the vast majority of restrictions on how airlines of the two signatory countries may operate between and beyond their respective territories. For example, these agreements remove prohibitions on the routes that airlines of the signatory countries can fly or the number of airlines that can fly them. Open Skies agreements also provide underlying traffic rights and provisions for cooperative marketing arrangements that allow airlines from different countries to form alliances with one another. Operating in an alliance allows an airline to greatly expand its service network, without having to increase the number of routes it flies using its own aircraft. U.S. and foreign air carriers wishing to enter into an alliance may also request that DOT grant them immunity from the U.S. antitrust laws. Antitrust immunity allows these airlines to coordinate their fares, services, and capacity as if they were a single carrier in these markets, subject to certain conditions. As part of its antitrust immunity review, DOT determines the effects of the immunized alliance on competition and whether the alliance serves the public interest. However, there is not universal agreement that alliances best serve the traveling public.

DOT issued a 1995 Statement of U.S. International Air Transportation Policy recognizing the importance of international air service and the need to enable U.S. carriers to serve foreign markets. The policy provides a broad umbrella under which actions such as bilateral negotiations and antitrust immunity alliance reviews are taken and emphasized a number of objectives, including, but not limited to: providing carriers with unrestricted opportunities to develop services and systems to meet market demand; eliminating market distortions internationally, such as government subsidies and unequal access to infrastructure; and, encouraging the development of a cost-effective and productive air- transportation industry through addressing infrastructure needs, privatizing airlines, and reducing barriers to the creation of global aviation systems, such as limitations on cross-border investment, wherever possible.

The Secretary of Transportation also serves as a member of the President’s Export Promotion Cabinet. This cabinet was established through executive order in 2010 and was tasked with implementing the National Export Initiative, which seeks to double the dollar value of U.S. exports by the end of 2014.

The FAAC report applauded DOT’s efforts to open foreign markets to U.S. airlines, but also noted that some of the world’s fastest-growing aviation markets—including those in Asia, South America, and the Near East—remain restricted to U.S. air carriers. In addition, the FAAC noted that in some key markets, U.S. passenger and cargo air carriers not only face restrictive aviation agreements, but also must confront a wide range of practical market access barriers—including slot restrictions, airspace limitations, and local ground-handling rules—that increase their operating costs and limit U.S. air carriers’ ability to compete, both domestically and globally. In addition, while many different factors can be included in DOT’s public interest analysis of antitrust immunity for alliances, including wages and working conditions, some FAAC members expressed concerns on the impacts of immunized alliances between U.S. and foreign carriers on U.S. workers.

DOT’s and FAA’s Actions to Address Recommendation

DOT officials told us that their actions on this recommendation consisted of a three-prong approach: (1) fostering conditions that enable global alliances to develop as well as ensuring DOT gives weight to existing statutory criteria when reviewing requests for antitrust immunity for alliances between U.S. and foreign carriers; (2) continuing efforts to open foreign markets to U.S. carriers; and (3) expanding DOT’s role in promoting aviation exports. Table 9 provides a summary of the FAAC recommendation to promote global competitiveness and DOT’s actions to address it, as of June 2013.

FAAC recommendation—global competitiveness Leverage the Secretary of Transportation’s appointment to the President’s Export Promotion Cabinet, and support an expansion of the DOT’s role in promoting aviation exports for U.S. air carriers, manufacturers, and airports, and facilitating international tourism.

DOT/FAA actions The Secretary serves on the President’s Export Promotion Cabinet, and DOT is also part of a working group for the National Export Initiative. This initiative was established in 2010 to support trade promotion, is led by the Secretary of Commerce, and includes representatives from the United States Trade Representative, Department of State, and the U.S. Trade and Development Agency. The initiative includes an emphasis on addressing aerospace market access and infrastructure issues, seeking to establish Open Skies agreements and eliminate restrictive aviation practices worldwide. Removal of such restrictions could allow U.S. airlines to more fully participate in the transport of U.S. exports overseas.

DOT’s and FAA’s Planned Actions

DOT officials noted that they are working to ingrain these recommendations into their existing efforts and processes. They stated that DOT continues to pursue Open Skies agreements with China, Mexico, Argentina, South Africa, and Russia, but given the nature of negotiating such agreements, there is no timetable for concluding these discussions. DOT is also considering a “best practices” template outlining how to implement Open Skies provisions in other countries but has not set a timeframe for finalizing this template.

FAAC Members’ Assessment of DOT’s and FAA’s Progress

Homeland Security, and Commerce on the National Export Cabinet. Two members stated that the agencies should work to make it easier for tourists and business travelers to obtain visas, and another member noted the need to ensure U.S. carriers receive the same opportunities overseas that foreign carriers receive in the U.S. market.

Three members stated that DOT should take a more aggressive approach when addressing anti-competitive practices by other countries and supporting the U.S. aviation industry. One subcommittee member stated that DOT needs to refocus on its statutory mandate to strengthen the competitive position of air carriers to at least ensure equality with foreign air carriers; and that the federal government should pursue a national airline policy to follow through on this and other FAAC recommendations. Another member noted that concerns remain with respect to equal access to airport slots during popular travel times while the third member said that DOT should push harder to get an agreement in place with China.

In addition, two subcommittee members, including one that felt the recommendation was addressed, emphasized the need for DOT to consider the labor impacts of Open Skies agreements and the resulting alliances between U.S. and foreign carriers. Another member noted the need to consider the safety impacts. These members noted a lack of consensus during the FAAC discussions regarding how DOT should address these issues; as a result, these issues are not included in the FAAC recommendation but were discussed in the FAAC report as “other areas of significant discussion.”

Challenges in Implementing the Recommendation

Obtaining consensus from many stakeholders, including foreign governments. DOT officials and four FAAC subcommittee members noted challenges in negotiating Open Skies agreements with other countries—a process that can take many years and ultimately depends on securing the agreement of another nation. Two subcommittee members also noted that addressing competitiveness issues involves input from a number of other stakeholders with conflicting viewpoints, including airlines, airports, labor, other government agencies, and elected officials. As previously noted, DOT officials stated that they had established a dialogue with stakeholders regarding impediments to the implementation of alliances around the world, and conducted outreach to get airlines’ and labor stakeholders’ perspectives on DOT’s public interest analysis of alliances.

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Slot-Controlled Airports: FAA’s Rules Could be Improved to Enhance Competition and Use of Available Capacity. GAO-12-902. Washington, D.C.: September 13, 2012.

Airline Industry: Potential Mergers and Acquisitions Driven by Financial and Competitive Pressures. GAO-08-845. Washington, D.C.: July 31, 2008.

U.S. Aerospace Industry: Progress in Implementing Aerospace Commission Recommendations, and Remaining Challenges. GAO-06-920. Washington, D.C.: September 13, 2006.

Transatlantic Aviation: Effects of Easing Restrictions on U.S.-European Markets. GAO-04-835. Washington, D.C.: July 21, 2004.

Issues Relating to Foreign Investment and Control of U.S. Airlines. GAO-04-34R. Washington, D.C.: October 30, 2003.

International Aviation: DOT’s Efforts to Promote U.S. Air Cargo Carriers’ Interests. GAO/RCED-97-13. Washington, D.C.: October 18, 1996.

7. FAAC Recommendation— STEM Education

Issue Overview

Aviation and aerospace employers, including government transportation agencies, airlines, and manufacturers, are facing a number of workforce challenges, such as an aging workforce, a lack of needed skills in the current and future workforce, and the need to adapt to rapidly evolving technology and compete in a global marketplace. A number of organizations, including the FAAC, have noted that addressing these challenges will require a focus on science, technology, engineering, and mathematics (STEM) education. The challenges faced by aviation and aerospace employers reflect a larger national trend, as research has shown that the United States lacks a strong pipeline of future workers in STEM fields and that U.S. students continue to lag behind students in other highly technological nations in mathematics and science achievement.

STEM, which is described in more detail in the next paragraph. Last year, the Office of Management and Budget established a cross-agency priority goal to improve the quality of STEM education at all levels. In May 2012, we reported that by naming STEM education as a cross- agency goal, the administration is taking the first step towards creating a government-wide plan to achieve its goal. However, we also stated that a number of limitations could hamper progress, such as overlapping STEM programs; agencies that did not connect STEM education activities to agency goals in their annual performance plans or measure the progress of their STEM activities; and a lack of information about the effectiveness of STEM programs. We reiterated our prior recommendations. agencies, including DOT. In December 2011, CoSTEM published an inventory of the federal STEM education portfolio. In May 2013, CoSTEM released a 5-year strategic federal STEM education plan. DOT officials told us that DOT’s Research and Innovative Technology Administration (RITA) represents DOT on the CoSTEM effort, and participated in the development of an inventory of federal STEM programs and the development of the Federal STEM education plan. The bulk of DOT’s and FAA’s activities that are related to STEM education are conducted through FAA’s Aviation and Space Education (STEM-AVSED) outreach program. STEM-AVSED’s goals include encouraging students to explore aviation and aerospace career opportunities; promoting the skills and knowledge critical to aviation safety; and increasing awareness and understanding of the agency’s role in aviation and aerospace.

DOT’s and FAA’s Actions to Address Recommendation

DOT and FAA officials have taken steps to address the wide-ranging actions identified in the recommendation by improving internal coordination, collaborating with external stakeholders, and conducting STEM outreach to educational institutions and students through a variety of programs. Table 10 provides a summary of the FAAC recommendation on STEM outreach and DOT’s and FAA’s actions to address it, as of June 2013.

FAAC recommendation—STEM Consider improving programs and connections with 2- and 4-year educational institutions that give students hands-on experience applicable to the aviation and aerospace workplace.

DOT/FAA actions FAA officials stated they improved lines of communication with the Centers of Excellence, which award aerospace research grants to colleges. Also, FAA has an MOU to increase the visibility of technical careers in aviation and aerospace with the National Coalition of Certification Centers (NC3), a network of schools and industry leaders that develop aviation certifications. As part of this effort, FAA and NC3 developed a brochure on aviation careers for college recruiters to share with high school counselors, embarked on a national poster campaign—Yes I Can Do That, and implemented a job shadowing program called Walk in Your Boots.

Establish an award for innovation to recognize persons, businesses, or organizations that develop unique scientific and engineering innovations in aerospace and aviation.

DOT established the Secretary’s Recognizing Aviation and Aerospace Innovation in Science and Engineering (RAISE) award to recognize innovative scientific and engineering achievements that will have a significant impact on the future of aerospace or aviation. The award is open to students at the high school, undergraduate, and graduate levels. DOT awarded its first RAISE award in October 2012.

Work with the Secretary of Labor as an integral part of the Interagency Aerospace Revitalization Task Force, originally established in 2006, to implement a national strategy focused on recruiting, training, and cultivating the aerospace workforce. Work with the Department of Education to provide resources that would create state-of-the-art STEM elementary and secondary educational facilities.

DOT officials noted that while the Interagency Aerospace Revitalization Task Force was disbanded, DOT has held semiannual Aviation Industry Workforce-Management Conferences with the Departments of Labor and Education. In addition, in September 2011, the Secretaries of Transportation, Education, and Labor signed a memorandum of understanding to collaborate on implementing strategies for using STEM education to develop a qualified aerospace workforce. DOT officials stated that the agencies developed an informal work plan, and have coordinated on efforts to provide information on transportation careers for the Department of Labor’s American Job Centers. In addition, as previously mentioned, RITA represents DOT on a federal agency-wide effort to coordinate STEM programs through the Committee on Science, Technology, Engineering, and Math Education.

DOT’s and FAA’s Planned Actions

important that the agency continue to keep a spotlight on STEM education. To maintain that focus, officials stated that the agency could include FAA’s STEM work into FAA’s Business Plan Goals. FAA officials stated they would like to eventually augment the existing STEM-AVSED efforts to target middle and high school students with additional programs for elementary students but have not established time frames to do so. DOT officials noted that they are working to determine how to attract students through STEM programs, as well as attracting students more interested in technical training.

FAAC Members’ Assessment of DOT’s and FAA’s Progress

Five of the seven FAAC labor and workforce subcommittee members stated that DOT and FAA had addressed the recommendation, but all of the members stated that the DOT’s and FAA’s work on this issue should continue. Four of the subcommittee members praised DOT efforts such as establishing the RAISE award or the Aviation Industry Workforce- Management Conferences. Two of the subcommittee members—one that thought the recommendation was addressed and one that did not—stated that DOT and FAA should conduct outreach outside of Washington, D.C., on workforce and STEM issues and made diverse suggestions, including involving FAA regional offices, hosting regional workforce summits, providing a regional RAISE award, and interacting with students in university and high school settings. One of the FAAC members who did not think the recommendation was addressed stated that DOT should provide more detail on what they are doing, and how they are measuring their performance.

Challenges in Implementing the Recommendation

seven FAAC subcommittee members we interviewed recognized that STEM education is a broad policy issue, and efforts on this recommendation require collaborating with and maintaining the participation of outside groups, such as other agencies, industry, and other stakeholders. The administration is also taking steps to address these issues through establishing a cross-agency priority goal and creating a 5-year strategic plan for STEM education. As previously noted, RITA has participated in the government-wide effort to coordinate STEM programs.

Sustaining long-term efforts. DOT and FAA officials and a FAAC subcommittee member noted that education is an evolving, ongoing effort, which can be difficult to sustain interest and support for over the long term. They added that funding and limited resources pose challenges to maintaining these efforts, but the agencies work to leverage resources through the partnerships previously noted.

Attracting students to aviation careers. FAA officials stated that attracting students to technical careers can be challenging given misconceptions about aviation maintenance careers. Five of the FAAC subcommittee members also noted the challenges in enticing students into the STEM fields or related aviation careers, and three of the members stated that a viable and sustainable aviation industry would help address this challenge. FAA officials also noted challenges in developing web content that appealed to students and educators while staying within FAA’s branding guidelines, which are typically geared toward FAA’s traditional audience of aviation professionals. However, FAA officials stated they were working across departments within FAA to address these issues.

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Science, Technology, Engineering, and Mathematics Education: Governmentwide Strategy Needed to Better Manage Overlapping Programs. GAO-13-529T. Washington, D.C.: April 10, 2013.

Aviation Safety: Additional FAA Efforts Could Enhance Safety Risk Management. GAO-12-898. Washington, D.C.: September 12, 2012.

Managing for Results: GAO’s Work Related to the Interim Crosscutting Priority Goals under the GPRA Modernization Act. GAO-12-620R. Washington, D.C.: May 31, 2012.

2012 Annual Report Opportunities to Reduce Duplication, Overlap and Fragmentation, Achieve Savings, and Enhance Revenue. GAO-12-342SP. Washington, D.C.: February 28, 2012.

Science, Technology, Engineering, and Mathematics Education: Strategic Planning Needed to Better Manage Overlapping Programs across Multiple Agencies. GAO-12-108. Washington, D.C.: January 20, 2012.

Federal Aviation Administration: Agency Is Taking Steps to Plan for and Train Its Technician Workforce, but a More Strategic Approach Is Warranted. GAO-11-91. Washington, D.C.: October 22, 2010.

8. FAAC Recommendation— Legal Protections for Safety Data

Issue Overview

For decades, FAA and the aviation industry have used data to identify the causes of aviation accidents and incidents and take actions to prevent their recurrence. Our prior work has shown that FAA is in the midst of a shift toward a proactive, data-driven safety oversight approach, commonly referred to as a safety management system (SMS) approach. Under this new approach, FAA plans to use aviation safety data to identify system- wide trends in aviation safety and manage emerging hazards before they result in incidents or accidents. analysis of multiple databases, FAA has partnered with industry through the Aviation Safety Information Analysis and Sharing (ASIAS) program. According to FAA documents, ASIAS leverages data from multiple sources, including FAA data sets, airline proprietary safety data, publicly available data, and manufacturer data, allowing FAA to (1) perform integrated queries across multiple databases, (2) search an extensive warehouse of safety data, and (3) display pertinent elements in an array of useful formats. The ASIAS home page shows that as of February 2013, 44 airlines were participating in ASIAS, including 13 of the 14 airlines with at least 1 percent of total domestic scheduled passenger service revenue. FAA is also in two rulemaking processes to require SMS—which will include the development of systems for reporting, tracking, and analyzing safety data—for air carriers and airports.

Our prior work has shown that the success of a SMS program depends upon the open sharing of safety information among aviation stakeholders; however, FAA officials have recognized that aviation industry concerns about data protection and legal liability could hinder the implementation of SMS. The FAAC stated that the development, analysis, and availability of shared safety information could be inhibited by the potential that this information may be used for other purposes, such as exposure through the media, admissions in criminal or administrative prosecution, or use in civil litigation.

DOT’s and FAA’s Actions to Address Recommendation

Table 11 provides a summary of the FAAC recommendation to ensure safety data protections and DOT’s and FAA’s actions to address it, as of June 2013.

DOT’s and FAA’s Planned Actions

completed in October 2013. FAA officials also stated they will continue to encourage the voluntary reporting of data into ASIAS.

FAAC Members’ Assessment of DOT’s and FAA’s Progress

The evolving nature of aviation safety and remaining concerns regarding the potential disclosure of data led to varying opinions on the extent to which the recommendation was addressed. Two subcommittee members said it was addressed, with one citing the provisions protecting safety data from disclosure in the FAA Modernization and Reform Act, and another noting the work is ongoing. Four of the seven FAAC safety subcommittee members did not believe that the recommendation was addressed, but three of them noted that work was ongoing or that safety was an evolving issue. One subcommittee member stated he did not have enough information to comment on the status of this recommendation. Three subcommittee members expressed concern on the potential disclosure of data during criminal and civil litigation while another member expressed concern on protecting data that is mandated to be submitted—neither of which is addressed by current law but were included in the FAAC recommendation. One member noted that FAA needs to better communicate to Congress how the lack of protections could have serious ramifications on voluntary reporting of safety data. Two subcommittee members suggested additional areas of focus beyond the recommendation, including collecting data on the amount of time pilots spend flying to the city where they begin their work day—an issue discussed in the aftermath of the 2009 Colgan accident—and the need for international harmonization on the definition of legal protections for safety data.

Challenges in Implementing the Recommendation

Addressing remaining data protection concerns. FAA officials as well as two FAAC subcommittee members acknowledged industry concern with respect to protecting safety data during criminal and civil litigation and recognized its potential impact on SMS implementation. However, they noted that it will be difficult to determine the extent to which this issue could affect SMS and data sharing until it is tested in court. Four of the subcommittee members stated that the potential for disclosure could also affect operators’ or their employees’ willingness to voluntarily report safety issues.

While protection of airport safety data was not specifically discussed as part of the FAAC’s recommendation, we reported in September 2012 that these data are subject to state-specific FOIA laws, which could make air carriers less willing to share safety information with airports. Specifically, while air carriers are not directly subject to state FOIA laws because they are privately owned, data that airports collect and submit to FAA for SMS—such as information on hazards or other safety data—may be subject to public disclosure under state FOIA laws. FAA officials and experts stated that state FOIA laws could affect the willingness of air carriers to share safety data with airports because any data they choose to share with airports could then be subject to these laws. We recommended that the FAA Administrator consider strategies to address airports’ concerns, including asking Congress to provide additional protection for SMS data collected by public entities. Officials stated that FAA is working to address this recommendation.

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Aviation Safety: FAA Efforts Have Improved Safety but Challenges Remain in Key Areas. GAO-13-442T. Washington, D.C.: April 16, 2013.

Aviation Safety: Additional FAA Efforts Could Enhance Safety Risk Management. GAO-12-898. Washington, D.C.: September 12, 2012.

Aviation Safety: FAA Is Taking Steps to Improve Data, but Challenges for Managing Safety Risks Remain. GAO-12-660T. Washington, D.C.: April 25, 2012.

Aviation Safety: Improved Data Quality and Analysis Capabilities Are Needed as FAA Plans a Risk-Based Approach to Safety Oversight. GAO-10-414. Washington, D.C.: May 6, 2010.

9. FAAC Recommendation— Predictive Analytic Capabilities for Safety Data and Information

Issue Overview

As previously noted, FAA is in the midst of a shift toward a proactive, data-driven safety oversight approach, commonly referred to as a safety management system (SMS) approach. Under this new approach, FAA plans to use aviation safety data to identify system-wide trends in aviation safety and manage emerging hazards before they result in incidents or accidents. The FAAC noted that to develop the robust predictive risk- discovery capabilities needed for SMS, FAA must develop advanced analytical tools and methods, as well as modeling and simulation capabilities. According to FAA, the Aviation Safety Information Analysis and Sharing (ASIAS) program—a joint industry and FAA effort that serves as a central exchange of safety information—is a cornerstone of its effort to implement SMS. According to FAA documents, ASIAS leverages data from multiple sources—including FAA data sets, airline proprietary safety data, publicly available data, and manufacturer data—allowing FAA to (1) perform integrated queries across multiple databases, (2) search an extensive warehouse of safety data, and (3) display pertinent elements in an array of useful formats. The ASIAS home page shows that as of February 2013, 44 airlines were participating in ASIAS.

According to the FAAC, the initial results of ASIAS analyses have demonstrated the value of using safety information to produce a system safety baseline. However, the FAAC noted that realization of predictive safety risk-discovery requires investment in expanding, accelerating, and maturing ASIAS capabilities.

DOT’s and FAA’s Actions to Address Recommendation

Table 12 provides a summary of the FAAC recommendation on developing predictive safety risk analysis capabilities and FAA’s actions to address it, as of June 2013.

DOT’s and FAA’s Planned Actions

By securing the funds for execution, FAA believes that it has fulfilled the spirit of the recommendation and is positioned to deliver predictive safety risk-discovery capabilities. Officials told us that FAA intends to continue executing its 5-year ASIAS Plan.

FAAC Members’ Assessment of DOT’s and FAA’s Progress

recommendation was fully addressed, and three noted this was due to the ongoing nature of the recommendation, but stated that they were satisfied with FAA’s actions. For example, one subcommittee member said that developing predictive safety risk-discovery capabilities requires constantly refining and making the capabilities more sophisticated.

Challenges in Implementing the Recommendation

to proactively identify risks. According to its ASIAS Plan, FAA will address and monitor these issues regularly as new data sources are added. It plans to develop taxonomies to better merge data from programs like ASAP, the Air Traffic Safety Action Program, and FOQA in 2013 and 2014.

Resource constraints. Three FAAC subcommittee members raised concerns about how budget issues would affect FAA’s efforts to implement the recommendation. One subcommittee member noted that making substantive progress on this recommendation will not be possible until budget issues are addressed. According to FAA officials, funding reductions due to sequestration will not have a major effect on the program’s development in fiscal year 2013. However, the officials noted that these reductions will delay some specific improvements, such as ASIAS’s ability to detect instances where aircraft situational awareness is lost.

Analytical capabilities. According to FAA officials, labor agreements and other factors can affect the agency’s ability to fully develop the analytical capabilities of ASIAS. For example, the ASIAS Executive Board must authorize analyses of ASIAS data, and in some cases, the members of the board are constrained by labor agreements that limit how their airlines’ data can be used. FAA officials noted that while they provide the airlines with industry benchmarks from ASIAS so the airline can see how it compares on certain metrics, it is unclear how the airlines are using the data. In addition, FAA officials told us that because some of the identifying information is stripped from the data, FAA is limited in its analyses that would indicate the relative safety performance of a particular airline. For example, if the information is left with identifiers, then FAA would be able to pull other relevant reports associated with a particular flight, and could merge that data to understand all the relevant factors, and then de-identify the information. As mentioned in Table 12, FAA stated it is working with three airlines to demonstrate the benefits of using this approach.

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General Aviation Safety: Additional FAA Efforts Could Help Identify and Mitigate Safety Risks. GAO-13-36. Washington, D.C.: October 4, 2012.

Aviation Safety: Additional FAA Efforts Could Enhance Safety Risk Management. GAO-12-898. Washington, D.C.: September 12, 2012.

Aviation Safety: FAA Is Taking Steps to Improve Data, but Challenges for Managing Safety Risks Remain. GAO-12-660T. Washington, D.C.: April 25, 2012.

Aviation Safety: Improved Data Quality and Analysis Capabilities Are Needed as FAA Plans a Risk-Based Approach to Safety Oversight. GAO-10-414. Washington, D.C.: May 6, 2010.

10. FAAC Recommendation— Prioritize Rulemaking

Issue Overview

The safety of the nation’s flying public depends, in large part, on the aviation industry’s compliance with safety regulations and FAA’s enforcement of those regulations when violations occur. As part of FAA’s oversight of aviation safety, FAA develops rules and regulations through the rulemaking process. FAA, the National Transportation Safety Board (NTSB), and we have previously expressed concerns about the efficiency and timeliness of FAA’s rulemaking efforts. In 2010, we noted that a number of issues may contribute to a lengthy rulemaking process at FAA, including the need to conduct research, obtain public comment, and provide industry time to comply with the rule. In addition, we reported that external pressures—such as highly publicized accidents, recommendations by NTSB, and congressional mandates—as well as internal pressures, such as changes in management’s emphasis, continued to add to and shift the agency’s priorities, and that shifting priorities can add to delays. The FAAC report raised similar concerns, stating that the queue of potential rulemaking projects far exceeds the FAA capacity for action in a reasonable time period, and there does not appear to be a universally understood methodology for FAA to ensure the most effective projects receive the highest priority. suspending or revoking operating certificates. However, as previously noted, FAA and the U.S. aviation industry are moving toward the adoption of safety management systems (SMS)—a data-driven, risk-based safety oversight approach. The FAAC report raised concerns that FAA’s enforcement policies are not reflective of the shift to SMS, because FAA focuses its enforcement on regulatory non-compliance, regardless of risk level, rather than prioritizing its efforts to address unacceptable risks.

DOT’s and FAA’s Actions to Address Recommendation

Table 13 provides a summary of the FAAC recommendation to review FAA’s rulemaking priorities and FAA’s actions to address it, as of June 2013.

DOT’s and FAA’s Planned Actions

implementation team is evaluating how to integrate the recommended model into the current rulemaking process without creating unnecessary redundancies. FAA officials stated they requested external feedback on the model through the ARAC, at ARAC’s June 20, 2013, meeting. According to FAA officials, ARAC members generally support implementation activities and FAA is considering the feedback ARAC provided on the tool and future ARAC involvement. FAA plans to beta test the model in June 2013 and fully implement it in fiscal year 2014. FAA officials stated that the current tool is supported by MS Excel, but noted that FAA is developing an automated version of all rulemaking tools and is including the prioritization model in the requirements.

FAAC Members’ Assessment of DOT’s and FAA’s Progress

Four of the six FAAC safety subcommittee members felt the recommendation was not fully addressed; two members felt it was addressed, although one stated that FAA should take additional actions as its work on this recommendation continues, and one member did not provide an opinion. One of the subcommittee members who stated the recommendation was not addressed, as well as one member who stated it was, suggested that FAA should be more transparent about its process. Another subcommittee member felt that FAA should communicate more with the NTSB when prioritizing rulemakings. Another subcommittee member stated FAA was making progress, but he was unsure where FAA was in the process since receiving the recommendations from the ARAC. The remaining member had concerns beyond prioritization of rulemaking, such as the clarity of FAA rules and the role of external input versus data when crafting rules.

Challenges in Implementing the Recommendation

prioritization process is appropriately addressing aviation safety issues raised by external parties, such as the public, Congress, the DOT Inspector General, and GAO, without shifting FAA’s focus from continuing to address other top priority issues.

Culture change. Two other FAAC subcommittee members noted that implementing this recommendation would require a culture change at FAA, which could be difficult. For example, one stressed the need for FAA to be proactive in addressing safety issues, and the other stated that FAA will need to develop a holistic approach toward rulemaking that allows it to address issues quickly.

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Federal Rulemaking: Agencies Could Take Additional Steps to Respond to Public Comments. GAO-13-21. Washington, D.C.: December 20, 2012.

Aviation Safety: Additional FAA Efforts Could Enhance Safety Risk Management. GAO-12-898. Washington, D.C.: September 12, 2012.

Aviation Safety: Improved Planning Could Help FAA Address Challenges Related to Winter Weather Operations. GAO-10-678. Washington, D.C.: July 29, 2010.

Aviation Safety: Better Management Controls are Needed to Improve FAA’s Safety Enforcement and Compliance Efforts. GAO-04-646. Washington, D.C.: July 6, 2004.

Aviation Rulemaking: Incomplete Implementation Impaired FAA’s Reform Efforts. GAO-01-950T. Washington, D.C.: July 11, 2001.

Aviation Rulemaking: Further Reform Is Needed to Address Long- standing Problems. GAO-01-821. Washington, D.C.: July 9, 2001.

Appendix I: Listing of the 23 Recommendations Made by the Future of Aviation Advisory Committee, by Area

1. Exercise strong national leadership to promote and showcase U.S. aviation as a first user of sustainable alternative fuels. 2. Support research and development related to airframe and engine technologies. 3. Secure operational and infrastructure improvements (NextGen, ground taxi delay management programs, and airport energy efficiency and emissions reduction program). 4. Establish a harmonized approach for aviation carbon dioxide emission reductions. 5. Support extending the alternative minimum tax exemption for airport private activity bonds. 6. Fund accelerated Next Generation Air Transportation System (NextGen) equipage of aircraft. 7. Deliver the benefits of NextGen. 8. Review eligibility criteria for the Airport Improvement Program and Passenger Facility Charge Program. 9. Promote the global competitiveness of the U.S. aviation industry. 10. Commission an independent study of federal aviation taxes and fees. 11. Ensure transparency in ticket pricing, fees, code-share, contracts of carriage, and travel statistics. 12. Support intermodalism by establishing a task force, examining the Essential Air Service Program, and recommending that legislation prioritize intermodal links. 13. Reform the Essential Air Service program. 14. Continue to be involved in efforts to address jet fuel price volatility. 15. Ensure coordination and focus on science, technology, engineering, and math education programs. 16. Urge the National Mediation Board to implement the Dunlop II recommendations. 17. Implement a semi-annual Aviation Industry Workforce-Management Conference. 18. Seek legal protections for safety data program participants. 19. Support predictive analytic capabilities for safety data and information. 20. Identify new sources of safety data and establish criteria for inclusion in voluntary data-sharing programs. 21. Include safety performance standards and training into NextGen planning and implementation. 22. Review and reprioritize FAA’s rulemaking initiatives. 23. Address issues related to child safety for air travel.

Appendix II: Future of Aviation Advisory Committee Members

The Department of Transportation (DOT) chartered the Future of Aviation Advisory Committee (FAAC) on April 16, 2010, to develop a manageable, actionable list of recommendations for DOT. The FAAC included 19 representatives —1 government official (DOT Assistant Secretary for Aviation and International Affairs) and 18 non-government representatives—from a cross-section of stakeholders, such as air carriers, airports, airline labor unions, manufacturers, and representatives from the finance community, academia, and passenger interests. The FAAC established five subcommittees to develop recommendations in the five areas of interest specified in the FAAC charter: environment, financing, competitiveness and viability, labor and workforce, and safety. A list of the FAAC members, as well as the subcommittees they served on, is provided in table 14.

Appendix III: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above the following individuals made important contributions to this report: Heather Krause (Assistant Director); Amy Abramowitz; Melissa Bodeau; Anne Dore; Kevin Egan; Crystal Huggins; Bert Japikse; Aaron Kaminsky; Bill Keller; Tim Minelli; SaraAnn Moessbauer; Susan Offutt; Paul Revesz; Marylynn Sergent; Gretchen Snoey; Pamela Vines; and Jessica Wintfeld.