Air Traffic Modernization on Congress' Radar but Funding Isn't
March 12, 2010
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    WASHINGTON – As the Senate finally considers long-stalled legislation this week to speed modernization of the air traffic system, the bill won’t resolve one crucial question: Who pays for the technology that planes need to make it work?

    Airlines and private jet owners want taxpayers to fund the gear that would let them benefit from an upgrade from radar to satellite-based navigation. The Federal Aviation Administration says the technology will make flying safer and enable controllers to accommodate more planes in the sky.

    The Senate bill mandates that aircraft owners buy the equipment, but it doesn’t give them what they want – between $2 billion and $4 billion to pay for it. And while the Senate bill, which could be voted on as early as today, offers incentives for adoption, the House version of the legislation doesn’t include direct funding or incentives.

    U.S. Transportation Secretary Ray LaHood said this week that the administration is discussing ways to be “helpful” to airlines and would make a decision soon, but it has not agreed to pay for it. Meanwhile, airline executives are still fuming from being shut out of the $787 billion stimulus bill last year.

    “If government is going to mandate it, which they would do in the Senate bill, they should fund this technology,” said Karen J. Lewis, vice president of governmental affairs at Dallas-based Southwest Airlines. Fort Worth-based American Airlines shares that position.

    GPS technology

    The technology, known as Automatic Dependent Surveillance Broadcast, or ADS-B, uses GPS technology to broadcast a plane’s speed and location, and to receive weather data. It would allow pilots and air traffic controllers to almost instantly know where planes are.

    It was pioneered in Alaska, where the mountainous terrain prevented widespread installation of ground-based radar stations. And it was recently implemented in Houston to track helicopters and planes over the Gulf of Mexico, where radar coverage doesn’t extend.

    The FAA bills are loaded with other provisions that enhance the regulator’s oversight of airlines and pilots, including several elements that stem from maintenance problems at Southwest and American in 2008 and 2009. The House bill includes a controversial provision that would make it easier for FedEx workers to unionize, which could slow negotiations with key senators who support FedEx’s opposition to it.

    But FAA officials and lawmakers say air traffic modernization is the most crucial feature of the bills because the radar-based system won’t be able to handle the expected traffic growth over the next 15 years. The FAA’s latest estimate says the modernization effort will reduce total flight delays 21 percent by 2018. The new system will enable more efficient flight paths, which will save 1.4 billion gallons of jet fuel over the same period, the FAA says.

    But travelers and businesses won’t get those benefits if planes don’t adopt the technology. While the FAA expects to issue a proposal by May that would mandate adoption of the avionics by 2020, the Senate bill sets the date at 2015.

    Airlines’ push

    Airlines argue it’s a difficult time for them to make expensive investments that might not yield cost savings. After striking out on the stimulus, the carriers are again lobbying for the government to cover those costs, which could exceed $4 billion for all aircraft.

    “I am still dumbfounded that there was no support for air traffic control infrastructure, particularly equipage, in the stimulus legislation,” American Airlines chief executive Gerard Arpey said Tuesday in a speech in Washington.

    “The airlines have invested billions to acquire state-of-the-art equipment,” he said. “The government has not. The net loser is the economy, which suffers from the diminished productivity of one of our greatest assets.”

    Some airlines, including Southwest, are also pushing for the government to reward their earlier modernization investments, which include avionics and training that allows them to fly more direct routes.

    Such “rewards” may involve asking the FAA to clear a path for Southwest to fly the more direct procedure, which could require other carriers, which aren’t capable of flying the more direct routes, to alter their routes, said David Newton. He has directed Southwest’s efforts to implement the procedures, known as Required Navigation Performance, or RNP. American has invested in RNP as well.

    “The real benefits to ADS-B require that everybody adopt it so that everybody is sharing this increased surveillance,” Newton said. “RNP, on the other hand, we can do that tomorrow.”

    Arpey said American’s new costs under the FAA bill would be in the “hundreds of millions of dollars.”


    Sen. Kay Bailey Hutchison, R-Texas, said Wednesday evening that senators are discussing a provision that would allow, but not direct, the FAA to pay for the carriers’ equipment. Hutchison, the senior Republican working on the bill, said it’s unclear if that would succeed.

    If Congress doesn’t allow funding for the technology, it may authorize incentives, such as a “best-equipped, best-served” policy, which would grant airspace and runway priority to jets that have the gear. The Senate bill also would allow the FAA to work with up to five states to offer loans to aircraft owners to adopt the gear.

    Arpey said he likes a “best-equipped, best-served” policy, but worries it would hurt general-aviation pilots, who may not have the money to upgrade their avionics.

    “Is that fair?” Arpey asked. “Is that the best way to allocate a scarce resource?”

    Steven Brown, director of operations for the National Business Aviation Association, said aerospace companies and private aircraft owners recommended to an FAA rulemaking committee that subsidies would be needed to accelerate their purchase of equipment.

    The funding options being discussed include direct payments, loans and tax benefits, FAA Administrator Randy Babbitt said.

    FAA officials say all aircraft – commercial and private jets – need the technology to reap the full benefits of modernization. They acknowledge that funding for owners of business aircraft will probably attract criticism.

    “Incentivizing equipment is of interest to all of us, and a big step forward if we can engage in it,” Babbitt told a conference on Tuesday. “We need the entire community to come forward with support.”

    Date: 2010-03-10