STATEMENT OF

NICHOLAS A. SABATINI,
ASSOCIATE ADMINISTRATOR FOR SAFETY,
ACCOMPANIED BY
HANK KRAKOWSKI,
CHIEF OPERATING OFFICER,
AIR TRAFFIC ORGANIZATION,
FEDERAL AVIATION ADMINISTRATION

BEFORE THE

SENATE COMMERCE, SCIENCE, AND TRANSPORTATION COMMITTEE,
SUBITTEE ON AVIATION OPERATIONS, SAFETY, AND SECURITY,

ON

AVIATION SAFETY ISSUES,

April 10, 2008.

Chairman Rockefeller, Senator Hutchison, Members of the Subcommittee:

I am pleased to appear before you today to discuss some of the Federal Aviation Administration’s (FAA) many important safety initiatives and how they contribute to extending this unprecedented aviation safety record.  Some people may dismiss claims like “this is the safest period ever” because they have heard this claim in the past.  For at least the past 70 years, aviation safety has improved by a third or more every decade.  In fact the pace of improvement has accelerated recently and we believe the pace of improvement will continue to accelerate for the next decade or more.

This context is important.  Over the past five years, on-board fatalities have occurred at a rate of about 1 fatal accident in every 15 million passenger flights.  We see no reason why that figure cannot become one in 30 million or even one in 40 million flights within 10 or 15 years.  The system’s performance now is so strong that we decided several years ago to develop a new measure to express the risk of fatality in commercial aviation.  In addition to traditional data on fatal accidents per 100,000 flight hours or 100,000 departures, the FAA now uses fatalities per 100 million persons flown as a basic measure of the system’s performance.  This includes all fatalities, whether they occur onboard a passenger or cargo flight, or whether they occur off the aircraft on the airport surface or elsewhere.

To offer a sense of scale, immediately after World War II, that measure yielded nearly 1,500 fatalities per 100 million persons flown.  By the early 1960s, the measure had improved to about 500 fatalities per 100 million persons flown.  By the mid-1990s, that measure had fallen to about 45 fatalities per 100 million persons flown.  Now, in a typical year, we experience rates of 5 to 8 fatalities per 100 million persons flown and we fully expect to reach long-term rates of 4 or fewer fatalities per 100 million persons flown within the next decade.  By comparing that level of safety to where we were just 20 years ago, or even a decade ago, we begin to get some sense of scale on how safe the system has become--and it will only continue to get better over the long term.

Yet, although we take great pride in the results of the efforts of aviation safety professionals in both government and industry, we remain ever mindful of the need to continue to push ourselves to find ways to improve a system that, by any standard, is performing remarkably well.

I would briefly like to put into context an incident involving Southwest Airlines that has received a great deal of attention recently.  In March of last year, the FAA Principal Maintenance Inspector (PMI) charged with overseeing Southwest Airlines inappropriately, and in violation of existing FAA policy and regulatory requirements, accepted a voluntary disclosure under the Voluntary Disclosure Reporting Program (VDRP).  The disclosure was the fact that 46 Southwest Airlines aircraft had continued flight operations past the due date for a required inspection of the aircraft airframe for cracks.  These aircraft had overflown an Airworthiness Directive (AD) requiring the inspection. 

Despite this determination, and, again, in violation of existing FAA policy and regulatory requirements, the airline, even after reporting this safety violation under VDRP, did not ground these aircraft immediately, but instead continued to operate the aircraft.  Subsequently, the airline conducted the required inspections and six aircraft were discovered to have cracks, five of which were ultimately determined to have the type of crack the AD was designed to detect.  A total of 1451 commercial operations were conducted by Southwest Airlines in violation of the law, putting thousands of passengers at risk.  That this was done with the implicit consent of the FAA PMI overseeing the carrier is beyond my comprehension. 

On March 6, 2008, the FAA issued a $10.2 million proposed civil penalty to Southwest Airlines for its decision to knowingly continue to operate noncompliant aircraft in commercial operations.  The FAA is in the process of taking appropriate personnel actions with respect to FAA employees in response to the findings of the ongoing investigation of this matter.

Last week, Acting Administrator Sturgell announced a five point plan that addresses the issues of responsibility, accountability, communication, and ethics.  I believe these initiatives will help ensure that our rules are being followed and reemphasize to our workforce the importance of consistency and adherence to national policy. 

Also, on March 13, 2008, to ensure that what happened with Southwest Airlines was an isolated problem and not a systemic one, I ordered a Special Emphasis Surveillance, the first phase of which has just been completed.  While a second, more comprehensive phase is ongoing, our initial findings validate that our systems safety approach of oversight is working as intended.  We expect to complete the second phase by June 30^th and will continue to analyze the incoming data to discover if and where other problems in the system exist and to immediately correct any problems identified.

As the FAA addresses these issues of responsibility, accountability, communication, and ethics, we also have hundreds of safety initiatives ongoing at any given moment.  As we continue to examine the broader issue of aviation safety in this hearing, I will focus my remarks on two areas that I know are of interest to this Subcommittee, our oversight of aircraft maintenance and our efforts to reduce runway incursions. 

When FAA last testified before this Subcommittee on safety oversight, we discussed how the agency has changed the way we oversee aircraft maintenance.  We moved from a paradigm where FAA’s inspectors were required to complete a prescribed number of oversight activities to one where we used the Air Transportation Oversight System (ATOS) model, which goes beyond simply ensuring regulatory compliance.  The goal of the oversight model is to foster a higher level of air carrier safety using a systematic, risk-management-based process to identify safety trends and prevent accidents.  ATOS has improved safety because it identifies and helps manage risks before they cause problems by ensuring that carriers have safety standards built into their operating systems. 

This oversight approach leverages FAA’s inspector workforce experience and knowledge by reducing the likelihood of repeating inspections of the same aircraft or function, unless deficiencies were found in prior inspections of the aircraft or function.  Our inspectors develop safety surveillance plans for each air carrier based on data analysis, and adjust plans periodically based on identified risks.  For example, with the cost of fuel increasing daily so many of our legacy carriers are dealing with how to manage these unexpectedly large costs.  In light of this reality, FAA inspectors can adapt their surveillance plan to increase their focus on areas that might be at risk due to rising fuel costs, such as flight planning, dispatch, and fuel loading.  Additionally the system can be adjusted when emphasis areas need to be addressed such as our recent efforts to review Airworthiness Directives.  I know that the Inspector General (IG) agrees with the FAA that it is a priority that our inspectors have the tools and information necessary to be flexible in our oversight of carriers as their financial and operational situation changes.

I also know that the IG agrees with us that our new approach to oversight is a better way to make the best use of agency resources as well as to improve safety.  We recently completed moving all air carriers to this oversight system.  In 2005, we committed to a transition plan to move all remaining FAR Part 121 air carriers operating under ATOS by the end of calendar year 2007.  This was no small undertaking.  At the time we had only 16 air carriers that were under ATOS.  I am happy to report we have met this goal and that all Part 121 carriers have made this most important transition.  Additionally, we have improved upon the original system and successfully implemented those improvements.  The initial reactions to the modifications and improvements we have made have been extremely positive.  However, our work is not done.  We must now be vigilant in using the system to manage identified risks, and take appropriate actions.    

This change in oversight recognizes that FAA cannot be expected to provide quality control for every airline or effectively police millions of flights.  The safety laws that Congress passes and the regulations we implement all place the responsibility for safety on the airlines.  The FAA has regulatory oversight responsibilities to ensure that air carriers comply with safety standards and requirements.  The FAA’s role is an important one, and we see the new approach under ATOS as providing more effective and efficient use of our resources.  By focusing on risk we can determine how well the airline is managing its processes and whether or not the processes are performing as designed to meet the safety standards.  Our inspection tools are designed to collect data for these purposes.  Our oversight systems engage air carriers in the management of their safety issues.

I am very aware of your concern with U.S. carriers having more of their maintenance performed by repair stations, both foreign and domestic.  I want to clarify the roles and responsibilities of air carriers, repair stations, and the FAA.  When an air carrier uses a contract maintenance provider (a certificated Part 145 repair station or a non-certificated provider) to provide all or part of its aircraft maintenance, that maintenance provider’s organization becomes an extension of the air carrier’s maintenance organization.  The air carrier must define the scope and limitations of the outsourced work, provide the applicable sections of the carrier’s maintenance manual, ensure that the personnel are competent and have the necessary facilities and equipment to properly execute that work, and supervise or direct the work to ensure that the work is accomplished and meets all requirements of the air carrier’s maintenance program.  We are reviewing how we could clarify how an air carrier can demonstrate that all of its maintenance has been properly performed, regardless of whether it is done by the carrier itself or by another entity.  We may pursue rulemaking on this issue in the near future. 

Additionally, the FAA has established a new training course for its field maintenance inspectors and supervisors.  This course will give our entire maintenance inspector workforce the knowledge and skills necessary to properly conduct surveillance on contract maintenance providers.  This is a four-day course that instructs the inspectors how to access the data collected from the airlines and contract maintenance providers and then use that data to properly assess the risks or potential risks of each contract maintenance provider used by the air carrier.

I am confident that the changes we have made in our oversight philosophy and the work we continue to do with input and assistance from the aviation community, Congress, and the international community has contributed to this historically safe period of commercial aviation safety.  Our safety oversight must keep pace with the industry as it changes and I believe we are well positioned to accept that challenge.

Turning to another of the FAA’s top priorities, I would like to discuss FAA’s efforts to reduce the number and severity of runway incursions.  Runway safety starts with preventing runway incursions, whether these mistakes are made by pilots, controllers or ground vehicle operators. 

Recently, the National Transportation Safety Board (NTSB) and the Government Accountability Office (GAO) have issued recommendations on areas where the FAA could make improvements in runway safety.  In November, the NTSB announced that improving runway safety will remain on the Board’s “Most Wanted” list of improvements for 2008.  FAA believes that the technologies we are now testing and deploying will be responsive to address the problem of runway incursions.  Also, the GAO reported on how the FAA has taken steps to address runway and ramp safety.  We appreciate the work that the GAO and NTSB have done, and we welcome their analysis and feedback.  The FAA has actively and consistently invested in programs and technology development to address this serious aviation safety issue.

An aggressive and effective FAA runway safety program has reduced the number of serious runway incursions by 55 percent since 2001.  In Fiscal Year 2007, we saw a 25 percent reduction in serious runway incursions from 2006:  there were 24 serious runway incursions (referred to as Category A and B incursions) during 61 million aircraft operations, a significant reduction from the 31 incursions in FY 2006 (and the 53 incursions in FY 2001).  But while we have made improvements with the most serious categories of the runway incursions, overall runway incursions increased in FY 2007 to 370, up from 330 in FY 2006.  While most of these incursions are Category C and D incidents, which pose little or no risk to the public, the increase in incursions and the fact that serious incursions are still occurring, prompted the Acting Administrator to issue a “Call to Action” on runway safety last August.

On October 1, 2007, the FAA adopted the definition of runway incursion as used by the International Civil Aviation Organization (ICAO), a United Nations organization charged with promoting safety and security in international aviation.  This new definition, which FAA helped develop for ICAO, is much more inclusive and counts every single mistake made on the airport operational surface, even if another vehicle, pedestrian or aircraft is not involved.  As a result, we will have more data to analyze trends and improve safety.  

The FAA investigates every reported runway incursion and assigns a reason for the incursion.  The investigation includes a review of the airport information; radar data and voice tapes, if they are available; statements from individuals involved; and, in the case of serious incursions, we send teams to conduct on-site investigations at the facility.  There are three broad categories to which we attributed runway incursions that happened since October 1, 2006.  About 60 percent are as a result of pilot error.  Operational errors and deviations by air traffic controllers represent about 30 percent of causes of runway incursions.  The rest are attributed to pedestrian or vehicle errors.

The FAA continues to work with aviation industry leaders to research and implement new technologies, and mine and interpret safety data with the focus on improving airport safety.  I would like to highlight some of our recent efforts in this area.  As noted earlier, on August 15, 2007, more than 40 representatives from a cross-section of the aviation industry agreed to an ambitious plan focused on solutions in improving cockpit procedures, airport signage and markings, air traffic procedures, and technology.  Within 60 days of this “Call to Action” on runway safety, Acting Administrator Sturgell announced that the aviation community had completed significant short-term actions and were making strides in the mid- and long-term goals.

Our nation’s busiest airports are now being equipped with runway surveillance technology that improves controller situational awareness on the airport movement area.  The FAA has spent over $404 million to date to acquire and deploy the next generation of ground surveillance technology, known as Airport Surface Detection Equipment – Model X or ASDE-X for short.  Twelve towers in the system have ASDE-X operational, and we have accelerated our installation schedule by one year—the target completion date for the last system is now September 2010.  The FAA will commit more than $806 million over a 30-year period on equipment, installation, operations and maintenance of the 35 ASDE-X systems.

Runway Status Lights, which were developed as a result of the NTSB’s “Most Wanted” list of safety improvements, are a full-automated system that integrates airport lighting equipment with surveillance systems to provide a visual signal to pilots and vehicle operators when it is unsafe to enter/cross/or begin takeoff roll on a runway.  Airport surveillance sensor inputs are processed through light control logic that command in-pavement lights to illuminate red when there is traffic on or approaching the runway.  The FAA has spent nearly $25.8 million on this initiative. 

The system is being tested at Dallas/Fort Worth and San Diego.  We have selected Los Angeles International Airport as an additional test site and are working to select several other large airports for continued testing of this system in "complex" airport environments.  The system is preventing potential accidents today.  Just a couple of weeks ago, at Dallas-Ft. Worth, a plane was cleared for take-off, while at the same time air traffic control cleared another aircraft to cross that same runway on a taxiway.  The first plane did not initiate its takeoff roll, because the pilot, “saw the red lights” of the Run

We are also testing a runway safety system at the Long Beach Airport, known as the Final Approach Runway Occupancy Signal (FAROS).  This system is similar to Runway Status Lights in that it provides immediate information to pilots on approach to land that the runway is occupied or otherwise unsafe for landing.  The FAROS system determines the occupancy of the runway by detecting aircraft or vehicles on the runway surface.  If a monitored area on the runway is occupied, FAROS activates a signal to alert the pilot that it is potentially unsafe to land.  We are developing a plan for implementing FAROS at larger airports, and expect to begin operational trials at Dallas-Fort Worth by the end of FY

The FAA is testing two low-cost ground surveillance systems at Spokane, Washington, that would provide ground situational awareness to controllers at airports other than the 35 slated to get ASDE-X systems.  To date, we have spent $4.5 million on this project and we are assessing if it is an alternative safety measure for less busy airports not scheduled to receive the ASDE-X system.

Twenty of the busiest airports in America were identified for targeted Runway Safety Action Team visits based on a combination of a history of runway incursions, wrong runway events and wrong runway risk factors.  The Runway Safety Action Team visits involved service analysis meetings with air traffic control, both management and controllers, safety inspectors from FAA and the airports, and airport managers and operators.  These meetings identified over 100 short term fixes that could be accomplished within 60 days, including new or improved signage, improved marking, driver training, and other actions.  This concerted effort is proving effective. 

Not all measures to improve runway safety will involve fielding expensive equipment and new systems.  Quick and relatively inexpensive solutions include improving airfield markings, adding targeted training for controllers and aircrews, and fine-tuning air traffic procedures.  Incorporating the lessons learned through the meetings with the initial 20 airports, FAA has identified a second tier of 22 airports we will be expanding this program to cover next.

Finally, the FAA is seeking input from the National Air Traffic Controllers Association (NATCA) on revamping policies for issuing taxi clearances.  We also recently signed an agreement with NATCA to implement a voluntary reporting system for air traffic controllers similar to the Aviation Safety Action Program (ASAP) with airlines, pilots, airport operators and the FAA.  This type of reporting system, which is in place throughout the industry, will help to create an atmosphere where controllers and managers can identify, report and correct safety issues.  This will go a long way in helping us further improve our safety record.

The FAA is committed to designing an end-to-end system that seeks to eliminate runway incursions while accommodating human error.  We all have a role in the solution.  Every reported runway incursion will be taken seriously, investigated thoroughly, and analyzed to determine the causal factors.  The FAA continues to seek ways to improve awareness, training, and technologies and we look forward to our collaboration with airlines, airports, air traffic control and pilot unions, and aerospace manufacturers to curb runway incursions.  We appreciate the Subcommittee’s interest in safety, and welcome your counsel and assistance in our efforts to reduce runway incursions and improve safety in our nation’s aviation system.

Mr. Chairman, the FAA’s commitment to improving safety and extending the excellent safety record we are currently experiencing is our number one priority.  I hope some of what I have shared with you today exemplifies that commitment.  Of course, as I stated at the outset, FAA is involved in hundreds of important safety initiatives and what I have highlighted represents only a small fraction of what we are doing and what has contributed to today’s impressive safety record. 

This concludes my remarks, and my colleague and I would be happy to answer any questions the Subcommittee may have.

STATEMENT OF

NICHOLAS A. SABATINI,
ASSOCIATE ADMINISTRATOR FOR SAFETY,
FEDERAL AVIATION ADMINISTRATION,

BEFORE THE

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE,

ON

“CRITICAL LAPSES IN FAA SAFETY OVERSIGHT OF AIRLINES:  ABUSES OF REGULATORY ‘PARTNERSHIP PROGRAMS,’”

APRIL 3, 2008

Chairman Oberstar, Congressman Mica, Members of the Committee:

I appreciate the opportunity to appear before you once again this morning.  My name is Nick Sabatini and with me today are James J. Ballough, Director of Flight Standards Service here in Washington, and Thomas E. Stuckey, Manager of our Flight Standards Division in our Southwest Regional office.  We have been asked to address the circumstances surrounding a specific incident involving the Federal Aviation Administration’s (FAA) oversight of Southwest Airlines and whether that incident supports the contention that FAA’s implementation and management of its voluntary disclosure programs, which the Committee refers to as regulatory partnership programs, are appropriate and in the best interest of aviation safety. 

I will discuss the details of this incident later in my statement, but first, I think it is entirely appropriate to review these voluntary disclosure programs and evaluate how they have been administered, whether they have been effective, and if they should be modified.  It is my hope that you will ultimately agree with me that the value of these programs should not be negated by an incident that all agree was extremely disturbing and not in accordance with the high standards of the FAA and my organization.  My disappointment and regret over the FAA’s failure to carry out its duties and responsibilities in this instance is beyond my ability to express and I do not minimize its importance.  But I would hope that, after a balanced evaluation of all the available evidence, it can be put in a context where we in aviation learn from our mistakes and that the very real safety benefits of our programs are not jeopardized by an overly broad and possibly damaging reaction.

As many Members of this Committee will remember, it was not long ago when FAA’s relationship with its stakeholders, including the airline industry, was extremely adversarial.  Airlines warned their employees about cooperating with the FAA for fear of enforcement action against the individual or the airline.  In that atmosphere, when an airline discovered that inadvertent mistakes had been made, they attempted to resolve the problems internally, without alerting the FAA.  The value of this approach was limited.  A specific problem was resolved at a specific facility.  But the past practice of, in essence, keeping the problem a secret unless caught, did not permit the opportunity to put the problem in a broader context to determine whether a more comprehensive solution was necessary. 

The trust that is necessary for voluntary disclosure programs to work did not come over night.  There was certainly a period of adjustment for industry to believe that the FAA would not use their mistakes against them.  In fact, there were adjustments to be made by everyone involved.  FAA inspectors had to learn how to work with industry to raise the safety bar and how to enforce our safety standards when necessary.  They had to understand that the value of being part of crafting the solution to a problem sometimes outweighed punitive action.  But they also had to be able to identify those actions or violations that merited enforcement action, despite disclosure.  Industry had to understand that what may appear to be an isolated event may have far broader implications, and that admitting the problem may mean finding a much more comprehensive solution, one benefitting an industry, rather than a facility.  But, as with FAA inspectors, the industry needed to understand that disclosure was not a “get out of jail free” card.  Certain types of violations would still result in punitive action.  Therefore, fundamental to the success of all of the programs was a clear understanding of under what circumstances a reported violation could be processed through administrative action and under what circumstances legal enforcement action would apply. Each program has a specific process and checklist so that it is clear to all involved what type of action is acceptable for disclosure and what is not.  What is clear, and what should have been clear to all of our inspectors, is that continued noncompliance after voluntary reporting is not permitted under any circumstances.

Our three major voluntary reporting programs gather information provided by certificate holders, individual employees of a regulated entity, and even the aircraft operating in the system.  To illustrate how the programs work, the protections in place and the limited circumstances in which a disclosure may be accepted, I would like to briefly describe our primary disclosure programs.

The Voluntary Disclosure Reporting Program (VDRP) is intended to identify and correct adverse safety events that would otherwise not come to the FAA’s attention.  The qualifying VDRP disclosures and associated corrective actions are protected from both FAA formal enforcement action and public release.  These protections allow FAA to oversee and participate in the root-cause analysis of events.  VDRP requires FAA to review and approve all corrective actions, oversee the corrective actions and perform surveillance to assure the continued effectiveness of such actions.  This process enables FAA to obtain and analyze important safety information of which the FAA might otherwise be unaware.  FAA issued Advisory Circular AC 00.58A that provides clear guidance for submission of a disclosure of a safety problem to qualify for VDRP.  There is also a VDRP website*.  It is FAA policy to accept a voluntary disclosure and forego legal enforcement action when ALL of the following criteria are met:

1. The certificate holder has notified FAA of the apparent violation immediately after detecting it and before the agency has learned of it by other means.
2. The apparent violation was inadvertent.
3. The apparent violation does not indicate a lack, or reasonable question of, qualification of the individual/entity.
4. Immediate action, satisfactory to the FAA, was taken upon discovery to terminate the conduct that resulted in the apparent violation.
5. The certificate holder has developed or is developing a comprehensive fix and schedule of implementation satisfactory to the FAA.  The comprehensive fix must also include a follow-up self-audit to ensure that the action taken corrects the noncompliance.  This self-audit is in addition to any audits conducted by the FAA.

Voluntary disclosures that meet these criteria are “closed” with an FAA administrative action (i.e. a Letter of Correction or a Warning Notice), meaning that no other regulatory enforcement action (e.g., civil penalty, or certificate suspension or revocation) is taken.

The Aviation Safety Action Program (ASAP) is another voluntary reporting program that is also designed to identify and correct adverse safety events reported by an employee of a regulated entity (e.g., an airline or maintenance facility) that would otherwise not be likely to come to the attention of FAA or company management.  The objective of the ASAP program is to encourage air carrier and repair station employees to voluntarily report safety information  that may be important to identifying potential precursors to accidents.   This program enables participants to identify actual or potential risks.  An ASAP program is tailored to one entity (air carrier, repair station) and is entered into voluntarily by the FAA, the certificate holding entity (i.e., Part 121, 135 or 145 certificate holder), and any applicable third party, such as the employee’s union.  A key part of the program is that it is overseen by a two or three member panel, known as an Event Review Committee (ERC), made up of designated representatives from the FAA, the certificated entity and usually a representative for the employees union or organization. 

The main responsibilities of the ERC are to review and analyze reports submitted under ASAP, determine whether such reports qualify for inclusion, identify actual or potential safety problems, and propose solutions for the problems.  ASAP is implemented in accordance with a Memorandum of Understanding (MOU) that provides the specifics of each program.  FAA guidance on how to draft an acceptable MOU are found in FAA Advisory Circular AC 120-66B and on an ASAP website*.

Where an employee is the sole source of a disclosure regarding a possible safety violation that qualifies pursuant to the MOU, it is FAA policy not to use the content of any such ASAP report to initiate or support any legal enforcement action against such employee.  Similarly, the certificate holder will not use the information in a report submitted under ASAP to initiate or support any company disciplinary action.  Where the employee is not the sole source of information, but the information is still accepted under ASAP, the FAA will take administrative action instead of legal enforcement action, even when sufficient evidence exists to support a violation.  Administrative action means an FAA Warning Notice or Letter of Correction, which is expunged from FAA’s files after two years.  Where the employee is not the sole source of the information and the information is insufficient to prove a violation, the FAA will issue a Letter of No Action, which is expunged from FAA’s files after 30 days.

To be accepted, an ASAP report must be submitted in a timely manner, usually within 24 hours of the employee’s having become aware of the possible noncompliance with the Federal Aviation Regulations.  The alleged regulatory violation must be inadvertent, and must not appear to involve intentional disregard for safety.  In addition, the reported event cannot be accepted if it appears to involve criminal activity, substance abuse, controlled substances, alcohol, or intentional falsification.  The ERC determines the disposition of all ASAP reports through consensus, including the corrective action for accepted reports, if determined to be appropriate.

As of February 2008, over 70 operators are participating in ASAP, and over 170 MOUs have been established for different employee groups (pilots, dispatchers, mechanics and flight attendants).

One final voluntary reporting program with which the Committee may be aware is the Flight Operational Quality Assurance (FOQA) program.  FOQA is a voluntary airline program for the routine collection and analysis of digital flight data generated during line operations.  Although it enables monitoring of individual aircraft operations and system performance, its principal value is in providing objective information on adverse safety trends obtained by aggregating data from multiple flights.  Acquisition of such aggregate data can provide an unprecedented basis for proactive intervention to correct unsafe trends before they can lead to accidents.  Today’s FOQA program is the result of a successful Demonstration Project initiated in 1995 that enabled FAA to both establish the usefulness of the information and gain the insight needed to establish a regulatory framework for the program. 

The FOQA regulation, finalized in 2001, codifies protection from the use of data from FAA approved FOQA programs for enforcement purposes, except for criminal or deliberate acts.  No airline is required to have a FOQA program, nor is it required to obtain FAA approval of its program.  However, an airline that seeks the enforcement protection of the rule must obtain FAA program approval through the formal approval of the Implementation and Operations Plan.   FOQA also requires participating airlines (there were 20 as of February 2008) to inform the FAA of adverse safety trends revealed by their programs, as well as corrective action undertaken. 

The FAA conducts periodic FOQA Information Sharing Meetings with industry to identify and discuss safety issues of potential national significance.  Issues identified from such meetings serve as a source for follow-on study.  Additionally, broad systemic issues identified through the Information Sharing Meetings lead to corrective actions that benefit not only one program owner but the industry as a whole.  One such example is a change to an air traffic procedure to enhance safety.

In an industry with an excellent safety record, finding ways to improve safety is always a challenge.  But it is a challenge that we embrace and in the last decade, many of the safety improvements we have made are the direct result of information we received through these voluntary disclosure programs; information that industry and its employees would not have provided to us just a few years ago.  While it is entirely appropriate to review the guidelines and procedures implementing these programs to determine whether they remain valid, I urge you to recognize the ongoing importance of these programs for providing us with access to important safety information to identify and address safety problems before they manifest themselves in an accident.

As a result of the information we have obtained through voluntary disclosure programs, we have implemented safety enhancements in deicing programs, airport signage, air traffic procedures, and maintenance procedures.  For example, there have been instances when a carrier or individual employees of the carrier identified and corrected improperly installed equipment.  By sharing the data we were able to improve and clarify information provided to mechanics so a similar mistake would not occur at other carriers.  The vast amount of information we receive through the voluntary reporting programs is invaluable and while I support a dialogue to ensure appropriate and consistent implementation of the programs, I truly believe a disruption of these programs will negatively impact safety.

I will turn now to the completely unacceptable situation that occurred last year involving Southwest Airlines and FAA’s oversight of their operations.  FAA has fully cooperated with the ongoing investigations of this incident with the Inspector General and the Special Counsel.  I will not restate the facts of the situation here, as the basic facts are not in dispute.  The bottom line is that the FAA Principal Maintenance Inspector (PMI), who was charged with overseeing Southwest Airlines, inappropriately and in violation of existing FAA policy and regulatory requirements, accepted a voluntary disclosure under the VDRP program.  The disclosure was the fact that 46 Southwest Airlines aircraft had continued flight operations past the due date for a required inspection of the aircraft airframe for cracks.  These aircraft had overflown an Airworthiness Directive (AD) requiring the inspection. 

Despite this determination, and, again, in violation of existing FAA policy and regulatory requirements, the airline, even after reporting this safety violation under VDRP, did not ground these aircraft immediately but instead continued to operate the aircraft.  To be clear, no FAA inspector has the authority to permit continued non-compliance of aircraft operations.  In fact, the VDRP requires a confirmation that the non-compliance has ceased in order for the VDRP to be accepted.  Subsequently, the airline conducted the required inspections and six aircraft were discovered to have cracks, five of which were ultimately determined to have the type of crack the AD was designed to detect.  A total of 1451 commercial operations were conducted by Southwest Airlines in violation of the law, putting thousands of passengers at risk.  That this was done with the implicit consent of the FAA PMI overseeing the carrier is beyond my comprehension.  I am also disturbed that, while the office manager began a review of this situation and asked for support from our Southwest Region Flight Standards Office (Region), it was not fully investigated until one of my front-line safety inspectors reported it to the Administrator’s hotline and DOT IG hotline. 

On March 6, 2008, the FAA issued a $10.2 million proposed civil penalty to Southwest Airlines for its decision to knowingly continue to fly noncompliant aircraft in commercial operations.  This decision was inexcusable and put its passengers at risk.  The FAA PMI who accepted the VDRP in violation of existing FAA standards and policies and who essentially permitted the unsafe flights to continue has been reassigned, is no longer supervising inspectors, and is the subject of a pending personnel action.  The action has not been finalized to date because the IG investigation is ongoing and we are waiting to consider all evidence before taking final action.

I cannot overstate my disappointment and, frankly, outrage and shock at the actions of Southwest Airlines and the FAA PMI.  I will not attempt to condone either.  Every FAA safety official must be dedicated to ensuring that we have the safest aviation system in the world.  Every FAA safety official must be dedicated to finding new ways to improve a system that has an already enviable safety record.  To learn that this was not the case with respect to certain individuals at the Certificate Management Office (CMO) overseeing Southwest Airlines is beyond troubling.  I applaud the persistence, dedication, and tenacity of FAA inspector Bobby Boutris in pursuing the identified deficiencies at Southwest Airlines, in spite of the unacceptable and inappropriate obstacles he faced due to the working environment at our CMO and the actions of his supervisor, the PMI.  Frankly, it is the reaction I would hope all of my inspectors would have to a similar situation.

Let me state first that this is my workforce.  I am ultimately responsible for their actions.  I am here today to apologize to this Committee and, more importantly, to the travelling public for FAA’s failures in this situation.  We have taken this situation extremely seriously and have done a great deal of soul searching and analysis to determine how the problems developed, how FAA could have prevented them and, most crucial at this point, how we proceed from here.

FAA’s inspector workforce is made up of 3859 individuals.  It is impossible to expect in a workforce of this size and scope that there will not be instances of personality clashes or professional disagreements.  Often, honest disagreements result in debate that is both healthy and productive if it is approached with respect and professionalism.  It is a critical management challenge to understand when personality differences and reports of inadequate or nonconforming oversight rises to the level of requiring regional or headquarters intervention.

In the situation at hand, we now see that the management and interpersonal problems that existed in the CMO where the PMI overseeing Southwest Airlines worked contributed to the incident.  Managers in the Southwest Region’s Flight Standards office did counsel both the manager of the CMO* and the PMI, about reports of their inability to work cooperatively with each other in early 2006.  Follow-ups to this counseling did occur.  Both managers claimed the counseling had improved the situation.  An FAA Work Environment Assessment Team, known as a “WEAT” was dispatched by the Southwest Region Flight Standards Office to the CMO for onsite evaluation.  The team concluded that a “tense relationship” existed between the manager of the CMO and the PMI.  The WEAT recommended that these individuals be put on notice that the conflicts in the workplace were unacceptable and would not be tolerated.  The team further recommended that the office’s management team participate in team building exercises facilitated by a regional representative.  In addition, the manager of the CMO was directed to develop an action plan to address the WEAT findings.  All the WEAT findings were addressed and the action plan completed by the end of 2006.

In fact, we now know that the actions taken did not result in an improvement in relations between the key individuals, despite their reports to the contrary.  Things continued to spiral downward, culminating in the CMO personnel communicating, in part, through hotline complaints beginning in early 2007.  This is ultimately how Mr. Boutris reported the improper acceptance of the voluntary disclosure of the noncompliance with the AD.  In retrospect, it is clear that the dysfunctional relationship between the manager of the CMO and the PMI was sadly emblematic of dysfunction throughout the office.  It thwarted the sort of open communication that should have prevented the continued operation of noncompliant aircraft.  It set up the office to support either the PMI or the manager of the CMO.  That such dysfunction should pose a threat to safety is unacceptable.

Although we all understand it is impossible to change the past, it is vitally important that we learn from it.  Our analysis suggests that more effective intervention in late 2005 and 2006 was FAA’s best opportunity to effect a change in the outcome of the events in March of 2007. Despite the assertions of the manager of the CMO and the PMI that the interventions of regional counseling and the WEAT were effective and that their interpersonal disagreements were reconciled, we now acknowledge that we should not have accepted these assertions at face value.  The concerns of the workforce that, absent an ongoing regional presence, the cosmetic reconciliation would be revealed for what it was – a pretense – was an alarm bell that should have been listened to.  Likewise, there should have been more visits by the Division Management Team (DMT) from the Southwest Region to the CMO, including conversations with front line inspectors asking for their view of how the office was functioning.  This did not happen.  The focus on the differences between the manager of the CMO and the PMI by the Region ignored the valuable information the frontline inspectors had to provide.  The Region also did not recognize that the disputes they were aware of posed a risk to safety.

In a properly functioning CMO, if a voluntary disclosure was improperly accepted, there would have been dialogue, debate and, if necessary, elevation of the issue to the region or headquarters.  Had this happened, the aircraft would have been grounded and the noncompliance would have been prevented before posing a threat to the flying public.  Unfortunately, this did not occur at this facility.  The Region became aware of this only after the office manager questioned the validity of the VDRP.  The Region then began an investigation into the circumstances of the case.  Mr. Boutris alerted the office manager who in turn alerted regional personnel later that month regarding other significant safety issues.  

The investigation of the events surrounding this incident is ongoing, but it is clear FAA’s failure to prevent Southwest from operating 1451 noncompliant operations was the result of a complete breakdown in adherence to FAA’s procedures and policies.  We are taking steps throughout the organization to emphasize to our workforce the need for managers to provide their inspectors with a forum to discuss professional disagreements.  We want all of our inspectors to understand and appreciate their responsibility to make their concerns known and elevate them if they are not satisfied with their supervisors’ reaction.

As I told this Committee, ultimately I am responsible for my workforce’s actions, and I am personally taking steps to ensure that something of this nature does not happen again.  In fact, on March 11, 2008, we held a Managers Conference with 88 of the AVS organizations top leaders, at which Acting Administrator Sturgell and I emphasized to our managers that our commitment to safety is paramount, that we need to fight against complacency, and that our policies and procedures must be followed to ensure the appropriate checks and balances to protect the traveling public. 

Additionally, we communicated to the entire work force through a Town Hall meeting held on March 18, 2008 the importance of open dialogue and communication.  I made it clear that I encourage this workforce to voice their opinions and concerns, and I wanted them to know that when they do so, they can be assured that their concerns will be welcomed in a culture that will not and does not tolerate repercussions.  To support my commitment in this area, I have ordered the development of a Safety Issues Reporting System that will afford employees with the opportunity to report safety concerns. 

I fully appreciate the significance of this incident, but to use this to make broad assumptions about the overall state of FAA’s oversight or the safety of the industry as a whole would be a mistake.  The safety record simply does not support allegations that the system and FAA are broken.  That having been said, we are always open to working with industry and Congress to discuss ways to make our safe system even safer and I would hope that is what we can do here today.

Mr. Chairman, that completes my prepared statement.  Mr. Ballough, Mr. Stuckey, and I would be happy to answer any questions you and the Members may have.

STATEMENT OF

RAMESH K. PUNWANI,
CHIEF FINANCIAL OFFICER,
FEDERAL AVIATION ADMINISTRATION,

BEFORE THE

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE,
SUBCOMMITTEE ON AVIATION

ON

THE FAA’S FY 2009 BUDGET,

FEBRUARY 7, 2008.

Good morning, Chairman Costello, Congressman Petri and Members of the Subcommittee.

As this is my first appearance before the Subcommittee, I would like to take this opportunity to introduce myself.  After working in the private sector in the aviation and travel fields for several decades, I joined the Federal Aviation Administration (FAA) four years ago as the agency’s Chief Financial Officer (CFO).  My job is to manage the agency’s budget, accounting, cost control and reduction efforts, as well as our financial programs and policies.  On behalf of our Acting Administrator, Bobby Sturgell, and the other members of our senior management team, I would like to emphasize our commitment to you, and ultimately to the American public, to deliver a safe, efficient, and accessible aviation system.  We have pushed hard to manage more effectively, rein in costs, and better respond to our customers.  The FY 2009 budget request moves FAA further along that road, toward a more streamlined and efficient organization that the taxpayers deserve. 

With me today is my colleague, Gene Juba, Senior Vice President for Finance, from our Air Traffic Organization (ATO). Gene is also from the aviation industry and is here to assist me in addressing some of your programmatic questions.

Today I would like to first briefly address a pressing budget issue for the current fiscal year and then provide an overview of our FY 2009 budget request and how it meets FAA’s strategic goals.

FY 2008 Agency Funding

As you are aware, the recently enacted Continuing Appropriations Act extended the authority to make expenditures from the Airport and Airway Trust Fund (AATF) only until February 29, 2008.  Of the $14.9 billion appropriated for FAA this fiscal year, approximately $12.6 billion (or 84%) of our FY 2008 budget is funded from the AATF, while the remaining $2.3 billion (or 16%) is supported from the General Fund.  All of FAA’s Airport Improvement Program (AIP), Facilities and Equipment (F&E), and Research, Engineering and Development (R,E&D) accounts are funded by law solely from the Trust Fund.  Without an extension of the Trust Fund expenditure authorities, FAA will be unable to obligate funds after February 29^th from the Trust Fund, including the uncommitted balance.  This will have immediate consequences.  Most notably, our airports, facilities and equipment and research personnel (approximately 4,000 employees) will be sent home because they can only be paid from the Trust Fund.  FAA will not be able to provide funding on our major contracts, including ADS-B, STARS, ERAM and WAAS*, which are the foundational programs for both our existing air traffic control system and the Next Generation Air Transportation System (NextGen). 

Essential functions will be maintained as long as possible but certain safety and capacity enhancing projects and programs will be deferred and our remaining personnel, who are funded by the General Fund portion of the Operations account, would also be sent home after funding provided by the General Fund has been fully obligated—most likely in early June. 

Secondly, the Consolidated Appropriations Act only provided a temporary extension until February 29^th of the authority to collect of most of the aviation related excise taxes that provide approximately 95% of the Trust Fund’s revenue.  The uncommitted balance in the Trust Fund (approximately $1.5 billion, as of the end of FY 2007), which could only be tapped if Trust Fund expenditure authority is extended, is insufficient to sustain FAA operations beyond a few months and a lapse in the collection of excise taxes could very quickly begin to impact FAA’s operations, forcing a shut down of our remaining 43,000 employees funded through the Operations appropriations account. 

Third, as you know, contract authority for AIP expired on September 30, 2007, however Congress, in a series of continuing resolutions, provided temporary and limited AIP contract authority through December 31, 2007.  Without contract authority, we are not able to make any new AIP grants.  We do have authority to honor payment requests for existing grants provided in prior years, and we will continue to pay those to the extent possible.  However, as a result of the lack of new contract authority, we cannot distribute funds to 62 airport sponsors that have requested approximately $265 million in FY 2008 to upgrade their runway safety areas, or make almost $250 million in discretionary letter of intent (LOI) payments.  Based on a quick survey, we have learned that eleven airports with pending LOIs are facing immediate impacts, some as soon as February and March, with several taking out short-term loans to bridge financial requirements, and others at risk for incurring heavy financial penalties on financing.  Unfortunately, with the gap in AIP contract authority for FY 2008, we are near the point of losing a portion of this construction season and airport sponsors will have to defer critical safety and capacity projects.

Mr. Chairman, it is in the best interest of aviation safety and efficiency that these current year fiscal concerns be addressed and we are hopeful that Congress will resolve this before the end of the month.  We remain ready to work with you and other Members to enact a full-fledged reauthorization proposal that is consistent with the goals of the Administration.

FY 2009 Budget

Turning now to the next fiscal year, our FY 2009 Budget request of $14.643 billion provides funding to support all critical priorities of the FAA.  As always, safety is FAA’s primary concern and our budget request, sixty-seven percent of which is dedicated to our safety mission, reflects that commitment.  (See attached chart showing our budget request in terms of agency goals).  This request includes $688 million for key research and technologies to enable the transition to NextGen, as well as funding to meet our hiring goals for our air traffic controller and safety inspection workforces--areas we know that this Committee is most interested in.  I want to point out to the Committee that over the past five years, we have improved our financial management performance in ways that enable us to better use the funding Congress provides for execution of our vital safety and infrastructure programs.  Financial management accomplishments include improving the discipline with which programs and contracts are first approved, improving the tracking and monitoring of approved programs, and reducing our overhead costs so that more of the taxpayer dollars are spent on a safe, efficient and accessible aviation system. 

The 2009 budget request assumes congressional passage of the President’s reauthorization proposal for FAA programs and revenue streams starting in 2010.  We firmly believe that comprehensive reform is necessary.  The FY 2009 budget once again provides the framework for the Administration’s Next Generation Air Transportation System Financing Reform Act (H.R. 1356), a proposal that will make flying more convenient for millions of travelers.  As air traffic is expected to nearly triple by 2025, our aviation system requires a more reliable and dynamic source of revenue to fund the modern technology required to manage this expanded capacity.  Our proposal replaces the decades-old system of collecting ticket taxes with a stable, cost-based funding program.  Based on a combination of user-fees, taxes and general funds, it creates a stronger correlation between what users pay to what it costs the FAA to provide them with air traffic control and other services.  The incentives our plan puts in place will make the system more efficient and more responsive to the needs of the aviation community.  FAA will continue to work with this Committee and others in Congress as well as our aviation stakeholders toward a successful reauthorization that is consistent with our key principles for a comprehensive cost-based funding structure that ensures that costs and revenues are better aligned, that all stakeholders are treated fairly and that our aviation system is ready for the congestion and environmental challenges of the future.  We continue to believe that these principles will provide us with the clearest path toward implementation of NextGen and with it, the avoidance of mounting congestion delays.

For FY 2009, we have proposed a new account structure that aligns FAA’s budget accounts with its lines of business.  We believe an account structure based upon agency functions makes sense both in terms of how we operate now as well as under our proposed new financing reforms.  For ease of understanding this approach, we have attached a “crosswalk” chart showing a comparison of our request with the current account structure.

Safety and Operations

The FY 2009 request is $2.052 billion for Safety and Operations, including $1.2 billion for Aviation Safety, $14 million for Commercial Space Transportation, and $851 million for Staff Offices.  Most of the funds requested support the agency’s activities to maintain and increase aviation safety and efficiency.  Our Aviation Safety (AVS) organization accounts for $1.187 billion of the request, to meet its mission of promoting aviation safety in the interest of the American public by regulating and overseeing the civil aviation industry.  AVS consists of eight distinct organizational elements employing approximately 7,000 personnel.  These employees are responsible for the oversight of the ATO, certification, production approval and continued airworthiness of aircraft, as well as certification of pilots, mechanics and other safety related positions.  The agency recognizes that this Subcommittee is particularly interested in our efforts regarding aviation safety inspector staffing.  Funding for AVS in FY 2009 maintains recent staffing gains to our aviation safety workforce, providing for 4,110 safety inspectors and requests an additional 30 safety staff positions for Air Traffic oversight.  In anticipation of future staff retirements, FAA is aggressively hiring and training safety personnel to enhance oversight, surveillance and certification activities.

I should also note that the $14 million Commercial Space Transportation request includes $270 thousand for 4 additional safety personnel needed to assess the human space flight aspects of the safety evaluations of commercial space license and permit applications.  In addition, $851 million is requested for FAA staff offices, including the CFO and finance, human resources, information systems, international policy, civil rights, and legal offices.

Air Traffic Organization

The FY 2009 Budget Request for the FAA’s Air Traffic Organization (ATO) is $9.670 billion, of which approximately $7 billion is for ATO operating expenses.  We recognize that this Subcommittee is also very interested in our efforts regarding controller staffing.  As with the safety inspector workforce, the FAA is aggressively hiring and training controllers to ensure the right number of controllers are in place at the right time to address the now well-documented retirement “bubble”.  As you know, the FAA began anticipating today’s air traffic controller retirement wave several years ago, issuing a comprehensive plan that we update annually.   

In anticipation that more than 60 percent of the controller workforce will become eligible to retire over the next 10 years, the FAA plans to hire more than 16,000 controllers over that period.  In fiscal year 2007, the FAA hired 1,815 controllers and ended the year with 14,874 controllers on board – 67 more controllers than our workforce plan target of 14,807.  This year, we have robust hiring goals with a year-end target of more than 15,000 controllers on board.  Our FY 2009 budget includes funding to hire a net increase of 306 new controllers, a level consistent with the targets being developed for our updated staffing plan to be published next month.  The agency is also offering a variety of incentives to recruit and retain controllers, including recruitment and relocation bonuses and repayment of student loans.

The ATO continues to see cost savings from Flight Service Station (FSS) contract, which was initiated two years ago.  We anticipate savings of over $1.7 billion over the ten years of the contract.  Our network of automated flight service stations, which provide weather guidance and other assistance to the pilots of small airplanes, was reduced from 58 to 18 in the fourth quarter of FY 2007.  The current set of flight service stations comprises 15 previously existing facilities and 3 new ones built by Lockheed Martin.  The contract not only saves money, it also commits the vendor to modernize and improve the flight services we provide to general aviation pilots.  These savings result directly in a reduction of the budget request.

NextGen and Capital Needs

Our FY 2009 budget request will provide $688 million--a nearly $500 million increase from 2008--in support for the comprehensive transformation of our air traffic control system known as NextGen that is already underway.  This Committee has held numerous hearings on our transformation and modernization efforts and is well acquainted with the ongoing management efforts to coordinate this tremendous undertaking.  As you know, in the past year, key NextGen defining documents have matured.  Last summer, the Joint Planning and Development Office (JPDO) released public versions of the Enterprise Architecture and Concept of Operations.  In July, the initial baseline of the NextGen Integrated Work Plan was completed.  The work plan lays out the progression from the present to the future, with activities and responsible agencies identified.  As envisioned, the work plan would guide the formulation of future budgets within partner agencies.

The FY 2009 NextGen budget represents strong collaboration between JPDO and the new OEP—formerly the Operational Evolution Plan, and now the Operational Evolution Partnership-- to define and estimate the budgetary requirements for FY 2009.  That collaboration will provide oversight and track progress to ensure that NextGen objectives are achieved.  This NextGen investment portfolio includes programs and activities deemed “transformational,” i.e., those that will truly move toward the next generation system.  The FY 2009 portfolio consists of $631 million in ATO Capital Programs, $57 million in Research, Engineering & Development, and $704 thousand in Safety & Operations, for a total of $688 million.  This funding level includes $19.5 million to directly support the JPDO:  $5 million from ATO Capital and $14.5 million from R,E&D.  This represents a significant investment in NextGen programs and reflects the Administration’s commitment to comprehensively address capacity constraints in the aviation system.

Grants in Aid for Airports (AIP)

The FAA’s reforms for the AIP program contained in our reauthorization proposal are designed to strategically target federal dollars to the airports where they will have the most impact.  While large and medium hub airports have a greater ability to finance their own capital requirements with revenue from passenger facility charges and their own rates and charges, small primary and general aviation airports rely more heavily on AIP funding to help meet their capital needs and complete critical projects.  We have proposed changes to the Federal funding program which will stabilize and enhance these funding sources for airports.  With our proposed programmatic changes, including the increase in the passenger facility charges, the $2.75 billion proposed in our budget will be sufficient to finance airports’ capital needs and meet national system safety and capacity objectives.  Our request also includes $15 million for the Airport Cooperative Research program and $19 million for airport technology research.

Research, Engineering, and Development (R,E&D)

The FY 2009 request for R,E&D is $171 million.  The request includes $91 million for continued research on aviation safety issues.  The remaining research funding is to address congestion and environmental issues, including $42 million for new NextGen Projects such as Self Separation, Weather in the Cockpit, Air-Ground Integration, and the Continuous Low Energy, Emissions, and Noise (CLEEN) Technologies program.  $14.5 million is provided for the Joint Planning and Development Office to continue defining and facilitating the transition to NextGen.  An additional $5 million in support for JPDO is contained in the ATO capital request, related specifically to the work on demonstration projects.

Increased Safety

Due to the combined efforts of government and the aviation community, we are fortunate to be living in the safest period in aviation history and the FAA is committed to making it safer still.  In the past 10 years, the commercial fatal accident rate has dropped 57%, to a rolling three-year average of 0.022 fatal accidents per 100,000 departures as of the end of FY 2007.  In the past three years, the United States averaged approximately two fatal accidents per year and 28 deaths per year; while any loss of life is tragic, this statistic is remarkable, given that there are roughly 12 million commercial aircraft flights per year.  General aviation accidents are down.  Air traffic control errors are occurring at a rate lower than in the previous two years. 

Approximately 67% of our budget request, or $9.855 billion, supports the FAA’s safety mission.  Our safety goals for FY 2009 are to reduce U.S. commercial airline fatalities per 100 million people (including crew) on board to fewer than 8.31 (an improvement of over 6% from our FY 2008 goal) and to reduce the rate of general aviation fatal accidents.  To achieve these goals, FAA’s FY 2009 budget request includes $9.9 billion to operate and maintain the air traffic control system, inspect aircraft, certify new equipment, ensure the safety of flight procedures, oversee the safety of commercial space transportation, and develop a replacement air traffic data and telecommunications system. 

The request includes an increase of $11.3 million to hire and train sufficient air traffic controllers to achieve our hiring targets noted earlier in my statement.  It also includes $800,000 for 30 new positions to support continued development of the Air Traffic Oversight office, which was formed in FY 2004 to improve the delivery of air traffic services, and maintains the staffing gains to our aviation safety workforce during FY 2007-2008.  Total aviation safety staffing will reach 7,069 by the end of FY 2009.

The FAA will continue working to reduce the precursors of aircraft accidents, runway incursions and operational errors.  This Subcommittee will be examining our efforts in this latter area at a hearing scheduled for next week so we will be brief here.  Suffice it to say that the FAA will continue to concentrate on outreach, awareness, technology, and improved procedures and infrastructure. 

International Leadership

Our FY 2009 request includes $63.1 million to expand the FAA’s international leadership role and to help improve safety.  FAA will expand training and technical assistance programs that help civil aviation authorities meet international standards, as well as promoting seamless global operations.  The FAA will continue to promote increased external funding for training and technical assistance programs that help civil aviation authorities around the world meet international safety standards.  FAA will also continue to work with its international partners and the International Civil Aviation Authority (ICAO) to harmonize global technological standards, and to expand the use of global satellite navigation systems.

Environmental Stewardship

Our FY 2009 budget request includes $276.8 million, of which $227 million is requested from the AIP program, to ensure that the number of people in the United States who are exposed to significant aircraft noise levels—a Day/Night Average Sound Level of 65 decibels or more—continues to decline.  FAA will continue to address the environmental impacts of airport projects, primarily aircraft noise.  FAA will also provide expertise and funding to assist in abating the impacts of aircraft noise in neighborhoods surrounding airports by purchasing land, relocating persons and businesses, soundproofing residential homes or buildings used for educational and medical purposes, purchasing noise barriers and monitors, and researching new noise prediction and abatement models and new technologies.  We estimate that 20,000 people will see a reduction in aircraft noise from these efforts.  The FY 2009 request includes $10 million in new RE&D funding for the Continuous Low Emissions, Energy and Noise Technologies program to accelerate the introduction of quieter and cleaner technology in commercial fleets, and to initiate a NextGen Environmental Management System. 

Security

As you know, responsibility for the security of the aviation system now rests with the Department of Homeland Security.  Therefore most of the $218.6 million requested in our budget for next year focuses on enhancing the security of the FAA’s own personnel, facilities, and communications.  FAA ensures the operability of the national airspace through the facilities, equipment and personnel of the air traffic control system, which is essential to the rapid recovery of transportation services in the event of a national crisis.  Additionally, the budget request includes funding to continue upgrading and accrediting facilities, procure and implement additional security systems, and upgrade our command and control communications equipment.

Performance and Accountability

Finally, as Chief Financial Officer of the FAA, I would like to highlight some of the ways we are better executing and managing the budget resources that Congress provides.  At FAA, “acting more like a business” isn’t just a slogan.  We are actively engaging in a comprehensive pay-for-performance program, consolidating operations, improving internal financial management, and increasing benefits to our customers.  Our beacon will always be our mission – to provide the safest, most efficient aerospace system in the world.  Our bottom line is results for our stakeholders, including the taxpayer and traveling public.

As I noted at the outset of my testimony, the transformation over the past five years has been steady and sure, as we have embraced the vision of the President’s Management Agenda (PMA) and its aggressive strategy to improve management throughout the federal government.  The evolution of the PMA complements the strategic vision of our Flight Plan.  It contains a number of management performance measures, including a cost control performance measure requiring each organization to contribute cost efficiencies that save money or avoid costs for the agency.  Through the Flight Plan and PMA, we have made dramatic gains in human capital, competitive sourcing and consolidations, financial performance, and, ultimately, accountability to the bottom line of our customers.

We are continuing to make every effort to control our operating costs.  Personnel reform for the agency, granted in 1998, is starting to bear fruit, with conversion from the traditional GS-Schedule pay system to pay for performance.  Accountability for results is systemic throughout our organization, with 90 percent of our employees on the pay-for-performance system, including our executives.  Flight Plan performance targets must be achieved before annual pay raises are calculated.  Executives and managers have a good deal of discretion in rewarding high-performing employees, and incentives are present to ensure quality work and innovation are rewarded.  Executives are also eligible for short-term incentive increases when specific performance thresholds are met or exceeded.  This conversion is allowing the agency to flatten pay bands and tie performance incentives to pay increases.

We know that labor costs drive a significant share of our budget, and we have been working to slow the rate of growth in labor costs, as evidenced by the FAA’s recent contract with our controller workforce, and such steps as back-filling positions with new employees at lower pay grades when possible.  We are also increasing workforce productivity through cutting multiple levels of management and better management and oversight of our worker’s compensation caseload.

I have already mentioned our ATO’s success with competitively sourcing its flight service station function.  They have also successfully consolidated administrative and staff support functions from nine service areas to three, allowing for better service while saving an estimated $360 to $460 million over the next 10 years.  FAA has also taken steps to consolidate and improve our real property management and information technology (IT) investments. 

In a concerted effort to control costs and make smarter capital investment choices, several years ago the FAA created a capital investment team to review financial and performance data.  The team provides an early warning for potential problems as well as help to develop corrective actions.  So far, these business case reviews have identified $460 million in lifecycle savings by restructuring/terminating 10 programs, 6 of them major.  To date, over 165 projects were reviewed in various stages of acquisition, capital formulation, and business case development.

Finally, the Strategic Sourcing for the Acquisition of Various Equipment and Supplies (SAVES) initiative is an ambitious effort begun in FY 2006 to implement best practices from the private sector in the procurement of administrative supplies, equipment, and IT hardware.  It is expected to achieve $9 million in savings annually.

Conclusion

Mr. Chairman, with Congress’ help we can avoid disruptions to our programs this fiscal year with an extension beyond March 1^st of critical authorities and taxes that support our programs.  Time is of the essence.  We also stand ready to work with this Committee and others in Congress to enact an aviation authorization bill this year that will provide the necessary cost-based financing and programmatic reforms that will enable us to move to the NextGen transportation system.  Our FY 2009 request provides strong support for our staff hiring goals, safety and capital programs and NextGen activities.  Given the vital role aviation plays in the Nation’s economy and the need to prepare for the future, our funding request for FY 2009 is designed to support America’s growing demand for aviation-related services.

That concludes my testimony.  My colleague and I would be happy to answer any questions you and Members of the Subcommittee may have.

STATEMENT OF

HANK KRAKOWSKI,
CHIEF OPERATING OFFICER,
AIR TRAFFIC ORGANIZATION,
FEDERAL AVIATION ADMINISTRATION,

ON

RUNWAY SAFETY: AN UPDATE,

BEFORE THE

HOUSE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE,
SUBCOMMITTEE ON AVIATION,

SEPTEMBER 25, 2008.

Chairman Costello, Congressman Petri, and Members of the Subcommittee:

Thank you for inviting me here today to update you on the Federal Aviation Administration’s (FAA’s) efforts to improve runway safety.  Since I was last here in February of this year, I am happy to report that we have made some excellent progress in this arena, and I am confident that we will continue on this path.

Current Status of Runway Incursions

At the FAA, safety is our first priority, and as I have mentioned to this Committee before, a commitment to safety is part of my DNA.  While 2007 was the safest year yet for aviation in our Nation’s history, when we last testified in February 2008, we had experienced one of the worst quarters for serious runway incursions – 10 between October 2007 and December 2007, and two more in January 2008.  Based on our response to this unacceptable situation, as of September 15, 2008, we are on track to equal or slightly improve on the safest year on record. 

The National Transportation Safety Board (NTSB) and the Government Accountability Office (GAO) have issued recommendations on areas where the FAA could make improvements in runway safety.  In November, the NTSB announced that improving runway safety will remain on the Board’s “Most Wanted” list of improvements for 2008.  FAA believes that the technologies we are now testing and deploying will be responsive to address the problem of runway incursions.  Also, the GAO reported on how the FAA has taken steps to address runway and ramp safety.  We appreciate the work that the GAO and NTSB have done, and we welcome their analysis and feedback.  While runway safety has received more public attention in recent months, it is important to remember that for many years, the FAA has actively invested in programs and technology development to address this serious aviation safety issue.

As a reminder to the Members, let me explain the categories of runway incursions.  Category A incursions are the most serious incidents, in which a collision was narrowly avoided.  Category B incursions are incidents in which separation decreases, and there is a significant potential for a collision, which may result in a time critical corrective or evasive response to avoid a collision.  Category C incidents are characterized by ample time and/or distance to avoid a collision, and Category D is an incident which meets the definition of runway incursion, such as the incorrect presence of single vehicle/person/aircraft on the protected area of a surface designated for the take-off or landing of an aircraft, but with no immediate safety consequences.

Beginning with Fiscal Year (FY) 2008, the FAA adopted the definition of runway incursion as used by the International Civil Aviation Organization (ICAO), the United Nations organization charged with promoting safety and security in international aviation.  This new definition, which FAA helped develop for ICAO, is much more inclusive and counts every single mistake made on the airport operational surface, even if another vehicle, pedestrian or aircraft is not involved.  As a result, we will have more data to analyze trends and improve safety.  

By redefining what a runway incursion is, the total number of what we now report as a runway incursion is expected to triple.  This explains the spike in Category C incidents beginning in October 2007.  Category C now includes data that we used to classify as Category C and D incursions.  The new Category D accounts for incursions which we previously tracked as surface incidents.  However, Category A and B incidents, the most serious incursions, continue to be defined and tracked as before.

An aggressive and effective FAA runway safety program has reduced the number of serious runway incursions by 55 percent since 2001.  In FY 2007, we saw a 25 percent reduction in serious runway incursions from 2006.  There were 24 serious runway incursions (Category A and B incursions) during 61 million aircraft operations, a significant reduction from the 31 incursions in FY 2006, and the 53 incursions in FY 2001.  We have only had 23 serious runway incursions as of September 15^th of FY 2008, as compared to 24 last year.

What is significant about this number, however, is the quarterly comparison.  During the first quarter of FY 2008, there were 10 Category A and B runway incursions, as compared to two in first quarter FY 2007.  During the second quarter of FY 2008, there were five Category A and B runway incursions, as compared to five in second quarter FY 2007.  In third quarter FY 2008, there have been four Category A and B runway incursions, while third quarter FY 2007 saw 10 of these.  And, as we approach the end of the fiscal year, there have been four (with a possible fifth pending) Category A and B runway incursions, in comparison to the seven in final quarter of FY 2007.  As you can see, the trend is towards continued improvement every quarter. 

But while we have made improvements with the most serious of the runway incursions, overall runway incursions increased in FY 2007 to 370, up from 330 in FY 2006, and they continued to increase in 2008.  If we use the prior definition for comparison purposes only, we have already had 388 runway incursions so far this year.  To understand the impact of the new runway incursion definition, last year there would have been 891 runway incursions and so far this year we have had 953.   So far, seven of the 23 serious incursions involved a commercial airline and there was one collision involving a general aviation airplane and a grass mowing tractor.

As you know, the FAA investigates every reported runway incursion and assigns a reason for the incursion.  We send a team to the facility to review the airport information; radar data and voice tapes, if they are available; and interview the individuals involved, often controllers, pilots and/or vehicle operators.  In 2008 we are seeing about 65 percent pilot error, 25 percent vehicle/pedestrian errors, and 10 percent controller errors.  The shift between Operational Errors (OEs) and Vehicle or Pedestrian Deviations (VPDs) is a result of the new definition.  Previously, Pilot Deviations (PDs) or VPDs that did not involve a loss of separation were not counted as runway incursions.  Under the new definition, they are, which is causing the increase in our count.  By contrast, this decreases the percentage of OEs in our database.

Update on Technology Installations

As I reported to you in February, we are working to install runway surveillance technology that improves controller situational awareness on the airport movement area at our nation’s busiest airports.  The FAA has spent over $404 million to date to acquire and deploy the next generation of ground surveillance technology, known as Airport Surface Detection Equipment – Model X or ASDE-X for short.  The FAA will commit more than $806 million over a 30-year period on equipment, installation, operations and maintenance of the 35 operational and three support ASDE-X systems.  I am pleased to report that we are rolling out ASDE-X even faster than we had originally anticipated.    Seventeen towers are now using ASDE-X operationally and 16 additional towers are scheduled to be operational by the end of October 2010, with the remaining two scheduled to be operational by Spring 2011. 

Runway Status Lights, which were developed as a result of the NTSB’s “Most Wanted” list of safety improvements, are a fully-automated system that integrates airport lighting equipment with surveillance systems to provide a visual signal to pilots and vehicle operators when it is unsafe to enter/cross/or begin takeoff roll on a runway.  Airport surveillance sensor inputs are processed through light control logic that command in-pavement lights to illuminate red when there is traffic on or approaching the runway.  The contract is scheduled to be awarded this fall. 

There are two types of Runway Status Lights currently being tested:  Runway Entrance Lights and Takeoff Hold Lights.  Runway Entrance Lights provide signals to aircraft crossing or entering a runway from an intersecting taxiway.  Takeoff Hold Lights provide a signal to aircraft in position for takeoff that another aircraft is crossing or entering the runway.  These systems are scheduled to be installed at 22 of the nation’s busiest airports by FY 2011.  We recently announced accelerated installation and testing at Los Angeles International Airport (LAX) and Boston Logan International Airport (BOS).  BOS will be testing a third type of light system designed to warn pilots of potential conflicts on intersecting runways.  We have also initiated Memoranda of Understanding at 18 airports, which contain the agreements for the light configuration and construction and installation timetables.

We are also testing a system at the Long Beach Airport, known as the Final Approach Runway Occupancy Signal (FAROS), which will further enhance runway safety.  This system is similar to Runway Status Lights in that it provides immediate information to pilots on approach to land that the runway is occupied or otherwise unsafe for landing.  The FAROS system determines the occupancy of the runway by detecting aircraft or vehicles on the runway surface.  If a monitored area on the runway is occupied, FAROS activates a signal to alert the pilot that it is potentially unsafe to land.  We are developing a plan for implementing FAROS at larger airports, and expect to begin operational trials at Dallas-Fort Worth later this fall. 

The FAA is also evaluating low-cost ground surveillance systems for potential application at airports that are currently not programmed to receive ASDE-X technology.  At present, we are evaluating two such systems at Spokane, Washington and we believe that basic ground surveillance capability, increasing controller situational awareness, can be provided at a cost less than the more sophisticated ASDE-X technology that is needed at larger, more complex airports. 

Since I last appeared before you in February, we have taken the process a step further.  Based on what we have learned at Spokane, we have issued a request for proposal inviting industry offers of candidate low-cost ground surveillance products for FAA consideration.  Our intent is to install these selected low-cost products at various airports as part of a pilot project to determine which products satisfy minimum operational and safety requirements.  We will use the results of the pilot project to determine the feasibility and cost-effectiveness of implementing a low-cost surveillance product, and if deemed feasible, develop a plan for acquisition and deployment.  Several industry offers are currently under review and we expect to complete our evaluations in the near future. 

The FAA recognizes that technologies that increase situational awareness and provide direct alerting to aircrews offer great potential to address some of the human factors that contribute to runway incursions.  Our decision to deploy runway status lights is just one example of our increased emphasis on direct aircrew alerting.  We are also aware that industry has stepped up to the plate to offer avionic product solutions that may further enhance aircrew situational awareness and thus increased runway safety.  To facilitate operational assessment of these solutions, the FAA recently announced a “Cooperative Agreement for Improving Runway Safety.”  Under this program, the FAA intends to enter into Funded Cooperative Agreements with users who agree to equip their aircraft with equipment which can display approved Airport Moving Maps or with equipment approved to provide aural situational awareness runway information to pilots.  The FAA will offer participants federal funds in an amount commensurate with the type of equipment proposed and the extent of the user’s installation and participation in the FAA’s operational evaluation program.  In exchange for the federal contribution, the users must agree to equip their airplanes within a specified period and participate in FAA tests detailed in a Test and Evaluation Master Plan.   The FAA is initially committing $2 million to this initiative.

Twenty of the busiest airports in America were identified for targeted Runway Safety Action Team visits based on a combination of a history of runway incursions, wrong runway events and wrong runway risk factors.  Last year, these 20 airports accounted for 33 percent (8 of 24) of the serious runway incursions.  So far this year that number is 17 percent (4 of 23).

The Runway Safety Action Team visits involved surface analysis meetings with air traffic control, both management and controllers, safety inspectors from FAA and the airports, and airport managers and operators.  Just through the interaction and discussion among these groups, action plans to mitigate identified risks were finalized.  These meetings identified over 100 short term fixes that could be accomplished within 60 days, including new or improved signage, improved marking, driver training, and other actions.  This proves that “common sense” opportunities for curbing runway incursions exist. 

Not all measures to improve runway safety will involve fielding expensive equipment and new systems.  Quick and relatively inexpensive solutions include improving airfield markings, adding targeted training for controllers and aircrews, and fine-tuning air traffic procedures.  Incorporating the lessons learned through the meetings with the initial 20 airports, FAA identified a second tier of 22 airports and we completed the focused surface analysis at these 22 airports in July 2008.

FAA has also continued to make progress in improving Runway Safety Areas (RSAs).  RSAs enhance safety in the event of an undershoot, overrun, or excursion from the side of the runway.  In FY 2000, FAA started an ambitious program to accelerate RSA improvements for commercial service runways that do not meet standards.  The FAA developed a long-term completion plan that will ensure that all practicable improvements are completed by 2015. 

When the RSA improvement initiative began in FY 2000 there were a total of 454 RSAs requiring improvement.  Since then, significant progress has been made and 68 percent of the RSA improvements have been completed.  By the end of 2010, 86 percent of RSA improvements will be completed, leaving only 59 to meet the 2015 goal.  Twenty-four airports have improved safety areas using Engineered Materials Arresting Systems (EMAS), a relatively recent technology of crushable material placed at the end of a runway, and designed to absorb the forward momentum of an aircraft.  EMAS offers a significant RSA improvement where the land off the ends of the runway is constrained and a conventional RSA is not practicable.  To date, four aircraft overruns have been caught by EMAS applications with a 100 percent success rate.

As part of the Administrator’s “Call to Action” last year, the FAA required all airports with enplanements of 1.5 million or more (75 airports) to enhance airport markings by June 30, 2008, and urged airports to provide recurrent training to contractors and service providers that drive on aircraft movement areas.  All 75 airports completed the marking upgrades by June 2008 and most did so well in advance of the deadline.  More than half of the commercial service airports not currently required to upgrade their markings have voluntarily agreed to do so.  In addition, roughly 85 percent of all commercial service airports currently have or plan to provide recurrent training for all who have access to the aircraft movement area.  Our Airports office at the FAA has completed rulemaking requiring the enhanced markings at all Part 139 certificated airports by 2009 for medium and 2010 for small airports.

Human Factors

While the FAA has made great strides in advancing and implementing technologies to reduce runway incursions, technology is only as good as the people who use it.  To this end, we are concentrating a great deal of effort into the human factors elements of runway incursions.  As I reported to you in February, the FAA is seeking input from NATCA on revamping policies for issuing taxi clearances.  The requirement to issue explicit taxi instructions was implemented in May 2008 and the requirement for an aircraft to cross all intervening runways prior to receiving a takeoff clearance was implemented in August 2008.  Both of these requirements address NTSB recommendations on runway safety. 

We are also working with NATCA to implement a voluntary reporting system for air traffic controllers similar to the Aviation Safety Action Program (ASAP) with airlines, pilots, airport operators and the FAA.  This program is know as the Air Traffic Safety Action Program (ATSAP) and marks the beginning of a demonstration program to encourage voluntary safety reports from the ATO controllers.  The program offers individual controllers an opportunity to provide valuable inputs to improve safety.

Voluntary safety reporting has proven very successful as sources of additional information that can be used to target safety risks that may not have been identified through existing audits, inspections, and automated tools.  In my role at United, I was responsible for four ASAP programs for pilots, dispatchers, mechanics and flight attendants.  Because of this work, I am convinced that information from a voluntary reporting system will help us to spot trends and prevent future runway incursions.  We have implemented voluntary reporting in our Chicago area facilities and receive valuable safety information daily regarding events and incidents that previously might have gone unreported.  We will continue to expand this program without delay to additional facilities.

Recently the FAA conducted our first-ever Fatigue Symposium.  This symposium brought together leading fatigue scientists; representatives of the airline industry and its employee groups, representatives of the NTSB, and representatives of the FAA and its employee groups.  At the symposium, fatigue scientists and industry experts presented the most current scientific and industry-relevant fatigue information to a broad audience representing both flight operations and shift-work operations, including air traffic control, maintenance, ramp operations, and aircraft dispatch.  The intent of the conference was to present information that would lead to improved understanding of fatigue in aviation and increased awareness of fatigue mitigation strategies, which the aviation industry can voluntarily adopt.  By all accounts that conference was extremely successful and resulted in a great deal of information, ideas, and strategies.

Following up on that, we are preparing the proceedings of the Fatigue Symposium for posting on the FAA homepage, so that all operators, not just those in attendance, may access the wealth of information the conference produced.  We have already applied some of the information, ideas and strategies in its evaluation of air carrier-specific proposals for ultra long range (ULR) operations (operations with a flight or flights in excess of 16 hours).  The FAA is observing the effectiveness of the fatigue mitigation strategies employed in ULR operations, for any "lessons learned" that may be applied to other, non-ULR operations.  We continue to examine the information from the Fatigue Symposium to determine what next steps we may be able to take.

The FAA is committed to designing an end-to-end system that seeks to eliminate runway incursions while accommodating human error.  In February, I mentioned to you that the FAA plans on creating a standing Runway Council Working Group to look at the data and address root causes, and continue to involve all who play a part in runway safety.  The Runway Council is scheduled to begin this fall, and will have dedicated human factors expertise to address this aspect of runway incursions. 

Conclusion

The FAA continues to seek ways to improve awareness, training, and technologies and we look forward to our collaboration with airlines, airports, air traffic control and pilot unions, and aerospace manufacturers to curb runway incursions.  I want to thank personally all of the stakeholders that have been working with the FAA on our efforts, including the Office of the Inspector General, the GAO, NATCA, the National Business Aviation Association, the Airline Pilots Association, the airlines, the Aircraft Owners and Pilots Association, and many others.  We could not do what we do without their incredibly valuable input.

We also value the Committee’s interest in this arena, and welcome your counsel and assistance in our efforts to reduce runway incursions and improve safety in our nation’s aviation system.  Your oversight has kept us on track to continue to improve safety, on the ground and in the air, and I appreciate that.

This concludes my remarks, and I would be happy to answer any questions the Committee may have.

STATEMENT OF

HANK KRAKOWSKI,
CHIEF OPERATING OFFICER,
AIR TRAFFIC ORGANIZATION,
FEDERAL AVIATION ADMINISTRATION
AND THE HONORABLE MICHAEL W. REYNOLDS,
ACTING ASSISTANT SECRETARY FOR AVIATION AND INTERNATIONAL AFFAIRS,
U.S. DEPARTMENT OF TRANSPORTATION,

BEFORE THE

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION,
SUBCOMMITTEE ON AVIATION OPERATIONS, SAFETY, AND SECURITY,

ON

THE OUTLOOK FOR SUMMER AIR TRAVEL: ADDRESSING CONGESTION AND DELAY.

JULY 15, 2008.

Chairman Rockefeller, Senator Hutchison, Members of the Subcommittee:

Thank you for inviting me here to testify about aviation congestion and delays. With me today is Michael Reynolds, the Acting Assistant Secretary for Aviation and International Affairs from the Department of Transportation (DOT). With the summer travel season upon us, the Federal Aviation Administration (FAA) and the DOT have a number of efforts underway to address aviation congestion and delays.

State of the Industry

In order to frame the issues properly, we must first take a look at the state of the aviation industry today. Record oil prices, a slowing economy, and increased competition are just a few factors that have created a number of significant challenges for airlines – challenges that certainly will change the face of the aviation industry in the years to come.

To meet these challenges, many carriers are raising fares, streamlining operations, and reducing service. With a few notable exceptions -- JFK, Denver and San Francisco, for example -- air traffic is down. General aviation operations are also down, due to fuel and insurance costs, further de-stressing the system. System-wide, FAA data shows the number of flights have decreased just over 2 percent, comparing May 2008 to May 2007.

While airlines are announcing reductions in service, and air traffic overall is down, it is likely that the busiest and most congested airports, particularly in the New York/New Jersey region, will not see a significant reduction. Even if they do see a downturn in the short run, history tells us that the aviation industry is very cyclical and that service will eventually return to – and exceed – the record levels we saw last year. Of the current delay minutes, 32.9 percent were at the three largest airports in the New York area (Newark Liberty International, LaGuardia Airport, and John F. Kennedy International Airport), as compared to 33.4 percent from last year. Approximately one-third of the nation’s flights and one-sixth of the world’s flights either start or traverse the airspace that supports the New York/New Jersey/Philadelphia (NY/NJ/PHL) region.

In 2007, the aviation industry recorded the second worst year for delays since 1995; 27 percent of flights were delayed or cancelled in 2007. Both the frequency and the severity of ground delays were unprecedented. The costs of delays are huge – the Senate Joint Economic Committee estimates that last year flight delays alone cost passengers, airlines, and the U.S. economy over $40 billion. Additionally, the Travel Industry Association estimates that air travelers avoided over 41 million trips last year – leading to lost revenues and taxes of over $26 billion.

Even if carriers reduce flights this summer enough to reduce congestion, we still must do something to fix the problems that caused last summer’s horrible delays. We continue to work towards developing and providing solutions for all of the users of the nation’s airspace system.

As we frame the problem, we should note that we are living in the safest period in aviation history and we are constantly striving to make it safer still. In the past 10 years, the commercial fatal accident rate has dropped 57 percent. General aviation accidents are down. Safety is and will always be the primary goal of the FAA. Nothing we do to address congestion and delays will compromise the FAA’s safety mandate.

Summer 2008

A snapshot of the system comparing May 2008 to May 2007 for the 35 Operational Evolution Partnership airports is telling. As you know, we had far more severe weather during May 2008 than we had in May 2007, particularly in the Midwest. Previously, this would have caused major delays throughout the NAS, and had the FAA done nothing, we would have seen thousands of delayed and stranded passengers all over the country. Instead, our projected data estimates that the average minutes of delay for all flights decreased slightly (by almost 1 percent), while the number of flights with more than one hour of delay decreased by 8 percent. Although the data from the Bureau of Transportation Statistics has not been finalized, we are expecting to see that cancellations for May 2008 have decreased approximately 8 percent and on-time arrivals increased nearly 1 percent over May of last year.

According to FAA data, bad weather causes 70 percent of all delays. The situation is worse during the summer, unlike winter storms, which take time to develop and move slowly, summer storms can form quickly, stretch for hundreds of miles and travel rapidly over large portions of the country, grounding flights and sending chain reaction delays throughout the NAS. While we cannot control the weather, we can control how we manage the delays. With new dispersal headings, the use of Adaptive Airspace Flow Programs (detailed below), new westbound departure routes out of New York, and other improvements, we are dealing more effectively with delays, using people, procedures, and technology.

In 1998, the FAA initiated Collaborative Decision Making (CDM), which represented a change in how the FAA communicates with the airlines in order to reduce delays. Prior to CDM, airlines were hesitant to share certain information for competitive reasons. Airlines now share schedule information with the FAA’s Command Center in Herndon, VA, including flight delays, cancellations and newly created flights. The Command Center uses this information to monitor airport arrival demand and take steps to reduce delays caused by heavy traffic and severe weather. Daily teleconferences are held every two hours between FAA air traffic managers, the airlines, and general aviation users, to discuss problems affecting capacity in the system and decide the most efficient, and collaborative solution as these situations arise.

For 2008, the FAA is implementing a number of new procedures and tools to enhance this system and to help manage and reduce congestion, outlined below:

Western Atlantic Route System
This initiative will increase capacity along the East Coast over the Atlantic this summer by reducing lateral separation from 90 miles to 50 miles for aircraft with avionics that provide an appropriate level of accuracy. The area includes parts of Miami and New York high altitude airspace, as well as the San Juan Center Radar Approach Control airspace.

In the past, lateral separation in oceanic airspace has been set at 90 miles between aircraft to maintain safe separation. This initiative takes advantage of more precise aircraft position technology to allow for more Atlantic routes, 20 more transition route fixes and ultimately more access to the available airspace. The procedures became fully operational on June 5, 2008.

New Playbook Routes
Playbook routes are pre-coordinated routes that are developed to route aircraft around convective weather. New playbook routes will be in place this summer to provide alternate route options during periods of severe weather. Nineteen new playbook routes will be available, including four Virginia Capes Area (VACAPES) routes designed for use in military airspace when it is available.

Integrated Collaborative Rerouting Tool
This is a new automated tool that depicts constrained airspace to airlines and other users of the NAS. This alleviates the need for the FAA to implement required reroutes, which may be less favorable to the users. It gives the airlines scheduling options and a more efficient utilization of the available airspace. The tool will allow pilots to provide early intent of their preferred routing around constrained areas, such as storms-affected areas.

Adaptive Airspace Flow Programs (AFPs)

The Airspace Flow Program was deployed in June 2006 and enables the FAA to manage adjustments to changing weather patterns. This is crucial during the summer convective weather season when storms grow rapidly and move across large swaths of the country. Before the FAA developed the technology to implement AFPs, the FAA's primary tool was a ground delay programs to prevent aircraft from taking off if they were headed for a delayed airport from any direction. Ground delay programs remain valuable under appropriate circumstances, but sometimes have the unintended consequence of delaying flights that would otherwise not encounter severe weather.

Last summer from May 2 through August 30, 2007 a total of 58 AFPs were used. Use of these AFPs provided approximately $68 million in savings for the airlines. AFPs, which focus on particular areas in the sky where severe weather is expected, generally are a more equitable and efficient way of handling flights during severe weather.

The Adaptive Airspace Flow Program is an enhancement to the original program. This summer, the FAA can adjust the parameters of an AFP based on changing weather intensity, providing a more effective way to manage traffic during severe summer storms that will minimize delays.

Using AFPs, the FAA is able to target only those flights that are expected to encounter severe weather. The targeted flights are issued an Expect Departure Clearance Time (EDCT), giving the airlines the option to accept a delayed, but predictable departure time, to take a longer route to fly around the weather or to make alternate plans.

Adaptive Compression
This program, launched in March 2007, automatically identifies unused arrival slots at airports affected by AFP or ground delays and moves other flights into those slots. This means that maximum arrival rates will be maintained, easing congestion and delays. Adaptive Compression saved $27 million for the airlines and 1.1 million delay minutes for the airlines and the flying public in its first year of operation.

Expanding Capacity

Expanding capacity in the overall NAS is always our preference, both on land and in the air. Airport capacity is critical. Along with our partners in the airport community, we have achieved significant progress in increasing capacity and we intend to continue to support this with our ongoing airport improvement programs. A brief overview of the status of recent airport projects as well as projects in the planning stages might be helpful.

The 35 airports included in the Operational Evolution Partnership (OEP) account for about 75 percent of all passenger enplanements. Much of the delay in air traffic can be traced to inadequate “throughput” (measured as arrival and departure rates) at these airports. Airfield construction (new runways, runway extensions, new taxiways, end around perimeter taxiways, and airfield reconfigurations) is the most effective method of increasing throughput. Consequently, constructing new and/or extending runways, taxiways, and airfield reconfiguration are solution sets of the OEP’s Airport Development Domain.

Arrival and departure rates at the nation’s busiest airports are constrained by the limited number of runways that can be in active use simultaneously. The addition of new and extended runways or airfield reconfigurations will expand airport throughput at the target airports, and possibly for other airports in the same metropolitan area. In most cases the airfield projects are sufficient to keep pace with forecasted demand. Since FY 2000, 14 of the 35 OEP airports have opened 15 airfield projects (including 13 new runways providing 20 miles of new runway pavement, 1 end around taxiway, and 1 airfield reconfiguration). The projects have provided these airports with the potential to accommodate 1.6 million more annual operations and decrease average delay per operation at these airports by about 5 minutes, and reduce the potential for runway incursions. The complete listing of airfield projects included in the OEP is shown in the table below.

The total cost of these projects is $5.6 billion with approximately $1.9 billion in Airport Improvement Program (AIP) grant funding. End around taxiways provide another means to decrease delays at a busy airport by providing an alternative to having aircraft cross an active runway. With the opening of the end around taxiway at Atlanta in April 2007 about 612 runway crossings per day were eliminated at the busiest airport in the U.S.

Currently, seven OEP airports have airfield projects (3 new runways, 1 airfield reconfiguration, 1 runway extension, and 2 taxiways) under construction. The projects will be commissioned through 2012 and will provide these airports with the potential to accommodate about 400,000 more annual operations, decrease average delay per operation by almost 2 minutes, and significantly reducing runway crossings. The cost of the 7 airfield projects, listed below, is approximately $3.9 billion with about $1.2 billion in AIP funding.

There are also ten other projects (3 airfield reconfigurations, 3 runway extensions, & 4 new runways) are in the planning or environmental stage at OEP airports through 2017.

In addition, four communities (Chicago, Las Vegas, Atlanta and San Francisco) have planning or environmental studies underway to examine how their metropolitan area will accommodate future demand for aviation.

AIP program planning will continue to reflect a special emphasis on increasing capacity and improving the airport arrival efficiency rate.

Controller Staffing

We know that controller staffing and how it affects delays are issues of concern to this Committee. The FAA is its workforce, and we consider controller staffing issues to be of the utmost importance to maintaining the safest aviation system in the world. To deal with the long-predicted retirement eligibility of today’s generation of controllers, the FAA began a large-scale recruitment and selection process to rebuild the controller workforce. By 1992, the controller workforce was once again fully staffed. However, the realities were that, because of the concentrated, post-strike period of hiring, the FAA would have to once again begin a major recruitment effort as these controllers began to age out of the system. The vast numbers of controllers hired in the 1980s were long-predicted to retire once they reached retirement eligibility after 25 years of service.

To deal with this, the FAA initially developed a 10-year controller workforce staffing plan in 2004, which we refine each year. In 2007, the anticipated retirement wave of controllers began, and we project that retirements will continue to hit record numbers in 2008 and 2009. Our strategic hiring plan takes into account both projected retirements as well as expected attrition in new hires. From 2008-2017, we plan to hire approximately 17,000 new air traffic controllers.

To achieve these ambitious goals, the FAA has been recruiting aggressively through a variety of traditional and non-traditional outlets. In an effort to diversify our workforce, we are actively recruiting more women and minorities, as well as disabled veterans. And, in October 2007, the FAA chose an additional nine colleges and universities to be part of the Air Traffic Collegiate Training Initiative (AT-CTI) program, which brings the number of schools currently in the program to 23. We plan to continue to offer the opportunity to other schools to apply to the program.

We have also been offering a recruitment bonus of up to $20,000 for qualified new hires and offering retention incentives to retirement-eligible controllers on a case-by-case basis. Retention bonuses are typically 25 percent of an individual’s salary with a cap of $25,000. Controllers may also be eligible for relocation and reassignment bonuses for certain key facilities. Thus far, 44 retention bonuses have been accepted, and another 26 are pending consideration.

Thus far, we have increased our controller workforce by a net gain of 256 in FY 2007, and we are on target to increase it an additional 256, to an end of year target of 15,130 for FY 2008. The President’s budget for FY 2009 calls for a further net increase of over 300 controllers. Given the current airline reductions and current staffing statistics, we believe our staffing goals and plans are on target.

NextGen

In addition to ensuring sufficient controller staffing, we need to put the right tools into our controllers’ hands. Our long-term plan to address congestion and delays is the Next Generation Air Transportation System (NextGen). We appreciate this Committee’s strong support for the NextGen effort. NextGen will transform the aviation system and how we control air traffic. We must be able to handle the demands of the future for aviation travel – projected to be one billion passengers by 2015 – particularly in areas (such as New York/New Jersey) where capacity cannot be expanded.

As you know, NextGen is a steady, deliberate, and highly collaborative undertaking, which focuses on leveraging our latest technologies, such as satellite-based navigation, surveillance and network-centric systems. It is designed to be flexible to take advantage of even newer and better technologies as they become available. We want to make sure that our air transportation system can accommodate innovations without becoming entrenched in technology that is new today but obsolete tomorrow.

The FAA is hard at work bringing new technology and techniques on-line to unsnarl air traffic delays, and we appreciate the funding Congress has appropriated for these purposes. In recognition of these critical enhancements, the President’s FY 2009 Budget Request would more than triple the investment in NextGen technology – providing $688 million for key research and technology to help meet the nation’s rapidly growing demand for air travel, including the transformation from radar-based to satellite-based air traffic systems.

The FAA will begin rolling out several elements of the NextGen system this summer. This rollout will include the national debut of Automatic Dependent Surveillance-Broadcast (ADS-B) technology, the cornerstone of NextGen. We are particularly proud that the ADS-B team, which includes the FAA, along with its industry, government, and university partners, recently won the Robert J. Collier Trophy, one of the most prestigious awards in aviation. The award is awarded annually by the National Aeronautic Association “for the greatest achievement in aeronautics or astronautics in America, with respect to improving the performance, efficiency, and safety of air or space vehicles, the value of which has been thoroughly demonstrated by actual use during the preceding year.” It recognizes the development team that worked for more than a decade to create the pioneering systems to improve efficiency and safety in the national airspace.

The FAA has chosen Miami as the key site for the installation and testing of Traffic Information Services – Broadcast (TIS-B) and Flight Information Services – Broadcast (FIS-B). These broadcast services are the transmission of weather and traffic information to the cockpit of properly equipped aircraft. In order to provide the services in roughly the southern half of the state, the contractor, ITT will install and test eleven ground stations in this area, including five at airports (Lakeland Linder Regional, Dade-Collier, Florida Keys Marathon Airport, Boca Raton Airport, and Sebastian Municipal).

The ITT installed equipment is currently undergoing a Service Acceptance Test (SAT) which began in May. In November 2008, the agency expects to commission (the FAA calls this an In-Service Decision or ISD) these broadcast services (TIS-B and FIS-B). Following the successful completion of ISD, the FAA can exercise an option in the ITT contract to deploy the services nationwide

The transition to ADS-B technology will allow the nation's air traffic control system to change from one that relies on radar technology to a system that uses precise location data from a global satellite network. Over the next few years, the FAA will also install and test ADS-B for use in Air Traffic Control Separation Services. The key sites for this initiative are Louisville, Philadelphia, the Gulf of Mexico, and Juneau. The FAA plans to commission the ADS-B services in September 2010 and complete a nationwide rollout by 2013.

NY/NJ/PHL Airspace Redesign

As mentioned above, one-third of all domestic and one-sixth of all international air traffic pass through New York airspace. Improvements in this region have effects throughout the system. Likewise, a bad storm or other delays in this region cascades throughout the system. In order to address these issues, the FAA is in the process of implementing the New York/New Jersey/Philadelphia Airspace Redesign.

The old, inefficient airspace routes and procedures pieced together over the past several decades were overdue to be reconfigured to make them more efficient and less complicated. In addition to more jet routes with increased and better access, the Airspace Redesign includes improved use of available runways, fanned headings for departures and parallel arrivals, and more flexibility to manage delays in severe weather. We project that under the Airspace Redesign, delays will be cut by 200,000 hours annually. This is the single greatest improvement to address congestion we see in the near future for the New York/New Jersey metropolitan area.

We also project that this will save $248 million annually in operating costs for airlines. Additionally, the increased flexibility during severe weather is projected to save another $37 million annually. Finally, the environmental advantages include reduced carbon dioxide emissions of a projected 430 million pounds per year, and the residents affected by aviation noise will be reduced by more than 600,000. These are impressive gains.

Reconfiguring the airspace will enable the FAA to take several direct actions to take advantage of improved aircraft performance and emerging ATC technologies. Leveraging these technologies, the FAA can implement new and modified ATC procedures, including dispersal headings, multiple departure gates and simplified arrival procedures by 2011. The FAA will also use these technologies to employ noise mitigation measures, such as use of continuous descent approaches (CDA), and raising arrival altitudes.

Implementation of the Airspace Redesign Project will be able to make use of procedures like Area Navigation (RNAV) and Required Navigation Performance (RNP), which collectively result in improved safety, access, predictability, and operational efficiency, as well as reduced environmental impacts. RNAV operations remove the requirement for a direct link between aircraft navigation and a ground-based navigational aid (i.e. flying only from radar beacon to radar beacon), thereby allowing aircraft greater access to better routes and permitting flexibility of point-to-point operations. By using more precise routes for take-offs and landings, RNAV enables reductions in fuel burn and emissions and increases in efficiency.

RNP is RNAV with the addition of an onboard monitoring and alerting function. This onboard capability enhances the pilot’s situational awareness providing greater access to airports in challenging terrain. RNP takes advantage of an airplane’s onboard navigation capability to fly a more precise flight path into an airport. It increases access during marginal weather, thereby reducing diversions to alternate airports. While not all of these benefits may apply to every community affected by the Airspace Redesign Project, RNAV and RNP may prove useful in helping to reduce overall noise and aggregate emissions.

The Airspace Redesign Project is very large and complex and the implementation will take several years. There will be four stages of the implementation, distinguished by the degree of airspace realignment and facility changes required to support each of the overlying operational enhancements. Implementation is estimated to take at least five years, with each stage taking approximately 12-18 months to complete. The FAA is presently finalizing a detailed implementation plan that will cover all elements of this project's implementation and we anticipate completion of stage 1 later this year. We have also begun additional operation validation of some of the key elements of stage 2.

Additional DOT Efforts to Reduce Congestion:

 In addition to the capacity enhancements, operational improvements, and ongoing efforts in the NextGen arena that have already been discussed, the Department is constantly searching for new ways to reduce congestion and improve customer satisfaction.  Given the record delays last summer, in July 2007, Secretary Peters formed an internal New York Air Congestion Working Group and tasked them with developing an action plan to reduce congestion and delays at airports in the New York City region and improve customer satisfaction.  The working group developed a plan, which, among other things, included establishing a New York Aviation Rulemaking Committee (ARC), holding scheduling reduction meetings, implementing operational improvements, and enhancing customer satisfaction.  ARC participants included, among others, the airlines and the Port Authority of New York and New Jersey. Since forming the Working Group, the Department has taken a number of actions to reduce congestion and increase customer satisfaction, including:

• Completion by the end of this summer of 17 key operational improvements proposed by the ARC;
• Establishing an executive-level Director position at the FAA to head the New York Area Program Integration Office;
• Amending the Airports Rates and Charges Policy, allowing airports to manage congestion at the local level;
• Publishing a final rule on denied boarding compensation;
• Creating a Tarmac Delay Task Force;
• Publishing a final rule to enhance delay data reporting;
• Publishing an Advance Notice of Proposed Rulemaking to enhance consumer protections, including tarmac delay contingency plans, requiring responses to consumer complaints, and requiring publication of consumer data; and
• Creating a chronically delayed flight enforcement regime to pursue unrealistic scheduling.

The Department has also set forth significant rulemaking proposals aimed directly at reducing congestion in the system.  As mentioned, one third of all U.S. air traffic passes through New York airspace.  This concentration of traffic has prompted the Department to take special action in the New York area.  Recently, the Department published notices of proposed rules intended to manage congestion and introduce competition at LaGuardia Airport (LaGuardia), John F. Kennedy International Airport (JFK), and Newark Liberty International Airport (Newark).  We believe these proposals will ultimately provide travelers with more reliable service while maintaining competition among the many carriers in a vibrant New York market. 

As you know, the three New York airports are all operating under a cap.  Caps solve the problem of congestion because they simply freeze capacity and stop additional flights from flooding the system.  Airlines are often enthusiastic in their support of caps at an airport they already serve.  When a cap is established, incumbent airlines are protected because they typically maintain their market share and the potential for new competition is diminished.  The incumbent airlines’ support for such a policy makes sense, because limited competition makes them more profitable and protects them from new entrants that might want to compete by offering lower fares.  This limitation on capacity and competition naturally leads to fare increases at an airport, because it creates a scarce commodity, and passengers pay a premium for that commodity. 

Unfortunately, straight caps without some mechanism to ensure an efficient allocation of scarce slot resources is economically inefficient and stifles competition – leading to reduced service and higher fares for consumers.  Granting slots without market-based mechanisms creates a system where incumbent airlines fight to maintain large shares of the airport traffic and to limit the ability of low-cost carriers to compete.  The 1996 DOT report Low Cost Airline Service Revolution details this anticompetitive culture at capped or dominated airports.  The report identifies slot hoarding as one of the key characteristics of such a culture.  Federal regulations require airlines to use their slots at least 80 percent of the time in order to retain possession of them.  However, by splitting up larger flights into smaller ones (“downgauging”) or by setting up a rotating schedule, airlines have unnecessarily taken up more slots than they would require to competitively serve their customers.  Slot hoarding prevents new entrants from taking available slots and increases airplane throughput without increasing passenger throughput, adding greatly to congestion.  The report maintains that the high fares charged at these dominated airports create incentives for an airline to use anticompetitive measures to discourage new entrants.

Using the historical backdrop of slots as a guide, we believe that integration of a market-based system into the proposal for slot caps is necessary to protect consumers and a competitive market.  Estimates from the DOT’s 1996 report valued savings from new entry competition at 35 percent for round-trip flights and 40 percent for one-way flights.  A case-specific study on the effect of Southwest Airlines noted that with the opening of just one route between Oakland International Airport and Ontario International Airport in Los Angeles, fares dropped 60 percent and traffic tripled, increasing both passenger throughput as well as savings for consumers.  Even nearby airports not directly offered service experienced a decrease in fare costs of up to one-third.  Southwest is just one example of low-cost carriers whose entry into the market drove down prices and increased passenger throughput at previously dominated airports.

This is why caps alone are not the best solution for improving travel options for passengers and why caps must be combined with some mechanism to preserve competitive market forces to benefit aviation consumers or the airlines. When we consider economic regulatory issues, the Department has a statutory obligation to place maximum reliance on competitive market forces and on actual and potential competition.  We know, however, that caps hinder the ability of air carriers to initiate or expand service at capacity constrained airports.  Therefore, when seeking a solution to the aviation congestion issues that we currently face in the New York area, the Department must act to both promote competition by permitting access to new entrants, and to recognize the long-term investments in airports made by existing carriers.

Keeping in mind the need to reduce congestion while simultaneously promoting competition, we have set forth proposals for the New York area airports that we believe would reduce congestion the smartest way—by using market incentives to assist in the efficient allocation of airspace.  Opponents of market incentives have suggested that only caps will reduce congestion. We do not agree. We believe market incentives will encourage more efficient use of available airspace and should result in a greater throughput than under a system using pure caps. Consequently, we expect fewer delays per passenger. For example, to the extent that airlines choose to absorb costs associated with our proposed market incentives by “up-gauging” to larger aircraft, passenger throughput will increase, effectively reducing congestion for a greater percentage of the traveling public.

Although market-based mechanisms are the most effective way to allocate scarce resources—like slots—we have taken a very conservative approach to introducing these mechanisms with this proposal.  The vast majority of hourly operations at the airport, as much as 90 percent or more, would be “grandfathered” and leased to the existing operators for non-monetary consideration.  The market-based aspect of our proposal involves auctioning off leases for only a limited number of the remaining slots and treats domestic and foreign carriers equally. 

We are firmly committed to the idea that any long-term solution to mitigate congestion in the Nation’s airspace must include a market-based mechanism.  Caps alone have proven to be insufficient, and perpetuating the kinds of delays we experienced in the summer of 2007 is not tolerable.

Conclusion

Chairman Rockefeller, Senator Hutchison, Members of the Subcommittee, this concludes my prepared remarks on behalf of myself and Mr. Reynolds. We look forward to answering any of your questions.

STATEMENT OF

HANK KRAKOWSKI,
CHIEF OPERATING OFFICER,
AIR TRAFFIC ORGANIZATION,
FEDERAL AVIATION ADMINISTRATION,

BEFORE THE

HOUSE OF REPRESENTATIVES
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE,
SUBCOMMITTEE ON AVIATION,

HEARING ON

AIR TRAFFIC CONTROL FACILITY STAFFING. 

JUNE 11, 2008.

Chairman Costello, Congressman Petri, Members of the Subcommittee:

Thank you for inviting me here to testify today on air traffic controller staffing issues.  The Federal Aviation Administration (FAA) is its workforce, and we consider these issues to be of the utmost importance to maintaining the safest aviation system in the world.  In my testimony today, I would like to give you both an historical, as well as current, overview of the national airspace system (NAS) and the staffing issues facing us today.  As part of that, I would also like to discuss some of our efforts to recruit, retain, and train controllers, and note some of our other safety initiatives to ensure that our air traffic system remains as safe as possible for the traveling public.

Historical Overview

Let me first begin by taking you back to 1981, when President Reagan fired over 10,000 members of the Professional Air Traffic Control Organization (PATCO) for an illegal strike.  In the wake of that event, our controller workforce was reduced to less than 4,700.  The FAA began a large-scale recruitment and selection process to rebuild the controller workforce.  By 1992, when our controller workforce was once again fully staffed, almost 28,000 people had entered the FAA Academy screening program.  Of that number, 16,000 individuals or 57 percent successfully completed the program, 33 percent did not pass, and 10 percent left the program for other reasons. 

Of the remaining 16,000 individuals, approximately 72 percent of those assigned to Air Route Traffic Control Centers (ARTCC) achieved the Certified Professional Controller (CPC) status, while 84 percent assigned to terminal facilities achieved CPC status.  Many of those not successful in the facility-training program were reassigned to less demanding facilities and ultimately achieved CPC status, while others secured jobs elsewhere within the FAA.  The remainder resigned or were dismissed from the agency.

Recruitment and Retention

Even though the controller workforce was once again fully staffed, the realities were that, because of the concentrated, post-strike period of hiring, the FAA would have to once again begin a major recruitment effort as these controllers began to age out of the system.  The vast numbers of controllers hired in the 1980s were long-predicted to retire once they reached retirement eligibility after 25 years of service. 

As you know, the FAA initially developed a 10-year controller workforce staffing plan in 2004.  We refine this plan each year.  Last year, for example, we developed staffing ranges for each facility.  The long-term focus of these ranges is on the CPC, who provides the maximum scheduling flexibility for a facility.  As we update and refine our ranges, we will continue to make adjustments based on facility traffic performance.  In the interim, many facilities will be in a state of transition as the agency manages through the ongoing retirements and concurrently certifies newly hired controllers.

However, the ranges also take into account the fact that developmental controllers, especially those in the later stages of training, can and do staff positions for which they are fully certified.[1]  This is not a new practice.  For example, Philadelphia International Airport is a Combination Radar Approach Control and Tower with Radar facility, in which controllers work in the tower cab portion and in the radar room (also known as a “TRACON ”).  In order to be a CPC in these types of facilities, the controllers must be “checked out” or qualified on all of the positions in both the tower and the TRACON .  Thus, a developmental controller who has completed 50 percent of the required training to achieve CPC status, is fully certified to work all positions in the tower independently, while continuing to qualify for the radar positions.

In 2007, the anticipated retirement wave began, and we project that retirements will continue to hit record numbers in 2008 and 2009.  While our historical hiring goal was a “one-for-one” model (one new hire for every one retirement), beginning in 2004, we increased our hiring requests to prepare for the anticipated retirements in the next decade.  Our strategic hiring plan took into account both projected retirements as well as expected attrition in new hires.  From 2008-2017, we plan to hire approximately 17,000 new air traffic controllers.

To achieve these ambitious goals, the FAA has been recruiting aggressively.  In addition to our more traditional vacancy announcements to recruit from the general public, retired military controllers, eligible veterans, and current and former civilian air traffic controllers, we have been using major Internet outlets such as Careerbuilder.com, Monster.com, and CraigsList, as well as the social/professional networking site, LinkedIn.  We have participated in military job fairs across the country, as well as advertised in USA Today and Aviation Week & Space Technology.

In an effort to recruit more women and minorities, we have also advertised in special interest newspapers and magazines, such as Native American Times, Asian Week, Latina, and Minority Careers.  The FAA has also participated in the NAACP Diversity Job Fair, the Congressional Black Caucus Diversity Job Fair, and the League of United Latin American Citizens Job Fair in FY 2007.  Additionally, our joint effort with the Department of Veterans Affairs enables veterans with disabilities to take advantage of on-the-job training opportunities through FAA’s new Veterans’ Employment Program. This initiative allows veterans with disabilities to train for air traffic control and airway transportation systems specialist positions.

In October 2007, the FAA chose an additional nine colleges and universities to be part of the Air Traffic Collegiate Training Initiative (AT-CTI) program, which brings the number of schools currently in the program to 23.  We plan to continue to offer the opportunity to other schools to apply to the program.  This partnership between the FAA and the colleges and universities in the AT-CTI program will contribute to meeting air traffic controller hiring goals in the coming years.  This is a hiring source of growing significance for the controller workforce.

One of our more effective recruitment tools is the offer of a recruitment bonus of up to $20,000 for terminal and en route new hires who have at least 52 consecutive weeks of experience within the last two years as a certified air traffic controller with control tower operator or radar certification.  New hires with no experience do not qualify for a bonus and are sent to the FAA Academy in Oklahoma City for one to three months (depending on the type of facility they will staff), where they are paid a base salary of $19,300 per year for the short time they are there.  Upon successful graduation from the Academy and assignment to a facility, their starting salaries almost double to at least $37,500 per year (including locality pay).  The average controller is making about $50,000 at the end of his/her first year.

New hires at the Academy receive additional benefits beyond their base salary.  Academy tuition is funded by the FAA, and the FAA pays for travel to and from the Academy based on the student’s official address.  While at the Academy, FAA provides transportation between central locations throughout the city and the Academy.  Controllers at the Academy are also entitled to room and board, which is reimbursed at $79.20 per day.  This covers meals, lodging and incidentals.  Thus, student controllers earn $2,376 in per diem every 30 days at the Academy.  Controllers at the Academy also begin earning annual and sick leave and are eligible for other federal benefits such as health and life insurance.  Those controllers who are hired under a Veterans Recruitment Appointment, or who are retired military, or current or former Federal controllers, receive a starting base salary of $33,100, and in addition receive locality pay, tuition, travel costs, room, board, and benefits.  As you might surmise, with such salaries, training opportunities, and benefit packages, we have found that we have had no problems attracting applicants.

The FAA has also streamlined and centralized the controller hiring process.  Individual facilities can identify vacancies and select prospective new controllers as much as one year in advance.  Our security and medical clearance process has been improved by implementing Pre-Employment Processing Centers (PEPCs) to reduce the time it takes to complete pre-hire screenings, such as medical examinations, psychological and drug testing, and security clearance applications.

These initiatives have yielded a deep applicant pool of quality candidates.  As noted above, we have discovered that with our salary and benefits packages, we have had no problems attracting qualified candidates.  Since March 2008, we have had over 5,500 qualified applications available for selection and placement from our various applicant sources (former FAA controllers, veteran military controllers, CTI students, and public sector announcements).  Our largest applicant source is our public sector announcements, which are published monthly.  The last two such announcements combined yielded 2,500 qualified candidates.

In addition to our aggressive recruiting efforts, the FAA has been offering retention incentives to retirement-eligible controllers on a case-by-case basis.  Retention bonuses are typically 25 percent of an individual’s salary with a cap of $25,000.  Controllers may also be eligible for relocation and reassignment bonuses for certain key facilities.  Thus far, 44 retention bonuses have been accepted, and another 26 are pending consideration. 

Training

We recognize that there is a great deal of interest over the high number of developmental controllers (controllers still in training) and the high ratio of developmentals to controllers in some of our facilities.  Let me first say that training is something on which the FAA places a very high priority.  Our controller workforce plan is projected to keep trainee to controller ratios below 35 percent.  Currently, the ratio is about 25 percent.  While we currently do have a higher percentage of developmentals in our facilities than we have had in recent years, our training programs are set up to maximize quality training, both in the classroom and on-the-job, while continuing to ensure we are keeping the air traffic control system as safe as possible.  In order to address this concern further, allow me to take you through the training process.

First, recruits begin training at the FAA Academy in Oklahoma City.  There, they learn the fundamentals of air traffic control for their particular job path:  en route, tower, or terminal radar.  The FAA Academy trains developmental controllers using classroom lectures, computer based-instruction, and simulation systems.  The Academy lays the foundation for developmental controllers by teaching fundamental air traffic control procedures that are used across the country.  When developmental controllers graduate from the Academy, they are prepared to adapt to their assigned facility and successfully complete the training required to reach CPC status.

Upon successful completion of their Academy training, developmental controllers then report to their assigned field facility to continue with their on-the-job training.  Facility training begins with developmental controllers learning facility-specific rules and procedures.  A developmental then will begin on-the-job training on an operational position.  This training is conducted by a CPC who observes and instructs a developmental controller as they work the control position.

During their on-the-job training, developmentals are assigned to different positions within their facility.  Once they have mastered those positions, they are then certified for those positions.  I want to emphasize that no developmental may control live traffic independently until he or she has been certified to work that traffic position.  Each control position has a minimum and maximum number of on-the-job training hours allotted.  Based upon the recommendation of the training team, a developmental can be certified by the supervisor on a control position anywhere between the minimum and maximum number of hours.  The final result at the end of training is achieving certification on all positions, or CPC for that facility.  If a developmental controller fails to certify, they can be removed from service, or reassigned to a less complex facility in accordance with agency procedures.  The on-the-job training process is designed to provide developmental controllers sufficient seasoning time and opportunity to develop their skills as they progress towards becoming CPCs.

The FAA has been leveraging the use of more advanced technologies to improve training while reducing the time needed to fully train our controllers.  Our latest data indicates that where it used to take three to five years to train an air traffic controller, controllers can now be trained in one to three years, depending on the complexity of the facility they staff.  The most recent data shows that average training time to achieve CPC status is 1.4 years for terminal controllers, and 2.6 years for en route controllers.  We have achieved this reduction, not by cutting training time or quality, but by improving the training and scheduling processes, and by the increased use of training technologies such as simulators. 

With simulators, training no longer depends on the density or complexity of actual air traffic operations.  Simulating the real-time traffic environment provides a uniform training format for trainees to develop the necessary skills and experience that would take much longer solely through on the job training.  Through the use of simulation systems students will benefit from consistent delivery of simulated traffic, weather, and unusual situations. 

The simulation system provides significant improvements to existing training operations.  It eliminates the need for preemptive intervention on the part of an instructor to avoid a possible hazardous situation, allowing the student to “work through” the scenario until they can consistently generate a successful outcome.  The simulator system does not interact with actual air traffic control operational systems and poses no threat to service.  It realistically replicates operations that enable training in an absolutely safe environment.  In addition to initial training, the simulator system provides for refresher training to heighten awareness of controllers by generating seldom seen operations and airport conditions.  Controllers who have recently been assigned to a new facility can also use the system to train in their new operational environment, reducing their training time.

We have also asked retired FAA air traffic controllers to return as contractors to train the new workforce.  More than 100 retired controllers became contract training instructors in FY 2007.  They joined an existing 200 contract instructors from previous years.  This allowed the FAA to retain their valuable expertise and train the next generation of controllers.  These experts focus solely on training the next generation of controllers, rather than moving back and forth between working traffic and on-the-job training.

The Office of the Inspector General has made recommendations to us about improving our training processes, including centralizing oversight of our training programs at headquarters.  To that end, we recently created and filled a new senior position in the Air Traffic Organization that is responsible for training, both controllers and technicians.  Our goal is to focus and enhance the high priority we place on training, and to centralize our training policies to ensure accountability and oversight.

Facilities Staffing

The FAA has learned many lessons over the years following the PATCO strike.  Among these lessons are that we recognize that we have a committed and dedicated controller workforce.  Immediately following the PATCO strike, more than half of our controllers were trainees.  Our controller workforce plan avoids such future disparities.  As mentioned above, the plan projects an average trainee to controller ratio below 35 percent, while the current average is about 25 percent.  And, while we have a higher percentage of developmentals (≥35 percent) in some of our facilities now, that will decline as trainees gain their certifications.  We aim to staff every facility according to its current and future needs.  Each facility is unique and each facility requires its own unique staffing solution. 

The FAA staffs facilities to the traffic volume and controller workload.  And, since traffic volume is dynamic, so are staffing needs at any given facility.  Our “staff to traffic” model exercises the flexibility to match the number of controllers at various facilities with traffic volume and workload.  Staffing to traffic requires the FAA to consider many facility-specific factors.  They include traffic volumes based on FAA forecasts and hours of operation, as well as individualized forecasts of controller retirements and other attrition losses.  Proper staffing levels also depend on the efficient scheduling of employees, so the FAA tracks a number of indicators as the agency reviews staffing levels.  Some of these indicators are overtime, time on position, leave usage, and the number of trainees.  In addition, staffing at each location can be affected by unique facility requirements such as temporary airport runway construction, seasonal activity and the number of controllers currently in training.  Staffing numbers will vary as the requirements of the location dictate.

The State of the System

I would like to turn now to an overview of what is happening in the NAS; the state of the system is the major determinant in our staffing needs.  Currently, we are seeing a downturn in air traffic in most of the country.  Due to the rising cost of fuel and other financial pressures, airlines are being forced to make changes.  Major carriers have announced substantial reductions in their flight schedules and five airlines have gone bankrupt.  These events have resulted in a reduction of over 42,000 operations from the air traffic control system.  General aviation operations are also down, due to fuel and insurance costs, further de-stressing the system.  With a few notable exceptions -- JFK, Denver and San Francisco, for example -- air traffic is down approximately 2% nationally year over year.     

In most cases, this downturn in traffic has translated into fewer operations that a given controller needs to oversee.  In 2000, the average annual number of operations per controller was 10,028.  For the 12 month period ending April 2008, the average number of operations per controller is 9,260.  “Time on position,” the time that a controller actually spends controlling traffic, is averaging 4:45 hours per eight hour shift.  And, average overtime for the past 12 months is 2.2 percent; in 2001, average overtime was 1.5 percent.  We do recognize that there are some facilities with greater staffing needs, and we are adjusting our planning to address these facilities. 

While the short-term pressure is easing, we still forecast long-term growth.  Thus, we increased our controller workforce by a net gain of 256 in FY 2007, and we are on target to increase it an additional 256, to an end of year target of 15,130 for FY 2008.  The President’s budget for FY 2009 calls for a further net increase of over 300 controllers.  Given the current airline reductions and current staffing statistics, we believe our staffing goals and plans are on target.

Other Initiatives

In addition to our recruitment, training, and retention efforts, as well as our management of staffing at our facilities, we are moving forward with other initiatives that we believe will improve safety and better engage our workforce.

The first of these is the Air Traffic Safety Action Program (ATSAP), a joint pilot program between the FAA and the National Air Traffic Controllers Association (NATCA), in which controllers can voluntarily self-report safety hazards and incidents to the agency for review and risk assessment, without fear of retribution.  ATSAP comes after several years of negotiation and is a logical extension of the FAA's aviation safety action program in which air carriers voluntarily participate.  The pilot program is scheduled to last 18 months, during which time either side may terminate the agreement. It will be implemented at several targeted facilities.  

Another major FAA initiative is scheduled for next week.  We will conduct our first Annual Symposium on Fatigue in Aviation from June 17-19, 2008.  The symposium will offer the United States and world aviation communities the opportunity to focus on fatigue, its management, and risks.  The agenda will offer content from 21 expert presenters from around the world and will be moderated by industry leaders, labor, and medical experts.

There will be three flight operations working groups that will be led by a panel of three management, union, science or government representatives, and facilitated by fatigue science experts.  These groups will consist of pilots and flight attendants and will break down into one “long-haul operations” group and two “domestic operations.”  The long haul group will consist of representatives from major and cargo airlines.  Both domestic groups (one with a transcontinental focus; the other with multi-leg/short haul focus) will represent pilots and flight attendants from major and regional airlines.  These three groups will also include a variety of participants including those from labor unions, the scientific community, the international aviation community, the National Transportation Safety Board, and other federal agencies.  We will also be having “shift work” groups which will all be jointly comprised of participants from air traffic control, maintenance, ramp operations, dispatch, and technical operations.  Each of these will be led by a panel of three industry or union decision makers.  Leadership structure and identity, as well as meeting processes for all, are in final development.

Our goal for these workgroups centers on the understanding that the fatigue issue demands a balanced, collaborative and earnest effort to reduce fatigue risk in aviation.  The symposium builds upon the potential for industry and government (both labor and management), and science to propose fatigue mitigation strategies that could develop into industry-wide policy, non-prescriptive approaches, regulatory initiatives, potential propagation of best practices, and other initiatives that may originate from the symposium workgroups.

Conclusion

I hope that my statement has helped illuminate the FAA’s plans and goals for our controller workforce.  As I said at the beginning, the FAA is its workforce, and we are proud to have one with dedicated individuals who are committed to our mission:  to ensure the safety and efficiency of our aviation system.

Chairman Costello, Congressman Petri, Members of the Subcommittee, this concludes my prepared remarks, and I look forward to answering any of your questions.

TESTIMONY OF

EUGENE D. JUBA,
SENIOR VICE PRESIDENT FOR FINANCE SERVICES,
AIR TRAFFIC ORGANIZATION,
FEDERAL AVIATION ADMINISTRATION

ON

THE GAO’S REPORT ON

AVIATION WEATHER SERVICE RESTRUCTURING

February 26, 2008

Good Afternoon, Chairman Lampson, Congressman Inglis, and Members of the Subcommittee, my name is Gene Juba, and I am the Senior Vice President for Finance in the FAA’s Air Traffic Organization.  I am honored to be here today to discuss the findings and recommendations of the GAO regarding FAA’s provision of aviation weather services from NOAA’s National Weather Service.  FAA believes that working together with NWS, we will be able to fulfill the new requirements for aviation weather services which FAA recently sent to the NWS, and move towards a better alignment of current services with the future requirements envisioned in the NextGen Concept of Operations.

The Federal Aviation Administration is responsible for ensuring safe, orderly, and efficient air travel in the National Airspace System.  The legislative foundation of the Federal government’s regulation of civil aviation was the Air Commerce Act of 1926.  This landmark legislation was passed in the belief that the aviation industry could not reach its full potential without Federal action to establish and maintain safety standards.  The Act charged the Secretary of Commerce with fostering air commerce, issuing and enforcing air traffic rules, licensing pilots, certifying aircraft, establishing runways and operating and maintaining aids to navigation. 

The Department of Commerce continued oversight and regulation of civil aviation until 1938, when the Civil Aeronautics Act transferred Federal civil aviation responsibilities to a new independent agency, the Civil Aeronautics Authority.  In 1958, passage of the Federal Aviation Act transferred the CAA’s functions to the newly created Federal Aviation Agency, and the FAA was born.  The FAA became the Federal Aviation Administration upon the creation of the Department of Transportation in 1967, and the FAA’s becoming one of the modal organizations within the new Department. 

All through these years, the FAA and the Weather Bureau cooperated to provide weather forecast services for pilots to improve the safety of the nation’s aviation system.  A formal arrangement by which the National Weather Service would provide aviation weather services directly through co-location of NWS meteorologists at FAA facilities was established following the NTSB’s report on the 1977 crash of Southern Airways flight 242.  The NTSB’s recommendation called for the FAA to, “formulate rules and procedures for the timely dissemination by air traffic controllers of all available severe weather information to inbound and outbound flights in the terminal areas.”  Based on this recommendation, the FAA, with the assistance of the NWS, created the Center Weather Service Units (CWSU), which are located at each of the FAA’s 21 Air Route Traffic Control Centers (ARTCC) across the United States.

This relationship between the FAA and the NWS was codified in 1994, when Public Law 103-272 directed that, “The Administrator of the Federal Aviation Administration shall make recommendations to the Secretary of Commerce on providing meteorological services necessary for the safe and efficient movement of aircraft in air commerce.  In providing the services, the Secretary shall cooperate with the Administrator and give complete consideration to those recommendations.” (49 U.S.C. 44720(a))

Presently, the FAA alone spends over $200 million a year on aviation weather services, through over 40 observing systems, processes and communications services.  This is independent of the NWS spending for aviation weather forecasting and research.  FAA spends approximately $12 million a year to support the 84 NWS employees located at 21 CWSUs to provide services to FAA traffic management personnel located at the air traffic control facilities throughout the National Airspace System (NAS).  The NWS also provides aviation weather services through entities such as the Alaska Aviation Weather Office, the Volcanic Ash Advisory Centers, the Aviation Weather Center in Kansas City, Missouri, and Weather Forecast Offices.  NWS provides warning, forecasts, meteorological advice and consultation for FAA and other customers throughout all phases of flight; pre-flight, planning, and operations.

In recent years, the FAA has undertaken a number of initiatives to assess and improve the performance of the Center Weather Service Units.  FAA found that the CWSUs were not providing the same level of services at all of its locations, and the services and forecasts were not standardized across the 21 locations.  There was also little collaboration or communication between the different CWSUs.  In addition, neither the FAA nor the NWS had a formal quality assurance program for CWSU products and services. 

To address these concerns, FAA requested that the NWS restructure its aviation weather services to provide improved services in a more efficient, performance-based process.  While the NWS was developing its proposal for restructuring its aviation weather services, FAA conducted a market survey to determine if the private sector could provide the weather services FAA needed.  Ten organizations, including government laboratories and private sector firms, responded to the market survey that they could provide the services FAA requested.  The NWS submitted its restructuring proposal to FAA in October 2006.  In April 2007, FAA declined the NWS proposal for restructuring its aviation weather services provided to FAA, primarily because, in the intervening time, we had initiated an internal review of our requirements, and had not yet completed this review.  The results of that review are the new requirements which were provided to the NWS in January 2008.

However, we are serious about effective inter-agency cooperation and continue to work with the NWS on improving CWSU services.  We decided that we would refine our requirements for the services provided by the CWSUs because our existing requirements were too broad to ensure the efficiency and cost effectiveness of the services.  Also, as GAO found, FAA did not have a system in place to provide quality assurance of the services provided by the NWS, and thus could not objectively evaluate the accuracy, efficiency and cost effectiveness of the Center Weather Service Units.

The FAA agrees with the recommendations of the GAO, and in building the new requirements for the CWSU service, added a component of performance evaluation.  The performance mechanism calls for setting up a team of individuals from both FAA and NWS, which will convene regularly and monitor and provide recommendations on CWSU services based upon a negotiated set of performance metrics.  The goal of this team is to install a mechanism that will improve CWSU service on a continuing basis and enhance the FAA-NWS aviation weather relationship at the same time.  Most importantly, we must ensure that aviation weather services meet the needs of the aviation community.

In January 2008, FAA provided NWS with revised and clarified requirements.  The new performance based requirements request a new approach to how the products are generated and delivered.   The requirements address deficiencies the FAA has identified with CWSU service, such as a fragmented approach to aviation weather forecasting, with 21 aviation weather forecasts developed independently of one another, and sometimes producing inconsistent products across the NAS.  FAA has requested that forecasts across regional boundaries be consistent and that more attention be devoted to areas with “active” weather conditions, and less to areas where weather patterns are having less impact on aviation operations.  The new requirements also request CWSU services on a 24 hour a day, 7 days a week basis, rather than the current 16 hours a day, 7 days a week services.  Planes are increasingly operating on a 24/7 basis, and aviation weather services need to evolve to meet that demand.

FAA views the new requirements as moving current aviation weather services towards the FAA’s future requirements envisioned in the NextGen Concept of Operations.  The NWS is the team lead for developing the aviation weather services observing systems, forecasting services, and communications delivery systems for the inter-agency NextGen system effort, and FAA believes that the new requirements for CWSU services will help NWS better align itself with the NextGen requirements.

In conclusion, Mr. Chairman, the FAA and the NWS are doing their utmost to improve the CWSU service.  FAA has continuously held meetings with the NWS throughout the requirements development process, and continues to hold bi-weekly meetings with NWS during the proposal development process to ensure that the NWS is provided sufficient information and opportunity to develop an improved CWSU service.  We believe the NWS is committed to providing their best response to these requirements.  The FAA looks forward to the NWS’s future concept of operations for the Center Weather Service Units, and hopes to continue our cooperative relationship well into the future to reduce the impact weather has on aviation. 

We thank the GAO for their careful analysis and positive recommendations to institute performance measurements and metrics to improve the quality and cost effectiveness of aviation weather services.  We also welcome Congress’ assistance and counsel as we work with the National Weather Service to improve the efficiency and effectiveness of Center Weather Service Unit services.

This concludes my remarks, and I would be happy to answer any questions the committee may have.

Statement of

The Honorable D.J. Gribbin
General Counsel,
U.S. Department of Transportation

Before the

U.S. House of Representatives
Committee on Transportation and Infrastructure
Subcommittee on Aviation

Concerning

Airline Delays and Consumer Issues

April 9, 2008

Mr. Chairman and Members of the Committee, thank you for the opportunity to testify today. Allow me to use this time to update you on the initiatives taken by the Office of the Secretary and the Federal Aviation Administration (FAA) to address the issues of airline delays and consumer protection.

The Administration identified the need to respond to the growing consumer impacts of aviation system delays over a year ago. Since then, we have taken a series of important steps, including the President’s announcements related to holiday travel. At the direction of Secretary Peters, our Department has developed a comprehensive list of initiatives designed to improve air travel and reduce the impacts of lengthy delays on consumers. While we have maintained a strong focus on short term actions, it is imperative that we not lose sight of the ultimate objective: establishing a sustainable and economically efficient aviation policy that actually reduces delays, not simply treats the symptoms. In order to accomplish this objective, it is important that we reform our economic model for air traffic control services and airport pricing similar to what the Administration proposed last year. Without changes of this magnitude and regardless of regulatory actions pursued, it is inevitable that millions of Americans will experience unreliable air travel options and growing dissatisfaction with the performance of the U.S aviation system.

I. The Problem

We are all too familiar with the litany of statistics that demonstrate without question that action is needed on behalf of air travelers and the aviation sector of the national economy. One of the most compelling statistics is that last year almost 2 million flights operated by large air carriers did not land on time because they were delayed, cancelled, or diverted. That is almost 27 percent of the operations reported by these carriers. Imagine any other business telling its customers that 27 percent of the time the service they paid for is not available as advertised. The Administration has made commitments at the highest levels to address this problem. When Secretary Peters met with President Bush last September, he said, “We’ve got a problem, we understand there’s a problem, and we’re going to address the problem.”

I think we all agree that the air traveler deserves a better approach. Last year, according to the American Customer Satisfaction Index, the satisfaction level with the airline industry overall fell to its lowest level in 7 years. The statistics we gather monthly at DOT confirm deteriorating service levels. In 2007, there was a sharp rise in the number of complaints received by the Department – 13,168 complaints, which is over 58% more than the 8,325 complaints received in 2006. Complaints are continuing at a high rate in 2008 – the Department received 3,152 complaints during the first quarter of this year. For us, the objective is not to parcel out the blame, but to get to the root of the problem – congestion. Consumer satisfaction would be vastly improved if flights simply arrived on schedule. The growing lack of reliability in air travel these days is one of the most significant impacts of congestion.

II. DOT Actions

The Department began to address flight delays and related consumer issues over a year ago. In February 2007, the Administration sent Congress a comprehensive plan for transforming our aviation system to meet our present and future needs. A central reform of the Administration’s proposal was the overhaul of the FAA’s financing structure to replace the decades old system of collecting ticket taxes with a stable, cost-based funding stream and to facilitate equipping our aviation system with modern Next Generation Air Transportation System (NextGen) technology. The proposal creates a stronger correlation between what users pay and what it costs the FAA to provide them with air traffic control services; thus, providing price incentives for systems users to reduce delays.

Flight delay problems – including cancellations and missed connections – are the number one air traveler complaint. That is why addressing aviation congestion is a critical component to improving consumer satisfaction with the aviation industry. The year 2007 was the second worst year for delays since 1995, and the first two months of 2008, while slightly better, are the third worst for flight delays during that time of year. Since one-third of the air traffic moves through New York airspace, the three airports in the New York City metropolitan area had the highest percentage of delayed flights last summer, and delays in New York cascade throughout the system, the Department chose to focus its initial efforts in the New York area.

Given the record delays last summer, in July 2007, Secretary Peters formed an internal New York Air Congestion Working Group and tasked them with developing an action plan to reduce congestion and delays at airports in the New York City region and improve customer satisfaction. The working group developed a plan, which included establishing a New York Aviation Rulemaking Committee (ARC), holding scheduling reduction meetings, implementing operational improvements, and enhancing customer satisfaction. Since the hearing before this Subcommittee last September, the Department has taken a number of actions to implement the working group’s recommendations.

A. Aviation Congestion Mitigation Efforts

Last September, Secretary Peters formed a New York Aviation Rulemaking Committee (ARC), which was composed of representatives from passenger and cargo airlines operating out LaGuardia, John F. Kennedy International (JFK), Newark Liberty International (Newark), and Teterboro Airports, airline and airport trade associations, the Port Authority of New York and New Jersey (Port Authority), passenger rights advocates, and representatives from FAA and DOT. The ARC had the monumental task of researching and vetting the options for reducing congestion in New York’s major airports over the course of merely three months. The Administration wanted to have a robust discussion and input from all interested parties before moving forward with a policy action.

Incorporating the information received from the ARC, the Department is undertaking several actions to address aviation congestion in New York.[1] These actions include:

• Caps on hourly operations at JFK;
• Proposed caps on hourly operations at Newark;
• Completion of 8 of the 17 airport and airspace recommended operational improvements identified by the Air Transport Association (ATA) and the Port Authority of New York and New Jersey. We expect to complete the remaining 9 recommended improvements by summer 2008;
• Establishing an executive-level Director position at the FAA to head the New York Area Program Integration Office;
• Further implementation of airspace redesign; and
• Proposed amendments to the Airport Rates and Charges Policy.

During the holiday season, the Department also instituted other measures to mitigate flight delays, such as negotiating an agreement with the Department of Defense to open military airspace for commercial use. We are also continuing our outreach efforts with various stakeholders, including consumer groups, airports, and airline CEOs.

Straight caps without some mechanism to ensure an efficient allocation of scarce slot resources is not economically efficient and, therefore, not our preferred option. Given the urgent need for action, however, it was necessary at the New York City area airports. The Port Authority elected not to pursue various delay reduction approaches, and the President and Secretary Peters would not tolerate delays like those that occurred last summer. The caps at JFK took effect on March 30, and we expect to issue a final order for Newark soon (the comment period on the notice proposing caps at Newark closed on April 1). The caps at JFK (and Newark, if imposed,) are scheduled to expire on October 24, 2009.

We still believe that there is a need for market-based measures to allocate capacity, and the Department continues to explore such measures. For example, there are options available to airports in lieu of caps. Our preference is to see airports address their challenges locally; however, the Federal Government will be involved once a congested airport impacts the rest of the national airspace. New York air congestion causes delays throughout the U.S.

In January, we issued a notice that proposed providing airports with a new and useful tool to price access to their facilities better. The FAA proposal would make three changes to the airports rates and charges policy. The first change would clarify that airports may use a two-part fee structure with an operation-based and weight-based element. The second change would permit an operator of a congested airport to charge for work under construction. Finally, the third change would expand the authority of an operator of an airport system to charge users of the congested airport in the system for the airfield costs of other airports in its system. If adopted, the amendments would allow a congested airport to charge prices commensurate with the true costs of using its runways. In return, this will provide users better incentives to consider alternatives, such as scheduling flights outside of peak demand times, increasing aircraft size to use the congested runways more efficiently or meeting regional air service needs through alternative, less congested facilities. The comment period ended on April 3, and we hope to act on the proposal soon.

Per landing charges are a much better proxy for costs than weight-based charges. Since 2002, the amount of small aircraft (planes with fewer than 100 seats) flying into New York area airport increased substantially. Small aircraft flights at JFK increased 393%; Newark increased 53%; and LaGuardia increased 48%. The way we charge for airport use is an important contributor to this trend. Economists on both sides of the political aisle have acknowledged this relationship.

We share the view that expanded capacity is a critical component of the long-term solution to relieve congestion and get travelers to their destinations on time and in a humane fashion. We are intensely focused on such solutions, both at the FAA with NextGen and at the Department level. The FAA is hard at work bringing new technology and techniques on-line to unsnarl air traffic delays, and we appreciate the funding Congress has appropriated for these purposes. In recognition of these critical enhancements, the President’s FY 2009 Budget Request would more than double the investment in NextGen technology – providing $688 million for key research and technology to help meet the nation’s rapidly growing demand for air travel, including the transformation from radar-based to satellite-based air traffic systems .

The FAA will begin rolling out several elements of the NextGen system this summer. This rollout will include the national debut of Automatic Dependent Surveillance-Broadcast (ADS-B) technology in Florida. The ADS-B program will change the nation's air traffic control system from one that relies on radar technology to a system that uses precise location data from a global satellite network. The FAA has chosen Miami as the key site for installation and testing of two broadcast services of the ADS-B program - Traffic Information Services – Broadcast (TIS-B) and Flight Information Services – Broadcast (FIS-B). These broadcast services transmit weather and traffic information to the cockpit of properly equipped aircraft. The FAA plans to commission these broadcast services in November 2008 and can then begin nationwide deployment.

Over the next few years, the FAA will also install and test ADS-B for use in Air Traffic Control Separation Services. The key sites for this initiative are Louisville, Philadelphia, the Gulf of Mexico, and Juneau. The FAA plans to commission the ADS-B services in September 2010 and a nationwide rollout by 2013.

B. Consumer Protection Initiatives

While relieving congestion will go a long way in addressing consumer issues, the Department also is undertaking a number of consumer-specific measures. Our consumer protection initiatives have advanced a great deal since your September 2007 hearing. This is due in part to the appropriation by Congress of $2.5 million targeted to improving consumer protections, and I can assure you we are putting it to good use. The funding is being used for additional staff to pursue investigations and enforcement actions, improvements to our aviation consumer protection Web site and consumer complaint system, brochures for air travelers to help them understand their rights and responsibilities, and a series of public forums to listen to air travelers and the problems they have experienced.

The Department has initiated three rulemakings to enhance passenger rights and protections. In November 2007, the Department issued a proposal to double the limits on the compensation required to be paid to “bumped” passengers and extend the compensation requirement to smaller aircraft (i.e., aircraft with as few as 30 seats, versus 60 seats in the existing rule). The Department is currently considering the comments received and expects to take final action on this proposal soon.

The Department also published a proposal to enhance the on-time performance data that carriers currently report to the Department so that the Department, the industry, and the public have access to more complete information on flights that are cancelled, diverted, or experience gate returns. We hope to take final action soon.

The third rulemaking, an Advance Notice of Proposed Rulemaking, requested comments on various proposals designed to provide consumers information or enhance consumer protections, including proposed requirements that airlines: create legally binding contingency plans for extended tarmac delays, respond to all consumer complaints within 30 days, publish complaint data online, and provide on-time performance information for international flights. The Department is currently considering the comments received. The next step would be issuance of a Notice of Proposed Rulemaking seeking comments on any proposals the Department decides to advance after reviewing the public comments.

In addition to these rulemakings, the Secretary formed a "Tarmac Delay Task Force" in December. The purpose of the task force is to study past delays, review existing and other promising practices, and develop model contingency plans that airlines and airports can tailor to their unique operating environments to mitigate the impact of lengthy ground delays on consumers. The task force also will consider possible unintended consequences that solutions to tarmac delays may pose for travelers. The task force is composed of 35 individuals representing a broad cross-section of airlines, airports, consumer groups, and other stakeholders. The first meeting of the task force was held February 26, and the next meeting is scheduled for April 29. The Department expects that the task force will meet at least three more times in 2008 and will complete its work by the end of the year. In my opinion, the Task Force is working well and will be the source of best practices that will improve the travel experience when things do go wrong.

Three other important initiatives of our Aviation Enforcement Office deserve mention. The office has plans to conduct on-site enforcement investigations of five large airlines this fiscal year to evaluate their compliance with consumer protection requirements. In addition, the office will be holding three Aviation Consumer Protection Forums across the country to educate consumers regarding their rights as air travelers and to hear first-hand their concerns about air travel. The office is also continuing its investigation of unrealistic scheduling by large airlines, targeting chronically delayed flights. During the fourth quarter of 2007, the number of such flights decreased dramatically, and in 2008, the Aviation Enforcement Office will be applying a somewhat more rigorous set of criteria during its review.

We are well aware that tarmac and flight delays are making air travel an unpleasant experience for passengers. The Department will continue to take action to ease uncertainty and reduce inconvenience for passengers.

III. Addressing the Problem and Not the Symptom

While we are working to improve consumer protections, we do not want to lose sight of the fact that the underlying cause of much of the occasional misery attributed to air travel is congestion and delays. For this reason, the Department has been engaged in a discussion over the last several months with a wide variety of stakeholders on the efficacy of using a better economic model to balance supply and demand in a sustainable way.

Some have incorrectly suggested that expanding capacity should be the only government response to congestion in New York City and around the country. This view largely ignores the tremendous short-term opportunities to utilize existing capacity efficiently. It also ignores the physical, economic, and political constraints on capacity expansion in many parts of the U.S. aviation system.

The Department looks to increase capacity whenever and wherever possible. Our support for expansion of O’Hare International Airport is one concrete example. Capacity increases must be part of the solution, particularly considering that we expect more than 1 billion air passengers by 2016. However, capacity increases, both physical and operational, often take a long time to implement and may be limited in scope. Sometimes physical capacity cannot be expanded; such as is the case with LaGuardia Airport. Operational improvements can help to address congestion, but sometimes they cannot provide enough capacity to meet demand. For example, in New York, even with the implementation of all the operational improvements initially suggested by the Air Transport Association (ATA) and the Port Authority, congestion was expected to double this year, assuming the FAA took no further action and the airlines moved forward with planned increases in their schedules.                              

There are additional solutions. Basically, we have a choice between two fundamentally different approaches – administrative remedies and market-based solutions. We believe that outdated government policies relying on administrative remedies have led to an inefficient allocation of the airspace, and that moving towards a market-based system will reduce these inefficiencies and contribute to an improved flying experience for air travelers.

A. Administrative Remedies

Instituting administrative remedies, such as caps, is an effective, but not efficient way to reduce delays. Limiting the number of flights into an airport will reduce congestion at that airport. The Department decided to institute a short-term cap at JFK and Newark airports because something needed to be done to avoid a repeat of the flight delays that we experienced last summer. However, caps are not the best solution for improving travel options for passengers

Airlines are often enthusiastic in their support of caps at an airport they already serve. When a cap is established, incumbents are protected because they typically maintain their market share and the potential for new competition is diminished. The legacy airlines’ support for such a policy makes sense, because limited competition makes them more profitable and protects them from new entrants that might want to compete by offering lower fares

Although caps protect existing airline business, they also prevent airlines from adding capacity at an airport unless they are able to obtain a slot from a competitor. As a result, one of the best-known problems with slots is that they encourage airlines to “babysit” slots; i.e., underutilize the slot by flying multiple small aircraft into an airport to maximize the number of slots an airline can occupy at the lowest possible cost.[2] As a result, slots do not always go to those who value them the most and who will use the capacity in the most efficient manner.

This limitation on capacity and competition naturally leads to fare increases at an airport, because it creates a scarce commodity, and passengers pay a premium for that commodity.

A less apparent problem is the perverse incentive that appears when caps are being contemplated at an airport for the first time. In such a situation, incumbents are encouraged to build up flight operations in advance of a capping action, simply to generate a better base for the future allocation of slots. Thus, the talk of a heavy handed and artificial solution to a problem actually exacerbates the congestion problems at the airport. For example, when the FAA began to intervene at Newark Liberty and JFK airports by designating both airports Level 2, Schedule Facilitated, airports under International Air Transport Association guidelines, the schedules that the air carriers proposed for the summer of 2008 reflected growth that appeared to be enhanced by the signals that the FAA intended to address the congestion problem with a cap.

If caps are not the answer, then the question arises – what is the solution?

B. Market-Based Remedies

Alfred Kahn, an airline economist and former Chairman of the Civil Aeronautics Board said, “Whenever competition is feasible, it is, for all its imperfections, superior to regulation as a means of serving the public interest.” Secretary Peters echoed that sentiment when she said, “Our preference is to find a way to let market incentives do the job, and not to return to the days of government-regulated flights and limited competition.” Although the Department instituted caps as a short-term measure, we continue to explore market-based remedies as a longer-term solution to congestion.

It is clear that the current system does not allocate airspace capacity efficiently. Solving that problem, however, should not entail government picking "winners and losers," particularly when, as currently structured, everyone involved in air travel feels like they are the loser—both those getting terrible service and those getting blamed for providing terrible service.

Market-based pricing has been demonstrated time and again as the most effective way to allocate a scarce resource that is in high demand. Space in a movie theater, use of cell phone infrastructure, or flights during certain times to certain destinations are all examples that illustrate that such pricing works. Pricing can balance demand with available capacity, resulting in less congestion and more reliable schedules. Also, pricing sends better signals as to where the system needs extra capacity, and it can supply the revenues to add such needed capacity. Increases in fares under a pricing regime would be an indicator that more capacity is needed. In terms of efficiency, the current system focuses on airplane throughput. Instead, the objective of airspace and airport management policies should be passenger throughput. Proper pricing can increase the number of passengers served at an airport, even if the number of planes does not increase. And a framework to establish proper price signals need not be disruptive to the operations of airports.

Changing from the traditional, increasingly inefficient administrative controls to a market-based system has generated a fair amount of concern, primarily from the airlines. The following discussion outlines the issues related to pricing that were considered by the ARC. It details concerns expressed about pricing and how those concerns can be addressed.

Track Record in Aviation – Some opponents to market-based pricing believe it does not have a proven track record in aviation, and that implementation of such pricing for airspace will devastate the industry. Further, they do not believe that experience with such pricing in other industries provides a meaningful parallel for application in the airline industry.

We live in a market economy which allocates scarce resources through pricing. This model has been adopted because history has demonstrated repeatedly that markets are the most efficient means of allocating a scarce commodity. While the aviation industry is unique in a number of respects, there is no reason to believe that market-based methods will fail if applied to this industry.

In fact, market-based pricing has been used effectively in the United States for aviation. Boston’s Logan International Airport applied a pricing plan in 1988 that dramatically reduced congestion at that airport. While the plan was later found to be out of compliance with the then-existing Federal rules, market-based pricing at Logan Airport did reduce congestion. In addition, the Port Authority of New York and New Jersey applied pricing in 1968 to control congestion. The pricing worked initially; however, the fee was not increased with time and eventually became ineffective.

Those questioning the efficacy of market-based pricing in aviation need look no further than airline pricing policies. Airlines already apply a market-based pricing model to airline travel. When searching for low fare flights to your destination, inevitably the cheapest flights to be found are those departing or arriving at the least desirable times. By pricing flights at less attractive times at a lower level than flights at popular travel times, airlines are incentivizing consumers to move to a less congested flight. However, this congestion fee does not reduce overall congestion in the system, because it does not impact the way the airlines themselves are charged for air traffic control and airport services.

Cost to Consumers – Arguments have been made that market-based pricing could increase the monetary cost to travelers, if airlines pass congestion fees on to consumers. The relevant question is not what are the costs of instituting market mechanisms, but rather, what are the costs of instituting market mechanisms compared to the costs of various alternatives (including capping access to an airport or allowing substantial increases in delays).

In fact, congestion is expensive. According to the ATA, congestion costs the economy over $12.5 billion a year. The New York City Comptroller has estimated that congestion costs travelers to New York City an additional $187 million. Reducing congestion will produce increased system reliability and dramatic savings for consumers. Market-based pricing would decrease congestion and thereby decrease the costs that flow from congestion.

Market-based pricing makes the costs consumers already pay for flying into a congested market transparent and gives them the ability to avoid the higher costs by traveling during less congested periods. When scarcity exists, consumers pay higher costs. In the case of aviation, those costs are paid in terms of wait times or higher fares due to slot controls or pricing. Only with market-based pricing do consumers have the choice of avoiding higher prices. Some airlines now charge more for additional leg room. If passengers will pay for additional leg room, they almost certainly will pay to arrive on time.

Government Tax – One of the principal points argued by those opposed to market-based mechanisms is that the organizations that control airport and airspace access are both monopolies and, therefore, are themselves not market-based. For this reason, pricing of airport or airspace access would operate as a government tax, rather than a market price between two private entities.

The details of how the proceeds of a pricing mechanism might be spent are important and if the proceeds are dedicated to expanding capacity and funding specific projects at the airports, then the revenue would be directly used to alleviate the congestion that generated the proceeds and would not be a tax.

International Considerations – Carriers have expressed concerns that market-based pricing will not work at international airports for two reasons: (1) international flights have to leave at certain times to meet connecting flights overseas; and (2) our bilateral and multilateral aviation agreements limit the types of charges that may be collected from foreign carriers.

Carriers have opined that market-based pricing will not work for international flights, because the European airports’ slots rules and the North Atlantic Air Traffic Control track system require them to leave within narrow windows. Thus, they cannot just reschedule these flights to other times. They argue that market-based pricing may not affect decisions for some international destinations, because there is no flexibility in those schedules. This is also true for important domestic spokes like New York, where even a slight shift in schedules can cause misconnection in hundreds of city pairs to/from New York, both domestically and internationally. However, the need for reliable departure times argues for market-based pricing. Currently, flights are delayed from departing because there is no disincentive for non-international flights to depart during this critical period. An appropriate pricing program would provide international carriers with increased assurance that their flights would be allowed to depart on time.

Some have expressed concern that market-based pricing would likely violate U.S. bilateral and multilateral aviation agreements, because such charges may not be considered to be cost-based. Any pricing plan pursued by the Department will comply with our international obligations and will not competitively disadvantage domestic carriers.

Relationship Between Physical Assets and Investments – Many airlines have invested hundreds of millions, and even billions, of dollars in terminals, gates, hangars, and other facilities at airports. Those airlines using special revenue facility bond financing gain tax preferences due to the public nature of the facilities whose financings they underwrite. They give up the facility to the airport proprietor at a predetermined date. The airlines also realize that the airport proprietor ultimately controls the use of the facilities for the benefit of the public. Nonetheless, those airlines are concerned that they would lose the ability to realize a return on those investments, if a pricing program resulted in the airlines not being able to fly their traditional schedule. Conversely, if reallocation of slots is achieved through imposition of a market-based pricing mechanism that does not recognize historic rights, some are concerned that the new owners of slots would not be able to gain access to the gates and ticket counters controlled by the former owners of the slots.

Any pricing mechanism pursued by the Department will recognize these concerns. Since the advent of the competition plan requirement in AIR-21, the Department has been educating airport proprietors about their responsibilities to accommodate all requesting carriers on a reasonable basis. Airlines are aware that their unused gate leaseholds may be accessed by other carriers, due to the unavailability of common-use gates and if the need arises. In addition, the Department would manage any market-based system in such a way as to recognize the legitimate interests of those airlines, which have made significant investments in existing infrastructure, to realize an adequate return on those investments. The Department does not want to create a disincentive for future airline investment in aviation infrastructure.

Reduced Demand for Air Travel – Some civic leaders were particularly concerned about the impact market-based pricing might have on the affordability of traveling to the New York City. As noted above, however, consumers are paying a heavy price in terms of congestion. It is unlikely that slightly higher prices during peak periods would serve as a greater deterrent than the chronic delays New York City currently experiences. In fact, a USA Today article published last year noted that savvy travelers avoid New York City whenever possible. That can change if market-pricing can play an appropriate role.

Economic Disruption – Given the sharp increase in fuel prices, airlines are understandably concerned about any additional financial burden generated by pricing. In addition, the airports have billions of dollars of debt and other financing tied to the financial health of the airlines. The Department understands the financial environment in which airlines and airports are operating. Any market-based solution will need to be implemented in a manner that does not unduly disrupt the current system.

Impact on Small Communities and General Aviation – There are concerns that market-based pricing would limit general aviation access to airports and would make it difficult for carriers to continue adequately serving small communities. While market-based pricing does an excellent job of allocating resources to those who can realize the most economic value from that resource, such pricing does not allow for the societal value placed on certain activities. The Department will monitor whether modifications to market-based mechanisms are necessary to provide for continued service to small communities and continued access.

IV. Conclusion

Our objective is to address the fundamentals of the problem of aviation congestion and achieve solutions that are long-term and that provide maximum benefits to the traveling public and the vital industry that serves them. The basic question for us is whether to continue to apply temporary band-aids to the problem, or whether to seek solutions that will do a better job of allocating our scarce airspace. We believe that we must take positive, immediate steps to deal with a dynamic air transportation system that has far outpaced earlier efforts at improvement. Air travelers deserve to fly the safest and most reliable air system possible. The time has come to bring aviation into the 21^st century and more fully allow market forces to work.

Change is difficult, and the airlines’ concerns are understandable. In fact, very similar arguments were made by the airlines in opposition to deregulation. Concerns were raised about disruption to the industry, lack of a track record, and disruption to business models. However, the ATA Airline Handbook includes a long list of benefits that resulted from deregulation. The Handbook notes that deregulation stimulated competition, led to rapid growth in air travel, and reduced fares by more than 50% in real terms. We believe that market-based remedies directed at congestion will improve airline service like deregulation did.

Thank you again for this opportunity to testify. I will be pleased to answer any questions you may have.

STATEMENT OF

VICTORIA COX,
SENIOR VICE-PRESIDENT FOR NEXTGEN AND OPERATIONS PLANNING

BEFORE THE

HOUSE COMMITTEE ON SCIENCE AND TECHNOLOGY

ON

THE NEXT GENERATION AIR TRANSPORTATION SYSTEM,

SEPTEMBER 11, 2008

Good morning, Chairman Gordon, Congressman Hall, and Members of the Committee.  I am Victoria Cox, Senior Vice-President for NextGen and Operations Planning in the Air Traffic Organization at the Federal Aviation Administration.  I thank you for the opportunity to testify today about the status of the work we are doing to develop and deploy the Next Generation Air Transportation System (NextGen) and to discuss how we are providing operational, environmental, and safety enhancements that deliver benefits to our customers today and into the future.

As you know, NextGen is not a single capability or program to be delivered at some date in the future; it is a portfolio of capabilities and programs that we are beginning to deliver now- and will continue to provide in an evolutionary manner.  It is also important to remember that NextGen is not simply about air traffic capabilities, but fostering improvements in ground infrastructure, aircraft technology, and alternative fuels.

Much progress has been made during the past year.  We have moved to accelerate initiatives that yield benefits to stakeholders in the near- and mid-term.  We have also taken steps to ensure a more holistic approach to managing NextGen and related legacy programs.  Last spring, the Secretary of Transportation and the NextGen Senior Policy Committee, which was established by Public Law 108-176  (Vision 100) and is chaired by Secretary Peters, asked us to take immediate action to accelerate the deployment of NextGen.  In response to this call, the FAA and the other NextGen agencies have focused on accelerating deployment of operational improvements to address the greatest need and on developing the capabilities that will provide the greatest benefit.  FAA has leveraged its research and development investments to accelerate targeted implementations and development of critical capabilities.

The introduction and wide-spread use of precision navigation tools that deliver increased precision to our operations represent the first step in our transition to NextGen. We are focusing deployment of Area Navigation (RNAV) and Required Navigation Performance  (RNP) around our most congested airports, using these tools to increase capacity and operational efficiency.  Partnerships with operators equipped to perform these procedures are yielding the biggest benefits from increases in operational efficiency and reductions in fuel use and emissions.  Today, 87 percent of commercial operators are equipped to fly RNAV routes and procedures; and 39 percent are equipped to fly the RNP Special Aircraft and Aircrew Authorization Required (SAAAR) approaches that allow design of flight paths to achieve more optimal use of airspace.  FAA has approved these types of approaches at Atlanta, Dallas/Fort Worth, Newark, Washington Dulles, LaGuardia, Chicago Midway, Miami, and San Francisco.  To date this year, we have published 20 RNP SAAAR approach procedures at eight airports, including San Jose, Washington Reagan National, Indianapolis and Los Angeles.  We have also published 63 RNAV Standard Instrument Departure (SID) and Standard Terminal Arrival (STAR) procedures at 45 airports, including Atlanta, Charlotte, Cincinnati, Newark, Orlando, Phoenix, Portland (OR), Santa Monica and Tucson. 

We are also seeing benefits today from the introduction of Optimized Profile Descents or OPD.  The OPD lets pilots use the Continuous Descent Arrival (CDA) technique to fly a continuous descent path, rather than the traditional “step downs” typically flown today.  Airplanes initiate descent from a high altitude with engines at low power and, ideally, maintain a continuous descent until cleared to land.  Flight demonstrations at Louisville’s Standiford Airport and testing at Atlanta Hartsfield have shown fuel savings averaging about 50-60 gallons of fuel for the arrival portion of flights and a reduction of as much as 1200 pounds of carbon dioxide per arrival. Significant noise reduction is also achieved through the later deployment of flaps and landing gear allowed by the CDA’s gradual reduction in speed. Under its NextGen Demonstration program, FAA is continuing with targeted implementations of  Optimized Profile Descent procedures at San Diego in addition to Atlanta and is cooperating with the United States Air Force Air Mobility Command to introduce OPD procedures with its C17 fleet in Charleston, SC.  OPD procedures have been instituted in Los Angeles on a permanent basis and are delivering major benefits in terms of operational efficiency and the environment.

Another NextGen-related demonstration program is the Atlantic Interoperability Initiative to Reduce Emissions (AIRE), a research and technology development venture between FAA, the European Commission and industry partners.  AIRE focuses on up-grading air traffic control standards and procedures for trans-Atlantic flights.  A similar initiative in the Asia-Pacific region, the Asia and South Pacific Initiative to Reduce Emissions (ASPIRE) has also been initiated.  In fact, tomorrow Air New Zealand is operating a flight, nicknamed ASPIRE I, from Auckland to San Francisco that will demonstrate some of the potential efficiencies.  Our Vice-President for Enroute and Oceanic Services will be onboard.  Both of these initiatives will enhance fuel efficiency while reducing environmental impacts.  Our first AIRE demonstrations showed one percent fuel savings in oceanic airspace – a significant amount of fuel and carbon emissions for these very long flights.

Other near-term benefits stemming from targeted implementations of the NextGen acceleration initiative include the introduction of surface management tools at JFK with the accelerated introduction of the Airport Surface Detection Equipment – Model X (ASDE-X).  FAA, in partnership with the Port Authority of New York and New Jersey and airlines, is providing information about surface traffic in both movement and ramp areas on the airport to Airline Operation Centers, air traffic controllers and the FAA Command Center.  This information gives common situational awareness that will allow airlines to better manage movement of their aircraft in crowded ramp areas.  The inability for airlines to know the exact location of their aircraft on the surface relative to other traffic contributes to surface gridlock and difficulty moving aircraft back to gates when required. As of last month, this much-needed information is available.

This capability stems from a joint FAA/NASA research and development project at Memphis with FedEx and Northwest Airlines.  The Memphis project is developing a surface traffic management system that employs a two-way, collaborative environment between the FAA and airlines to significantly improve the efficiency of ground operations and will be integrated with arrival and departure traffic to enable the most efficient use of airport and terminal facilities and reduce emissions that impact air quality.

These and other demonstrations are providing valuable information that will assist FAA in developing standards and procedures for operations in the NextGen environment while providing immediate benefits to targeted areas.   FAA plans to continue these activities in an integrated test bed approach that focuses on Florida, the east coast, Texas, and the Gulf of Mexico and takes advantage of early Automatic Dependent Surveillance-Broadcast (ADS-B) deployment.  Upcoming demonstrations include tailored arrivals in Miami starting later this month with American Airlines and with Air France.  We will also begin integrating predictive weather information as part of the Traffic Management Advisor (TMA) at Daytona Beach with Embry Riddle and a consortium of companies in November.  We have over 20 partners from the airlines, industry, academia, and other government agencies that are involved in demonstrating the effectiveness and safety of integrated NextGen capabilities.  We will model these and another demonstration in ways that enable more rapid, widespread deployment of these capabilities in the future.

NextGen will bring major changes to the roles and responsibilities of all the participants in the NAS, especially the controller, as the NAS becomes more automated and some tasks are delegated to the pilots flying more sophisticated aircraft.  A strategic job analysis has been initiated to examine how changes to technology, roles, responsibilities and procedures will impact the aptitudes, knowledge, skills and abilities that we will expect from controllers as NextGen matures.  This will enable the NAS to go from a “controlled” airspace environment to a “managed” airspace environment, allowing automation to assist with decision-making. 

The human factors research program has also delivered products that enable the use of data communications in the en route domain and is now focused on the increased use of RNAV, limited self spacing, and novel modes of grouping aircraft to enable an increase in capacity while reducing controller workload and error potential. 

Another key NextGen transformation is the move from Forensic Safety Systems to Prognostic Safety Systems, as evidenced by the development of the Aviation Safety and Information Analysis and Sharing (ASIAS) system.  The ASIAS program integrates a large number of previously unrelated data sources from both government and industry into a comprehensive safety picture that can assist in identifying emerging risks and enabling earlier interventions against these risks before they can lead to accidents.

Research and development in the weather arena is providing advanced weather capabilities to improve NAS operations during adverse conditions.  This requires improvements in weather forecasting and observation network capabilities as well as integration of weather into decision support tools.  Improvements in forecasts and observations quality developed by the Aviation Weather Research Program (AWRP) are aimed at providing more accurate aviation weather forecasts for phenomena such as turbulence, convective activity, icing, and restrictions to visibility.  The Weather Technology in the Cockpit (WTIC) program will facilitate the development of technologies necessary to integrate weather information into aircraft-based decision support systems. WTIC will enable pilots to access weather information similar to that being utilized by air traffic controllers and dispatchers on the ground.

In Fiscal Year 2008, the wake turbulence research program completed prototype evaluations of the Wake Turbulence Mitigation for Departures tool, a product of NASA and FAA research and development, that permits increased departure capacity from airports with closely spaced parallel runways.  Prototype evaluations of the system were conducted at Houston Intercontinental and Lambert St. Louis airports.  Another application of research and development has been wake turbulence data collection and analysis in support of a National Rule Change which would allow the use of ILS procedures to Closely Spaced Runways for specific aircraft types, thus increasing capacity at five specific airports. 

The wake program, along with global partners, has evaluated separation standards for new aircraft (B-747-8, A380) and has re-evaluated the B757 family of aircraft.  We have also developed a methodology and optimization tools for the re-evaluation of wake turbulence categories and separation standards for today’s aircraft fleet mix, which has changed significantly since the early 1990’s.  Working jointly with European Air Navigation Service Providers and aircraft manufacturers, FAA is seeking a harmonized set of wake categories and wake separation minima for the NAS and International fleet mixes. 

In an example of concept validation that shows great promise, FAA researchers are developing the concept for an Integrated Arrival/Departure Control Service that we are calling “Big Airspace.”  Employing modeling and simulation, including human-in-the-loop simulations, researchers used scenarios that incorporated a generic large metropolitan area, a major airport and three small airports into the same Terminal Radar Approach Control (TRACON) facility.  The “Big Airspace” concept extends terminal procedures to a portion of en route transition airspace, increasing the number of RNAV routes, and incorporating dynamic resectorization (a fundamental NextGen concept) to allow airspace boundaries to be more flexible.  A key element of “Big Airspace” is the incorporation of all operations into one facility to reduce the amount of cross-facility coordination needed to safely manage traffic into and out of busy areas.  Human-in-the-Loop simulations employed both terminal and en route controllers as well as pilots who flew simulated aircraft linked to the simulation.  Results of the modeling and these simulations showed that controllers could handle up to 50 percent more traffic. With the introduction of data communications, controllers may handle up to 150 percent more traffic before performance degraded, all without a significant change in the number of operational errors and with a significant decrease in the number of conflicts. 

With 2012 projected traffic, “Big Airspace” simulations showed increased operational efficiencies of about a minute of flight time and five nautical miles in scenarios with weather present.  To provide context for these savings, Southwest Airlines has indicated that for its operations a single minute of time saved on each flight contributes an annual savings of up to $25 million in fuel per year. Extend this to the number of flights operated by all carriers in major metropolitan areas and you can see that “Big Airspace” adds up to tremendous savings for all our airlines.    FAA is building towards implementing “Big Airspace” as its mid-term concept in high density metropolitan areas.

Accelerating air traffic management improvements is leading to efficiencies and reducing fuel burn, but we are also pursuing other R&D strategies to mitigate NextGen environmental impacts.   We are hastening the development of promising environmental improvements in aircraft technology. The President’s budget funds a research consortium called Continuous Low Emissions, Energy and Noise (CLEEN) which will allow us to work with industry to accelerate the maturation of technology that will lower energy, emissions and noise.  CLEEN offers a good example of FAA and NASA partnership in advancing the NextGen plan as we worked together closely in developing this initiative to mature technology with NASA’s foundational research efforts.

We are also exploring the potential of alternative fuels for aviation.  Fuels that improve emissions performance at both the local and global level not only help the environment, but also enhance energy security and supplies.  Issues of fuel supply and costs are having an increasing impact on the shape of the U.S. aviation system- as fuel costs now approach up to 40% of airline operating costs. To this end, the FAA helped form – and is an active participant in – the Commercial Aviation Alternative Fuels Initiative, or CAAFI.  We have already seen coal-to-liquid and gas-to-liquid fuels in jets, and most recently completed a bio-fuel flight demonstration.  Alternative fuels will be the “game changer” technology that gets us closer to carbon neutrality.  Alternative fuels are a part of the CLEEN effort.

Activities like these that consist of concept validation employing modeling and simulation, prototyping and field demonstrations in an operational environment can accelerate the transition from concepts and research and development to implementation of operational systems.  FAA is employing this approach in an effort to accelerate NextGen implementation.  Not only will this approach speed the development of NextGen operational improvements, it is also aimed at speeding their acquisition by accomplishing, in parallel, required steps in FAA’s Acquisition Management System.

Another way that FAA is accelerating transition from research to implementation is through Research Transition Teams (RTT) between NASA and FAA, facilitated by the JPDO.  The goal of the RTTs is to ensure that R&D needed for NextGen implementation is identified, conducted, and effectively transitioned to the implementing agency.  Four teams are successfully underway with NASA and FAA engagement.  

The approaches described above are mechanisms we have established to ensure that we retain the focus on the goals of NextGen while moving expeditiously to incorporate changes into the National Airspace System which support those goals and begin to achieve the benefits of a transformed system in a timely manner.

This year has seen a shift in focus for NextGen from planning to action.  The realignment of responsibilities for NextGen under a Senior Vice President for NextGen and Operations Planning is an indication of that changing focus of NextGen from purely planning and research to actual implementation and integration of technologies that will transform the National Airspace System.  As we enter this new phase, the Agency decided to place accountability for all aspects of NextGen, including management of the NextGen investment portfolio, under one senior official.

This realignment also responds to stakeholder requests for a single point of accountability for NextGen and addresses the suggestion raised by Industry, including members of JPDO Working Groups, that more focused oversight by FAA of JPDO deliverables would be desirable.

With the establishment of the NextGen and Operations Planning organization under the leadership of a Senior Vice President, the Joint Planning and Development Office (JPDO), the Operations Planning function, and the new Office of NextGen Integration and Implementation have a common reporting structure. For the FAA this ensures that the Agency acts promptly to achieve the JPDO vision by accomplishing the right kind of R&D and that a steady stream of improvements taking us along the road to NextGen are delivered for implementation and coordination with legacy systems operations.  This arrangement increases FAA support for JPDO Working Groups as well as cross-agency initiatives by closer linking of FAA to JPDO.  

The Senior Vice President for NextGen and Operations Planning is responsible for implementation of all elements of NextGen, most of which are executed by other service units in the Air Traffic Organization and other lines of  business in the FAA, and has decision authority over all matters related to NextGen integration and implementation including allocation within the Agency of the $688 million NextGen budget request for fiscal years 2009.

NextGen implementation is a difficult and complex undertaking that cannot be accomplished without cooperation across the industry, the FAA and the NextGen partner agencies.  The Senior Vice President for NextGen and Operations Planning has a direct and immediate path to the FAA Administrator and the Secretary of Transportation should their assistance be required.

The highly successful FAA-wide Operational Evolution Plan (OEP) process is the basis for guiding NextGen integration and implementation and ensuring the cooperation of all elements within the FAA with NextGen responsibilities. This process includes all FAA organizations, within and outside of the ATO including the JPDO.  The process tracks specific capability improvements through R&D, field demonstration, investment decision, acquisition and implementation, with clear objectives that result in specific commitments to the operating community outside FAA.  An executive oversight board (NextGen Management Board) at the Associate Administrator level, chaired by the Deputy Administrator, oversees the process. A review board (NextGen Review Board) manages the flow of improvements from concept, through R&D, to investment decision, to implementation.  Aviation community participation will be improved through a formal advisory process, Industry Days, and stepping up stakeholder participation at the SPC, which encourage feedback from users, operators, and developers.

An important product of the process described above is the NextGen Implementation Plan, the latest version of which was published on June 30, 2008.  The plan details implementation commitments for the near-term (between 2009-2011), and describes more than 30 additional improvements targeted for introduction between 2012 and 2018.  This version shows how FY 09 research and development projects move us toward specific outcomes.   The entire plan can be accessed on line at www.faa.gov/nextgen.

As directed by the Secretary of Transportation, who is chair of the NextGen SPC, JPDO will continue to focus on long-term (beyond 10 years) research and development and cross-agency coordination with FAA placing emphasis on near-term implementation and mid-term planning over a rolling 10 year timeframe.   FAA will ensure that the Agency’s implementation plans and Integrated Work Plan are aligned for the near and mid-term, while keeping an eye to the future that JPDO is defining through the long-term R&D plan.  The JPDO Integrated Work Plan (IWP), will also be published this month, is still a work in progress, and the elements in it have not yet been prioritized.  That said, it represents a great amount of work across the NextGen agencies and industry to document their initial development work and planning.  

An overarching goal, and a clear responsibility of JPDO, is a long-term R&D program, with well-defined and prioritized research goals and supporting activities and that responsibility will be clearly assigned to the Partner agencies.  Success will depend on assuring that agency R&D budgets are linked.  Research must be aligned to leverage cross-agency investments and deliver products that will transition to implementation. 

We are confident that planned investments lead to the capabilities described out to 2018.  These are investments in the five transformational programs discussed later, as well as to seven solution sets. In total, they fund research, engineering, analysis, demonstrations, concept validation and ATC infrastructure enhancements.  The far-term, beyond 2018, is dependent on research that is ongoing or planned in coordination with the JPDO. The results of that research will be used to guide the far term development.   JPDO will continue to maintain the vision of NextGen and will update the Concept of Operations in accordance with results of the long-term research that it is charting. 

JPDO will also continue to produce a yearly Progress Report.  This year’s progress has been noteworthy.  The Senior Policy Committee (SPC), chaired by the Secretary of Transportation, provides directed focus on important efforts including a government-wide Safety Management System; a collaborative weather initiative involving the Department of Commerce (DoC), FAA and the Department of Defense (DoD); an initiative for net-centric aviation information sharing; and planning for integrated aviation surveillance with the DoD, Department of Homeland Security (DHS) and FAA. 

JPDO has formalized organizational relationships with partners to facilitate transfer of technology for NextGen application by establishing the previously described Research Transition Teams to facilitate smooth transition of research products from NASA to FAA.  Additionally, the DoD has established a NextGen Joint Planning Office with the U.S. Air Force leading to coordinated DoD contributions and technology transfer.  The DoD, DHS and FAA also jointly invested in a demonstration of Network Enabled Operations technology.

JPDO completed a gap analysis of NextGen partner agency programs against the Integrated Work Plan.  The gap analysis identified seven critical interagency focus areas, including various ATM research topics, research to mitigate environmental constraints, security risk management, and the verification and validation of complex systems.  FAA was identified as the lead for three of the focus areas, NASA for two, DHS for one, and JPDO for one.  Working with the partner agencies, the JPDO will incorporate operational improvements that address these gaps into the Integrated Work Plan and through the governance process, including the JPDO Board and SPC, will encourage partner agencies to include activities that support these operational improvements in their implementation plans and future year budgets.

As we move forward with NextGen it is important for us to measure our progress by defining our near-term, mid-term, and long-term goals with suitable performance metrics.  The right metrics will allow us to determine not only how well we are doing but also the impacts of events that reduce or delay progress.   FAA plans to employ three methods of measurement.  First, we will track progress against milestones established in the NextGen Implementation Plan.  These are linked directly to the National Airspace System Enterprise Architecture decision points. We will also track investments, measuring whether specified products are delivered on time and on budget.  We are also developing methods to measure and report on benefits accrued with the implementation of NextGen capabilities in an integrated fashion rather than the case by case approach that we take today. 

The FAA’s National Aviation Research Plan (NARP) published in February 2008 identifies $740 Million for NextGen R&D in the President’s Fiscal Year 2009-2013 budget with $83.5 Million requested in Fiscal Year 2009.  Much of the other R&D work contained in the 2009 request is NextGen enabling.

My testimony has focused on R&D, Advanced Technology Development and Prototyping and Demonstration investments.   Major NextGen transformational programs are making progress as well. ADS-B has continued to meet all the program milestones. Since the national contract was awarded last summer, the program has deployed the ground infrastructure in the Southern Florida key site area. The system has for the first time  equipped pilots to receive traffic and weather in the cockpit for enhanced situational awareness. The system will reach an In Service Decision (ISD) for essential services for commissioning into the National Airspace System (NAS) in November 2008.  Critical services IOC and ISD is planned for 2010. 

While the agency has been busy with deploying the ground equipment, we are also simultaneously working on the rulemaking for ADS-B. The Notice of Proposed Rulemaking (NPRM) was published in October 2007. The comment period closed in March 2008 and the agency is taking into account every single comment that was received. We have been working closely with all facets of the aviation community through the ADS-B Aviation Rulemaking Committee (ARC). We will consider all the recommendations from the aviation community in developing the final rule, which we estimate will be published in spring 2010.

The System-Wide Information (SWIM) Program recently awarded a $37M contract for commercial, off-the-shelf (COTS) software to Iona Technologies of Waltham, Massachusetts.  This software will help FAA develop interfaces between systems more quickly and cheaply, and will help establish new connections between systems and with new users – just what’s needed for NextGen. 

The Data Communications program and the NAS Voice Switch program have both completed development of initial program requirements, and the NextGen Network Enabled Weather (NNEW) program has begun analysis to develop standards for universal access to a weather data base, which will contain forecast information of interest to all national airspace participants including FAA, Department of Defense, National Weather Service and our European partners.

I thank both this Administration and this Congress for supporting the FAA’s NextGen budget requests and hope that issues surrounding the FAA’s reauthorization are quickly resolved.  Be assured that we will identify NextGen as a key programmatic and budgetary issue requiring decisions from policymakers in the incoming Administration. 

Given the impact of aviation on the U.S. economy and the longstanding support from this Committee, this Congress, and most of the aviation community, I sincerely believe that the impetus for NextGen and its program focus will continue and not suffer due to transition activities.

Mr. Chairman, this concludes my testimony.  I would be happy to answer any questions the Committee may have.