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

Joseph C. Szabo
Federal Railroad Administrator

Before The

Subcommittee on Railroads, Pipelines and Hazardous Materials
Committee on Transportation and Infrastructure
United States House of Representatives

October 14, 2009

Chairwoman Brown, Ranking Member Shuster and members of the Subcommittee: I am honored to appear before you today to discuss one of the most significant new initiatives of President Obama, Vice President Biden, and Secretary of Transportation LaHood – the development of high-speed rail transportation in America, which builds upon the solid foundation laid by Congress last year in the Passenger Rail Investment and Improvement Act of 2008 (PRIIA). In this statement I will touch on the opportunities and challenges we, the Administration, the Congress and a diverse group of stakeholders, face in creating a sustainable program to improve intercity passenger mobility in the United States and what FRA is doing today to make the vision for high-speed rail a reality.

Discussions of high-speed rail tend to begin with the fundamental question: “What is high-speed rail?” Some prefer to define high-speed by peak speed –say 200 miles-per-hour (mph). Some will say high-speed is average speed or trip time. The Federal Railroad Administration (FRA), in its 1997 report “High-Speed Ground Transportation for America" used a more market oriented definition – that is service that can cost effectively be the preferred option for intercity travel in a specific transportation market. Using that definition, high-speed rail is service that is superior from a time-competitive stand point than air and/or auto on a door-to-door basis. In other words, if I leave my home in Chicago and travel to a meeting in St. Louis and the total trip time by rail is better than flying or driving, then that rail service is high-speed. What that means is that the peak speeds and average speeds of high-speed rail are not one set number but can and should vary by the market served. The speeds needed to effectively serve the Los Angeles to San Francisco market, a distance of 450 miles is different from the speeds needed to effectively serve the market between Washington, D.C. and Richmond, VA., a distance of 90 miles.

In the Administration’s Vision for High-Speed Rail in America we used four definitions for the multiple types of intercity passenger rail that we will see in the future:

• Conventional Rail – Traditional intercity passenger rail services of more than 100 miles with peak speeds in the 79 mph to 90 mph range.
• Emerging High-Speed Rail – Developing corridors of 100-500 miles in length with top speeds in the 90-110 mph range
• High-Speed Rail-Regional – Relatively frequent service between major and moderate population centers 100-500 miles apart with top speeds in the 110-150 mph range
• High-Speed Rail –Express with frequent service between major population centers 200-600 miles apart with few intermediate stops and top speeds in excess of 150 mph.
• Ensure safe and efficient transportation choices. Promote the safest possible movement of goods and people, and optimize the use of existing and new transportation infrastructure.
• Promote energy efficiency and environmental quality. Reinforce efforts to foster energy independence and renewable energy, and reduce pollutants and greenhouse gas emissions.
• Build a foundation for economic competitiveness. Lay the groundwork for near-term and ongoing economic growth by facilitating efficient movement of people and goods, while renewing critical domestic manufacturing and supply industries. This strengthening of domestic manufacturing is particularly critical today as evidenced by the severe atrophy affecting the U.S. rail supply industry. A long-term market for railroad equipment, infrastructure and supplies will help rebuild this once proud part of the American economy.
• Support interconnected livable communities. Improve quality of life in local communities by promoting affordable, convenient, and sustainable housing, energy, and transportation options.

Thus, in discussing how we make high-speed rail a reality we need to be talking about a range of technologies and a range of investment options that each have their own sets of opportunities and challenges.

That is not to say that high-speed rail is preferable in all situations to air and/or auto. Indeed each has and will have an important place in the transportation system of our future. High-speed rail will only be successful as part of an integrated, intermodal transportation system that includes effective connections to our transit, highway and aviation systems.

High-Speed Rail – the Opportunities

President Obama proposes to help address the Nation’s transportation challenges by investing in an efficient, high-speed passenger rail network of 100-600 mile intercity corridors that connect communities across America. The vision for high-speed rail aligns well with the Department’s strategic goals:

I wish to offer one of many possible examples where these opportunities come together. FRA has been working with the California High-Speed Rail Authority since 2001 on the planning and environmental review of California’s State-wide high-speed rail initiative. The Final Environmental Impact Statement/Report for the California High-Speed Rail Program has been completed and is available for review[1]. This document is one of the most comprehensive environmental analyses of a new transportation system ever undertaken and helps crystallize the opportunities offered by the development of high-speed rail. Among the benefits of high-speed rail investment when compared to alternatives for meeting the identified travel demand are:

Transportation Investment requirements Avoided

• 2,970 lane-miles of highway construction no longer needed.
• Five runways and 90 gates at airports
• Annual Energy/oil consumption saved
• 6 – 12 million barrels per day
• Annual Air Pollution avoided
• 3.4 – 5.5 million tons of carbon emissions
• 730 tons of PM10
• 1,095 tons of PM2.5
• 3,650 tons of NOx
• 2,190 tons of TOG

Employment

• 168,000 job-years during construction
• 450,000 permanent jobs created from economic effect.

Access to Service

• Major cities in California will be served through downtown intermodal terminals, integrated in the city and region’s public transportation systems.

California happens to be the most recent EIS that FRA has completed on high-speed rail and is used as an illustrative example and should not be construed as an indication we favor one project over another. Such benefits can be realized from proposed high-speed rail projects across the country.

High-Speed Rail – the Challenges

While the potential for high-speed rail is great, so too are the challenges we face in delivering on that potential. FRA sees a number of pressing challenges in developing a successful high-speed rail program:

Safety

FRA’s first and foremost mission is Safety. If high-speed rail is to be successful, it must be safe. Newton’s second law of motion, that force equals mass times acceleration (f=ma) has significant implications for the safety of high-speed rail. When things go wrong at high speed, a derailment as an example, the repercussions can be very significant. Many point to the strong safety record of foreign systems operating primarily on purpose-built infrastructure to draw a conclusion that high-speed rail is inherently safe. That is just not the case. Safety comes from superior design, superior manufacturing, superior operating practices, superior maintenance and above all superior vigilance. At FRA, we call this a strong safety culture. This will be particularly needed in the U.S. where, in most instances, high-speed rail will not begin operations on dedicated right-of-way and infrastructure. Instead, most proposed systems will involve the use of rights-of-way and perhaps infrastructure owned and operated by America’s freight railroads. The co-location of high-speed rail and freight operations raises significant safety issues, not the least of which is determining what point high-speed passenger rail operations need to be separated from freight rail and the nature of that separation. Ultimately this will likely not be a “one size fits all” type determination but reflect such issues as volume of freight and passenger traffic, train, infrastructure condition, etc.

Capability of the States

A handful of States have been actively engaged in railroad issues for many years. As an example, if you go on the North Carolina DOT website you will see a rail bureau with 60 positions. Unfortunately, States with a strong and experienced rail-oriented institutional structure capable of undertaking the planning, developing the complex relationships, and implementing a complex rail improvement program are the exception rather than the rule. This is understandable. Up until just recently, the Federal role in passenger rail investment was overwhelmingly a bi-polar relationship between FRA and Amtrak. Until enactment of the Passenger Rail Investment and Improvement Act last October, there was no statutory role for States in the planning and implementation of intercity passenger rail except for the occasional one-off grant contained in FRA’s annual appropriation. Until February of this year, there was no real funding to go with this authorization. There is now a significant and pressing need to help the States develop and maintain the internal staff resources and capabilities to oversee the management of planning and program implementation of high-speed rail and to be effective negotiators and partners with the various stakeholders that will be essential to successful implementation. Over time, States have developed such resources for the highway and transit programs but rail is sufficiently different that it will take time and effort for many States to develop these skills for rail.

The Status of Planning

The Recovery Act has provided a stark contrast between the established highway and transit programs and the new high-speed rail initiative. States have a well established pipeline of highway and transit projects that have undergone years of planning, design and environmental review. Thus, when the opportunities were offered by the Recovery Act for additional funding, the States were able to turn to a list of highway and transit projects. While some States had undertaken planning and had some projects that could begin in the short-term, most States had not undertaken the development of a detailed service development plan with the accompanying service, or Tier 1 documentation required by the National Environmental Policy Act (NEPA) for the larger development of a high-speed rail corridor. Again this is understandable. While the surface transportation legislation has over the last several decades provided States and regions funding for planning, this planning has been primarily focused on those programs – highway and transit – that offered the potential of a Federal funding partner at the end of the planning process. The States that are better prepared today are those that decided that improved passenger rail was so important to meeting the State’s future mobility needs that they invested substantial State funding in the planning for these new services. The challenge we face with the advent of the high-speed rail program is that there are many States playing catch-up. How can we bring them up to the point that they have a realistic high-speed program plan and implementation strategy so that they too can have the pipeline of rail projects like they have for other forms of transportation?

Freight Railroad Partnerships

America’s freight railroad system is the envy of the world. The Obama Administration is committed to building a world class high-speed intercity passenger rail system but we will not do that at the expense of degrading our world class freight rail system. Until just a couple of years ago, America’s freight railroads were hauling record levels of freight traffic on a system substantially smaller than half a century ago. In a number of critical areas, bottlenecks in rail infrastructure were creating congestion in freight movements. And, as this Subcommittee is well aware, the ability of Amtrak to maintain an on-time reliable service over this intensely used freight system left much to be desired. On a rail infrastructure designed primarily for freight train movements, fast passenger trains can use up more capacity than if those trains were replaced by freight trains. The challenge that we face is how to develop the infrastructure that permits emerging high-speed rail and freight rail to not only co-exist but to find the synergy to keep both world class. This will require a new level of partnerships between the freight railroads and the State promoters of high-speed rail. Several States have recognized the growing benefits that accrue from investment in privately-owned rights-of-way and infrastructure. For many States used to solely investing in publicly owned infrastructure, however, the shift to investing public funds in privately-owned assets may be a new and challenging experience.

The Intellectual Infrastructure

Once the rail industry was a major driving force of the U.S. economy. It employed thousands of planners, engineers and other experts in railroad engineering and sciences. After World War II, as the railroads first slipped into the financial abyss of the 1960s and 1970s and then went through a recovery period by slimming down, the demand for engineers and planners with rail expertise plummeted. A substantial percentage of the experienced people in these professions are approaching retirement. A major challenge that we face today at the advent of the new high-speed rail program is rebuilding this intellectual infrastructure in such diverse areas as track design, signal engineering, track-train dynamics, etc. This will require a new partnership among the Federal and State DOTs, the larger rail industry and the academic community.

Sustainability and Managing Expectations

There have been many efforts to promote development of high-speed rail over the years. Indeed, one of the entities that were merged in 1967 to form the Federal Railroad Administration was the Office of High-Speed Ground Transportation that had been established in the Department of Commerce. To date, however, with a very few notable exceptions, these efforts have not been successful. Secretary LaHood and I believe that if we spend the $8 billion in Recovery Act funds really well on terrific projects that produce real results but the program meets the fate of the previous efforts and does not continue, then we have not been successful. The challenge for us – the Administration and the Congress – is to find a way to make this program sustainable. The model I like to point to is the model developed by President Eisenhower and the Congress of the mid-1950s that led to the successful development of the National System of Interstate and Defense highways – a program that took over four decades to complete.

An integral part of developing a sustainable program will be managing expectations. The interest by the States in the high-speed program far exceeds the funds available today, or next year or over the next five years. But this was true of the Interstate Highway program at its beginning as well. The public support for the program did not wane, in part because our citizens could both see early successes and they knew that eventually the Interstate system would serve them as well. Of all of our challenges, this may be the most important to address.

What FRA is Doing to Make High-Speed Rail a Reality

This past June I had the opportunity to meet with the Subcommittee and review FRA’s progress in implementing the Recovery Act including the “standing up” of the high-speed rail program. At that time I was able to report that we had met the deadlines set in the Recovery Act and published the Obama Administration’s Vision for High-Speed Rail in America (April 2009) and High-Speed Intercity Passenger Rail (HSIPR) Program Notice of Funding Availability, Issuance of Interim Program Guidance (June 2009). Both documents are available on FRA’s website: www.FRA.DOT.GOV.

On August 24, we received applications for projects that are “ready to go”, including some projects for preliminary engineering and environmental review, and would be funded from the funds made available under the Recovery Act; projects for high-speed intercity passenger rail planning funded from FRA’s FY 2009 appropriation; and projects for capital improvements funded from FRA’s FY 2009 appropriation. There were a total of 214 applications received, representing projects proposed in 34 States and totaling approximately $7 billion. Those projects have been through a very intense period of first level reviews by staff of FRA along with volunteers from the Federal Transit Administration (FTA) and the Research and Innovative Technology Administration (RIITA) to whom we are grateful for their help. The results of these reviews are presently being evaluated at the senior leadership levels of FRA and the Department.

On September 16 we received expressions of interest for private sector participation in the development of high-speed intercity passenger service pursuant to a notice FRA published last December to implement the provisions of Section 502 of the PRIIA. These applications are currently under review, consistent with the statutory requirement that initial reviews be completed by the Department by mid-November.

On October 2, we received applications for what will amount to commitments to develop specific high-speed rail corridors. Our preliminary analysis shows that we received 45 applications representing 24 States totaling approximately $50 billion. FRA is currently undertaking a triage of these applications to eliminate duplicates and ineligible applicants and projects. Our preliminary review shows that the numbers presented above should be close to the final. Detailed review of applications by panels of FRA staff and volunteers from other modes of the Department will begin in earnest next week.

Our overriding goal in evaluating these applications is the development of a sustainable and truly national high-speed intercity passenger rail investment program. Due to the overwhelming response, our need to assure coordination among the various FRA programs and between the FRA programs and the Tiger Grant program being managed in the Secretary’s immediate office, we will be announcing all awards this winter. Our selections will be merit based and reflect President Obama’s vision to remake America’s transportation landscape.

FRA is also moving forward to addressing the other challenges important to developing a sustainable high-speed intercity passenger rail investment program.

Safety: FRA has recently made available for comment a draft High-Speed Passenger Rail Safety Strategy which is appended to this testimony. The goal of this strategy is to lay out how FRA will: establish safety standards and program guidance for high-speed rail; apply a system safety approach to address safety concerns on specific rail lines; and, ensure that railroads involved in passenger train operations can effectively and efficiently manage train emergencies. This strategy endeavors to achieve uniformly safe rail passenger service, regardless of speed.

Capability of the States: FRA is lucky to have someone like Karen Rae, who has had a long and distinguished career in transportation program management in several States, to play a leadership role in the design of the new high-speed program. Under her leadership we have engaged the States early and often and have committed to a continuing effort on the part of FRA in developing and enhancing the ability of the States to get involved in high-speed rail. Attached to my statement are two unsolicited statements concerning FRA’s outreach activities. I would take particular note of the statement from the chair of the Capitol Corridor (CA) Joint Power Authority that says “We know of no other federal agency that has asked its customers (the states and intercity passenger rail agencies) for comments, suggestions and even criticisms on the HSIPR Program funding applications and award criteria BEFORE (emphasis in original) any awards were made or applications received. This is an excellent example of how government should work ….”

Status of Planning: FRA has on our website a “how to” manual for the development of service development or transportation investment plans. This is based upon FRA’s previous experience in the planning of specific corridors in which all interested parties came to the table to work cooperatively in identifying investment needs. While FRA cannot and should not plan every corridor, we are a resource to facilitate the development of processes that can lead to successful completion of corridor wide service development plan and related environmental documents.

Freight Railroads: Freight railroads will be key to the successful development of high-speed intercity passenger rail in many corridors. Indeed, FRA’s grant guidance requires that applications demonstrate the stakeholders’ commitments, including that of the host railroad/infrastructure owner, to advance the high-speed intercity passenger rail program. FRA believes that there are opportunities to develop constructive partnerships between the freight railroads and States that can address areas of common interest including statutory requirements for positive train control and the safety at highway rail grade crossings. By placing a premium on such cooperative relationships FRA believes that we can facilitate their development. We also see our safety and research activities as complementary parts of this effort.

Intellectual Infrastructure: FRA is very concerned that this Nation has the people that can deliver on a successful high-speed rail program for the foreseeable future. As part of the President’s FY 2010 budget request, FRA proposed that 1% of the high-speed intercity passenger rail funds be available for research. Our first and highest priority for the use of these funds is the establishment of the Rail Cooperative Research Program (RCRP) at the Transportation Research Board of the National Academy of Sciences. The RCRP was authorized in PRIIA as a necessary counterpart to the National Cooperative Highway Research Program (NCHRP) and the Transit Cooperative Research Program (TCRP). These programs have helped these modes of transportation develop the corps of trained professionals they rely on. We are also exploring other opportunities of using research, including the use of University Transportation Centers managed by RITA to help in this effort.

FRA’s short term needs

As I said in a hearing before you this past June, FRA’s financial assistance staff today is sized for that earlier, quieter era. Even though the PRIIA added a number of responsibilities in the areas of passenger rail and financial assistance to FRA, that Act did not authorize an expansion of FRA’s financial assistance staff. That they have produced high quality products in response to the aggressive schedule in the Recovery Act, is a testament to knowledge, skill and dedication of that small staff. Having said that, we cannot successfully manage the high-speed rail program envisioned by the President and implement the provisions of PRIIA and undertake our other new and expanded financial assistance functions contained in other recent Acts with the present levels of staff and other resources. The President’s FY 2010 budget begins to address FRA’s financial assistance staff and resource needs. I urge members of this Committee to support this request. I will also note that successful implementation of the Recovery Act including oversight of the expenditure of $8 billion, will require that the amount of these funds available for use by the Secretary in project oversight be consistent with the 1% authorized in 49 U.S.C. 24403(b)(1) and not the one quarter of one percent authorized in the Recovery Act.

Conclusion

The FRA of two years from now will be a significantly different agency than you see today. Safety will always be our most important mission, but we will also be playing a leading role in making the investments that position this country’s transportation system for the future. I am incredibly proud to be at FRA today and have an opportunity to lead the dedicated team at FRA through this transformation.

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[1] Available on the CAHSR website at CAHighSpeed Rail.ca.