After 23 short-term funding extensions that dragged out over five years, the $63-billion Federal Aviation Administration authorization bill that President Obama recently signed is giving the aviation industry plenty to cheer—and plenty to loathe.
On the bright side, experts say, the bill provides a predictable funding outlook until 2016 after years of uncertainty and a 14-day shutdown last summer, which put many airport projects permanently on hold. It also authorizes $2.7 billion annually for the FAA's facilities-and-equipment account that also funds the "NextGen" modernization programs that are bringing the nation's aviation systems into the 21st century.
Airport Improvement Program (AIP) funding for maintenance and construction is flat at $3.4 billion a year—about the same as allocated in 2006. Other infrastructure funding via the Passenger Facility Charge (PFC) on tickets is capped at $4.50, about the same as the 2000 level. Airport officials are not pleased.
"[The bill] does not provide airports the resources they need to meet their infrastructure needs," says Debby McElroy, executive vice president for policy for the Airports Council International-North America (ACI-NA). "There is a recognition that the current system [for funding] is broken, that Washington doesn't get it and that we need a new system."
The stalemate over new taxes to pay for infrastructure continues in Washington, and no one wants to pay for improvements, says industry expert William A. Fife, founder of the Fife Group, former Port Authority of New York & New Jersey aviation chief and AECOM aviation director. "Airports are losing almost a billion a year in AIP funding for major hubs" with the current authorization and also looking at fewer dollars from the PFC funds, Fife says. The authorization is shifting funds to smaller airports, he adds.
Ideally, Fife says, the industry would like to see the PFC capped at $7 a ticket, which airports should be able to manage directly so they can have more control over how funds are spent locally. "Or they could take off the cap entirely as they have in Canada and let each airport decide because each has a different capital requirement," says Fife. The bill's funds for infrastructure are "pathetic," he adds.But there is good news on the technology side: For example, NextGen programs ultimately will cut fuel burn and save travel times.
Big Year for NextGen
The FAA is planning to bring several of its major air traffic control facilities on line with Automatic Dependent Surveillance-Broadcast (ADS-B) technology, a key underpinning of its NextGen system that provides surveillance for tracking aircraft. The ground component of that system is scheduled to be completed in 2013, says Ed Sayadian, vice president of air traffic management for ITT Exelis, which has the contract to provide the system. He says about half the infrastructure is already in place.
This year, the FAA will award a Data Communications Integrated Services (DCIS) contract, which addresses replacing much of the voice portion of the existing system. Sayadian says the DCIS program will enable controllers to relay takeoff clearance and other instructions to pilots via text rather than voice,streamlining clearances while reducing errors. Today, air traffic controllersspeak only through analog-radio voice communication—basically, a walkie-talkie on a VHF frequency.
Sayadian says DCIS systems will help controllers communicate more complex instructions to pilots. "More importantly, it allows aircraft to negotiate complex trajectories," he adds. Some of the biggest names in the aerospace industry are vying for the multi-billion DCIS contract, which will likely be one of the largest NextGen programs awarded to date when it is announced, probably in June.
The winning team will establish and operate the DCIS network for a 17-year period, with the FAA paying a fee for the service. ITT Exelis is leading one DCIS bid team, Harris Corp. is heading another, and Lockheed Martin is leading the third team. The bill also creates a NextGen position that will report to the FAA's administrator and, ideally, will be the point person on the NextGen programs, a third of which are over budget and half of which are behind schedule, according to a new Government Accountability Office report (that examined 30 of the most critical NextGen programs).
An FAA spokesperson says the agency has already adopted a majority of the GAO's cost-estimation best practices. "[The FAA] looks forward to reviewing the GAO's recently released scheduling best practices," the spokesperson says. Meanwhile, airport officials wonder how they will fund improvements to support NextGen, says Jane Calderwood, vice president of government affairs of ACI-NA. "We are concerned that the shortfalls could limit our ability to move forward on some of these NextGen projects. We are going to have to work with the appropriation process."
