National Airspace System
Reauthorizing FAA Provides Opportunities and Options to Address Challenges Gao ID: GAO-03-473T February 12, 2003Much has changed since the Congress enacted the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR-21) 3 years ago--the downturn in the nation's economy and the terrorist attacks of September 11, 2001, have taken a heavy toll on aviation. Competition for federal funding has also grown. The reauthorization of AIR-21 provides an opportunity for the Congress and the Federal Aviation Administration (FAA) to focus on several challenges to improving the national airspace system. These challenges include (1) funding planned airport capital development, (2) increasing capacity and efficiency, (3) implementing human capital and procurement reforms, and (4) ensuring aviation safety. This testimony is based on ongoing and published GAO work. The information on funding and development, obtained from FAA and the Airport Council International (ACI), a key organization representing the airport industry, is preliminary and therefore subject to change.
Funding planned airport development: Estimates vary as to the annual cost of planned airport capital development over the next 5 years, from FAA's estimate of about $9 billion to the airport industry's estimate of about $15 billion. If airports continue to receive about $12 billion a year for planned capital development--the average for 1999 through 2001--they would be able to fund all of the projects included in FAA's estimate, but would fall about $3 billion short of the industry's estimate. Increasing capacity and efficiency: Recently, airports have taken about 10 years to develop runways, and ongoing runway projects are expected to take even longer. The federal government and airports have taken actions to expedite runway development, but it is still too early to assess the impact of these actions. FAA's management of costly air traffic control acquisitions has improved, but cost, schedule, and performance problems remain. Implementing human capital and procurement reforms: FAA is making progress in implementing human capital and procurement reforms, but it has not fully implemented a new compensation system, in part because it has to negotiate with multiple unions, and it is not yet systematically evaluating the results of reforms in either area. Ensuring aviation safety: The Safer Skies program, which focuses on identifying and correcting the causes of aviation accidents, and FAA's redesigned program to inspect airline operations are two important aviation safety initiatives. While both programs have made good starts, some challenges remain. The Safer Skies program, which began in 1998, is not fully implemented, and the inspection system has encountered startup problems with inspector training and guidance.
GAO-03-473T, National Airspace System: Reauthorizing FAA Provides Opportunities and Options to Address Challenges
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United States General Accounting Office:
GAO:
Testimony:
Before the Subcommittee on Aviation, Committee on Transportation and
Infrastructure, House of Representatives:
For Release on Delivery:
Expected at 2:00 p.m. EST:
Wednesday, February 12, 2003:
National Airspace System:
Reauthorizing FAA Provides Opportunities and Options to Address
Challenges:
Statement of Gerald L. Dillingham:
Director, Civil Aviation Issues:
GAO-03-473T:
GAO Highlights:
Highlights of GAO-03-473T, a testimony before the Subcommittee on
Aviation, House Committee on Transportation and Infrastructure.
Why GAO Did This Study:
Much has changed since the Congress enacted the Wendell H. Ford
Aviation Investment and Reform Act for the 21st Century (AIR-21) 3
years ago”the downturn in the nation's economy and the terrorist
attacks of September 11, 2001, have taken a heavy toll on aviation.
Competition for federal funding has also grown.
The reauthorization of AIR-21 provides an opportunity for the Congress
and the Federal Aviation Administration (FAA) to focus on several
challenges to improving the national airspace system. These challenges
include (1) funding planned airport capital development, (2) increasing
capacity and efficiency, (3) implementing human capital and procurement
reforms, and (4) ensuring aviation safety.
This testimony is based on ongoing and published GAO work. The
information on funding and development, obtained from FAA and the
Airport Council International (ACI), a key organization representing the
airport industry, is preliminary and therefore subject to change.
What GAO Found:
Funding planned airport development:
Estimates vary as to the annual cost of planned airport capital
development over the next 5 years, from FAA‘s estimate of about $9
billion to the airport industry‘s estimate of about $15 billion. If
airports continue to receive about $12 billion a year for planned
capital development”the average for 1999 through 2001”they would be
able to fund all of the projects included in FAA‘s estimate, but would
fall about $3 billion short of the industry‘s estimate.
Increasing capacity and efficiency:
Recently, airports have taken about 10 years to develop runways, and
ongoing runway projects are expected to take even longer. The federal
government and airports have taken actions to expedite runway
development, but it is still too early to assess the impact of these
actions. FAA‘s management of costly air traffic control acquisitions
has improved, but cost, schedule, and performance problems remain.
Implementing human capital and procurement reforms:
FAA is making progress in implementing human capital and procurement
reforms, but it has not fully implemented a new compensation system, in
part because it has to negotiate with multiple unions, and it is not
yet systematically evaluating the results of reforms in either area.
Ensuring aviation safety:
The Safer Skies program, which focuses on identifying and correcting
the causes of aviation accidents, and FAA‘s redesigned program to
inspect airline operations are two important aviation safety
initiatives. While both programs have made good starts, some challenges
remain. The Safer Skies program, which began in 1998, is not fully
implemented, and the inspection system has encountered startup problems
with inspector training and guidance.
Past Funding Is Sufficient to Cover FAA‘s Estimate but Would Fall $3
Billion Short of Industry‘s Estimate (dollars in billions):
[See PDF for image]
Annual FAA Planned Development: $9.2;
Annual Funding Received by Airports: $11.8;
Annual ACI Planned Development: $15.0;
Annual Funding Received by Airports: $11.8.
Source: FAA and ACI.
[End of figure]
What GAO Recommends:
This testimony does not contain recommendations. However, GAO reports
containing relevant recommendations are listed among the Related GAO
Products following the testimony.
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-473T].
To view the full testimony, including the scope and methodology, click
on the link above. For more information, contact Gerald L. Dillingham
at (202) 512-3650 or dillinghamg@gao.gov.
[End of section]
Mr. Chairman and Members of the Committee:
We are pleased to be here today to discuss issues relevant to ensuring
the safe and efficient operation of the national airspace system. These
issues are particularly relevant as you prepare to reauthorize the
Wendell H. Ford Aviation Investment and Reform Act for the 21st Century
(AIR-21). Much has changed since the Congress enacted AIR-21 3 years
ago. As you know, the downturn in the nation‘s economy and the
terrorist attacks of September 11, 2001, have taken a heavy toll on
aviation. Flights that were once filled are now being canceled for lack
of business, and attention has shifted from increasing the capacity of
the national airspace system to enhancing aviation security.
Furthermore, as the federal budget deficit has increased, competition
for federal resources has intensified.
The Congress and the administration have responded to the public‘s
concerns about aviation security by federalizing airport screeners,
upgrading and installing new airport screening equipment, and expanding
the Federal Air Marshal Service. These security measures will continue
to require and compete for federal funds. At the same time, the
transfer of some key security responsibilities to the Transportation
Security Administration, which recently moved to the new Department of
Homeland Security, will allow the Federal Aviation Administration (FAA)
to focus on the challenges it faces in improving the national airspace
system. These challenges include (1) funding planned airport capital
development, (2) increasing capacity and efficiency, (3) implementing
human capital and procurement reforms, and (4) ensuring aviation
safety.
My statement today is based on our ongoing work on airport funding and
on our published reports addressing the other challenges. Because our
information on planned airport capital development, including the
information we obtained from surveying 400 smaller airports, is
preliminary, it is subject to change.
In summary:
* Although it is generally agreed that maintaining the integrity of the
national airspace system requires continual funding, estimates vary as
to the type and cost of planned airport capital development needed to
ensure a safe and efficient system. For 2001 through 2005, FAA has
estimated annual planned capital development costs of about $9 billion,
while the Airport Council International (ACI), a key organization
representing the airport industry, has estimated annual costs of about
$15 billion for 2002 through 2006. FAA‘s estimate includes only
projects that are eligible for federal funding, whereas ACI‘s estimate
includes projects that are both eligible and ineligible for federal
funding. Neither FAA‘s nor ACI‘s estimate covers the airport terminal
modifications needed to accommodate the new explosives detection
systems required to screen checked baggage. According to ACI, these
modifications could cost $3 billion to $5 billion over the next 5
years. The Congress has not yet determined how these modifications will
be funded. If airports continue to receive about $12 billion a year for
planned capital development”the average amount they received from 1999
through 2001”they would be able to fund all of the projects included in
FAA‘s estimate, but they would not be able to fund about $3 billion in
planned development estimated by ACI. While this projected shortfall
could change with revisions in future funding, planned development, or
both, it nevertheless provides a useful indication of where funding
differences may be the greatest. Options are available to increase or
make better use of the funding for airport development, and these
options would benefit different types of airports to varying degrees.
For example, raising the current cap on passenger facility charges would
primarily benefit larger airports, while increasing or redistributing
Airport Improvement Program grant funds would be more likely to help
smaller airports.
* To increase the capacity and efficiency of the national airspace
system, FAA has focused on building new runways and modernizing air
traffic control. Results have been mixed in both areas. FAA‘s
Operational Evolution Plan, a 10-year blueprint for increasing capacity
and efficiency, includes one new runway but notes the cancellation of
another runway and delays in the construction of six others. Our work
has identified challenges to runway development, including community
opposition, environmental concerns (especially noise issues), and
litigation.[Footnote 1] Because of these and other challenges, airports
have taken about 10 years to plan and build runways, and they expect to
take about 14 years for runways that are not yet completed. Several
federal initiatives, such as an executive order designed to streamline
the environmental review process, are designed to facilitate runway
development, but we believe it is too early to assess their impact. To
modernize air traffic control, FAA spends almost $3 billion annually,
but its progress has been slow because of cost overruns, schedule
delays, and performance shortfalls. As a result, we designated this
area as high risk in 1995, and it remains at high risk today. FAA has
made some progress in addressing the root causes of its modernization
problems”by, for example, improving its cost-estimating and cost-
accounting practices”but it has not yet determined which modernization
technologies and initiatives are most likely to increase capacity and
efficiency and what impact the current financial condition of the
airline industry will have on the implementation of planned
modernization efforts.
* Recognizing the importance of effective human capital and acquisitions
management to FAA‘s ability to achieve its mission, the Congress
exempted FAA from many federal human capital and acquisitions laws, and
FAA began implementing reforms in these areas in 1996. FAA has made
progress in implementing the reforms. However, as we reported last
week,[Footnote 2] FAA has not yet finished implementing some key human
capital management initiatives, in part because it needs to negotiate
changes with multiple unions. FAA also lacks data on the effects of its
human capital initiatives, indicating that it has not fully
incorporated important elements into its human capital reform effort,
including data collection and analysis, performance goals and measures,
and links between its reform goals and program goals. Developing a
strategic approach to human capital management is particularly
important because FAA faces the likelihood of hiring thousands of air
traffic controllers in the next decade to fill vacancies caused by
retirements. To improve its procurement management, FAA implemented an
acquisitions management system that is now capturing key information;
however, FAA has not yet put processes in place to evaluate projects
after implementation so that it can identify lessons learned and
improve the investment management process.
* Finally, FAA and the Congress have taken important steps to enhance
aviation safety; however, some challenges remain. Safer Skies, an
initiative designed by FAA and the aviation industry to reduce the
nation‘s fatal aviation accident rate by 80 percent by 2007, is the
centerpiece of FAA‘s efforts to improve aviation safety. The initiative
was implemented in 1998 and many preventive actions are under way but
have not yet been fully implemented. Another key to improving aviation
safety is effective inspections of the nation‘s airline operations. In
reporting on FAA‘s redesigned Air Transportation Oversight System in
1999, we noted that it incorporated important features to ensure that
airlines have systems to control risks and prevent accidents, but that
it had encountered startup problems with inspector training and
guidance.[Footnote 3] Many of these problems were not yet fully
resolved when the Department of Transportation‘s Inspector General
reported on the inspection system last year.[Footnote 4] Finally, to
reduce the risk of accidents, the Congress enacted the Pilot Records
Improvement Act of 1996, which requires air carriers to review
information on a pilot‘s performance, qualifications, and training
before making a final hiring decision. As we reported in 2002,[Footnote
5] compliance with the act has improved over time, but FAA needs to
update its guidance and incorporate information on the act in the
agency‘s training for inspectors so that they can more effectively
monitor and enforce compliance, particularly among the smaller
carriers.
Prior Years‘ Funding Levels Would Cover Projects Included in FAA‘s
Estimate, but Not All Planned Capital Development:
Both FAA and ACI have estimated the costs of planned airport capital
development. Our analysis indicates that recent funding levels would
cover the costs estimated by FAA, but not all the costs estimated by
ACI. Options for addressing the potential difference between funding and
planned development estimates include increasing or reallocating Airport
Improvement Program (AIP) grant funds and removing the current cap on
passenger facility charges.
FAA‘s and the Airport Industry‘s Estimates of Planned Capital
Development Vary Substantially:
The estimated costs of planned airport capital development vary
depending on which projects are included in the estimates. According to
FAA‘s estimate, which includes only projects that are eligible for AIP
grants, the total cost of airport development will be about $46
billion, or over $9 billion per year, for 2001 through 2005. FAA‘s
estimate is based on the agency‘s National Plan of Integrated Airport
Systems, which FAA published in August 2002. ACI‘s estimate includes
all of the projects in FAA‘s estimate, plus other planned airport
capital projects that may or may not be eligible for AIP grants. ACI
estimates a total cost of almost $75 billion, or nearly $15 billion per
year, for 2002 through 2006. Projects that are eligible for AIP grants
include runways, taxiways, and noise mitigation and noise reduction
efforts; projects that are not eligible for AIP funding include parking
garages, hangars, and expansions of commercial space in terminals.
Both FAA‘s and ACI‘s estimates cover projects for every type of
airport. As table 1 indicates, the estimates are identical for all but
the large- and medium-hub airports, which are responsible for
transporting about 90 percent of the traveling public. ACI‘s estimates
are about twice as large as FAA‘s for these airports.
Table 1: Average Annual Planned Development Costs Estimated by FAA and
ACI, by Airport Type, 2001-2006 (Dollars in millions):
Airport type: Large hub;
Number of airports: 31;
Annual average, FAA: $4,855;
Annual average, ACI: $8,554.
Airport type: Medium hub;
Number of airports: 37;
Annual average, FAA: $1,073;
Annual average, ACI: $3,109.
Airport type: Small hub;
Number of airports: 71;
Annual average, FAA: $675;
Annual average, ACI: $675.
Airport type: Nonhub;
Number of airports: 280;
Annual average, FAA: $807;
Annual average, ACI: $807.
Airport type: Other commercial service;
Number of airports: 124;
Annual average, FAA: $142;
Annual average, ACI: $142.
Airport type: Reliever;
Number of airports: 260;
Annual average, FAA: $526;
Annual average, ACI: $526.
Airport type: General aviation;
Number of airports: 2,558;
Annual average, FAA: $1,167;
Annual average, ACI: $1,167.
Airport type: Total;
Number of airports: 3,364;
Annual average, FAA: $9,245;
Annual average, ACI: $14,980.
Source: FAA and ACI.
[End of table]
According to FAA‘s analysis of the planned capital development for 2001
through 2005, airports will use (1) 61 percent of the $46 billion for
capacity enhancement, reconstruction, and modifications to bring
airports up to the agency‘s design standards and (2) 39 percent to fund
safety, security, environmental, and other projects. See figure 1.
Figure 1: Distribution of FAA‘s Estimated $46 Billion for Planned
Capital Development at Airports by Project Type, 2001-2005:
[See PDF for image]
This figure is a pie-chart that represents the distribution of FAA‘s
estimated $46 billion for planned capital development at airports by
project type, 2001-2005. The following data is depicted:
Safety and Security: 3%;
Environment: 4%;
Reconstruction: 13%;
Capacity: 18%;
Standards: 30%;
Other: 32%.
Source: FAA.
[End of figure]
Neither FAA‘s nor ACI‘s estimate includes funding for terminal
modification projects that are needed to accommodate the new explosives
detection systems. ACI estimates that terminal modifications will cost
about $3 billion to $5 billion over the next 5 years.
Airports Obtain Most Funding from Bonds and Federal Sources:
From 1999 through 2001, the 3,364 airports that make up the national
airport system received an average of about $12 billion per year for
planned capital development. The single largest source of these funds
was bonds, followed by AIP grants and passenger facility charges. (See
table 2.) It is important to note that the appropriated AIP funding for
fiscal year 2002 totaled $3.2 billion and that the authorized AIP
funding for fiscal year 2003 is $3.4 billion. However, because data for
funding from other sources were not available for these years, we used
the figures from 1999 through 2001, the most recent years for which
consistent data were available.
Table 2: Sources of Airport Funding (Dollars in billions):
Funding source: Airport bonds;
1999-2001 average annual funding[A]: $6.90[B];
Percent of total: 59;
Source of funds: Usually, state and local governments or airport
authorities issue tax-exempt debt. Funds also include notes.
Funding source: Airport Improvement Program grants;
1999-2001 average annual funding[A]: 2.42[C];
Percent of total: 21;
Source of funds: The Congress makes funds available from the Airport
and Airway Trust Fund, which receives revenue from various aviation-
related taxes.
Funding source: Passenger facility charges;
1999-2001 average annual funding[A]: 1.59[D];
Percent of total: 13;
Source of funds: Funds come from passenger fees of up to $4.50 per trip
segment at commercial service airports.
Funding source: State and local contributions;
1999-2001 average annual funding[A]: .44[E];
Percent of total: 4;
Source of funds: Funds include state and local grants, loans, and
matching funds for AIP grants.
Funding source: Airport revenue;
1999-2001 average annual funding[A]: .42[F];
Percent of total: 4;
Source of funds: Funds are generated from (1) ’airside“ revenues
derived from the operation and landing of aircraft, passengers, or
freight and (2) ’landside“ revenues derived from concessions and
leases.
Funding source: Total;
1999-2001 average annual funding[A]: $11.78;
Percent of total: 100.
Source: GAO, FAA, and Thomson Financial.
Note: Totals may not add because of rounding.
[A] Amounts expressed in inflation-adjusted 2001 dollars.
[B] Net of refinancing. Of this total, $1.43 billion per year
represented the proceeds of special facility bonds, which are secured
by revenue pledges from the indebted facility and issued on behalf of
non-airport beneficiaries, such as airlines.
[C] Since the passage of AIR-21 in 2000, annual AIP funding has been at
or above $3.2 billion. Before that, it was less than $2 billion.
[D] Airports have been eligible to charge $4.50 since fiscal year 2001.
Before that, the ceiling was $3.00.
[E] Net operating revenue in excess of a minimum coverage ratio of 125
percent of the debt service (principal and interest payments) for
commercial service airports. For general aviation and reliever
airports, amounts are calculated as net operating revenue.
[F] Does not include local grants and loans for commercial service
airports because we found no data to document the amounts from these
sources.
[End of table]
The amount and type of funding vary depending on the airport‘s size. For
example, as shown in figure 2, the large- and medium-hub airports depend
primarily on bonds, while the smaller airports rely principally on AIP
grants. Passenger facility charges are a more important source of
revenue for the large- and medium-hub airports because they have the
majority of commercial service passengers.
Figure 2: Distribution of Sources of Funding, by Airport Type:
[See PDF for image]
This figure is a multiple vertical bar graph representing the
distribution of sources of funding, by airport type. The vertical axis
of the graph represents percentage from 0 to 100. The horizontal axis
of the graph represents six types of funding for both smaller airports
and large and medium hub airports. The following data is depicted:
Source of funding: Bonds:
Smaller Airports: approximately 12%;
Large and Medium Hub Airports: approximately 55%.
Source of funding: Special facility bonds;
Smaller Airports: approximately 2%;
Large and Medium Hub Airports: approximately 15%.
Source of funding: Passenger facility charges;
Smaller Airports: approximately 8%;
Large and Medium Hub Airports: approximately 15%.
Source of funding: AIP grants;
Smaller Airports: approximately 65%;
Large and Medium Hub Airports: approximately 10%.
Source of funding: Available operating revenue;
Smaller Airports: less than 1%;
Large and Medium Hub Airports: approximately 4%.
Source of funding: State and local;
Smaller Airports: approximately 15%;
Large and Medium Hub Airports: less than 1%.
Source: GAO.
Note: The 1999 and 2000 figures were converted to inflation-adjusted
2001 dollars.
Note: Special facility bonds are secured by the revenue from the
indebted facility for projects such as terminals, hangars, and
maintenance facilities, rather than by the airport‘s general revenue.
Note: Available operating revenue accounts for less than 1 percent of
the capital development funding received by smaller airports, and state
and local contributions represent less than 1 percent of the capital
development funding received by large- and medium-hub airports.
[End of figure]
Prior Years‘ Funding Levels Would Cover All of FAA‘s Planned
Development Estimate but Would Fall About $3 Billion Short of ACI‘s
Estimate:
If the funding for airport capital development remains at about $12
billion a year over the next 5 years, it would cover all of the
projects in FAA‘s estimate. However, it would be about $3 billion less
per year than ACI‘s estimate. Figure 3 compares the average annual
funding airports received from 1999 through 2001 with FAA‘s and ACI‘s
annual planned development for 2001 through 2006. This difference is
not an absolute predictor of future funding shortfalls; both funding
and planned development may change in the future. However, it does
provide a useful indication of where funding differences may be the
greatest.
Figure 3: Recent Average Annual Funding Compared with Estimates of
Annual Planned Development Costs (dollars in millions):
[See PDF for image]
This figure contains two stacked bar graphs depicting the following
data:
Average annual funding 1999-2001:
Airport bonds (net): $6,898;
AIP: $2,422;
Passenger facility charges: $1,587;
State and local: $444;
Available operating revenue: $424;
Total: $11,775.
Annual planned development 2001-2006:
Additional planned development, according to ACI: $5,736;
Other AIP eligible projects: $2,970;
Standards: $2,971;
Capacity: $1,688;
Security, safety, environment, reconstruction: $1,826;
Total: $14,980.
Sources: FAA and ACI (data); GAO (analysis).
[End of figure]
Funding Difference Would Affect Smaller Airports Proportionally More
Than Larger Airports, but Difference Has Narrowed:
The difference between past funding and planned development is
proportionally greater for smaller airports than for large- and medium-
hub airports. If the smaller airports were to continue to receive an
average of about $2.4 billion per year, they would be able to fund
about 73 percent of the estimated cost of their total planned
development. In comparison, large- and medium-hub airports would be
able to fund about $9.4 billion per year, or about 80 percent, of the
estimated cost of their total planned development. It is important to
note that while the airlines may be experiencing financial problems,
most large airports have very solid credit ratings and could, if
necessary, issue more debt without facing exorbitant interest rates.
Figures 4 and 5 illustrate the differences between funding levels and
estimated planned capital development at smaller and at large and
medium-hub airports.
The primary reason that smaller airports would be able to fund 73
percent of their planned development, rather than the 52 percent
reported we reported in 1998, is that they have benefited significantly
from the increases in AIP grants, which is a larger source of funding
for smaller airports than it is for larger airports. Of the $2.4
billion in AIP grant funds that airports received each year, on
average, from 1999 through 2001, smaller airports received almost 63
percent, whereas large- and medium-hub airports received about 37
percent. Smaller airports have received an increasing share of AIP
grants primarily because of statutorily required changes in the
distribution of these funds. For example, in AIR-21, the Congress
increased the funding for two categories that primarily or exclusively
benefit small airports”the state apportionment fund and the small
airport fund”and created general aviation entitlement grants, which
also benefit smaller airports.[Footnote 6]
Figure 4: Average Annual Funding Compared with Estimated Annual Planned
Capital Development for Smaller Airports (dollars in millions):
[See PDF for image]
This figure contains two stacked bar graphs depicting the following
data:
Average annual funding 1999-2001:
AIP: $15,30;
State and local: $387;
Airport bonds (net): $331;
Passenger facility charges: $172;
Available operating revenue: $0.3;
Total: $2,421.
Annual planned development 2001-2006:
Other AIP eligible projects: $259;
Standards: $1,866;
Capacity: $165;
Security, safety, environment, reconstruction: $1,026.
Total: $3,317.
Source: FAA and ACI (data), GAO (analysis).
[End of figure]
Figure 5: Average Annual Funding Compared with Estimated Planned Capital
Development for Large- and Medium-Hub Airports (dollars in millions):
[See PDF for image]
This figure contains two stacked bar graphs depicting the following
data:
Average annual funding 1999-2001:
Airport bonds (net): $6,567;
Passenger facility charges: $1,415;
AIP: $892;
Available operating revenue: $424;
State and local: $57;
Total: $9,354.
Annual planned development 2001-2006:
Additional planned development, according to ACI: $5,736;
Other AIP eligible projects: $2,710;
Standards: $894;
Capacity: $1,523;
Security, safety, environment, reconstruction: $800;
Total: $11,663.
Source: FAA and ACI (data), GAO (analysis).
Note: The total for average annual funding may not add because of
rounding.
[End of figure]
Options Are Available to Address Difference between Funding and Planned
Development:
Options are available to increase airport funding or to make better use
of the existing funding. These options, some of which were authorized or
implemented as part of AIR-21, include increasing the AIP grant funding
for smaller airports, increasing passenger facility charges, and using
innovative financing approaches. The various options would benefit
different types of airports to varying degrees.
To help address the difference between funding and planned development,
AIR-21 provided that up to $150,000 a year in AIP grant funds be made
available to all general aviation airports for up to 3 years for
airfield capital projects such as runways, taxiways, and airfield
construction and maintenance projects. In our report issued yesterday,
we reported that since the program‘s inception in fiscal year 2001,
general aviation airports have received a total of about $325 million,
which they have used primarily to help build runways, purchase
navigational aids, and maintain pavements and airfield lighting.
[Footnote 7] Most of the state aviation officials and general aviation
airport managers we surveyed said the grants were useful in meeting
their needs, and some suggested that the $150,000 grant limit be
increased so that general aviation airports could undertake larger
projects. However, a number of state officials cautioned that an
increase in the general aviation entitlement grant could cause a
decrease in the state apportionment fund, which states use to address
their aviation priorities.
Another option would be to increase or eliminate the cap on passenger
facility charges. This option would primarily benefit larger airports,
because passenger facility charges are a function of the volume of
passenger traffic. However, under AIP, airports that collect passenger
facility charges must forfeit a certain percentage of their AIP formula
funds. These funds are subsequently divided between the small airport
fund, which is to receive 87.5 percent, and the discretionary fund,
which is to receive 12.5 percent. Thus, smaller airports would benefit
indirectly from any increase in passenger facility charges. In our 1999
report on passenger facility charges, [Footnote 8] we estimated that a
small increase in passenger facility charges would have a modest effect
on passenger traffic. At that time, we estimated that each $1 increase
would reduce passenger levels by about 0.5 to 1.8 percent, with a
midrange estimate of 0.85 percent. Since AIR-21 raised the cap on
passenger facility charges from $3.00 to $4.50, the full effect of the
increase has not been realized because only 17 of the 31 large-hub
airports (55 percent) and 11 of the 37 medium-hub airports (30 percent)
have increased their rates to $4.50. Additionally, 3 large-hub airports
and 6 medium-hub airports do not charge a passenger facility fee. The
reluctance to raise passenger facility charges is likely to be the
result of several factors, including the views of airlines, which are
opposed to any increase in passenger facility charges because an
increase would raise passenger costs and reduce passenger traffic.
Nonetheless, if all airports were to increase passenger facility
charges to the current ceiling, additional revenue could be generated.
FAA has introduced other mechanisms to make better use of existing
funding sources, the most successful of which has been letters of
intent, a tool that has effectively leveraged private sources of
funding. A letter of intent represents a nonbinding commitment from FAA
to provide multi-year funding to an airport beyond the current AIP
authorization period. Thus, the letter allows the airport to proceed
with a project without waiting for a future AIP grant because the
airport and investors know that allowable costs are likely to be
reimbursed. A letter of intent may also enable an airport to receive a
more favorable interest rate on bonds that are sold to refinance a
project because the federal government has indicated its support for
the project. FAA has issued 64 letters of intent with a total
commitment of about $3 billion; large- and medium-hub airports account
for the majority of the total.
Other approaches to making better use of existing funding resources were
authorized under AIR-21. Specifically, the act authorized FAA to
continue its innovative finance demonstration program, which is
designed to test the ability of innovative financing approaches to make
more efficient use of AIP funding. Under this program, FAA enabled
airports to leverage additional funds or lower development costs by (1)
permitting flexible local matching on some projects, (2) purchasing
commercial bond insurance, (3) paying interest costs on debt, and (4)
paying principal and interest debt service on terminal development
costs incurred before the enactment of AIR-21. FAA has provided about
$31 million for smaller airports to test these innovative uses of AIP
funding. According to FAA officials, the results of the program have
been mixed. The most popular option for airports has been flexible
matching, which has resulted in several creative loan arrangements.
Improvements in Capacity and Efficiency Will Be Needed to Meet Future
Demand:
Ensuring the efficient operation of the national airspace system is an
important reauthorization issue that is vital to improving mobility and
supporting economic growth. Despite the overall decline in air traffic
since September 11, demand is gradually increasing, and at some
airports, especially those in the Midwest, recovery is progressing more
rapidly. To avoid the congestion and delays that plagued air traffic
before September 11, FAA, airlines, and airports are continuing to
pursue capacity-enhancing efforts, such as building new runways, making
more efficient use of existing capacity, and better managing the
acquisition of air traffic control technology. Figure 6 illustrates
congestion at a major airport.
Figure 6: Aircraft Lined Up to Take Off:
[See PDF for image]
This figure is a photograph of five aircraft lined up to take off.
Source: Used by permission.
[End of figure]
FAA‘s Operational Evolution Plan Encompasses Capacity and Efficiency
Improvements:
In December 2002, FAA published the most recent version of its
Operational Evolution Plan, a 10-year plan to increase the capacity and
efficiency of the national airspace system, primarily by focusing on
building runways. If successfully carried out, the plan would
substantially increase capacity and improve efficiency. However, FAA
faces several challenges in implementing the plan. First, the success
of the plan depends on adequate funding and on the consensus of FAA‘s
aviation industry partners. Yet according to the most recent version of
the plan, the timing and implementation of some activities may be in
jeopardy because of the current economic situation and the uncertain
viability of some industry participants. For example, the plan calls
for the airline industry to invest $11 billion in new equipment for
aircraft. FAA is currently reviewing the ability of the airlines to
make this investment. Second, as noted, the plan relies heavily on
runway development to increase capacity, but the most recent version
reports mixed results in building new runways. While the plan indicates
that one new runway will be built, it points out that another runway
has been canceled and the construction of six additional runways has
been delayed because of local situations. Furthermore, building new
runways would be difficult at several of the most delay-prone airports,
such as La Guardia, Newark, Kennedy, Los Angeles, and San Francisco,
because these airports either are out of room or would face intense
local opposition. Persistent delays at key airports such as these will
continue to create ’choke points“ that slow air traffic throughout the
system. In addition, AIR-21 requires the phaseout of slot restrictions
at Chicago O‘Hare by July 1, 2002, and at LaGuardia and John F. Kennedy
airports by 2007. Because slot restrictions limit the number of gates
at an airport, their phaseout could lead to an increase in air traffic.
According to the Operational Evolution Plan, FAA is undertaking a
number of efforts to address problems at choke points, such as
rerouting aircraft and adding technology.
Building Runways Is Challenging and Takes a Long Time:
Our work has found that airports face many of the same challenges and
delays in building new runways that FAA reported in the Operational
Evolution Plan. In January 2003, we reported that airports spent about
10 years planning and building recently completed runways and expect to
spend about 14 years on runways that are not yet completed. [Footnote
9] Several external factors affect how much time is spent planning and
building runways, and several airports with unfinished runway projects
identified significant challenges that had delayed their projects‘
completions. While many airports believed that completing the
environmental review phase was a significant challenge, they also
described other phases of the runway development process as equally
challenging. For example, airport officials in Los Angeles and Boston
said that they faced significant challenges in reaching agreement with
community interest groups during the planning phase. In Boston,
differences with these groups have led to lengthy litigation. Other
airports said that mitigating the potential impact of aircraft noise on
the surrounding community continues to be a challenge because of
heightened community concerns about noise.
Although there may be no single solution to all of the issues involved
in planning and building runways, the federal government and airport
authorities have taken some actions. For example, a recent executive
order is designed to streamline the environmental review of
transportation infrastructure projects. In addition, FAA has taken
several actions to increase communication and coordination and
streamline the planning and environmental review of runway projects.
Some airports said these actions could help airports resolve challenges
more quickly; however, we believe it is too early to assess the impact
of these actions on the runway development process.
Our work has shown that airports have also tried to address the
challenges in building runways by, for example, involving local
stakeholders, such as community groups, at the beginning of the process
and reaching early agreement on how to mitigate the adverse effects of
runway projects. Airports said these efforts helped to facilitate the
completion of their projects and could be useful for other airports
considering runway projects. However, the variety of situations that
airports described and the different levels of challenges they face
make it difficult to generalize from one airport‘s experience to
another‘s.
Recognizing that building new runways is not always a practicable way to
increase capacity at some airports, we identified three alternatives to
building runways:[Footnote 10]
* Add capacity by using nearby airports that have available capacity or
by building new airports.
* Find ways to manage and distribute demand within the system‘s existing
capacity by, for example, limiting the number of takeoffs and landings
during peak periods or limiting the ability of aircraft, other than
those operated by airlines, to use especially crowded or sensitive
airports (under current law, all aircraft have equal access to even the
largest airports).
* Develop other modes of intercity travel, such as high-speed rail,
where metropolitan areas are relatively close, to form an integrated,
intermodal transportation network.
These alternatives would require extensive change, could conflict with
the interests of one or more key stakeholder groups, and would often be
costly. Nevertheless, they may be essential to accommodate expected
increases in the demand for efficient transportation services or to
address security and other concerns prompted by the terrorist attacks.
To facilitate their implementation, we believe that the federal
government will need to assume a central role. Accordingly, we have
recommended that the Department of Transportation (DOT) begin a more
extensive evaluation of initiatives to address flight delays, including
intermodal solutions and a dialogue with the aviation community and
other transportation stakeholders as a basis for developing a
comprehensive blueprint for addressing the nation‘s long-term
transportation needs. DOT has recognized the need for more and better
long-range planning on the potential use of such measures, but its
efforts are in the beginning stages. The current hiatus in air traffic
growth creates an opportunity for such planning to take place.
FAA‘s Air Traffic Modernization Effort Remains High Risk:
To increase the safety, capacity, and efficiency of the national
airspace system, FAA undertook a major effort in 1981 to modernize and
replace aging air traffic control equipment. This effort has been
plagued by cost overruns, schedule delays, and performance shortfalls.
In 1995, we designated it as high risk, and we continue to designate it
as such.[Footnote 11] Inefficiencies in the air traffic control system
contributed to some of the delays in the system that peaked in 2000. At
that time, FAA estimated that modernizing equipment along with other
changes, such as redesigning the airspace, would increase capacity by 5
to 15 percent.
Originally, FAA planned to complete its modernization in 10 years at a
cost of $12 billion. Now, two decades and $35 billion later, FAA
estimates that it will need nearly $16 billion more through fiscal year
2007 to complete key projects, including the Standard Terminal
Automation Replacement System (STARS), the Wide Area Augmentation
System (WAAS), the Next-Generation Air/Ground Communications (NEXCOM),
the Local Area Augmentation System (LAAS), the Integrated Terminal
Weather System (ITWS), and free flight initiatives, which FAA‘s
Operational Evolution Plan recognizes as a new way of managing air
traffic that is expected to help lower costs for the airlines and help
the aviation system accommodate more flights.
While FAA is making progress in managing the air traffic control
modernization, key programs continue to experience cost, schedule, and
performance problems. As a result, resources have not been spent cost-
effectively and improvements in capacity and efficiency have been
delayed. Table 3 shows the status of three major programs that we have
been monitoring.
Table 3: Selected Air Traffic Control Modernization Acquisition
Projects:
Project: Standard Terminal Automation Replacement System (STARS),
designed to replace aging displays and processing systems used by air
traffic controllers;
Original Estimated cost: $940 million;
Current Estimated cost: $1.33 billion;
Original Projected deployment schedule: Start: 1998; Finish: 2005;
Current Projected deployment schedule: Start: 2002; Finish: 2005;
Status: FAA‘s latest cost and schedule for STARS is based on
acquisition of 74 systems, as opposed to the original 172 systems. In
September 2002, we found that FAA‘s schedule for deploying STARS to a
large facility presents challenges in terms of completing efforts to
test the system, resolve problems, and train all employees on the new
system.[A]
Project: Wide Area Augmentation System (WAAS), designed to provide
satellite-based navigation for airspace users;
Original Estimated cost: $892 million;
Current Estimated cost: $2.9 billion;
Original Projected deployment schedule: Start: 1998; Finish: 2001;
Current Projected deployment schedule: Start: 2003; Finish: to be
determined;
Status: Integrity concerns have plagued WAAS‘s development. While the
agency has made progress in resolving these, FAA must decide whether to
stop WAAS‘s development in 2003 or continue to refine the technology to
provide an approach capability with greater precision.
Project: Next-Generation Air/Ground Communications (NEXCOM), designed
to replace existing communications systems and provide additional voice
channels;
Original Estimated cost: $986 million (1st segment only);
Current Estimated cost: $986 million (1st segment only);
Original Projected deployment schedule: Finish: 2009;
Current Projected deployment schedule: Finish: 2013;
Status: FAA is only in the early stages of making a final decision to
select the technology for NEXCOM and still needs to address three major
issues: whether (1) the preferred technology is technically sound and
will operate as intended, (2) the preferred technology and equipment it
requires can be certified as safe for use in the national airspace
system, and (3) it is cost-effective for users and the agency.
Source: FAA.
Note: Dollars are nominal.
[A] U.S. General Accounting Office, National Airspace System: Status of
FAA‘s Standard Terminal Automation Replacement System, GAO-02-1071
(Washington, D.C.: Sept. 17, 2002).
[End of table]
DOT‘s Inspector General has noted similar problems with the Local Area
Augmentation System”a new precision approach and landing system that is
expected to boost airport arrival rates under all weather conditions”
and the Integrated Terminal Weather System”which provides enhanced
weather information. FAA planned to begin operating the Local Area
Augmentation System in 2004, but it will not meet that milestone because
of additional development work, changing requirements, and unresolved
safety certification issues. In addition, the estimated production
costs for the Integrated Terminal Weather System, originally expected
to be about $286 million, have tripled. [Footnote 12]
Our work has also identified free flight implementation issues. Free
flight is a new approach to air traffic management that replaces highly
structured rules and procedures with a more flexible system based on
collaboration between air traffic controllers and pilots. The use of new
free flight technologies and procedures is expected to increase the
efficiency and capacity of the airspace system and help to avoid
gridlock by improving operations in various segments of flight. In
2001, we made several recommendations to improve the implementation of
free flight, including improving training for air traffic controllers
and establishing detailed tracking of costs, schedules, and benefits.
[Footnote 13] FAA has begun to address our recommendations. However,
several outstanding issues remain. For example, the airlines are not
likely to voluntarily equip their fleets with new technologies to
support free flight until their business improves.
Since 1995, we have made over 30 recommendations to address the root
causes of FAA‘s modernization problems. Although FAA has made progress
in addressing these root causes, more remains to be done, including the
following:
* Improve immature software capabilities. FAA has developed an
integrated framework for improving its software acquisition, software
development, and systems engineering processes. In addition, FAA has
continued to increase the number of system development projects that
use this integrated framework. However, FAA still does not require all
systems to achieve a minimum level of progress within the framework
before being funded.
* Improve cost-estimating and cost-accounting practices. FAA has
developed a standard work breakdown structure and established an
historical database for tracking systems‘ estimated costs and other
information. Furthermore, FAA has made progress in implementing its
cost-accounting system. However, the agency has not yet fully instituted
rigorous cost-estimating practices”that is, FAA is not yet incorporating
actual costs from related system development efforts in its processes
for estimating the costs of new projects. Most recently, we reported
that the cost estimates for the Standard Terminal Automation
Replacement System are unreliable because FAA did not follow its own
acquisition guidance. [Footnote 14]
* Change organizational culture. FAA issued an organizational culture
framework in 1997 and is working to implement it. However, in 2000, the
DOT Inspector General followed up on problems that we first identified
in 1996[Footnote 15] and reported that FAA‘s culture remains a barrier
to successful acquisition project management and that integrated teams,
a key mechanism to deliver more cost-effective and timely products, are
not working well because FAA‘s culture continues to operate in vertical
’stovepipes,“ which conflict with the horizontal structure of team
operations. Our 2000 report on the Wide Area Augmentation System also
found that the integrated teams were not working as intended.[Footnote
16] We found that competing priorities between two key organizations
that are part of the system‘s integrated team negated the effectiveness
of the team‘s approach for meeting FAA‘s goals for the system.
As FAA moves forward with modernization in the current economic
climate, it will be important for the agency to ensure that it is
spending its resources on the projects that will provide the most
return. This may require reprioritizing projects in the agency‘s
investment portfolio, cooperating more closely with private industry to
leverage federal dollars and share the risk of investments, and seeking
other opportunities to reduce costs and operate more efficiently. Such
activities would be under the purview of the Air Traffic Services
Subcommittee and the chief operating officer, a position created by AIR-
21 to oversee the air traffic control system and FAA‘s modernization
program. However, FAA has not yet hired a chief operating officer to
direct these efforts.
FAA Is Implementing Human Capital and Procurement Reforms:
As problems with the air traffic control modernization program mounted
in the early 1990s, FAA attributed the delays in implementing air
traffic control projects, at least in part, to burdensome
governmentwide human capital rules and federal acquisition regulations
that impeded its ability to hire, train, and deploy personnel and to
acquire equipment and systems. In response to these claims, the
Congress exempted FAA from many federal laws governing human capital
and acquisitions, and the agency began implementing human capital and
procurement reforms in 1996.
Human Capital Reforms Have Not Been Fully Implemented, Evaluated, or
Linked to Goals:
As we reported last week, FAA has implemented the majority of its human
capital reform initiatives, but it has not yet completed this effort.
(Fig. 7 shows the status of several key initiatives.) For example, it
has not implemented a new compensation system for about 20 percent of
its 50,000 employees”those staff whose unions have not reached
agreements with FAA. Among the factors affecting FAA‘s progress in
implementing this initiative were the wide range of skills represented
in FAA‘s workforce and the multiple unions representing FAA employees.
Figure 7: Implementation Status of Selected FAA Personnel Reform
Initiatives:
[See PDF for image]
Reform area: Compensation and performance management;
Initiatives: Broadbanded pay systems;
Status: In progress.
Reform area: Compensation and performance management;
Initiatives: Performance appraisals without ratings;
Status: In progress.
Reform area: Workforce management;
Initiatives: Workforce planning;
Status: In progress.
Reform area: Workforce management;
Initiatives: Decentralized competitive hiring;
Status: Completed.
Reform area: Workforce management;
Initiatives: Delegated training management;
Status: Completed.
Reform area: Workforce management;
Initiatives: Flexible relocation policies;
Status: Completed.
Reform area: Labor and employee relations;
Initiatives: Labor partnership forums;
Status: Completed.
Reform area: Labor and employee relations;
Initiatives: Workplace improvement policies;
Status: Completed.
Source: FAA (data); GAO (analysis).
[End of figure]
FAA has not developed data to assess the effects of its human capital
reforms. For example, it has not systematically surveyed managers and
employees or analyzed their views on the new compensation system.
Although FAA human capital officials cited positive effects of the
system, nearly two-thirds (110 out of 176) of the managers and
employees we interviewed disagreed or strongly disagreed that the new
system is fair to all employees.
The lack of data on the effects of its human capital reforms is an
indication that FAA has not fully incorporated elements that are
important to effective human capital management into its overall reform
effort. These elements include data collection and analysis,
performance goals and measures, and links between reform goals and
program goals. Evaluations of FAA‘s human capital reforms have cited
these shortcomings, but FAA has not developed specific steps and time
frames for building the missing elements into its human capital
management and for using these elements to evaluate the effects of its
initiatives, make strategic improvements, and hold the agency‘s
leadership accountable.
Addressing these weaknesses and developing a more strategic approach to
its human capital reforms is particularly important as FAA faces the
likelihood of hiring thousands of air traffic controllers in the next
decade to replace retiring controllers. While the exact number and
timing of the controllers‘ departures is impossible to determine, FAA‘s
and our analyses show that the attrition rate will grow substantially
in the near and long term as thousands of controllers hired over a 3-
to 4-year period in the 1980s become eligible to retire. In June 2002,
we reported that FAA‘s strategy for replacing controllers was generally
to hire new controllers only when current, experienced controllers
leave”an approach that makes it challenging to ensure that well-
qualified new controllers are available when needed.[Footnote 17] For
example, we found that FAA‘s hiring process did not adequately take
into account the time needed to fully train replacements, which could
take up to 5 years; there was uncertainty about agency‘s tools for
screening and testing the aptitude of applicants; and the agency had
not addressed the resources that may be needed to train these
replacements. We recommended, among other things, the development of
a comprehensive workforce strategy to address FAA‘s impending
controller needs. While FAA has made some changes in this area since our
report appeared, it remains to be seen whether the agency‘s actions
will be sufficient to ensure that qualified new controllers are
available when needed. Figure 8 shows an air traffic controller
monitoring and handling air traffic.
Figure 8: Air Traffic Controller:
[See PDF for image]
This is a photograph of an air traffic controller at work.
Source: FAA.
[End of figure]
FAA‘s Procurement Reforms Have Improved Investment Management
Processes, but Weaknesses Remain:
As part of its procurement reforms, FAA introduced an acquisition
management system to reduce the time and cost to deploy new products
and services. In 1999, we found that while this was a good first step in
establishing a structured investment management approach for selecting
and controlling the agency‘s investments, the system had weaknesses in
its selection, control, and evaluation phases that impeded FAA‘s
ability to manage its investments effectively and make sound decisions
about continuing, modifying, or canceling projects.[Footnote 18] We
concluded that correcting these weaknesses would increase the
likelihood that FAA‘s projects would meet established cost and schedule
objectives and contribute to measurable improvements in the agency‘s
mission performance, and we made several recommendations designed to
improve the agency‘s selection, control, and evaluation of its
information technology investments.
Recently, we found that FAA has improved its investment management
processes, but that more remains to be done. For example, FAA is now
overseeing investment risks and capturing key information from the
investment selection process in a management information system. FAA
has also developed guidance for validating costs, benefits, and risks,
and expects to finalize this guidance by early 2003. However, FAA has
not yet implemented processes for evaluating projects after
implementation in order to identify lessons learned and improve the
investment management process. Because its procurement reform effort is
not complete, major projects continue to face challenges that could
affect their costs, schedule, and performance.
FAA Is Making Progress in Implementing Safety Initiatives:
Safety has always been and continues to be FAA‘s highest priority. FAA
has taken a number of important steps to improve aviation safety;
however, planning and implementation could be more effective in some
cases.
FAA and Industry Have Taken Actions to Reduce the Fatal Accident Rate:
Reducing fatal aviation accidents is key to improving aviation safety.
FAA‘s centerpiece for reaching this goal is Safer Skies, an initiative
that dates back to 1998, when FAA and aviation industry representatives
worked together to identify the major causes of fatal accidents and to
design and implement preventive actions. Safer Skies is intended to
reduce the fatal accident rate for commercial aviation by 80 percent
and to reduce the number of fatal accidents for general aviation to 350
by 2007.[Footnote 19] Because many preventive actions have not yet been
fully implemented, it may be too early to assess their effectiveness.
Achieving the initiative‘s goals will require FAA to systematically
implement these preventive actions and to maintain good data to monitor
their progress and evaluate their effectiveness. As of last week, 44
preventive actions had been undertaken”of which 16 are completed and 28
are under way, according to FAA.
FAA‘s New Safety Inspection System Offers Promise, but Problems Still
Need to Be Addressed:
Improving the effectiveness of FAA‘s inspections of airline operations
is key to improving aviation safety. The FAA Administrator has noted
that perhaps the greatest support the agency can provide to the
industry is a robust safety oversight role that will not waver in
difficult times. FAA‘s new inspection program, the Air Transportation
Oversight System, is central to this oversight role. The program aims
to ensure not only that airlines comply with FAA‘s safety requirements
but also that they have operating systems to control risks and prevent
accidents. We found that FAA had not completed many critical steps,
such as developing guidance and creating usable databases to capture
information, before implementing the new inspection system in 1998. As
a result, the agency‘s ability to conduct effective inspections remains
limited. FAA has begun to address some of these problems. However,
according to a 2002 review by the DOT Inspector General, many of the
problems persist, and the program‘s implementation remains inconsistent
because FAA has not established strong oversight and accountability
procedures.[Footnote 20] These problems limit FAA‘s ability to conduct
more systematic, structured inspections; analyze the resulting data to
identify safety trends; and target its resources to the greatest
aviation safety risks.
Better Implementation and Monitoring of Requirements to Perform
Preemployment Checks on Pilots Could Enhance Aviation Safety:
Finally, the Congress has endeavored to keep unsafe pilots out of the
cockpits of commercial aircraft by requiring that carriers perform
preemployment checks on pilot applicants. We found that carriers have
increasingly requested the required records since the Pilot Records
Improvement Act took effect in 1997. In 2000, nearly half of the
nation‘s large commercial airlines reported deciding not to hire pilots
because of this information. However, our data analyses and surveys of
carriers showed that a few carriers did not request all required
records. In a few cases, hiring carriers reported never receiving the
records. Delays in providing the records can be costly for both
carriers and pilots because the carrier is not allowed to use the pilot
to fly passengers or cargo until the records have been received. In
addition, because FAA did not update its guidance when the law was
amended, carriers and pilots lack awareness of some provisions, and FAA
inspectors are not prepared to review compliance. In response to our
recommendations, FAA has updated its guidance and is taking additional
steps to better inform carriers, pilots, and inspectors of the law‘s
requirements.
In conclusion, Mr. Chairman, the aviation industry and the national
economy are still struggling to recover their health. Analysts
nonetheless expect the demand for air travel to rebound, and the
nation‘s aviation system must be ready to accommodate the projected
growth safely and securely. Sustaining recent funding levels for
planned capital development should allow the majority of airport
capital improvements to move forward, but it will not address the
costly terminal modifications needed to accommodate explosives
detection systems. Options such as additional federal grant funding or
increases in passenger facility charges could make more funding
available for airport improvements; however, competition for federal
budget dollars and concerns about the impact of higher charges on
airline ticket sales may limit the practicality of these options.
Enhancing the capacity and efficiency of the national airspace system
through runway development and air traffic modernization is critical to
preparing for the projected growth in demand for air travel. Today, we
have a window of opportunity to prepare for this growth without the
pressures of congestion and flight delays. Yet we also face public and
private constraints on spending that require us to accomplish these
improvements as efficiently as possible. Setting priorities among
projects, identifying opportunities for streamlining the runway
development process, and fully implementing human capital and
procurement reforms should help to ensure efficiency. Finally, moving
forward with aviation safety initiatives is essential to restore and
maintain the public‘s confidence in air travel.
Scope and Methodology:
To determine how much planned development would cost over the next 5
years, we obtained planned development data from FAA and ACI. ACI
provided its estimate to us in January 2003, and we are still analyzing
the data on which the estimate is based. To determine the sources of
airport funding, we obtained capital funding data from FAA, the National
Association of State Aviation Officials, Thomson Financial, and a survey
we conducted of 400 general aviation and reliever airports. We obtained
funding data from 1999 through 2001, because they were the most recent
years for which consistent data were available. We screened the planned
development and funding data for accuracy and compared funding streams
across databases where possible. We also clarified ambiguous
development or funding source information directly with airports. We
did not, however, audit how the databases were compiled, except for our
own survey. However, we have not finished analyzing our survey data,
and the results presented in this testimony are still preliminary.
We performed our work from May 2002 through February 2003 in accordance
with generally accepted government auditing standards.
This concludes my statement. I would be pleased to answer any questions
you or other members of the Committee might have.
Contact Information:
For further information on this testimony, please contact Gerald
Dillingham at (202) 512-2834. Individuals making key contributions to
this testimony include Jon Altshul, Bonnie Beckett, Tammy Conquest,
Howard Cott, Elizabeth Eisenstadt, James Geibel, Charles D. Ireland,
Edward Laughlin, David Lehrer, Maren McAvoy, Matthew Sakrekoff, John W.
Shumann, Teresa Spisak, Richard Swayze, Larry Thomas, and Alwynne
Wilbur.
[End of section]
Related GAO Products:
Aviation Finance: Implementation of General Aviation Entitlement
Grants. GAO-03-347. Washington, D.C.: February 11, 2003.
Human Capital Management: FAA‘s Reform Effort Requires a More Strategic
Approach. GAO-03-156. Washington, D.C.: February 3, 2003.
National Airspace System: Better Cost Data Could Improve FAA‘s
Management of the Standard Terminal Automation Replacement System. GAO-
03-343. Washington, D.C.: January 31, 2003.
Aviation Infrastructure: Challenges Related to Building Runways and
Actions to Address Them. GAO-03-164. Washington, D.C.: January 30,
2003.
High-Risk Series: An Update. GAO-03-119. Washington, D.C.: January
2003.
Air Traffic Control: Impact of Revised Personnel Relocation Policies Is
Uncertain. GAO-03-141. Washington, D.C.: October 31, 2002.
Airport Finance: Using Airport Grant Funds for Security Projects Has
Affected Some Development Projects. GAO-03-27. Washington, D.C.:
October 15, 2002.
National Airspace System: Status of FAA‘s Standard Terminal Automation
Replacement System. GAO-02-1071. Washington, D.C.: September 17, 2002.
Options to Enhance the Long-term Viability of the Essential Air Service
Program. GAO-02-997R. Washington, D.C.: August 30, 2002.
Aviation Safety: Better Guidance and Training Needed on Providing Files
on Pilots‘ Background Information. GAO-02-722. Washington, D.C.: August
30, 2002.
Air Traffic Control: FAA Needs to Better Prepare for Impending Wave of
Controller Attrition. GAO-02-591. Washington, D.C.: June 14, 2002.
Aviation Finance: Distribution of Airport Grant Funds Complied with
Statutory Requirements. GAO-02-283. Washington, D.C.: April 30, 2002.
Department of Transportation, Transportation Security Administration:
Aviation Security Infrastructure Fees. GAO-02-484R. Washington, D.C.:
March 11, 2002.
Applying Agreed-Upon Procedures: Airport and Airway Trust Fund Excise
Taxes. GAO-02-380R. Washington, D.C.: February 15, 2002.
National Airspace System: Long-Term Capacity Planning Needed Despite
Recent Reduction in Flight Delays. GAO-02-185. Washington, D.C.:
December 14, 2001.
Air Traffic Control: FAA Enhanced the Controller-in-Charge Program,
but More Comprehensive Evaluation Is Needed. GAO-02-55. Washington,
D.C.: October 31, 2001.
National Airspace System: Free Flight Tools Show Promise, but
Implementation Challenges Remain. GAO-01-932. Washington, D.C.:
August 31, 2001.
Air Traffic Control: Role of FAA‘s Modernization Program in Reducing
Delays and Congestion. GAO-01-725T. Washington, D.C.: May 10, 2001.
Aviation Safety: Safer Skies Initiative Has Taken Initial Steps to
Reduce Accident Rates by 2007. GAO/RCED-00-111. Washington, D.C.: June
30, 2000.
National Airspace System: Problems Plaguing the Wide Area Augmentation
System and FAA‘s Actions to Address Them. GAO/TRCED-00-229. Washington,
D.C.: June 29, 2000.
National Airspace System: Persistent Problems in FAA‘s New Navigation
System Highlight Need for Periodic Reevaluation. GAO/RCED/AIMD-00-130.
Washington, D.C.: June 12, 2000.
Federal Aviation Administration: Challenges in Modernizing the Agency.
GAO/T-RCED/AIMD-00-87. Washington, D.C.: February 3, 2000.
Air Traffic Control: Status of FAA‘s Implementation of the Display
System Replacement Project. GAO/T-RCED-00-19. Washington, D.C.: October
11, 1999.
Aviation Safety: FAA‘s New Inspection System Offers Promise, but
Problems Need to Be Addressed. GAO/RCED-99-183. Washington, D.C.: June
28, 1999.
General Aviation Airports: Oversight and Funding. GAO/T-RCED-99-214.
Washington, D.C.: June 9, 1999.
Passenger Facility Charges: Program Implementation and the Potential
Effects of Proposed Changes. GAO/RCED-99-138. Washington, D.C.: May
19, 1999.
Airport Improvement Program: Analysis of Discretionary Spending for
Fiscal Years 1996-98. GAO/RCED-99-160R. Washington, D.C.: May 18, 1999.
Air Traffic Control: FAA‘s Modernization Investment Management Approach
Could Be Strengthened. GAO/RCED/AIMD-99-88. Washington, D.C.: April 30,
1999.
Air Traffic Control: Observations on FAA‘s Air Traffic Control
Modernization Program. GAO/T-RCED/AIMD-99-137. Washington, D.C.: March
25, 1999.
Federal Aviation Administration: Financial Management Issues. GAO/T-
AIMD-99-122. Washington, D.C.: March 18, 1999.
Airport Financing: Smaller Airports Face Future Funding Shortfalls.
GAO/T-RCED-99-96. Washington, D.C.: February 22, 1999.
Airport Financing: Annual Funding As Much As $3 Billion Less Than
Planned Development. GAO/T-RCED-99-84. Washington, D.C.: February 10,
1999.
[End of section]
Footnotes:
[1] U. S. General Accounting Office, Aviation Infrastructure:
Challenges Related to Building Runways and Actions to Address Them, GAO-
03-164 (Washington, D.C.: Jan. 30, 2003).
[2] U.S. General Accounting Office, Human Capital Management: FAA‘s
Reform Effort Requires a More Strategic Approach, GAO-03-156
(Washington, D.C.: Feb. 3, 2003).
[3] U.S. General Accounting Office, Aviation Safety: FAA‘s New
Inspection System Offers Promise, but Problems Need to Be Addressed,
GAO/RCED-99-183 (Washington, D.C.: June 28, 1999).
[4] U.S. Department of Transportation, Office of Inspector General,
Report on the Air Transportation Oversight System: Federal Aviation
Administration, AV-2002-088 (Washington, D.C.: Apr. 8, 2002).
[5] U.S. General Accounting Office, Aviation Safety: Better Guidance
and Training Needed on Providing Files on Pilots‘ Background
Information, GAO-02-722 (Washington, D.C.: Aug. 30, 2002).
[6] It is also important to note that if we replaced the AIP figures
for 1999 through 2001 with the AIP figures appropriated for fiscal year
2002 and authorized for fiscal year 2003 in our analysis, assuming no
changes in the distribution of AIP funds, smaller airports would be
able to cover even more of the estimated cost of their planned
development because AIP grant funds for fiscal years 2002 and 2003 are
about $1 billion more than the average annual AIP funding for 1999
through 2001. Because data for funding from other sources were not
available for these years, we used the figures for 1999 through 2001,
the most recent years for which consistent data were available.
[7] U.S. General Accounting Office, Aviation Finance: Implementation of
General Aviation Entitlement Grants, GAO-03-347 (Washington, D.C.: Feb.
11, 2003).
[8] U.S. General Accounting Office, Passenger Facility Charges: Program
Implementation and the Potential Effects of Proposed Changes, GAO/RCED-
99-138 (Washington, D.C.: May 19, 1999).
[9] U. S. General Accounting Office, Aviation Infrastructure:
Challenges Related to Building Runways and Actions to Address Them, GAO-
03-164 (Washington, D.C.: Jan. 30, 2003).
[10] U.S. General Accounting Office, National Airspace System: Long-
Term Capacity Planning Needed Despite Recent Reduction in Flight
Delays, GAO-02-185 (Washington, D.C.: Dec. 14, 2001).
[11] U.S. General Accounting Office High-Risk Series: An Update, GAO-03-
119 (Washington, D.C.: Jan 2003).
[12] DOT Office of Inspector General, Top Management Challenges, PT-
2003-012 (Washington, D.C.: Jan. 21, 2003).
[13] U.S. General Accounting Office, National Airspace System: Free
Flight Tools Show Promise, But Implementation Challenges Remain, GAO-01-
932 (Washington, D.C.: Aug. 31, 2001).
[14] U.S. General Accounting Office, National Airspace System: Better
Cost Data Could Improve FAA‘s Management of the Standard Terminal
Automation Replacement System, GAO-03-343 (Washington, D.C.: Jan. 31,
2003).
[15] U.S. General Accounting Office, Aviation Acquisition: A
Comprehensive Strategy Is Needed to Cultural Change at FAA, GAO/RCED-96-
159 (Washington, D.C.: Aug. 22, 1996).
[16] U.S. General Accounting Office, National Airspace System:
Persistent Problems in FAA‘s New Navigation System Highlight Need for
Periodic Reevaluation, GAO/RCED/AIMD-00-130 (Washington, D.C.: June 12,
2000).
[17] U.S. General Accounting Office, Air Traffic Control: FAA Needs to
Better Prepare for Impending Wave of Controller Attrition, GAO-02-591
(Washington, D.C.: June 14, 2002).
[18] U.S. General Accounting Office, Air Traffic Control: FAA‘s
Modernization Investment Management Approach Could Be Strengthened,
GAO/RCED/AIMD-99-88 (Washington, D.C. Apr. 30, 1999).
[19] Commercial aviation includes both large air carrier operations and
smaller commuter operations. General aviation includes a wide variety
of aircraft, ranging from corporate jets to small piston-engine
aircraft as well as helicopters, gliders, and aircraft used in
operations such as firefighting and agricultural spraying.
[20] U.S. Department of Transportation, Office of Inspector General,
Report on the Air Transportation Oversight System: Federal Aviation
Administration, AV-2002-088 (Washington, D.C.: Apr. 8, 2002).
[End of section]
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