May 18, 2004
Members will hear testimony on how the FAA is preparing for future growth in air travel, the status of its modernization program, and how it is controlling its cost growth. Senator Lott will preside. Following is a tentative witness list (not necessarily in order of appearance):
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The Honorable Kenneth MeadInspector GeneralU.S. Department of Transportation
Click here for a PDF version of Mr. Mead's remarks.
Ms. JayEtta Hecker
Click here for a PDF version of Ms. Hecker's remarks.
The Honorable Marion BlakeyAdministratorFederal Aviation Administration
Chairman Lott, Senator Rockefeller, and Members of the Subcommittee: Good morning. It is my pleasure to appear before you this morning to discuss the future of the air traffic system in this country. This is a very timely hearing as we approach Memorial Day weekend and the start of the busy travel season with its daily reminders of the benefits and challenges of air travel in this country. Today, I would like to bring you up to date on what we at the Federal Aviation Administration (FAA) are doing to manage the system while planning for the future. As you all know, September 11th triggered a severe downturn in aviation. However, based on our recent forecasts, aviation is rebounding, and we are taking steps to be ready for its resurgence. We are already working with the aviation community to stay ahead of the curve. In the near term, we have taken several concrete steps to ensure that delays are kept to a minimum. In March, we convened “Growth without Gridlock,” an unprecedented three-day conference with aviation decision makers to develop a strategy to reduce delays this summer. We sat down with representatives of the airlines, pilots, controllers, military, business, regional and GA airports, and a collection of aviation organizations. As a result, working together, we developed a new approach. We agreed on "express lanes," that allow for reduced departure delays by keeping certain parts of the airspace around congested airports clear to allow for more rapid departures. The group also agreed to "delay triggers" that can reduce bottlenecks at our busiest airports by imposing minor delays on the ground at airports sending flights into a congested area until our controllers can clear the congestion. The theory is that by imposing minimal delays when necessary, where necessary, we can reduce major delays that clog the entire system. I must emphasize that these near-term steps do not resolve long-term capacity issues. We must continue to build runways where needed, improve our airspace designs, and field new capital investments, and improve our management of the air traffic system. We at the FAA must act more like a business with a customer focus. This will pay real dividends. That’s why we are working to transform the way the FAA’s Air Traffic Organization (ATO) does business. We have designed the ATO to be a more streamlined, effective means of providing the safest air traffic control in the world to the most complex airspace in the world. The ATO will execute our Flight Plan, implement our Operational Evolution Plan (OEP) and lead us into the future with the Joint Planning Development Office (JDPO). As you know, last August, after a long and comprehensive search, Russ Chew became the ATO’s first Chief Operating Officer (COO), a position created by statute under the leadership of this Committee. He is primarily responsible for all aspects of providing air traffic services and products. Our foundation has not changed: any conversation about air traffic is premised upon the uncompromising commitment to safety by Secretary Mineta and me. Every decision we make is done with the safety of the flying public in mind. I am pleased to announce that the three-year commercial airline accident rate is the lowest in history. That’s a tribute to the highly skilled men and women of the FAA and the industry we support. Air Traffic Organization Thanks in large part to the continuing support from this Committee, the FAA is completely restructuring how we manage air traffic services. Congressional support for greater efficiency and accountability at the FAA has enabled FAA to be more flexible, adaptable, and business-like. Today, I want to briefly describe how our recent changes will position us to meet once again a growing aviation system. Those who use our system want an agile organization that can create greater access -- and that is what we intend to provide. Indeed, with every change, we will continue to ensure that safety remains our top priority. Accordingly, we have added a new office --the Air Traffic Safety Oversight Service--to monitor the safety of our air traffic operations and help us ensure accountability. We have placed this office outside the ATO to ensure its independence, locating it within the FAA’s Office of Regulations and Certification. We have also added a Vice President for Safety Services inside the ATO, and we will conduct risk-targeted, data-informed audits that will provide trend analysis and review systemic issues. To obtain a more results-oriented, more accountable process that will reduce future operational costs, we are also integrating the authority and accountability for capital investments within the ATO. In the past, capital programs and operations have been managed separately, and success had been driven and defined by building the system, not measuring the operational benefit. Thus, the definition of success was not always results oriented. Further, from a fiscal perspective, the capital budget was inadequately linked to the future operating costs of any given procurement. Consequently, operational costs have increased year after year with little consequence to capital decisions or the program portfolio. Through a more integrated approach to managing capital and operations, past mistakes will be corrected and the ATO will have greater fiscal insight to make long-term investments. We expect to be able to reduce our unit operating costs and fund near term operational improvements that pay the biggest dividends. To do this, we are developing new financial management tools to pinpoint unit cost and productivity, which will enhance our fiscal effectiveness. Field managers need to know the full import of their financial decisions and headquarters’ managers need to know which facilities are most efficient. In the future, each Vice President will know the value of their decisions by measuring their service performance -- in terms of safety and efficiency -- and what resources are required to achieve it. To that end, we are developing new cost reports that include labor distribution information. Timely reporting on safety, costs, and operational performance will give us a better understanding where our resources are being used. The ATO must ensure the highest rate of return for each dollar invested. Ensuring organizational excellence means more people actually providing the products and services, with fewer, more effective people managing them. Russ Chew, our COO, has already flattened the organization, which has resulted in better communication and more efficient decision-making. He now is six management layers from the controller or technician versus 11 in the original structure. We are increasing our target average ratio of the number of eight staff employees per manager. But streamlining the organization, in and of itself, means little unless you empower the managers by creating new financial reports and processes that give them the information necessary to make informed, data-driven decisions, and then be accountable for them. We are not waiting for our final realignment before making changes. No longer will one line of business make purchasing decisions for another line of business to use. Even though the ATO was only started in February, we are optimistic about seeing some early productivity and efficiency improvements by the end of this fiscal year. Future Aviation Capacity and Delays We have put in place an even more effective organization that will help us meet the air traffic demands of this century. This more agile organization will be better positioned to implement our Flight Plan and the Operational Evolution Plan. The Flight Plan links the agency’s activities through 2008 to our budget requests. It aligns all of our business plans to ensure accountability at all levels. Beyond the Flight Plan, the OEP, a rolling ten-year plan, takes our capacity and efficiency plans out a decade to 2014. Looking even further into the future, the JPDO is crafting a plan for the Next Generation Air Transportation System to meet air traffic demand in the long-term, out to 2025. The OEP’s objective is to add capacity enhancements that will accommodate a 30 percent increase in demand over the ten-year period. Since the plan’s inception in 2001, there has been a 6.5 percent increase in effective capacity (i.e., the amount of traffic that can be handled within a 14 minute delay) due to OEP activities and industry changes. The OEP’s capacity solutions are divided into four core areas: Arrival/Departure Rates, Airport Weather, En Route Congestion, and En Route Severe Weather. Within each core area, we have identified specific strategies for addressing known or projected capacity problems. The OEP also tracks 35 airports that are the most heavily traveled and located in the most densely populated areas because the OEP activities at these airports will have the greatest positive effect on the system. We are increasing capacity and reducing delays in a number of ways. First, let me start with runways, for they are the means to provide the single most significant capacity increases and delay reduction. Runways are expected to account for a significant part of the overall expected 30 percent gain in capacity over next ten years. In the last five years, eight new runways have opened at the 35 OEP airports allowing almost a million more operations annually. The OEP currently includes seven runway projects (six new runways and one runway extension) that will be commissioned in the next five years allowing these airports to accommodate an additional 840,000 more operations annually. Taken together, these 15 runway projects represent a 12 percent increase in capacity over the period from 1999 through 2008. New runway construction and runway extensions are the most effective method of increasing passenger throughput, or “arrival and departure rates”. Because the 35 OEP airports account for 73 percent of all passenger enplanements, by increasing the throughput of those passengers’ flights, we affect the entire system. We know that runways themselves are just one part of the solution and cannot maximize capacity alone. For example, studies have shown that 40 to 60 percent of the projected capacity gained from new concrete will be lost without the necessary changes to terminal and en route airspace. The OEP is instrumental in attaining the maximum capacity increases from a new runway. It provides a coordination mechanism to ensure that all procedures, navigational equipment and pilot training are ready when new runways are opened. A second critical element of the OEP, and of particular interest to this Committee, is our ongoing National Airspace Redesign (NAR). The U.S. airspace has remained largely unchanged while technology, demand and diversity of aircraft using the system have advanced. The NAR is a multi-year initiative to review, redesign, and restructure the nation’s airspace to meet the increasing operational demands on the national airspace system. This effort is addressing, both locally and system-wide, the congestion, complexity and limited departure points in the current airspace that cause operation. In addition, next January, we plan to implement a program in the airspace over the continental U.S. that will enable us to reduce vertical separation at certain altitudes that will make six additional, more fuel efficient, flight levels available for aircraft operations. It will enhance both air traffic control flexibility and efficiencies for our customers. Canada and Mexico are planning for full implementation at the same time. This program, known as the Reduced Vertical Separation Minimum (RVSM), has been successfully implemented in Europe, the Pacific Ocean, Australia and parts of Canadian airspace already. Redesign efforts will occur at the higher altitudes as well as in the terminal area, taking advantage of new navigational technologies such as advanced area navigation (RNAV) and Required Navigational Performance (RNP) that increase the potential for pilots to fly more efficient routes and altitudes they select. This is in contrast to the more rigid assigned routes and altitudes that have been the basis for air traffic control in congested airspace. Performance procedures will also allow for more efficient use of the constrained terminal airspace. Benefits associated with these changes will be dependent on the level of equipage of aircraft. While non-equipped aircraft will still be accommodated, airspace and procedures will be designed to offer additional benefits for those aircraft having additional capabilities. Recent airspace redesign has already proven its value in several critical regions of the country. For instance, because airspace between Chicago and the New York often clog capacity, we created new sectors to mitigate these bottlenecks. A new departure fix at Philadelphia has increased aircraft arrivals and departures to the west. Modeling to support this new route projected departure increases of up to 4 to 5 aircraft an hour, thus reducing delays at a critical east coast hub airport. Moreover, two new off-shore radar sectors created for our New York Center have permitted 65% of departures to leave on time. They otherwise would have been delayed or cancelled due to sever weather. These and other near-term solutions show a real benefit to the traveling public and have already provided FAA customers with $100 million per year in savings. Recognizing that there are limited resources, the OEP examines solutions that would make use of existing systems, especially aircraft avionics. At the same time we continue to pursue new technology that brings capacity enhancements. In some cases, we are just beginning implementation of new tools and making investment decisions so that our customers can expect to see increased benefits over time. For example, we are providing improved weather products to ATC facilities that can help our controllers minimize traffic flow disruption from fast moving weather by optimizing safe routes that avoid the storm. We are also providing our controllers with new tools to help them manage traffic levels and the predicted traffic increases. Some of our controllers now have the tools to predict spacing conflicts, with the User Request Evaluation Tool, known as URET. At the ten sites where URET has been deployed, airlines are saving both time and fuel and other operating costs. We are in the process of equipping the rest of our en route centers with this technology. Once that phase is complete, we project an increase of direct routings by 15% which will further reduce users operating costs. Also, controllers at five of our facilities can sequence arriving and departing aircraft with technology known as Traffic Management Advisor (TMA). At each location where TMA is now in use, we get a three to five percent increase in capacity. All of these tools ultimately reduce delays. We are also seeing the safety and capacity benefits from technology that supplements radar coverage. Pilots and air traffic controllers can “see” aircraft and ground vehicle traffic with greater precision creating additional airspace, runway and taxiway efficiencies. What this means is that we can now provide “radar like” service in remote airspace. Alaska’s Capstone program is using this technology and seeing the benefits of shorter, more efficient routings during inclement weather. We also expect to use this technology to increase the arrival and departure rate at some airports. The diverse application of this technology may also allow visual approaches to continue into marginal visual flight rules conditions as bad weather moves into the approach airspace, reducing the need to divert aircraft. We are always working to anticipate changes in aviation trends that require us to adjust our strategies for increasing capacity. Today, the OEP focuses on 35 of the Nation’s busiest airports, but it will be expanded to include other airports needing capacity in the future. Just over a year ago, we began assessing the capacity of the Nation’s airports given the anticipated demand for air travel. This analysis, A Look into the Future: An Analysis of Airport Demand and Operational Capacity Across the NAS, should be released this month. We looked at socioeconomic trends in demand with changes in population and income and compared those to existing and forecast capacity. We identified locations where additional capacity is needed now, and where capacity would be needed in 2013 and in 2020. We also found that if certain OEP capacity targets are not met, then we will experience even greater than anticipated capacity constraints at airports already identified as needing capacity in 2013 and 2020. The long-term projections of the Capacity Study support the OEP initiatives as well as the JPDO’s efforts to assess system growth out to 2025. The Capacity Study tells us that the FAA and the aviation industry must continue to work together to ensure that adequate capacity is in place when and where needed, and reinforces the importance of keeping pace with current and future demand, and publishing a formal plan to identify and track our improvements. For the development of longer-term plans and concepts, and under the direction of Vision 100, we have established the JPDO. Its mandate is to coordinate goals, priorities, and research activities within the Federal Government as well as with United States aviation and aeronautical firms to create a National Plan – a roadmap for our future aviation system in furtherance of the Next Generation Air Transportation System Initiative. In developing the National Plan, the JPDO will establish the 2025 target and capture the major priorities that represent the coordinated decisions of member agencies. While these decisions will be in broad four-to-five year windows, it will be the individual agencies that will prioritize the specific projects and programs needed to carry out their individual portions of the National Plan. Both the Secretary and I believe that the combination of these plans and programs will position us to meet future needs of the system. This would not be possible without the unprecedented commitments of support provided by the Departments of Defense, Commerce, and Homeland Security, NASA and the White House Office of Science and Technology Policy. Even the JPDO motto - “New Ideas Are Welcome” - demonstrates a willingness to think beyond what otherwise might be considered “traditional” as they create the roadmap for the future. These efforts represent unprecedented collaboration among all aviation system stakeholders ranging from government to industry. At the forefront of the National Plan’s goals for the future air transportation system, is the goal of increased capacity. While we are still building the plan that will take us to 2025 and beyond we expect to see an “early victory” for future capacity. As you know full well, weather creates significant delays—delays that we can’t eliminate but delays that can be “managed” with skill, technology and procedures. To this end, the JPDO is developing an Integrated Plan for Aviation Weather, the first step toward bringing all of these efforts together for maximum benefit. We are encouraged by this early success but it represents a fraction of the work that must be done to maintain our leadership role in aviation and to create the infrastructure for the future system. Cape Town Treaty Finally, Mr. Chairman, you had requested that we briefly address an issue that is particularly important to the aviation community: the Cape Town Treaty, which is now awaiting action by the Senate Foreign Relations Committee. The Treaty is composed of two instruments: the Cape Town Convention, containing the basic terms and provisions that underlie the regime that reflects modern asset-based financing practices in this country, and the Aircraft Protocol, which makes the Treaty operational specifically as to aircraft, aircraft engines and helicopters above a certain size. Once in force, the Treaty will provide significant economic benefits both here at home and abroad. By creating an internationally recognized system of rights and enforceable remedies in aircraft equipment, the Treaty reduces the risk assumed by creditors in financing transactions and thus should reduce the costs of those transactions. For countries such as the U.S. that manufacture aircraft, those reduced costs should encourage increased exports and export-related economic growth--not just by major manufacturers, but also by smaller companies that make the parts and provide related aviation services. In addition, the Convention and Aircraft Protocol will benefit the companies that provide the capital that finance the sale of such equipment around the world. U.S. financial institutions are major players in aircraft financing. The creditor protections provided for by the Convention and Protocol will benefit them by significantly reducing the risk they now incur when financing aircraft in countries whose laws do not meaningfully protect creditors in the event of a default or insolvency. The full implementation of this Treaty should hasten the replacement of older equipment with state-of-the-art aircraft, making the world’s skies safer and cleaner as newer equipment is acquired and brought into service. This will benefit aviation both within the United States and abroad, particularly in developing countries whose carriers have had to pay high interest rates or who have not been able to access the commercial credit markets at all because of their credit risk. In short, Mr. Chairman, this Treaty is a “win-win-win” proposition. It is a fine example of how international legal cooperation can benefit all parties. I want to highlight the extraordinary collaborative nature of the Cape Town Treaty effort. It is an example of what a strong government/industry partnership can produce. The financing provisions on secured interests under the Treaty do not require any implementing legislation here in the U.S., because they are fully consistent with U.S. law under the Uniform Commercial Code. To this extent, the Treaty is self-executing. However, certain technical amendments to the FAA’s Civil Aircraft Registry functions are required to fully integrate our Registry with the new, fully computerized International Registry that will be established under the Treaty. Last week, the House Transportation and Infrastructure Committee favorably reported a bill that we support, H.R. 4226. Although it is somewhat different from the Administration’s proposal that we sent to Congress last fall, it nevertheless accomplishes essentially the same goal—full implementation of the Treaty. The bill designates the FAA’s Registry as the “entry point” for authorizing filings to the International Registry while maintaining the full documentation system of the FAA registry. It also provides for expedited rulemaking so that the FAA may quickly update its regulations and put into place all requirements for implementing the Treaty. And importantly, to avoid any confusion over what legal standards apply during the rulemaking process, the bill provides that the Treaty’s provisions would supercede inconsistent FAA regulations. We support the bill and look forward to working with this Committee as the Treaty and legislation advance. That concludes my testimony, Mr. Chairman. I would be pleased to answer any questions you may have.