February 5, 2017

Back on December 1, Senator John Thune (R-SD), chairman of the Senate Committee on Commerce, Science, and Transportation, asked the Federal Aviation Administration to report promptly on the status of NextGen deployment, the agency’s multi-year endeavor to modernize air traffic control (ATC). The agency responded on December 15, the deadline given by Thune, in a letter that can be read here.

Presenting a rosier picture on the deployment of NextGen that recent government watchdog reports, the FAA argues in its response that NextGen is an “extremely worthy public investment” on track to meet its original objectives by 2025, that it is delivering real benefits now ($2.72 billion through 2016) and will deliver $160.6 billion in benefits by 2030 with a cost, for government and industry combined, of only $35.8 billion. Additionally, the FAA says that NextGen programs are only 6.4 percent over cost and 6 percent behind schedule.

The FAA also cites its collaboration with industry as a success, allowing the agency to work together with industry stakeholders in deciding what projects to prioritize. Besides working more closely with industry, the FAA is also increasing the level of public engagement efforts to assuage the concerns that some communities have had with new NextGen procedures that concentrate flight paths in smaller areas. (Ed. Note: Like this guy.)

For the FAA, the biggest risks that the agency faces in the deployment of NextGen are outside of their control. Namely, the FAA mentions the need for stable funding and long-term authorization, both of which are in the hands of Congress. Previous issues with sequestration, continuing resolutions, and short-term reauthorizations, made long-term planning more difficult, forcing the agency to focus on NextGen improvements that ensure near-term benefits.

A response to each of Thune’s 12 questions can be found in the FAA’s full response. Some highlights follow:

• On the priority programs agreed with industry stakeholders, FAA has a 96.2 success rate in completing commitments on time, with 102 out of 106 programs complete as schedules, and 60 ahead of time.
• These priority programs are “providing benefits today with little industry investments” – however, “there is no separate return on investment calculated” for them.
• The FAA disagrees with the Inspector General of the U.S. Department of Transportation and his assessment that there is insufficient outreach to stakeholders, namely in terms on expected quantifiable returns on investment. FAA also argues that, despite not being able to provide return on investment figures for every NextGen budget line, “NextGen is delivering improvements in every phase of flight”.
• NextGen will break even for the government in FY2021 with a net present value by then of $54.5 billion. For users, the breakeven point will be the following year, with a net present value of $10.3 billion.
• The payback period for investments by passenger and cargo airlines will be between 2 and 6 years and 5 and 12 years, respectively. Currently only 787 out of around 7,000 commercial U.S. aircraft are equipped with the mandated NextGen equipment
• FAA is working on cybersecurity threat models to be delivered by June 2017.

Eno has been researching and discussing issues around ATC governance, funding, and modernization for several years now, and we’ve compiled all related information (including our 2015 report on ATC reform) in our FAA Reform Reference Page.