Avoiding Gridlock in the Skies: Issues and Options for Addressing Growth in Air Traffic

CRS Report for Congress
Avoiding Gridlock in the Skies:
Issues and Options for
Addressing Growth in Air Traffic
Updated January 19, 2006
Bart Elias
Specialist in Aviation Safety, Security, and Technology
Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

Avoiding Gridlock in the Skies: Issues and Options for
Addressing Growth in Air Traffic
A major challenge facing aviation policymakers is developing a strategy for
increasing the capacity of the national airspace system to keep pace with projected
growth in demand for air travel. While Transportation Secretary Norman Mineta’s
vision for the next generation air traffic system aspires to triple system capacity by
2025, FAA projections suggest that capacity enhancements will struggle to keep pace
with growth in demand at major airports, in busy airspace around major metropolitan
areas, and along certain busy high altitude corridors. Factors, including the
continuing population shift into major metropolitan areas, the increased reliance on
smaller jets in both airline and general aviation operations, and increased point-to-
point service, are expected to spur growth in those aviation operations that impact
high altitude airspace and contribute to increased congestion at capacity constrained
The current aviation system is constrained by limited available capacity at
critical major metropolitan airports and is increasingly unable to meet projected
future demand. The system also is constrained by outdated technology and
procedures that limit the utilization of available airspace. In addition to meeting
these challenges, the FAA also faces internal challenges to meet future controller
staffing needs given that almost half of its existing controller workforce is expected
to retire over the next decade. The FAA also faces significant challenges in
reforming its organizational culture which historically has been blamed for consistent
cost overruns, schedule slips, and performance shortfalls in major air traffic
modernization projects.
Two new organizations within the FAA — the Air Traffic Organization (ATO)
and the Joint Planning and Development Office (JPDO) — are viewed as key
elements of organizational reform that may be closely scrutinized by Congress and
administration policymakers to ensure that they effectively manage the
implementation of near term and long range capacity enhancement efforts. The key
challenges for these organizations is to develop and execute capacity expansion plans
that appropriately invest in airport infrastructure, air traffic system technology, and
operational procedures to keep pace with expected growth in demand for air travel
while maintaining or improving upon current levels of safety and efficiency.
Possible strategies for meeting these objectives include implementing free flight
concepts that will allow more autonomy and direct routing of aircraft to better
optimize airspace utilization; safely reducing aircraft separation standards to increase
capacity in crowded airspace; effectively implementing automation and decision
aiding technologies to improve airspace utilization and traffic flow; and expanding
and reconfiguring existing airport infrastructure. In addition, demand management
strategies, such as curtailing peak hour flights or implementing slots or quotas may
be examined as means to align demand with available capacity at congested airports.
The FAA’s investment strategy for meeting these capacity needs is also likely to be
of considerable interest in future years as significant funding challenges may arise
because of possible aviation trust fund shortages and a history of significant cost
overruns on major airspace modernization projects. [This report will not be updated.]

Factors Affecting Growth in Air Traffic Operations.......................3
Impact of Overall Economic Growth on Aviation.....................3
Population Growth in Metropolitan Areas...........................4
Increased Use of Smaller Jets....................................6
Regional Jets.............................................6
Business Jets and Mini-Jets..................................8
Low-Cost Carriers............................................12
Increased Point-to-Point Service.................................13
The Future of Hubs...........................................13
The Net Effect on Capacity Straining Operations....................15
Factors Affecting Airport and Airspace Capacity ........................16
Available Capacity at Major Airports.............................16
Airspace Design..............................................18
Controller Staffing............................................19
FAA’s Organizational Culture...................................23
Air Traffic Organization...................................24
Joint Planning and Development Office.......................25
Cost Overruns...............................................27
Impact of Under-capacity on Flight Operations..........................29
The Summer of 2000..........................................29
Some Possible Delay Remedies..................................31
The Relationship Between Capacity and Delay......................31
Impact of Congestion on Aviation Safety..............................33
Runway Incursions............................................34
Loss of Separation and Near Mid-Air Collisions.....................39
Possible Strategies for Enhancing Capacity While Maintaining Safety and
Effi ci ency ..................................................42
The “Free-Flight” Concept......................................42
Reducing Separation Standards..................................45
Automation and Decision Aiding for Air Traffic Management..........48
Airport Expansion and Reconfiguration...........................49
Market-Based Options.........................................51
De-peaking Strategies and Incentives.........................52
Slots and Quotas.........................................54
Funding Challenges...............................................55
Status of the Airport and Airways Trust Fund.......................55
FAA’s Facilities and Equipment Account..........................59
Summary of Findings..............................................61

List of Figures
Figure 1. Population Growth in Metropolitan Areas Since 1950.............5
Figure 2. Fleet Composition for Regional and Commuter Operators
(Passenger Aircraft > 30 Passenger Seats)...........................7
Figure 3. Fleet Utilization for Regional and Commuter Operators
(Passenger Aircraft)............................................8
Figure 4. Fractional Ownership of Aircraft.............................10
Figure 5. Historic Data and Forecast Growth for General Aviation and
Air Taxi Turbojet Operations...................................11
Figure 6. Historic Data and Forecast Growth in Airborne Hours............15
Figure 7. Average Delay (1/1998 — 11/2005)..........................30
Figure 8. Percent of Flights Delayed (1/1998 — 11/2005).................30
Figure 9. The Tradeoff Between Expanding Capacity and Mitigating Delay...32
Figure 10, Runway Incursion Rate....................................35
Figure 12. Continuum of Government Involvement in Market-Based
Strategies to Alleviate Aviation Congestion........................51
Figure 13. Income and Uncommitted End of Year Balances in the Airport
and Airways Trust Fund.......................................56
Figure 14. FAA Facilities and Equipment Funding.......................60
List of Tables
Table 1. Mitigation Strategies to Prevent Runway Incursions and Reduce
Their Severity...............................................38
Table 2. Risk Elements and Considerations for Implementing Free Flight
Concepts ....................................................45
Table 3. Projected Aviation Trust Fund Revenues Before and After
September 11, 2001 ($ Billion)...................................57

Avoiding Gridlock in the Skies: Issues and
Options for Addressing Growth in Air Traffic
The demand for air travel over the next 15 years is expected to grow
significantly necessitating the expansion of the national airspace system. Passenger
boardings are expected to increase by almost 60% compared to pre-September 11,
2001 levels.1 Systemwide, air traffic operations are expected to increase by about
15%, including a 30% growth in air transport and commercial operations. At the
nation’s 35 busiest airports, total operations are expected to increase more than 34%
by 2020. To expand system capacity to meet this projected growth, the Department
of Transportation has unveiled an ambitious plan calling for a threefold increase in
systemwide capacity over the next 15 to 20 years. However, at least in the near-term,
planned capacity enhancement projects are expected to lag slightly behind projected
growth in aviation operations. Therefore, to meet future demand novel approaches
may be needed to expand system capacity while maintaining system efficiency and
Speaking before the Aero Club of Washington in January 2004, Secretary of
Transportation Norman Mineta unveiled his plan for the future of the national
airspace system and set the bar for expanding its capacity:
Unless we act now, our leadership [in aviation and aerospace] is in jeopardy, and
we could be facing gridlock in our national airspace. ...Therefore, I have
launched an initiative to galvanize America’s energies to design the Nextst
Generation Air Transportation System. A cleaner, quieter system based on 21
century technology that will offer seamless security and added capacity to relieve
congestion and secure America’s place as a global leader in aviation’s second
century. ...We will harness technology in a way that triples the capacity of our2
aviation system over the next 15 to 20 years.
Experts have expressed concerns that, unless the FAA addresses the impact of
anticipated growth in air traffic, flight operations are likely to be constrained by
under-capacity in the national airspace system, especially at the nation’s busiest
airports. While clearly a significant increase in capacity is likely to be needed,
tripling system capacity — as Secretary Mineta’s vision aspires to do — appears to
be an extremely lofty goal to attain. Nonetheless, additional capacity is especially
needed at several of the nations busiest airports that are already operating at or

1 Based on FAA Terminal Area Forecast (TAF) model. Pre-September 11, 2001
comparisons use 2000 data as the comparison basis.
2 Remarks for the Honorable Norman Y. Mineta, Secretary of Transportation. Securing
America’s Place as Global Leader in Aviation’s Second Century. Aero Club of
Washington, Washington, DC, January 27, 2004. U.S. Department of Transportation, Office
of Public Affairs.

slightly above their theoretical capacity limits during peak travel times and in poor
weather scenarios.3
In fact, if capacity could be doubled over the next 20 years, these enhancements
will likely be sufficient to provide enough headroom to accommodate projected
growth in aviation operations for about the next 30 years. However, many remain
skeptical whether even this goal is achievable and worry that, unless significant
changes occur, the national airspace system is destined to be constrained by under-
capacity at the nation’s busiest airports and an inability to expand the infrastructure
and effectively implement technology and procedural changes to air traffic operations
to alleviate congestion and delay. These critics point to FAA’s historic failures to
effectively manage major acquisition projects, large looming costs for air traffic
operations and capacity enhancement projects, and possible shortfalls in the aviation
trust fund as major hurdles standing in the way of progress to fully implement the
next generation air transportation system (NGATS).
Several challenges have been identified that may limit the FAA’s ability to
significantly increase the capacity of the national airspace system over the next 15 to
20 years. One significant challenge is overcoming FAA’s traditional organizational
culture that has, in the opinion of many, failed to effectively develop a
comprehensive national strategy for enhancing capacity and failed to effectively
manage major acquisition efforts designed to address capacity needs.4 A second
factor is that there is a relatively high degree of uncertainty and risk associated with
many of the proposed programs designed to enhance capacity. While some of that
risk can be tied to FAA’s past performance in managing airspace modernization
projects, it should also be recognized that the complexity of the technology and the
national airspace system pose significant technical challenges that expose both short-
term and long-range plans for enhancing aviation capacity to considerable risk. A
third factor is the potential lack of available capital to fund capacity-related projects
and programs. Possible revenue shortfalls in the airport and airways trust fund and
potential cuts to the FAA’s facilities and equipment account could significantly
impede progress toward enhancing capacity. If these current funding challenges
persist, FAA is likely to face difficult decisions in prioritizing capacity enhancing
projects over the next several years.
This report examines: factors influencing the forecast growth and changing
characteristics of flight operations in the national airspace system; factors affecting
the ability to expand airport and airspace capacity to meet future demands; and the
impact of capacity constraints on flight operations and aviation safety. This report
also examines several possible strategies to expand system capacity, many of which
are being implemented or evaluated by the FAA and Congress. These strategies fall
into four broad categories: 1) airport expansion and infrastructure improvements; 2)
technology options to improve traffic flow and safely reduce aircraft separation; 3)

3 See Federal Aviation Administration. Airport Capacity Benchmark Report 2001.
4 See, especially, U.S. General Accounting Office. Air Traffic Control: FAA’s
Modernization Efforts — Past, Present, and Future.” Statement of Gerald L. Dillingham,
Director, Physical Infrastructure Issues Before the Subcommittee on Aviation, Committee
on Transportation and Infrastructure, House of Representatives, October 30, 2003.

strategic plans and tactical tools to improve traffic flow and respond to delay-
inducing events; and 4) market based solutions to alter the demand characteristics of
flight operations at busy airports and in congested airspace. Finally, this report
examines the fiscal needs and funding challenges associated with implementing both
near-term and long-term programs to improve aviation system capacity.
Factors Affecting Growth in Air Traffic Operations
Several factors are expected to affect the growth in air traffic operations over the
next several years. Behind all of these factors is the country’s overall economic
growth. Another key underlying factor is the growth in U.S. population, and more
importantly, the population shift into major metropolitan areas and corresponding
economic growth in these areas. Additional factors include the increased use of
smaller commuter jets, more point-to-point routes for airline service, and significant
growth in business jet operations. The net result of these factors is a forecast
average annual growth rate of about 4.4% in airborne hours for airlines (including all-
cargo carriers), commuter operators, and business jets. These operations will most
significantly impact the busiest commercial and general aviation reliever airports in
the United States, airspace in major metropolitan areas, and certain busy high altitude
Impact of Overall Economic Growth on Aviation
Future demand for aviation is likely to closely track projected growth in gross
domestic product (GDP). In fact, projected GDP growth is the main factor
considered in FAA’s forecast assumptions for aviation demand over the next 10 years
and has historically been an excellent long-term predictor of growth in the aviation
industry. Analysis of historic data from 1976 to 2003 indicate that the correlation
between GDP and passenger boardings is 0.97, and the correlation between GDP and
the total number of air carrier, air taxi, and other commercial operations is 0.94.5
Over the past few years, however, this has not been the case. The response to the
September 11, 2001 terrorist attacks, a decline in air travel during the initial phase
of the U.S. war with Iraq, and impact from the 2003 severe acute respiratory
syndrome (SARS) outbreak have all been identified as contributors to the significant
decline in aviation operations over the past four years that could not have been
foreseen. In fact, when the years between 2001 and 2003 are removed from the
analysis, the correlation between GDP and passenger boardings rises to almost 0.99
and the correlation between GDP and commercial operations is almost 0.97. As the
aviation industry recovers from these unprecedented events, passenger demand and
operations are expected to resume a track of growth that closely parallels the forecast
rise in GDP barring any unforeseen events that could significantly alter this projected
growth pattern.

5 CRS calculations of correlation between OMB historical data of GDP and FAA terminal
area forecast (TAF) historical data of systemwide enplanements and operations. Correlation
values measure how closely related two variable are and range between -1 and +1. Since
the correlations between GDP and passenger boardings and GDP and flight operations are
close to 1, these variables are considered to be closely related. However, this does not imply
that there is any causal relationship between these variables.

While the FAA expects that other economic factors, such as the consumer price
index (CPI) and fuel costs, will have a negligible impact on forecast growth in
aviation operations over the next 10 years, anticipated changes in the shape of the
aviation industry may raise the significance of these factors in predicting future
demand for aviation operations. For example, rising fuel costs to the aviation
industry could drive up airline ticket prices thus slowing demand for air travel. Such
factors are likely to become more important considerations as the aviation industry
shifts toward a consumer base consisting of more leisure travelers whose purchasing
patterns tend to be more cost sensitive. Competition among low-cost carriers in a
market of cost conscious consumers with ready access to ticket pricing data over the
internet is likely to keep airline prices relatively low and demand high. The
emergence of other aviation options for business consumers, such as fractional
ownership programs for business jets and lower cost mini-jets, may result in further
shift the demand characteristics for airline travel and alter the composition of
operations in the national airspace system.
Population Growth in Metropolitan Areas
Since the end of World War II, major metropolitan areas have grown
significantly (see Figure 1). By 2000, more than 80% of U.S. residents were living
in metropolitan areas. Fifty of these metropolitan areas had populations greater than6

1 million people and these areas were home to 57% of the total U.S. population.

The resulting impact of the increasing population concentration in metropolitan
areas on aviation is reflected by a high density of air traffic operations and concerns
over capacity at a relatively small number of commercial and general aviation
reliever airports located within these major metropolitan areas. In fact, out of more
than 400 airports with commercial service in the United States, the FAA currently
identifies only 35 commercial airports in its near-term strategic plan for enhancing7
the capacity of the national airspace system — the operational evolution plan (OEP).
All of the airports listed in the OEP are located in major metropolitan regions with
more than one and one-half million inhabitants. These 35 airports, referred to as the
OEP-35 airports, handled 57% of all commercial operations at towered airports
between FY1999 and FY2002.
While capacity constraints, delays, and environmental considerations are likely
to be the most significant issues for these large metropolitan airports, the continued
availability and adequacy of service is likely to be a challenge for airports outside of
these major population centers, many of which have already lost air service as a result8
of airline industry cutbacks. In other words, while major metropolitan areas are
likely to face challenges in meeting aviation capacity needs, airports in small cities

6 Frank Hobbs and Nicole Stoops. Demographic Trends in the 20th Century: Census 2000
Special Reports. U.S. Department of Commerce, U.S. Census Bureau, CENSR-4,
November 2002.
7 Federal Aviation Administration. Operational Evolution Plan (Version 6.0), 2004-2014.
8 Michael Allen. Crisis in Small Community Air Service. BACK Aviation Solutions: New
Haven, CT.

may face difficulties in maintaining adequate air service. Thus, aviation capacity is
largely a geographically specific issue affecting service to and from major
metropolitan commercial and general aviation reliever airports and the flight
corridors interconnecting these major population centers.
Figure 1. Population Growth in Metropolitan Areas Since 1950
60. P
20ercent of U.S
0 1950 1960 1970 1980 1990 2000
SuburbsCentral Cities
Source: U.S. Census Bureau.
Besides population growth, high income growth in a metropolitan region may
increase demand for both airline travel and business aviation. Recognizing the
influence of both population and income growth in major metropolitan areas on air
traffic demand characteristics, the FAA and the MITRE Corporation’s Center for
Advanced Aviation System Development (CASSD) recently released a detailed study
of aviation capacity needs over the next 15 years.9
The study identified five airports across the country where additional capacity
is already needed: Hartsfield-Jackson Atlanta International (ATL), Newark Liberty
International (EWR), New York LaGuardia (LGA), Chicago O’Hare (ORD) and
Philadelphia International (PHL). Atlanta, Georgia was identified as the one
metropolitan area already in need of additional capacity because it lacks a second
commercial airport to offload some of the ATL traffic. However, the study found
that the completion of a fifth runway at ATL should meet Atlanta’s additional
capacity needs, at least until 2020.
The study concluded that by 2013, 15 airports will need additional capacity
improvements, assuming planned enhancements at airports are completed before
then. All three major airports in the New York metropolitan area (EWR, LGA, and
Kennedy International (JFK)) made the list as did three airports in the Los Angeles

9 Federal Aviation Administration and The MITRE Corporation. Capacity Needs in the
National Airspace System: An Analysis of Airport and Metropolitan Area Demand and
Operational Capacity in the Future. June 2004.

area. If planned improvements don’t occur, the total number of airports needing
additional capacity may rise as high as 26.
According to the study, by 2020, the number of airports needing additional
capacity will grow to 18 assuming planned enhancements stay on track before then.
An additional 23 airports were identified as potentially needing additional capacity
by 2020 if planned improvements are delayed or cancelled. For some metropolitan
areas, the outlook is not particularly promising. In Los Angeles, for example, if
planned enhancements don’t occur, additional capacity will be needed at all major
commercial airports and two key reliever airports. Even with the planned
enhancements in place, the Los Angeles metropolitan area will face significant
capacity constraints in the next 10 to 15 years.
While major metropolitan areas like Los Angeles and New York face significant
challenges to meet aviation capacity needs over the next 15 years, capacity needs are
not limited to the largest metropolitan areas and the current busiest airports. For
example, the study found that the fast-growing metropolitan areas of Austin and San
Antonio, Texas, and Tucson, Arizona, while not included in the OEP-35, are
anticipated to have a significant need for additional capacity over the next 15 years
spurred by large economic growth. In sum, the capacity needs study identifies
significant challenges ahead for meeting aviation capacity demand in large and fast-
growing metropolitan areas.
Increased Use of Smaller Jets
Besides population growth in metropolitan areas, the shift toward using more
smaller jets in scheduled service and expansion of the business jet market is expected
to increase the operational load of the national airspace system.
Many are anticipating the arrival of Airbus A-380, the world’s largest
commercial airliner, which is expected to enter service in 2006. However, the A-380
is targeted at long-range international operations and is expected to have a negligible
impact on airspace capacity considerations domestically, especially since no domestic
passenger airline has placed an order for even one of these airplanes to date. In fact,
the projected trend in the domestic U.S. market is actually toward smaller jets rather
than larger jets both in the airline industry and also in charter and general aviation
operations. The net effect of large anticipated growth in the market and utilization
of these smaller aircraft is an expected increase in traffic at both commercial and
general aviation reliever airports.
Regional Jets. Regional and commuter airlines have been, and continue to
convert their fleets from turboprop aircraft to faster regional jets that appeal to
consumer demand for jet service. Regional jet manufacturers, chiefly Canadian
maker Bombardier and Brazilian manufacturer Embraer, continue to produce large
numbers of aircraft for the 50 to 90 seat regional market and are now developing
larger aircraft that will seat up to 120 passengers to compete with the Boeing 717 and
Airbus A319. FAA data indicate that the number of regional jets flown by regional
and commuter carriers has increased by about 550% since 1998. The growth in
regional jets is expected to continue, but at a reduced rate: the number of regional jets
is expected to double compared to current fleet size by 2015. This increase in

regional jets will only be slightly offset by a modest decline in the use of turboprop
aircraft. Overall a net increase in regional and commuter fleet size of 50% over
current levels is forecast (see Figure 2).
Figure 2. Fleet Composition for Regional and Commuter Operators
(Passenger Aircraft > 30 Passenger Seats)

Source: FAA Aerospace Forecasts FY2005-2016.
While the size of the overall regional and commuter fleet (including turboprop
and turbojet aircraft) is anticipated to increase by 50% over the next 10 years, the
utilization of these aircraft is expected to increase by 60% over that same time period,
indicating an increased reliance on these smaller airplanes. Like fleet size, utilization
of commuter and regional jets is expected to increase more than twofold by 2015 (see
Figure 3).
However, skeptical industry experts have questioned these optimistic growth
projections for regional jets. These analysts point out that — along highly
competitive routes with competition from low-cost carriers — operating small jets
is more costly than operating larger jets simply because there are fewer revenue-
generating seats to offset the fixed unit operating costs. They reason that, if cost,
schedule, and other factors are relatively equal, consumers would rather travel on the
larger jets anyway. Skeptical analysts also caution that airlines have over-bought
regional jets in the 50 passenger seat size range, and there may soon be a glut of these

50-seat aircraft on the used aircraft market.10

Regional jets play a critical role in serving smaller markets. Their future,
therefore, depends to a large extent on airlines finding ways to make a profit serving
these markets. Since the regional jets have historically been run by network affiliates
10 Eric Torbenson. “Smaller jets lift profits, but have airlines overindulged?” The Dallas
Morning News, June 5, 2004.

of major legacy air carriers, many of whom are now financially troubled, the once
certain prospects of continued growth in the regional jet market reflected in the FAA
forecasts is now much more doubtful. What there is greater certainty about, however,
is the forecast growth in passenger volume that is driving these trends. How regional
jets fit into the airlines strategic plans to meet this demand is much less certain.
Perhaps they will grow as forecast, or perhaps they will be replaced by large
passenger jets in many markets. If regional jet operations do grow as forecast, they
are likely to have a very large impact on system capacity, especially at busy hub
Figure 3. Fleet Utilization for Regional and Commuter Operators
(Passenger Aircraft)

Source: FAA Aerospace Forecasts FY2005-2016.
Business Jets and Mini-Jets. While negligible growth is expected in
operations of piston-engine and turboprop aircraft used for general aviation and air
taxi operations over the next 10 years, significant growth in business jets and very
small jet aircraft, referred to by many as mini-jets, is anticipated by some. Whether
this trend plays out as some anticipate will largely depend on the overall health of the
U.S. economy as the business jet marketplace has historically been very sensitive to
economic conditions. From an air traffic management standpoint, this projected
trend will likely have a large impact. These operations will likely place significant
demands on high altitude airspace, congested airspace around major metropolitan
areas, and particularly at general aviation reliever airports and those commercial
airports that have a fair amount of general aviation operations in addition to
commercial traffic.
Two specific trends are likely to spur continued growth in the business jet
market. These trends are the proliferation of fractional ownership programs and the
introduction of relatively low cost mini-jets. Both of these trends are viewed as

opening up the aviation marketplace to many customers who previously viewed
aircraft ownership as cost prohibitive. The increased flexibility in trip scheduling and
available airports that business jets can operate in and out of, coupled with the ability
to avoid many of the hassles of airline travel, such as parking, ticketing, and security
screening, is likely to prompt business travelers and corporations to consider
fractional ownership programs and mini-jets as alternatives to airline travel.
Fractional Ownership. One specific source of the large growth in business
jet operations is the exponential growth in fractionally owned aircraft. In fractional
ownership arrangements, corporations or individuals purchase an interest in as little
as 1/16th of an airplane (or 1/32nd of a helicopter) and typically pay a fixed fee for
operations and maintenance. Large fractional ownership management companies like
NetJets and Bombardier Flexjet provide fractional owners with access to all
comparable and smaller sized aircraft in their fleet thus providing owners with on-
demand access to a entire fleet of business jets at a small fraction of the typical
purchase and operating cost of just one airplane. In essence, this arrangement
provides the fractional owner with a fixed number of hours of flight time usage in a
jet of a particular size each year. More recent innovative approaches, such as the
Marquis Jet Card program offered by NetJets, allow businesses and individuals to
purchase flight time in 25-hour increments, thus providing access to business jets at
an even lower cost than buying into a fractional ownership program.
Fractional ownership programs and charter flight-time purchase programs like
the Marquis Jet Card are likely to attract a significant number of corporations and
individuals to business aircraft operations who would have otherwise viewed the
costs of owning and operating business aircraft to be prohibitive. The fractional
ownership concept — although first introduced in the mid 1980s — was still virtually
unheard of 10 years ago. However, over the past 10 years, fractional ownership
programs have seen exponential growth (see Figure 4). In the last four years,
fractional ownership has grown by 62%. This trend is expected to continue. Experts
believe that only a small amount of the potential for fractional ownership has been
developed so far, and forecasts estimate that the number of fractional shares will
reach 7,000 and the total number of fractional aircraft will be about 1,200 by 2007.
Fractional ownership is expected to account for about 100 aircraft deliveries per year
through 2012. By then, fractional aircraft are expected to comprise almost 1/4th of
the business aircraft market.11

11 National Business Aircraft Association. NBAA Business Aviation Factbook 2004.
Washington, DC.

Figure 4. Fractional Ownership of Aircraft

6000 5827

5000 4871

4000 3834

3000 2607

Fractional Shares

2000 1551

1000 548 957

26 51 57 71 84 110 158

0 1986 1988 1990 1992 1994 1996 1998 2000 200235

Source: National Business Aircraft Association. NBAA Business Aviation Factbook


Very Light Jets. Another trend that is likely to attract new customers to the
business jet marketplace in the near future is the anticipated entry of several low-cost
very light jets (VLJs), with typical seating configurations for 5-6 passengers. The
VLJs currently under development will have cruise airspeed capabilities of about 400
miles per hour and will fly along high altitude routes (above 18,000 feet) along with
airliners and larger business jets. First generation mini-jets such as the Eclipse 500
jet and Adam Aircraft A700 Adamjet are expected to enter full scale production in
2007 and will sell in the $1-1.5 million price range. Not to be outdone by these new
entrants, established business jet manufacturers like Cessna and Raytheon-
Beechcraft, are now offering small entry-level jets as well.
These aircraft may not be limited to just private or business use. For example,
Donald Burr, founder of People Express, and Robert Crandall, a former CEO of
American Airlines, have teamed to form a startup air taxi corporation and placed a
75 aircraft order for the A700 AdamJet.12 The mini-jet concept is too new to foresee
whether they will attract a sizable market for air taxi operations. Historically, air taxi
operations using small aircraft have met with only limited success anywhere besides
Alaska, Hawaii, and in some western states because of consumer reluctance to fly on
small airplanes. The ultimate success of ventures such as these will likely depend on

12 Adam Aircraft Industries, Inc. Adam Aircraft Announces $150 Million Order For Its New
Breed Of Personal Jets. Press Release. Englewood, CO, May 24, 2004.

the ability to establish a well proven safety record for these small jets. Success is
also likely to depend heavily on identifying and exploiting niche markets where such
service can provide a cost effective alternative to other modes of transportation.
While the overall impact of newly introduced and forthcoming mini-jets remains
largely unknown, the market for mini-jets, particularly from fractional ownership
programs and private owners appears promising for manufacturers. With so many
companies vying for a stake in the mini-jet market, clearly there are great
expectations of high demand for these airplanes.
The net effect of these trends — the proliferation of mini-jets and fractionally
owned business jets — will likely be a significant increase in general aviation and air
taxi jet operations. This is important because these operations, unlike typical general
aviation operations using smaller piston-engine airplanes, will impact high altitude
airspace and airspace around major metropolitan areas to a much greater extent. By
2015, the fleet size for general aviation and air taxi jets is expected to double and the
total usage of these aircraft, expressed in terms of hours flown, is expected to
increase by 80% (see Figure 5). This growth is significant because general aviation
and air taxi operations — a sector that is not nearly as visible as the airlines to most
observers — is expected to maintain about 20% of the share of those flight operations
that impact congested airspace.
Figure 5. Historic Data and Forecast Growth for General Aviation
and Air Taxi Turbojet Operations

Source: FAA Aerospace Forecasts FY2005-2016.

Low-Cost Carriers
Another trend that is already shaping growth in aviation operations is the
increasing prevalence of low-cost passenger air carriers. Low-cost carriers is a term
used to refer to airlines whose business models generally involve simplified pricing
schemes and service along mostly point-to-point routes. Examples include AirTran,
Spirit, Frontier, Independence Air, Southwest, and JetBlue. By comparison, legacy
carriers, the other segment of the airline industry, employ business models that
consists primarily of hub and spoke systems where smaller markets are linked to a
carrier’s network through large hub airports such as Atlanta, Chicago, Dallas-Fort
Worth, Minneapolis-St. Paul, Detroit, Denver, Charlotte, and so on.
In a recent study comparing low-cost airlines to legacy carriers, the GAO found
that, despite major efforts to cut expenses, legacy airlines have been unsuccessful in
sufficiently reducing costs to be competitive with low cost carriers.13 Unit costs, a
key determinant of profitability in competitive markets, are significantly lower at
low-cost airlines largely due to lower labor and asset-related costs. Consequently,
several low cost carriers have been able to maintain profitability in the weak post-
September 11, 2001 market for air travel whereas legacy carriers have collectively
lost billions of dollars. In response to the growth of low-cost carriers, several major
carriers have launched spinoff operations that mimic the business model of low-cost
carriers. Examples include Delta’s Song and United Airline’s Ted.
Presently, with four legacy airlines in bankruptcy and escalating fuel prices,
low-cost business models and practices have been adopted by many as a means of
controlling costs. However, adopting a low-cost carrier model is not by any means
a guarantee of success as demonstrated by the recent demise of Independence Air —
a former regional partner of United Airlines that struggled in its short history as a
low-cost competitor and closed its doors in early January 2006. Also, while United
is forging ahead with its subsidiary, Ted, as part of Delta’s restructuring, the Song
brand is being eliminated, and Song airplanes are being reintegrated with Delta’s
mainline fleet. Over the past five years, the industry has been very dynamic, which
likely created some oversupply of flights in the market placing additional strain on
capacity. Many industry experts believe that this situation is unsustainable and that
ultimately a marketplace with fewer carriers and higher load factors (filled seats on
flights) will prevail. A sharp increase in fuel prices during 2005 has prompted
airlines to restructure schedules to increase load factors as much as possible. While
such factors may reduce congestion somewhat in the short term, this may be offset
by the low-cost carrier model which relies more heavily on point-to-point service.
This may result in an increased concentration of flights on very specific routes, such
as between Northeast cities and Florida destinations, as compared to the hub-and-
spoke model used by legacy carriers which, on the other hand, tends to concentrate
operations at specific hub airports like Atlanta and Denver.

13 United States General Accounting Office. Commercial Aviation: Despite Industry
Turmoil, Low-Cost Airlines Are Growing and Profitable. Statement of JayEtta Z. Hecker,
Director, Physical Infrastructure — Testimony Before the Subcommittee on Aviation,
Committee on Transportation and Infrastructure, House of Representatives. GAO-04-837T,
June 3, 2004.

Increased Point-to-Point Service
The hub and spoke system offers extensive flexibility in routing and centralizes
operations in a manner that can limit the impact of maintenance and operations-
related delays and cancellations at airlines’ hub facilities. However, the hub and
spoke system is susceptible to weather-related delays and cancellations due to
thunderstorms, heavy snow, or other extreme weather conditions at hub locations.
On the other hand, point-to-point service — favored by many of the low-cost carriers
— is less susceptible to having weather-related delays impact large portions of their
operations. However, this type of operation is more susceptible to maintenance- or
operations-related delays because their network is more decentralized and therefore
the availability of maintenance and operations support is more limited.
There is little doubt that, in order to survive, airlines will increasingly adopt
low-cost strategies to control costs and maintain or achieve profitability. What is less
certain is: to what degree will low cost airline operations continue to rely on point-to-
point operations, and if and to what extent will growing low-cost carriers evolve their
operations into a hub-and-spoke model? Given that there are advantages and
disadvantages to both operational models, hybrid models that incorporate best
business practices of each are likely to emerge.
To some degree legacy carriers are already implementing hybrid operational
models as a means to reduce costs. For example, American Airlines has implemented
what they call a rolling-hub or a hub de-peaking strategy, in which they have reduced
the number of connecting flights through their main hubs such as Dallas-Forth
Worth, TX (DFW). The strategy results in longer waits for connecting flights on
average. While this strategy reduces operating costs by reducing the number of
flights, because of the longer layovers it may be less appealing to consumers,
especially in markets where alternative point-to-point service is available from low-
cost carriers. While such a model may have the effect of reducing congestion at
hubs, its long term system-wide impact on capacity will largely be determined by
consumer demand characteristics which may favor point-to-point service in some
cases, particularly along busy, competitive routes.
The ability to address national airspace system capacity needs to a large extent
hinges on the ability of policymakers to foresee how these market-based trends will
affect airline business practices in the future. In this evolving marketplace for
aviation services, policymakers may need better tools for modeling and predicting
market factors and examining the effects of capacity enhancement efforts in the
larger context of changing demand characteristics on the aviation system . Nowhere
is this more true than in predicting future traffic at major hubs, especially since a
large proportion of these hub operations are tied to specific business practices of
financially troubled air carriers.
The Future of Hubs
As low cost carriers continue to compete by offering more point-to-point service
in selected markets and legacy carriers follow suit, experts have raised questions
about the future prospects for some of the nation’s busiest hub airports. For example,

U.S. Airways significantly scaled back flight operations from its Pittsburgh (PIT) hub
to cut costs.14 Since PIT does not have a high volume of origination and destination
passengers despite having a metropolitan area population of more than 2 million, it
is unlikely that a competitor will pick up the slack. In the current economic
environment, where legacy carriers operating hub-and-spoke networks continue to
seek cost cutting measures, the outlook for just about any secondary hub is uncertain.
For US Airways, who also operates hubs in Charlotte, North Carolina (CLT) and
Philadelphia (PHL), PIT is seen as having very little strategic importance in its
current restructuring plan and is not considered an attractive location for any other
carrier to fill in the gaps left as US Airways scales back operations.15
For other secondary hubs, like Delta Airline’s Salt Lake City (SLC) operation
and Delta Connection’s Cincinnati/Northern Kentucky (CVG) facility, the future is
also uncertain. Prior to Delta’s bankruptcy filing, traffic at SLC continued to lag
behind other Delta hubs and Delta moved to reduce mainline flights there and
increase the presence of its regional partner’s Delta Connection flights. Whether
large legacy carriers will be able to maintain and grow their multi-hub networks
remains questionable, and in the short-term, more consolidation of hub operations
may occur. What may also occur, with the shift toward more regional jet operations,
is the expansion of regional jet hubs like Delta Connection’s Cincinnati/Northern
Kentucky (CVG) facility. Regional hubs, where regional partners can link to
mainline flights, appeared to be a major focus of Delta’s restructuring efforts prior
to entering bankruptcy, although since filing for bankruptcy Delta has scaled back
flights at CVG by almost 25%. Despite this change of course, other airlines may
shift toward more regional jet operations and manufacturers remain optimistic about
the utilization of larger regional jets in the 70-100 seat range as compared to
declining utilization for 50-seat models. Northwest Airlines, also restructuring under
bankruptcy protections, recently announced plans to launch a new low-cost
subsidiary, tentatively named NewCo, in 2007 that will operate these larger regional
jets.16 If and how this restructuring will impact operations at Northwest’s hubs in the
long term remains unclear.
Knowing where future hubs operations will be concentrated is obviously of
particular interest for understanding future capacity needs. However, besides the
major hubs and major population centers, where continued high volumes of
operations are likely, the long-range outlook for specific large airports may be hard
to predict. For example, Saint Louis-Lambert Field (STL) lost its status as a major
hub when American Airlines bought TWA. As a result, airline operations there have
dropped by 60% there over the past four years. However, STL’s geographically
central location and existing hub infrastructure could make it an attractive hub
location in the future for regional operations or perhaps an expanding low-cost
carrier. While the location of possible future hubs is difficult to foresee, the impact
of certain distributions of operations on the national airspace system can be modeled

14 Steve Lott. “US Air May Cut One-Third of PIT Departures In November.” Aviation
Daily, July 21, 2004.
15 “Are Hubs An Endangered Species?” Airline Business Report, 22(3), January 19, 2004.
16 “Northwest To Launch Low-Cost Carrier In ‘07.” Brandweek, January 9, 2006.

and simulated so that decision-makers and airspace planners can be better poised to
address different growth patterns in aviation operations as they unfold.
The Net Effect on Capacity Straining Operations
The aforementioned trends are expected to contribute to increased flight
operations in capacity constrained areas of the national airspace system. The types
of flight operations considered most likely to be limited by capacity constraints
include operations: in high altitude airspace (airspace above 18,000 feet referred to
as Class A airspace); in congested airspace around major metropolitan areas (Class
B and some Class C airspace); and at busy commercial airports and general aviation
reliever airports in major metropolitan areas. Flight operations of 1) airliners, 2)
commuter and regional operators, and 3) general aviation turbine-powered aircraft
are considered most likely to impact capacity constrained airports and airspace.
Overall airborne hours in these three categories of operations are expected to increase
by 44% over the next 10 years (see Figure 6). The largest percentage growth in
airborne hours is expected to be in jet-powered general aviation aircraft (95%),
followed distantly by large air carriers flying both passenger and cargo operations
(39%). The expected growth in airborne hours among regional and commuter
aircraft will not be quite as large, but will nonetheless be significant (34%). Large
carrier operations, which currently represent 64% of total airborne hours among these
three categories, will grow more slowly than general aviation jet and commuter and
regional operations. By 2015, large carrier operations are expected to still make up
61% of these capacity straining operations, only three percent less than the current
level. Nonetheless, the composition of flight operations 10 years from now could be
quite different than today with smaller jets, and particularly general aviation
turbojets, accounting for a larger percentage of the mix.
Figure 6. Historic Data and Forecast Growth in
Airborne Hours

Source: FAA Aerospace Forecasts FY2005-2016.

Factors Affecting Airport and Airspace Capacity
Based on FAA forecasts and capacity growth assumptions, the projected growth
in aviation operations is likely to outpace projected capacity expansion for the
foreseeable future at major metropolitan airports, in crowded terminal airspace
around major metropolitan regions, and along certain high altitude corridors.
According to the latest version of the FAA’s Operational Evolution Plan (OEP),
while system-wide capacity has increased about 6.5% over the past four years, it is
expected to increase by only 27% by 2013 compared to the effective capacity in
2000. While this reduction in projected capacity enhancement may simply be a
reflection of different forecasting methods or assumptions or a reflection that
capacity enhancements in the previous plan were realized sooner than expected, it
could also be a preliminary indicator of a future slowing trend in capacity growth.
There is a potential concern that beyond the 10-year time frame examined in the
OEP, there may be a diminishing marginal gain in capacity over time. In other
words, unless new approaches are applied to the problem of aviation capacity as part
of a long term strategy, it may become more and more difficult to enhance system-
wide capacity using methods applied in the OEP beyond this time frame. Several
factors including available capacity at major airports, current airspace design, air
traffic controller staffing, and the FAA’s organizational culture could provide unique
challenges to enhancing the capacity of the aviation system to meet the growth in
demand for aircraft operations.
Available Capacity at Major Airports
To assess available capacity at the nations busiest airports, the FAA conducted
capacity benchmark studies in 2001 and 2004, detailing the available capacity at
these airports and comparing this available capacity to actual traffic levels.17 In 2001,
the FAA released its initial capacity benchmark report detailing the maximum
number of hourly flights that can be accommodated at the nation’s 31 busiest
airports.18 This study defined the envelope of aircraft arrival and departure rates at
these airports under optimum, good weather, conditions and under reduced rate
conditions when visibility requires radar separation standards and procedures to be
implemented. The study found that many of the busiest airports, including the eight
most delayed airports, operated close to their available capacity levels and sometimes
exceeded these levels during peak hours, especially when these peak periods
coincided with poor weather conditions. Capacity loss due to weather can be quite
significant, but varies significantly from airport to airport depending on differences
in runway configurations and foul weather procedures. Airports such as Cincinnati
(CVG) and Minneapolis-St. Paul (MSP) have a minimal capacity loss during bad

17 Federal Aviation Administration. Airport Capacity Benchmark Report 2001; Federal
Aviation Administration and The MITRE Corporation. Airport Capacity Benchmark Report

2004. September 2004.

18 In earlier versions of FAA’s OEP, only 31 airports were listed. The list of OEP airports
has now grown to 35.

weather, whereas some airports, like STL and San Francisco (SFO), may lose as
much as 40 percent of their available capacity when visibility drops.
The revised benchmark study released in September 2004, modified the
methodology slightly to examine capacity under three different weather scenarios:
optimum, marginal, and low visibility — instrument flight rules (IFR). The study
was expanded to include the four airports added to the list of major airports in the
operational evolution plan (OEP) and now provides benchmarks for all OEP-35
The 2001 benchmark study examined forward-looking projections of capacity
enhancement by 2010 assuming planned runways and new technologies would be in
place by that time while the 2004 benchmark study projected future benchmarks for
the OEP-35 airports in 2013 under the same assumptions that planned capacity
enhancement work was completed by that time. While the 2001 study found that
many capacity enhancement projects, such as new runways and new technologies,
were planned or underway, the cumulative capacity enhancement of these projects
often fell short of keeping up with projected growth in demand. In fact, at each of
the top six airports in terms of delays, projected growth was expected to outpace
planned capacity enhancements, on average, by over 9% percent in good weather and
by more than 10% during reduced visibility operations. Among the 8 airports
identified in the study as experiencing significant passenger delays, growth in
demand through 2010 was expected to average 14.8%, while runways and
technologies were expected to increase capacity, on average, by only 8.6% in good
weather and 7.7% during reduced visibility operations over this time period.19 Not
surprisingly, the benchmark study concluded that the top six most delayed airports
plus Los Angeles International Airport (LAX) — ranked 12th overall in passenger
delays at the time of the study — would continue to experience significant passenger
delays through 2010. The 2004 benchmark study did not provide growth projections
to make similar comparisons. However, based on the fact that the 2004 benchmark
projections of capacity enhancement achievable by 2013 are comparable to those
projected for 2010 in the 2001 benchmark, the expectation is that growth in aviation
operations will continue to outpace system-wide capacity expansion.
Other trends observed in the 2001 benchmark study further indicate that, despite
ongoing and planned expansion projects, many airports will be unable to keep up
with projected growth in demand. For example, Orlando International Airport
(MCO), the most popular domestic leisure travel destination, is expanding to address
an anticipated growth in demand of 42 percent by 2010 compared to 2000 levels.
However, the combined impact of both a new fourth runway, now in operation, and
air traffic technologies is expected to enhance capacity by only 28% in good weather
and 38% in poor weather. While this expansion is significant, it is not expected to
keep pace with projected growth. While MCO is expected to see the largest increase
in demand through 2010 of the 31 airports studied, several other airports are expected
to be unable to increase capacity to meet their anticipated demand growth as well.

19 CRS calculations based on projections for each of the airports provided in: Department
of Transportation, Federal Aviation Administration. Airport Capacity Benchmark Report


Of the 31 airports studied in the 2001 benchmark, only 6 are anticipated to grow
their capacity at levels sufficient to clearly outpace projected growth in demand
through 2010. One of those airports is the Atlanta Hartsfield-Jackson International
Airport (ATL), where the addition of a fifth runway — expected to be completed in
June 2006 — coupled with enhanced air traffic technologies and procedures is
expected to increase capacity by 37% in good weather and 34% in restricted visibility
by 2010. By comparison, projected growth at ATL during this period is expected to
increase by 28%. Consequently, the study concludes that these actions are likely to
alleviate delays.
For the past three years, the downturn in demand for aviation since September
11, 2001, has alleviated some of the need to implement this technology in the near
term. However, anticipated future growth is likely to prompt the need for
implementing these types of capacity-enhancing capabilities. The 2001 benchmark
study concluded that new runways, which were planned at 14 of the 31 airports
examined, can provide the most significant increases. Forecast increases on the order
of 30 to 60 percent appear achievable at most airports from the addition of new
runways. For some airports, that already have high capacity layouts like Denver
(DEN), an additional runway provides a much smaller gain in capacity. And in
some cases, new runways do not appear to be the solution to increasing capacity at
all. Specifically, the 2004 benchmark points to Boston’s Logan International Airport
(BOS) as a location that will not be able to expand capacity by adding a new runway.
The new runway at BOS, expected to open in 2006, is anticipated to have no impact
whatsoever on increasing capacity. However, the new runway is expected to mitigate
delays during poor weather assuming ground infrastructure and environmental
constraints support the operational plans for this runway.
Despite some exceptions like Boston, building new runways is seen as having
the largest system-wide impact on expanding capacity. In addition, technology
enhancements are seen as providing additional capacity gains in the range of 3% to
8%, and procedural enhancements could provide another 5% to 10% gain in available
capacity at airports. While technology and procedural solutions will play a small but
important part of expanding capacity at airports, they are likely to play a more central
role in expanding the capacity of en route and terminal airspace.
Airspace Design
The national airspace system has evolved over the years into its present day
form consisting of a web of routes interconnected by ground based navigational aids
called very high frequency omnidirectional range (VOR) stations. These routes, or
airways, are often likened to highways in the sky. Along these airways, instead of
using lanes, opposite direction traffic is separated by altitudes. However, restricting
airplanes to airways does not make use of all available airspace. This can create
congestion on the airways which is compounded by large vertical separation
requirements implemented to keep aircraft at safe distances that were established
decades ago to allow for errors in altitude equipment and altitude deviation by pilots
that today can be effectively controlled by more precise instrumentation and cockpit
automation to detect and prevent unintended altitude deviations. Also, following
airways sometimes requires zig-zagging between points along the airway rather than
proceeding directly to the destination airport. While, these maneuvers only add a few

extra minutes to a typical flight, the additional fuel burn can be very significant for
an airline or aircraft operator. Therefore, flying the most direct routes between origin
and destination can be beneficial for air traffic management as well as operational
efficiency. FAA is currently laying the regulatory and operational frameworks for
such operations — referred to by many as free flight — based on precision satellite
navigation capabilities using the Global Positioning System (GPS) augmented by
ground-based signals to better pinpoint an aircraft’s position in space.
Besides limitations imposed by the current airway system, high altitude airspace
is also limited by the number of available altitudes, or flight levels (FLs), that
airplanes can travel on. Opposite direction traffic has historically been separated by
2,000 foot altitude spacing above 18,000 feet to ensure adequate separation in cases
of instrument or pilot error. However, with improved altitude measurement and
monitoring capabilities, the FAA is phasing-in the use of 1,000 foot altitude spacing.
This reduction in altitude spacing down to 1,000 feet, referred to as reduced vertical
separation minimums or RVSM, has virtually the same effect as doubling the number
of lanes on an interstate highway. RVSM is initially being implemented between
29,000 feet and 41,000 feet (FL290 to FL410). It has already been implemented
between these altitudes on ocean-crossing flights, and will be implemented in
domestic airspace by January 2005. Airplanes must meet special equipment
requirements to operate at these altitudes. RVSM will likely be expanded to include
all high altitude airspace (above 18,000 feet, specifically, FL180 to FL600) in the
In order to manage and control the flow of high altitude traffic, airspace is
broken up into regions, or centers, which are further subdivided into sectors. One
significant factor affecting the design of the national airspace system and its capacity
is air traffic controller workload. Current demand characteristics result in a
concentration of east-west operations in airspace between Chicago, Boston, and
Washington, DC. The high altitude airspace monitored by controllers in Cleveland
Center is especially busy as this tends to be the bottleneck for flights transiting
between the West Coast and Chicago and cities in the Northeast. There is also a
heavy concentration of north-south traffic between Norfolk and Richmond, Virginia
and New York, and to a lesser extent along the California coast, especially between
Los Angeles and San Francisco. In these areas controller workload and the
segmentation of airspace to manage that workload can be a significant constraining
factor affecting capacity in high altitude airspace.
The strategies that the FAA has adopted to address these constraints is heavily
focused on the use of technology, automation, and pilot and controller decision aids
along with airspace redesign to assist with both the management and control of air
traffic in high altitude airspace. These initiatives are discussed in further detail in the
section titled The “Free Flight” Concept.
Controller Staffing
Another challenge facing the FAA is maintaining an adequate staff of air traffic
controllers (ATCs) to meet operational needs. In the past, between 1 and 2 % of the
controller workforce became eligible for retirement each year. There is a current
upward trend in the percentage of controllers that will be eligible for retirement,

which has currently risen to between 3 and 4% per year and will peak at almost 10%
per year in 2007 and remain above 5% per year through 2011. The FAA has
estimated that 7,100 controllers, roughly 45% of its current workforce, will retire
over the next eight years.20
Several factors are contributing to high demand for air traffic controllers over
the next 10 years. Foremost is the hiring wave in the early 1980s that occurred
following the 1981 dismissal of over 11,000 striking controllers. Since an air traffic
controller career in the United States is structured around a 25-year service model,
it is to be expected that those hired in 1982, as many current controllers were, would
be at or near the end of their careers by 2007. Another factor is the lengthy training
required to fully train and certify an air traffic controller which typically takes about
two to four years to complete, depending on the area of specialization. As controllers
retire, shortages of fully trained controllers for specific positions could occur,
especially if staffing allocations and appropriate training is not initiated well in
advance of anticipated retirements. Another factor affecting controller staffing is the
high labor costs for ATCs. These high labor costs are heavily influenced by the fact
that many controllers are at senior levels in the pay scale and under-staffing at many
facilities requires extensive use of overtime.21 The potential impact of these high
labor rates on addressing staffing shortages is that it may take away from available
funding needed to recruit, hire, and train the next generation of ATCs.
However, the number of air traffic controller positions is actually expected to
increase only modestly — at a rate slightly greater than 1% per year — through
2012.22 Therefore, other than addressing the pending wave of retirements and filling
vacant slots at air traffic control facilities during that time, it is not expected that
there will be significant expansion in the numbers of controllers needed. Rather,
staffing requirements are expected to be relatively flat for the foreseeable future. In
the long term, the increased use of automation and implementation of free flight
concepts may reduce some demand for controllers and shift some controller functions
to more strategic air traffic management positions. Airspace redesign to address
controller workload in busy airspace could create a need for some additional
controller positions. However, little overall growth in the total number of air traffic
controller positions is anticipated. Future technological advances could, however,
result in a shift in where controllers are needed. The implementation of free-flight
concepts coupled with terminal airspace redesign in busy metropolitan areas may, for
example, result in fewer controllers being needed to operate en route facilities and
an increased demand for controllers in terminal radar approach control (TRACON)
facilities, especially in major metropolitan areas.

20 U.S. General Accounting Office. Federal Aviation Administration: Plan Still Needed to
Meet Challenges to Effectively Managing Air Traffic Controller Workforce. Statement of
JayEtta Z. Hecker, Director Physical Infrastructure Team Before the Subcommittee on
Aviation, House Committee on Transportation and Infrastructure. June 15, 2004, GAO-04-


21 Department of Transportation, Office of Inspector General. FAA’s Management of and
Control Over Memorandums of Understanding. AV-2003-059, September 12, 2003.
22 Based on Bureau of Labor Statistics employment data for 2002 and 2012 projections.

Controller staffing is currently an issue of particular interest in Congress.
Vision 100 (P.L. 108-176) requires the FAA to submit annual air traffic controller
staffing plans, including strategies to address anticipated retirement and replacement
of air traffic controllers and requires a comprehensive human capital workforce
strategy to determine the most effective method for addressing the need for more air
traffic controllers. The FAA’s plan, released in December 2004, calls for hiring
controllers at a faster rate over the next 10 years to offset the wave of retirements and
improve selection and training. The FAA also anticipates that improved workload
efficiency and scheduling practices will reduce projections of staffing needs by 10%
over the next 10 years. However, the DOT Inspector General’s office has noted that
the FAA needs better location-specific projections of attrition rates to better gauge
future staffing needs.23 FAA’s initial plan did not include this location-specific
information on future staffing projections. However, the FAA is working on a
detailed assessment of staffing needs for each facility based on size, complexity, and
traffic volume.
Various options are under consideration to address the FAA’s ATC staffing
needs and funding challenges associated with meeting these staffing requirements.
One proposal offered has been to either grant age waivers to controllers allowing
them to work beyond 56, or to raise the statutory retirement age. Proponents of
raising the retirement age indicate that with better health and wellness of aging
adults, controllers may be able to perform safely and efficiently at older ages.
Research on cognitive performance of aging ATCs and the potential long term health
effects of ATC workload and stress, however, is contentious and does not provide
clear-cut answers to policy questions regarding the appropriate retirement ages for
controllers. A similarly contentious issue is the mandatory retirement age of 60 for
airline pilots. In both of these cases, the establishment of a retirement age is based
loosely on the research findings of medical and performance studies of aging and
long range effects of job-related stress, but is influenced by other factors such as
annuity calculations for retirement.
In general, research shows a gradual decline in cognitive abilities beyond age
30 that becomes more pronounced in the span between 60 and 70 years. Not
surprisingly, there are large individual differences that make pinpointing a specific
age where skills and abilities to perform ATC tasks decline precipitously. While
ATCs have to pass annual health exams, these only provide a very cursory evaluation
of cognitive abilities. Therefore, the potential impact of raising the ATC retirement
age above 56 or granting waivers on system safety is largely unknown. For this
reason, proposals to raise the retirement age are likely to be contentious.
In the near term, raising the retirement age could put off the need to hire and
train new ATCs for a few years and lessen the impact of pending retirements by

23 Statement of Alexis M. Stefani, Principal Assistant Inspector General, U.S. Department
of Transportation. Before the Committee on Transportation and Infrastructure,
Subcommittee on Aviation, United States House of Representatives. Addressing Controller
Attrition: Opportunities and Challenges Facing the Federal Aviation Administration. June

15, 2004.

spreading them over a longer time span. Such a strategy could be effective in helping
FAA to better meet annual hiring requirements.
Other proposals, such as modifying annuity calculations to reward ATCs for
additional years of service beyond their eligible retirement date or providing retention
bonuses as incentives to experienced controllers to stay in their positions may also
be considered as tools to spread the projected retirement wave out over a greater
number of years. However, any such proposal is likely to be controversial as it would
create a funding impact that may limit the FAA’s resources to hire and train
replacement controllers. Also, many believe that ATC labor costs at the FAA are
already too high.
Freezing or limiting wages of current controllers is also viewed by some as a
possible option to free up funds for hiring and training new ATCs, but this option has
several disadvantages. First, the cost savings would likely take a few years to have
a great enough impact to provide the needed funding for hiring and training
replacement ATCs. Second, such action may prompt current controllers to enter
retirement at a faster rate, thus negating the intent of the action. And finally, freezing
wages could have a negative effect on recruiting efforts if prospective applicants
view it as an indicator of future salary potential with the FAA.
The FAA is also mulling the idea of requiring newly hired ATCs to pay for their
initial training as a means to reduce the federal burden of training the next generation
of air traffic controllers. While the FAA notes that many airline pilots must pay for
their initial training, this option may significantly limit the pool of interested
applicants for ATC positions, especially given that the marketplace for applicants
with technical aptitude similar to that needed to be an ATC is highly competitive.
Another possible option for Congress is to provide special funding for the
purposes of hiring and training the next generation of ATC specialists. FY2005
appropriations included $9.5 million for this purpose. For FY2006, the House bill
included almost $25 million to increase the FAA workforce by 595 air traffic
controllers. However, the final appropriations act (P.L. 109-115) did not include
specific reference to this amount. Faced with budget constraints and rising
operational costs, it is uncertain how the FAA will allocate funding to address the
continuing need for succession planning, hiring, and training of air traffic controllers
in the near term.
If controller shortages persist, there may be a need to increase overtime and
perhaps impose mandatory overtime for controller staff. Such practices may impact
safety because it may contribute to controller fatigue. Additionally, a 2002 GAO
survey found that use of mandatory overtime may result in more controllers opting
to retire earlier.24 Thirty three percent of controllers indicated they would retire
earlier if required to work additional overtime hours.

24 U.S. General Accounting Office. Air Traffic Control: FAA Needs to Better Prepare for
Impending Wave of Controller Attrition. June 2002, GAO-02-591.

A more controversial option that has been proposed in various forms over the
years is the partial or complete commercialization or privatization25 of the air traffic
control system, including ATC job functions. The FAA already uses commercial
contractors to run about 218 non-radar towers throughout the country, including
several airports that handle commercial operations. Proponents for privatizing the
entire air traffic control system also note that many foreign countries including
Canada, Great Britain, much of mainland Europe, and Australia operate their air
traffic control systems under various forms of privatization. Besides addressing
controller staffing issues, commercializing or privatizing the ATC is viewed by some
as a means to potentially overcome perceived management deficiencies that have
historically plagued FAA’s handling of ATC systems acquisitions.
Critics of privatizing the ATC system fear that it could erode safety, although
a recent DOT Inspector General’s audit of the FAA’s contract tower program found
no identifiable difference in operational error rates between contract towers and
FAA-run towers.26 Language protecting the FAA air traffic control system from
further privatization, except for maintaining and possibly expanding the contract
tower program, was ultimately dropped from the FAA reauthorization bill (Vision
100; P.L. 108-176). As a concession for removing this language, the FAA had
agreed to a moratorium on any further plans for privatization or commercialization
of ATC functions during FY2004 which has now expired. Given the pending
controller staffing shortages faced by the FAA, debate over ATC privatization may
be revisited. However, any plan to commercialize or privatize operations at busy
towers or any en route facilities is likely to be highly controversial.
FAA’s Organizational Culture
Historically, poor planning, management, and oversight of major ATC-related
acquisitions by the FAA has been blamed for cost overruns, schedule slips, and
performance shortfalls of major systems designed to enhance the capacity of the
national airspace system. FAA’s poor track record in systems development has led
many observers to speculate that the FAA’s own organizational culture is the root
cause of difficulties in meeting the challenges of enhancing aviation system capacity
to keep pace with growth in air traffic operations. The GAO noted that over the
years, inadequate management controls and human capital issues at the FAA have
contributed to consistent cost overruns, schedule delays, and performance shortfalls
of major air traffic control and management projects.27 Similarly, the DOT Inspector

25 ATC commercialization, as used in this paper, refers to the outsourcing of some or all
ATC functions to commercial vendors, whereas privatization encompasses both outsourcing
of ATC functions and possible implementation of user fees or other revenue-generating
mechanisms to fund ATC services. In recent congressional debate, the term privatization
has been used to refer to legislative proposals calling for protections against privatization
that would limit both commercialization and privatization of ATC functions.
26 Department of Transportation, Office of Inspector General. Safety, Cost, and
Operational Metrics of the Federal Aviation Administration’s Visual Flight Rule Towers.
AV-2003-057. September 4, 2003.
27 U. S. General Accounting Office. Air Traffic Control: FAA’s Modernization Efforts —

General found that the FAA exhibited lax oversight of contracts and continued to
operate with an ineffective vertical, hierarchical management structure. The DOT
Inspector General also found that management inefficiencies persisted on major
programs despite the fact that, in 1995, the FAA was statutorily exempted from many
of the federal procurement regulations it had argued were hindering modernization
The response of Congress to these concerns was twofold. First, AIR-21 (P.L.
106-181) mandated the creation of a Chief Operating Officer (COO) position within
the FAA to oversee the strategic plans, operations, and budget of the air traffic
control system. More recently, in Vision 100 (P.L. 108-176), Congress set forth a
framework for the creation of a joint planning and development office to establish
the long range national plan for the national airspace system and oversee the
implementation of that plan. The Bush administration has responded to these
mandates with the establishment of the Air Traffic Organization (ATO) within the
FAA headed by the COO, and the creation of a multi-agency Joint Planning and
Development Office (JPDO) headed by the FAA. While these steps formally
restructure the FAA in significant ways, an important issue is whether these
organizational changes will lead to meaningful changes within the FAA’s
organizational culture and enable the FAA to better meet the challenges it faces in
expanding the capacity of the national airspace system.
Air Traffic Organization. The first COO of the ATO was finally hired and
the ATO was formally established on February 8, 2004, almost four years after it was
mandated under AIR-21. The new COO, Russell Chew, has indicated that the
primary emphasis of the reorganization that has taken place within FAA to establish
the ATO is designed to integrate acquisition and operations functions to make sure
that major systems acquisitions are better tied to operational service needs and29
operational cost considerations. The ATO is comprised of 10 service units, each
run by a vice president that reports to the COO. The 10 service units are:
! Safety
! Communications
!Operations Planning
! Fi nance
!Acquisition and Business Services
!En Route and Oceanic Services
!Terminal Services
!Flight Services
!System Operations Services
!Technical Operations Services

27 (...continued)
Past, Present, and Future. Statement of Gerald L. Dillingham, Director, Physical
Infrastructure Issues Before the Subcommittee on Aviation, Committee on Transportation
and Infrastructure, House of Representatives. October 30, 2003 (GAO-04-227T).
28 Department of Transportation, Office of Inspector General. Top Ten Management Issues.
Report PT-2001-017, January 18, 2001.
29 “Russ Chew 101.” Aviation Week & Space Technology, August 16, 2004, 46-48.

In addition to its internal safety office, the FAA created the Air Traffic Safety
Oversight Service within its Office of Regulation and Certification, which is
responsible for oversight and coordination of system safety functions within FAA,
including the ATO.
Since the ATO has existed for less than one year, it is too early to fully assess
its effectiveness. One indicator of the ATO’s success is how well it is meeting its
own performance objectives. In this regard, the results have thus far been mixed.
The ATO has thus far failed to meet its goals for on-time arrivals and arrival
efficiency.30 However, the ATO has generally met its criterion to have air traffic
equipment operationally available 99% of the time. However, a high profile ATC
equipment outage in the busy southern California airspace in September 2004 due to
maintenance errors highlighted the criticality of these systems and the need for
extremely high reliability and available backup capabilities. With regard to safety,
while it appears that some progress has been made to reduce the number of runway
incursions, the National Transportation Safety Board (NTSB) has recently questioned
the completeness and accuracy of the FAA’s statistics on runway incursion incidents.
Additionally, operational errors remain at higher than acceptable levels as defined in
FAA’s performance goals. The FAA’s ability to meet performance objectives and
the effectiveness of the ATO organization is likely to be an issue of continued
interest for Congress as the ATO matures and more fully engages in addressing the
operational challenges created by growth in aviation operations.
Joint Planning and Development Office. Another initiative to revamp
FAA’s organizational culture and approach to systems planning and acquisition is the
creation of the Next Generation Air Transportation System Joint Planning and
Development Office (JPDO). The JPDO was established under the most recent FAA
reauthorization bill, Vision 100 (P.L. 108-176), and is charged with the task of
establishing and executing the national plan for the next generation air transportation
system (NGATS). Whereas the ATO is focused on the day-to-day operational
aspects of running the existing national airspace system and implementing the short
term capacity enhancement objectives defined in the OEP, the JPDO’s focus is on
long range planning to meet the anticipated capacity requirements of 2025.
Under a provision in Vision 100 (P.L. 108-176), the JPDO was required to
submit its NGATS integrated plan to Congress by December 2004. That plan was
unveiled by the JPDO on December 12, 2004.31 Under the provisions of Vision 100,
the JPDO is now responsible for overseeing the execution of the plan and
coordinating research and development and implementation efforts among
government agencies and industry to achieve the goals set forth in the plan. In
developing and executing the NGATS integrated plan, FAA is required to work in
conjunction with relevant programs in the Department of Defense, the National

30 Arrival efficiency is a measure of how well the actual arrival rate compares to the lesser
of the scheduled arrival demand or the established arrival rate for an airport.
31 Next Generation Air Transportation System Joint Planning and Development Office. Next
Generation Air Transportation System Integrated Plan. December 12, 2004: Washington,

Aeronautics and Space Administration, the Department of Commerce, and the
Department of Homeland Security. The goals of implementing the NGATS plan
!Improving the safety, security, efficiency, quality, and affordability
of aviation;
!Exploiting emerging ground-based and space-based
communications, navigation, and surveillance technologies;
!Integrating data streams from multiple agencies and sources to
enable situational awareness and seamless global operations for civil
aviation, homeland security, and national security;
!Leveraging investments in civil aviation, homeland security, and
national security and build upon current air traffic management and
infrastructure initiatives to meet system performance requirements
!Accommodating and encouraging substantial growth in domestic
and international transportation and anticipating and accommodating
continued technological growth;
!Accommodating a wide range of aircraft operations, including
airlines, air taxis, helicopters, general aviation, and unmanned aerial
vehicles; and
!Designing airport approach and departure flight paths to reduce
noise and emissions exposure of affected communities.
The NGATS integrated plan provides a top-level roadmap identifying core
objectives and strategies for transforming the national airspace system to meet future
capacity needs. The integrated plan outlines several goals for the NGATS including:
!Establishing innovative airport planning and management;
!Establishing a cost effective aviation security system without
limiting mobility or civil liberties;
!Establishing an agile air traffic system;
!Establishing user specific situational awareness within the air traffic
!Establishing a comprehensive, proactive safety management
!Developing environmentally friendly and sustainable air traffic
!Developing a system-wide capability to reduce the impact of
weather; and
!Harmonizing equipment and operations internationally.32
JPDO director, Charles Keegan, has indicated that the NGATS plan will rely
heavily on increasing automation of air traffic functions and reducing system costs.
However, the initial report is reported to contain few details on what technologies,
operational changes, and integration schemes will be implemented to achieve these

32 David Hughes. “The ‘Silent’ Crisis.” Aviation Week & Space Technology, October 25,

2004, 72-75.

objectives.33 Providing too many details, however, could place artificial constraints
on the plan by settling on specific technologies that may become obsolete before they
are implemented. It is difficult to foresee how technology may evolve over the next
ten years or what breakthrough technologies with application to air traffic
management and control might emerge. Based on this, the apparent strategy the
JPDO seems to be adopting is a rather broad framework, or architecture, for how
emerging and future technologies may be integrated into the NGATS system.
However, in adopting such a strategy there may be a risk of being too vague and not
providing sufficient detail to be useful. Congressional oversight may specifically
focus on whether the plan contains sufficient detail to measure progress over time
toward achieving the end goal of increased capacity and efficiency in the national
airspace system as well as whether the plan creates an organizational climate and
facilitates partnerships with other government agencies and the aerospace industry
to foster cooperative and collaborative work toward achieving this vision.
Cost Overruns
The FAA’s original plan to modernize the air traffic control system, began in
the early 1980s and was estimated to be completed by the early 1990s at a projected
cost of $12 billion. A central element of that modernization effort, the advanced
automation system (AAS) was ultimately scrapped in large part after large cost
overruns, schedule delays, and failures to deliver promised capabilities and
performance. According to the GAO, since then FAA’s cost estimates have
mushroomed and schedules have continued to slip. Over $35 billion have been
spent so far on modernizing the national airspace system and the FAA estimates it
will need an additional $16 billion through 2007 to complete key projects.34
In fairness to the FAA, it is important to point out that many of the system
modernization projects included in its current efforts to increase system capacity
were not even conceived of in the early 1980s. The efforts of the early 1980s that
extended into the 1990s were largely aimed at improving the existing en route and
terminal radar networks by upgrading hardware and software and providing
controllers with improved workstations and consoles and rudimentary automation
tools. These efforts focused largely on air traffic communications and surveillance,
and largely did not address enhancement to navigation capabilities. The global
positioning system’s (GPS) network of navigation satellites did not exist when the
program was initiated; therefore, programs like WAAS and free flight were not
initially calculated into cost projections. GPS and GPS-related technologies, the
enabling technologies allowing revolutionary new navigational concepts like free
flight to be implemented, have only been considered as part of FAA’s air traffic
control modernization plans for the past 10-years or so. In essence, looking broadly
at the current costs to enhance FAA facilities and equipment compared to past cost
estimates is not a fair comparison. However, what is clear is that, on a program by
program basis, FAA spending on ATC modernization efforts has been riddled with
cost overruns and schedule slips.

33 Ibid.
34 U.S. General Accounting Office. Air Traffic Control: FAA’s Modernization Efforts.

The FAA’s historic cost overruns and schedule slips in its AAS program
throughout the 1980s and into the 1990s, well documented in GAO reports and DOT
IG audits, gave the FAA a reputation as an ineffective manager of major systems
acquisitions. The GAO has routinely found, and continues to identify inadequate
cost controls, cost estimating, and cost accounting within FAA as a significant
impediment to effective management of large scale acquisition programs. Also, the
FAA still does not have a sufficiently detailed blueprint tying its major acquisition
programs to modernization objectives for the air traffic control system, and does not
adequately link these programs to both near term and long-range budget projections.35
One of the principal objectives of the new ATO and JPTO is to address these
concerns. Time will tell if these new organizations are effective in meeting this
objective, and it is likely that the work of these organizations will be a subject of
considerable congressional interest over the next several years.
Russell Chew, the COO of the ATO, is well aware of the challenge faced by his
organization. The ATO is facing a $5 billion shortfall in operations and a $3.2
billion shortfall in the airport and airways trust fund if operations and capital
improvements continue to follow a “business as usual” approach.36 Chew believes
that the answer to the problem — given no foreseeable increase in aviation trust fund
tax yield and a decreased reliance on general fund coffers to make up for trust fund
shortfalls — is to focus on reducing unit costs for air traffic services. Chew’s
initiatives to reduce costs include
!Streamlining management and reducing overhead staff not directly
involved in providing service;
!Improving productivity;
!Improving training efficiency;
!Improving infrastructure efficiency;
!Developing cost-saving cooperative efforts with the airline industry;
!Managing costs of growing system complexity effectively;
!Revamping telecommunications infrastructure;
!Using competitive sourcing to reduce flight service station operating
costs; and
!Improving the management and oversight of time off, sick leave, and
The ATO faces major challenges to find savings in these areas to reduce overall
air traffic service costs by 21%, which is what it projects the deficit would be over
the next five years if they maintain the status quo. Only one of these efforts —
revamping telecommunications infrastructure — is underway, and that is only
expected to net a savings of about 1% annually. Chew noted that hard choices must

35 Ibid.
36 David Hughes. “Affordable ATC Ops.” Aviation Week and Space Technology.
November 8, 2004, p. 46.

be made in the near future to achieve sustainable, cost-efficient air traffic services.37
The decisions made by the ATO in meeting these challenges are likely to be a key
topic for congressional oversight of the FAA.
Impact of Under-capacity on Flight Operations
To understand the need for increased capacity, it is important to examine the
effects of under-capacity on flight operations. Examining past deficiencies in
meeting aviation demand can help identify capacity needs on both a systemwide and
an airport-by-airport level of analysis. Examination of these capacity strained periods
can also provide useful data for modeling the potential benefits of capacity-
enhancement proposals.
Presently, the effect of capacity constraints are beginning to be felt once again
as demand for air travel returns to pre-September 11, 2001 levels. Throughout the
summer of 2004, increased demand brought with it increased delays, but so far,
system-wide operations and delays have not reached the level they were at during the
summer of 2000.
The Summer of 2000
During the summer of 2000, record setting demand for air travel, a long bout
with thunderstorms — particularly in the busy northeast corridor and at major hubs
like Dallas-Fort Worth, Chicago, and Atlanta — and aircraft maintenance difficulties
conspired to produce long delays and cancelled flights that wreaked havoc on many
travelers’ plans. This difficult time for travelers was followed by even more acute
delays during the 2000 holiday season in December. During these periods, air
travelers experienced the worst delays in U.S. aviation history and delays frequently
exceeded acceptable levels.38 Following this period, the U.S. economy entered a
downturn that reduced demand for air travel. Meanwhile, the FAA was busy
implementing near term solutions to avoid a repeat of the summer of 2000. The net
result was less traffic volume and significantly fewer and shorter delays in the
summer of 2001. Since then, airline travel significantly declined in the aftermath of
the September 11, 2001 terrorist attacks and, as might be expected, delays have been
significantly less in the past three years. Recent statistics released by the Department
of Transportation’s Bureau of Transportation Statistics indicate that delays are on the
rise, although not to the level seen in the summer of 2000 (See Figures 7 & 8).
While the decrease in demand for air travel from 2001 to 2004, in essence, bought
the FAA additional time to study and implement near term solutions to alleviate
congestion and delay, the effectiveness of these mitigation strategies remains largely
undetermined and over the past two years key delay statistics have been steadily

37 Ibid.
38 In the OEP, the FAA adopted a standard of maintaining an average delay of 14 minutes
or less. Based on this standard, average delays in excess of 14 minutes are described as
exceeding acceptable levels in this report.

rising, a possible indicator of increasing strain on system capacity. As traffic volume
increases and surpasses pre-September 11, 2001, levels over the next few years, the
near term mitigation strategies to alleviate congestion and delay will receive the first
real tests of their effectiveness.
Figure 7. Average Delay (1/1998 — 11/2005)
y (My (M
age Dage D
Solid line: 12-month moving average
Source: Bureau of Transportation Statistics.
Figure 8. Percent of Flights Delayed (1/1998 — 11/2005)

Mi Mi
ed (>yed (>
t Delnt Del
PercSolid line: 12-month moving averagePerc
Source: Bureau of Transportation Statistics.

Some Possible Delay Remedies
In examining the delay data in Figures 7 & 8, it is notable that while the
monthly average departure delay has typically been greater than monthly average
arrival delay, a greater proportion of arrivals are delayed more than 15 minutes39
compared to departures. Thus, from a operational standpoint, airborne delays that
impact arrival times, while less frequent than delays affecting departure times, are
more likely to be longer in duration. Given that airborne delays are costly to airlines
in terms of fuel costs, increased wear and tear on the engines, and so on, specific
operational strategies to reduce these airborne delays would be particularly
advantageous to airlines and other aircraft operators. FAA has been working with
the airlines to take such steps to reduce airborne delays. Some examples include:
!Using ground holds to delay departures in order to better space
arrivals at destination airports;
!Using decision aids to meter the flow of arrivals into busy airports;
!Creating “express lanes” into and out of busy airports by holding
traffic at satellite and reliever airports during peak travel hours.
It appears that these efforts were somewhat effective in staving off a repeat of
delays such as those experienced in the summer of 2000, during the peak travel
months of 2004 and 2005. However, the upward trend in delay statistics, especially
arrival delays, during the peak summer and holiday travel seasons of 2004 and 2005,
could be a forewarning that chronic delay conditions may return to the aviation
system as operations surge past pre-September 11, 2001, levels over the next several
The Relationship Between Capacity and Delay
While the FAA continues to implement stopgap measures to mitigate delay in
the current national airspace system, most observers recognize that the long term
solutions to alleviating congestion and delay should address the underlying capacity
constraints. Since delay is a key symptom of strain on system capacity, delay can be
mitigated to some extent by investing in capacity-enhancing infrastructure and
technologies. However, in practice, policymakers and system planners must balance
a tradeoff between meeting demand for aviation services while maintaining delays
within acceptable levels. Given that growth in aviation operations may easily
outpace capacity enhancement of the national airspace system for the foreseeable
future, policymakers will likely face tough choices in meeting demand without
increasing delay.
The FAA’s OEP (Version 6.0) projects a 27% overall capacity enhancement
by 2013. However, this capacity enhancement assumes that an average system delay
of 14 minutes is acceptable and does not seek to reduce this level of delay in its
projections of future system capability. Rather, the FAA intends to increase capacity
at what it has set as a threshold acceptable level of delay — the typical delays flyers

39 Based on Bureau of Transportation Statistics delay data.

have grown accustomed to, but not the extent of delays experienced in the summer
of 2000. The potential danger of this strategy is that with an emphasis on enhancing
capacity to meet growth in demand, delay may increase significantly in a capacity-
constrained system, especially if capacity enhancement efforts fall behind schedule
or fail to fully meet expectations.
Figure 9 shows conceptually the tradeoff that exists between capacity and delay.
In essence, these two metrics comprise elements that compete for system capability.
In reality, the situation is much more complex since the relationship between capacity
and delay is influenced significantly by external factors, such as weather and airline
scheduling practices, that are either uncontrollable or not controlled directly within
the system. Certainly, the relationship between capacity and delay and the influence
of both system variables and external factors on these two metrics is very complex.
While the tradeoff relationship between capacity and delay may be difficult to
quantify or predict, the effect is relatively easy to conceptualize. Working from a
baseline capacity (CB), enhanced system capabilities can be projected to enhance
capacity assuming a fixed level of delay (CFD). The FAA chose to conceptualize
capacity enhancement in this manner, selecting a fixed systemwide acceptable level
of delay of 14 minutes — a figure never exceeded before the infamous summer of

2000 — as its target.

Figure 9. The Tradeoff Between Expanding Capacity and
Mitigating Delay
Enhanced System Capability34
es 5es
nut Ba se lin e6inut
mi 7m
y (lay (
ela 8e
e D9e D
erag 10verag
Av 11A
13Maximum Acceptable Delay
Capacity (Operations/Hour)
Where, CB is baseline capacity (that is, current available capacity);
CRD is future capacity with a reduced delay;
CFD is future capacity assuming a fixed delay; and
CID is future capacity assuming an increase in delay.
Source: Bureau of Transportation Statistics average delay data and FAA OEP (Version

6.0) fixed level of delay for assessing effective capacity.

While the FAA’s objective is to meet growth in demand while maintaining
delays at 14 minutes or less, consumer complaints tend to focus on system delays
rather than available capacity. Therefore, reducing delay might be a reasonable
objective for enhancing system capability. In Figure 9, it can be seen that, at least
conceptually, capacity can be traded for a reduction in delay within the bounds of
system capability. So, the capacity enhancement achievable with a reduced delay
(CRD) is not as large as the capacity reduction with a fixed delay (CFD). However,
delays could potentially be reduced along with a less significant gain in capacity
(CRD) if reducing delay was targeted as an objective of system enhancement.
Conversely, capacity could grow larger, although not as significantly due to other
constraining factors, if delays were allowed to increase. That is, the conceptual
increase in capacity with increased delay (CID) is greater than the capacity
enhancement with a fixed delay (CFD).
As the capability of the national airspace system expands, it is largely a policy
decision whether the enhanced capability will be used primarily for increasing
capacity or for decreasing delay. However, the FAA’s forecast that growth is
expected to meet or exceed planned capacity improvements provides a reasonable
justification for adopting a policy of projecting capacity expansion while attempting
to maintain a fixed level of delay. Capacity is projected to, at best, parallel expected
growth through 2010. Therefore, essentially all of the projected enhancements to be
engineered into the national airspace system by that time will be needed to meet the
forecast growth in aviation operations. Therefore, if demand is to be met,
enhancements are not likely to be available for mitigating delay. Furthermore,
system enhancement efforts are likely to have a greater impact on increasing capacity
rather than decreasing existing delay, given that delay is constrained to a greater
extent by external factors such as weather and airline scheduling practices that are
more difficult to control. Also, given the complexity of tradeoffs between capacity
and delay, using a fixed level of delay in projecting future effective capacity
simplifies the comparison to baseline capacity levels. An alternative strategy, that
would involve core conceptual changes in policy, would value system efficiency over
capacity and target reducing delays. Such an approach may involve various market-
based strategies, discussed later in this report, to reduce demand characteristics for
aviation operations in addition to system enhancements targeting delay reduction.
While a more efficient national airspace system may improve the satisfaction of
many consumers, it is likely to increase associated costs by limiting the supply of
aviation services. Therefore, such a shift in policy regarding the objectives for
modernizing the national airspace system could be contentious.
Impact of Congestion on Aviation Safety
As demand for air transportation continues to grow, increasing flight operations
may introduce additional risks to aviation safety that may need to be addressed if the
system is to maintain or improve upon its current level of safety while at the same
time addressing capacity needs. The FAA’s ATO has identified two key indicators
of safety in its performance-based plan: runway incursions and air traffic controller
operational errors.

Runway Incursions
As traffic density at airports increases, so does the probability that an aircraft or
ground vehicle will enter on to an active runway when an aircraft is taking off or
landing unless steps are taken to effectively reduce the likelihood of such
occurrences. The FAA refers to these breaches of runway safety that occur at
towered airports as runway incursions.40 Runway incursions pose a significant safety
risk because they are the manifestations of human errors and pre-existing conditions
that may well have led to a runway collision.
The potentially deadly consequences of a runway collision were highlighted
most recently on October 8, 2001 when a Cessna business jet strayed on to the active
runway in foggy conditions and was struck by a departing airliner at Milan, Italy’s
Linate Airport killing 118 people and injuring 4.41 A year earlier, a Singapore
Airlines 747 bound for Los Angeles mistakenly attempted to take off from Taiwan’s
Chiang Kai Shek International Airport using a partially closed runway at night during
a typhoon. The airplane collided with construction equipment killing 83 of the 179
on board.42 The world’s deadliest aircraft accident (583 fatalities), the 1977 collision
between two Boeing 747 aircraft on the Island of Tenerife, was also the result of a
runway incursion during low visibility conditions.43
The United States has not been immune to such disasters. Since 1990, there
have been four runway collisions in the United States involving large commercial
airliners. The deadliest runway collision in the U.S. occurred at Los Angeles
International Airport (LAX) on the night of February 1, 1991. A USAir Boeing 737
was cleared to land on a runway occupied by a commuter flight that was instructed
to line up on the runway and await takeoff clearance. The National Transportation
Safety Board (NTSB) determined that the accident was attributable to shortcomings
in LAX’s air traffic control management, procedures, and oversight, which ultimately
led to the failure of the tower controller to maintain appropriate situational

40 The FAA defines a runway incursion as any occurrence in the airport runway environment
involving an aircraft, vehicle, person, or object on the ground that creates a collision hazard
or results in a loss of required separation with an aircraft taking off, intending to take off,
landing, or intending to land (See FAA Office of Runway Safety. Runway Safety Report:
Runway Incursion Trends at Towered Airports in the United States (FY1999-FY2002). July


41 Agenzia Nazionale per la Sicurezza del Volo (Italy). Milano Linate, ground collision
between Boeing MD-87, registration SE-DMA and Cessna 525-A, registration D-IEVX.
January 20, 2004.
42 Aviation Safety Council (Taiwan, Republic of China). Crashed on a Partially Closed
Runway During Takeoff — Singapore Airlines Flight 006 — Boeing 747-400, 9V-SPK —
CKS Airport, Taoyuan, Taiwan, October 31, 2000. Aircraft Accident Report ASC-AAR-02-


43 Subsecretaria de Aviacion Civil (Spain). KLM, B-747, PH-BUF and Pan-Am B-747,
N736 — Collision at Tenerife Airport, Spain on 27 March 1977. Madrid, Spain.

awareness.44 Another notable runway collision occurred in the U.S. on November
22, 1994 when a TWA DC-9 collided with a twin-engine Cessna at St. Louis
International Airport (STL), Missouri. Similar to the recent Milan crash, the NTSB
found that the Cessna pilot had mistakenly taxied past the assigned runway and into
the DC-9’s path in foggy conditions. The NTSB further concluded that airport
surface monitoring equipment could likely have prevented the collision.
Since FY1999, the rate of runway incursions at the nation’s 35 busiest airports
has remained relatively constant, slightly above 5 incursions per million flight
operations.45 Overall, the rate of incursions for commercial operations has averaged
slightly more than 5.5 incursions per million flight operations. While the overall rate
of runway incursions appears to be relatively constant since 1999, the FAA has noted
that the severity of incursions declined during that period. That is, a decline in the
most serious types of incursions — those classified by the FAA as having a
significant or extreme collision potential (Category A and B incursions) — was
observed, whereas the rates of less severe incursion incidents (Category C and D
incursions) has remained relatively unchanged (see Figure 10).
Figure 10, Runway Incursion Rate

Source: FAA Runway Safety Report, July 2003, August 2004, & August 2005.
While the FAA concluded that this trend demonstrates progress in mitigating
the severity of runway incursions, such a conclusion may be premature. Given the
low rate of these events (about 1 in every 3 to 5 million operations), it is difficult to
44 National Transportation Safety Board. Runway collision of US Air Flight 1493, Boeing

737 and Skywest flight 5569 Fairchild Metroliner, Los Angeles, California, February 1,

1991 (AAR-91-08).

45 See FAA Runway Safety Reports (July 2003, August 2004, and August 2005).

say for sure whether this reduction in incursion rate is meaningful and even more
difficult to attribute it to specific actions taken to reduce the rate and severity of
incursions. Furthermore, the reduction in severity levels observed between 2001 and
2002, has appeared to flatten. This may indicate that the effects of currently
implemented mitigation strategies have already been largely realized. If this is the
case, then more may need to be done to keep the overall numbers of Category A and
B incursions to a minimum. This is because, even if the severe incursion rate is held
constant, increasing number of operations will bring with them likely increases in the
number of severe incursions. While more data is needed to draw meaningful
conclusions regarding the reduction in risk of runway incursions, these trends are at
least promising and the FAA is continuing its efforts to implement operational and
technological approaches to further reduce runway incursions.
Of the OEP-35 airports, 7 had 15 or more incursions over the four year period
from 2000-2003. These airports were: Chicago-O’Hare (ORD); Dallas-Fort Worth
(DFW); Los Angeles International (LAX); Phoenix Sky Harbor (PHX); Boston
Logan (BOS); Saint Louis (STL); and San Francisco International (SFO). Traffic
density was certainly a major contributing factor in the number of runway incursions
experienced at an airport. Four of these 7 airports were among the top 5 busiest
airports in the United States. The FAA recognizes that traffic volume is a major
factor in runway incursions since increases in operations increase the number of
opportunities for error. However, the FAA found that annual fluctuations in traffic
volume did not have predictable effects on runway incursions rates. Thus, traffic
volume appears to interact with airport-specific characteristics to affect the likelihood
of runway incursions in complex ways that are not yet fully understood.
The highest number of runway incursions (34), and the largest number of
Category A & B incursions (12) over the 2000-2003 period for the OEP-35 airports
was observed at LAX, which ranks fourth overall in number of operations and has
a complex taxiway layout. However, LAX had no Category A & B incursions in
2003 suggesting that, while they have been unable to reduce the annual number of
incursions at that airport, strategies to mitigate the severity of incursion incidents
appear to be working there. Efforts to date have primarily focused on outreach to
increase pilot runway safety awareness, improved signs, pavement markings, and
lighting, and procedural modification to improve operational safety.
Besides high traffic density, the attributes that those airports experiencing higher
numbers of runway incursions appear to share include complex taxiway and runway
layouts; and complex taxi procedures. Some, but not all, of these airports have
intersecting runways which also present opportunities for runway incursions to occur.
The runway incursion risk of intersecting runways could have implications for
capacity-enhancing operational procedures such as land and hold short operations
(LASHO) in which pilots of landing aircraft are required to stop before reaching a
crossing runway so that simultaneous operations can be conducted on both runways.
Clearly, other airports share these attributes as well and procedures such as LASHO
have been used safely for many years. Therefore, the specific factors that make an
airport more vulnerable to runway incursions are not yet completely clear. How
airport-specific factors such as infrastructure, procedures, operations, and
environment interact with traffic density to define the runway incursion risk for a
specific airport is not fully understood and continues to be scrutinized by the FAA

and others to identify the influence of these various factors on runway incursion
risk. 46
The leading direct cause of runway incursions was pilot deviations, which
account for about 53% of incursions involving commercial aircraft. Controller errors
and deviations account for about 29% of runway incursions among incursions
involving commercial aircraft and incursions occurring at the OEP-35 airports.
Deviations by vehicles and pedestrians operating in the air operations area comprise
the remaining runway incursions. Consequently, mitigation measures to reduce
runway incursions are likely to have the greatest benefit if they can reduce the
number of pilot deviations during surface movement. However, FAA’s efforts to
date in terms of high cost technology options — including ground radar (Airport
Surface Detection Equipment (ASDE) and the Airport Movement Area Safety
System (AMASS) — are primarily focused on improving air traffic controller
situation awareness regarding traffic position and the potential for incursions.
In 2001, the NTSB evaluated the Airport Movement Area Safety System
(AMASS) and determined that it was not capable of providing sufficient warning to
prevent runway collisions in all instances and, as currently implemented, provides no
capability to issue warnings directly to pilots and other vehicle operators.47 In
essence, the AMASS system inserts controllers into the decision cycle, thereby
increasing the time needed for pilots to take evasive action to prevent a collision.
Providing traffic information and alerting directly to pilots, as opposed to only
alerting controllers, would be preferable in this regard. But, this is not what the
NTSB’s original recommendation sought. Rather the NTSB specifically asked the
FAA to develop a system analogous to cockpit traffic collision avoidance systems
(TCAS) to alert controllers to pending runway incursions.48 However, TCAS
provides alerts and conflict resolutions directly to pilots.
The NTSB assessment went on to conclude that FAA’s efforts to curtail runway
incursions largely through technological approaches aimed at improving air traffic
controller situational awareness was an incomplete solution, and specifically called
for specific actions to address recommended changes in operational procedures at
airports. The NTSB’s recommendations urged the FAA to install ground movement
safety systems at all airports with passenger service that provide a direct warning
capability to pilots, and demonstrate through computer simulations or other means
that the system will, in fact, prevent runway incursions. The recommendations also
included numerous suggested changes to operational procedures to: increase pilot and
controller situation awareness and resolve ambiguities regarding runway crossing
clearances; eliminate the practice of positioning an aircraft on a runway to await
takeoff at night and in poor weather; modify phraseology of airport movement

46 FAA Office of Runway Safety. Runway Safety Report. (July 2003 and August 2004).
47 Carol J. Carmody. Testimony before the Committee on Transportation and Infrastructure,
House of Representatives Regarding Runway Incursions, June 26, 2001. Washington, DC:
National Transportation Safety Board.
48 National Transportation Safety Board. Runway collision of Eastern Airlines Boeing 727,
flight 111 and Epps Air Service Beechcraft King Air A1000, Atlanta Hartsfield International
Airport, Atlanta, Georgia, January 18, 1990 (NTSB/AAR-91/03).

instructions to be consistent with international standards; and provide controllers
with guidance on appropriate phraseology and speaking rates, especially when
communicating with foreign flight crews.49
The FAA continues to address many of these procedural changes to enhance
runway safety. However, the NTSB has expressed continued frustration with the
FAA’s progress. At a recent meeting, the NTSB questioned the completeness of the
FAA’s runway incursion incident reporting and cast doubt on FAA’s claims that the
incursion rate is declining.50 Most observers agree that there is no single solution to
mitigating runway incursions and continued investment in airport design, procedural
modifications, pilot and controller training, and technology is needed to reduce the
risk of runway accidents. Several mitigation strategies to reduce the potential for
runway incursions are currently being implemented or are under study by the FAA
and NASA. Mitigation strategies to reduce the risk of runway incursions can be
placed into six general categories, as shown in Table 1. These various strategies are
mainly aimed at improving pilot and controller situational awareness regarding:
aircraft position relative to other aircraft and ground vehicles; aircraft and vehicle
position relative to assigned taxi routes and active runways; and flight crew and
vehicle operator understanding of taxi instructions and runway clearances. Other
solutions seek to provide controllers and pilots with alerting and conflict resolution
capabilities to predict and circumvent impending runway incursions or reduce the
severity of incursions by reducing the risk that such an event could result in a
Table 1. Mitigation Strategies to Prevent Runway Incursions and
Reduce Their Severity
Mitigation StrategyExamples
Markings, Signs, and LightingHigh Contrast Taxiway Markings and
Hold Short Lines;
Improved Visibility and Positioning of
Signs; and
Runway Status Lights
Increasing Pilot Positional AwarenessCockpit Moving Map Displays; Airport
Position Transmitting Devices; and
Auditory Advisories and Audible

49 National Transportation Safety Board. Safety Recommendations A-00-66 through A-00-


50 National Transportation Safety Board. NTSB calls for federal action to adopt “most
wanted” safety improvements. Press Release SB-04-33, November 9, 2004.

Increasing Pilot and ATC TrafficGround Surveillance Radar (e.g., Airport
AwarenessSurface Detection Equipment - Model X
(ASDE-X)); and Cockpit Traffic
Information Displays (e.g.,
Traffic Information Service (TIS),
Cockpit Display of Traffic Information
Procedures and TrainingRamp worker training;
Educational materials to flight crews and
operators of ground vehicles and
Modifying and standardizing taxi routes;
Modifying ATC phraseology
Warning Devices and Conflict ResolutionAirport Movement Area Safety System
Advisory Systems(AMASS); and
ASDE-X with conflict detection alerting
Airport Redesign/ReconfigurationPerimeter taxiway construction;
Eliminating or minimizing intersections
where taxiways cross runways
Loss of Separation and Near Mid-Air Collisions
As runway incursions are indicators of safety risk associated with ground
operations, breaches of required airborne separation between aircraft are indicators
of safety risk during flight. These loss of separation incidents are a safety concern
because they point to system failures and errors that could lead to a midair collision.
A loss of separation caused by an air traffic control error is termed an operational
error. Operational errors, like runway incursion, are placed into one of four
categories (A, B, C & D) based on severity. Operational errors are reviewed and
scored using a point system that considers factors such as: the vertical and horizontal
separation between aircraft; whether the aircraft were on converging or diverging
flight paths; the closure rate between aircraft; and whether ATC took corrective
actions or TCAS (Traffic Collision Avoidance System) resolution advisories were
issued.51 The severity is then categorized as high, moderate, or low. Under recent
changes by the FAA, these three levels of severity are now grouped into four
categories, in the following manner:
!Category A: All high severity incidents
!Category B: All moderate severity incidents where ATC fails to
take corrective action (uncontrolled)

51 Federal Aviation Administration. Air Traffic Quality Assurance. Order 7210.56C,
August 15, 2002.

!Category C: All moderate severity incidents where ATC takes
appropriate corrective action (controlled); and
!Category D: All low severity incidents
There is growing concern over operational errors as annual operational error
rates — expressed as the number of incidents per million flight operations — have
been on the rise over the past five years and are up 35% compared to the previous
five year period (see Figure 11). Furthermore, the severity of these operational
errors has been regarded as being too high. Specifically, the DOT Inspector General
reviewed severity ratings for 13 months of operational error data collected from May,
2001through May 2002 and found that 78 percent were classified as moderate
severity, and 6% were classified as high severity, while only 22% were classified as
low severity.52 The DOT Inspector General’s report concluded that much work needs
to be done to reduce the severity of operational errors so that the large majority are
low severity events.
Source: DOT Office of Inspector General. Operational Errors (AV-2003-040) and
FAA Administrator’s Fact Book (November 2005).
The DOT Inspector General also highlighted potential problems in the use of
controllers-in-charge (CICs), a program using senior controllers rather than managers
to supervise facility operations, which was greatly expanded in recent years. Their
study found that while the use of CICs increased 13.6% between 2000 and 2001, the
number of operational errors while CICs were on duty increased by 45.7%. While

52 Department of Transportation, Office of Inspector General. Operational Errors and
Runway Incursions: Progress Made, but the Number of Incidents is Still High and Presents
Serious Safety Risks (AV-2003-040), April 3, 2003.

other factors may have contributed to this rise in error rates, this trend may be an
indicator that tighter controls and monitoring of the program may be needed.
Both the DOT Inspector General and the NTSB have criticized FAA policy and
agreements with controllers that limits the use of remedial training following
operational errors. FAA policy does not require the FAA to impose remedial training
following a low severity operational error and prohibits follow-on training if the
controller took corrective actions during the course of the event. Even for controllers
who have moderate or high severity operational errors, remedial training is not
required. Also, FAA policy prohibits supervisors from revoking or suspending
controller certificates and facility ratings on the basis of performance deficiencies.
In light of these findings, the DOT Inspector General concluded that FAA needs to
strengthen its actions to address controller performance deficiencies highlighted by
operational errors.
Even with improved oversight and safety regulation of air traffic facilities,
operational errors can still pose serious safety risks. In essence backup capabilities
are needed to assure aircraft separation by alerting controllers and pilots when a loss
of separation occurs and poses a threat of collision between two aircraft. These aids
include conflict alert (CA) algorithms to alert controllers to impending loss of
separation events, and TCAS to provide pilots with traffic awareness and conflict
resolutions for preventing midair collisions.
The August 31, 1986 collision of an Aeromexico D-9 and a small private plane
over Cerritos, California highlighted growing concerns over the risk of mid-air
collisions and prompted the FAA to promulgate regulations phasing in the use of
airborne traffic collision avoidance systems (TCAS) on airliners and commuter
aircraft.53 Currently, FAA regulations stipulate that passenger air carrier flights be
equipped with an operating TCAS system that provides visual and aural advisories
of traffic conflicts. Additionally, all aircraft operating near the nation’s busiest
airports are required to use altitude report equipment (Mode C or Mode S
transponders) that transmit aircraft position and altitude to TCAS devices.
Since these requirements have gone into effect, there has not been a mid-air
collision involving a TCAS-equipped aircraft in U.S. airspace. However, TCAS is
not required on all airplanes. Regulations stipulate that only passenger airliners and
jet and turboprop air taxi and commuter flights with seating for 10 or more
passengers must be equipped with TCA54S. Thus, most cargo aircraft, business jets,
and many charter aircraft are not required to install or use TCAS.
One option to increase safety as operations increase in congested airspace would
be to require the use of TCAS systems for other users of the aviation system. This
may be particularly important given the large anticipated increases in business jet and

53 National Transportation Safety Board. Collision of Aeronaves de Mexico, S.A. McDonnell
Douglass DC-9-32, XA-JED and Piper PA-28-181, N4891F, Cerritos, California, August

31, 1986. NTSB Report AAR-87-07.

54 Title 14, Code of Federal Regulations §121.356, §135.180.

cargo jet operations over the next 10 years. However, alternative technologies —
such as automated dependent surveillance-broadcast (ADS-B) with cockpit display
of traffic information (CDTI) or Traffic Information Systems (TIS) — have the
potential to offer TCAS-like capabilities at significantly lower cost, which may be
particularly attractive to general aviation users of business jets and mini-jets. Thus,
alternative technical standards for traffic awareness and alerting systems may be able
to adequately address safety concerns regarding traffic collision avoidance in the near
future. Congress may pursue the implementation of such systems through either
legislation or oversight of FAA regulatory activities.
Possible Strategies for Enhancing Capacity While
Maintaining Safety and Efficiency
There are numerous approaches to enhancing capacity of the national airspace
system under development and evaluation. The core policy issue is determining the
right mix for investing in airport infrastructure, technology, and modifications to
operational procedures in order to grow capacity at a rate commensurate with growth
in demand while at the same time maintaining the efficiency and safety that aviation
consumers expect. The aviation community has invested a great deal in future
concepts for air traffic management and control that are just beginning to mature and
take shape in the operational framework of the national airspace system.
Additionally, airports continue to expand and reconfigure to enhance their capacity
and improve operational efficiency. However, these measures may not be enough to
meet demand without eroding the efficiency and possibly the safety of air travel.
Consequently, policymakers are continuing to evaluate market-based strategies to
alter the demand characteristics for aviation operations so that operations can
continue at a level that is safe and meets consumer expectations of efficiency in a
resource constrained system.
The “Free-Flight” Concept
Over the next decade, the current model of the national airspace system is
expected to change dramatically. Virtually all airliners and business jets now have
onboard capabilities, such as area navigation equipment (RNAV), global positioning
system (GPS) receivers, and inertial guidance systems that provide precise aircraft
position data without sole reliance on ground-based VORs, thus allowing pilots to
fly directly from airport to airport. However, allowing aircraft to fly direct to their
destination presents significant challenges to air traffic managers and controllers that
are currently being worked out under a concept called free flight. Since free flight
is an evolving concept, the term is used both loosely to describe conceptual aspects
of future air traffic systems allowing aircraft to fly along direct routes and deviate as
needed to avoid weather and traffic, as well as more concretely to describe a suite of
air traffic management (ATM) and air traffic control (ATC) tools being developed
and tested by the FAA to allow greater flexibility in aircraft routing.
One step in the process toward implementing free flight is to redefine the
structure of high altitude airspace around point-to-point direct routes that
appropriately equipped aircraft can utilize. The FAA began doing this in July 2003,
defining and charting high altitude routes — designated by international convention

as “Q routes” in the U.S. and Canada — for use by aircraft with precision satellite
navigation capabilities.55
One major challenge in implementing the free flight concept is defining how
much autonomy each aircraft will have during the en route portion of flight.
Currently, aircraft in high altitude airspace can only fly along the specific course and
altitude profile that air traffic control has approved or cleared. Thus, in the present
system, ATC has direct control over every aircraft in high altitude airspace. Under
a free flight model it is likely that pilots would have some degree of autonomy
regarding their flight path. For example, in the current system if a pilot sees a
thunderstorm ahead, he or she must request a deviation around the storm from ATC.
Under the proposed free flight model, the pilot may be able to deviate around the
storm without formally receiving permission to do so by ATC. Similarly, pilots may
have some degree of autonomy regarding deviations for traffic, altitudes and
airspeeds deviations to avoid or mitigate turbulence and increase fuel economy, and
so on. This would shift the ATC role for high altitude airspace from direct control
to a supervisory control function, where ATC would monitor traffic in a given sector
of airspace and resolve conflicts as well as provide advisories and instructions to
maintain appropriate aircraft spacing and alleviate congestion at destination airports.
In the future, the en route controller is also likely to take on a more active role as an
interface between aircraft and air traffic management (ATM) functions within the
FAA that will apply more complex analyses of the overall traffic picture to more
efficiently control the flow of air traffic throughout the system.
A second major challenge in implementing a free flight model for the national
airspace system is handling the transitions from the busy terminal airspace around an
origin airport to the en route phase of flight along these routes and from the en route
segment to the approach phase of flight when aircraft enter busy terminal airspace
around a destination airport. The working concept to address this challenge is by
using what are referred to as pitch and catch points to define specific transition points
into and out from busy terminal airspace. Under this concept, aircraft would fly
predefined departure routes — much as they do today, except with the aid of
precision satellite navigation — to a pitch point where the would then proceed semi-
autonomously via a direct routing to a catch point where they would enter the
terminal airspace at the destination airport and follow predefined approach routes or

55 The FAA has defined advanced aircraft navigational performance capabilities broadly
under the umbrella of what they call Area Navigation or RNAV equipment. By establishing
performance standards in this manner, it does not limit operators to any specific technology
to meet the required navigational performance to perform certain operations. In this sense,
the FAA has moved away from technical standards and instead had adopted performance
standards for future navigation capabilities. At present, the aircraft technology needed to
meet these performance standards include Wide Area Augmentation System (WAAS)
enabled GPS receivers and inertial reference units (IRUs). The use of ground-based RNAV
systems developed in the 1970s that rely on VOR receivers and distance measuring
equipment (DME) to navigate using more direct routing is being evaluated under this
framework, but is not currently approved for high altitude airspace. In this report, the term
precision satellite navigation capabilities refers to the WAAS enabled GPS technology
which is one of two core enabling technologies of emerging free flight operational concepts
in the U.S.

ATC instructions to arrive at the destination airport. Thus, at least in the near term,
the free flight implementation that is most likely to emerge is one in which aircraft
will operate semi-autonomously in high altitude airspace between pitch and catch
points, and will operate under more direct control of ATC when transiting busy
terminal airspace during departure and before landing.
The core enabling technology needed to implement navigation under a free
flight system — precision satellite navigation — is already mature. The other
element needed to enable free flight — assuring safe separation between aircraft —
involves a more complex interplay between onboard technologies and air traffic
management and control tools. Onboard technologies for traffic awareness and
separation include TCAS systems which are already widely deployed. The other
onboard technology for traffic awareness and separation in aircraft is Automatic
Dependent Surveillance - Broadcast (ADS-B), a technology capable of broadcasting
aircraft position information to other aircraft and to air traffic control and displaying
traffic information in the cockpit. Unlike TCAS which uses onboard radar and radar-
based air traffic control displays, ADS-B will rely predominantly on satellite-based
aircraft position data using GPS. The potential advantage of this technology is that
it can provide a common traffic picture, that is, the capability for pilots, and
controllers, and air traffic managers to have shared situation awareness regarding
nearby traffic and potential conflicts. Such a capability is seen as a step toward
providing pilots with more autonomy regarding navigation and separation. While
such technology has significant potential and has been implemented successfully in
various operational tests performed under the FAA’s Safe Flight 21 program, much
work is still needed to create a system-wide infrastructure to support this technology.
Much work is also still needed to develop decision support tools and automation that
can assist air traffic managers, controllers, and pilots to handle traffic and weather
conflicts. Finally, much work still needs to be done on the human factors and system
design of a free flight system to more clearly define the roles and protocols for air
traffic managers, controllers, and pilots.
The FAA is in the process of defining the regulatory structure to permit limited
operations exploiting this technology. However, significant work is still needed to
create a seamless, integrated free flight system throughout the domestic U.S. airspace.
As shown in Table 2, there is still considerable risk associated with integrating and
implementing free flight concepts in the national airspace system. At this point, this
risk exists although the core enabling technologies are relatively mature, because
extensive systems integration is still needed in order to utilize these technologies to
provide seamless navigation, communications, surveillance, and air traffic
management capabilities throughout the most complex airspace system in the world.
Despite ongoing reform with the creation of the ATO and the JPDO, the FAA’s
capability to implement free flight also introduces an element of risk because of the
FAA’s history of cost overruns, schedule delays, and failures to meet performance
objectives in managing large scale programs. Given the relatively high level of risk
associated with implementing free flight concepts, this could be an area of continued
congressional oversight over the next several years.

Table 2. Risk Elements and Considerations for Implementing
Free Flight Concepts
ElementRisk Considerations
TechnologyCore technologies (e.g., GPS, ADS-B) are mature;
Extensive systems integration, both hardware and software, is
ApplicationHighly complex airspace system;
DomainHighly complex interactions between human operators (i.e., air
traffic managers, controllers, and pilots);
Extensive requirements for collaboration/information sharing; and
Highly dynamic scenarios (e.g., weather and traffic flow variations)
ProgramHistorically, FAA programs have been plagued by cost overruns,
Managementschedule delays, and failures to meet performance objectives;
Historically, FAA has “stovepiped” or compartmentalized projects
with inadequate integration and inter-project collaboration;
Historically, FAA has had inadequate and incomplete blueprints for
system integration and technology investment strategies;
ATO and JPDO were established to correct management deficiencies
at FAA but are too new to assess their effectiveness;
FAA is implementing incremental, spiral development processes and
other acquisition reforms to address concerns
Reducing Separation Standards
In parallel with the FAA’s efforts to introduce free flight concepts in the
national airspace system, the FAA is implementing initiatives to reduce the
separation between aircraft both in high altitude airspace and in the terminal
environment, near airports. Reducing separation is seen as an important strategy for
increasing capacity in congested airspace.
For example, reducing vertical separation from 2,000 feet to 1,000 feet in high56
altitude airspace in essence doubles en route capacity, although actual capacity
enhancement through RVSM is likely to be constrained to some degree by factors
such as airspace configuration and air traffic controller workload that may limit the
number of aircraft that can be handled within an air traffic control sector. Only with
the advent of more autonomous means of navigation and surveillance of air traffic,
using free-flight direct navigation concepts and pilot/controller decision aids for

56 High altitude airspace, as used in this report, refers to airspace between 18,000 feet and

60,000 feet (Flight Level (FL) 180 to FL600, which is classified as Class A airspace.

example, will technology and operational procedures allow for this increase in
capacity to be fully exploited. Nonetheless, in the near term, RVSM is expected to
have numerous benefits including:
!Reduced fuel burn from improved routing, altitude selection, and
delay reduction;
!Increased air traffic sector capacity, throughput, and efficiency;
!Increased controller flexibility for resolving weather and traffic
!Decreased controller workload by providing controllers with more
!A reduction in conflict points in high density traffic areas; and
!Enhanced predictability by allowing aircraft to use requested
In high altitude airspace, efforts are underway to reduce the vertical separation
between aircraft from 2,000 feet to 1,000 feet. RVSM requirements are now in effect
for many oceanic and international flights operated between 29,000 feet (FL290) and
41,000 feet (FL410). Domestic RVSM requirements covering the lower 48 states
and Alaska will be required by January, 2005
The Domestic RVSM implementation will make six additional flight levels
available for operations between FL 290-410. According to the FAA, RVSM has
been shown to enhance aircraft operating efficiency by making more fuel/time
efficient flight levels available and enhance air traffic control flexibility in addition
to providing the potential for enhanced en route airspace capacity.
While RVSM is designed to target capacity expansion in high altitude airspace,
reducing separation standards near airports is seen as an important strategy to
improving capacity and efficiency of arrivals and departures. One major hurdle to
overcome in implementing this strategy is that many airports have been built with
runways that are too close together to support simultaneous arrivals using current
separation requirements. Therefore, the FAA is working on technology and
procedures to reduce the separation between aircraft operating to closely spaced
parallel runways by providing pilots and controllers with precision aircraft and traffic
position information that will allow operations to continue under visual separation
rules during periods of marginal in-flight visibility. In the future, aircraft meeting
specific levels of navigational accuracy — called required navigation performance,
or RNP57 in aviation parlance — may be able to use cockpit traffic displays in lieu

57 Required navigational performance (RNP) is a performance standard that defines
the required position accuracy needed to keep the aircraft within a specified
containment area, or bubble, 99.9% of the time. The required navigational
performance is not tied to any specific technology, but sets a technical standard that
can be met using various FAA-approved equipment. While precision satellite-based
navigation is currently the principal technology for meeting RNP standards, these
standards allow for the use of other technologies — including yet to be developed
technologies — to meet navigational performance standards.

of out-the-window visual confirmation of traffic position to see and avoid nearby
traffic approaching parallel runways in virtually all weather conditions.
Like free flight, reduced separation standards in the terminal environment near
airports are likely to rely heavily on precision satellite navigation capabilities
provided by the global positioning system (GPS) augmented by ground-based
stations that provide increased precision in the GPS signal. The FAA has two
systems for precision satellite navigation - the recently commissioned Wide Area
Augmentation System (WAAS) that provides systemwide coverage and the higher
resolution Local Area Augmentation System (LAAS) which may provide more
precise navigation capability for precision landings during low visibility operations
at selected airports. While WAAS is operationally available, LAAS is still in early
testing phases of operational testing and there are some that still question whether the
improvement in navigational accuracy of current LAAS systems over WAAS is
enough to justify their cost.58
The FAA turned on the WAAS network on July 10, 2003 and is now phasing-in
landing procedures that can exploit the precision vertical and lateral navigation
capabilities of GPS/WAAS. WAAS is a milestone achievement because it offers the
potential for precision vertical and lateral navigational guidance to practically any
runway in the United States in addition to providing improved accuracy of aircraft
position data needed to reduce aircraft separation standards.59
In terms of capacity enhancement, WAAS provides two key benefits. First,
WAAS can be used as a means to allow more precise spacing of aircraft on approach
to an airport. This can permit runway utilization to better approach optimal levels.
In the future, the precision of WAAS enabled GPS position data may allow for the
reduced separation of aircraft on approach and may also reduce the separation of
aircraft arriving on closely spaced parallel runways. The second way WAAS can
enhance capacity is by providing precision landing capabilities to many general
aviation reliever airports. In poor weather, the only available landing sites with
precision landing capabilities offered by current airport-based instrument landing
systems (ILS) are often commercial airports and large general aviation reliever
airports. Consequently, commercial airports often see increased general aviation
activity during poor weather because general aviation aircraft are forced to use these
landing facilities. With new instrument approach procedures exploiting WAAS-
enabled GPS navigation, numerous other airports can potentially relieve commercial
airports of general aviation traffic during reduced visibility conditions. Thus, the
potential benefit of precision satellite navigation extends beyond providing the
capability to reduce separation standards.

58 John Croft. “More WAAS, less LAAS.” Professional Pilot, April 2003, pp. 60-64.
59 While WAAS provides the capability for precision vertical guidance to virtually all
runways, terrain, obstacles, noise abatement and other factors may limit its implementation
at some airports.

Automation and Decision Aiding for Air Traffic Management
The future national airspace system is likely to make extensive use of
automation and decision aiding tools to more efficiently manage traffic flow in a free
flight environment with reduced aircraft separation. Many experts see automation
and decision aiding tools as a core element of the next generation airspace system
that will allow users to more fully exploit the capabilities of precision satellite
navigation and enhanced communications and surveillance capabilities. According
to the JPDO director, Charles Keegan, a central concept of the NGATS is to rely
extensively on the automation of core air traffic management functions such as flow
control and the metering or spacing of aircraft.60
The FAA and NASA are actively engaged in the research and development of
several tools that may someday provide essential automation and decision aiding
capabilities to air traffic managers, controllers, and pilots in the future national
airspace system. One precursor to future decision aiding capabilities to enable users
to exploit en route free flight concepts is the user request evaluation tool (URET)
currently being deployed at en route air traffic facilities. URET predicts and notifies
controllers of potential conflicts between aircraft or special activity airspace and
provides conflict assessments of proposed flight path changes. Presently, URET has
been deployed at six Air Route Traffic Control Centers (ARTCCs) as part of the first
phase of FAA’s free flight implementation and installation at the remaining 14
ARTCCs is underway as part of the second phase of free flight implementation.
Another component of high altitude free flight enabling technology is the Traffic
Management Advisor (TMA), a strategic planning tool for high altitude controllers
and traffic management specialists. The TMA is used for arrival schedule planning
to implement time based metering or sequencing of aircraft for the handoff between
en route phases of flight and approach to airports in congested airspace. A related
tool designed to also improve flow control is the passive final approach spacing tool
or pFAST. As the name suggests, pFAST has been designed to serve as a decision
aid for controllers to better optimize traffic flow during the final approach to a
runway. While these tools are currently making their way into air traffic control
centers and approach control facilities, they may not offer complete solutions to air
traffic management. Extensive work is still likely to be needed to integrate these
various tools and concepts on a system-wide level in order to enable more optimal
utilization of airspace and more efficient flow of air traffic.
In the future, integrated air traffic management concepts and collaborative
decision making are likely to increase in importance and allow the FAA to develop
strategies and tactics for handling system-wide traffic flow. The FAA may
increasingly rely on traffic management tools to aid strategic and tactical decision-
making. The national playbook is one example of a traffic management tool
currently implemented to give the FAA the ability to deploy specific situation-based
tactics for handling capacity constraining conditions such as adverse weather. The
national playbook provides the air traffic control system command center
(ATCSCC), the nerve-center for FAA’s air traffic management operations, other
FAA facilities, and system users a common set of strategies for various scenarios.

60 David Hughes. “The ‘Silent’ Crisis”.

The purpose of the national playbook is to aid the FAA and system users in
expediting route coordination during the most common scenarios that occur during
severe weather. The selected routes in the national playbook include textual and
graphical depictions of specific routing tactics that have been vetted by air traffic
control representatives from affected facilities involved in a given scenario.
Another operational tool that the FAA recently began implementing is the use
of “express lanes” to temporarily increase the flow out of airports experiencing
departure delays. The concept is that specific levels of delay will trigger the tactical
implementation of these “express lanes.” When this happens, air traffic controllers
will hold up traffic to and from nearby satellite and reliever airports to allow
departures from the major airport to flow more quickly through these “express lanes”
in the sky that open up as a result. In the future, air traffic managers may rely more
extensively on these strategies and tactics and rely more heavily on the use of
automation and decision aiding tools to optimize airspace utilization and traffic flow
However, despite the FAA’s focus on air traffic management technologies and
methods to improve future airspace utilization and increase the efficiency of traffic
flow, these efforts are not believed to be capable of fully addressing capacity needs
by themselves. As discussed previously, one of the main challenges for meeting
aviation capacity needs appears to be linked to the future capability to expand airport
infrastructure, such as new runways and new airports, in major metropolitan areas
where demand for air travel is expected to grow significantly over the next 25 years.
While increased automation and decision aiding to support air traffic managers,
controllers, and airspace users will help to optimize the utilization of underlying
infrastructure, experts generally agree that expansion and reconfiguration of airport
infrastructure is likely to provide the most substantial gains in available capacity of
the national airspace system.
Airport Expansion and Reconfiguration
As the FAA notes, there are two main strategies for alleviating peak demand at
airports: building new runways; and maximizing the use of existing runways.61 As
indicated from models in the FAA’s capacity benchmark studies, new runways can
significantly increase an airports capacity. Of the twelve OEP-35 airports building
or planning new runways, those new runways are expected to net an average capacity
improvement of 31% across all weather conditions.62 By comparison, technology
improvements at airports are expected to net more modest capacity increases in the
3 to 8 percent range.63 Thus, any systemwide strategy to enhance capacity is likely
to focus heavily on building new runways. Technology enhancements to improve the
usage of existing infrastructure, while important, do not appear to be capable of
keeping pace with near-term growth in airport operations.

61 Federal Aviation Administration. Operational Evolution Plan (Version 6.0).
62 Based on FAA Airport Capacity Benchmark Report 2004 data.
63 Federal Aviation Administration. Airport Capacity Benchmark Report 2001.

Expanding capacity at airport level, either by adding new runways or by building
new airports in metropolitan areas, requires extensive cooperation between the
federal government, local and state entities, airport authorities, and industry and
community stakeholders. For this reason, airport expansion plans are often
contentious, time consuming, and challenging. The growing need for expanded
airport infrastructure throughout the aviation system is pressuring the FAA and
airport operators to seek more streamlined methods for planning and addressing
regulatory compliance issues, such as environmental considerations, in the planning
process. Partnerships and close cooperation between the FAA, airport operators,
state and local governments and stakeholders, such as airlines and impacted
communities, are likely to become more critical in determining the best course of
action to expand regional capacity for aviation operations while minimizing
environmental impacts and integrating proposed solutions with other regional
transportation objectives. As a step toward addressing these challenges, Vison 100
(P.L. 108-176) included provisions to streamline the environmental review process
for airport capacity enhancement projects by designating the DOT as the lead agency
in these assessments and directing the Secretary of Transportation to develop a
coordinated review process including simultaneous review by all involved
government agencies. The objective of these provisions is to reduce the amount of
time and number of reviews required for airport expansion projects.
One major hurdle for many airports in congested areas is available land. Many
airports in major metropolitan areas lack the available land to build on. Moreover,
the acquisition of surrounding land to accommodate new runways is often not a
viable option, and even when it is, doing so is a time consuming and resource
intensive process that often takes several years. Some experts believe that one
alternative solution is to construct closely spaced parallel runways in hopes that
technology will be able to provide the capability to operate these runways at high
capacity levels under most, if not all, flyable weather conditions.64 There are several
challenges to doing this. Probably the most significant challenge is designing
runways and taxiways for safe and efficient surface movement between multiple
closely spaced parallel runways. There are complex operational challenges for
handling arrivals that need to taxi across active runways, and safety concerns about
runway incursions make the use of multiple, closely spaced parallel runways a
particular challenge.
Another significant challenge is the separation requirements imposed to prevent
wake turbulence encounters which currently limits the capacity of closely spaced
runways significantly. Wing-tip vortices produced by heavy jets pose a danger to
trailing aircraft that presently are dealt with by spacing aircraft several miles apart.
Reducing this separation is an important element of optimizing the usage of closely
spaced runways. Many experts see great promise in ongoing wake vortex research
and development at NASA’s Langley Research Center that may someday lead to the
operational deployment of a wake turbulence prediction tool for airports.65 However,
reducing aircraft separation based on the use of such a tool in an airport environment

64 David Hughes. “2025 squeeze play.” Aviation Week & Space Technology, November 15,

2004, p. 44-45.

65 Ibid.

is still likely to be several years away. In addition to these challenges, significant
human factors challenges related to controller workload and traffic situation
awareness likely will need to be addressed before a viable means for reducing
separation and conducting simultaneous operations on closely spaced runways can
be implemented without compromising safety.
Market-Based Options
Data indicate that, at best, through airport expansion and improvements, and
through implementation of technology solutions to enhance the capacity of the
national airspace system, the FAA will struggle to keep pace with the growth in
demand for air travel. Thus, there may be a growing need to examine alternative
means to alleviate congestion and delay in the aviation system. One particular
strategy that may be examined is the use of market-based approaches that, in essence,
alter the demand characteristics of aviation operators in ways designed to make
demand for aviation services more commensurate with available capacity in order to
maintain efficiency and safety of operations.
These market-based options vary along a continuum of government involvement
(see Figure 12). On one end of the continuum, airlines and other operators could be
left to work it out amongst themselves to define market approaches and schedules
that will cause minimal delay. In some cases, there could be limited government
involvement in these activities, such as having the FAA or DOT serve as a mediator
during discussions of scheduling or as an observer to ensure that there is no collusion
or other violation of antitrust statutes and regulations and that no specific user groups
are unfairly disadvantaged in establishing schedules and access to airports. The
government may take a somewhat more active role in such activities by discussing
air traffic concerns over proposed schedule options, or even, suggesting scheduling
options based on air traffic management considerations and models of traffic flow.

Figure 12. Continuum of Government Involvement in Market-Based
Strategies to Alleviate Aviation Congestion
Col laborati on
On Scheduling
Government Mediation
In Scheduling Practices
Active Participation with Industry
On Scheduling
Government Offered or
Recommended Scheduling Solutions
Quota and Slot Systems
Level of Government Involvement

Another way in which government could exert limited control over scheduling
practices is to implement incentives for off-peak scheduling, or disincentives for
operations during peak hours. Incentive programs could be accomplished through
quota systems (for example, multiplying a landing or takeoff during peak hours by
a weighting factor when calculating an operator’s daily or monthly quota of
operations at a specified airport). Incentive programs could also be implemented by
increasing or imposing fees, such as landing fees or ATC impact fees, during peak
hours. More direct government involvement may involve the use of slot systems
where operators and air carriers are allocated limited access to certain congested
airports. At the other end of the spectrum from no government involvement at all
over airline scheduling practices, is government regulation of the airline industry,
which was eliminated in 1978. Since it is likely that any proposal to re-regulate the
airline industry would face strong opposition from both the airlines and consumers,
such an option is not considered in this discussion of market-based approaches.
In the current debate over alleviating congestion at major airports, a significant
policy question that remains is: what degree of government involvement in airline
scheduling and airport access is most likely to provide an appropriate balance
between equitable and efficient access to limited airport capacity on the one hand and
fair and open competition between air carriers in desirable markets on the other?
Options under consideration to address this issue fall into two broad categories: 1)
strategies for curtailing peak hour demand at busy airports through various incentives
or disincentives, and 2) the use of slots or quotas to allocate access at capacity-
constrained airports.
De-peaking Strategies and Incentives. De-peaking strategies are
designed to alleviate congestion and delay at airports during peak travel times. De-
peaking strategies can be implemented with varying degrees of government
involvement. With a minimal level of government involvement, airlines may
negotiate schedules in a manner that would reduce delay under recently passed
statutes that exempt airlines from antitrust laws to allow them to hold meetings for
these purposes. Specifically, Vision 100 (P.L. 108-176 Sec. 423; Title 49 U.S.C.
§40129) established a collaborative decision-making pilot program at two of the most
capacity-constrained airports in the United States. Under the pilot program, airlines
are provided special immunity from antitrust laws in order to hold collaborative
discussions regarding flight scheduling in order to use air traffic capacity most
Under this program, airlines have negotiated peak hour schedules at Chicago’s
O’Hare airport (ORD) over the past several months with limited success. The FAA
persuaded United Airlines and American Airlines to voluntarily cut peak hour flights
at ORD, however there is concern that these concessions alone were not sufficient66
to alleviate congestion because other carriers have added peak time flights at ORD.
Consequently, the FAA has been working with industry to come up with an equitable
schedule arrangement for addressing congestion at ORD. In a recent decision, the
FAA has limited the number of unscheduled operations at ORD to 5 per hour, but

66 “Airline Overscheduling Still Hurting O’Hare, Controllers Say.” Aviation Daily, July 15,
2004, pp. 1-2

some operators have criticized this measure because they assert that it disadvantages
charter operators who are no longer able to use Meigs Field — a nearby general
aviation reliever airport that was closed by the city of Chicago in the spring of 2004
— as well as operators who base or perform maintenance on their aircraft at ORD.
The process for managing schedules at ORD is increasingly leading the two
legacy carriers who have curtailed operations to complain about losing market share
to smaller low cost airlines that are expanding in the Chicago market. The ongoing
frustrations in effectively managing schedule demand at ORD highlights the
challenges of trying to do so in an equitable fashion that does not impact competition
in the market. Ironically, the use of slots at ORD was eliminated in 2002 under
provisions in AIR-21 (P.L. 106-181). The current scenario at O’Hare suggests that
some government intervention to control schedules at some of the nations busiest
airports may be needed in the near future. Whether this means a return to slots or
some other form of economic regulation is likely to be an issue of considerable
interest to Congress.
Despite the ongoing challenges with scheduling at ORD, there are some
examples that suggest that airlines may find some instances where spreading
operations out could provide business advantages by reducing operating costs. For
example, a recent analysis of American Airlines de-peaking efforts at three of its
main hubs — Dallas-Fort Worth (DFW); Chicago-O’Hare (ORD); and Miami
International (MIA) — indicates that spreading flights out over the day rather than
clumping them can improve operational efficiency. In reworking its schedule at
DFW, American reduced daily departures by almost 10% compared to 2000 levels,
but lost only 1.1% of available seats.67 This analysis indicates that by de-peaking
operations, carriers may be able to increase productivity, make more efficient use of
gates, and consolidate terminal operations. Thus, there appears to be a viable
business case for de-peaking operations in certain instances. Consequently, airlines
may be quite willing to adopt de-peaking strategies that could serve a mutual benefit
to both airline operations as well as FAA air traffic operations.
In cases where there are no clear cut business advantages to de-peaking
operations and where no equitable solutions can be attained by airline industry
collaboration and bargaining over flight schedules, the federal government and
airport operators may look to specific de-peaking incentives such as peak hour
pricing as a means to manage schedule demand. Few in the airline industry are in
favor of such a system. The Air Transport Association (ATA), a trade organization
representing major U.S. airlines, opposes congestion pricing schemes because they
argue that these mechanisms siphon off revenues from airlines and put the money in
the hands of the airports which are natural monopolies and do not have to compete
in the highly competitive and price sensitive airline industry.68 Similarly regional
airlines, and general aviation operators object to peak hour pricing because they

67 Steve Lott. “Redistributing hub flights saves time, dollars.” Aviation Daily, June 16,

2004, p. 5.

68 “Airport Slot Auctioning ‘Simulation Games’ Will Pinpoint Service Disruptions.”
Aviation Today, July 19, 2004.

believe that such pricing schemes would unfairly limit access to major airports to
large carriers who can pass along increased landing fees to a larger consumer base.
There is concern that peak hour pricing may further limit air service to small
communities served by regional carriers who will essentially be priced out of major
airports.69 Airport operators may also look less favorably on peak hour pricing
schemes over alternatives such as slots and quotas, because a peak hour pricing
scheme is more complex to manage and may not result in meeting scheduling
objectives to the extent that can be achieved by implementing slots and quotas.70
Slots and Quotas. Since economic deregulation of the airline industry in
1978, slots have been used at a few busy airports as a method to control airport
scheduling. Under AIR-21, statutory language was enacted phasing out the use of
slots largely over concerns that slots could preferentially advantage well established
carriers and made it difficult for new entrant carriers to gain a foothold in certain
desirable markets. Under these provisions, the only airport that will continue to have
a statutorily defined slot system for regulating flight schedules after January 2007 is
Washington Reagan National Airport (DCA). However, with the phase out of
statutory slot systems, policymakers will likely face challenges in managing demand
to avoid strains on capacity that could induce congestion and increased delay.
It has been reported that the FAA is mulling the idea of implementing
“auctions” for slots at New York’s LaGuardia (LGA) after the statutory slot
authorizations expire in January 2007 and possibly at other congested airports like
ORD.71 Under such a scheme, airlines would either pay up front fees or monthly
leases for slot rights to operate at a given airport. Whether the FAA would need
statutory authority to carry out such a scheme remains debatable. The FAA retains
the authority to limit flight operations on the basis of safety and could likely
implement such a scheme so long as it does not treat any airline or operator
preferentially in allocating slots. However, concerns over the potential that the
allocation of slots could result in unintended market imbalances or may disadvantage
service to small communities could prompt congressional oversight or possible
legislative action on the issue of airport slot allocations.
The ATA opposes such a system largely on the belief that current exceptions
and variances for slots — such as those that currently exist for new entrant carriers
and for flights serving small communities — undermines the purported basis of these
schemes for managing operational demand at busy airports and instead melds facets
of market controls that directly affect airline business practices. On the other hand,
the Airport Council International - North America, a trade organization representing
large airport operators, favors slot auctions over other schemes such as congestion
pricing, noting that allocating slots is administratively easier to implement, and
results in regular, predictable schedules with fixed numbers of flights that can be tied
directly to available airport capacity. In contrast, congestion pricing schemes can be

69 See CRS Report RS20914, Aviation Congestion: Proposed Non-Air Traffic Control
70 “Airport Slot Auctioning.” Aviation Today, July 19, 2004.
71 Ibid.

difficult to manage and may have little or no impact on congestion if it does not
correctly predict market factors and demand for peak travel times that may fluctuate
based on a variety of market factors.72
Any debate on the issue is likely to rise in significance in the next two years,
because the slot restrictions at New York’s LaGuardia (LGA) and Kennedy (JFK)
airports are set to expire at the beginning of 2007, under the same provisions of AIR-

21 that eliminated slots at ORD in 2002.

Funding Challenges
Status of the Airport and Airways Trust Fund
One concern over available funding for aviation infrastructure enhancements
and expansion is the status of the airport and airways trust fund (AATF). The AATF
has experienced a recent drawdown in fund balances coupled with reduced revenues
caused primarily by a decline in aviation ticket tax revenues from FY2000 through
FY2003. Both the declining balances and the loss of revenues are indicators of
possible future shortages of funding to pay for capacity enhancement projects.
Figure 13 shows the annual income and uncommitted end of year balances in the
aviation trust fund since 1998. A modest decline in trust fund revenue between 1999
and 2003 is coupled with a precipitous decline in uncommitted trust fund balances
since 2002. The effects of the economic decline in the aviation industry since 2000
are reflected in this trend. From 1999 through 2003, the aviation trust fund
experienced about a $1.3 billion dollar decrease in revenue, roughly a 12% decline
in annual revenues. More notable is the continuing decline in aviation trust fund’s
uncommitted end-of-year balances which have declined 66% compared to 2001
levels despite recent trust fund revenue increases. The continuing trend of declining
trust fund balances is an indicator that costs for modernization efforts are exceeding
annual revenues and interest flowing into the trust fund. There is also concern that
the increasing costs of day-to-day operations and the increased reliance on the trust
fund for FAA’s operational costs is creating a strain on the trust fund. This is of
particular concern if a greater proportion of air traffic operations are expected to be
funded directly by the trust fund as the current administration hopes to achieve as
opposed to partial funding from the general fund as is currently the case. Allocations
for FAA operations between the trust fund and the general fund may become a
significant policy issue for future appropriations cycles and the next FAA
reauthoriz ation.
Trust fund financial projections through FY2005 indicate continued declines in
trust fund balances. Along with these declining balances, updated projections of trust
fund revenues through 2007 identify a potential revenue shortfall of almost $12
billion compared to pre-September 11, 2001, revenue projections (see Table 3).
This is despite an expected rebound in revenues starting in FY2004 tied largely to
increases in airline ridership. However, even with increases in airline passenger
volume, the shift toward low cost carriers and discounted airfares, could reduce the

72 Ibid.

trust fund income since a 7.5% tax levied on passenger tickets is the largest
contributor to trust fund revenue. Consequently, revenue generated as a percentage
of ticket cost may be lower than in the past despite increased passenger boardings.
Further declines in tax revenue may occur as the result of increased reliance on point-
to-point service. With more point-to point service, flyers may fly fewer trip segments
thus lowering revenues generated by the per segment tax. In recent years, the
passenger ticket tax and segment tax have comprised more than 60% of total aviation
trust fund income. Thus, even with an anticipated recovery in the airline industry,
trust fund income may still lag due to low-fare competition and increased point-to-
point service. However, this effect could be offset by large growth in passenger
boardings. If the growth in airline operations can outpace inflation over the next few
years, it is likely that the trend of declining aviation trust fund balances could be
Figure 13. Income and Uncommitted End of Year Balances in the
Airport and Airways Trust Fund

Source: Air Transport Association, Office of Economics. Airport and Airways Trust Fund:
Cash Flow and Balance: 1971 — Present.

Table 3. Projected Aviation Trust Fund Revenues Before and
After September 11, 2001
($ Billion)
FY2003 FY2004 FY2005 FY2006 Total
April 200112.913.714.515.456.5
February 20049.310.411.111.742.5
Difference -3.6 -3.3 -3.4 -3.7 -14.0
Source: Department of Transportation, Office of Inspector General, Short and Long-term
Efforts to Mitigate Flight Delays and Congestion. Statement of the Honorable Kenneth M.
Mead, Inspector General, U.S. Department of Transportation before the Committee on
Commerce, Science, and Transportation, Subcommittee on Aviation, U.S. Senate. May 18,


While there is still over $2 billion in reserve in the aviation trust fund, the trend
of declining trust fund balances and revenues may indicate potential shortfalls in the
ability to fund future aviation infrastructure projects. The status of the trust fund is
also impacted by the scope of outlays that it is used to support. Historically, trust
fund outlays have been the sole funding source for aviation infrastructure
improvements and enhancements to address capacity needs and safety requirements.
However, many view the significant increase in use of the trust fund to pay for
FAA’s day-to-day operations over the past 15 years as a potential threat to the
availability of funds for FAA’s modernization efforts. Critics of using trust fund
revenues for FAA’s operations account argue that these activities should receive a
greater percent of funding from the U.S. Treasury General Fund. However, others
view the aviation system as a self-supporting entity whose program spending in all
areas, including operations, should be met largely, if not entirely, by trust fund
revenues. Therefore, one proposal to increase available funds for facilities and
equipment upgrades and airport improvements is to increase the use of General Fund
sources for FAA operations and perhaps even for capacity enhancement projects.
Since many view aviation as a self-supporting system, like highway funding, all
proposals to increase the General Fund share of aviation expenditures are likely to73
be controversial.
Another option, albeit a highly controversial one, is to implement a fee-for-
service schedule to pay for operational costs associated with running the national
airspace system thus offsetting the strain that these operational costs impose on the
aviation trust fund. Implementation of usage fees for air traffic services is one
element of a concept of privatizing some or all air traffic service functions, although
user fees are not unique to a privatized model of air traffic services and could be
imposed in a government-run system as well. Usage fees for air traffic services
levied on operators would ultimately be borne by operators and, in the case of

73 For additional information, see the discussion of aviation trust fund issues in CRS Report

32498, Vision 100: An Overview of the Century of Aviation Reauthorization Act (P.L.


airlines, passed along to passengers. Airlines note that with aviation taxes and fees
already high, despite cost saving measures to trim operational expenses, they are
unable to absorb additional tax burdens by further reducing operating costs.
The other difficulty with user fees is the cost and logistical challenge of
implementing a fee-for-service operation and collecting user fees. Nonetheless, some
claim that such an approach would create a more equitable system, arguing that the
current aviation tax and fee structure results in imbalance in which airlines and their
passengers pay more than their fair share while business jet operators in particular are
able to use the system at only a small share of the associated costs.74 General
aviation lobbyists argue, to the contrary, that most general aviation users create little
impact on the system and pay equitably through taxes levied on aviation fuels.75
Further complicating the issue is the fact that air traffic services are safety-related,
and as such, are in the interest of the general public. Therefore, some argue that
some of the costs for these services should be borne by the general public as they
currently are. This view has especially been highlighted in the aftermath of
September 11, 2001 where air traffic services were seen as playing an important role
in national security as well.
Another potential means to make additional funds available for aviation
infrastructure is through increasing trust fund revenue, either by increasing aviation
taxes destined for the trust fund or by increasing the tax base for the trust fund.
Available options include raising the percent tariff on airfares; increasing fixed fees
such as the per segment tax; or other aviation taxes. Aviation taxes are obviously a
contentious issue, especially in the current economic climate of the aviation industry.
The main source of trust fund revenue is the airline passenger ticket taxes, levied at

7.5% of the fare plus an additional inflation-adjusted fee charged per flight segment.

Trust fund revenues are also derived from aviation fuel taxes, taxes on cargo
shipments, and international arrival and departure taxes. Analysis by the ATA
indicates that taxes and other government fees currently can make up more than 25%
of the total cost of a typical $200 round-trip ticket.76 By comparison, their analysis
indicated that taxes and fees accounted for only 7% of the total ticket cost in 1972
and 15% of the cost in 1992. Therefore, the airline industry is understandably
concerned that increasing revenue for the aviation trust fund by increasing taxes will
further destabilize struggling airlines and makes this option extremely contentious.
Implementing any of these options is likely to be unpopular with airlines and aviation
consumers. As the ATA noted, “[t]axes and fees imposed on the industry, whether
on airlines, airport or passengers, ultimately impact the industry’s ability to meet
consumer demand to grow and produce further economic expansion in all sectors of
the economy.”77 Therefore, policymakers may consider alternatives to increasing

74 “Why should overtaxed fliers subsidize private planes?” Editorial. USA Today, April 14,


75 Phil Boyer. “Current system works.” Opinion. USA Today, April 14, 2004.
76 Airline Transport Association. “Statement on the State of the Airline Industry.” Airline
Transport Association, Washington, DC.
77 Ibid. p. 40.

An alternative strategy may be to lower taxes, either temporarily or permanently,
to reduce the tax burden and stimulate growth in the industry. While lowering
aviation taxes in an effort to increase the tax base is a possible option, many view this
as a counter-intuitive approach that offers no guarantee that short-term tax revenue
losses will be offset in the long-term from the increase in tax base attributable to the
tax cut.
Another possible option is to reduce aviation trust fund outlays in other areas.
For example, trust fund outlays for airport construction is apportioned using formulas
based on the airport’s level of commercial aviation activity under the FAA’s airport
improvement program (AIP). Capacity enhancements are funded through a variety
of other sources including airport passenger facility charges (PFCs); other airport
revenue from the leasing of commercial space and so on; state grants; and bonds.
Outlays from the aviation trust fund could be reduced by altering AIP funding
formulas thus increasing the reliance on these other funding sources for airport
infrastructure improvements. However, this option may be unpopular because it may
further limit the federal role in capacity enhancement projects. Also, large and
medium sized airports, those most directly affected by capacity constraints, are not
particularly reliant on AIP funds anyway. A study by the GAO found that AIP funds
covered only 10.6% of development funding at 71 large and mid-sized airports,
compared to 50.5% of development costs at other national system airports.78 Another
possible option could be to use general fund resources to pay for FAA research and
development as opposed to relying on trust fund revenue for these activities.
Advocates for such a proposal may argue that research and development activities
have the potential to benefit all citizens, not just aviation systems users. However,
even if policymakers were to agree and fund FAA research and development from
the general fund, this would likely have little overall impact on the status of the trust
fund because research and development currently accounts for about $130 million
annually, slightly less than 1% of the total FAA budget.
Near-term projections indicate that aviation trust fund revenues will not keep
pace with spending needs for air traffic operations and modernization efforts.
Consequently, the FAA expects that it will have considerably less funding to finance
new capabilities in its operating budget. Therefore, the FAA is prioritizing programs
based on both anticipated capacity gains as well as cost efficiencies, and recognizes
that it will need to discontinue low-priority programs.79 Several elements of the
FAA’s facilities and equipment account, the funding source for airspace
modernization technologies, have been the subject of this prioritizing and cost-
cutting process.
FAA’s Facilities and Equipment Account
One potentially contentious issue that reemerged in the FY2005 appropriations
process and may be a topic of considerable scrutiny in future year budgets is funding

78 U.S. General Accounting Office. Airport Financing: Funding Sources for Airport
Development. GAO/RCED-98-71. March 12, 1998.
79 Federal Aviation Administration. National Airspace System Operational Evolution Plan

2004-2014. Executive Summary - January 2004 (Version 6.0)

for FAA’s Facilities and Equipment (F&E) account. This account pays for capacity
enhancement projects related to air traffic control and navigation. As seen in Figure
14, the F&E account has grown over recent years, peaking at just under $3 billion in
FY2003. Figure 14 shows that F&E funding has historically followed a cyclical
trend that appears to be on about a 10-year cycle. Such a trend is to be expected,
given that technologies to modernize air traffic operations take time to mature and
go through lengthy development and testing. Thus, surges in funding levels could
be expected during periods when these technologies reach maturity and are deployed
in large numbers and integrated into the national airspace system. The GAO noted
in a 1994 report that F&E appropriations rose sharply between FY1982 and FY1985,
then declined briefly in FY1986 and FY1987, before increasing sharply again at an80
inflation-adjusted rate of 11 percent annually, peaking in 1992. This crescendo in
funding during the late 1980s and early 1990s that peaked in 1992 can be tied to
work conducted under FAA’s advanced automation system (AAS), a costly and
controversial program to modernize the FAA’s en route and terminal radar control
facilities that was to be completed during that time frame. The current peak in
FY2003 can be tied to the maturation and rollout of two key programs: (1) the
standard terminal automation replacement system (STARS) — a technology to
upgrade the radar consoles in TRACON facilities; and (2) the commissioning of
WAAS — a system to improve the accuracy of GPS navigation signals. Therefore,
given the cyclical nature of F&E funding, lower funding requests for FY2005 and
FY2006 might be expected.
Figure 14. FAA Facilities and Equipment Funding

Source: Appropriations Conference Reports; FAA Budget Estimates; and CRS Reportth
RS20177, Airport and Airway Trust Fund Issues in the 106 Congress.
80 U.S. General Accounting Office. FAA Budget: Management Attention Needed for Future
Investment Decisions. Statement of the Record by Allen Li, Before the Subcommittee on
Transportation and Related Agencies, Committee on Appropriations, U.S. Senate, April 21,

1994. GAO-T-RCED-94-195.

However, the present decrease in F&E funding for FY2005 and FY2006 —
about a 12% cut compared to FY2004 levels — is seen as somewhat controversial
because significant work still needs to be done on communications, navigation, and
air traffic control projects to keep pace with OEP targets for the next ten years.
Furthermore, the FAA faces large funding needs if it is to: deploy next generation
radar sites; equip ATC facilities with enhanced weather information systems; fully
deploy STARS; and move forward with testing and implementation of free flight
concepts over the next few years. The FAA has cut funding to several lower priority
programs, particularly communications related programs like: NEXCOM — a
program to provide digital voice and data channels and broaden available very high
frequency (VHF) radio spectrum for air to ground communications; and controller-
pilot data link communications (CPDLC) — a tool that will provide text messaging
capabilities between pilots and controllers. The FAA argues that these cuts are
reasonable because they are not running out of VHF spectrum as quickly as
anticipated, and financially strapped airlines are not ready to make the necessary
investment in CPDLC. One major question that may be raised by Congress is
whether the FAA is effectively managing its F&E dollars, which it has not done a
good job of in the past as discussed earlier in the section on cost overruns.
One option to enable future spending on facilities and equipment is to use
airport improvement program (AIP) funds, rather than F&E funds, to pay for airport-
specific facility acquisitions. This has both positive and negative implications for
airports. On the positive side, it can help assure or expedite the acquisition of needed
or wanted equipment to enhance capacity or improve safety at an airport. On the
other hand, use of AIP funds for equipment purchases may take funds away from
runway construction or other planned capital improvement projects. This may result
in an increased reliance on local airport funds to keep projects on track. If local
funds are unavailable or if schedules are allowed to slip for funding-related reasons,
then capital improvements to meet capacity needs may lag behind growth in demand
at specific airports. Also, as previously noted, with declining balances in the aviation
trust fund, it may be difficult to meet additional program funding needs with federal
dollars thereby increasing the cost burden on airports. Besides the cost implications
to airports, this could also result in implementation of F&E programs based on local
priorities which may not be the same as the federal priorities for enhancing the
national airspace system as a whole.
Summary of Findings
This report has identified several factors affecting aviation growth and the
ability to meet that growth by enhancing the capability and capacity of the national
airspace system. Below is a summary of findings detailed in this report regarding
aviation growth, capacity needs, and factors affecting the FAA’s ability to address
these capacity needs.
!Aviation capacity needs are geographically specific, affecting
airports and airspace in several major metropolitan areas and certain
high altitude flight corridors.

!Growth trends in aviation operations in major metropolitan regions
will continue to strain capacity for the foreseeable future. Current
FAA short-term plans for capacity growth will, generally, lag
slightly behind forecast growth in demand in these capacity
constrained regions.
!Despite an optimistic long-range vision to triple system capacity,
fully implementing FAA’s OEP will likely only yield about a 27%
increase in capacity by 2013 as compared to available capacity
during the summer of 2000. This projected capacity enhancement
will barely keep pace with forecast growth. Also, delays will not be
reduced at this level of capacity enhancement since FAA’s forecast
model assumes that the prevailing acceptable level of 14 minutes of
average delay is maintained.
!Capacity constraints have an impact on system efficiency as
measured by delay, as well as on system safety as indicated by
metrics such as runway incursions and operational errors.
!Controller staffing shortages and high labor costs for air traffic
services may become an impediment to meeting future capacity
needs. The FAA currently does not have a strategic plan in place to
hire and retain adequate numbers of controllers to replace an aging
controller workforce. Under Vision 100 the FAA was directed to
develop such a plan and language in FY2005 appropriations bills
would provide funding to hire and train new controllers.
!Meeting future capacity needs will likely require a comprehensive
systems approach using appropriate options that may include new
runways and airport configurations; additional airports; airspace
redesign; operational tools and decision aids; the use of technologies
to increase system throughput; and market-based strategies to alter
the demand characteristics of operations likely to cause congestion
and delay.
!Airport improvement projects, such as adding runways or
reconfiguring taxi routes, are seen as one of the most effective ways
to alleviate airport-specific congestion and delay. However, these
projects often take many years to plan, require buy-in from local
authorities, and may involve lengthy environmental and economic
impact assessment processes. Similarly, airspace redesign can be an
effective tool for enhancing system capacity, but requires lengthy
study and evaluation of operational and environmental impacts
before implementation.
!Core technologies to improve system throughput, such as GPS and
ADS-B, are generally mature, but significant work on complex
systems integration is needed to effectively exploit these
technologies in a manner that will optimize NAS capacity.

!Based on past FAA program management efforts that have resulted
in cost overruns, schedule delays, and performance deficiencies in
major systems acquisitions, systems integration programs to enhance
the capacity of the national airspace system are regarded as high risk.
!Both the ATO and JPDO are too new to assess whether they will be
effective in overcoming the organizational factors identified as
impediments to effective management of NAS modernization
!A reduction in aviation trust fund revenues may cause the FAA to
suspend work or scale back low priority programs in the near-term
and search for ways to reduce unit costs for air traffic services by
about 21%. In the long term, continued aviation trust fund revenue
shortfalls — a possible result of low-cost airfares — could result in
a lack of funds for critical capacity enhancement projects. However,
growth in airline ridership could reverse this trend and provide
needed funding.
!The long range next generation air transport system (NGATS) plan
is likely to focus on automation and collaborative decision making
tools for air traffic management (ATM) and expanded free flight
concepts. While the plan is being designed to maximize flexibility
for incorporating new, unforeseen technologies into the future
airspace system, the plan may lack sufficient detail and focus to
guide and monitor progress toward implementation of the NGATS.