Funding Debate Stalls Air Traffic Control Upgrade

The radar system used to guide U.S. flights is more than 40 years old, which may help explain why nearly one-quarter of all those flights are late.

The Federal Aviation Administration wants to phase out radar and roll out a satellite-based air traffic control system, NextGen, which is based on the same GPS technology now used in cars.

Air traffic controllers and pilots would have instantaneous information on the location of any plane at any time. Supporters of the system say it would allow planes to fly closer together, making more room in the sky for additional flights and cutting delays.

But it will cost the government as much as $20 billion to update its air traffic control operations, and the airline industry will have to spend another $20 billion for new equipment and training.

Some airlines are already spending money on upgrades to be ready for NextGen, which is scheduled to be up and running by 2025. But so far, Washington has not anted up the cash the FAA needs to modernize.

Clashes Over Taxes

"We're behind because the Bush administration refused to put the money forward to make those investments and to move the system ahead," says Rep. Jim Oberstar (D-MN), who heads the House Transportation Committee.

Oberstar rejected the Republican administration's attempts to revamp the FAA's funding system. The FAA currently relies mostly on excise taxes on jet fuel and tickets; the Bush administration wanted to add a system of user fees on takeoffs to provide a steady stream of funding for NextGen. That plan would have shifted some of the cost to smaller planes, which commercial airlines, naturally, supported.

House and Senate Democrats have also clashed over aviation taxes. At one point last year, lawmakers agreed on a $70 billion proposal that funded the air traffic control upgrade mostly by raising jet-fuel taxes and doubling the passenger fee. That measure passed in the House, stalled in the Senate and left all sides frustrated.

"I'd very much like to catch up with Mongolia on our air traffic control system, but we haven't been able to do that yet," Sen. Jay Rockefeller (D-WV), chairman of the Senate Transportation Committee, said at a recent hearing. "The challenge I want to pose to witnesses today and to the aviation industry is to find a way to work together to make this happen."

Unused Upgrades

Commercial airline executives are also eager to move along.

Joe Kolshak of United Airlines, which has upgraded planes in anticipation of NextGen, says, "The old adage is, 'Build it and they will come.' We've come, and they haven't built it."

Kolshak says this year United is retiring more than 100 aircraft equipped with $20 million in technology they never used.

"It's very hard for me to go to the CFO of the company and ask for tens of millions of dollars for equipage when it's not going to be required, and more importantly, I will not gain the benefit for another 10 or 15 years," Kolshak says.

The big airlines still support takeoff fees to create a dedicated stream of funding for the new air traffic control system, saying smaller aircraft need to pay their fair share.

Craig Fuller, president of the Aircraft Owners and Pilots Association, is watching the debate closely. He notes that the Obama administration's budget assumes that in a few years, the FAA could start earning $7 billion a year from the kind of fees pitched by the Bush administration.

"That is of great concern to us," Fuller says. "It kind of re-engages a debate that, frankly, has slowed down the progress to getting modernization of the air traffic control system."

Trying Again

Fuller's group wants to stick with the current system of jet-fuel taxes, arguing that commercial airlines get the fullest use of the air traffic control system and should bear the brunt of the cost for upgrading it.

Sen. Byron Dorgan (D-ND), who chairs a subcommittee on aviation, says he is inclined to stick with jet-fuel taxes. "I feel like most everybody shares a common goal here. They say, 'Let's get going; let's get this done.' Because of that urgency, I think we can find a way to provide the financing for this that moves it ahead."

The House is moving forward with legislation similar to what it passed last year, and some of the issues that dragged down that legislation could return. Those include a passenger bill of rights, a ban on cell phones in flight and labor issues with traffic controllers.

Dorgan says the Senate is writing its own bill and will hold another round of hearings this spring.

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