FAA conducted a study in 1994 to assess the benefits and costs of installing a surveillance radar at the airport. FAA’s Decision-Making Process for Installing Surveillance Radars at Airports

FAA uses a multifaceted process to determine which airports should get surveillance radars. For example, after conducting the 1994 benefit-cost study and determining that the airport met FAA’s cost-effectiveness criteria, agency officials prematurely concluded that Cherry Capital qualified for a radar. Factors FAA Considered When Conducting Benefit-Cost Studies

In accordance with its decision-making process, FAA used its investment criteria to identify the factors to consider when conducting the 1994, 1996, and 1997 benefit-cost studies for the Cherry Capital Airport. Therefore, the resulting average annual growth rate used in the 1996 and 1997 studies was about 1 percent. Impact of Other Air Traffic Projections on the 1997 Benefit-Cost Study

Since air traffic projections were the most critical factors influencing the results of the benefit-cost studies for the Cherry Capital Airport, we requested air traffic projections developed by the state of Michigan and Traverse City transportation planning officials to determine what impact their projections would have had on the results of FAA’s 1997 study. Actions FAA Has Taken to Address Safety Concerns at the Cherry Capital Airport

In response to the safety concerns raised by Members of Congress and controllers at the Cherry Capital Airport, such as the greater risk of aircraft collisions that results from increased air traffic, FAA installed a Terminal Automated Radar Display and Information System (TARDIS) in 1997 to help the controllers locate and identify aircraft approaching or departing the airspace around the airport. FAA Plans to Replace Surveillance Radars at Airports With Fewer Total Air Traffic Operations Than the Cherry Capital Airport

Beginning in 1999 and continuing through 2004, FAA plans to retire all of the older airport surveillance radars (ASR), specifically ASR-7 and ASR-8, which were installed in the 1960s and 1970s. We noted that FAA officials routinely conduct benefit-cost studies using air traffic operations as one of the critical factors in deciding whether it would be cost-effective to install surveillance radars at airports without radars. But they said they have no plans to conduct such studies because they believe that it would be very difficult to discontinue radar operations at an airport found not to qualify because the public’s perception would be that safety was being reduced, even if safety was not compromised and other circumstances warranted the discontinuance of radar operations. Although installing and retaining radars at some of the airports with fewer total air traffic operations than the Cherry Capital Airport might be justified, conducting benefit-cost studies and revalidating the operational needs would ensure that (1) radars are installed or replaced first at the airports that have the greatest needs and (2) FAA is not spending millions of dollars to replace radars when continued operation of the existing radars might not be justified. Conclusions

An overstatement of projected air traffic growth was the primary reason the Cherry Capital Airport met FAA’s cost-effectiveness criteria in 1994, and agency officials prematurely concluded that the airport qualified for a surveillance radar. Recommendation

Because of current budget constraints and the future expenditures associated with installing radars as part of the effort to modernize the nation’s air traffic control system, we recommend that the Secretary of Transportation direct the Administrator of the Federal Aviation Administration to conduct benefit-cost studies to validate the cost-effectiveness and revalidate the need for the radars at airports scheduled to receive replacement radars and to use the results of the studies in prioritizing the replacement of the radars at qualifying airports.
Why GAO Did This Study

Pursuant to a legislative requirement, GAO reviewed the benefit-cost studies that the Federal Aviation Administration (FAA) conducted for the Cherry Capital Airport in 1994, 1996, and 1997, focusing on: (1) FAA's decisionmaking process for installing surveillance radars at airports; (2) the factors, including costs, benefits, and air traffic projections, that FAA considered when conducting the 1994, 1996, and 1997 studies; (3) the impact, if any, that air traffic projections developed by other sources would have had on the results of the 1997 study; (4) actions FAA has taken to address safety concerns at the airport; and (5) FAA's plans to replace surveillance radars at airports with fewer total air traffic operations than the Cherry Capital Airport.

What GAO Found

GAO noted that: (1) FAA uses a multifaceted process to determine which airports should get surveillance radars; (2) this process includes completing a benefit-cost study, assessing an airport's need for a surveillance radar compared with the needs of other airports, and determining the availability of radar equipment or funds to purchase needed radar equipment; (3) in its 1994 benefit-cost study for the Cherry Capital Airport, FAA officials overstated the projected air traffic growth; (4) this overstated growth was the primary reason FAA concluded that the airport met its cost-effectiveness criteria; (5) moreover, in 1994, FAA officials did not follow the agency's decisionmaking process and prematurely concluded that the Cherry Capital Airport qualified for a surveillance radar; (6) when conducting the 1994, 1996, and 1997 benefit-cost studies, FAA considered the potential efficiency and safety benefits; (7) with the higher growth rate used in the 1994 study, the benefits exceeded the costs of installing a surveillance radar, so the Cherry Capital Airport met FAA's cost-effectiveness criteria; but with the lower growth rate used in the 1996 and 1997 studies, it did not qualify; (8) the air traffic projections were the most critical factors influencing the results of FAA's benefit-cost studies; (9) to address the safety concerns, FAA installed an automated display and information system at the Cherry Capital Airport in 1997; (10) while the controllers told GAO that the equipment can help them better manage air traffic and improve safety, they have difficulty using it because information on aircraft identification and altitude is sometimes unreadable on the display monitor; (11) beginning in 1999, FAA plans to replace the existing surveillance radars installed in the 1960s and 1970s at 101 airports as part of its efforts to modernize its air traffic control system; (12) seventy-five of the 101 airports had fewer total air traffic operations in 1996 than the Cherry Capital Airport did; (13) although FAA conducts benefit-cost studies and uses air traffic operations as a basis for determining the cost-effectiveness of installing surveillance radars at airports, agency officials did not conduct similar studies to determine whether it would be cost-effective to replace existing radars at the 101 airports or to prioritize the replacement of the radars; and (14) FAA has no plans to undertake such efforts because agency officials believe that it would be very difficult to discontinue radar operations at an airport because of the public's perception that safety would be reduced.