FAA’s and the Airport Industry’s Estimates of Planned Capital Development Vary Substantially

The estimated costs of planned airport capital development vary  depending on which projects are included in the estimates. Airports Obtain Most Funding from Bonds and Federal Sources

From 1999 through 2001, the 3,364 airports that make up the national  airport system received an average of about $12 billion per year for  planned capital development. Prior Years’ Funding Levels Would Cover All of FAA’s Planned Development Estimate but Would Fall About $3 Billion Short of ACI’s Estimate

If the funding for airport capital development remains at about $12 billion  a year over the next 5 years, it would cover all of the projects in FAA’s  estimate. If the smaller airports were to continue to receive an average of  about $2.4 billion per year, they would be able to fund about 73 percent of  the estimated cost of their total planned development. FAA’s Operational Evolution Plan Encompasses Capacity and Efficiency Improvements

In December 2002, FAA published the most recent version of its  Operational Evolution Plan, a 10-year plan to increase the capacity and  efficiency of the national airspace system, primarily by focusing on  building runways. Some airports said these  actions could help airports resolve challenges more quickly; however, we  believe it is too early to assess the impact of these actions on the runway  development process. While FAA is making progress in managing the air traffic control  modernization, key programs continue to experience cost, schedule, and  performance problems. FAA Is Implementing Human Capital and Procurement Reforms

As problems with the air traffic control modernization program mounted  in the early 1990s, FAA attributed the delays in implementing air traffic  control projects, at least in part, to burdensome governmentwide human  capital rules and federal acquisition regulations that impeded its ability to  hire, train, and deploy personnel and to acquire equipment and systems. In  response to these claims, the Congress exempted FAA from many federal  laws governing human capital and acquisitions, and the agency began  implementing human capital and procurement reforms in 1996. For example, it has not  implemented a new compensation system for about 20 percent of its  50,000 employees—those staff whose unions have not reached agreements  with FAA. FAA and Industry Have Taken Actions to Reduce the Fatal Accident Rate

Reducing fatal aviation accidents is key to improving aviation safety. Setting priorities among projects,  identifying opportunities for streamlining the runway development  process, and fully implementing human capital and procurement reforms  should help to ensure efficiency. However, we have not finished analyzing our survey data, and the  results presented in this testimony are still preliminary. Aviation Safety: Better Guidance and Training Needed on Providing  Files on Pilots’ Background Information. Aviation Safety: Safer Skies Initiative Has Taken Initial Steps to Reduce  Accident Rates by 2007. Federal Aviation Administration: Challenges in Modernizing the  Agency.
Why GAO Did This Study

Much has changed since the Congress enacted the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR-21) 3 years ago--the downturn in the nation's economy and the terrorist attacks of September 11, 2001, have taken a heavy toll on aviation. Competition for federal funding has also grown. The reauthorization of AIR-21 provides an opportunity for the Congress and the Federal Aviation Administration (FAA) to focus on several challenges to improving the national airspace system. These challenges include (1) funding planned airport capital development, (2) increasing capacity and efficiency, (3) implementing human capital and procurement reforms, and (4) ensuring aviation safety. This testimony is based on ongoing and published GAO work. The information on funding and development, obtained from FAA and the Airport Council International (ACI), a key organization representing the airport industry, is preliminary and therefore subject to change.

What GAO Found

Funding planned airport development: Estimates vary as to the annual cost of planned airport capital development over the next 5 years, from FAA's estimate of about $9 billion to the airport industry's estimate of about $15 billion. If airports continue to receive about $12 billion a year for planned capital development--the average for 1999 through 2001--they would be able to fund all of the projects included in FAA's estimate, but would fall about $3 billion short of the industry's estimate. Increasing capacity and efficiency: Recently, airports have taken about 10 years to develop runways, and ongoing runway projects are expected to take even longer. The federal government and airports have taken actions to expedite runway development, but it is still too early to assess the impact of these actions. FAA's management of costly air traffic control acquisitions has improved, but cost, schedule, and performance problems remain. Implementing human capital and procurement reforms: FAA is making progress in implementing human capital and procurement reforms, but it has not fully implemented a new compensation system, in part because it has to negotiate with multiple unions, and it is not yet systematically evaluating the results of reforms in either area. Ensuring aviation safety: The Safer Skies program, which focuses on identifying and correcting the causes of aviation accidents, and FAA's redesigned program to inspect airline operations are two important aviation safety initiatives. While both programs have made good starts, some challenges remain. The Safer Skies program, which began in 1998, is not fully implemented, and the inspection system has encountered startup problems with inspector training and guidance.