MAY 26, 2005

Good morning Chairman Burns, Senator Rockefeller, and Members of the Subcommittee. Thank you for the opportunity to be here this morning to discuss our plans to ease air traffic congestion this spring and summer. Secretary Mineta and I wish to offer our congratulations to you, Mr. Chairman, on assuming the Chair of this Subcommittee and to extend our good wishes to the new and returning Members of the Subcommittee. But before we discuss capacity and delays, let me address safety. As you know, safety is and will always be the FAA’s top priority. Every decision we make is done with the safety of the flying public in mind. The system must be safe, as you know, and we deliver a remarkably safe system. I am pleased to note that over the last three years, the commercial airline fatal accident rate is the lowest in history. That’s a tribute to the men and women of the FAA and the industry we support.

The health of our aviation system is critical to our economy, and the good news is that air travel has rebounded. We now project that overall passenger demand and commercial activity at FAA air traffic facilities will return to pre-9/11 traffic levels by the end of this year, reaching about 710 million passengers. Commercial operations at 17 of this country’s top 35 airports have already exceeded their pre 9/11 levels, with some airports like Salt Lake City and Fort Lauderdale already showing very high growth, above 11.5 percent and 6.6 percent over pre 9/11 levels respectively.

With approximately 9 percent of our country’s Gross Domestic Product tied to aviation, this is a very welcome rebound. However, we need to brace up because with this rebound will come delays, potentially serious ones, as early as this summer, and we need to do all we can to avoid them. That’s why today’s hearing is both important and timely.

Certainly some aviation markets have fared better than others, and new trends have emerged. Low-cost carriers have increased their market share, while the larger “legacy carriers” have been restructuring and downsizing. Also, regional and commuter carriers have been replacing and supplementing flight routes once dominated by legacy carriers, as well as introducing new services that use longer range regional jets. As a result, we are seeing significant growth in the regional carrier market, and we expect it will continue to grow. Following 9/11, the agency worked with this Committee and industry stakeholders to prepare for the return of air traffic demand. We developed careful plans and worked to ensure that the agency was better situated to avoid the delay problems of past summers. We will continue the successful innovative steps begun in recent years that have helped to avert a repeat of past delay-riddled summers. To address and alleviate congestion and delays over the short term we will work to implement new procedures, more pavement, and better technology. Our plan takes into account the myriad of factors -- some well beyond our control -- that contribute to system delays, including weather, security, airline operations, air traffic control, airports, infrastructure, and equipment. We are confident that this approach will provide effective inroads to manage the surge in traffic that will coincide with the busy summer travel season.

To emphasize the difficulty some of these factors create for the National Airspace System, you may recall that last summer four major hurricanes made landfall in the state of Florida, one of the country’s primary tourist and travel destinations, in just a six-week period. Airports and air traffic facilities across the state suffered significant damage, including Southwest Florida in Fort Myers; Orlando International in central Florida -- which was hit by three different hurricanes; and the FAA’s Pensacola TRACON in the Panhandle. The FAA responded quickly to restore capabilities damaged by the storms. For example, the Pensacola TRACON was nearly destroyed by Hurricane Ivan. The facility was closed on September 15th because of the forecasted winds and storm surge. Employees volunteered to stay behind to monitor the facility condition and begin service restoration after the hurricane passed. However, during the height of the storm, the roof of the Pensacola TRACON was partially torn off. Employees on site quickly unplugged and protected the sensitive ATC equipment from the wind and rain, saving millions of dollars worth of equipment. Through the dedicated work of our employees and the cooperation of several agencies, the Pensacola TRACON was reopened for daylight operations only within two days, and to full ATC operations only 20 days after Ivan’s devastation. Additionally, FAA’s Airports Organization distributed $25 million from the Emergency Hurricane Supplemental Appropriations Act to 85 airports in Alabama, Florida, Kentucky, Mississippi, North Carolina, Pennsylvania, West Virginia and Puerto Rico in record time, allowing the airports to make repairs and resume operations.

Many of the new procedures we are now using were the result of a first-of-its-kind meeting of industry decision makers and the government, known as “Growth Without Gridlock,” which we convened last year. The group agreed to a series of new procedures designed to relieve congestion during the heavy summer travel season. We moved away from the “first come-first served” model of air traffic when demand far exceeds capacity by issuing revised flight plans or rerouting some aircraft away from problem areas, allowing us to maximize utilization of available airspace under adverse conditions. The most innovative of these new procedures, a concept we call “delay triggering,” imposes minor delays on the ground to avert massive delays across the National Airspace System. When delays at an airport are anticipated to reach 90 minutes or more, other airports sending aircraft into the congested area will hold flights until our controllers clear the congestion. Although this may mean brief delays for some flights, it helps prevent the massive delays that can occur system-wide when critical airports become gridlocked. This procedure has been so successful that we have incorporated the philosophy into other areas of managing demand and delays. Most recently, we began using this concept in managing departure delays from Fort Lauderdale. The feedback from our customers has been very positive, and we will continue to apply this procedure during the upcoming convective weather season.

A major accomplishment this year is our implementation of Domestic Reduced Vertical Separation Minimums or DRVSM. This is a tremendous boost to air traffic capacity because it essentially doubles capacity at high altitudes, adding six cruising altitudes or jet lanes above 29,000 feet. The procedure permits controllers to reduce minimum vertical separation at altitudes between 29,000 and 41,000 feet from 2000 feet to 1000 feet for aircraft that are equipped with dual altimeter systems and autopilots. Not only does this double the capacity options for controllers and pilots, but the higher altitude routes are more fuel efficient. We estimate the DRVSM will save airlines approximately $5 billion through 2016, an estimate that will prove to be conservative if fuel prices remain high. Another major initiative is the expanding implementation of Area Navigation (RNAV) procedures to additional airports. RNAV procedures have been implemented and are performing successfully at Las Vegas, Philadelphia, and Dulles airports. Just last month, 13 RNAV departure procedures went into full operation at Atlanta Hartsfield-Jackson International Airport – the world’s busiest airport. These procedures provide flight path guidance incorporated in taxi procedures, with minimal instructions required during departure by air traffic controllers. This significantly reduces routine controller-pilot communications, allowing more time on frequency for pilots and controllers to handle other safety-critical flight activities. Key benefits of the RNAV procedures include more efficient use of airspace, with improved flight profiles, resulting in significant fuel efficiencies to the airlines. RNAV procedures are scheduled for implementation at Dallas-Ft. Worth airport this year as well.

Another technological innovation, known as Required Navigation Procedure or RNP, promises to add to capacity. RNP is on-board technology that allows pilots to fly more direct point-to-point routes reliably and accurately. RNP give pilots not only lateral guidance, but vertical precision as well, and the system is highly precise and accurate. RNP reaches all domains of flight – departure, en route, and arrival. This not only will allow more efficient airspace management, but also provide savings in fuel costs for the airlines. For example, in January 2005, in partnership with Alaska Airlines, we implemented new RNP approach procedures at Palm Springs International Airport, which is located in very mountainous terrain. Under the previous conventional procedures, planes could not land unless the ceiling was at least 2,300 feet. With the new RNP procedures, approved air carriers can now operate to a ceiling of 684 feet, which allows much better access during bad weather. Additionally, RNP has enabled aircraft to cut significant mileage out of their flight path into Palm Springs – nearly 30 miles – which translates into substantial fuel savings for operators.

The U.S. is leading the world in RNP, by issuing the first set of criteria and standards in this area in the very near future. Boeing and Airbus support RNP, and our standards are being embraced in Europe, Asia and South America, and by our neighbors to the north in Canada. In addition, we improved communication among the system users and the FAA. Airlines agreed to improve their input to the FAA’s flight schedule monitor system using new software so that it will more accurately reflect the latest airline schedule plans. This move minimizes unused airport capacity when flights are rescheduled or cancelled. Also, airlines are encouraged to file flight plans earlier, allowing for more time to address potential congestion problems. In addition, our relationship with the air carriers who participate in our daily conference calls is genuinely cooperative, reflecting our common understanding that we all have a stake in the process. The conference calls – scheduled every 2 hours during the busiest portion of the day -- also provide an opportunity for feedback. Customers let us know if they believe they were disadvantaged by a prior day’s delay reduction measures or offer ideas on how we can all improve the system. We all know that continued cooperation is essential to the success of our spring and summer airspace management plans. Delays are bad for business, regardless of whether you are a large, legacy carrier, a low-cost carrier or a regional airline.

I’d like to take a moment to recognize this Committee’s role in addressing system capacity constraints. With the passage of Vision 100 – Century of Aviation Reauthorization Act, you provided the FAA and DOT with additional tools to address unexpected challenges that threaten to reduce capacity or cause delay at critical chokepoints. We must be ready to react to situations when they unfold. For example, the authority provided by Vision 100 enabled us to take initial action last year at Chicago O’Hare International Airport to address over-scheduling by air carriers and the resultant excessive delays that affected the entire National Airspace System. As you know, two major carriers, American Airlines and United Airlines, have hubs at O’Hare. The competition for market share is compounded by the obvious physical limitation on the number of planes that can take off and land during any time period. Moreover, it has been well demonstrated over the years that delays at O’Hare have the potential to cause delays at as many as 40 other airports nationwide. Consequently, managing delays at O’Hare is essential to the effective management of air traffic nationally. In November 2003, major delays began occurring as a result of steady increases in flights, as O’Hare’s slot rules phased out, and a shift by American Airlines of flights from St. Louis to O’Hare. Vision 100 enabled us to take action.

Early last year, Secretary Mineta and I asked United and American to make a voluntary 5 percent schedule reduction during peak travel times. This voluntary reduction took effect March 4, 2004. American and United further agreed to reduce their overall peak-hour schedules by another 2.5 percent by June 10, 2004. This voluntary agreement was extended through last summer, as negotiations between the FAA and all airlines serving O’Hare continued in an effort to craft a more comprehensive plan to reduce flight delays, and one which treated all air carriers serving O’Hare fairly. Eventually, in August 2004, a voluntary agreement for schedule reductions during peak hours was reached involving all airlines currently serving O’Hare, and which allowed some leeway for new entrant carriers as well. This agreement took effect in November, and in March 2005 was extended through October 29, 2005. At the same time we extended the agreement, we also published a Notice of Proposed Rulemaking (NPRM) which proposes options to address congestion at O’Hare for the next three years. By that time, if approved by FAA, O’Hare’s proposed Modernization Project or a reasonable alternative to that project could provide additional airport capacity. Since the voluntary agreement took effect last November, O’Hare’s on-time arrival performance has improved by more than 10 percent, and overall delay minutes from November through this past February have been cut by 22 percent, as compared to the previous year. We estimate that maintaining limits on the number of arrivals through April 2008 will result in a reduction in delays at O’Hare, and save airlines and passengers over $700 million lost through delays as compared to November 2003. As noted above, the proposed rule is timed to expire as airport capacity improvements are expected to take hold. Under the terms of the NPRM, we will review every six months the level and length of delays and other operating conditions, to determine if the airport can accommodate more arrivals. If additional capacity becomes available while the rule is in effect, we propose a method to assign the additional capacity to air carriers interested in initiating or expanding service at O’Hare. We partner with airports to address capacity and delay concerns and we support implementation of solutions with funding from the Airport Improvement Program (AIP). By the end of 2008, eight new runway projects are scheduled for commissioning. These include new runways at: Minneapolis-St. Paul; Cincinnati; St. Louis; Atlanta; Boston; Charlotte; and Seattle, and a runway extension at Philadelphia. Beyond 2008, we are working with other airports to increase capacity. We recently announced our final Record of Decision for Los Angeles, which will permit the airfield reconfiguration project to go forward. We continue to maintain and monitor the schedule for the Environmental Impact Statement at Chicago as well. We are also working closely with Fort Lauderdale on a major runway extension, and three major metropolitan areas Chicago, Las Vegas, and San Diego who are considering the need for new airports. We are supporting, through AIP funding, the preparation of regional studies in the New York Metropolitan area and the LA Basin. While new runway construction typically provides the largest increase in capacity, there are new technologies and procedural improvements, such as Traffic Management Advisor (TMA) and Precision Runway Monitor (PRM), which add capacity, as well. TMA is a tool that assists the air traffic controller to sequence and schedule aircraft to the runway to maximize airport and terminal airspace capacity without compromising safety. PRM approaches have been implemented at San Francisco, Philadelphia, Cleveland and Minneapolis-St. Paul, and are planned for Atlanta and St. Louis. PRM allows air traffic controllers to run simultaneous operations on closely spaced parallel runways. It should be noted that increases in capacity from new runway construction often cannot be fully realized unless implemented along with new procedures and technology.

As with other networks that experience peak period demand surges, congestion management, such as congestion pricing, could be an option at a small number of airports where demand may come to exceed capacity in the short term, pending capacity expansion, or in the long term if capacity expansion is not a practical option. In FY 2004, the FAA completed a study analyzing system capacity, taking into account the socio-economic and demographic trends expected to occur in the United States through 2020. This study expanded the focus of the 35 OEP airports and evaluated nearly 300 commercial service airports nationwide. This study identified airports and metropolitan areas expected to have significant growth in population and/or income that could result in an increase in the demand for air transportation that may not have been previously anticipated. The study identified the airports that need additional capacity and any constraints to enhancing capacity. Without capacity improvements at airports in these areas, this demand may go unsatisfied. In FY 2005, the FAA will complete a second phase of this study that will take a more detailed look at the non-OEP airports and will begin to identify possible solutions to increase long-term capacity

We must also make sure we are using the best technology to maintain a safe and efficient air traffic system. One example of this is the Wide Area Augmentation System, known as WAAS. WAAS is a precise navigation system that enhances the satellite signals from the Global Positioning System (GPS) to provide the accuracy and reliability necessary for pilots to rely on GPS during flight. Because the system is satellite-based, WAAS procedures cost a lot less to implement and maintain than traditional ground-based navigation systems. WAAS makes more airspace usable to pilots, provides more direct en route paths, and provides new precision approach services to runway ends. The implementation of WAAS into the NAS will result in safety and capacity improvements. Since WAAS became operational in July 2003, the FAA has developed 3,000 WAAS approaches. This is a significant accomplishment in modernizing how we use our airspace, and one which will have a lasting, positive effect on capacity.

In the longer term, however, we know that these short and mid-term efforts will simply not be enough. The recent FAA aviation forecast provides further evidence that our current system, already coming under stress in some areas, will be stretched to its limit as future demands continue to grow. Passenger totals are expected to exceed one billion by 2015, and we project up to a tripling of passengers, operations and cargo by the year 2025. As Secretary Mineta said in a speech before the Aero Club in January 2004: “The changes that are coming are too big, too fundamental for incremental adaptations of the infrastructure. We need to modernize and transform our air transportation system – starting right now.” Our overarching goal in the Next Generation initiative is to develop a system that will be flexible enough to accommodate very light jets and large commercial aircraft, manned or unmanned air vehicles, small airports and large, business and vacation travelers alike, and to handle up to three times the number of operations that the current system does with no diminution in safety, security and efficiency. At the same time, the system would minimize the impact of aviation on the environment.

However, the move to a modern, efficient and technology-driven aviation system is going to require sustained, long term investments. The problem we face is that the status of the Aviation Trust Fund, which supports these investments, is inextricably tied to the fortunes of the aviation industry. Policy makers need to know that there is a gap that exists between our revenue and expenses, and this gap is quickly eroding the Trust Fund. The FAA needs a stable source of funding that is based both on our costs and the services we provide so that we can meet our mission in an extremely dynamic business environment. Tying fees to the cost of providing service protects both FAA and the customers who use FAA services by not subjecting our ability to provide a critical level of service to unrelated factors like ticket prices. A stable, cost-based revenue stream can also ensure funding for long-term capital needs. We also believe that a cost-based revenue structure would provide incentives to our customers to use resources efficiently and to the FAA to operate more efficiently, as stakeholder involvement can help us ensure that we are concentrating on services that the customer wants and is willing to pay for. Mr. Chairman, with a comprehensive plan in place, cooperative initiatives underway, and thanks to the tools provided to us by this Committee, we are ready for the spring and summer travel season. This completes my statement. I will be happy to answer your questions at this time.