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Summary

This report is one in a series of reports on implementation of a cost accounting system within the Federal Aviation Administration (FAA). In this phase, we concentrated our review on FAA's efforts to implement the cost accounting system within Air Traffic Services. Our audit objective was to review the process used to determine costs and aircraft activity for "overflights." For this report, overflights represent aircraft that fly in U.S.-controlled airspace, but do not take off from or land in the United States. Within FAA, overflights are handled by En Route and Oceanic centers, of which overflights represent slightly over one percent of all En Route and Oceanic flights.



FAA is calculating its costs based on the existing system and historical experience. However, FAA is currently in the process of modernizing its oceanic system, which may significantly impact FAA’s overflight fees. The cost to modernize and operate the new and significantly different oceanic air traffic control system is unknown at this time, but it is likely to affect FAA’s costs and its future fees. FAA is seeking vendors to demonstrate operational systems and tentatively expects to award a contract by October 2000. Due to the pending decision on this, FAA cannot determine at this time whether its costs will increase or decrease when the new system is implemented.