*****************************************************************

Date of Submission: Monday June 25, 2007

Title: Conflict Analysis: Who should pay for the Next Generation Air Traffic Control System
Next Gen?

CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that
any assistance I received in its preparation is fully acknowledged and disclosed in the paper. I
have also cited any sources from which I used data, ideas or words, either quoted directly or
paraphrased.

Author's Signature:

Phanel Petit

*****************************************************************

Who Should Pay for NextGen? By Phanel Petit 1

Abstract
There has been a number of conflicts in Aviation, there will continue to be conflicts between
different segments of the industry; however the outcomes of the conflict discussed in this paper
will change Aviation forever. This latest and most important conflict in aviation is a widespread
disagreement on who should bear the cost for the future implementation of a new air traffic
control system known as NextGen. The heart of the controversy is money, it is estimated that
the new system implementation will cost over 20 million dollars. The conflict over funding
NextGen has caused lobbyist to spread throughout West Virginia (because its home to Senator
Jay Rockefeller, chairman of the Senate Aviation Subcommittee), and other parts of the country
where they can be heard by politicians. Hearings on the FAA refunding package are also being
held in Virginia. Air Traffic Control as you will see throughout this paper plays a central role in
air transportation. The aerospace industry agrees that replacement of this old system which is
based on 1950s technology is overdue. While the technology itself: Global Positioning System
(GPS) is available, who should pay for it remains a controversy.

Who Should Pay for NextGen? By Phanel Petit 2

The issues: history and background

The first powered flight took place on December 17, 1903. The flight was conducted by the
Wright Brothers. Following the success of the Wright Brothers, Aviation evolves very rapidly. In
Europe, aircraft were flown transatlantic creating a need for tracking airplanes while en route
until they reach their destination. In 1999, the International Commission for Air Navigation
(ICAN) was created with the purpose of providing standard traffic rules and procedures for all
countries where aircraft were flown. The United States failed to sign the ICAN convention
because they did not see a need for such regulations. Though, it did not take long for the US to
realize that air traffic rules were needed. In 1926, the US Air Commerce Act was passed calling
for implementation of air traffic rules through the department of commerce. The first basic rule
for pilots was Do not take off until there is no risk of collision with landing aircraft and until
preceding aircraft are clear of the airfield. Airports felt that such rule was not enough and
decided to take matters into their own hands in order to prevent collisions of aircraft. The
airports provided visual air traffic signals to inbound and outbound flights using flags (waving
flags to direct pilots on the airfield). In the 1950s that has changed, radio communication and
ground based radar technology were introduced. (http://www.centennialofflight.
gov/essay/Government_Role/Air_traffic_control/POL15.htm). The ground based radar allows
aircraft to fly from one radar point to another. Aircraft fly in zigzag because they must follow the
highways in the sky created by the ground radar point to point system. This system works, but it
does not allow aircraft to fly direct route. For this reason, the pilots rely heavily on the
controllers for directions and separation distances between aircraft to prevent air collision. While
the number of aircraft have increased tremendously since the 1950s, the 1950 technology is still
in used today resulting to gridlock, delays at airports and a very congested airspace.

Who Should Pay for NextGen? By Phanel Petit 3

The current system will be replaced by Global Positioning System (GPS). GPS is not only
cheaper to maintain than the older system, but more importantly its more accurate, reliable and
automated and it is already being used in vehicles, boats and others. It will allow a plane to
identify its location through GPS satellites and automatically broadcast its position to the
controllers and other aircraft in the vicinity.
Airplanes will be able to fly more direct routes in the sky, pilots will use more advanced
navigational instruments that will allow them to locate other aircraft at all times. The aircraft
flight tracking information will not only be available to controllers on the ground, it will be
available to other aircraft as well. Aircraft will depend less on controllers instructions and
directions, they will use their navigational resources to maintain a safe flight. Since the pilots
will be able to see other aircraft location, the distance required between aircraft in flight would
be less. Air traffic controllers will be able to manage the airspace efficiently using all available
airspace and resources without any path restrictions unlike the ground based radar approach.
(http://www.gaservingamerica.org/how_work/work_navigation.htm)
From the history of Air Traffic Control (ATC), one can see how control, power and
ownership of the ATC system has shifted from the pilots handling their own traffic control, to
the airports providing directions on the airfield, to the airlines implementing their own air traffic
system, to the government taking over, improving the system and making it their responsibility.
Today those parties are very well involved in this conflict which consists of the FAA (Federal
Aviation Administration), the airlines (schedule air carriers flight - commercial airliners that are
in business for profit), general aviation (non military and non scheduled flights or non air
carrier), the airports (departure and destination point), the US Congress (represents the public:
tax payers).

Who Should Pay for NextGen? By Phanel Petit 4

The Primary Parties and their Objectives

The FAAs main job is to develop, implement air traffic control system and navigation for
both civil and military aircraft, to regulate civil aviation to promote safety, to encourage and
develop civil aeronautics, including new aviation technology, to research and develop the
National Airspace System (NAS) and civil aeronautics, to develop and carry out programs to
control aircraft noise and other environmental effects of civil aviation. The safe and efficient
use of navigable airspace is one of our primary objectives. We operate a network of airport
towers, air route traffic control centers, and flight service stations. We develop air traffic rules,
assign the use of airspace, and control air traffic. (http://www.faa.gov/about/mission/activities/)
It is the FAAs objective to obtain funding for the system by submitting a proposal to Congress.
The airlines transport passengers and cargo throughout the world. The service provided by
the airlines can be categorized as being international (to and from foreign countries), domestic
(within the US), and regional (serving a particular region in the US). The airlines business is very
challenging; it goes through a cycle stage. Since deregulations, in the US alone there has been
over 200 airlines that have either been taken over, merge, or went out of business. Several
airlines went bankrupt after 9/11; they are just now recovering from their financial hardships.
The airlines embrace the idea of the new system, they know its importance and how it will save
them money and increase safety in the long run. However their goal is to not have to pay a
penny. The airlines trade associations also play an important role in this controversy because
they are backing them up in achieving that goal.
The Regional Airlines Association (RAA) is an aviation organization that represents the US
regional airlines as well as the manufacturers that create products or provide services to support
the regional airline industry. RAA was founded in 1975, they have represented their members

Who Should Pay for NextGen? By Phanel Petit 5

very strongly by providing technical, government relations and public relations, before congress,
Department of Transportation (DOT), FAA and other federal agencies. The association currently
has 43 airline members and 246 associate members. The regional airlines operate more than
2,700 aircraft that serve 15,000 flights daily. RAA reported that 1 in 5 domestic airline
passengers now travel on regional airlines and their fleet accounts for one-third of the entire US
commercial fleet. (http://www.raa.org/)
The Air Transport Association of America (ATA) is the airlines largest and oldest trade
association, it was founded in 1935. Since its birth, it has played a major role in all aviation
related government decisions and policies including the creation of FAA, the implementation of
the ground radar air traffic control system, deregulation, and the aftermath of September 11th
attack on the trade center. According to ATA its members and their affiliates transport more than
90 percent of all U.S. airline passenger and cargo traffic. (http://www.airlines.org/aboutata/)
The International Air Transport Association (IATA) is the airlines global trade organization,
it was created in 1947. The global trade organization has over 250 passenger and cargo airlines
members. They represent the airline on a global level, they are known for shaping the
commercial standards for the global airlines industry. (http://www.iata.org/about/)
General Aviation (GA) is the remaining sector of aviation that does not include military and
commercial airlines. It comprised the majority of aviation to include flight school, Fixed Based
Operators (FBOs), companies with small jets, community airports (smaller airports that serves
GA only), major airports (serving both commercial airliners and GA aircraft), GA
manufacturers (those who produce for GA) and others. The General Aviation party is composed
of several other parties, interest groups and trade associations such as the Airlines Pilots
Association (AOPA), and the National Business Aviation Association (NBAA).

Who Should Pay for NextGen? By Phanel Petit 6

The Aircraft Owners and Pilots Association was founded in 1939. It has a total membership
of 412,000 pilot members representing two thirds of all pilots and some aircraft owners in the
US. The majority of AOPA members falls under the general aviation industry. AOPA has
achieved its prominent position through effective advocacy, enlightened leadership, technical
competence, and hard work. Providing member services that range from representation at the
federal, state, and local levels to legal services, advice, and other assistance, AOPA has built a
service organization that far exceeds any other in the aviation community.
(http://www.aopa.org/info/)
The National Business Aviation Association, Inc. (NBAA) is based in Washington, DC. It
was founded in 1947. It supports GA as well as companies that rely on GAs service to improve
their businesses. Their goal is to positively affect legislation and regulatory changes in order to
protect general business aviation. The association represents more than 8000 member companies.
(http://web.nbaa.org/public/about/)
The secondary party
An airport used to be just an airstrip (piece of pavement) where aircraft take off and land.
Nowadays, airports are similar to communities. They have a number of facilities and
infrastructure to include runways, navigational systems, air traffic control towers, fixed base
operators, fire and emergency services, concourse terminal buildings, shopping stores (malls),
hotels, parking garages and others. In the mix of increasing air traffic capability, airport capacity
must be increased in the form of building more runways, bigger concourse terminal in order to
meet the demand. All parties agree that airports need fund. The airports are currently being
funded through the Airport Improvement Program (provided by the FAA).

Who Should Pay for NextGen? By Phanel Petit 7

The third Party
The US Congress is composed of the House of Representatives, and the House of Senate.
The House of Representative has 435 voting members representing their congressional district
during a two year term. The Senate has 100 members, 2 from each State. Its important to know
that this country vested all of its power in the House of Congress.
(http://en.wikipedia.org/wiki/Congress_of_the_United_States) They are all elected members,
they must serve the people.
Conflict Context Analysis
Airport capacity such as runways must be addressed along with NextGen. Next Gen is a
must. It is the solution to many of the challenges faced by the aviation industry. Congestion is
generating some very strong headwinds. Delays are mounting. It costs our economy $9.4 billion
annually in productivity loss as passengers waited at airports for hoursTheres absolutely no
way we can cope without NextGen, Said the US Transportation Secretary Mary Peters.
There is a lack of confidence in FAAs capability to handle such a task. This is a huge task,
FAA has not always been successful at accomplishing big task. For this reason many believe that
transforming 140,000 ground based radar to satellite GPS ATC system is an impossible task for
them to undertake.
Air transportation is the engine that drives our strong economy. This transportation network
makes global business and tourism possible. It connects us to remote areas of the world that
otherwise wouldnt be available. It provides jobs to more than 29 million (direct and indirect)
people around the globe. According to the Air Transport Action Group Aviations global
economic impact is estimated at $2.960 billion, equivalent to 8% of the world Gross Domestic

Who Should Pay for NextGen? By Phanel Petit 8

Product (GDP). (The Economic and Social Benefits of Air Transport, 2 Air Transport Action
Group)
Time is an important factor because the law that currently funds the FAA will expire on
September 30th, 2007. Under the current funding system for FAA, the authority collects aviation
taxes on fuel, passenger tickets, and air cargo waybills.
The idea that the system needs replacement without considering making improvements to
meet traffic demands is not acceptable. Some argue that the FAA does not need additional
funding, they are grabbing onto this opportunity to increase their budget.
In Canada, the ATC system is privatized, NavCanada, an ATC company took over ATC
responsibilities from the Canadian government since 1997. Some believe that privatization may
be the answer. A private company would not only finance the system, but they will manage it
successfully and provide a greater return. Aviation security has been the highlight since 9/11,
should the government give out our national airspace to some private organization? User fee is a
form of privatization, the contributors are considered to be stakeholders. In addition Congress
would not have authority in telling how that money (user fee) should be appropriated or spent.
The money would be used solely for ATC modernization.
The politicians want to get reelected; they see this as an opportunity to be recognized for
shaping the future of aviation. The Bush administration supports the FAA while the FAA is more
in favor of the airlines. Congress has a great relationship with the airlines and values their
importance (economic, sociological and military needs), for example after 9/11 Congress bailed
out the airlines. In time of a major war such as a world war, the airlines will provide
transportation to the US troops. A lot of politicians in Congress utilize smaller private jets which
fall under general aviation.

Who Should Pay for NextGen? By Phanel Petit 9

User fee will not necessarily kill GA, let the market decides one should never
underestimate the power of the economy. As a matter of fact after September 11, while the
airlines were struggling, it was a prosperous time for GA (GA aircraft orders increased
tremendously). Sometimes its best to leave it up to the economy. (Professional Pilot. Editorial
opinion. ATC The case for change, 13)

The Parties and their Strategies

The FAA proposed the following to congress in order to obtain funding for NextGen:
raise GA gasoline taxes from 21.9 to 70.1 cents per gallon, impose user fee on all GA aircraft
flying the Class B airspace (Class B is the busiest airspace used mainly by commercial airlines),
charge the airlines user fee instead of taxes, charge landing fee at some 215 airports. The Bush
administration is supporting FAA in convincing Congress to accept this proposal.
The airlines and General Aviation along with their trade associations use the same strategies.
Both parties do a great job at lobbying Congress in D.C. for their own interest. They educate the
politicians in Congress independently on the importance of airlines and general aviation. They
also educate the public because they believe a more educated public will support their cause. One
thing sets the airlines apart; they emphasize on the need of ATC modernization and blame GA
for not contributing enough.
The airports know that they are indispensable to the air transportation network. Both GA and
the airlines understands the need for airports and agree that the airports should continue to be
financed through the federal government for development works such as building new runways
and increase capacity. The airport could serve as a mediator to both parties, but instead they
yield to the parties.

Who Should Pay for NextGen? By Phanel Petit 10

Congress has been listening to all parties, consulting with experts to educate themselves on
the issues. Members of the senate, particularly those of the Aviation Subcommittee will come up
with their own proposals in order to resolve the conflict. Congress as a whole will serve as the
arbitrator. They will hold hearings to listen to both sides of the issues; however their decision
will be final as in binding arbitration.

Who Should Pay for NextGen? By Phanel Petit 11

References
Air Transport Action Group (2005). The economics and social benefits of air transport.
The importance of the industry, 2.
Professional Pilot (May 2007). Editorial opinion. ATC The case for change, 13.
History.com. (2006) Air Traffic Control. Retrieved May 9, 2007 From the History.com:
http://www.history.com/encyclopedia.do?articleId=200471
Donald B. Marron (2006, September 27) Congressional Budget Office. Finanacing Investment
in the Air Traffic Control System: http://www.cbo.gov/ftpdocs/75xx/doc7597/09-27AirTraffic.pdf
Calvin L. Scovel III (2007, March 21) US Department of Transportation. FAAs Financial
Proposal : http://www.oig.dot.gov/StreamFile?file=/data/pdfdocs/FAA
_Financing_Testimony_Final.pdf
US Centennial of Flight Commission (2003) Air Traffic Control. Retrieved May 13,2007
from the US Centennial of Flight Commission: http://www.centennialofflight.
gov/essay/Government_Role/Air_traffic_control/POL15.htm