oversight

Federal Aviation Administration: Issues Concerning the Reauthorization of Aviation Programs

Published by the Government Accountability Office on 1999-01-20.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                   United States General Accounting Office

GAO                Testimony
                   Before the Committee on Commerce, Science, and
                   Transportation, U.S. Senate




For Release
on Delivery
Expected at
                   FEDERAL AVIATION
9:30 a.m. EST
Wednesday          ADMINISTRAITON
January 20, 1999



                   Issues Concerning the
                   Reauthorization of Aviation
                   Programs
                   Statement of John H. Anderson, Jr., Director, and
                   Gerald L. Dillingham, Associate Director,
                   Transportation Issues,
                   Resources, Community, and Economic
                   Development Division




GAO/T-RCED-99-68
    Mr. Chairman and Members of the Committee:

    We are pleased to be here to provide information for your deliberations on
    reauthorizing programs for the Federal Aviation Administration (FAA),
    including the Airport Improvement Program (AIP). Last year, the Senate
    passed legislation to reauthorize FAA’s programs for a 2-year period. The
    Senate legislation included various provisions to enhance competition and
    service in the aviation industry and to improve aviation safety, security,
    and system capacity. However, the House did not pass similar legislation,
    and instead, the Congress passed a 6-month reauthorization that expires
    on March 31, 1999. You asked us to comment on issues considered in the
    proposed legislation that you introduced yesterday.

    Over the years, we have performed a significant body of work in several
    areas covered in the proposed legislation—aviation competition, FAA’s air
    traffic control modernization program, FAA’s efforts to make its computer
    systems ready for the year 2000, AIP funding, and aviation safety and
    security. Today, we will provide you with our views on these issues, which
    you may wish to consider in drafting new reauthorization legislation. In
    summary:

•   Provisions in the draft legislation to enhance the competitiveness of the
    aviation industry address concerns we have raised about operating
    barriers at airports and airline marketing practices that have limited the
    full potential benefits of deregulation. Airline deregulation has led to lower
    airfares and better service for most air travelers, largely because of
    increased competition spurred by the entry of new airlines into the
    industry and established carriers into new markets. However, some
    communities have not shared these benefits and have experienced higher
    air fares and/or less convenient service since deregulation. By establishing
    programs to promote air service in various communities, the draft
    legislation would assist communities in developing and improving their air
    service. The draft legislation would also address various
    barriers—including certain marketing practices, restrictive gate leases,
    and limits on the number of take-offs and landings at four congested
    airports—that have contributed to limiting the full potential benefits of
    deregulation.
•   The reporting requirements that the proposed legislation would place on
    FAA’s air traffic control modernization program would aid in continued
    congressional oversight of this problem-ridden program. Over the past 17
    years, FAA’s multibillion-dollar program to modernize aging air traffic
    control systems has experienced cost overruns, schedule slippages, and



    Page 1                                                       GAO/T-RCED-99-68
                         performance problems of large proportions. Because of the program’s size,
                         complexity, cost, and problems, we have designated it as a high-risk
                         information technology initiative since 1995. Our recent review of the
                         program indicated continuing problems. For example, the Wide Area
                         Augmentation System has incurred significant cost growth and schedule
                         delays, and questions remain about whether the system can perform as
                         originally intended.
                     •   The proposed legislation calls for FAA to report every 3 months on the
                         problems associated with making its computer systems ready for the year
                         2000. The implications of FAA’s not meeting the Year 2000 deadline are
                         enormous and could affect hundreds of thousands of people through
                         customers’ inconvenience, increased airline costs, grounded or delayed
                         flights, or degraded levels of safety. Over the last year, we have reported
                         that FAA continues to face serious challenges in meeting the deadline. Our
                         recent review of FAA’s efforts indicated a need for continued attention to
                         the agency’s progress, as called for in the proposed legislation. Focusing
                         solely on FAA, however, provides an incomplete picture of the nationwide
                         network of aviation operations. Airports and domestic airlines also depend
                         on computer technologies and are likely to be affected by the Year 2000
                         problem. We found that many airports did not believe they would meet
                         FAA’s recommended deadline for completing preparations for the Year
                         2000. It would be appropriate to expand the reauthorization language to
                         require FAA to also report on the Year 2000 status of airports and airlines.
                     •   Provisions to reauthorize AIP would help to address critical funding
                         shortfalls for airport development by expanding FAA’s innovative pilot
                         projects and providing small airports with more flexibility in funding AIP
                         projects, among other things. In addition, the proposed legislation would
                         help to improve FAA’s information on airfield pavement quality, which
                         should improve decisions about funding these costly improvements.
                     •   The legislation’s proposals to enhance aviation safety and security
                         encompass areas in which we have identified a continuing need for
                         improvements. Requiring FAA to promptly address issues that could
                         prevent future accidents and better deal with human error are positive
                         steps. Similarly, requiring FAA to report on the status of its new airline
                         inspection and certification program and providing additional oversight of
                         aircraft repair stations should result in additional safety improvements.


                         Airline deregulation has led to lower airfares and better service for most
Enhancing Aviation       air travelers, largely because of increased competition spurred by the
Competition              entry of new airlines into the industry and established carriers into new
                         markets. However, some communities have not experienced the benefits



                         Page 2                                                      GAO/T-RCED-99-68
                     of deregulation and thus have found themselves facing higher air fares
                     and/or less convenient service. In numerous reports and testimonies
                     issued since the late 1980s, we have found that competition could be
                     improved in many communities around the country. Various operating
                     barriers—including restrictive gate leases and limits on the number of
                     take-offs and landings at four congested airports—and airline marketing
                     practices have contributed to limiting the full potential benefits of
                     deregulation. The proposed legislation addresses a number of important
                     issues intended to enhance the overall competitiveness of the aviation
                     industry.


Community Aviation   Among other things, the proposed bill would establish two programs to
Programs             promote air service in various communities and establish ways to
                     overcome some of the operating barriers that we identified. The proposal
                     would authorize the expenditure of up to $30 million for a 4-year program
                     to develop air service in up to 40 small communities, or groups of
                     communities. A second pilot program would assist communities and states
                     with inadequate access to the national transportation system in improving
                     their access to the system.

                     The programs would provide a vehicle for trying and evaluating different
                     approaches to improving air service. We found that a variety of factors
                     have contributed to the higher fares and poorer service that some
                     communities have experienced since deregulation.1 Similarly, we
                     suggested that a coordinated effort involving federal, regional, state, local,
                     and private-sector initiatives may be needed to address those factors. Such
                     initiatives, coupled with other initiatives included in this
                     legislation—particularly provisions relating to the use of regional jets by
                     commuter carriers—have the potential for increasing competition and
                     improving the quality of service for some communities. We believe the
                     programs may provide the vehicle by which such efforts can be
                     systematically tested and evaluated.


Airline Practices    The proposed legislation would require the Department of Transportation
                     (DOT) to review the practices of airlines that may inhibit the availability of
                     quality, affordable air transportation services to small and medium-sized
                     communities and to take appropriate regulatory actions to address



                     1
                     See, for example, Domestic Aviation: Barriers Continue to Limit Competition (GAO/T-RCED-98-32,
                     Oct. 28, 1997).



                     Page 3                                                                       GAO/T-RCED-99-68
                      problems. These practices include marketing, code-sharing partnerships,
                      and gate leases at airports.2

                      We have long recognized that the marketing practices of major
                      airlines—such as frequent flyer programs and travel agent commission
                      overrides—may make competitive entry more difficult for other airlines.3
                      These practices encourage travelers to choose one airline over another on
                      the basis of factors other than obtaining the best fare. Such practices may
                      be especially important if an airline is already dominant in a given market
                      or markets. Ultimately, these practices may lead to higher fares than
                      would exist in their absence. Other marketing arrangements, such as
                      code-sharing partnerships between airlines, may have both positive and
                      negative effects on consumers.4 For example, the partnerships may
                      improve the convenience of connections for travelers but could reduce
                      competition and lead to higher fares if alliance partners do not compete
                      with each other.

                      Restrictive gate leases may also be barriers to establishing new or
                      expanded service at some airports. We reported that gate leases at six key
                      airports permitted one or a few airlines to hold exclusive rights to use
                      most of an airport’s gates over a long period of time, commonly 20 years.
                      Such leases have prevented nonincumbents from securing necessary
                      airport facilities on equal terms with incumbent airlines and have
                      contributed to higher airfares at these airports.5 We are analyzing
                      information on recent changes in airfares and gate arrangements and plan
                      on reporting that information to you in February 1999.


Slot Exemptions and   The legislation also requires DOT to quickly grant or deny exemptions for
Perimeter Rule        nonstop regional jet service from small communities into three
                      high-density airports—O’Hare, LaGuardia, and Kennedy. To reduce
                      congestion, FAA has limited since 1969 the number of takeoffs and landings

                      2
                       Code-sharing occurs when an airline, by agreement, uses its designator code to market flights
                      operated by another carrier as its own.
                      3
                       Under frequent flier programs, passengers qualify for awards by flying a certain number of miles with
                      the sponsoring airline. A travel agent commission override is a special bonus commission paid by
                      airlines to travel agents or agencies as a reward for booking a targeted proportion of passengers on
                      their airline. Among our reports, see Aviation Competition: International Aviation Alliances and the
                      Influence of Airline Marketing Practices (GAO/T-RCED-98-131, Mar. 19, 1998).
                      4
                       Aviation Competition: Proposed Domestic Airline Alliances Raise Serious Issues
                      (GAO/T-RCED-98-215, June 4, 1998).
                      5
                       This issue is discussed, for example, in Airline Competition: Effects of Airline Market Concentration
                      and Barriers to Entry on Airfares (GAO/RCED-91-101, Apr. 15, 1991).



                      Page 4                                                                            GAO/T-RCED-99-68
(referred to as slots) that can occur at these airports and at Ronald Reagan
Washington National Airport. However, efforts by DOT to allocate these
slots equitably among airlines have not been effective in preventing
established airlines from strengthening their control of slots. In response
to our October 1996 report, DOT began to use the authority that the
Congress gave it in 1994 to allow additional slots at O’Hare, LaGuardia,
and Kennedy.6 These exemptions could help to enhance service from some
small and medium-sized communities.

The draft legislation would also provide limited exemptions to the federal
perimeter rule at Reagan National that prohibits incoming and outgoing
flights exceeding 1,250 miles. Among other things, the draft legislation
would require DOT to assess the impact of the exemptions on safety, noise
levels, and the environment. The perimeter rule, which has been amended
in the past to extend the distance, has been used to promote Dulles
Airport as the long-haul airport for the metropolitan area. However, the
rule restricts the ability of airlines based in the West to serve Reagan
National because they are not allowed to fly directly from the markets
where they are strongest. By contrast, because of their proximity to
Reagan National, each of the seven largest established carriers is able to
serve the airport from its principal hub.7

In 1996, we suggested that the Congress consider granting DOT the
authority to allow exemptions to the perimeter rule at Reagan National
when the proposed service will substantially increase competition.8 We did
not recommend that the rule be abolished because doing so could have
unintended negative consequences, such as reducing the amount of
service to smaller communities in the Northeast and Southeast. This could
happen if the airlines serving Reagan National were to shift their service
from those communities to take advantage of more profitable,
longer-distance routes.



6
 The FAA Authorization Act of 1994 (P.L. 103-305, section 206) created an exemption provision to
allow additional slots at O’Hare, LaGuardia, and Kennedy when DOT “finds it to be in the public
interest and the circumstances to be exceptional.” The number of flights at Reagan National is further
limited by federal law to address local concerns about noise. DOT’s exemption authority does not
presently include Reagan National. Airline Deregulation: Barriers to Entry Continue to Limit
Competition in Several Key Domestic Markets (GAO/RCED-97-4, Oct. 18, 1996).
7
A similar rule is in place at New York’s LaGuardia airport, restricting flights to within 1,500 miles. It
was established by the Port Authority of New York & New Jersey and was intended to promote
Kennedy as the long-haul airport for the metropolitan area.
8
Airline Deregulation: Barriers to Entry Continue to Limit Competition in Several Key Domestic
Markets (GAO/RCED-97-4, Oct. 18, 1996).



Page 5                                                                               GAO/T-RCED-99-68
                         The proposed legislation would also delineate special rules for O’Hare by
                         granting 30 slot exemptions over a 3-year period—18 for underserved
                         markets and 12 for air carrier slot exemptions. DOT would be required to
                         report to the Congress 3 years after the first exemption is granted on the
                         impact of the additional slots on safety, environment, noise, access to
                         underserved markets, and competition. In the year 2000, DOT would be
                         required to complete another study encompassing all four high-density
                         airports.9

                         We recognize that the communities where the airports are located will be
                         concerned with any proposals to grant additional slots because of
                         potential congestion, noise, and safety problems. These are sensitive
                         issues, and ultimately, any final decisions about slots can best be resolved
                         through congressional deliberations. However, the proposed legislation
                         provides for a relatively modest number of additional slots and could
                         enhance competition at and improve access to these airports. Similarly,
                         the proposed requirements that would spread the additional flights at
                         Reagan National throughout the day and limit those flights to quieter, stage
                         3 aircraft, may mitigate the concerns of the community. And finally, by
                         requiring DOT to report to the Congress on the impacts of the additional
                         slots at Reagan National, the draft bill would provide an opportunity to
                         reexamine concerns about noise, safety, and the environment.


                         Over the past 17 years, FAA’s multibillion-dollar program to modernize
Overseeing Air Traffic   aging air traffic control systems has experienced cost overruns, schedule
Control                  slippages, and performance problems of large proportions. Because of the
Modernization            program’s size, complexity, cost, and problems, we have designated it as a
                         high-risk information technology initiative since 1995. The proposed
                         legislation contains reporting requirements for several of the program’s
                         major modernization projects. We recently reported on the status of major
                         projects and would like to provide you with an update on the progress and
                         challenges faced by two of the projects targeted in the draft
                         legislation—the Wide Area Augmentation System (WAAS) and Oceanic
                         Automation System.10


Wide Area Augmentation   The proposed legislation would call for FAA to report to the Senate and
System                   House authorizing committees on the implementation plans and the

                         9
                          The report due in 2000, when the airports are using only stage 3 aircraft, would compare current
                         community noise levels with the 1991 levels.
                         10
                             Air Traffic Control: Status of FAA’s Modernization Program (GAO/RCED-99-25, Dec. 3, 1998).



                         Page 6                                                                           GAO/T-RCED-99-68
                              timetable for the WAAS system—a network of ground stations and
                              geostationary communications satellites. FAA would also be required to
                              determine whether WAAS will ultimately be the primary or sole means of
                              navigation. FAA is developing the system to augment the Global Positioning
                              System (GPS)11 to enable it to replace its present ground-based navigation
                              system with a satellite-based system. WAAS has incurred significant cost
                              growth—from approximately $500 million in 1994 to just over $1 billion in
                              1998 to develop the system and from about $1.5 billion in 1997 to slightly
                              over $2.0 billion in 1998 to operate and maintain it. FAA recently reported
                              that the operation of the initial system—originally planned for
                              June 1997—was likely to be delayed until September 2000. FAA attributed
                              the delay to problems with the development of a critical software
                              component that helps ensure that WAAS signals are precise and valid. We
                              have reported over the years that the lack of a disciplined software
                              acquisition process has contributed to FAA’s past problems to deliver
                              systems capabilities on time and within budget.12

                              Furthermore, many questions remain about whether WAAS can perform as
                              originally intended—that is, provide the sole means of navigation, so that
                              it allows aircraft to meet all performance requirements for the navigation
                              system for a given operation or phase of flight. With WAAS fully operational,
                              FAA would be able to phase out its costly network of ground-based
                              navigation aids. Key issues that relate to the system’s ultimate capability
                              include (1) its cost/benefit, (2) the vulnerability of GPS signals to radio
                              frequency interference, (3) the availability of a second civil broadcast
                              frequency, and (4) the acquisition of additional satellites. FAA is currently
                              addressing these issues, and their resolution will allow the agency to
                              develop a roadmap for the future navigation system. The reporting
                              requirements outlined in the draft legislation regarding the certification of
                              WAAS’ capabilities and the necessity of a back-up system until FAA
                              determines that WAAS should be the sole means of navigation would aid in
                              continued congressional oversight to help ensure that FAA does not repeat
                              past problems with major modernization systems.


Oceanic Air Traffic Control   The proposed legislation also calls for FAA to report to the Congress on
System                        plans to modernize the oceanic air traffic control system and, if necessary,
                              submit a proposal to fund the project. FAA’s oceanic automation project is


                              11
                                The Department of Defense’s GPS satellites transmit radio signals that allow properly equipped air,
                              land, and sea users to calculate the time and their position and speed anywhere above the earth’s
                              surface and under any condition.
                              12
                               Air Traffic Control: Immature Software Acquisition Processes Increase FAA System Acquisition Risks
                              (GAO/AIMD-97-47, Mar. 21, 1997).


                              Page 7                                                                           GAO/T-RCED-99-68
                    designed to improve air traffic control over the ocean by allowing
                    controllers and aircraft operators to take advantage of new technology
                    and procedures—such as automatic dependent surveillance position
                    reporting, advanced conflict probe, and data link—that would improve
                    safety and traffic flow.13

                    The oceanic project has encountered problems in development. For
                    example, the project’s scope has been reduced from five segments, which
                    would have allowed incremental functional improvements, to one
                    segment. That one segment, in turn, has been reduced from three to two
                    components—data link and controller tools. FAA eliminated the third
                    component—a requirement for automatic dependent surveillance—from
                    this segment, partially in response to contractor performance problems
                    and the potential for a $45 million cost increase to this segment. FAA
                    reported that it was on schedule to deliver the data link and controller
                    tools by October 1999.

                    FAA officials believe that further improvements in oceanic air traffic
                    control automation are needed and are examining alternative means to
                    satisfy those needs. Oceanic users expect FAA to improve oceanic air
                    traffic control to allow them to achieve maximum fuel efficiency,
                    minimum travel time, and access to preferred takeoff times and flight
                    paths. The draft legislation’s reporting requirement, including a budget for
                    the program, is important to help ensure that FAA meets these
                    expectations.


                    The proposed legislation calls for FAA to report to the House and Senate
Managing the Year   authorizing committees every 3 months on problems associated with
2000 Problem        making its computer systems ready for the year 2000. To safely guide and
                    direct aircraft, FAA depends on an extensive array of
                    information-processing and communications technologies. The
                    implications of FAA’s not meeting the Year 2000 deadline are enormous and
                    could affect hundreds of thousands of people through customers’
                    inconvenience, increased airline costs, grounded or delayed flights, or
                    degraded levels of safety. Over the last year, we have reported that FAA
                    continues to face serious challenges in meeting the deadline. In

                    13
                      Automatic dependent surveillance is a technology that will provide more accurate position reports
                    for use by controllers and pilots to safely reduce distances between aircraft and make more efficient
                    use of airspace. Conflict probe tools allow air traffic controllers to identify conflicts up to 20 minutes
                    in advance of their occurrence. Advanced tools would provide controllers with suggested resolution
                    for these conflicts. Data link provides digital communication between ground and airborne automation
                    systems. All of these capabilities will ultimately allow FAA to move to a more collaborative system of
                    air traffic management known as “free flight.”



                    Page 8                                                                             GAO/T-RCED-99-68
August 1998, we reported that FAA was unlikely to complete critical testing
activities in time because, among other reasons, its projections were based
on very optimistic schedules and because the agency’s testing process is
complex. We also reported that unresolved risks—including those
associated with data exchanges, international coordination, reliance on
the telecommunications infrastructure, and business continuity and
contingency planning—threatened aviation operations.

More recently, our reviews of DOT’s Year 2000 progress reports
demonstrate the need for continued attention to FAA’s progress. DOT
recently reported that FAA expected to complete implementing14 repairs on
33 of its 155 mission-critical systems by December 31, 1998. However, it
later reported that only 14 of these systems were completed by that date.
While there could be a reasonable explanation for FAA’s not reaching its
goals, this type of information would be valuable to congressional
committees to allow further questioning and to aid in congressional
decision-making. This type of information is called for in the draft
legislation.

Focusing solely on FAA, however, provides an incomplete picture of the
nationwide network of aviation operations, commonly called the National
Airspace System (NAS). In addition to FAA’s air traffic control system, major
NAS components include airports and domestic airlines, which both
depend on computer technologies and are likely to be affected by the Year
2000 problem. FAA has some insight into the Year 2000 status of these
industries because it regulates certain airline and airport systems. The
agency has also hosted a number of outreach meetings aimed at sharing
Year 2000 information with members of the aviation community.

At the request of this Committee and its Subcommittee on Aviation, we are
reviewing the status of airports’ preparations for the Year 2000 and will
issue a report soon. We have found that nearly a third of the more than 330
airports that responded to our survey did not report that they would meet
the June 1999 date recommended by FAA to complete preparations for the
Year 2000 and did not have contingency plans for Year 2000 induced
failures. Therefore, it would be appropriate to expand the reauthorization
language to require FAA to report on the Year 2000 status of all critical NAS
components—including airports and airlines.




14
 Implementation is the final phase in the government’s approach to resolving Year 2000 problems. It
occurs after systems have been fixed and tested and involves putting systems into operation.



Page 9                                                                          GAO/T-RCED-99-68
                       AIP provides grants to fund the capital needs of the nation’s commercial
Funding Airport        and general aviation airports. Funding for most of FAA and all of AIP is
Improvement            provided through the Airport and Airway Trust Fund. The proposed
Programs               legislation would remove caps on the amount of discretionary grants,
                       increase the apportionment for noise grants, and make other technical
                       adjustments to the AIP funding formula.

                       We have previously reported on the need for adequate and predictable
                       funding for airport improvements. Last year, we reported that airports face
                       a potential funding gap of as much as $3 billion annually over the 5-year
                       period, 1997-2001.15 The $3 billion is the difference between $10 billion in
                       planned development and $7 billion in funding at historical levels. The
                       difference between current funding and planned development is especially
                       acute for smaller airports. Their 1996 funding covered only about half of
                       their total planned development.


Innovative Financing   To help address airports’ funding needs, the proposed legislation would
                       codify FAA’s innovative finance pilot project and expand it from 10 to 20
                       projects.16 The pilot project allows FAA to provide AIP grants to projects
                       that demonstrate innovative financing, specifically through the payment of
                       interest, credit enhancement, and a flexible nonfederal matching share.
                       The draft bill would also provide small airports with more flexibility in
                       funding AIP projects by allowing them to contribute more than 10 percent
                       in local matching funds.

                       In March 1998, we reported that FAA’s innovative financing pilot program
                       had attracted only limited interest among airports.17 Of the airports that
                       applied, the greatest interest was for flexible local matching, which allows
                       local airport sponsors to increase their local matching contribution above
                       10 percent. Flexible matching allows projects, which otherwise may be
                       delayed, to be started sooner and may ultimately increase the funds
                       available for the airports’ infrastructure needs. We also recommended that
                       the Secretary of Transportation be given the authority to use AIP grants to
                       capitalize state revolving funds for those states with the capability of
                       managing such a fund. We believe that state revolving funds are an



                       15
                          Airport Financing: Comparing Funding Sources With Planned Development (GAO/T-RCED-98-129,
                       Mar. 19, 1998).
                       16
                         FAA selected 10 projects before the pilot expired at the end of fiscal year 1998.
                       17
                         Airport Financing: Funding Sources for Airport Development (GAO/RCED-98-71, Mar. 12, 1998).



                       Page 10                                                                               GAO/T-RCED-99-68
                             innovative financing concept that could help smaller airports obtain
                             additional financing.


Airfield Pavement            The proposed legislation would also require FAA to evaluate options for
                             improving the quality of information on runway pavement condition.
                             Runways, like highways, are prone to deterioration from weather and
                             usage. Left unchecked, such deterioration can eventually pose safety risks
                             to planes. While the rehabilitation of runway pavement is a high priority
                             for FAA in awarding AIP grants, the agency does not have accurate,
                             consistent, nationwide information on the runways’ condition. To improve
                             the existing information contained in the Airport Safety Data Program, we
                             recommended that FAA require airports to submit these data on a regular
                             basis in order to create a pavement condition database. 18 The draft bill
                             incorporates our recommendations.

                             We also reported in July 1998 that while most runway pavement is
                             currently in good condition, over the next 10 years, many airports will face
                             substantial costs to keep them in that condition. We estimated that future
                             costs to maintain airport runways will be $1.38 billion if rehabilitation
                             occurs when needed. However, this could mean as much as $774 million in
                             the first year alone. If, however, runaway rehabilitation is funded at the
                             historical level of about $162 annually, the overall cost of maintaining
                             runways will increase and will result in an unmet need of $2.37 billion
                             after 10 years. This situation will occur because many projects would be
                             deferred, pavement would deteriorate more rapidly, and pavement would
                             ultimately become more expensive to rehabilitate.


                             The proposed legislation contains a number of provisions to enhance the
Improving Aviation           safety and security of the nation’s aviation system. We have done work
Safety and Security          that is relevant to provisions concerning Flight Operational Quality
                             Assurance (FOQA) programs, human factors issues, the Air Transport
                             Oversight System (ATOS), and the oversight of aircraft repair stations.


Flight Operational Quality   The proposed legislation would require FAA to promptly issue a Notice of
Assurance Programs           Proposed Rulemaking to protect air carriers and their employees from
                             civil enforcement penalties for incidents discovered under FOQA programs.
                             These programs analyze data recorded during uneventful flights to detect

                             18
                              The pavement condition index rates pavements on a scale of 100 (excellent) to 0 (failed). See Airfield
                             Pavement: Keeping Nation’s Runways in Good Condition Could Require Substantially Higher Spending
                             (GAO/RCED-98-226, July 31, 1998).



                             Page 11                                                                          GAO/T-RCED-99-68
                technical flaws and unsafe practices or conditions early enough to prevent
                future accidents or incidents. In December 1997, we reported on the
                important safety benefits that could result from such programs.19 In that
                report, we identified as a serious impediment to implementing FOQA
                programs the concerns held by airlines and pilots that the information
                gathered would be used against them in civil enforcement actions by FAA.
                We believe that it is time for this concern to be laid to rest and that formal
                rulemaking is the appropriate way to do so. Last month, FAA issued a
                policy statement promising conditional protection from civil enforcement
                actions for airlines participating in FOQA programs. The agency has also
                indicated that a Notice of Proposed Rulemaking will soon be forthcoming.
                The statement reiterated a policy statement issued in February 1995, but
                no rule has been issued.


Human Factors   In addition, the proposed legislation would emphasize the importance of
                ensuring that human factors concerns are addressed throughout FAA.
                Human factors is a science that examines how humans interact with
                machines and other people and determines whether procedures and
                regulations take into account human abilities and limitations. Identifying
                chances for human error can reduce the need for later replacing or
                modifying equipment and procedures. Among other things, the draft
                legislation would require FAA to address problems and concerns that have
                been raised about its human factors program and to develop human
                factors training for pilots and flight crews.

                In 1997, we recommended that FAA better integrate human factors
                considerations into the projects it was developing.20 In addition, we and
                others have pointed out several cases in which increased and early
                attention by FAA to human factors issues could enhance the agency’s
                efficiency and effectiveness. The National Air Traffic Controllers
                Association and the Professional Airways Systems Specialists are working
                with FAA to resolve numerous human factors problems with the Standard
                Terminal Automation Replacement System (STARS)—a major component of
                the air traffic control modernization program, which will replace aging
                controller workstations and supporting equipment. The fact that many of
                the human factors issues were not identified and resolved early in the
                project has contributed to added project cost and schedule delays. FAA


                19
                   See Aviation Safety: Efforts to Implement Flight Operational Quality Assurance Programs,
                (GAO/RCED-98-10, Dec. 2, 1997).
                20
                 See Human Factors: Status of Efforts to Integrate Research on Human Factors Into FAA’s Activities
                (GAO/RCED-96-151, June 27, 1996).



                Page 12                                                                         GAO/T-RCED-99-68
                           estimated that the total cost for incorporating all human factor issues into
                           the final design of STARS would be $192 million and entail a delay of more
                           than 2 years.


Air Transport Oversight    The draft legislation would also establish reporting requirements for FAA
System                     on ATOS—a reengineered approach to the way FAA fulfills its safety
                           inspection and certification responsibilities, which are essential to the safe
                           operation of the nation’s aviation system. Over the past several years, we
                           and others have reported on a number of deficiencies in FAA’s inspection
                           program.21 ATOS was developed in part to respond to the criticisms and
                           recommendations made by us and others. ATOS promises to provide a
                           structured approach to inspections by using data on past accidents,
                           incidents, and problems detected during inspections to target the
                           surveillance of airlines. FAA began implementing the system in
                           October 1998, applying it to the nation’s 10 largest airlines. We are
                           monitoring the system’s implementation and plan to report our findings
                           later this year.


Aircraft Repair Stations   The draft legislation would create an advisory panel to review issues
                           related to the use and oversight of aircraft repair stations. During this
                           decade, the airlines and air cargo industries have increasingly come to rely
                           on independent repair stations to perform their maintenance. FAA is
                           responsible for certifying these repair stations and inspecting them
                           regularly to ensure that they continue to meet the agency’s certification
                           requirements. In October 1997, we found that FAA was meeting its goal of
                           inspecting every repair station at least once a year.22 The overwhelming
                           majority of the inspectors we surveyed stated that they believed the
                           overall compliance of repair stations was good or excellent. However,
                           more than half of the inspectors believed there were areas of compliance
                           that repair stations could improve. We made a number of
                           recommendations to improve the quality of inspections and record
                           keeping, and DOT is now implementing our recommendations. The
                           proposed legislation would provide continued oversight of repair stations.




                           21
                             See, for example, Aviation Safety: Weaknesses in Inspection and Enforcement Limit FAA in
                           Identifying and Responding to Risks (RCED-98-6, Feb. 27, 1998); Aviation Safety: New Airlines Illustrate
                           Long-Standing Problems in FAA’s Inspection Program (GAO/RCED-97-2, Oct. 17, 1996).
                           22
                              See Aviation Safety: FAA Oversight of Repair Stations Needs Improvement (GAO/RCED-98-21,
                           Oct. 24, 1997).



                           Page 13                                                                           GAO/T-RCED-99-68
           In summary, we have conducted a large body of work that addresses many
           of the issues now being considered by this Committee. We support the
           passage of legislation to reauthorize FAA. It provides an opportunity to
           address critical issues facing FAA and the aviation community while
           ensuring appropriate Congressional oversight. We would be glad to work
           with you and your staff through this legislative process.


           Mr. Chairman and Members of the Committee, this concludes our
           prepared statement. We would be glad to respond to questions.




(348150)   Page 14                                                  GAO/T-RCED-99-68
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