The future of FAA's NextGen depends on how it will deliver economically

The aviation community -- from large commercial carriers to independent aircraft owners -- say they must see a positive return on the investment they would have to make in navigational equipment before they adopt the Federal Aviation Administration's new air traffic control system, a panel of experts said on Wednesday.

Steve Loranger, chairman and chief executive officer of ITT Corp., an engineering and manufacturing company, said aviation executives "need to ensure the NextGen technological developments deliver the benefits promised." NextGen is a $20 billion satellite-based network that FAA has developed to replace the nation's aging radar-based air traffic control system by 2020.

The new program is unique because the airline industry has never modernized the air traffic control network while continuing to use the existing system, Loranger said. "We still have substantial challenges in front of us," he said. For example, pilots need a business case that shows it is cost efficient to install the equipment to operate with the NextGen technology, such as additional equipment in cockpits and on the ground to receive satellite communications, he added.

One of FAA's biggest challenges is showing a positive cost-benefit analysis for independent aircraft owners, said Melissa Rudringer, senior vice president of government affairs for the Aircraft Owners and Pilots Association, a not-for-profit individual membership association. The measure of success for them is the benefits they get as aircraft owners, she said.

Rudringer said by 2020, one of the metrics that will show the program was helpful for pilots would be the fact that FAA would not require them to equip their aircraft with NextGen technology, instead owners would have installed the technology because it makes economic sense and improves safety. For example, without a mandate, about 80 percent of aircraft owners installed GPS as their primary means of navigation while flying.

Commercial carriers also want to see a positive cost-benefit analysis. Capt. Ken Speir, director of line operations at Delta Air Lines, said a plane loses revenue by being out of service for the installation of new technology. For some additions, "there are very aggressive activities to take airplanes out of service to provide retrofit capability ... [which] produce future benefits." Retrofits include such things as winglets, which improve the efficiency of aircraft, that provide an immediate benefit, he said.

While not specifically mentioning NextGen, Speir added other capabilities have higher risk and airlines will determine if taking the planes out of service is economically worth that risk.

Airports also will evaluate what NextGen provides them, said Chris Oswald, vice president of safety and technical operations at the Airports Council International in North America, which calls itself the voice of the world's airports.

In April, FAA Administrator Randy Babbitt said NextGen will move forward only if "we continue to work together and build on the consensus we have to determine the most effective order in which to implement new capabilities."