Early investment in NextGen technology is a tough sell for airlines

Commercial air carriers might require stronger incentives to invest early in equipment and training crucial to the success of a major air traffic control modernization project, a senior Federal Aviation Administration official said in an interview with Nextgov.

To use FAA's satellite-based Next-Generation Air Transportation system, carriers must outfit planes with new navigation technology and teach pilots to use it. Doing so is optional for now, however, and airlines have been reluctant to cover the upfront costs because the inherent benefits "don't go directly into [their] bottom line," said Victoria Cox, FAA's senior vice president for NextGen.

For example, when airlines invest in sleeper beds for first-class cabins, the plane must be taken out of service for a few days, but the cost is quickly recouped as consumers pay more for tickets, Cox noted. But "passengers will not pay [more] if [you] tell them the aircraft is equipped with [better navigation technology]," she said. "It should resonate with the airline because it should save fuel," by allowing planes to take more direct paths and land with poorer visibility, "but it will take longer to recoup investment."

FAA plans to have the infrastructure for NextGen completed by 2013 nationwide, and by 2020 any airline that wants to fly in controlled airspace in the United States must have ADS-B avionics, which use Global Positioning System satellite signals to provide air traffic controllers and pilots with information, spokesman Paul Takemoto said.

A few carriers already are looking at the longer-term picture. Seattle-based Alaska Airlines has installed NextGen-compatible equipment on all its planes, and the investment in "technology and training is paying off in fuel savings, noise reduction, efficiency, [and] perhaps most importantly, in positioning Alaska Airlines for the future," said spokeswoman Marianne Lindsey, in an e-mail.

Southwest Airlines also has equipped its planes with required navigation performance technology that relies on space-based communications rather than ground-based radar beacons to show air traffic controllers the location and altitude of aircraft. The airline expects to recoup its $175 million investment in the technology and related training in about 10 years, spokeswoman Marilee McInnis said.

Passengers do understand the benefits of NextGen, such as getting to their destination quicker, keeping fuel prices down and allowing the airline to keep fares lower, according to McInnis. "All of those benefits are something we have talked about publicly," she said.

Southwest will celebrate its 40th birthday next year and "thinking about the future and us being on [the] cusp, 10 years is nothing," she added.

But for many airlines, that is a long time to wait and "that's the gap we're trying to overcome," Cox said.

FAA has "no decision or intent at this time to mandate" a switch to NextGen before 2020, but instead might turn to incentives such as access to better routes, Cox said. The "competitive edge should be a desirable entity," she noted.

Other carriers that have made the investment already include the United Parcel Service, which has outfitted about 100 planes, Takemoto said.