Watchdog finds inefficiencies in US airline oversight

A watchdog for the Department of Transportation is questioning the efficiency of the Federal Aviation Administration’s oversight of U.S. airlines. 

The department’s inspector general said in a report released last week that FAA reforms enacted by Congress in recent years “have not achieved anticipated cost savings and operational efficiencies.

“Since 1996, FAA has implemented performance-based compensation systems for its workforces, established the Air Traffic Organization (ATO), contracted out its flight service stations operations, and undertaken several reorganizations,” the report said. 

{mosads}”However, costs continue to rise while operational productivity has declined,” the report continued. “Between fiscal years 1996 and 2012, FAA’s total budget grew by 95 percent, from $8.1 billion to $15.9 billion, and its total personnel, compensation, and benefits (PC&B) costs increased by 98 percent, from $3.7 billion to $7.3 billion.” 

The report comes as lawmakers are debating a proposal from House Republicans to privatize large portions of the nation’s air traffic control system as Congress tries to beat a March 31 deadline for renewing the agency’s funding. 

It blamed the “FAA’s disappointing reform outcomes” on “the agency’s failure to take full advantage of its authorities when implementing new personnel systems, and not using business-like practices to improve its operational efficiency and cost effectiveness. 

“For example, while FAA has implemented a cost accounting system, it does not regularly analyze the operational and cost data generated to determine if it could reduce costs or improve productivity,” the report said. “In addition, FAA’s workforce levels have remained relatively constant over the past two decades, and the number of air traffic facilities the Agency operates has not changed since 2000. FAA’s organizational culture, which has been resistant to change, further deters its reform efforts.” 

Lawmakers who have pushed for the air traffic control privatization proposal jumped on the watchdog’s findings this week — debate on the FAA funding bill is expected to heat up soon.

“This report shows that the FAA simply isn’t suited to successfully modernize our Nation’s antiquated air traffic control system,” Transportation and Infrastructure Committee Chairman Bill Shuster (R-Pa.) said in a statement.  

“Over two decades of FAA personnel, organizational, and acquisition reforms have failed to slow the agency’s cost growth, improve its productivity, or improve its performance in modernizing the system,” Shuster continued. “The FAA remains a vast government bureaucracy, not a high-tech service provider. It’s clear from the DOT IG’s findings that we need transformational FAA reform if we are going to have a safe, efficient, 21st century aviation system.”

Democrats were equally unforgiving about the report’s finding. 

“Congress exempted the Federal Aviation Administration from bureaucratic procurement and personnel rules in 1996, but the FAA seems to be stuck in the 1980s,” said Rep. Peter DeFazio (D-Ore.), the top ranking Democrat on the House Transportation Committee. 

“It’s time to cut the red tape that keeps its workforce from achieving its full potential, and to get rid of archaic personnel and procurement rules and procedures that do nothing but bog down good work in modernizing our aviation system and improving safety,” he said. “The Inspector General’s report today yet again demonstrates the FAA’s failure to seize on the opportunity Congress gave it 20 years ago.”  

DeFazio said he is “preparing a proposal to transform the FAA into a 21st-century organization free of the yoke of the Federal bureaucracy in areas like procurement and employment rules, and I look forward to refining my proposal as we approach FAA reauthorization.”

The FAA’s funding bill is one of the few pieces of must-pass legislation that is left on Congress’ agenda after a busy 2015 that saw lawmakers pass a large spending bill for most government agencies and a multi-year highway funding package. 

Most major airlines have embraced the proposal to privatize large portions of the nation’s air traffic control system in the FAA funding bill, but non-commercial aviation groups have been pleading for Congress to ground the idea. 

“The general aviation community has very real and long-standing concerns about foreign air traffic control models, which go well beyond the user fee issue,” a group of 15 non-commercial aviation organizations in Washington said in letter to members of the House Transportation Committee on Tuesday.

“These concerns are based on our operating experiences in foreign systems, as well as thoughtful analysis about what those systems might look like in the United States,” the groups continued. 

GOP leaders in the House have said the proposed nongovernmental entity could better manage the commercial and private jet flights in the nation’s airspace, citing the findings of the report to bolster their case. Under their proposal, Congress would create a new nongovernmental agency that would take over air traffic control from the FAA.

“According to the Inspector General’s report, although the FAA has implemented performance-based compensation systems, established the Air Traffic Organization (ATO), contracted out flight service stations operations, and reorganized multiple times over the years, costs continue to rise while operational productivity has declined,” the GOP-led House Transportation Committee said in a statement about the report.  

“The FAA has also missed opportunities to complete large-scale facility consolidations that would maximize operations, improve the flow of air traffic, avoid the cost of maintaining aging facilities and facilitate the transition to NextGen capabilities,” the committee continued. “Furthermore, major FAA air traffic control modernization projects continue to experience problems that delay the introduction of new technologies, postpone benefits to system users, and defer the retirement of costly legacy systems.” 

The FAA disputed the inspector general’s findings, saying it “is making very significant progress modernizing the world’s busiest and most complex aviation system despite an often challenging financial environment that has included budget cuts and funding uncertainty.

“Since 1996, we have successfully leveraged congressional mandates to implement several cost-savings initiatives,” the agency said in a statement that was provided to The Hill.

“The agency as a whole has seen lower cost growth than many other agencies and departments and we are committed to continually finding ways to reduce costs and increase efficiency,” the FAA continued. “We have a comprehensive NextGen implementation plan, and we are meeting our deployment goals. The foundational infrastructure for NextGen is complete. We have installed a new, nationwide en route air traffic control system, and more than 600 radio transceivers across the country that make up NextGen’s satellite-based surveillance system.” 

The full report can be read here. 

-This story was updated with new information at 10:53 p.m.