Aviation industry leaders had to feel good about last week’s meeting between dozens of the top US business leaders and the White House. After all, they heard the strongest language in decades out of the White House that gives cause for hope that NextGen will actually be deployed on President Barack Obama’s watch. Now it's up the industry to get its act together.
The leaders – including United CEO Glenn Tilton, Sabre Holdings CEO Sam Gilliland, Southwest Chair Gary Kelly and UPS’s Scott Davis – were called together at the Forum on Government Modernization and they must have been thrilled to hear such language as “bringing our government into the 21st century by revamping the outdated technologies and information systems that undermine our efficiency and threaten our security, and fail to serve their interests.”
President Obama even bemoaned the fact that the “technological revolution that has transformed our society over the past two decades has yet to reach many parts of our government,” a familiar refrain as airlines grouse about the fact that any kid with a cell phone or a Garmin nuvi, has better situational awareness than the pilot of a multi-million dollar aircraft. Obama even joined that refrain when he said, “Many [government employees] will tell you that their kids have better technology in their backpacks and in their bedrooms than they have at the desks at their work… Even worse, too often, when we've attempted to update or replace outdated technology, we end up spending exorbitant sums of money on technologies that don't meet our needs – or that took so long to implement that they were obsolete before we even started using them.”
Now that does sound familiar. The fact is the warrantees have expired on much of the equipment the Federal Aviation Administration has yet to field! While the President was not talking specifically about NextGen that is more modernization talk from the White House than we’ve heard for decades!
But don’t get too excited just yet. President Obama also said something that we’ve all heard before - “something” that has stifled the modernization of the nation’s air traffic control system. In calling for a continuing dialogue, Obama said he wanted to hear from business leaders on how this modernization could get done. But then he said, “How we can do it without spending a whole lot of taxpayer dollars is especially what I want to hear from you.”
You could almost hear the air rushing out of the balloon along with industry hopes that something will finally get done. Oh, but wait. The federal government doesn’t pay for the aviation system, except for a miniscule contribution from the general fund. It’s paid for by its users. Indeed, aviation is the only industry expected to pay for its own infrastructure. This, at a time when all other passenger transportation is actively subsidized by the federal government.
Still, the White House is actually talking modernization. And the President included every agency in the effort. Are you listening DOT? Let’s just hope that DOT’s new aviation consumer website rolled out last week is not all it can offer.
More, importantly, are you listening Congress? Congress has been unable to get reauthorization past the committee level for so many years. The biggest test will come as the federal budget is rolled out in the coming months. We are also still waiting for the Administration of offer its own reauthorization legislation. While both Senate and House offered their own bills last year, they were only for two years so that the Administration could offer its own. Are you listening, Mr. President?
So, if users pay, why can’t we get anything done, you may well ask. A Congressional staffer last year suggested that in addition to the industry infighting, Congress gets ticked that the industry high-balls its cost estimates when it opposes a program. A good example is the security programs imposed in the immediate aftermath of 9/11. Industry said it would cost USD75 million annually. But surprisingly when it came time to assess the industry for those costs, the estimate was much, much lower.
There is no question that Congress doesn’t trust FAA because it has fielded a lot of costly stuff that didn’t work. It also takes too long to field critical technologies. “Since FAA began its modernization efforts in 1981, it has spent $50 billion,” said the General Accountability Office’s Gerald Dillingham dolefully during a hearing last year. This is an astonishing figure, even counting for inflation, to be where we are today and for a system that was supposed to cost a fraction of that when calls to modernize first started in the 1960s.
Last year, legislators from both parties said flat out they didn’t trust the FAA and, what’s more, they were tired of the infighting amongst users and wanted to see a unified front to help them convince more powerful committees such as Ways and Means and Budget committees to keep aviation spending in the budget, something that is hard enough to do without the infighting. Aviation legislators even begged the industry to give it the ammunition they need to convince those who hold the purse strings.
The economic meltdown has unquestionably compromised the health of the Aviation Trust Fund, as passengers abandoned carriers. And, of course, all the rhetoric President Obama issued about travel last year didn’t help. But that doesn’t mean the industry, Congress and the executive branch can’t come together to get the job done while the modernization mood is still flying fresh over Washington. At the very least a television campaign extolling the economic benefits of NextGen versus its costs would be justified. The cost/benefit analysis is there - just get it on the air.
NextGen represents an opportunity to finally capture the efficiencies promised by modernization. The efficiencies that would eliminate the USD12 billion that aviation delays costs the economy and the hassle factor that costs the economy USD26 billion. That’s a USD38 billion economic (dis)benefit and that is also a lot of bang for the NextGen buck. NextGen pays for itself several times over at that rate.
All this is very refreshing not just because the White House is talking modernization and that has to include NextGen, right? It is refreshing because President Obama has done great harm to the aviation industry by lashing out at corporate trips and corporate aircraft without thinking that travel and business aviation are substantial economic drivers. While some of the drop in travel and business aviation spending resulted from the economic meltdown, President Obama spent much of the year sending clear signals that businesses should forego something that employs 11 million people and contributes USD1.2 trillion to the US economy every year. He may have been scoring political points - but not with the hundreds of thousands of aviation workers laid off from US’s many aircraft manufacturers, airlines, hotels, and restaurants.
“Improving the technology our government uses isn't about having the fanciest bells and whistles on our website – it's about how we use the American people's hard-earned tax dollars to make government work better for them,” he said.
Work for them? That is exactly what NextGen would accomplish. It would reduce delays. It would reduce emissions. And, it would make air traffic control more efficient. If the president wants more efficiency, he couldn’t pick a finer target that NextGen.
Obama appointed the government’s first ever CIO and CTO to ensure agencies and department are “embracing the best, most effective technologies possible.” So, aviation industry, get in there and make your case.
After the Forum, the White House will seek ideas from the public about how government can improve its use of technology. A report from OMB will summarize the Forum’s findings with an implementation plan containing a timeline, milestones, key challenges, ownership and accountability. Informal networks of CEOs, deputy secretaries, and department chief information officers will continue to work together to spark improvements across the government.
This Forum is part of a larger effort to streamline what works and eliminate what doesn’t in the federal government as well as to save money. Not only do we have to make sure that NextGen is a big part of this modernization effort, we have to make sure that OMB report is not shelved as a good political effort that was never meant to be executed as so many other studies are.
Participants in the forum included:
- Shantanu Narayen, Adobe Technology
- John McGlade, Air Products & Chemicals, Inc.
- Klaus Kleinfeld, Alcoa Consumer Goods
- Angie Hicks, Angie’s List
- Cheryl Milone, Article One Partners
- Andrea Jung, Avon
- Debra Lee, BET Networks
- Gregory Page, Cargill, Inc.
- David Dougherty, Convergys
- Craig Newmark, Craigslist
- Samuel Allen, Deere & Co.
- John Riccitiello, Electronic Arts, Inc.
- Pam Nicholson, Enterprise
- Chris Hughes, Facebook
- Michael Thompson, Fair Oaks Farms
- Ping Fu, Geomagic
- Wendy Lea, GetSatisfaction
- Andrew Mason, Groupon
- Daniel Weirich, GW Micro
- Al Fuller, Integrated Packaging
- Mickey Drexler, J.Crew
- Carl Camden, Kelly Services Staffing
- James Crowe, Level 3 Communications, Inc.
- Bill McComb, Liz Claiborne, Inc.
- Jeff Joerres, Manpower, Inc.
- Steve Ballmer, Microsoft
- Sal Iannuzzi, Monster.com
- Punita Pandey, netCustomer
- Jeffrey Jordan, OpenTable
- Charles Harrington, Parsons Corp.
- Indra Nooyi, PepsiCo
- Peter Darbee, PG&E Corp.
- Robert Glaser, Real Networks
- Tom Adams, Rosetta Stone
- Sam Gilliland, Sabre Holdings
- Gary Kelly, Southwest Airlines
- Daniel Hesse, Sprint Nextel
- Ronald Sargent, Staples
- John Chen, Sybase, Inc.
- James Kennedy, T. Rowe Price
- Jeff Bewkes, Time Warner
- Dan Bane, Trader Joe’s
- Glenn Tilton, United Airlines
- Scott Davis, UPS
- David Segura, VisionIT
- Daniel Fulton, Weyerhaeuser
- Jeff Fettig, Whirlpool
- Jeremy Stoppelman, Yelp
- Harold Mills, Zero Chaos]
Want more analysis like this? CAPA Membership gives you access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find out more and take a free trial.