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The FAA modernization of the nation’s air traffic control system, called the National Airspace System, or NAS, has not reduced the cost of providing air traffic control services, nor is it likely to, as currently planned. Since 1981, FAA operating costs have increased about as fast as the growth in aviation. Although its workforce took about 10 years to recover from the crippling controller strike, since 1992 it has only increased about 5 percent. The FAA predicts that in the next decade, its operating costs will continue to rise about as fast as forecast passenger-revenue miles, the principal source of Aviation Trust Fund revenues derived from ticket taxes. The aviation trust fund currently supports both FAA operations and NAS modernization appropriations. We examined more than 20 years of NAS modernization and automation program investments to modernize operations and a variety of operations and controller work force data for Air Route Traffic Control Center (ARTCC) and Traffic Radar Approach Control (TRACON) facilities providing air traffic control services. At issue is why this large public agency performing an essential service could invest billions of dollars to modernize and increase its operations, but not reduce its costs per operation. We contend that FAA may have to reduce operating costs in a constrained budget environment, when confronted with potentially altered demand for aviation services. Either NAS modernization will have to change or aviation excise taxes will have to be increased. Otherwise, FAA’s growing operations cost will crowd out future modernization investment.


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