Remarks as Prepared for Delivery

Introduction
It’s great to see all of you again. Thanks to our host Honeywell Aerospace.

A lot has happened since we last met – I have a feeling I will be saying that at each NAC meeting from now on!

I want to cover a few topics today:

• the budget situation;
• the NAC prioritization recommendations;
• an update on some major NextGen programs;
• Administrator Huerta announced his strategic initiatives for the FAA for the next four years;
• and my meeting with some of our European counterparts last month.

Budget
In October we had a 16-day government shutdown. This of course caused the suspension of many NextGen activities.  But beyond the actual 16 days of delay, we do not anticipate any knock-on delays to the NextGen programs.

Congress then passed a compromise spending bill in December that provides a framework that lends stability for the next two years. This compromise has still left us at historically low funding levels. We are in an extremely tight fiscal environment, though we anticipate we will have adequate funding to remain on track with NextGen and provide focus to the priorities identified by the NAC – as we will be discussing today.  But we are still in a situation where we need to find ways to operate more efficiently.

Two years from now, it will be time to reauthorize the FAA again. We are beginning to look at what changes we want to allow us to operate more efficiently. 

We rely upon Congress for a substantial portion of our budget and that is a fundamental challenge. With that reliance, we are subject to politics and gridlock, which is especially challenging when trying to run a complex endeavor like NextGen. Providing air traffic service is a fundamental and important job for our economy, and modernizing our system is a critical investment for our future. We can best do both with stable funding so that we can predictably plan and build our nation’s infrastructure.

NAC Prioritization
Since our last meeting we continue to engage with the NAC subcommittee on the NextGen priorities. I want to again thank everyone who worked on the recent NextGen prioritization task. I know it was very challenging, and a lot of work and thought went into that project in a very short time frame. Going through the entire NextGen Implementation Plan, and giving recommendations for what work we should prioritize is not easy, but it’s very useful. We want and need industry feedback. Coming from a career in the airline industry, I understand that we need to align our efforts to obtain the maximum benefit, so thank you again.

Today we’ll hear from Ed Bolton and Paul Fontaine with more details on the FAA’s response to this prioritization work. Also:

• Dennis Roberts will share our response on PBN priorities.
• Carl Burleson will share our response on categorical exclusions.
• And Nancy Kalinowski will share with you our fuel data sharing response and plans going forward.

Update on Major NextGen Programs
I am also pleased to report that we continue to make substantial progress on key NextGen foundational programs – including ERAM and ADS-B. As Bill has said in the past, we are reaching a tipping point with many NextGen programs, and we are starting to see the final stages of some key initiatives.

Right now, 18 of our 20 en route centers have started running ERAM. More than half are using it exclusively to control air traffic, instead of the legacy system of the 1960s. All 20 en route centers are expected to be running ERAM exclusively by March of 2015, which will allow us to pull down the legacy host system.

As for ADS-B, we have installed nearly 90 percent of the ground transceivers needed to track airplanes using satellite-based information. As you know, ADS-B will transmit aircraft location to controllers with a dramatically faster update than radar. It provides surveillance where radar cannot, such as in mountainous regions and over water. All of this enhances safety and saves operators time, fuel and money.  We’ll complete the nationwide deployment of the ground transceivers this year. 

Also, this year we plan to make some important investment decisions on the next stages of DataComm, SWIM and NAS Voice System. We are on track to validate the business case and make a final investment decision, which means that the FAA will plan to roll out the next phases of these technologies and use them in our everyday work.

For SWIM, we’re planning to go from sharing limited surface and weather data information to providing full flight data publication services. For NVS, we’re going from the demonstration phase to full production of dynamically reconfigurable voice services, with the new internet protocol voice system for air traffic. For DataComm, we’re going to the second phase, from tower departure clearances to using DataComm for en route services.

We have a lot to look forward to in 2014.

Strategic Initiatives
Yesterday, Administrator Huerta announced four strategic initiatives for his tenure. These are the areas where we can make the most impact and will focus our efforts in the next few years to shape the FAA and aviation for years to come. These are:

• Deliver benefits through technology and infrastructure
• Make aviation safer and smarter
• Enhance FAA’s global leadership
• Empower and innovate with FAA’s people

This first initiative – what we call the NAS initiative – is one that I am leading. It involves three areas of work.  First is delivering the benefits of NextGen.  This involves keeping NextGen on schedule and on budget, but also encompasses the delivery of benefits to users – the work that the NAC has been engaged in with us.

The NAS initiative also focuses on the integration of new users into the NAS – specifically UAS and Commercial Space flight.  Both of these growing technologies present technological and process challenges for us.

The NAS initiative also acknowledges that we remain in a constrained budget environment, so we’re taking a serious look at the services that the FAA provides. We will look at streamlining and becoming more efficient.

We need to match the services we provide and the facilities we maintain with the demand from our stakeholders—an effort that we are calling right-sizing the NAS.

Right now, there is a mismatch. The aviation industry as a whole is going to have to have a thoughtful conversation about what it makes sense for the FAA to continue doing, and what we might be able to stop doing, or do differently. 

We have traditionally provided a variety of services to our airspace users in addition to air traffic control. We are increasingly being asked to do more with less.

Our industry has many segments and interest areas. Each segment promotes the parts of the system that are most important to its constituency, of course. But what we have seen with the sequester, and what we have seen with the government shutdown, is that we need to have a comprehensive view of our priorities. And that conversation needs to involve all of us. We must come together to decide what kind of system we want and need. The NAS initiative is an important one and I look forward to working with all of you on this.   

That is a summary of the NAS initiative.

Our second initiative builds on safety management principles to proactively address emerging safety risk. We want to make smarter, system-level, risk-based decisions.  This initiative is being led by our Associate Administrator for Aviation Safety, Peggy Gilligan.

Third, it’s important for the FAA to play a leadership role globally. We want to improve safety, air traffic efficiency, and environmental sustainability across the globe. We’ll do this through shaping global standards and enhancing collaboration and harmonization. This initiative is being led by our Acting Assistant Administrator for Policy, International Affairs and Environment, Carl Burleson.

And finally, we need to prepare for the future by improving how we recruit and train our workforce. We need the leadership, technical, and functional skills to ensure the U.S. has the world’s safest and most productive aviation sector.  This initiative is being led by our Assistant Administrator for Human Resource Management, Carrolyn Bostick.

These are the areas where we feel we can make the greatest contributions in the next four years, and where we can best serve the public and improve our nation’s airspace.

Brussels
Finally, and speaking of the global leadership initiative, I’d like to say a little about meetings we had with our European counterparts last month. (January 21-24, 2014)

Ed Bolton and I met with our government counterparts and industry representatives in Brussels to get a sense of where we are in our cooperative efforts with SESAR, Europe’s modernization program.  We were pleased to see that many of our joint modernization programs are working well under the existing agreement between the FAA and Europe.  We also discussed areas where we can conduct further cooperative efforts, and we pledged to continue to engage at senior levels across the Atlantic.  Ed, Teri, and David Batchelor, SESAR’s representative based in Washington, will give a more detailed review of the trip later this morning. 

This concludes the FAA report. I’m happy to answer questions.