Good morning everyone.  Thank you, Marc (Warren), for that kind introduction.

It is a pleasure to be here with you today.  I’m not a lawyer, but I am quite at home in the company of lawyers, particularly aviation and space lawyers.

You are a relatively small and distinguished group, and I think there is something remarkable about those who devote themselves to aviation law.  You are experts in statutes and rules and regulations, but you also share the common bond of aviation.  Many of you are pilots; many of you have experience in government, industry and private practice.  You play a critical part in ensuring that our aviation system is safe, properly regulated and efficiently run.  And you do it by providing wise counsel to your clients – to airlines, airports, manufacturers, leasing agents, labor unions and many more within the industry.

There is a real professional satisfaction and personal pride in being part of aviation, and I hope you realize that you are all part of something very special.

Our goal at the FAA is to take aviation to the next level of safety and to leverage technology to make air travel more efficient.  

A year ago this month, Congress reauthorized the FAA with the goal of restoring the predictability of our funding so that we could continue to work towards these incredibly important goals. After four and a half years of uncertainty and stop-gap measures, this was very welcome. A multi-year reauthorization has given us the ability to plan better – to invest in NextGen and to invest in the future of our air traffic system.

But just one year later, we are again facing fiscal uncertainty and unpredictability. Sequestration is looming, and massive across-the-board budget cuts are set to go into effect just two days from now. 

The sequester would jeopardize many of the positive benefits that we sought to create with last year’s reauthorization.

It is my hope, and the hope of everyone at the Department of Transportation that our leaders can work together to rally around the improvements that we need for our air transportation system. We hope that we can continue to support the programs that we all acknowledged were so important just a year ago. 

Under the sequester, the FAA would have to cut $627 million in this fiscal year. Those cuts would be distributed proportionately across all budget line items in the affected accounts, which significantly decreases our flexibility in managing the budget reductions.

As you’ve heard from Secretary LaHood, we are currently considering actions that would include furloughing a majority of the FAA’s nearly 47,000 employees for approximately one day per pay period until the end of the fiscal year in September.  This is not an action we take lightly, and we are looking at all options to reduce costs, including contracts and non-operational expenses—but given the magnitude of the reductions we face, it does not appear possible to avoid these furloughs.

Flights to major cities like New York, Chicago and San Francisco could experience delays in some instances of up to 90 minutes during peak hours, because we will have fewer controllers on staff.

Delays in those major airports will ripple across the country.

Cuts to budgets mean preventative maintenance and quick repair of air traffic equipment might not be possible, which could lead to further delays.

We would need to consider eliminating midnight shifts at more than 60 air traffic control towers across the country. And we would have to consider closing a large number of the 230 air traffic control towers at airports that are less busy – those that have less than 150,000 flight operations per year. This includes airports such as those in Boca Raton, Florida; Joplin, Missouri; Hilton Head, South Carolina and San Marcos, Texas.

Our aviation safety inspectors would have to focus their attention on the most pressing priorities and would devote their time to overseeing current activities to ensure continued safety. They would not be in a position to take on a lot of new projects.

We very much hope that Congress will pass an alternative debt reduction strategy that would eliminate the need for indiscriminate cuts.

Aside from the possible sequester, the FAA does not have a budget for fiscal year 2013. Congress passed a continuing resolution which keeps the government running until March 27 at a rate equal to last year’s budget. After March 27, the FAA, and in fact the entire government, would need an approved budget or another continuing resolution to keep operating.

So as you can see, we are in a very challenging fiscal environment.  But despite these challenges, we are committed to working towards our goal.

Safety
At the FAA the number one mission is safety, and we are striving to be even smarter about how we enhance safety. We are continually working to gather and share operational data so that we can identify and address potential hazards and mitigate issues before they occur.

Let me say that with regard to the Boeing 787, we are working around the clock to conduct a comprehensive review of the critical systems of the aircraft, including the design, manufacture and assembly of the Dreamliner. As part of that review, we are working closely on a data-driven process to identify the cause of the recent battery issues and the mitigations for them.  

Last week, we met with senior executives from Boeing to discuss the status of ongoing work to address the 787 battery issues. We’re carefully analyzing Boeing’s proposal to address these issues. The safety of the flying public is our top priority and we won’t allow the 787 to return to commercial service until we’re confident that any proposed solution has addressed the battery failure risks. 

More broadly, in the last few years, we have accomplished a lot in our continuous effort to enhance aviation safety. The FAA overhauled flight and duty rules to ensure that airline pilots have the opportunity to get the rest they need to operate safely. And we are raising the required hours of experience before a pilot can operate the controls of any airline flight. We expect to meet the August statutory deadline to complete this rule. We are also finalizing a rule that will require more rigorous and realistic training so that flight crews can better handle rare but serious scenarios they do face.

The best way to enhance safety across the board is to enhance the safety culture of an organization. This is what we have been doing at the FAA. Part of this effort involves self-reporting by our employees on safety issues. We are making a cultural shift inside the agency for more transparency and greater dialogue. We have put programs in place for air traffic controllers and aviation technicians to report a problem, even a mistake they might have made – and not fear retribution. 

The goal is to encourage people to share information to make the system safer. This is a key element to taking a smarter, risk-based approach to safety.

Technology
Now, while we are advancing the safety of the system that we know today, we are also working to deliver the benefits of new technology to create the aviation system of tomorrow.

We are working to safely integrate Unmanned Aircraft Systems into our national airspace.

This month we requested proposals to host six test sites across the country to test unmanned aircraft systems.

We need to better understand the operational issues to safely integrate unmanned aircraft into our airspace. We need to explore pilot training. We need to make sure that unmanned aircraft sense and avoid other aircraft. And if an unmanned aircraft loses the link to its ground-based pilot, we need to make sure it operates safely.

This is why developing more data sources is so important. We need to make sure we use these test sites to obtain the best data that we possibly can.

In addition, we are requesting comments from the public about how to address privacy concerns associated with these test sites. Each site operator will be required to obey all laws regarding the protection of an individual’s right to privacy.  

We are dedicated to working with stakeholders in this growing industry and with our government partners – the Departments of Defense and Homeland Security, NASA and the Joint Planning and Development Office.  

Just as with unmanned aircraft, the FAA is working to safely integrate commercial space operations into the national airspace system as well.     

The FAA believes in this industry and we’re committed to supporting its safe growth and development. 

To date, the FAA has licensed 214 commercial space launches and reentries.  They have gone off without a fatality, a serious injury, or significant property damage. 

Last year, we licensed the historic launches of the SpaceX Falcon 9 rocket – marking the first time a commercial company delivered cargo to the International Space Station.  The vehicles then returned safely to earth.  Missions like these continue to demonstrate the viability of the commercial space industry. 

The FAA has also licensed a total of eight commercial spaceports.  And we’ve provided grants to support the development of spaceports across the country which will help create the infrastructure necessary for the success of this industry.

For commercial human space flight, we’ve established an historic partnership with NASA. The FAA’s responsibility is to ensure public safety, while NASA will take responsibility for crew safety and mission assurance.         

The key ingredient to introducing unmanned aircraft and to integrating commercial space launches is collaboration.

Collaboration
And collaboration is also the key to realizing the benefits of NextGen. We have made great strides in collaborative efforts on many fronts.

And we have worked with our labor unions to lay the foundation for NextGen, with the En Route Automation Modernization, or ERAM.  The collaboration has been exceptional. We are now using this new computer system to guide airplanes at high altitudes in nearly half of the nation.

We are collaborating with industry to improve our aviation system and have convened several aviation rulemaking committees to discuss important challenges. These include ensuring a more consistent interpretation of our regulations by officials in regional offices, and the transition to unleaded aviation fuel for piston-engine aircraft. We convene these committees to work with the best minds in industry and to create the best policies to guide us in the future.  

As a result of the work that we are doing with many partners – airlines, airports, air traffic controllers and other federal agencies – we are producing satellite-based navigation procedures much more quickly. And we are using these NextGen procedures right now and with great benefit. We are reducing the miles aircraft must fly; creating more direct routes; reducing fuel burn and cutting greenhouse gas emissions.

In fact, right here in metropolitan Washington, D.C. airlines have started using these NextGen procedures to fly into Dulles and Reagan National. And we estimate they’ll save $2.3 million in fuel per year.

Cost Effectiveness
Now, to better implement NextGen and to prepare for the many changes that aviation will undergo in coming years, we know that the FAA must change to better handle these challenges. We have already done a lot of work – we have created 36 initiatives to change the way we do business and to eliminate duplication and waste. And we’re continuing to make our agency more efficient and effective for the long term.

Reauthorization laid out a vision intended to address the future needs of our aviation system. We all know that these needs have not gone away. It’s important for us to work together to protect the great contribution that civil aviation makes to our economy. Aviation is our largest export industry. It strengthens our balance of trade. It adds $1.3 trillion to the economy and provides 10 million jobs.

Conclusion
I hardly need to tell this group that there is a legal component to everything we do at the FAA.  We are at once a regulator but at the same time an operating agency, and the demands of the FAA for legal support are tremendous.  We are very fortunate to have a capable legal team at the FAA, and I am so fortunate to have Katie Thomson and Marc Warren leading our Chief Counsel’s office.  Katie and Marc both serve the FAA as great lawyers and wonderful leaders, and I rely on them as key advisors and sounding boards on a very wide range of issues. 

As we move forward in uncertain times, I think we all need to remember that we share the common bond of aviation.  We may have budget and other challenges, but we are all part of a very special and historic time in aviation. Many of you have heard me say before that the decisions we make over the next several years will affect the air transportation system in this country for decades to come.

Now, I ask you, as air and space lawyers, to work collaboratively and creatively to reach the next level of safety.  And whether you’re a lawyer or a pilot, or both, I look forward to working together with you on our common goal to ensure that America continues to operate the largest and safest aviation system in the world.