Before the House Appropriations Committee Subcommittee on Transportation, Housing and Urban Development, concerning FY 2016 Budget

Good morning, Chairman Diaz-Balart, Ranking Member Price and members of the subcommittee. And thank you for the opportunity to discuss the Administration’s fiscal year 2016 budget request for the Federal Aviation Administration.

This request of $15.83 billion will support the FAA’s mission to run the safest and most efficient aerospace system in the world while transforming our airspace through NextGen. Our budget reflects a set of principles that the Administration has developed for the FAA’s reauthorization. These principles promote safety, modernization and the alignment of our resources to better match our users’ needs, while maintaining America’s standing as a global leader in aviation.

In the 2016 Operations budget request we are asking for $9.92 billion to operate our nation’s aviation system on a day-to-day basis. This will strengthen our safety and security programs through hiring additional safety inspectors, engineers and others to address the increased demand for certification of aircraft, operators and pilots. It also addresses our increased focus on integrating new users such as unmanned aircraft and commercial space vehicles.  Furthermore, we want to enhance our security for personnel and facilities, which we reviewed extensively after an act of sabotage and resulting fire at the Air Route Traffic Control Center near Chicago last fall. Finally, we are actively working to protect the FAA from cyber attacks.

Our Facilities and Equipment request of $2.85 billion will help us continue to bring the benefits of NextGen to users now, while at the same time addressing the backlog of needed repairs and maintenance of our infrastructure. I’d like to take this opportunity to thank the Committee for its continued support of the En Route Automation Modernization program, which we plan to complete at the end of this month.  This new automation system will accommodate the technologies of NextGen, and is one of the largest automation changeovers in the history of the FAA. We introduced a great deal of discipline and structure to this ongoing program, and now it’s just a matter of turning off the old system at the last two centers to complete the nationwide transition to ERAM. The new program creates a more powerful air traffic system that can handle the challenges of the coming decades.

We are also upgrading the automation system in our terminal airspace, where we control traffic approaching airports. The Terminal Automation Modernization and Replacement program is well underway at our largest TRACONS. The Committee’s strong support of these foundational NextGen programs will prepare us for continued growth and provide the infrastructure for a healthy economy.  

Our 2016 request of $166 million for Research, Engineering & Development allows us to boost funding for research into sustainable jet fuels, as well as research for integrating commercial space transportation and unmanned aircraft into our airspace system. The Committee has significantly bolstered unmanned aircraft research this year with strong financial support.

Finally, in the Airports budget, we are requesting $2.9 billion to ensure the continued safety, capacity, and efficiency of our nation’s airport network. As in years past, the Administration is proposing to eliminate passenger and cargo entitlement funding for large hub airports. In exchange, the budget requests an increase in the Passenger Facility Charge from $4.50 to $8.00, which will provide large hub airports with greater flexibility to generate their own revenue for projects. At the same time it would allow us to restructure the airport grant program to better respond to the needs of smaller airports.

The FAA continues to face many challenges. America’s leadership in aviation is facing competition on a global level with the growth of foreign markets.  Domestically, we have had to navigate a constrained and challenging fiscal environment in recent years. In this budget request, we are asking for the flexibility to transfer funds across accounts to be able to prioritize resources, to leverage new technology, and respond nimbly to evolving challenges. The FAA needs to realign today’s airspace system with current demands. We need the flexibility to make investment choices that further the health of our airspace system so everyone can benefit.

Civil aviation contributes $1.5 trillion to our economy and generates nearly 12 million American jobs. The FAA’s fiscal year 2016 budget request will enable us to continue to protect and expand this vital economic engine and to create the right environment for further innovation and global leadership.

Thank you, and that concludes my opening remarks. I would be happy to answer any questions you may have.

Before the House Transportation and Infrastructure Committee, Subcommittee on Aviation concerning “Federal Aviation Administration Reauthorization: Enabling a 21st Century Aviation System”

Chairman LoBiondo, Ranking Member Larsen and Members of the Subcommittee, thank you for inviting me to speak today about the reauthorization of the FAA.

It seems like not that long ago we were united behind the FAA reauthorization of 2012 with a sense of urgency to provide long term funding to support our nation’s aviation system. And now we are here again to continue that work. We have a joint responsibility – government and industry – to pull together to create the air traffic system that will carry this nation well into the 21^st century.

In the last five years the FAA has made major progress in transforming our airspace system through NextGen, and that progress continues as we speak. 

The FAA has delivered on its commitment to build the foundation that will support the many applications of NextGen. In 2014, we completed the coast-to-coast installation of a network of radio transceivers that will enable a satellite-based air traffic control system that provides a more precise and efficient alternative to radar. With this foundation in place, we have fulfilled our end of the bargain. We are working with the airline industry and the general aviation community to help them do their part to meet their requirement to equip by the 2020 deadline.

By the end of this month, we will finish the upgrade of our en route air traffic control automation system. This system will accommodate the new technologies of NextGen. Again, we met our commitment. This is one of the largest automation changeovers in the history of the FAA. It results in a more powerful air traffic system that can handle the challenges of the coming decades.

Through our collaboration with industry, we have identified key priorities in implementing NextGen, and we have followed through. We now have more satellite-based procedures in our skies than radar-based procedures. We have created new NextGen routes in cities across America that are saving millions of dollars in fuel burn, shortening flight paths, decreasing carbon emissions and cutting down on delays. All of this means airline schedules are more predictable and travelers face fewer delays.

The United States stands as a leader in aviation internationally, and we intend to remain the gold standard. Our manufacturers produce innovative aircraft and avionics that help maintain our nation’s positive balance of trade.  We are truly unique in that we have the most diverse aviation community, which includes new users like unmanned aircraft and commercial space vehicles. Civil aviation contributes 12 million jobs and $1.5 trillion to our economy.

America’s leadership in aviation is being challenged on a global level, however, with the growth of foreign competitors and the shifting dynamics of supply chains. Domestically, the FAA faces challenges that I think we can all acknowledge: We have competing priorities among our stakeholders – one of the byproducts of a healthy, diverse system. And, we have had to navigate a constrained fiscal environment in recent years, with nearly two dozen short term extensions prior to our 2012 reauthorization.

The FAA needs to prioritize its resources to leverage new technology and to respond nimbly to evolving challenges. To maintain our global leadership and to continue to reap the economic benefits of this industry, we should use the upcoming reauthorization to provide the FAA with the tools necessary to meet the pressing demands of the future. A lot is at stake, and we need to get this right.

To that end, the Administration has developed a set of principles that we believe will improve our nation’s airspace system and set the course for future progress.

First, we need to maintain our excellent safety record and foster the use of data and analysis to focus our precious resources on the areas of highest risk in our aviation system.

We must continue the modernization of our air traffic control system. Part of that effort is to ensure stable funding for core operations and NextGen investments. Collaboration with industry is absolutely essential. We need to deliver benefits, and industry needs to equip to use these improvements.

FAA Reauthorization should secure appropriate funding for our nation’s airports. It should also enable the integration of new users into our airspace system and support the agency in fostering a culture of innovation and efficiency.

The FAA also needs to realign today’s airspace system with current demands. We need the flexibility to make investment choices that further the health of our airspace system so everyone can benefit.

And finally, we need to maintain our position of aviation leadership on the world stage. This means the FAA needs to remain at the table to shape and harmonize international aviation standards that promote seamless travel around the world.

We are extremely proud of America’s aviation heritage and the innovation and inspiration that our strong and diverse system has always provided. I look forward to working together to make sure that the United States continues to lead the world as we create the right conditions for further innovation and achievement in the second century of flight.

FAA Report

Introduction 

Welcome to Richard Anderson

Thank Dennis Roberts:

• It is my pleasure to announce Dennis Roberts as our new Southern Regional Administrator, based here in Atlanta.
  
• Many of you already know Dennis from his tremendous work in the Performance Based Navigation arena.
  
• Since December 2010, Dennis has been serving as Director, Airspace Services for ATO’s Mission Support.
  
• He worked closely with many of you as the key FAA representative on several PBN-related NAC taskings.
  
• He was also instrumental in developing the PBN blueprint for success and in helping industry identify both FAA and industry barriers – and possible solutions – to successful usage of PBN procedures. 
  
• Edie Parish will be Acting Director of Airspace Services.  But I want to thank and acknowledge Dennis for his very significant contributions to our NextGen efforts.  

NextGen Priorities 

• A lot has happened since our last NAC meeting on Oct. 8^th.
  
• We delivered the NextGen Priorities Joint Implementation Plan to Congress on October 17..
• The plan incorporated the NAC’s NextGen Integration Working Group Final Report as an appendix.
  
• We have participated in several Congressional briefings – with the NAC by our side.
  
• We have also developed and implemented an oversight process for monitoring these priorities.
  
• I am pleased to announce that the FAA delivered on 11 out of 11 commitments in calendar year 2014.  We completed wake recat in Atlanta, Cincinnati, and Houston, and completed feasibility assessments for PBN and surface initiatives. We also completed a final investment decision for initial en-route services for Data Comm.
  
• We are on target to deliver on three out of three commitments at the end of the first quarter of this calendar year, making us 14 for 14.
  
• Industry also met their commitment in calendar year 2014.
  - The Performance Based Operations Aviation Rulemaking Committee (PARC) completed their review of the data link recording rule and delivered recommendations in November of last year. 
  - I am very pleased to report that we completed our review of their recommendations, and on Wednesday, February 25, our new policy went on display in the Federal Register. The new policy applies the recorder rule only to new aircraft, manufactured after the effective date of the rule, and to those aircraft which did not have any data link solutions available before the effective date. 
  - This new policy will allow the rule to be applied in a consistent and predictable manner, and it enables thousands–of older aircraft to affordably access the safety and efficiency benefits of data communications.
  
• This work on NextGen Priorities has been very rewarding for the FAA and sets a new standard for how we are working together with the NAC to move NextGen forward.
  
• You will hear more details on all of these accomplishments this afternoon from the leads of the working groups and our FAA subject matter experts.
  
• I would also like to take this opportunity to thank Steve Dickson for his outstanding leadership of the NAC Subcommittee – Tim Campbell has a tough act to follow.

ADS-B Equip 2020 Mandate

• Eleven days after filing our report to Congress on the NextGen Priorities, FAA hosted an industry Call to Action.
  
• This was designed to bring all industry stakeholders together to assess how we’re doing toward being fully equipped with ADS-B Out by January 1, 2020.
  
• It was a very well attended event.
  - Identified a number of issues.
  - Created working groups to roll up our collective sleeves and problem solve.
  - This was led by General Hoot Gibson from the NextGen Institute, and the effort was called Equip 2020.
  
• I’m pleased to report that this initiative has resulted in quite a bit of progress.  I’ll mention just three areas where we’ve made significant progress.
  - In general aviation, we are seeing a marked uptick in equipage – 3,000 aircraft have equipped since October: A 50 percent spike.
  –More significantly, competition amongst avionics manufacturers has led to a dramatic cost reduction in equipage – over a 50 percent price drop since October.
  –Several sources now exist for units at prices lower than $2,000.
  
• In support of airline equipage, the Equip 2020 team reached an agreement that allows air carriers with first and second generation receivers (SA aware) to continue to use these until 2025. This recognizes their dedication in adopting early and it provides time to upgrade to the best available receiver technology. 
  
• It also recognizes that we want to reward – not punish – early adopters of technology.  We want to ensure earlier equippers have flexibility in compliance with final standards.
  
• This has been an unresolved issue for three years … but after the Call to Action, we got an agreement in about 60 days.  It’s a good example of what can be accomplished when experts work together as a team.
  
•  I also want to credit Equip 2020 for producing an equipage tracking database.
  
• With this effort, you’ll be able to capture data from suppliers (the solutions and products they’re offering) … and you’ll be able capture data from the air carriers (what are they buying, when are they buying it, etc.). 
  
• With this information, you’ll be able to track the equipage trends … specifically, by comparing supplier plans with air carrier plans and spot potential risks to achieving equipage compliance by the deadline.
  
• This way, we’ll know if we’re on track for 2020 … and if not, we can redouble our efforts accordingly.

McKinsey Benefits Study 

Like I said, it’s been a busy few months

• In addition to the Priorities and Equip 2020, FAA engaged the consulting firm McKinsey & Company to better understand the benefits NextGen is providing to the aviation industry.
  
• The FAA worked with McKinsey to conduct carrier-specific NextGen benefits evaluations, including the benefits of equipping with ADS-B Out. 
  - This McKinsey study covered major categories of carrier benefits, including:
  –Savings in direct operating expenses
  –Savings in crew time
  –Overhead savings
  –Benefits of added capacity
  –Benefits of increased predictability
  - The consultants used a replicable analysis based on the FAA’s system-wide model, with added elements that can be included in future modeling.
  
• We presented a business case to carriers in their language based on carrier-specific details, including:
  - Flight schedules and
  - Fleet projections and
  - The Net Present Value investment case for ADS-B Out and partial DataComm equipage by 2020, which in each case has a positive NPV.
  
• We held discussions with the six major passenger carriers:
  - Delta, Alaska, United, Southwest, American and jetBlue
  - We have also met with UPS and are scheduled to visit FedEx and Republic in the coming weeks.
  
• Key themes we heard from the airlines:
  - Appreciation of, and need for, an open, airline-specific dialogue with FAA on NextGen.
  - Perceived challenges with previous programs.
  - Commitment to equip for the ADS-B 2020 mandate.
  - Excitement over NextGen and the promise of future benefits.
  - Specific, near-term improvements each airline would like to see to maximize benefits.
  
• Next steps for the FAA’s work on NextGen benefits and carrier alignment:
  - Follow-up discussions with airlines.
  - Update to the FAA’s NextGen strategy.

 Houston, North Texas and DC Metroplex 

• Finally, just before the last NAC meeting, we implemented the latest Metroplex in North Texas, and subsequently we implemented new procedures in DC.
  
  - Lynn Ray is going to provide an overview of those projects.

Lynn:

• I would like to share a few highlights from our successful Metroplex initiatives in Houston, North Texas and Washington, D.C.
  
• In the spring of 2014, we launched 61 new routes for flights into and out of Houston area airports. At the same time, we also used a Time Based Flow Management capability along with the Houston Metroplex enhancements to help match capacity and demand, and increase throughput and capacity.  Post-implementation data analysis shows an annual savings of $6 million from reduced fuel consumption.
  
• Now in December, as part of NextGen priorities, we added the wake recat capability into Houston Intercontinental and Hobby airports, giving Houston a suite of fully integrated tools and capabilities.
  
• Last September in North Texas, we increased safety by procedurally separating departure and arrival flows to the two major airports serving Dallas with 80 new NextGen procedures. This was the North Texas Metroplex initiative. We continue linking North Texas to the rest of our nation’s airspace with the same repeatable and predictable methods of optimizing TBFM that were used in Houston. We are currently conducting post-implementation analysis of North Texas and will make sure the efficiency of the airspace compliments its increased safety.
  
• In Washington, D.C. our Metroplex initiative employs safer and more efficient procedures throughout the region. The D.C. Metroplex will implement 50 new procedures staged over eight publication cycles. These procedures will be completely implemented by June 25 and have projected savings of $6.8 million in fuel costs, 2.5 million gallons of fuel saved, and a reduction of 25,000 metric tons of carbon. The D.C. area will be more efficient and more green because of Metroplex.
  
• With various NextGen technologies, policies, and procedures coming to fruition and our ability to deliver on our promise to implement NextGen priorities, we are climbing that “mountain of challenges” Bill Ayer so often referred to. 

ERAM 

• Looking forward, I am very pleased to report that we are on the verge of finishing all ERAM sites.  Teri Bristol, ATO’s COO, will provide a few more details.

TERI:

• ERAM is considered the backbone of the nation’s airspace system.  Replacing the 40-year-old Host system, ERAM processes flight and radar data, provides communications, and generates data for controllers' screens—functions that enable air traffic control across the nation.
  
• The transition to ERAM represents one of the largest automation changeovers the FAA has ever undertaken.
  
• ERAM is a flexible and expandable system designed to accommodate the new technologies being implemented as part of the FAA’s NextGen initiative.
  
• To date all 20 En Route centers have reached Initial Operating Capability (IOC), a milestone met when the system is deemed acceptable to be introduced into the operational environment at an Air Route Traffic Control Center (ARTCC) and a local and national plan exists that can support the facility’s goal to move toward extended and continuous operations.
  
• 16 of the 20 centers have declared Operational Readiness Date (ORD) which is the commissioning of a new system into the National Airspace System (NAS).
  
• ORD is the culmination of a series of events and milestones that demonstrate confidence and operational suitability of a system.  ORD occurs prior to decommissioning of a legacy system, and is a separate activity from decommissioning.
  
• By the end of March we anticipate marking the completion of the ERAM deployment as the four remaining centers declare Operational Readiness (ORD).

FACT 3 Report

• Also since our last meeting, the FAA has issued its latest FACT report.  FACT stands for the Future Airport Capacity Task and details the long-term airport capacity needs of domestic airports.   Eddie Angeles, our Associate Administrator for Airports, will share the highlights of this important work

Eddie Angeles:

• As Mike stated, in late January, the FAA published the third edition of its report on long-term airport capacity needs. 
  
• The report identifies airports that are at risk for significant delays and congestion through 2020 and 2030.
  
• For the rest of this decade, much of the U.S. hub airport system has sufficient capacity – except for several high-demand airports that have consistent delays: NYC area airports, ATL, PHL, and SFO to a degree.
  
• New runways have helped to improve capacity at many formerly congested airports.  Going forward, both new runways and NextGen improvements are needed to improve efficiency at capacity-constrained airports.

Small UAS Proposed Rule

• Also, as I’m sure you are aware, earlier this month, we issued a UAS proposed rule as the next step in our continuing efforts to integrate unmanned aircraft systems into our nation’s airspace.
  
• We’ve made a lot of progress in our task to integrate UAS. Last year, we published a comprehensive plan and road map to safely integrate unmanned aircraft; we opened six test sites across the country for research on unmanned aircraft; we approved the first ever commercial operations in the Arctic; and we have granted more than two dozen exemptions for commercial use of unmanned aircraft in domestic airspace.
  
• The proposed rule is a big step forward in outlining the framework that will govern the use of small unmanned aircraft weighing less than 55 pounds. This proposed rule offers a very flexible framework that provides for the safe use of small unmanned aircraft, while also accommodating future innovation in the industry.
  
• Safety is always our number one priority. This proposed rule makes sure that we are protecting other aircraft, as well as people and property on the ground.
  
• The unmanned aircraft industry is expanding greatly and this technology has the capability to dramatically change the way we use our nation’s airspace. 
  
• We are doing everything that we can to safely integrate these aircraft while ensuring that America remains the leader in aviation safety and technology.

Catex 2 Decision

• Continuing on our theme of recent accomplishments, I am pleased to share our most recent decision on Categorical Exclusions.
  
• In the fall of 2012 we asked the NAC to provide technical suggestions for determining ways to measure reduction in noise on a per flight basis. 
  
• The NAC approved their Catex task group’s recommendation to implement a system for noise analysis in the summer of 2013.
  
• The FAA has decided that we will use the NAC’s recommended net noise reduction methodology to implement the Categorical Exclusion that is called for in the 2012 reauthorization, with a couple of technical modifications:
  1. We’ll evaluate net changes in noise, instead of net changes in the affected population.  This is more consistent with the statute, which requires a determination of measurable reductions in noise.  A net day-night average sound level reduction would support this determination.
  2. We’ll rule out using the categorical exclusion if noise increases are significant. Instead of the NAC’s add-on significant test, this will be embedded in FAA’s interpretation of what constitutes a measurable noise reduction.  We won’t make a reduction determination in situations where there are significant noise increases.
  
• Our noise staff tested these modifications using the same data at two airports that the NAC Task Group used to test the NAC’s recommendation, and we got the same results.
  
• The FAA will provide a detailed debrief at the March 11 subcommittee meeting for those who are interested.
  
• I do want to call to your attention that industry provided the only positive comments on this categorical exclusion and this net reduction methodology. 
  
• All other comments were negative, and highlight the problem we’re experiencing with opposition to PBN procedures that shift noise over communities.  One of the expressions of community concern is to demand more detailed and participatory environmental reviews than occur when we implement a procedure using a categorical exclusion. The opposition to using categorical exclusions to bypass environmental reviews is a symptom of the larger issue of noise.  We’ll be discussing this in more depth at the June NAC meeting when we review the Blue Print for Success to Implementing PBN.

SESAR

Moving to the international scene, Ed and I made a trip to Brussels two weeks ago to meet with SESAR, Eurocontrol, the Commission, and the new Deployment Manager.

Ed, you want to provide a brief update on that?

• Since the NAC last met, the FAA and European teams have continued their harmonization work on many fronts.
  
• We've also had constructive discussions on how we are working together, and how we will do so going forward, especially as the new SESAR Deployment Manager section takes shape. 
  
• This was included in our discussions during our recent visit to Brussels. 
  
• One major accomplishment in the trans-Atlantic partnership that I would like to highlight is the recent completion of the Joint Harmonization Report that we have noted at previous meetings.  This document was written by a team of representatives from SESAR, EuroControl, and the FAA's NextGen and Air Traffic Organizations. 
  
• The report provides details of major initiatives and accomplishments made via the FAA-Europe agreement on harmonization over the last few years.  The report was presented to the High-Level Committee that oversees the trans-Atlantic agreement, and this committee approved the document and its public release. 
  
• And, I'm happy to report that the document has been printed and we've got a few copies here today.  The report will also be posted on the FAA and SESAR websites, and we'll have many more copies available at World ATM Congress in a few weeks in Madrid. 
  
• I think you'll find it a useful document that showcases the important work being done in partnership across the Atlantic.

Reauthorization and Capital Investment Plan

• The work on reauthorization progresses, we have a hearing before Congress scheduled for March 3. This hearing will cover our progress in implementing NextGen and areas where Congress can help us to create a more efficient system. With the current FAA authorization set to expire at the end of September, passing a new bill that helps lay the groundwork for the future of U.S. aviation is a top priority. 
  
• And finally, I’ve asked Mark House, our Chief Financial Officer to be here today to provide some highlights on our current capital investment plan.  In the interest of transparency, Mark is here to share our capital investment process and challenges we have in funding NextGen multi-year programs without multi-year funding. 

Mark House:  Presented Brief from a Slide Deck

Thank you, and that concludes the FAA remarks. 

Small UAS NPRM Press Call

As Delivered

Thank you, Mr. Secretary.  Today’s proposed rule is the next step in our continuing efforts to integrate unmanned aircraft systems into our nation’s airspace.

As you heard from the Secretary, we’ve made a lot of progress. Last year, we published a comprehensive plan and road map to safely integrate unmanned aircraft; and we also opened six test sites across the country for research on unmanned aircraft; we approved the first ever commercial operations in the Arctic; and we have granted more than two dozen exemptions for commercial use of unmanned aircraft in domestic airspace.

Today’s proposed rule is a big step forward in outlining the framework that will govern the use of small unmanned aircraft weighing less than 55 pounds. This proposed rule offers a very flexible framework that provides for the safe use of small unmanned aircraft, while also accommodating future innovation in the industry.

As you heard from the Secretary, this technology offers many potential benefits to society. Due to the size of a small unmanned aircraft, we envision that these aircraft could be used for a wide variety of activities, particularly those that might be considered dangerous.

Under this proposed rule, these aircraft could inspect utility towers, antennas, bridges, power lines and pipelines in hilly or mountainous terrain. Academic institutions could use them for educational purposes or to pursue research and development. Small unmanned aircraft could also support wildlife conservation, or be used to monitor crops.  They can help with search and rescue and they can be used to shoot scenes for films and television.  And of course there is a lot of interest in using them to take aerial photographs for real estate purposes. In many cases unmanned aircraft can do these tasks with less risk than a manned aircraft that might have to fly in dangerous terrain or in bad weather. And, in some cases an unmanned aircraft could conduct inspections more safely than a worker who would need to, for example, climb a tower.

As a reminder, what we are releasing today is a proposed rule. It is not a final rule. Today’s action does not authorize wide spread commercial use of unmanned aircraft. That can only happen when the rule is final. In the meantime, operators must still go through the current process for a waiver or exemption to fly.

Also, this proposed rule does not affect those who want to fly model aircraft as a hobby or for recreation. They already can – you simply need to fly according to our model aircraft guidelines. The FAA’s unmanned aircraft website has a lot of good information on how to fly your model aircraft safely.

As the Secretary said, safety is always our number one priority. This proposed rule makes sure that we are protecting other aircraft, as well as people and property on the ground. I’d like to go over these safety provisions.

The proposed rule accommodates aircraft up to 55 pounds, operating at speeds of up to 100 mph and up to 500 feet in altitude. This keeps these small unmanned aircraft away from manned aircraft that usually fly at higher altitudes. Also unmanned flights would be restricted near airports and in certain airspace unless air traffic control gives permission. This is to provide a buffer between manned and unmanned aircraft.

This proposal would allow operations during daylight hours and would require the operator to be able to see the unmanned aircraft at all times.

Rather than requiring a private pilot’s license, we propose that operators obtain a newly created FAA unmanned aircraft operator’s certificate by passing a knowledge test focusing on the rules of the air. The operator must renew their certificate every two years by passing a written proficiency test.  And before each flight, operators would conduct a preflight inspection, just as pilots do with manned aircraft today.

These small unmanned vehicles pose the least amount of risk to our airspace and therefore, the rule would allow these aircraft to operate without the need for an airworthiness certificate. Such a certificate could take a manufacturer between three and five years to obtain.  With the pace of innovation in the market, an unmanned aircraft could very well be outdated by the time it obtained a certificate. Therefore, no airworthiness certificate is needed. However, these aircraft must operate under a clear set of parameters to maintain safety, as I mentioned.

The proposed rule also invites comments on a number of provisions so that we can determine the appropriate standards.   Particularly, we ask the question of whether there should be a category and special rules for “micro unmanned aircraft” – those that weigh 4.4 pounds, or 2 kilograms, or less. We are asking the public to comment on whether such a category – and different rules governing them – should be included in the final rule.

The proposed rule will be on the FAA’s website and goes into greater detail on all of these provisions.

The unmanned aircraft industry is expanding greatly and this technology has the capability to dramatically change the way we use our nation’s airspace. We have been working tirelessly to address all the special characteristics of unmanned flight so that we can safely expand the use of these innovative aircraft in routine operations across the country. Today’s proposed rule is a milestone in that effort. We are doing everything that we can to safely integrate these aircraft while ensuring that America remains the leader in aviation safety and technology.

So thank you for joining us today, and I’d like to pass it back to Secretary Foxx.

Unmanned Aircraft Systems (UAS)

NextGen Helps FedEx Deliver Valentine’s Day Gifts on Time

Remarks as prepared for delivery

Good morning, everyone. 

As you know, the FAA is putting in place the Next Generation Air Transportation System.  NextGen includes innovative technologies and procedures that are making flying more efficient and greener, while ensuring that all safety needs are met.  And all of this is in real time, as you’re about to see.  NextGen is very clearly, very definitely happening now. 

We’re in Memphis today, because NextGen is making a difference, and for companies like FedEx—for whom being on time is the coin of the realm—NextGen is just what they’d hoped it would be. 

In the water, big boats cause big wakes.  In aviation, it’s the same thing, except the wake is an unseen, turbulent wave of air that can disrupt anything that gets too close.  This can create a flight hazard, and it’s especially a concern if a smaller aircraft is following a larger one.  Ask any air traffic controller, and they’ll tell you that they’re always keeping an eye out to make sure trailing aircraft are at a safe enough distance.  

Now, because of NextGen air traffic technology, we're able to more efficiently separate aircraft and still avoid wake turbulence.  It's a process we call Wake RECAT … and it means that aircraft can safely land and depart – one behind another – slightly closer than before.  Wake RECAT more narrowly and accurately defines safe wake turbulence separation standards based on the performance characteristics of aircraft.  This eliminates conservatively long separation standards that are necessary under current broader wake-turbulence classifications, which are based primarily on aircraft weight classes.

We’ve implemented Wake RECAT here at Memphis … and several other major airports like Atlanta’s Hartsfield … Louisville … Cincinnati … and Houston’s Bush Intercontinental and Hobby airports.  And soon, we'll add JFK … LaGuardia … Newark … and Teterboro to that list. 

So that’s what it is and where it’s going.  Let’s talk about what it’s doing. 

Because of Wake RECAT, FedEx gets 20 percent more planes in and out of Memphis every hour. 

Simply put, this means that Wake RECAT is helping FedEx deliver all of your packages on time.  That includes your Valentine’s Day flowers … chocolates … and teddy bears too!  You know, I never used to think of NextGen and Valentine’s Day at the same time, but I do now.    

Passenger carriers are seeing the benefit too.  At Atlanta’s Hartsfield-Jackson airport, Delta Airlines is reporting a 14-24 percent reduction in departure queue delays.  Delta projects to save $15-38 million dollars in fuel costs over a one-year period.   

In a moment, Captain Paul Cassel [Castle] from FedEx will say more about their flight operations, and the specific benefits they’re seeing from Wake RECAT.  Then, Paul Rinaldi, President of the National Air Traffic Controllers Association, will share his thoughts about what Wake RECAT means for controllers. 

Before turning over the microphone, let me emphasize that Wake RECAT is just one of many innovations that the FAA is putting in place all around the U.S. as part of our NextGen modernization effort.  Through NextGen, our nation is fundamentally evolving from a radar-based air traffic control system to a satellite-based system.  In doing so, we'll continue to make flying more efficient and greener.  And we’ll continue to reduce delays and aircraft fuel consumption.  This means less carbon dioxide emissions. 

So NextGen is good for the parcel shippers …

… good for the passengers … and

… good for the planet.

Now, let me turn it over to Captain Cassel … 

Towards a Framework for Standards

Thank you, George [Nield].  Good afternoon.  I am delighted to be here with you today. We’re making so much progress and things are happening so quickly in commercial space, that I think this conference is a good place for us to look ahead for a moment and anticipate what this industry will look like in the next decade and how we can position ourselves for maximum success.

It was only a few short years ago that the idea of private companies delivering payloads to the International Space Station was a novel idea. Could it be done? Could the private sector perform what had always been a government mission?

Well, this industry has showed that yes, private companies can handle this mission, and handle it very well. There have been nine deliveries to the International Space Station in the last three years by two private companies – proving to the naysayers that these types of missions are no longer the exclusive purview of the government.

In the next two years, private industry is working to also deliver NASA crew to the International Space Station, in addition to cargo.  As you know, contracts for these missions were awarded to Space X and to Boeing. Both companies are now finishing development of their vehicles.   

This is another example of public-private partnership.

On the horizon there could be any number of innovations: 

• We could see the launch of thousands of small satellites into lower earth orbit to help extend internet connections around the world. This could also allow students and researchers access to satellites to conduct their own research.
• Down the road, we could see flights from Los Angeles to Sydney in just three hours, thanks to space planes using rocket propulsion to touch the edge of space and then arc back to Earth in a controlled descent. 
• And we are not far away from commercial space tourism.

I won’t say commercial space travel, because no one intends for the public to travel from point A to point B in space, at least in the near future. However, the idea of private companies ferrying paying passengers to the edge of space for a tour is very real. Space flight participants will have the opportunity to experience weightlessness and to see the magnificent curvature of the Earth out of the spaceship’s window.

Astronauts on Apollo 8, the first manned mission to orbit the moon, were the first to see the blue orb of the Earth rise over the lunar landscape. It was Christmas Eve, 1968. The astronauts remarked what a beautiful sight it was to behold. In the words of Command Module Pilot James Lovell, “The vast loneliness is awe-inspiring, and it makes you realize just what you have back there on Earth.”

It’s truly amazing that private citizens may soon have the chance to experience a similarly exceptional view of our planet.  

What has allowed progress and innovation to take place has been the very experimental nature and the very experimental culture of the commercial space industry. Companies have made breakthroughs in composite structures, innovative propulsion systems and remote sensing satellites. They have had the freedom to think creatively and to explore different applications for new technology and to make products more affordable.  

And the market has responded. It was responded with investment of billions of dollars in the promise of commercial space. People are investing in America because the sense of security that surrounds our industry and the regulatory environment that the United States offers, and that’s a good thing.

Consider how the pace of activity has quickened. There were just three commercial launches in the U.S. in 2012. Last year there were 19 launches. And by the end of next year, in 2016, if activity in suborbital space tourism continues apace, we expect that this number could triple. America has seen a resurgence in space related innovation, continuing a proud tradition. 

President Obama’s 2016 budget, released this week, acknowledges this and includes an additional $1.3 million for the FAA’s Office of Commercial Space to support 25 new staff positions to handle licenses, permits, safety inspections, and technical outreach.  We want to keep up with the demand and not present a bottleneck to the innovation that’s been taking place.

All of this progress is very good news. As an industry, commercial space enjoys a unique environment. The FAA promotes commercial space, but does not set standards for the industry in terms of those on board a flight into space. The FAA does, of course, protect the safety of the public not involved in the mission, and has regulations to protect national security and the environment. These are set forth in the licenses and permits we issue for launches. But for those going into space, everyone is informed of the risks and everyone consents to them.

That notwithstanding, the two failed launches last year coming one after another, focused the public’s attention on the commercial space industry. It was an important reminder that risk accompanies all ventures into space, and it was an important reminder that risk is something we all need to manage when making design and operations decisions. But I think how we take responsibility for this risk is the real measure of how we are doing as an industry. We should not take an attitude that “risk happens,” but adopt the attitude that we will need to address and mitigate risk as this industry continues to mature.

I am not here today to suggest that we change the experimental culture of the commercial space industry. Rather, I am here to suggest that industry and government have a responsibility to consider together the appropriate transition to a framework that involves performance based standards. There is a moratorium right now on regulation of occupant safety for commercial space transportation. That is set to expire at the end of this fiscal year, and it could very well be extended.

What I want to suggest is that we need to start a thoughtful discussion across government and across industry about risk. What we don’t want is to have some kind of framework that would be imposed upon us in reaction to something that might happen. We need to start a conversation about the balance between innovation and regulation.

Now, commercial space is a different animal from aviation, and the regulatory picture for this industry could be very different from that of commercial aviation. But it’s not realistic to think that there should not be any standards or any regulation at all, ever. What we need is a plan for how this industry will make the transition, and at what time, and what the future will look like as we integrate more and more launches into our national airspace.

Now, already efforts are underway to create industry standards. The Commercial Space Flight Federation has so far issued one completely voluntary standard to its member companies. They are working now in concert with the American Institute of Aeronautics and Astronautics, as well as SAE International, to start the discussion about what kinds of standards are necessary for commercial space transportation. SAE has more than 100 years of experience in developing standards and AIAA represents the subject matter experts that are in the field. The Commercial Space Transportation Advisory Committee now has a standards working group as well, which can provide a link between government and industry.

Innovation is essential to the commercial space transportation industry. We want new products to come to market thereby fueling the U.S. economy, and we want to continue the America tradition of space exploration. We don’t know yet what future space vehicles will look like. Therefore, I realize that talking about standards at this time could be like standing on the sands of Kitty Hawk and asking the Wright Brothers for best practices on how to build a 787 Dreamliner. How do we know what the standards are when we don’t know what we’re going to be building?

While it’s too early for specifics, I don’t think it’s too early to call for a plan. We need to start to think about how industry and government can work together to create standards that will ensure success for this industry in the future.  A good place to start would be practices for human spaceflight occupant safety. The FAA released recommended practices for this area just last year.

America has had a rich history in space since the 1960s. We were the first to set foot on the moon. We developed the Saturn V rocket – the largest ever at the time – that made the Apollo missions possible. And today, the United States plays a vital role in the research and operations of the International Space Station.  

Now, American companies are continuing these proud traditions and building and launching rockets entirely funded by private investors. They are advancing our leadership in space. There is no one else in the world that is doing that.  Commercial space is an industry that runs on daring and big ideas. It’s exciting and it’s innovative. Let’s continue to work together to take the necessary steps that will help this industry continue to thrive for decades ahead of us.

Thank you.

A Global Safety Culture

Good day, Mr. President, Mr. Secretary General, fellow delegates, and distinguished guests.  It is an honor for me to address this international gathering, and to discuss the progress made in the safety arena since the last High-Level Safety Conference in 2010.

Aviation continues to grow around the globe, and we are fortunate to have an unprecedented level of safety.  Global accident rates continue to decrease, and flying has never been safer.  This is a testament to the work of ICAO and its Member States in making safety a number one priority.  Countries here today have adopted strong safety cultures that enhance our incredibly safe system.  This is due, in large part, to ICAO’s important work.

In the past, our approach to safety was to study the causes of accidents after they occurred.  This helped us to continuously improve safety.  But we all know that our ultimate goal is to prevent accidents from happening at all.  The new way of doing business is to use safety data to identify hazards, and modify our operations to prevent incidents before they happen.  An example of how we can proactively use safety information is the data sharing agreement between the United States and ICAO that was just signed last week.  This agreement is a great step forward.          

While our current system is extremely safe, global aviation has also recently endured tragic events.  These incidents transcended borders and affected us all as a global community.  These events serve as reminders that more work needs to be done to keep aviation safe.

This second High-Level Safety Conference brings us together at a pivotal time when we can directly impact the future of aviation for the next several decades.  During this conference, we will discuss ways to prevent accidents from occurring even before an aircraft begins its departure.  This will be done in large part with more effective and integrated safety management systems.  This solid foundation will assist States in maintaining a safe aviation system. 

Once a flight departs, the challenge remains to monitor the aircraft to respond to any abnormalities.  These integrated safety systems must be in place to learn from incidents, and to prevent similar events from recurring.

We also face the challenge of working together to share information about areas of conflict that can impact civil aviation with catastrophic consequences. 

The challenges of enhancing safety even further are much bigger than one country or region.  It is essential that we work through ICAO, and its regional offices and partners, to effectively and efficiently improve aviation safety. 

Thank you for your kind invitation to speak.  It is again with great pride and anticipation that I am here.  On behalf of the United States, I wish this conference much success.

Safety Management System Rule

Thank you, Mr. Secretary.  I want to reiterate a point you made, and that is that we are constantly striving to enhance safety and to improve the system we have right now, which is very safe.

In the past, our focus in improving safety was to study the causes of past accidents.  As a result, we have continuously improved aviation safety and, fortunately, today we have very few accidents.  But we all know that our ultimate goal is to prevent accidents from happening at all. 

That is where Safety Management Systems come in.  A Safety Management System is an organization-wide approach to mitigating risk in airline operations. It’s a series of processes and procedures that everyone follows so that we can enhance safety. It does this by having a structured approach to look at data from airline operations. This data can help identify patterns and trends that could possibly lead to a problem.  But having this information enables the industry to take action before there is a problem. 

As the Secretary said, a safety management system does NOT replace FAA oversight or inspections, but what it DOES do is help foster a stronger safety culture within an airline.

A strong safety culture is a very, very valuable thing. It’s something that we cannot regulate completely in every aspect because it is something that a company has to create from within. This rule helps further that process. A vibrant Safety Management System stems from employee professionalism and from employee dedication to always doing the right thing, even when no one is looking.

Already, airlines are voluntarily sharing enormous amounts of their operational data with the FAA in a cooperative effort to enhance safety. We can all learn from each other. The data we have now covers about 96 percent of U.S. air carrier commercial operations. This represents a great willingness to work together. This data comes from a variety of sources, including self-reporting by employees when they see a safety risk.

The rule requires airlines to implement a safety management system within three years. They must submit their implementation plans to the FAA within six months. The rule also requires a single accountable executive to oversee SMS.

What a Safety Management System does is create a process for looking at this data in a systematic way, identifying the risk, and then taking actions to mitigate risk before there is a problem. This rule applies to all commercial carriers, both passenger and cargo. A Safety Management System can be scaled to the size of an airline’s operation. It is NOT one size fits all. We want airlines to create the best system that matches their operations.

In making this rule, we looked at more than 100 accidents of U.S. commercial carriers between 2001 and 2010 and we determined that if Safety Management Systems had been in place, they may have prevented many of these tragedies.

There is no question in my mind that Safety Management Systems are the right way to go, and we are adopting this approach within the FAA as well.

I appreciate you all coming out to learn more about this important advancement in aviation safety.

Now, I’d like to turn it over to Nick Calio, President and CEO of Airlines for America, for the industry perspective.

UAS Safety Campaign

Thank you, Michael (Drobac, Executive Director, Small UAV Coalition). Good morning everyone.

Thank you for joining us today to talk about safety in operating unmanned aircraft outdoors.

This is an issue of growing concern. The price of unmanned aircraft has come down, and this newer and more powerful technology is more affordable to more people, yet many are not familiar with the rules of flying.

In previous years, many model aircraft enthusiasts were drawn to the hobby by an interest in aviation and in developing stick and rudder skills and other aviation skills. Today, those enthusiasts are still among us and are using unmanned aircraft, but a large segment of the market for multi-rotor unmanned aircraft is photography enthusiasts.

Retailers and manufacturers sell all kinds of models, priced starting as low as $20 to models costing thousands of dollars.

These aircraft are sophisticated and they are relatively easy to fly compared to older types of model airplanes. Most of them are small helicopters with four or six blades.

We want consumers to have fun with their unmanned aircraft, but we also want them to follow these best practices for safety.

• Don’t fly above 400 feet.
• Keep your unmanned aircraft within sight.
• Don’t operate near people or crowds.
• Do not fly an unmanned aircraft within five miles of an airport without notifying FAA Air Traffic Control or the airport operator. These conversations with Air Traffic Control are critical for safety.
• You may only fly unmanned aircraft for hobby or recreational uses – you cannot earn money or use it for your business unless you get prior authorization from the FAA.
• Please respect the privacy of everyone. No taking pictures of people if they are not expecting it!
• We urge you to join a model aircraft club to help you learn how to safely operate and enjoy your aircraft.

Thank you again to everyone for joining this morning. These are very important safety tips and we urge anyone operating an unmanned aircraft to know the rules before you fly.

I’d like to open it up to questions now.