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Air Traffic Control Newsletter #95

More problems for ATC facility consolidation, cyber attacks and NextGen vulnerability

Robert Poole
August 3, 2012

In this issue:

More Concerns with FAA Facility Consolidation Plans

Last month I expressed some concerns about FAA’s plans to consolidate Centers and TRACONs as part of the NextGen transformation, based largely on testimony presented at a May 31st hearing of the House Aviation Subcommittee. My concerns have been reinforced by a new report from the DOT Office of Inspector General (OIG) released on July 17th (AV-2012-151, available on the OIC website).

The OIG audit confirmed my report that the former Special Program Management Office for consolidation, reporting directly to the FAA deputy administrator and the ATO’s chief operating officer, has been shifted to a lower level at the ATO and been renamed the Future Facilities Group. The audit provides some details on the overall plan drafted by the SPMO to develop replacements for current Centers and TRACONs nationwide, organized into six geographical segments, which sounds good. But it also raises a number of serious concerns:

But the biggest problem I see with this plan barely rated a mention in the OIG audit: the large potential labor cost savings due to the inherent productivity increases that facility consolidation and NextGen should bring about. On p. 11, the report states, “The [ATO’s] initial business case also assumes that the number of employees will remain the same and that there will not be labor cost savings, and it does not fully quantify future productivity and efficiency enhancements.” It then notes that FAA will include such information in future analyses of individual facilities, but that “these officials also stated that future business cases will continue to assume no reductions in facility staff, and that decisions regarding future staffing levels will be made based on operations.” The OIG lets that go with no further comment, and makes no recommendations for any different course of action.

This should raise all kinds of red flags among the ATO’s aviation customers (such as those represented on the RTCA NextGen Advisory Committee, NAC). A key ingredient in the original business case for NextGen transformation is supposed to be large-scale productivity increases—i.e., more bang for the buck. This is certainly one of the driving forces behind the EU’s Single European Sky effort. One of the key goals of SESAR, the European counterpart of NextGen, is to reduce the unit cost of air traffic management. How will that be done? Part of the answer is via implementation of new technologies and procedures that will make flight routings more direct. But a major portion is planned to come via large-scale facility consolidation, reducing the number of en-route centers from the current 63 to perhaps nine, one for each of the cross-border Functional Airspace Blocks now being implemented.

The latest Performance Review Report from the Eurocontrol (May 2012) finds that en-route unit costs decreased by 5.6% in 2010, and are expected to show another 3% decrease in 2011 once all the numbers have been crunched. Figures from CANSO (“Air Navigation Service Provider Performance Results, 2006-2010” for individual ANSPs show that while most have an IFR cost per flight hour significantly higher than the U.S. figure (which was $429 in 2010), they are making progress in reducing them, with the U.K.’s NATS averaging a 4.5% annual reduction in IFR cost per flight hour over the past six years. NATS has consolidated from four centers to two during the past decade.

Yet cost reduction still seems to be a foreign concept to the FAA’s Air Traffic Organization. The otherwise useful report produced jointly by Eurocontrol and the ATO, “U.S./Europe Comparison of ATM-Related Operational Performance” (March 2012) does a comprehensive job of measuring service quality, punctuality, predictability, and efficiency—but completely ignores cost-effectiveness.

And that is unacceptable. The ATO’s customers need to demand realistic plans and projections for reduced unit costs as part of the business case for NextGen. A major, nationwide facilities consolidation plan that does not produce large unit cost savings will be very hard for the agency to justify.

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Modest Progress on E.U. Functional Airspace Blocks

It was three steps forward, one step back, during June and July, as European governments continue moving cautiously toward implementation of cross-border Functional Airspace Blocks (FABs), required to be in place by this December.

On July 1st, the first jointly owned company—NUAC—took over en-route ATC in the airspace of Denmark and Sweden. NUAC is a company jointly owned by the air navigation service providers (ANSPs) of the two countries: Denmark’s Naviair and Sweden’s LFV. It is now operating the three en-route centers at Copenhagen, Malmo, and Stockholm. Staff at those centers are still employees of their own ANSP but have been seconded to NUAC as of now. NUAC is the first (and so far, only) integrated (cross-border) ANSP in Europe.

Nearby, the FAB created by Irish ANSP IAA and the U.K.’s NATS released its plan for the 2012-2015 period. Its focus is on short-term operational improvements, “while working toward closer integration.” So at this point, there is no plan for creating anything like NUAC for this FAB.

But larger efforts are afoot in northern Europe. On June 20th, nine ANSPs—including above-mentioned Naviair, LFV, IAA, and NATS plus the ANSPs of Finland, Iceland, Norway, Estonia, and Latvia—formally launched the Borealis Alliance to develop greater cooperation among the FABs of northern Europe “with an aim to a possible merger if this will lead to further efficiency benefits for airspace users,” according to a news report in AirTrafficManagement.net (June 20th). Borealis has recruited Lance Stuart from NATS as its Executive Director, with Knut Skaar of Avinor (Norway) as board chairman.

In contrast to these positive developments, politics intervened in Britain to prevent further ANSP integration. Transport Minister Justine Greening persuaded her colleagues to reject any sale of the government’s 49% ownership stake in NATS, rather than “risk the political and financial consequences of handing control of Britain’s skies to Berlin.” That was a reference to the widely known interest expressed by DFS, Germany’s ANSP, in buying at least some of those shares. Greening also focused on short-term government revenue considerations, noting that the government currently receives hefty dividends on its NATS shares, as opposed to only a one-time gain from selling them.

Consolidation of Europe’s fragmented airspace will require not merely the creation of cross-border FABs but the actual merger of ANSPs as the precondition for serious consolidation of en-route centers from the current 63 to a much smaller number. A partial merger of two of the biggest ANSPs, DFS and NATS, would be a giant step in that direction. Fortunately, the U.K. airlines that jointly own 42% of NATS could decide to sell a portion of their shares to DFS. Instead of just complaining about the high cost of Europe’s fragmented air traffic control, they should take a positive step towards solving the problem.

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Inspector General Audit Stirs ATSAP Controversy

Back in 2008, the FAA initiated a voluntary, anonymous reporting program called ATSAP, under which controllers could self-report errors; full implementation at all ATC facilities was achieved by October 2010. The rationale for the program is that safety will be best served by creating a corporate culture in which all safety problems can be identified, without fear of punitive action being taken. ANSPs in other countries refer to this as a “just culture,” and aviation safety experts are generally supportive. A similar program, called ASAP, has existed for many years between airlines and the FAA, under which flight crews anonymously report errors.

How things get implemented, of course, can sometimes be less than ideal. So I was eager to read the first audit report on ATSAP from the DOT Office of Inspector General (Av-2012-152, July 19, 2012). Overall, the OIG report commends ATSAP but points out a number of problems, not all of which are addressed by its 10 recommendations.

FAA negotiated a memorandum of understanding (MOU) with controllers union NATCA for dealing with reports filed under ATSAP. After preliminary staff analysis, the reports go to a three-person Event Review Committee (ERC) consisting of one person from ATO management, one person from NATCA, and a third person from FAA’s air traffic safety oversight office (AOV). The ERC must determine whether each report meets the criteria for being accepted into the ATSAP database, and may also recommend skill enhancement training (SET) for employees involved in an error or incident. All ERC decisions must be unanimous. Accepted ATSAP reports fall into two categories: event reports (e.g., an error or loss of separation) and safety problems (policies, procedures, etc. that might be changed to enhance safety).

The OIG audit identified a number of problems with how the program is being run, including a lack of verification of many reports that makes them useless for identifying trends, less than ideal communication of identified problems to the facilities where they originate, allowing operational errors or deviations to be reported long after the event occurred (an exception to the normal rule requiring filing within 24 hours), very little use of skill enhancement training, and a perception among many controllers that such training  is punitive. There are also a handful of controllers who have each submitted over 100 reports, and a small number who have submitted self-reports on misconduct (e.g., playing movies or sleeping), using the non-punitive nature of ATSAP as a way to escape discipline.

The OIG report includes 10 recommendations, of which the FAA has accepted five, partially accepted three, and rejected two. I’m more concerned with two problems OIG identified for which it made no recommendations at all. One is the MOU provision that allows controllers to report operational errors or deviations at any time, rather than within the usual 24-hour period after the event. This differs from reporting requirements in the comparable airline reporting program, ASAP. Second, there is no recommendation regarding the problem of ERCs accepting misconduct reports into ATSAP, thereby giving those employees a free pass. Both of these cry out for being changed.

I was also disappointed that the OIG analysts did not seek to draw more on lessons from other voluntary self-reporting programs in aviation safety. They make occasional mentions of the airline program ASAP, but don’t really explain how ASAP handles some of the admittedly difficult issues now confronting ATSAP. Moreover, there is considerable experience by ANSPs worldwide in developing, implementing, and fine-tuning “just culture” environments and programs in air traffic control. That knowledge base should be drawn upon to get a better handle on what works and what does not.

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Cyber Attacks and NextGen Vulnerability

Some of my aviation colleagues have pooh-poohed a series of recent articles about the potential vulnerability of NextGen to hacking and spoofing. But I think this is a very real concern.

Aviation Week (July 23) took seriously the recent demonstration by University of Texas professor Todd Humphreys last month at White Sands Missile Range, in which he was able to hack into a small UAV’s GPS system and take command. Forbes.com’s Andy Greenberg reported (July 25) on a paper given last week at the Black Hat conference in Las Vegas by Andrei Costin of the French security institute Eurecon on the vulnerability of ADS-B to jamming and hacking, due to the lack of either encryption or authentication in its communications.

Actually, I started getting reports on this vulnerability several months ago, when a reader sent me an Air Force Institute of Technology master’s thesis by USAF Maj. Donald F. McCallie, “Exploring Potential ADS-B Vulnerabilities in the FAA’s NextGen Air Transportation System,” June 2011. About a week later I found an article by New Scientist’s Paul Marks, summarizing the same points, based on a paper by McCallie and two members of his dissertation committee, Capt. Jonathan Butts and Robert Mills. Their paper appeared last year in the International Journal of Critical Infrastructure Protection.

McCallie takes issue with the findings of FAA’s Security Certification and Accreditation Procedures (SCAP) for ADS-B. (Another reader sent me the Security section of that SCAP report, so I’ve seen that, too.) FAA concludes that “using ADS-B data does not subject an aircraft to any increased risk compared to the risk that is experienced today.” They also state that they do not expect spoofing or jamming to occur, and that encryption of its signals would restrict ADS-B’s use internationally. FAA rests a lot on the claim that ADS-B data will be fused with primary radar returns (and hence not really spoofable), but McCallie notes the inaccuracy of those returns and hence questions how the system will determine which is the correct target. He also cites actual examples of unencrypted data links being exploited by adversaries, one a Shiite militant whose laptop included video feeds from an unencrypted Predator datalink and another case in which Hezbollah intercepted Israeli video footage from surveillance operations. Inexpensive software such as Skygrabber and PlaneFinder can be powerful tools for those intent on mayhem.

His dissertation goes on to define a number of examples of how ADS-B vulnerabilities could be exploited:

After assessing the relative feasibility of each of these attack scenarios, McCallie goes on to present three rather chilling vignettes, showing how various ADS-B messaging attacks could be used against military and civilian ATC systems. He concludes by recommending (1) publication of FAA’s SCAP data, opening it to broader critical scrutiny, (2) a complete and holistic security analysis of the entire NextGen implementation plan (in which security is mentioned only a handful of times), (3) operational security assessments of each major NextGen component, (4) user education on potential system vulnerabilities, (5) separate security testing for military applications of ADS-B, and (6) work on technology fixes for identified vulnerabilities.

I hate to be the bearer of bad news, but I think these problems are real and need serious attention by the entire aviation community.

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Airline Ancillary Revenue Keeps Growing

Last month, IdeaWorks and Amadeus released their fifth annual report on ancillary revenue generated by airlines worldwide. The total for 2011 was $22.6 billion, only a slight increase in dollar terms from 2010’s figure of $21.46 billion, but a 21% increase when measured in Euros.

Before discussing the implications of this growing phenomenon, some qualifications are in order. Those totals understate the likely global total, since only 50 airlines (out of 108) disclose ancillary revenues. IdeaWorks did not estimate what the total might be if data from all 108 were available. They did point out that since their initial report in 2007, the number of airlines disclosing such data has increased from 23 then to 50 now.

It’s also important to note that although most of the sources of ancillary revenue are flight-related (baggage fees, early boarding fees, premium seating fees, meal charges, etc.), a significant portion of the total, depending on the airline, is revenue derived from airline-branded credit cards and frequent-flyer program revenues.

That qualification is especially important in the U.S. context, in which flight-related fee revenue covers many items that in previous decades were bundled into the airfare. So in the days when airfares routinely included bags, meals, blankets, etc., the revenues collected via the ticket tax (the largest source of funding for the Aviation Trust Fund that pays for most of ATC and all of AIP grants) were proportionally larger than they are today, when all those extras are not part of the fare.

The top 10 airlines for ancillary revenue worldwide in 2011 included America’s six largest: United (#1 in ancillary revenue), Delta (#2), American (#3), Southwest (#5), US Airways (#8), and Alaska (#10). Their combined ancillary fee revenue was $12.69 billion last year. Assuming that heavy users of ancillary fees such as Allegiant, Spirit, and all others account for another 10%, the total would be $13.96 billion. Making a guess that flight-related fees account for two-thirds of that ($9.31 billion), if that sum had been bundled into airfares, the additional ticket tax revenue for the Aviation Trust Fund (@ 7.5%) would have been $698 million. That would cover a non-trivial chunk of one year’s NextGen investment.

Let me hasten to add that I am not advocating taxation of ancillary revenue. I’m simply pointing out how the bizarre way the United States funds aviation infrastructure encourages and rewards the trend toward unbundling airline charges—and has gradually led to reduced investment in aviation infrastructure here, but not in other countries. And that is something that could be fixed by switching to a more rational aviation infrastructure funding system in which airports and ATC are funded directly by their customers.

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News Notes

Airways New Zealand’s ATC Training Business. One of the benefits of being set up as a self-supporting air navigation service provider (ANSP) is the freedom to market services to others. A good example is provided by Airways New Zealand, as reported July 17th by 3News.co.nz. The company’s controller training program trains about 50 people per year, half of whom are foreigners. The article cites a recent class that included many trainees from Saudi Arabia, and notes previous trainees from China, Indonesia, various Pacific islands, and the United Arab Emirates. Airways has developed its own simulators for use in its training program, and recently sold one to the ANSP of South Africa, for around $2 million.

Feedback on Space-Based ADS-B. In response to last issue’s story on the competition between ADS-B Technologies and Aireon (the Iridium/Nav Canada/ITT/Harris joint venture), I heard from Iridium CEO Matt Desch. He pointed out that Aireon customers will not have any additional equipage costs, since their system relies on equipment either already on commercial aircraft or already mandated in any case. He also wrote of the satellite constellation to be used by his competitor, “Globalstar does not provide real-time connectivity over the oceans or poles, and never will.”

Competing Global ATC Conferences. Last year many aviation people were skeptical that the industry would accept the plan of CANSO, in association with ATCA, to create a new annual conference, competing with the long-established ATC Global conference in Amsterdam. But it looks as if CANSO and allies are pulling it off. On July 12th the World ATM Congress 2013 scored a big win by attracting the SESAR Joint Undertaking as one of its (thus-far) 85 exhibitors for the Feb. 12-14 event in Madrid. The event will include the Jane’s Awards dinner, previously held at ATM Global in Amsterdam. And a number of large exhibitors, including Boeing, Eurocontrol, Harris, Lockheed Martin, and Saab-Sensis are listed as having made exclusive commitments to exhibit in Madrid. But ATC Global is not giving up. It is scheduled for March 12-14 in Amsterdam, and boasts a long list of exhibitors. Whether this industry can long support two such conferences remains to be seen.

Politics Obstructing First Major US Facility Consolidation. New York politicians, ranging from Sen. Charles Schumer (D, NY) on down to a local Republican town board member from Islip, are insisting that the first major consolidated Integrated Control Facility be located on Long Island and not at any of the other sites the FAA is considering within a 150-mile radius of New York City. And local newspaper Newsday on July 10th editorialized that the politicos should unite around MacArthur Airport in Islip. None of this bodes well for either this initial consolidation or the overall 22-year plan.

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Quotable Quotes

“Towards the end of last year, air traffic in Europe started a second decline—a double dip. . . . Will the double dip impact [FAB] development? It’s still a little early to say, but we should remember that they were envisaged as a means to help make the ATM industry in Europe more efficient—to bring down the costs to something closer to the levels seen in North America. That will only happen when they start to have a real operational impact, when they start acting less like clubs and more like linked businesses. So far, we haven’t seen much evidence of that. The European Commission has said it will not accept a sub-optimal result but, in that case, it may find itself having to take more direct action and drive a more top-down approach—something it has instinctively avoided thus far.”
—David McMillan, outgoing Director General of Eurocontrol, “Double Dip,” Air Traffic Management, Issue 2, 2012.

“Imagine a scenario where all [automobile] traffic in a particular city is directed by human controllers in control towers through a series of voice commands via radio transmissions. In this scenario, the controllers would be overwhelmed, the airwaves would be full of radio traffic, and a lot fewer vehicles would be permitted on the road to ensure safe separation. This scenario seems silly, but it essentially illustrates our current air traffic control philosophy. Now, let’s contrast this with how the Interstate Highway System actually works. Of course there are no control towers along highways across the country. They would not be necessary because each driver can precisely position and guide their own vehicle along their intended route. Paint markers, reflectors, and divided lanes for traffic neatly organize the flow of vehicles and provide a tremendous amount of capacity. In the same way, the modern aircraft has very precise navigation and guidance capability that can permit them to use defined air routes. When aircraft use this advanced technology to organize the flow of traffic, it is called Required Navigation Performance (RNP), and it results in a variety of substantial benefits.”
—Steve Fulton, GE Aviation, Airlinereporter.com, July 15, 2012

“Should a government agency—or any agency—be responsible for the overall policy guidance of an entire industry, and at the same time operate an element of that industry?”
—W. G. Osmun, Editor, Business & Commercial Aviation, July 1962 (reprinted in BCA’s July 2012 issue)

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Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy


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