So what happens when a government leader proposes bold new innovations that involve partnering with the very organizations he regulates? Acting Administrator Michael Huerta of the Federal Aviation Administration has been embarking on such a collaborative transformation in response to the current, emerging and anticipated challenges faced by the aviation sector. Now is a critical time to update outdated technology to maintain the FAA's impressive safety standards--the United States has witnessed no fatal airline accidents in three and a half years--as the numbers of travelers, planes and airports continue to grow.
The Next Generation Air Transportation System, or NextGen, is the FAA's answer. Allocating costs, benefits and risks plays the central part in this high-stakes reinvention drama, requiring coordination among pilots, manufacturers, airlines, unions, environmentalists, airports and government professionals. NextGen brings them in as long-term partners, aiming to build a spirit of cooperation that encompasses the overarching initiative as well as individual component programs.
Aviation has a history of using collaboration to push innovation: In 1918, airmail service began in the United States through a cross-agency collaboration between the Post Office and the Army Air Service, revising expectations of mail delivery and potential speed. NextGen follows in these footsteps, setting a new bar for the industry.
NextGen's goals are simple: Make the air-transport system safer and smarter, accelerate the implementation of new technology to bring benefits to the public now, and improve employee efficiency by embracing innovation. NextGen uses data and analytics to address potential safety risks preemptively, rather than relying only on investigation and forensic study after accidents have occurred.
Specifically, NextGen is an integrated initiative combining a transition from radar to more-precise satellite tracking, faster processing of route requests and changes, integration of voice and data, automation of communication between pilots and air-traffic controllers, and sharing of data among industry partners. In south and central Florida, where the system is getting its first trials, proximate airports are being envisioned as total systems called "metroplexes." These allow for regional cost-benefit analysis and for simultaneous optimization of routes and operations of both major and smaller airports. Metroplexes also facilitate rolling out program changes on a regional basis rather than one airport at a time.
NextGen's expected benefits are multifaceted: Improving the efficiency of operations brings down costs for companies and consumers, while helping a tenuous industry to continue moving forward. These improvements also carry considerable environmental benefits, using less fuel through more direct and exact routing and trimming of lag time off of ground operations. And improved data sharing can allow participating groups to catch each other's mistakes and reduce the chances of accidents even further.
NextGen is a major investment-as much as $160 billion through 2025, according to the Government Accountability Office-that will be borne not only by the FAA but also by aircraft owners and operators, other federal agencies, local governments, airports and ultimately users. Its cumulative benefits aren't expected to exceed its cumulative costs until 2020, requiring long-term outlooks and planning. But by delivering benefits now through metroplexes, satellite-based routing and fuel savings, the program provides immediate incentives in addition to its promised long-term payoff.
Coordination among partners, suppliers and regions, especially the timing of their investments, is key to implementing NextGen efficiently, cost-effectively and on schedule. At the beginning of 2012, the FAA regained authorization after four and a half years without funding stability or predictability, working off of 23 short-term extensions. Lacking re-authorization, investment and project schedules were thrown off, one of the causes of the program's rising cost estimates. With its critical programs now authorized until 2015, the FAA can move forward with long-term planning and transformative programs like NextGen.
The NextGen initiative requires a new level of coordination between the regulator and the regulated to properly leverage the investments of both. There are inherent difficulties to such a level of cooperation: Data-sharing means to industry that the regulator will be even further into its business, and disclosing risk to the regulator can impose more short-term costs on the regulated. The stakeholders, from executive to congressional to airlines and customers, will need to trust the professionalism of the FAA to find a balance in line with these concerns.
The FAA's NextGen effort demonstrates the complexities and opportunities of better, faster, cheaper change when diverse parties are involved. Taking into account efficiency gained, start-up costs and how resulting benefits are allocated defines whether an innovation is in fact cheaper. How to partner with those you manage and how to encourage the risk of innovation both come into play. Perhaps one lesson from all this is that the character and reputation of the leader of change makes a difference, pointing to the importance of President Obama's nomination of Huerta to move up from his acting position to become the FAA's next permanent administrator.
Ben Weinryb Grohsgal contributed to the research and writing for this column. He is a research assistant at the Ash Center for Democratic Governance and Innovation and a student in the master's in public policy program at the Harvard Kennedy School.
