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Hearing Of The Transportation, Housing And Urban Development, And Related Agencies Subcommittee Of The House Appropriations Committee - Federal Aviation Administration FY 2010 Budget And Next Generation Air Transportation System

Chaired By: Rep. John Olver

Witnesses: Randolph Babbitt, Administrator, Federal Aviation Administration

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REP. JOHN OLVER (D-MA): Okay, the hearing will come to order. I'd like to welcome the new FAA Administrator, Randolph Babbitt, to the subcommittee. Congratulations on your swearing in. Confirmation, I guess, but that comes before the swearing in. But, so, both of them, in any case, you've only been on job just a little over two weeks. But you're well respected, with a long history in the aviation industry. You're going to need that.

It's a pleasure to have you before the subcommittee to testify on the FAA's fiscal year 2010 budget request, give us an update on the status of the NextGeneration air traffic system, so called NextGen. FAA is requesting a $15.9 billion in -- $15.9 billion budget, which is a three percent increase over the fiscal year '09 enacted level. This request recognizes that our nation faces many aviation challenges driven by the conflict between explosive passenger growth and aging infrastructure. The aviation industry's declining performance record is just one symptom of this overburdened interface.

For this reason, I am pleased that your budget rejects the previous administration's practice of severely under funding the Airport Improvement Program, the AIP program, and request three and a half billion, which is at or slightly above the '09 enacted level. Over 3,400 eligible airports rely on these funds to invest in safety capacity, noise mitigation and efficiency. Additionally, I appreciate the important steps you've taken to improve morale within the FAA's workforce. The first step was committing to enter mediation with the air traffic controllers and move beyond the imposed work rules of the previous administration. The budget reinforces this commitment by requesting funding to hire almost 250 additional controllers and safety and technical staff.

The subcommittee will carefully examine whether the resources requested in the budget are adequate to meet the agency's operational and safety requirements. I also look forward to discussing the budget's request of $865 million for the NextGen aviation system. This program will replace our antiquated air traffic control system. This multi-year, multi-billion dollar initiative is clearly a complex management undertaking. But I believe it's a vital to reducing congestion, improving safety, producing aviation's environmental footprint. So, I'm looking forward, looking to you for suggestions on how this subcommittee can expedite NextGen's deployment timeline. The modernization of the world's most sophisticated, yet outdated air traffic control system is a daunting challenge. It will require significant resources.

Resources is the term, euphemistic term that we have around here for money. It will require diligent management and oversight on the part of the administrator and the FAA's senior leadership. And it will require careful implementation and coordination among the agency safety operational and research lines of business, and that's why I see before me this array of important operational people that are involved in this.

We look to each of you to ensure that the program stays on schedule, and within its planned budget. Finally, I hope to hear of your vision for the development of renewable jet fuels. As you know, the aviation industry is responsible for three percent of our greenhouse gas emissions. That's expected to go up to maybe five percent within a 20 year period. Additionally, fuel costs now represent the largest portion of airline's operating cost, about 30 percent. Developing a renewable fuel that meets aviation's unique operating requirements will be vital to an industry looking to provide affordable service in a carbon constrained economy.

And before I recognize our ranking member, Tom Latham, I'd like to acknowledge some of the members of your leadership team who have joined you at the witness table. We have Hank Krakowski, your Chief Operating Officer, who is a fellow pilot, previously safety executive at United Airlines. And you are, of course, as operating, Chief Operating Officer, are in charge of making all the work forces function properly in this process, I think, among other things. We have Margaret Gilligan, the Associate Administrator for Aviation Safety. We are always very interested in safety, and Peggy Gilligan is a 29 year veteran of the FAA, former chief of staff to four different FAA administrators.

We have Victoria Cox, Senior Vice President for NextGen and Operations Planning. That is a really daunting task. Veteran of research and development programs at DOD, and NASA. And last, Nancy LoBue, who is the Deputy Assistant Administrator for Aviation Policy and environment, planning and environment. And there of course, is the area of jet fuels, alternative jet fuels. With that, I'd like to turn it over to Mr. Latham for his comments, his opening comments.

REP. TOM LATHAM (R-IA): Thank you, Mr. Chairman, and good morning everyone on the panel here. Good to have you. It's going to be interesting hearing, I think. And Mr. Babbitt, you've had a lot of committees to address in your first few weeks on the job. And I appreciate your willingness to accommodate us, and as you continue to work in your role, and thank you very much for coming by and having the opportunity to visit. I appreciate that very much.

I look forward to working with you in the months ahead, and want to make sure that we help usher the transformation of our national air space system in the most expeditious and effective way possible. I do have a few issues about, which we hope to have dialogue with today. And they won't be a surprise probably to you or any of your great staff. One area, of course, is the strategic plan for hiring new controllers, and the succession planning that will ensure that able and adequate controller services are always available for the public. There are very few agencies in the government that are engaged in as large a hiring exercise as the FAA. And I think that all of us want to make sure that turns out to be successful.

I'll have a few questions about the staffing increases for the controllers, particularly in light of the renegotiation of the union contract. And the additional staff needed to oversee aviation safety. Clearly your efforts in this area will be key to our success, or your success in your tenure as administrator. I think like everyone else I'm disappointed at the pace of the implementation of the NextGen project, and just as I know the chairman is also. And I'm sure many other people have real concerns also. The FAA perhaps, raise expectations unrealistically in the beginning.

But now I think it's time to reassess and determine how it can best reap near and mid term benefits rather than waiting until 2020, which is the latest estimate for completion. And that delay probably also means higher cost, and I'm sure the original estimate of $14 billion dollars maybe is not, no longer valid.

Whether it's the NextGen, the upgrading of legacy systems or the placement controllers, I'm concerned about the relative treatment of smaller airports, in compared to large airports.

It's probably not a big surprise to anyone. It's important to me that investments in and deployments of capital, human resources recognize that rural economies and towns depend on the air space system just as much as our urban counterparts. Just, you must have a special position down there. I just wanted to point out as a new member of this subcommittee, I've been a bit overwhelmed by the sheer number of acronyms and abbreviations in your agency. Again, you must have an acronym czar down there or something. But you hold the record, probably in government. Last count she had 527 distinct acronyms and abbreviations to describe various aspects. What do you pay this person? It's just incredible. Anyway, with that, Mr. Chairman, I look forward to the testimony, and I yield back.

REP. OLVER: Thank you, Mr. Latham.

REP. OLVER: Mr. Babbitt, your complete written statement will be included in the record. If you could give oral summary in around five minutes, then we can move quickly to questions, and we intend to be out of here within a two hour period.

MR. RANDOLPH BABBITT: Sure. All right, sir. Well, good morning again, chairman Olver, ranking member Latham, and other distinguished members of this sub committee. It's a pleasure to be able to appear before you this morning to discuss the administration's budget request for fiscal year 2010. And I want you to know that I certainly respect and appreciate the important role in this budget process. And I look forward to working with you in the short term and for years to come. Because aviation safety is my primary duty, and I don't take that charge lightly, let me start by saying that this is a budget that enables the FAA to pursue its paramount mission, advancing operational safety throughout the national air space system.

That being said, I think we're all aware that you don't have to turn too many pages in the newspaper to understand that we find ourselves in a very complicated financial time. The airlines aren't excluded in that. I also want to stress that this is a fiscally responsible request that will help us deliver on all of our performance goals. Our fiscal 2010 budget request of $15.9 billion maintains safety and capacity gains while providing investments to meet our future system demands. We've made commitments to you, to the president, and to the taxpayer about controller and safety staffing, aviation research, as well as investments in infrastructure, airports and NextGen.

This budget will help us meet those commitments, and while we deliver the aviation system of the future. And if you will, I'll take the liberty here to detail some of the larger numbers in our operations submission, the fiscal 2010 request of $9.3 billion includes $7.3 for the air traffic organization, or for those who like acronyms, ATO, the $1.2 billion for aviation safety, and the balance for support as well as commercial space transportation. The equation for us is simple; run the system safely, and look to the future, through NextGen and commercial space investments. You'll be pleased to know that the budget also funds the hiring of the additional air traffic controllers, the aviation safety staff, and the NextGen staff that we're going to need to implement as well. I'd also like to discuss our ten year strategy for the air traffic control workforce. It calls for a net increase of 107 controllers in fiscal year 2010.

We're expected to hire more than 1,700 controllers over the next year to reach that goal, obviously considering retirements. And most importantly, or more importantly, our controller workforce strategy allows us to put the right number of trained controllers in the right place at the right time. In the last four years, the FAA has hired more than 5,600 new air traffic controllers. That exceeded the original number by 40 percent. And flying as much as you and I do, knowing that the government is taking steps to match the number of controllers with traffic volume and workload is reassuring. I've heard that there are areas where we don't have the balance right.

We had plans to make sure that we continue to bring these new employees on board. And we hope to carefully manage that process to ensure that our trainee program is accomplished in a timely manner, and that they are hired in places and we can afford them where we need them. I also want to assure you that I intend to consider the staffing and training concerns of our controller workforce. They're truly out on the front lines. I respect their hard work and their input. And I want you to know that we're hiring controllers now faster than we ever have. We're providing them with quality training. They're making the grade, and that will help us make the grade with them. Let me diverge for a second, and address labor stability just for a second.

As you know, further talks are underway with the air traffic controllers. I'm fairly optimistic. The talks are proceeding well. Both sides are at the table and reporting good progress. I think we'll reach an agreement with them. My background would indicate to me that the best agreements are reached when everybody involved at the table wants an agreement, and I believe that's the case now. We certainly have everybody there, and there's a good atmosphere that is overarching those talks. As far as labor stability is concerned, I want you to know too that I'm not just talking about getting our largest union, NAFTA (ph) squared away.

I'm also talking about the other seven unions that we have. And I'm also talking about the other 15,000 employees that work at the FAA that aren't part of a union. We've got to restore the confidence in our entire workforce. We need to make sure that we all have accountability and credibility within that workforce across the board. And it's my goal to see that all 45,000 employees of the FAA move with confidence in their skills and pride in their work. We've got to get that restored. With all of that as context, I appreciate that you're, the help that you're providing as we make headway with the inspector workforce as well.

Result of staffing additions in '07 through '09, we now have 4,245 safety inspectors. This FY 2010 request maintains the increased level while adding aviation safety staffing by 30 additional positions. The requested staffing increase is consistent with the updated aviation safety workforce plan. Recognizing that the FAA's future workforce may be very different than it is today, last year we engaged the National Academy of Public Administration to help us identify the skills needed to accomplish the transition to NextGen. To respond to their recommendations, the FAA included seven million dollars to hiring 104 new staff in the ATO, the air traffic organization operational service units to support the development and deployment of NextGen and its suite of new applications.

These additional staff will help identify transition requirements, develop procedures, coordinate with the industry and stakeholders, and perform operational impact analysis. From a facilities and equipment, this budget maintains the capacity and safety of our national air space system, while keeping our comprehensive modernization and transformation efforts on track. The request of $2.9 billion does represent a healthy increase of 6.7 (percent ?) above FY 09. The bulk of that investment, slightly above 2 billion, will be spent in legacy areas. And in many ways this is part of the current system infrastructure. It includes things like power systems, information technology, navigation aides and weather systems.

Looking to the future, the NextGen portfolio for F&E grows by $790 million. That's a 24 percent increase. NextGen transformational programs, such as ADSB, systemwide information management, data communications, national air space voice switch, those are funded at 372 million. Approximately $392 million is provided for NextGen demonstration system development and enabling activities. Our research and development funding request is a 5.3 percent increase. This year, we're increasing our emphasis on fire safety, propulsion, fuel systems, advance materials, as well as aging aircraft. We're requesting a 15 percent increase for our R&D NextGen portfolio, to about $65 million.

This will support the enhanced NextGen research and development efforts in the areas of air to ground integration, weather information directly into the cockpit, and environmental research for aircraft technologies, fuels and metrics. Our request also takes care of airports, we believe, which this administration recognizes as an essential part of the aviation system infrastructure. As you know, the design, structural integrity, and ongoing maintenance have a direct impact on safety, capacity and efficiency. In the FY 2010 request of $3.5 billion will allow us to continue our focus on safety related development projects, including runway safety area improvements, runway incursion reduction, aviation safety management, and improving infrastructure conditions. In closing, I'd like to emphasize that our FY 2010 budget provides a total of $865 million in support of NextGen. That's a 24 percent increase.

Step by step, procedure by procedure, we are increasing the integration between aircraft and ground based technologies.

Both the secretary and I have made the delivery of NextGen one of our highest priorities. And I'll be looking hard at every opportunity that we can find to accelerate this transformation and the efficiency and environmental benefits it will bring. But I must underscore that the drive before NextGen will find only success through collaboration. We're bringing all the parties to the table, our employees, the industry, and the manufactures to make sure that our focus remains where it belongs. The tragic accidents over the past few months are ever-present reminders that we must maintain our vigilance. My testimony this morning is a commitment that we intend to do just that. So with that, I thank you. In closing, I and my staff here will look forward to any questions. And I appreciate the consideration for letting me bring a team with me, for recognizing my short tenure.

REP. OLVER: Under those circumstances, it will certainly allow you to use whoever it is on the staff that really needs to answer the question that is being brought up as this goes on. Our usual procedure is to have rounds of five minute questioning, but first myself, and then the ranking member, and then the other members who are present, or as they come in. Let me just start sort of kicking off some words that you said earlier. And I won't quote them. But this issue of the NextGen, this is an enormous undertaking. Has the FAA involved its controller, its employees, its inspectors, its safety technicians and such? Have you involved them in the planning at this stage, or what? Can you give me some sense of that?

MR. BABBITT: Yes, sir. Let me speak to that, and then I might ask Vicki to step in, or Hank. We haven't involved them to the extent that I would be comfortable with at this point. I think there has been, I think I can best describe it as a distraction with some labor concerns. I hope to put those concerns behind us with this new agreement that we're negotiating with the controllers. And I hope that both of us can focus on getting their participation. We certainly have had a lot of other components within the FAA deeply involved. But we are sorely missing the involvement of the controllers. And I do hope to engage them.

REP. OLVER: Well, given the earlier words that you used about that being good form, I'm willing to accept at this stage that that will be something that will be worked on, that you will make an effort to engage those people who are very much affected by what it is that goes on. So, we'll pass that opportunity for Hank and Vicki to weigh in at this point. That's probably the best way to deal with it. My staff tells me that NextGen program is expected to cost something in excess of 20 million dollars.

I've long since forgotten that it was 14 through the year 2025, which implies that there is a timeline for the complete implementation of NextGen somewhere around 2025. When Secretary LaHood was in before us, three or four weeks ago, I had made the comment, and I have to sort of qualify the comment. When I first served on this subcommittee, the key issues, the key controversies in new equipment and so on, was STARS and Common Arts (ph) and so forth. And that argument went on for quite a while, probably through 2002. So, probably we weren't really talking about NextGen until about 2003 and began.

And I think, looking back at the budgets the first time, that there are things assigned in the budgets. I have a little chart here. The first time that there was assigned money is actually 2007. But there was considerable talk before that time about the deficiencies of the present system, the problems of the present system, and the benefits, what we really needed to do. So I had, I had said to the, I thought I was using, that we were planning to implement this by 2020. And I think I used 2020. I'd have to go back and look at their, the transcripts which show that exactly. I don't think I used 2025. And I said, we've got to do this, to the secretary, at that time.

And he said he agreed. Well, so now I'm left with the question of how, whether I was completely misunderstanding. I don't think he was particularly. He is very careful about the words that he uses. But I know you have an implementation plan that came before us, that was issued in January of 09. You referred to it in your testimony. It was very careful testimony about all the different things, all the problems, all the needs and requirements and so forth in your written testimony about why we're doing this and what the benefits that we hope to accrue.

But I think that that plan actually is a sort of a mid term plan that gets us to about 2018. Now, I was, had in my mind that we ought to be in full implementation of NextGen in maybe by 2016 or 17 at the latest. So I, I'm out of sync here. I'm impatient, but that's in part because I'm older than everybody else at the table, at this side or that side of the table. And I had hoped to see NextGen in place at some point along the way. So, would you like to, are we moving, are you moving this? You said you would like to move it faster. What are you, what's your, what is your sense of a timeline for realistically getting NextGen in place? And then we'll go from there.

MR. BABBITT: All right. It's a very fair question. And one of the things that we're doing right now, we're in the process of, there's an environment actually, RTCA is a company that is allowed to bring in non profit. It's allowed to bring in all the parties within our industry. We have tasked them with brining together the users, manufacturers, FAA. Really looking at NextGen for the single purpose of what are the priorities that the industry wants? We have two sides to this equation. We have all the technical equipment. And that --

REP. OLVER: And the 20 billion is, that estimate is for the work that has to be done by the agency.

MR. BABBITT: Yes sir.

REP. OLVER: And then there's another estimate of 20 billion as to what, which may be inflated.

MR. BABBITT: It could be. The other thing I would --

REP. OLVER: Actually be done by the industry.

MR. BABBITT: Let me finish the timeline. But I want to go back to that budget. What we're doing is finding the areas. We know, for example, that many of the carriers have already put some of the equipment on board. They're capable of shooting these required navigation performance approaches. Many of them have a Arnav (ph), which is a very sophisticated navigation capability. They already have this equipment. We simply need to design the procedures so they can use them. So we can take, they're a little more complicated than that. But the essence of this is that we're going to look back and see what they have, what we have.

What could we implement right now? I think what we drew out originally, and I'll be corrected if I'm wrong, is more of a linear implementation. And we put everything on the same plane. We were going to put all the parts in. But some of the things don't bring us the savings. For example, in some of the big congested areas. We get a much bigger benefit, for example, by redesigning air space, implementing some of the technology, then we would by shifting over to voiceless communications.

So, we want the voiceless communications. It will improve safety. But that's not necessarily something we should do first, because we won't get the benefit for it at that point. The other thing that I, I want to mention in the budgeting is that this budget, while it might seem expensive, remember that we have to run systems in parallel.

We're going to be introducing the very first leg of implementation next June, which you'll be happy to know is actually going live here shortly. And we're going to begin to use the first in-route modernization technique. But we have to run a parallel system, you know? We're not going to shut the old system down and turn on the new one, and really hope that it works well. We have every, every highest degree of confidence that it will. But we are going to back it up with our other systems for a while. So, there is some overlap in that area. Hank, you want to --

REP. OLVER: I'm, I'm way out of time. But that's not your fault. It's my fault. In just finishing, and then I will let my ranking member have similar time. But there are just so many moving parts to this. Your budget for this, this year, is 865 billion. It's divided into more than 25 different line items that I suspect cover topics in every one of people's here and some other people who have also managerial, I suspect, managerial control. So, the coordination of this, not running in parallel, or not running in, what is it, not running in series, but in parallel to get out the best that you can by this, and move as quickly as possible, is an incredibly difficult and complicated task for all of you. And I just commend you for undertaking it. I'll stop there, and then come back. Because I'm going to try to understand this system a little bit better.

MR. BABBITT: All right, sir.

REP. OLVER: Mr. Latham.

REP. LATHAM: Thank you, Mr. Chairman. Excuse me. I am told that a number of the NextGen components, and just kind of follow up what the chairman was visiting about. Like the NextGeneration enabled weather program, or the voice switch, to name a couple. Their completion dates have slipped by at least a year, two years, three years. And that always costs more money, obviously when that happens. Just to get a handle on it, is the $20 billion—can you give us an estimate of what you actually expect this to cost?

MR. BABBITT: If you don't mind, I'll defer to Hank. They've worked with these budget numbers a lot more closely than I have. And I'll give it also to Vicky for some granularity.

One thing about the timeline I'd like to talk about, though, and this is important. We can't think of this as strictly a United States only system. Our airplanes fly in our border air traffic air space. Their airplanes fly in ours, so what we're embarking on is actually truly an international effort, so there's an awful lot of work here to get this right, and we have to be so careful because we're going to be implementing this system in layers in a live system with real airplanes and people in them, so when you think about accelerating it you have to think about it very, very carefully. Vicky.

MS. COX: Thank you. If I could go to the question of the investment delays. Actually, we have transformational programs. Automatic dependent surveillance broadcasts is one. The program that you mentioned, the NextGen network enable weather and the NAS voice switch are transformational programs, and of the five current transformational programs, only two have gone to an initial investment decision. So they are not delayed.

In fact, ADSB and system-wide information management are the two programs that have awarded contracts and are actually proceeding, and ADSB achieved its in-service decision for broadcast services just 14 months after contract award, so the program has been performing very well.

Our other programs, because we have not even gone to initial investment decision; that means that we have not completed the investment analyses that are necessary for us to move forward. It's very difficult to come up with a very accurate number for the total cost of the system because these five, and next year six, transformational programs are going to be the bulk of the cost of the system going forward, so our estimate of $15 to $20 billion, we think it's a good estimate out to the 2025 timeframe. But that estimate will get better as we complete the detailed engineering studies and prototyping and development and demonstrations that are necessary for us to truly understand where we're going in a 2025 timeframe with this program.

REP. LATHAM: All right, so you really can't -- the problem we have is we have to deal with real numbers here rather than guessing out there, but that's minor. One thing that concerns me is even after certification and approval of technologies and ground systems procedure design criteria have to be set by the FAA aviation systems standards, and according to your agency, as many as 7,200 procedures remain to be developed and the GAO has identified this as one of the largest obstacles for the timely implementation of the NextGen.

What, if anything, do you think you can do to streamline activities and the NextGen workload without compromising safety and one question, too, is there any push back from the industry as far as the costs or the implementation of the NextGen?

MR. BABBITT: I think the biggest concern of the industry, and it's a fair one, is we don't want to do the equipage unless we know -- we're not going to put the kind of money into equipment unless we know we can, in fact, use it and it's a little bit of, I think the responsibility falls on us, as it rightly should, but we need to be credible when we say we're going to have a system, and if you put equipment in your airplane by 2010, you're going to be able to go in and out of airports using this equipment. That's a responsibility that we're going to have to accept. If we make that statement, then we need to be sure that we can do that.

With regard to the high number of procedures, that's a very valid point and there's a pretty good history in this industry. We have a number of areas where we have broadened our ability to monitor and oversee and do various programs by authorizing other people -- airlines are a good example. The FAA, I wouldn't even want to guess how many inspectors that we would have to have to check all of the pilots in this country or all of the mechanics in this country, so what we do, we take and allow the carriers to send and recommend their bright senior pilots and we certify them, we oversee them, and we monitor them and allow them to do some checking.

I'm really asking that we look into something similar. We do the same, exact thing for certification of airlines. We have provisions out there-there are companies that meet very strict FAA criteria that are allowed to essentially put together the certification package for an airline, saving the FAA an enormous amount of time. We sign off on it; we review it, but we don't do all of the legwork.

That's something we're going to have to look at here. There are companies today that can design very sophisticated approaches. We acknowledge that we don't have the manpower and we have to ask ourselves, "Does it make sense to ramp up to build, you know, 7,000 procedures with a lot of staff and once they're built, we don't need them?" And I don't know that that's the wisest decision, but we'll have to look at it, and that's something that we may say, "Look, it would be worth our while to allow companies that are qualified and competent to design some of these approaches," and we would certify their work as opposed to doing the work.

REP. LATHAM: Thank you, Mr. Chairman.

REP. OLVER: Thank you very much and welcome, Mr. Babbitt. I want to, first of all, congratulate you on making those comments about making sure we don't move to technology if they're not going to be utilized.

I was a school board member one time and when we moved to computers way back in the late '60s, early '70s, and they sat there for a long time because we forgot the training component to it. And so, let me ask you about integrating and the staff and making sure that the training that's, you know, as we move on and if you have to refer to Mrs. Cox, how are we going to move on that because I know Mrs. Cox mentioned not a pilot project, but demonstration projects. How far are we from that as we move on? Either yourself or Mrs. Cox.

MS. COX: Thank you. Well, we recognize that training is an integral part of the NextGen development and deployment. Training is built into our major acquisition programs and we never introduce a new program, just as we're introducing the En Route Automation Modernization system, ERAM, today. Training is ongoing now with automatic dependence surveillance broadcast training is an integral part of the delivery and deployment of that capability, just as it will be with all of our capabilities.

We are looking at how we integrate a training plan because we are going to be delivering so many of these new capabilities in a very shortened timeframe. We're working with our new training vice president in the air traffic organization to develop the appropriate approach to that.

REP. OLVER: Okay. You know, I've been working with a junior college for about three years to try to work with the controllers. We've had some difficulty, you know, getting recognized there, and I know that, you know, some of your staff has, you know, air controllers were picked, you know, from, I guess, from the field, you know, with no training whatsoever for training, and so I was concerned in terms of what the, you know, it would make sense that you would start looking at some facilities, you know, for training for the future.

Let me be a little more specific on the demonstration, once again. Is it best to approach some of these areas to look in that specific demonstration projects or how do we—we don't transfer real quickly from one to the other, but how do we make that happen? Have we come up with some conclusions there?

MS. COX: Oh, we're working a number of demonstration projects in the field now, particularly focusing on procedures that take advantage of capability existing in the aircraft today.

We're working with active controllers. We can't put a demonstration in place without working with the controller workforce.

We've had a lot of success in several areas. LAX is a prime example of developing procedures, optimized profile descents into LAX. Today about half of the arrivals in LAX take advantage of NextGen procedures called Controlled Descent Approaches and are saving a lot of fuel there. The controller workforce is very supportive of those. There are 400 flights a day that utilize that. We're looking at expanding that and working in other airports in areas around the country for that.

REP. LATHAM: Yeah, we want, as the chairman indicated, we want to move quicker on this. What do you need from us in order to make that happen in some of these areas? I know the variety of six or eight areas that you have identified in moving forward, what do we need to do to, you know --

MS. COX: So we are looking at areas that we can advance. The procedures area is one. We need an integrated national approach to both air space design, putting in place routes that take advantage of a satellite-based navigation capability in the aircraft today, approach procedures that allow us to get higher capacity at our most congested airports, and we're looking for industry to make the recommendations to the task force that Mr. Babbitt referenced.

I will be getting the recommendations in August about which airports they would like for us to concentrate on and prioritize our efforts. We're looking at acquisition programs that we may be able to significantly advance in terms of delivery timeline without introducing significant risk to the programs. Some of that effort, you know, we're looking at what additional funding would be required to get us to that because the funding requests that we have in place today goes to the implementation plan for NextGen that was published in January.

REP. LATHAM: Quickly, as you look at that, how do you view rural America in terms of this whole process? Can they play a major role in that implementation?

MR. BABBITT: Oh, absolutely, and let me add, I mean, that's one of the key components that I think we may have overlooked. We focus on the key congestion areas and what NextGen will bring us, if we just--for example, we're focused on, you know, probably the top 20 airports. We have commercial service into another roughly 400 airports. There's thousands of other airports in this country and a lot of our commerce depends on getting in and out of those airports and currently, today, we need equipment on the ground.

If we're going to have an approach facility into any airport, currently it's required that we put facilities on the ground, guidance to give the airplanes horizontal and vertical guidance to runways. With NextGen, all of that comes from space and so all we need to do is design the approaches, and I have asked that we should consider very quickly, at a minimum, we should be able to design approaches that would give visual, you know, horizontal and vertical guidance to the primary prevailing wind runway of the thousand next biggest airports in the country.

If nothing else, the same people that are going in there under visual conditions will be able to go in there under safer visual conditions, and the next step would be to give them an actual approach procedure in there so that when the weather is not good they have an approach to shoot into those airports, and this is done -- the only cost of doing this is designing the approach. We need no facilities. The equipment is in the airplane and the navigation capability comes from the sky and the satellite arrays, of course.

REP. LATHAM: Thank you.

REP. LA TOURETTE: Thank you, Mr. Chairman. Mr. Chairman, in your opening remarks you mentioned renewable jet fuels, and I just—it hasn't come in testimony today, but my understanding is the Air Force is changing their RFP on jet fuel to take out the word "petroleum" and to permit renewable competitors, and if the Chairman has a minute, Ms. Kaptur and I would be happy to take the chairman to Ohio, where we're growing algae that's being turned into jet fuel. We used to grow algae by mistake in Ohio, and now we're growing it on purpose for that specific purpose.

Mr. Administrator, I want to congratulate the president of the United States, Secretary LaHood, and now you, for the approach that's being taken with the air traffic controllers. I've been a pretty vocal critic of the previous administrator and administration when it came to imposing a contract. I don't think you have a happy workforce when people don't get their -- and believe that their contract has been reached fairly. Mr. Forrey is a constituent of mine and he reports that you're down two or three or four issues, and I congratulate you on that.

MR. BABBITT: Thank you.

REP. LA TOURETTE: On the issue of air traffic controllers, though, now that I've thanked you, I'm going to spank you. The Ohio congressional delegation sent a letter earlier this year asking that there be a moratorium on some of the realignments relative to air traffic control facilities. We got a nice letter back from the acting administrator saying that the review process is going to be transparent. We hear that a lot this year, transparent.

But, despite that, and despite the fact that in the FAA reauthorization bill it's passed the house and one day will pass the senate, has a review process. It's my understanding that there's a continuation to moving forward on the realignment of air control facilities and services in Ohio without the stakeholder input and some of the things that Mr. Oberstar's bill talks about. And so, I guess my question is -- and I should also mention such notables when they served in the United States Congress as Ray LaHood, Rahm Emanuel and Barack Obama, all supported the notion endorsed by the Inspector General, so just would ask you where you fall down?

MR. BABBITT: Sure. We find ourselves in an odd situation. You know, on the one hand, we want to do everything possible. We talk about the amount of money that we're spending towards NextGen and the implementation of that NextGen. That also contemplates a different deployment of the workforce and how we deploy the workforce.

An example: We need to be somewhat flexible and scalable, and the example that I've used recently and I think everyone is aware, Pittsburgh Airport came to us with a rather ambitious forecast. One of their primary constituent airlines there forecast flight operations up to 400 flights a day, so we built a very robust air traffic control facility there, staffed it completely.

But because of a corporate realignment, instead of 400 flights a day, I think they operate about 35 flights a day, so we now have a giant facility there and a lot of people there that simply aren't needed. Any other business in the world, if this was a company that you and I owned, we wouldn't leave the people in the empty factory.

REP. LA TOURETTE: Right.

MR. BABBITT: So, how we realign those people -- we can do these things digitally today. For example, it doesn't surprise anyone. We have events that happen in the country: Super Bowl would be a good example, where air traffic just blossoms for two weeks, but we are forced to fly literally hundreds of controllers into some of these facilities, put them up in hotel rooms to handle the overload.

REP. LA TOURETTE: Right.

MR. BABBITT: But the fact is, under the NextGen, we can do this digitally. We don't have to sit under the airplanes we control.

REP. LA TOURETTE: Okay.

MR. BABBITT: For example, we're currently controlling all the air traffic in Afghanistan from the Miami center, so that's part of the issue.

REP. LA TOURETTE: Okay. I understand that. I think I'm just—my observation would be, and my request to you would be, is that Inspector General has endorsed it, it's in H.R. 915. It calls for stakeholder input, and I understand you have -- and you really don't impress me, a guy from Cleveland when you talk about Pittsburgh. I just wanted to tell you.

MR. BABBITT: Okay.

REP. LA TOURETTE: But we're just looking for stakeholder input.

MR. BABBITT: Sure. And, hopefully, to round that out, hopefully when we get the NextGen or, I'm sorry, the controller contract, we will get their input, and I would welcome their input into how we move with these facilities.

REP. LA TOURETTE: I'd appreciate that and, while the yellow light's on, I just want to bring up a parochial issue.

A former member of this committee, Lou Stokes, served 35 years and now he's representing a bunch of folks that want to put some windmills near Lake Erie in a place called Euclid, Ohio, which is in Marcia Fudge's district. And the FAA has issued a Notice of Presumed Hazard, and we're arguing about windmills being 450, the FAA has indicated that they can be 403. The potential impact is on Burke Lakefront Airport in the city of Cleveland, and I would just ask you and your staff to take a look at that and if we could have a dialogue about whether or not we can get the extra 47 feet for our windmills so we can produce electricity.

MR. BABBITT: Yes, sir. I'm very familiar with that regime and Part 77. I've actually done some work there myself, so absolutely, we'll get back to you and coordinate.

REP. LA TOURETTE: I thank you.

REP. OLVER: Ms. Kilpatrick.

REP. KILPATRICK: Thank you, Mr. Chairman. Thank you very much, Mr. Administrator and team. Good to see you this morning. Former Administrator Garvey has been appointed to continue the negotiation. In my own town of Detroit and surrounding areas -- we have a mold problem in my new airport, number one. I want you to get back with me on the status of that. They say it's one way. I want to hear from you all on the mold in the new Detroit Metro Towers for the controllers.

Mr. Administrator, you mentioned earlier that you've hired 5,500 controllers over the last four years. In our budget I think it's 1,702, or something like that, that we're asking for. I'm worried about the safety and the training. When I was on this committee before, they were retiring at a large rate, and I know that's why you have a big influx of new employees. Are we safe? Is the training going well?

MR. BABBITT: Yes, we are. I think there's a little bit of a misunderstanding, and I'm going to let Hank expand a great deal on this because he knows a lot more, but one of the things I want to assure people, that we certainly are safe. There's a misunderstanding when people say, "Well, there were trainees in the tower."

Well, everybody starts somewhere. Everyone picks up a microphone and speaks for the first time once, but when they do that, they have a qualified controller with them. They're being mentored and monitored and so forth, so, yes, the system is safe.

We did have the issue that a lot of the controllers were hired in a very short time span, which is unusual in business because those people are all about the same age, and of course, you know, they all age together, and we're seeing a big retirement bubble that we're faced with. And so, Hank, you may want to expand on how we're dealing with that and—

MR. RAKOWSKI: Yes, indeed. I can tell you that a year and a half ago I think we were in quite a bit of trouble trying to keep up with the system, but I think we're over the hump right now, and let me give you some statistics. Right now we're seeing controller retirements lower by about 35 percent; perhaps it's a function of the economy right now, but the controllers are not retiring as fast, so that adds some stability to the system.

The ratio of new people, new hires, in the system right now is at 26 percent, and that's kind of like a 40-year average of what we've always had. We've had it as high as 52 percent at one point right after the PATCO strike.

The other thing that's different is how we're training. Vicky alluded to a new Vice President of Technical Training. This is a new position just filled over the last two months. I will tell you that when I came into FAA a year and a half ago, coming from the airline industry, like Randy, where we were used to high fidelity flight simulators and distant learning and electronic training techniques, we were still training controllers in very old fashioned ways.

REP. KILPATRICK: Antiquated.

MR. RAKOWSKI: Antiquated. Absolutely. So we are in the process of acquiring 24 high fidelity control tower simulators; about half of those are deployed right now. We'll get the rest of them out this year.

REP. KILPATRICK: Are they in the '10 budget?

MR. RAKOWSKI: Yes, they're already budgeted. Yeah. But to a budget question, we've asked Mr. Sean Clark, our new Vice President of Technical Training, who comes to us from industry, to take a look at everything we do with training because we want to be leading edge, not just training, but people for the current system that they have to operate. We do have to get them ready to train NextGen as it comes on line, and as we sit here right now I don't think my training organization is ready yet. That's why we brought Mr. Clark on.

REP. KILPATRICK: Okay. I'm convinced that you're moving in the right direction. I think you have a yeoman's job to do yet, though, to get them all trained.

In reading the briefing for the committee, it said that the traffic control system would be paid for by direct user charges levied on users of the system. Is that revenue adequate? Which users are we talking about? How much do you hope to gain from that?

MR. RAKOWSKI: Yeah. Having inherited that phrase, let me talk to it a bit. One of the problems that we have in this industry, and it's been around a long time, and that is we have a fixed budget that is established and you do that for us and help. At the other side of it, where the money comes from is highly variable, and we saw a downturn in the aviation industry.

Traffic is off 15, 18 per cent and when we tax those tickets, obviously, our revenue goes right down with it. Ironically, the lower fares get, the lower the monies that we collect in fees get, and so we're suffering the double whammy of airlines drastically reducing fares to try and keep traffic and, in fact, the reality today even reducing traffic.

The other side of that, not nearly as big an impact, but we collect and tax fuel up in general aviation, we tax the weigh bills in the cargo world; all of those are going the wrong way for us, so when fuel got very expensive, some of that general aviation revenue dropped.

REP. KILPATRICK: It just came on, but Mr. Chairman, one last point. Because of that, and I think I woke up this morning, if the airline industry is about to come to Congress and ask for a bailout like autos -- I'm from auto country, please don't do that. I mean, I don't know if that's the right answer and your last comment. Is that how we're moving?

MR. RAKOWSKI: You know, that would be a different group. I mean, that wouldn't be our issue. I mean, I think it's important how we move our goods and services around, and the airlines are a key part of that, but that's not an FAA direct issue.

REP. KILPATRICK: Thank you, Mr. Chairman. I apologize that I was not here earlier. I had another subcommittee I had to meet with. In FY 2010, FAA plans to identify a second location to demonstrate the 3-D path arrival management tool which is designed to enhance arrival efficiency and reduce fuel consumption. We've already talked about that, and emissions.

It's my understanding that Bush-Houston Intercontinental Airport was the original site selected for this demonstration, but the FAA moved the demonstration to another location because of other projects going on at Houston at the time. Is Houston being selected for the second demonstration location? If not, why not?

MR. BABBITT: I'm going to plead a little ignorance to that one and get a little staff report here, if I may.

MS. : Yeah, as you know, there was a lot going on in the Houston area with the air space redesign that was in place then and we moved 3-D path arrival management to Denver, where we have been doing the demonstrations. Once we have gained confidence that—the demonstrations are about gaining confidence around the process. We'll be doing an assessment for other areas that we can move that to, and certainly Houston will be an area that we will look at in making that determination.

MR. : And if I may add, we are deploying ADSB in the Gulf of Mexico controlled from Houston for the helicopters, which is a real leading age NextGen capability, which will be coming on line this year.

REP. KILPATRICK: Thank you, Mr. Chairman. That's all I have.

REP. : Thank you, Mr. Chairman. Good morning. Congratulations.

MR. BABBITT: Thank you, sir.

REP. : I join my colleagues for your work with the air traffic controllers. I think it's the right thing to do. On the wildlife hazard mitigation, at the suggestion of Brendon Kenney about five years ago, we -- I think it was, paid about $800,000 to do a study, and I'm sure that study is there somewhere. You may want to dust it off and see what that study shows because obviously birds and plane engines sucking up birds is a problem.

MR. BABBITT: Yes, sir.

REP. : But that study is there so you may use that to implement whatever needs to be implemented.

Let's see, we recently went through an inverter -- (sic) -- box to go from analog to DH (sic) -- and it's been one hell of an experience because we've been on, we've been off. Personally, for me, I think it's two converter boxes, but we're working, you know, it's not that important because it only deals with entertainment.

But NextGen deals with my life, so it's very important, and that's why I guess you sense that members are concerned that it comes on time and, hopefully, not too much above budget. But you made a comment and I—the airlines are giving some push back because of credibility, whether or not the system is going to be utilized. It kind of reminds me about the converter box. You know, I'm not going to buy the converter box because I didn't know if it's going to work.

I sat here for a number of hours dealing with STARS, the air traffic controllers' came in and said the mouse was not the type that gave them the efficiency, that the screen was not what would give them the efficiency, and I'm saying, What the hell am I doing here worried about a -- you know, and those concerns are being voiced today.

I have to tell you, the airline industry is voicing—I know there's some pilot projects that you have out there. The air traffic controllers, hopefully, will come on board soon, and I think it's very important to get credibility from the airlines and to make sure that the users, the air traffic controllers who will be using this equipment, are happy with it. They're going to be happy with the contract.

Now we want them to be happy with their equipment, so somehow you have to integrate these concerns, and I don't know whether this task force is the right way to do it. Not too long ago I had Secretary Chu, and he says that we have to look at mini-Bell. Maybe what you need to do is bring in some of the industry, whoever they elect in air traffic and the technology people, to see if they're going in the right direction and—because I hate to see all this money and then at the end we're here talking about whether or not the mouse is one that they like, and the industry is telling us it is a better aircraft and we didn't have a role.

And so maybe what you need to do is kind of think out of the box and say, bring people in because the users, the people are going to pay for it. I'm very interested because of my safety. We can all see the progress made and be supportive, and so I encourage you to do that the best you can and under the rules and regulations.

MR. BABBITT: We are, hopefully, doing something very close to that with this RTCA project, where we have just that. We have, you know, folks of the industry, the users, the manufacturers of the equipment. We have folks from MITRE to look at the science. And again, I hope when we get this controller contract, we get a lot higher level of involvement. I look to them for some of their input.

And we do look at these things. The human interface -- we've learned a lot of things in science. NASA has been a wonderful source for us in how you design controls, you know, things like a mouse, a screen that you look at. We learned the hard way with the first generation of digital aircraft. The displays, actually the analog displays were better in depicting information to you. So we redesigned them.

So we do learn, but you are absolutely correct, and I take very seriously that we need to be accountable and credible to the industry. And I take that as a serious priority.

REP. : My time is up, and I appreciate, I look forward to working with you.

MR. BABBITT: Yes, sir. Likewise.

REP. OLVER: (Off mike.)

REP. LUCILLE ROYBAL-ALLARD (D-CA): Thank you, Mr. Chairman.

I am going to try and get in three quick questions, but first, I want to know exactly if there is a back-up plan once you move to satellite. When satellite loses the signal, is there a back-up plan? I mean, for example, have satellite to TV? During the storm, it broke. The signal was lost three times. So, what is that back-up plan?

MR. BABBITT: We have, actually, there's several layers of it. You're right to ask. There's several layers of it. We are not going to do away with radar completely. We don't need this robust coverage, but we do need to be able to separate the airplanes. But I'll let Hank and/or Vicky add to that.

MR. KRAKOWSKI: And just for clarity, the satellites that are used around television transmission are very different than the GPS satellites. The GPS satellites are well-proven in all kinds of weather and atmospheric conditions. So, you know, we have a high level of confidence that it will be okay.

As Randy said, we will keep radars running. We are going to keep a lot of our radio technical infrastructure running. And we're not going to turn it off, turn any of that Legacy system off until we are absolutely assured that we have a level of safety necessary in NextGen.

REP. ROYBAL-ALLARD: Okay. Administrator, in June of 2008, the FAA produced a report detailing this recruitment effort in minority communities for open-air traffic controller positions. The good news is that African Americans are nearly about 34 percent of the incoming applicant pool. The bad news is that Latinos are only 6.3 percent of the applicant pool.

So it appears that the FAA has had a very successful outreach program in the African American community, but was considerably less successful in the Latino community. In fact, I've been told by several people that the outreach in the Latino community was not seen as an aggressive outreach program. So in reviewing the report, I noticed that there was no mention of using local Hispanic news media or national Hispanic television networks, such as Telemundo and Univision, both of which are very highly viewed by the Latino community.

Could you just elaborate on what you attribute to this lack of response in the Latino community and what steps are being taken to correct it, so that you could develop a more robust and effective program?

MR. BABBITT: Sure. I will be happy to do that. I can't really look back and tell you, you know, why it didn't. But I can tell you looking forward what we are going to try and do.

I did see a report, and I know that the outreach programs were a focus of that concern. And apparently, we were not looking in the right places. And so I've been assured that we are evaluating, and I take your input very constructively, and what I'd like to do is suggest that we might have some staff get back in touch with you if there are better ways to communicate.

I might even employ my wife who was born in Puerto Rico to add to the case. But what we'd like to do is utilize every vehicle. And the numbers, candidly as you pointed out, are showing us just exactly that. We're not reaching into the right places. We're not asking into the right places, and we need to fix that. So, what I'd like to do is get back with you and your staff, if you wouldn't mind, and maybe you could help us --

REP. ROYBAL-ALLARD: Yes, and I'm sure there are other members of the Hispanic caucus --

MR. BABBITT: -- Yes, absolutely.

REP. ROYBAL-ALLARD: -- that would also want to be helpful in that area.

Something from the Human Intervention Motivation Study, which is an air safety program. That is going to expire this year. And this is an ongoing FAA program which provides substance-abuse education and intervention to the airline industry. And it will be up for renewal in 2010. And according to the pilot's association, this is an important and very valuable program, and one which they would like to see expanded to cover the flight attendants as well.

Yet the administration budget has no funding for the HIMS. You know, making sure that pilots and flight attendants are not abusing alcohol and drugs is certainly an important safety issue. And so I'm just wondering why there is no funding in the budget for this program, and if Congress were to put money into the program, what are your views in expanding it flight attendants?

MR. BABBITT: First, we are funded through '09. I do understand that. I found out myself with my, you know, my second week on the job, that the HIMS was missing. I am a huge advocate. I was, in my background as president of the pilot's association, I appreciate what the HIMS program does. I was around when it was formed. I am a big advocate of it, and I would strongly support putting that in, and all safety-related employees.

This is an area -- we don't have any tolerance for alcohol abuse in this industry. And this is a program that's been proven to be very effective, and so I would be quite supportive of finding a way to put that in our budget.

REP. ROYBAL-ALLARD: Okay. I have one more question that's more specific to LAX. And I've been told that the FAA-imposed work rules on controllers have eliminated incentives to work in high-density facilities like LAX. And one example that is given is that to work at LAX, most experienced controllers have to take a pay cut. And this has forced the FAA to hire controllers with limited experience to work at LAX and other busy radar facilities like the southern California TRACON.

It is also my understanding that, to date, not one of these trainee new hires assigned to LAX was certified, and that there are similar problems at the radar facilities, and also facilities are very short staffed with the increasing wave of experienced controllers retiring.

In testimony before our subcommittee, Secretary La Hood stated the FAA budget request includes funding to increase the number of new air traffic controllers. What is being done to address the more immediate, and most serious problem of attracting and retaining experienced controllers at the most busy airports, like LAX?

MR. BABBITT: If you don't mind, I'll defer to Hank.

MR. KRAKOWSKI: Yeah, we know Los Angeles has been a challenge for us, particularly with the fact that we got into the hiring program late. Some years ago we had a large number of retirements that occurred. Some of it was a labor relations situation, which is starting to stabilize.

I am encouraged that the retirement rate is going down right now and the new hires are qualifying. I'm not familiar with your point that nobody is getting certified over there. That sounds inaccurate to me. I'd like to get back to you on that.

REP. ROYBAL-ALLARD: Okay, well let me just explain. My understanding is, while they are at LAX, they are not certified. They haven't been able to pass the test to be certified. So then they are moved to a less busy airport, and they get their certification there. That's what we have been told, so I would appreciate you looking into it, because we really need to make sure that those that work at LAX are certified to work at such a busy airport.

And also if you would look into the incentive in the rules that are discouraging experienced people to go. Thank you.

REP. OLVER: (Off mike.)

REP. MARCY KAPTUR (D-OH): Thank you, Mr. Chairman.

Welcome. Great to have you here today. Thank you for your work --

MR. BABBITT: Thank you.

REP. KAPTUR: -- and your service. I wanted to, Mr. Babbitt, address the issue of employment levels. In your testimony, I'm interested -- coming from a region with double-digit unemployment and rising -- I'm interested in the hires that you have here in your budget. You indicate a net increase of 107 controllers. You're going to hire 1,702. Does that mean those people are retiring?

MR. BABBITT: I'll let Hank talk about the staffing levels.

MR. KRAKOWSKI: Right. The 1702 that we're hiring will be 107 more additional head count for controllers. So it takes into account those people who are not just retiring but other typical attritions that you have.

REP. KAPTUR: Okay, so essentially, how many new interviewees would you have come through your door next year, then? One thousand, seven hundred and two?

MR. KRAKOWSKI: Well that's what we'll end up hiring. You typically have twice or three times as many actually go through the process of, you know, going through the interview. As an example, right now we have over 7,000 applicants in the pipeline for those jobs. Four or five hundred people are in process right now for the current hiring. So, you know, it's just a matter of going through the interviews and getting them out to the academy, and --

REP. KAPTUR: So the window is still open for people to apply.

MR. KRAKOWSKI: It will always be open. We put out bids continuously. We have employment processing centers which travel around the country to actually process applicants faster. And that's all on the FAA website. And that's all available to the public.

REP. KAPTUR: I'll tell you, you know, that's interesting because I ran into somebody the other day, quite, quite well known, a military person from our region who is retiring from one position and tried to get a job with the -- well, was looking for federal work, and went to the government website and so forth, and ended up now working for DIA, Defense Intelligence. But that wasn't on the USA Jobs website. That individual had to go into the DIA website and dig around and so forth.

All I want to know, I want to have an announcement in our area that basically says, we want to hire for the next year, in every category.

How do I get that?

MR. KRAKOWSKI: We can take that back to HR.

MR. BABBITT: Yeah. You mean throughout all government? Or --

REP. KAPTUR: No, FAA.

MR. BABBITT: Oh, just FAA.

REP. KAPTUR: In fact, you've got aviation safety.

MR. BABBITT: Sure.

REP. KAPTUR: You've got technical staff here. So I'm sure, I would just like -- any job in my region now is like a golden egg. And they are not connected to the federal government, for the most part. We're not a government center like this place, Washington, D.C., where the top employers are all government. We live in the free market, and it's really hurting.

And I feel part of my responsibility is to bring information. One thing I can do is to let people know where positions are available, people who might not have families that work at the FAA or might have no connection to the union, or anything else. But just to let them know. So I would greatly appreciate any position for which the FAA will be hiring, assuming you get this budget, and even based on your 2009 budget. Any information you can give me would be greatly appreciated.

The other question I have on the controller piece is, I understand, from talking to individuals who have applied for the controller program, some of the difficulty that they've had in going through the academy out in -- where is it, Colorado or somewhere? Where is it?

MR. KRAKOWSKI: Oklahoma City.

REP. KAPTUR: Oklahoma City? Okay. And it's very difficult. They have to pay their own hotel bills and everything, and then they don't know whether they are actually going to be hired or something after that.

What's the process for somebody that wants to be a controller? How difficult is it? You know, if you are unemployed and you get in the line to get this job, and you try to get it, what happens to you?

MR. KRAKOWSKI: Well, just like with a pilot crew which Randy and I had to go through, you start down a career path, but not everyone is successful. It's a tough, challenging job, and we have to make sure that the people who apply for this kind of work are prepared to function in it correctly. So, just because we hire you as a new hire, and your first year's probation as well, which is typical in the airline industry with pilots, it's a pretty tough rigor of work that you have to go to prove that you can do this work.

REP. KAPTUR: I'm not worried about that. What I'm worried about is if they have to take their own money, and, thank you, come from Toledo south end and you graduated from high school and you went in the military and you came home, and now you need a job and there are no jobs. Okay. And you are interested maybe in being a controller. What happens to you? I'm asking myself, can our community do anything to support them if they have to pay their own hotel bills while they are over there in Oklahoma City. What happens to them economically as they try to do this?

MR. KRAKOWSKI: So they make per diem, so it pays their expenses, about $80 a day. Their base salary is about 17,000 while they are at the academy, and then when they get deployed out to the field, it typically jumps on the average up around 30,000, so --

REP. KAPTUR: Okay. Can you provide me with that information --

MR. KRAKOWSKI: Be happy to.

REP. KAPTUR: -- as a part of this effort?

MR. KRAKOWSKI: Yes.

REP. KAPTUR: Thank you very much. I truly appreciate it.

REP. OLVER: (Off mike.)

REP. MARION BERRY (D-AR): Thank you, Mr. Chairman.

Mr. Administrator, congratulations. You've probably wondered in the last few weeks whether you won or lost.

(Laughter.)

MR. BABBITT: I've actually reached the conclusion.

(Laughter.)

REP. BERRY: And we thank all of you for your service, and forgive me for being parochial. Even though Memphis is not in my district, I fly in and out of there, and it serves a good portion of the state of Arkansas that I represent. I can't imagine a worse situation than we have had for the last several years between the staff and the administrators of that facility. The administrators are arrogant, dismissive, and completely unresponsive, as far as I can tell, to anyone -- their employees, me, or anyone else. And the morale there is horrible.

Now, the decision has been made by the FAA to separate the tower and the TRACON. One of them -- I can't remember which -- but one of them contains most of the experience in that operation, and now they are going to separate them, where most of the experience is going to be in one place and the inexperienced people -- whether they are certified or not, I don't know -- in another. But they are not going to be available to help somebody out when trouble arises. And I know that there would be no great loss if I perish because of a failure in the air traffic control system in there, but I've got a lot of constituents that don't deserve that.

And so I would ask you to reconsider that separation, at least until there can be some progress made between the workers and the bosses in that situation. And somebody needs to go down there and get somebody by the hair of the head, if it's available, and see if we can't get that mess straightened out, because it is not a safe situation. Those people go to work mad every day. And I don't think that's a good thing.

MR. BABBITT: No, sir. It's not. I think you may recall in my opening statement, or if you weren't in here, one of the things I want to focus on is getting labor stability back. We've had -- again, I'm not looking in the rear view mirror, I'm looking forward, but I can tell when things are not quite right, and we've got a difficult atmosphere right now.

And we're going to try to start off and fix the controller contract. There's other agreements. There's a lot of other people that work for the FAA, and we want to change their attitude and their outlook and the culture here.

Secondly, you'll be, I hope, encouraged to know that I am meeting with some representatives from the Memphis facility and the president of the union, to look at this. Having that out there, I mean, one of the issues that we discussed earlier with one of your colleagues, we do have to, there's more to it, you know, there's a rationale behind the separation in the TRACONs and the towers.

Part of it has to do with adapting to getting ready for the NextGen. But I think Hank may know a little more information and some of the fundamentals behind reductions in overtime and staffing, and, of course, you know, I can assure you that the level of safety wasn't compromised. But Hank if you want to --

MR. KRAKOWSKI: Yeah, and I think that's the big point. And I come from a strong background in safety, and we wouldn't do this if we didn't think it was safe. We actually, I think safety has been enhanced at Memphis with the split, and here's why. Prior to the split, you had 45 controllers who were certified and 19 trainees. When we did the split, we went to 62 certified controllers and only two trainees. Overtime went down 77 percent.

So the experience in the tower, the certifications plus the mandatory overtime, that Memphis, Orlando, a lot of the other facilities that were struggling because of this big churn of retirements and new hires coming into the system, we thought we needed to do some things to stabilize the overtime, the fatigue, and all of those sorts of things.

Memphis was part of that.

I am hoping that with this new labor agreement, if we can achieve that with (NACO ? ), we can work out a heck of a lot better process than what we've been using.

REP. BERRY: With all due respect, you are the only person I know that thinks things are any better in Memphis. And I don't know about the separating and all that. That's your job, and I respect your obligation and expect that you will do it responsibly, but that's still a mess down there, and it needs to be cleaned up. And I thank you for listening to me.

REP. OLVER: All right, we'll start a second round here.

I'd like to get a little bit better picture of what we're doing here. Are we going to end up -- when NextGen is fully implemented, are we going to have a Legacy program that is there for back-up? Or are we -- we've been building TRACONs, more TRACONs, tearing them apart or putting them together, or, and so on. Are we going to have all those things that are necessary?

MR. BABBITT: No, sir. One of the things, and I use an example to show where the system gets more efficient, and while everybody, you know, has concerns in their own area, let me give you an example. We look at a state that has maybe ten TRACONs. Well we could operate perhaps with two TRACONs. They wouldn't necessarily be sitting under the airport --

REP. OLVER: That would be quite an interesting job for you to get these stakeholders involved in that process. Every time you try to change the -- I mean, I wanted to ask. Let me just get a sense of what is going on here, without really any of the examples of details, because the examples just get all the one more place.

Vicky, you talked about the Houston air space redesign. How long did it take to do that?

MR. ( ): A couple of years?

MS. COX: Yeah, it was a multi-year effort.

REP. OLVER: A multi-year effort. How many of the 20 largest airports now have air space design completed? Is it done in LA, southern California? It's not done in New York. That will be a big one. Multi-year effort too, probably?

MS. COX: Oh absolutely, that one is. The Chicago air space redesign is virtually complete.

REP. OLVER: Which, how many?

MS. COX: Chicago.

REP. OLVER: Chicago. And, which are the major ones that are complete now? Maybe Chicago and Houston are the major 20?

MS. COX: We're operating with new procedures in Atlanta that take advantage of satellite-based navigation.

REP. OLVER: Is that the three that are farthest along in this process?

MS. COX: I would say those are the top three.

MR. KRAKOWSKI: Those are the ones that are operational.

REP. OLVER: Okay. And how many of these airports have ADSB in place now?

MS. COX: Well, ADSB is not scheduled to be delivered with the ground stations that are required for full implementation until 2013, and the rule does not --

REP. OLVER: -- For all places?

MS. COX: For everywhere. It will be fully implemented domestically in 2013 and --

REP. OLVER: Do we have some rule making, and your space design is the delivery of the ADSBs of any particular value at that point? Or is there some values I get that you can get right away?

MS. COX: We should be able to get value right away from equipped operators. So as soon as operators begin to equip, we can start to take advantage of the capability that ADSB provides. So by 2013, and even next year in the Gulf of Mexico we'll have surveillance services with ADSB where we never had any before. So --

REP. OLVER: And the 20 largest places are likely to be the places that you have the most international involvement. But we do have to have the back-up at least for awhile. I'm not sure the back- up ever goes away.

MS. COX: The back-up may change. The nature of the back-up may change. We're looking at about 50 percent of current radars as back- up for the near term. And the far term, we're looking at other capabilities, such as multi-lateration as back-up, which won't require the radars.

REP. OLVER: You see, I'm still thinking in terms of, I've now changed my horizon to think in terms of how could one do by 2018 full implementation of what is only a partial, a mid-term implementation in the route to 2025? Because it seems to me we ought to be able to make some progress here. But what you're telling me is all these features, all these moving parts, all of them have to be moving at the same time.

This is a horrendous job that you're involved in.

MR. BABBITT: But one thing that I think we should point out. We can focus on key areas. For example, if we fix the delays of the ten largest airports in the country, we have essentially eliminated most of our en route delay problems.

REP. OLVER: Of your delays?

MR. BABBITT: Yes, sir.

REP. OLVER: Oh, yes. That would be great. I mean, there are problems that you can probably focus upon, but we aren't going to be fully implemented anywhere nearly as quickly as I would hope would be the case. That's a little depressing for me. But, so be it. I'm learning here, a little bit.

I wanted to ask Nancy LoBue, on the fuel issue. What do you think are the most promising research programs that are going on? A couple of those. Could you describe very briefly a couple of those that are very promising, where any --

MS. NANCY D. LOBUE: Certainly. Right now, for aviation, we have a commercial aviation alternative fuel initiative, and it's a cooperation by industry, manufacturers, the FAA. We have participation by DOE, NASA, DOD. So it is a place where we can pull together a lot of the different initiatives.

We have some, a number of demonstrations using different types of renewable fuels.

REP. OLVER: Using them?

MS. LOBUE: Actually using them in demonstration flights. Correct. Using feedstock --

REP. OLVER: -- Where, and by what mechanism are we producing renewable fuels that are -- these are also carbon-based fuels, I take it?

MS. LOBUE: Right now, we are in the process of --

REP. OLVER: -- of renewable.

MS. LOBUE: Renewable fuels. Correct. We have a certification process ongoing as we speak. We're hoping to have certification by the end of the year of something that is a 50 percent petroleum, 50 percent Fischer-Tropsch system. By 2012, we should have 50 percent bio-fuel, 50 percent petroleum. By 2013,100 percent bio-fuel, certified to use drop-in in the current engines of airplanes.

So that process, that certification process is ongoing as we speak, and the first piece of that, when we get this 50/50 with the Fischer-Tropsch in the field --

REP. OLVER: -- Let me just ask you, is the Fischer-Tropsch is making syn gas and then putting together things, again, from the syn gas that has been produced.

MS. LOBUE: Correct.

REP. OLVER: But it starts with fossil fuel. It starts with oil or natural gas or something like that.

MS. LOBUE: Fifty percent would be fossil fuel. Fifty percent can be biomass.

REP. OLVER: All right. Well, the other route is the biomass which is probably oxygen-poor pyrolysis that gets you some green oils, essentially, out of the biomass, (certainly not ?) trying to get to ethanol.

MS. LOBUE: No. Ethanol doesn't work for aviation.

REP. OLVER: Why? All right. Look. I'll stop. I'll stop. I just wanted to get a sense of where -- you've indicated the two procedures that you seem to be working on.

Mr. Latham.

REP. LATHAM: Mr. Chairman, did you say, "pay-ralysis?"

(Laughter.)

"Pye-ralysis?"

(Laughter.)

Did you know that he's a chemistry professor?

(Laughter.)

MR. : A long time ago.

REP. LATHAM: A long time ago.

(Inaudible.)

I am becoming, being from Iowa, a little sensitive -- maybe your feeling about ethanol or something here -- (laughter) -- soybeans. Soybeans are the answer, soy-diesel --

MS. LOBUE: Yes sir.

(Cross talk; laughter.)

REP. LATHAM: Okay. Fantastic. It's okay -- (laughs) --

I'm going to change the subject just a little bit. Mr. Administrator, on May 7, the IG reported that hackers broke into the FAA computer several times in recent years, gaining access to personal information, including the social security numbers of 48,000 FAA employees, and took control of critical network servers. The report goes on to say that malicious codes were installed, passwords were stolen, and that the problems could have easily spread from operations support to mission control and operational networks.

My question, I guess, would just be, what has been your response, the agency's response to try and fix these problems? It's obviously extremely concerning to a lot of folks, so --

MR. BABBITT: And you are absolutely correct. I am aware that we have a fairly robust review. I also know that we're meeting with Mr. (Chopra ?) who was recently confirmed. He's at the White House. I'm not quite sure of his technical title, but is chief information officer, essentially.

REP. LATHAM: I'm sure you have an acronym for him. (Laughter.)

MR. BABBITT: I'm sure we'll come up with one. We'll work on it. By the way, I'm just as lost in there as you are, so -- (laughter).

But we really want to make sure, and there is a very, you know, in depth review going on we'd be happy to share with you, and I also have a meeting scheduled next week with the inspector general to review that report and give him the track that we're on and make sure that he's comfortable that we're doing the right thing.

REP. LATHAM: And is any one of your able staff here be able to --

MR. KRAKOWSKI: Yeah, I actually testified with our chief information officer at a roundtable by the T&I committee last week on the IG report and the things we are doing. We concurred with all of the IG recommendations, and they expressed that they're satisfied with our commitments and our timetables for it.

One thing I would like to say, though, is, one of the advantages of an old crusty air-traffic system is it's almost impenetrable. So systems that were attacked don't directly relate to controllers talking to pilots or looking at them on the radar screen. It's this old hard-wired system, you know, some of the support things that do Crown delay programs and things like that, that had vulnerabilities.

REP. LATHAM: So this stovepipe thing actually works in this case, right?

MR. KRAKOWSKI: Yes. Ma Bell, FAA, yeah.

REP. LATHAM: Okay. And on another subject as far as air traffic controllers, with the negotiations going on, and for the -- renegotiating the multiple contracts; and that at some time will be needed to determine if and to what extent additional funds would be needed. However, the budget submission makes no allowance at all for any kind of additional funding that will be needed.

If FY 2010 costs increase material wise, are you going to come back to submit a budget amendment? How do you expect us to handle that?

MR. BABBITT: We're trying right now to work within the confines of the budget. And I think the -- that we have the numbers that I've heard. And interestingly the majority of the negotiations -- well, anybody who says it's not about the money, it's probably about the money. The majority of these negotiations haven't been about the money. They've been about work rules and about, you know, some professional things that are of concern the controllers and how they relate with their supervisors and their accountability.

And a lot of very -- things that I find interesting were at the core of some of these issues. I wouldn't say, however, that I could expect that, you know, we could achieve this and not, you know, face any increase. I'd like to think that we could handle it. But to be candid with you, if we couldn't I would tell you precisely where we went over; and come back and hopefully we would be finished with these negotiations and know the full impact before you're actually finished with this appropriation. So I wouldn't want to delude anybody and say that we can do this all for free. I don't think that's realistic.

REP. LATHAM: I'd just -- if there is a plan, we'd like to know about it I guess. But part of the negotiations -- is there any discussion at all about how you ensure, and again, coming from a state with small regional airports, that there is a blend of the new and the seasoned controllers, and the mix in both, you know, small airports and the larger ones. Is there any discussion and is that part of any negotiation that is going on?

MR. BABBITT: I'll defer to Hank. Hank has been a little closer to these negotiations. He's been briefing me on a -- kind of a high level, but Hank.

MR. KRAKOWSKI: Yeah, and I can give you the list of what those mixes look like in your facilities. Typically, actually we have a little higher -- we try to put a little higher level of training in the smaller facilities because that's where the apprenticeship starts.

But quite frankly, we've had some new hires literally off the street hires who qualified at O'Hare Tower in a year, year and a half -- were just naturally good at what they do.

So I think that the difference is with a 26 percent training ratio across the country, some are a little higher, some are a little lower. But it feels good to me because you've got about 75 percent of the old guard mentoring the new people into this profession. That's what Randy and I are used to from the airline career.

REP. LATHAM: Very good. Thanks Mr. Chairman.

REP. OLVER: Mr. Rodriguez.

REP. CIRO RODRIGUEZ (D-TX): Yes. Real quickly, you mentioned earlier the design of quotes "it would be something that we could take care of, you know, fairly quickly and the special rule American throughout." You've got something that could be done nationwide in terms of just designing the approaches that would help I guess for future encroachment and that kind of stuff. That could -- and why not, you know; if so do you have a phase in of that?

MR. BABBITT: We're looking at it right now. We haven't made the decision. I need to have a better understanding. I think all of us need to have a better understanding because there are certain parameters and guidelines that would have to be created to certify people that could do this. And then, you know, we also -- other folks are going to be involved. Is this a road we want to go down to farm out some of the work traditionally done within the FAA.

REP. RODRIGUEZ: And you mentioned yourself and I would ask you not to mention, you know, because you said that the Rule America is kind of like an afterthought. I would ask that you take into consideration -- not in those words, I know it's something that you'll, you know, need to prioritize also as we bring them in and how important that is.

Real quickly, just on the fuel and in talking about the fuel in cyber, in air traffic control training has there been any collaboration with the Department of Defense, DOD because I notice some new fuel now research. And I don't know how long it's going to take before it comes from the research to the actual implementation that doesn't burn, for example. That's being looked at for Afghanistan and Iraq. When it's hid (ph) gasoline, it's a new fuel that -- some research where it doesn't burn. And so, is there any collaboration with DOD in terms of some of the stuff that they're doing?

MS. GILLIGAN: Absolutely. DOD is spending quite a bit of money obviously on fuel. The Air Force has a commitment that by 2016 they'll be even 50 percent alternative fuel. We've actually been able to leverage a lot of the work they're doing on the commercial side for a lot smaller amount of money. So they've been working with us in this CAAFI (ph) initiative that I mentioned.

REP. RODRIGUEZ: And on the training, a phase of it for the air controllers, they do a pretty good job of training their air controllers. I know I have Laughlin Air Force Base it does the job of training. I have Randolph Air Force Base, it does jet training, you know, the pilots -- they come in thousands, you know, hundreds of them. Is there any coordination being done with the type of training they do to air controllers?

MR. KRAKOWSKI : Yes, it's actually all trained to a standard because civilian controllers control military traffic. And military controllers control civilian traffic as well through their air space. So the concept works very, very well. However, I actually think there are opportunities to work closer with DOD in our approach to training and --

(Cross talk)

REP. RODRIGUEZ: Well is there anything you could do for us to help. Because I know how difficult it is to get just a -- we're trying to get the VA and DOD to work together for the last 15 years. It's just been like pulling teeth. So whatever you can do to make that happen, you know, and not reinvent the wheel in some of those areas where they might be doing a better job. And let me ask you a quick question on cyber -- have you done any cyber exercises on anything? You wouldn't know but -- and have you --

MR. BABBITT: Yes, there is penetration testing and things like that that go on.

REP. RODRIGUEZ: Well any cyber exercise that have actually, you know, taken, you know, we have one in San Antonio -- a dark-tree exercise where we actually went through a two-year process of, you know, you know, have you all done any exercises that you could call for?

MS. GILLIGAN: Yes, sir. Traditionally, we do them -- we coordinate with the Department of Homeland Security and TSA. We do tabletop exercises as well as exercise our continued operation of government facilities. So we do a lot of that integration. I do think the experience FAA had will become a part of one of the exercises that we will go through to assure that we've addressed all the gaps.

REP. RODRIGUEZ: Because as you go into a new system, you'll probably open up yourself more to more vulnerability.

MR. BABBITT: It's a concern.

REP. RODRIGUEZ: Okay. Make sure you keep that in mind from the cyber security perspective. Thank you.

REP. OLVER: Mr. LaTourette.

REP. STEVEN C. LATOURETTE (R-OH): Thank you, Mr. Chairman.

Mr. Administrator, I want to rely on you and Mr. Krakowski because of your experience as pilots; and talk to you about two things that are driving me crazy, and that's regional jets and the Scope Clause. The Scope Clause, and maybe you can educate me, I think that's one of the things where the industry and the pilots are in cahoots with each other. The pilots like it because it guarantees slots for the type of aircraft that they carry. The airlines like it because they can fly people on little planes and don't have to pay them so much.

I think a lot of us were shocked at the copilot on the Colgan flight, on the Bombardier crash in Buffalo, was making $18,000 a year. I just -- I guess I'm wondering if the Scope Clause hasn't seen its day. And the reason, I was recently in Brazil -- not to diss Boeing Airbus, but I was visiting Embry Air; and they've come up with this new generation of regional jets, the 170 series and the 190 series. And Cleveland is a hub to a great airline, but flying in their 140 series is like flying in a hypodermic needle. I mean, it's ridiculous.

These 170s and 190s are nice, comfortable jets, comparable to a 737 or a 300 series for airbus. And I said how come, you know, you don't fly some of these around. And they said it's the Scope Clause prevents them from coming into new markets with things of that nature. I saw you on TV with Secretary LaHood talking about some new training for people who fly regional jets. And so, I guess that's sort of a rambling question.

But how do we -- if we're going to update to NextGen, how do we update and treat pilots fairly, treat the airlines fairly, but also treat the traveling public fairly; and get them nice, new comfortable planes. And basically, it should be a market-based decision. I mean, if you can fill 80 seats, you fly an 80-seat plane. If you can fly 140 seats, you do that. So, I just throw that out to you because you two are pretty experienced pilots.

MR. BABBITT: Well it's something I think you're aware that would be under FAA's jurisdiction, you know, the pay, nor the Scope Clauses. Those are derived between negotiations and the carriers.

REP. LATOURETTE: I'm just asking you what you think about it.

MR. BABBITT: Well, the -- ironically, I signed, I was a signatory to one of the very first scope exceptions, because the term Scope Clause is actually not reflective of what it is. It's the reverse --

MR. KRAKOWSKI : It's the lack of scope clause.

(Laughter)

MR. BABBITT: It's exactly. The original agreement was, you know, the pilots of one carrier agreed to do all the flying for that carrier.

And so, what they signed is exceptions to that rule to allow them to go outside and contract with other people. What I said yesterday in direct answer to that question to the press was this is something that is a concern. I think it's been expressed by a couple of pretty seasoned pilots, the two gentlemen that did a marvelous job of landing in the Hudson -- just an absolute stellar performance of professionalism, cockpit discipline.

Both of them were quoted and I don't disagree with their quotes. They said if you as an industry want to continue to attract the best and the brightest, you're going to have to do better than offer somebody $22,000, $24,000 a year. People that -- I mean, I can look to my own -- Hank, I'm probably a few years older than Hank. But when I was hired, probably half of the pilots that I was hired with came from the military; and half of them were trained from military academies.

If you had offered them a career that never got above $30,000 or $40,000; they would have gone and done something else. Even though they might have enjoyed flying, and they enjoyed it as a special career; if there is no compensation, they'll find another career path.

REP. LATOURETTE: Well, and I think that leads to turnover too. I mean, I -- three times I've flown into DCA; and we've touched down and taken back off. You know, making discreet inquiries, I was lucky enough to be on training flights, you know, from Cleveland to DCA. And I'm all for people getting training, but I like it when we land and we stay landed; and we don't leave again.

MR. BABBITT: So do the pilots.

REP. LATOURETTE: Yeah, I know. But you know I have to tell you, they don't tell you anything. You know, when the plane is shuttering and you're going back up in the air, they don't talk to you for about five minutes. Then, the come on and the say well, we couldn't land because a big gust of wind took us. And I got off the plane and there was no wind, I mean. So, that wasn't it.

Mr. Krakowski, how do you feel about the Scope Clause and sort of the --

MR. KRAKOWSKI: Yeah, so I agree with my boss, number one.

REP. LATOURETTE: Nice. (Laughter)

MR. KRAKOWSKI: But I think the effort that was started yesterday is going to be important because I can tell you that the hardest flying I've ever done in my life was flying turbo props for a commuter airline, most fatiguing flying. And the easiest flying I did was flying a DC-10 to Honolulu. So, you know, the real rigor of intensity is in the regional carriers. And I think these steps started yesterday are going to help identify and help.

REP. LATOURETTE: Thank you very much.

REP. OLVER: Mr. Pastor.

REP. ED PASTOR (D-AZ): It used to be that the pilots would blame the air traffic controllers. (Laughter) I guess you don't do that any more. I basically have three questions. One deals with the research, development. In this report that I have, it says that alternative fuels research. We have the Ag Department, we have DOE, we have DOD and you guys. And I wonder do the four of you get together? And where are we on developing a fuel that will be non- petroleum based? And L.G. I think we use in Arizona.

The second question I have is what are the priorities of the FAA on the AIP Program? And thirdly, we recently passed a law that says that we would inspect foreign airlines -- no, we would inspect the foreign locations at least twice a year in the foreign. How is that going to affect your budget? So those are the three questions. You can start either way, wherever you want.

MR. BABBITT: Do you want to do the fuel?

MS. GILLIGAN: Sure. So for alternative fuel, we have a commercial aviation alternative fuels initiative and that's the FAA part. But in that, it is done in conjunction with all those other departments. We meet regularly. We have quarterly meetings. And all of the different initiatives being done in many of the different organizations are talked about and coordinated.

For instance, Agriculture has money they got through the Farm Bill for (biomass ?) refineries and green jobs. That's going to feed from things that the FAA is doing to create and certify the types of fuels that can be used for commercial airplanes. So there are some differences between the different types of fuels, the different types of things being produced.

And that's why we coordinate a lot of these efforts. We are, as I mentioned, this year going to get a certification of the first 50 percent, regular fuel 50 percent Fischer-Tropsch, which is just really the first step. I mean, what we're really looking for to get to carbon neutral growth in aviation is that 100 percent renewable fuel or a biomass-based fuel that will have a life cycle of less carbon. And that we're looking at in the 2013 timeframe. In the meantime, when you get this first piece, then bio refiners will start producing and building up to be able to create the types of fuels we're going to need by 2013, 2014, 2015.

MR. BABBITT: Thank you. Of the other two questions, the AIP -- I can't, if you're looking for specifics; I can get those to you. But in general terms, they're based upon the priorities of, you know, any particular airport's needs. You know, have they made their case. How do they contribute to the national transportation system? And I think to the most part, my understanding is that we can accommodate the majority of those requests. Obviously, you know, you want to see that that money is well spent and they are contributing. The last question --

MS. GILLIGAN: If I could mention something on that too. About 60 percent of AIP goes to maintaining the current system, repaving, a lot of -- and you see a lot of the jobs there. About 40 percent goes to new capacity projects, those things like O'Hare modernization, Philadelphia has new runways. We've done -- we opened three new runways last November. That's that kind of other 40 percent of AIP.

MR. BABBITT: And the last, the foreign repair station, that's under consideration. Actually, that hasn't been enacted yet, but we are prepared; and Peggy may want to speak to that. We have anticipated that if it happens, we'll be prepared to deal with it.

MS. GILLIGAN: We've estimated that we'll need approximately 60 additional inspectors, 40 that would be based here domestically and would travel to do the oversight. And probably about 20 that we would put overseas -- positions overseas are quite expensive, as you know. And we're estimating somewhere around $16 million. That is not in the 2010 request because when we built our budget the provision that is under consideration now had not gone forward. So we would in the first year, if that were to pass, we'll begin that process and probably look to add that into 2011 or 2012 whatever the appropriate budget level or year would be.

REP. PASTOR: Thank you, Mr. Chairman.

REP. OLVER: Just as a -- do we also -- are we also getting into the business of having foreign inspectors keep working here in this country? We're not paying for them, that I take it is their interest or their airlines' interests.

MS. GILLIGAN: Yes, sir. The Europeans have indicated that if FAA goes to two inspections a year of their repair stations, they will do the same for the 1600 repair stations in the U.S. that hold their certificate. Right now, we do the oversight at those stations and we provide that information to the Europeans. They instead will come in and do their own inspections.

REP. OLVER: Ms. Roybal-Allard.

REP. ROYBAL-ALLARD: I would just like some clarification on my previous questions. Am I correct in understanding that you have no objection to expanding the HIM (ph) program to flight attendants?

MR. BABBITT: No, I don't. I don't.

REP. ROYBAL-ALLARD: Okay. And Mr. Krakowski, you are, as I understand, will be looking into what I have been told are imposed work rules on controllers that take away the incentives to work at places like LAX. And secondly, the issue about trainees being -- that fail at LAX -- failed getting certified at LAX then being sent to less busy and smaller airports to get their certification.

MR. KRAKOWSKI: That one is of interest to me because I was not aware that there is a lot of that going on. It happens occasionally is my perception. On the first point though, the current contract negotiations we're doing with NATCO; we are having discussions with them on a plan that does reward the people at the real intense facilities better. And I think the old concept that we used to use to incentivize people to work at O'Hare or New York or Los Angeles got deluded over the years. There are some refocus discussions going on right now.

REP. ROYBAL-ALLARD: Thank you.

REP. OLVER: We are -- would you like to make another round because I'm -- by all means. (Laughter) You can have another round and then I will close because I promised we would close around 11:30.

REP. LATHAM: I thank the chair for the courtesy. And I just -- I'll attempt to be brief. This foreign repair station question -- I understand that you're ready to go. I also understand that the European Union and others have indicated that it's going to start a trade war. And basically, they're going to insist on the same thing. And full disclosure -- my brother is in the repair station business for General Electric.

I guess to you and Mr. Krakowski, what's your opinion of this? I mean, I will tell you it's a -- we all know it's a labor issue. I mean, you can call it a safety issue if you want to. I happen to like organized labor.

But this is job protection and, but its being billed as a safety issue. So I guess based upon the experience that all of you have around this table, is it really a safety issue? Or are we seeing shoddy repairs at foreign repair stations and will two FAA inspections at foreign repair stations on an annual basis make us safe?

MR. BABBITT: Well, I'll give you my personal opinion.

REP. LATHAM: That's what I was looking for.

MR. BABBITT: The current system is covered by a bilateral arrangement. All the stations are inspected. What -- if I understand the full ramifications, we would just switch inspectors and create a lot of additional travel and expense to create the inspections.

I personally have not seen any degradation or any signs that, you know, the repair stations regardless of where they are, are doing, you know, less than work that is up to the standards. Now I'm certainly open to people's review. Or if people have information that would suggest that you know we could improve the safety, it's worth looking at. But currently, I have to candidly say, I have not seen any sign of that.

REP. LATHAM: Mr. Krakowski, how about you?

MR. KRAKOWSKI: Actually, you're looking at someone who actually was head of quality assurance for maintenance for my airline when we outsourced to Korea and to China. We had to put our stamp of approval on it, not only to us but to the FAA that the quality of work was equal to or better than what we had in the United States. And I can tell you unequivocally we found that.

REP. LATHAM: Anybody else have a thought on foreign repair stations? I don't want to exclude anyone?

I thank the chair and I thank all of you for your testimony.

REP. OLVER: I think if I don't close out we aren't going to get closed out, so I'm going to do that. Nothing that has been said here today changes my view that we need to move away from the radar-based system, which we have been talking about doing now for sometime and putting a certain amount of money. We will with your appropriation, if we give you that full appropriation this year, we will have spent almost $2 billion in moving in that direction.

I've been interested that under ADSB the largest sum of money -- the larger sum of money was last year, the '09 appropriation there; the '010 is asking less. Sort of implies that we're farther ahead on -- farther along on ADSB. And we don't need to -- big sums of money; as what is viewed as the key backbone of this whole NextGen operation. I thought we would be moving on to ever higher numbers for ADSB. But nothing has changed my view that we need to move away from the radar- based system, which had its genesis in the bonfires that were, I'm told to my great surprise, that were part of the first transcontinental air flights, so forth, that sort of thing.

And to move on to a very large, a very important new technology for a whole series of reasons you've all alluded to in your comments, the benefits that one can get from that in terms of congestion; and on-time performance and handling a much greater capacity than through the NextGen system. I am disappointed that I am going to have to change my preconception that this was something that would be possible to complete in a timeframe, I thought by maybe 2017 or thereabouts. And so, the idea that we are -- and I do recognize that you're talking about how careful one has to be. You have to make certain that each of these moving parts fits together -- the gears are running.

It's going to be a really daunting task. And for all of you to take it on, there are just so many moving parts to this process. We've touched on a lot of them and briefly here, but we're going to have a lot. Is there any way that we can get that -- move that and it means very much with very careful coordination. And I think if you're going to be able to move more quickly, you're going to have to have the acquiescence of the workforce in essence. Because if you end up with -- go back to the first question I asked you Mr. Babbitt, that if you don't have that then there is sand in those gears for all the way along.

So thank you very much for being here. Thank you for doing this. This is an important project that we're involved in; and it's going to be costly. But there are, I think, really critical savings and benefits down the road. So thank you very much.


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