May 27 (Bloomberg) -- The U.S. is seeking to speed installation of a satellite-based system to control airplanes in flight and may offer airlines incentives to add the technology ahead of a 2020 deadline, regulators said.
The upgrade of the air-traffic network to boost safety, cut delays and save fuel will cost $2.1 billion to $4.1 billion, shared by the government and carriers, Federal Aviation Administrator Randy Babbitt said today on a conference call with reporters. The system, dubbed NextGen by the FAA, uses satellites to direct aircraft rather than ground-based radar.
The Obama administration has considered offering incentives to airlines as a way to install the satellite navigation equipment sooner, Transportation Secretary Ray LaHood said on the call, without offering details.
“We have the White House’s attention on this, significant enough people where there could be some opportunities for us to be helpful to them along the way,” LaHood said. “If we want the airlines to be a part of it, we have to move things along.”
NextGen will reduce total flight delays by about 21 percent by 2018, according to the Federal Aviation Administration’s website.
The installation of new equipment in airplanes, required by an FAA rule announced in 2007, is one step in the 20-year upgrading of the network that controls the nation’s airspace.
Yesterday, the agency awarded Boeing Co., based in Chicago, along with Falls Church, Virginia-based General Dynamics Corp. and White Plains, New York-based ITT Corp. contracts to help integrate new procedures and technologies into the air-traffic system, the FAA said in an e-mailed statement. The contracts are worth as much as $4.4 billion in the next 10 years, it said.
Babbitt said he doesn’t expect resistance from airlines to the performance standards for the equipment announced today.
“They clearly see the benefit,” he said. “The business case for NextGen becomes clearer daily.”
The Air Transport Association, the largest trade group for U.S. airlines, is “carefully reviewing” the rule given its cost, Chief Executive Officer James C. May said today in an e-mailed statement.
“Any rule requiring this type of equipage and expense must be based on a solid business case in which the true benefits and real costs are fully understood and justified,” May said.
The Washington-based association’s members include Delta Air Lines Inc., the biggest U.S. passenger carrier, and United Parcel Service Inc., which flies cargo and voluntarily installed satellite-based technology in its planes.
The new system allows pilots and controllers to see the same air-traffic configurations at the same time, including the locations and directions of other planes.
The system duplicates what exists with radio transponders and will be expensive for small plane owners, the Aircraft Owners and Pilots Association, the largest group representing general aviation, said in a statement.
“Since the 1990s, AOPA has worked with the FAA on the development of space-based navigation,” said Melissa Rudinger, the Frederick, Maryland-based group’s senior vice president of government affairs. “The industry has always maintained that the migration to the new system must be benefits-driven.”
To contact the reporter on this story: Angela Greiling Keane in Washington at firstname.lastname@example.org.
To contact the editor responsible for this story: Larry Liebert at email@example.com.