NextGen vs. Legacy Aviation NAVAIDs: Cost-Benefit Analysis

Introduction

When deciding whether to upgrade airport navigational systems, it is important to perform a cost-benefit analysis in order to determine which course — to upgrade or not to upgrade — is the better option (FAA, 2011). Upgrading from legacy systems can be expensive in terms of implementation and training, while the added value of the Next Generation Air Transportation System (NextGen) aviation terminal navigation systems (NAVAIDs) is, as yet, unknown aside from the projected estimates supplied by the FAA (Materna, Mansfield, & Walton, 2015).

Following the FAA's 2011 request for feedback in the Federal Register on its proposal to upgrade legacy NAVAIDs such as VORs to NextGen's GPS/WAAS RNAV, over 300 comments were provided from the public. These ranged from trepidation about safety ("The elimination of the VOR system and reliance solely on GPS for navigation would be a grave mistake") to concern for environmental issues (Bello, 2012). Congressman Eliot L. Engel (2012) of the U.S. House of Representatives wrote to the FAA:

"While I agree the modernization of our aviation system is necessary to bring it into the 21st century, it must also keep pace with the increased number of flights and maintain our technological advancements by implementing new equipment to keep our system the safest in the world. I do have several concerns as the transition takes place. The first concern is that the combination of the NextGen implementation and the airspace redesign will put an undue burden on the residents of Rockland County. These two changes will direct more flights, closer together, over this suburban community. This will directly lead to increased noise and increased pollution. My other concern is that some aspects of the NextGen implementation may be exempted from the proper environmental review. I strongly object to this. While it is claimed that NextGen will lower overall pollution, Rockland County should not be the test case for this. The increase in flights will add to pollution and could exacerbate the already too-high childhood asthma rate." (Engel, 2012)

The concerns expressed by the Congressman regarding the update are not directly related to safety for pilots and passengers, but rather to noise pollution — upgraded systems could mean more flights being flown over residential communities — and environmental pollution, which could detrimentally affect the health of children and adults. These are, in other words, safety issues that impact stakeholders on the ground, and as a result, they bear directly on the decision about whether or not to upgrade systems. As GPS systems will alter routes and raise political, social, and environmental issues (as Engel's letter — one among many — to the FAA demonstrates), the NextGen upgrades are not as clear-cut or as simple as the FAA's initial proposal appeared to suggest.

While these concerns may be valid, the cost-benefit analysis in this study focuses not only on such issues but also on whether NextGen systems will provide meaningfully better safety features and mechanisms than legacy NAVAIDs already in place. For example, Jan and Kao (2013) assessed the tracking performance of the GPS NextGen system and identified the "major concern to aviation authorities" regarding its use — namely, that the GPS signal could be jammed by radio-frequency interference (p. 6636). As Sueki and Kim (2016) point out, "many vulnerabilities of NextGen stem from the increased interconnection of systems through wireless networks" (p. 201). The fact that security measures still need to be addressed in these interconnected systems indicates that the upgrade may present more cost and less benefit in terms of safety. Jan and Kao (2013) also note that with simple algorithmic retrofitting, current legacy systems could be enabled to track aircraft in real time — just as the proposed GPS NextGen systems would do — without the added cost.

This study tests the hypothesis that the cost-benefit ratio of upgrading NAVAIDs to NextGen systems justifies the expense when compared to continuing to use existing legacy systems. The null hypothesis is that the cost-benefit ratio of upgrading NAVAIDs to NextGen systems does not rationalize the expense when compared to continuing to use existing legacy systems. To test this hypothesis, a literature review was conducted of reports in the National Transportation Safety Board database, journal reports, and correspondence between agencies regarding NextGen upgrades. The Federal Register's Proposed Provision of Navigation Services for the Next Generation Air Transportation System (NextGen) Transition to Performance-Based Navigation (PBN), along with its 366 public comments, provided ample material for examination of going concerns. The literature review also includes descriptions of legacy and NextGen systems, current articles and reports, and federal aviation regulations.

Background and NextGen Overview

As Karp (2016) notes, the FAA is currently in the middle of completing "an 18-year ATC modernization initiative encompassing a variety of technologies and procedural changes, all coming under the umbrella of NextGen." With mega-contracts awarded to companies like Lockheed Martin — tasked with producing an infrastructural piece of equipment called the Terminal Flight Data Manager (TFDM) at a price tag of $344 million — the FAA is spending a substantial amount of money on upgrades that many critics do not see the value of (Karp, 2016). The FAA has stated that a full sense of the benefits of upgrading to NextGen will not be felt until 2030, when all the components of the system have come together.

The problem is that critics already see the picture that is emerging and believe the costs associated with NextGen outweigh the benefits (Public Submission, 2015). While supporters can point to technological upgrades that make the industry safer, opponents can point to problems that make the whole initiative seem like little more than an unnecessary exercise in contracting work to companies like Lockheed Martin — routinely and historically known for obtaining lucrative contracts from the federal government (Karp, 2016).

In 2007, the FAA released a Fact Sheet explaining its approach to upgrading airport navigation systems. NextGen was described as a "wide-ranging transformation of the entire national air transportation system — not just certain pieces of it — to meet future demands and avoid gridlock in the sky and in the airports" (FAA, 2007, p. 1). NextGen was designed as a deliberate and total shift away from legacy ground-based systems, which would be replaced by a "more dynamic satellite-based technology" using GPS to show where aircraft are at every second, as opposed to the seconds-long intervals of legacy radar sweeps that leave gaps in real-time knowledge of an aircraft's position (FAA, 2007, p. 1). With GPS and a number of other navigation tools installed, NextGen would allow aircraft to fly more closely together on more streamlined routes.

Some of the major elements of NextGen include Automatic Dependent Surveillance-Broadcast (ADS-B) — described as the "backbone of the NextGen system" due to its GPS technology and real-time continuous surveillance capability (FAA, 2007, p. 1). As of 2007, the FAA's President's Budget request for ADS-B had reached $564 million.

Other components of the NextGen upgrades included the System Wide Information Management system (SWIM), which the FAA identified as providing "infrastructure and services to deliver network-enabled information access across the NextGen air transportation operations" (FAA, 2007, p. 1). By 2007, its budget request total stood at $173 million. The NextGen Data Communications system was promoted as an improvement on the voice-only communications of legacy systems, allowing aircraft that are "data-link equipped" to exchange "routine controller-pilot messages and clearances via data," enabling traffic controllers to better and more safely monitor traffic (FAA, 2007, p. 1). Its budget request total had reached $126 million by that year. Other features identified in the Fact Sheet included the NextGen Network Enabled Weather system, the NAS Voice Switch, and NextGen Demonstrations and Infrastructure Development.

According to the FAA (2007), NextGen would also promote more collaborative air traffic management, reduce weather impacts, "improve airport surface movements" at high-density airports by reducing "spacing and separation requirements," and more effectively manage "flows into and out of busy metropolitan airspace" (p. 2). However, as Materna, Mansfield, and Walton (2015) showed nearly ten years after the FAA's Fact Sheet was published, even high-density airports would be unable to effectively utilize NextGen upgrades without further physical expansion of the airports themselves (p. 137).

Regardless of whether the upgrades would have a beneficial or costly effect on the industry and the U.S. economy, at the outset of the initiative, more than $1 billion had already been allocated to the FAA's upgrading plan. The FAA advised in 2015 that this plan would save the industry more than $11 billion through 2030, with savings expected from En Route Automation Modernization (ERAM), ADS-B, Datacomm, and Performance-Based Navigation (FAA, 2015). In the same FAA (2015) Fact Sheet, it was revealed that estimates for NextGen upgrade costs had reached more than $32 billion — a projected budget covering the years 2007 to 2030 — with nearly half of that going to private-sector contract costs.

Within the scope of this project, the term benefit may be understood in terms of safety, strategy, and cost-efficiency. Safety encompasses all stakeholders — not just industry leaders, but also those within communities under flight paths and those working within the industry. The study draws primarily on the NTSB federal database and its affiliated links, such as the FAA Aviation Safety Information Analysis and Sharing (ASIAS) database, as well as Airlines for America (A4A), the Flight Safety Foundation, and IATA for statistical data. As the data indicate, U.S. aviation currently provides the safest form of transportation in the nation according to the NTSB (A4A, 2015), meaning that safety statistics alone cannot determine the cost-benefit ratio regarding NextGen upgrades. A broader approach addressing cost and benefit across multiple dimensions must therefore be employed.