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Aviation Management Associates Gary Church Budget Briefing 20112

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Aviation Management Associates Gary Church Budget Briefing 20112 Powered By Docstoc
					2012 FAA Budget Briefing
      to Industry




      May 7, 2012
Thanks to Our Sponsors




2012 FAA Budget Briefing
      to Industry
2012 FAA Budget Briefing
      to Industry




      May 7, 2012
Text Message Questions to
      571-379-0415
 Current/Future Challenges
Moderator:
• Budget challenges:
  – Church, Aviation
GaryUncertain outlook Management Associates
     • Reauthorization levels for FY2013 and FY2014 are below the
Speakers:
       FY 2012 enacted
    • November elections –
Donna McLean, Donnaexpect Continuing Resolution LLC
                           McLean Associates,
         • Continued pressure to reduce spending
Nick Stoer, Nicholas Stoer & Associates
• Operational challenges:
   – Sullivan, US Senate Commerce Committee
Gael Balancing the demands of implementing NextGen
       capabilities while continuing to deliver current services
    – Prioritizing ATO services in a constrained budget
      environment
 FAA ATCA Budget Symposium                         Federal Aviation   5
 May 07, 2012                                      Administration
                                                                             Aviation Management
                                                                       ....a six sigma company established 1984...




                                 FAA ATO and NextGen Funding
                                     and Finance Overview

                                                                                Gary Church
                                                                                May 7, 2012




                     The information contained within this correspondence may be privileged, confidential or copyrighted. Distribution of this correspondence in
                    whole or part to other than those specifically addressed in the original correspondence is prohibited. Violations are subject to civil and criminal
November 16, 2012                                                 penalties as prescribed by U.S. State and Federal Law.                                                  Viewgraph 6
                                                                             Aviation Management
                                                                       ....a six sigma company established 1984...


   FAA ATO & NextGen Funding and Financing

  • Adequate FAA funding is critical to mission success
         •      Sustain safety
         •      Maintain FAA operations
         •      Develop and deploy NextGen
  • Four major budget accounts support FAA ATO & NextGen
         •      Operations & Maintenance
         •      Facilities & Equipment
         •      Research & Development
         •      Airport and Airways Trust Fund




                     The information contained within this correspondence may be privileged, confidential or copyrighted. Distribution of this correspondence in
                    whole or part to other than those specifically addressed in the original correspondence is prohibited. Violations are subject to civil and criminal
November 16, 2012                                                 penalties as prescribed by U.S. State and Federal Law.                                                  Viewgraph 7
                                                                              Aviation Management
                                                                        ....a six sigma company established 1984...


   FAA ATO & NextGen Funding and Financing

  •        FAA Operations and Maintenance Funding
                                                                                                                          Projected Budget Shortfalls
           $12,000                                                                                                                   FY2012     $269 M
                                                                                                                                     FY2013     $473 M
           $10,000                                                                                                                   FY2014     $798 M
                                                                                                                                     FY2015     $1,137 M
            $8,000
                                              O&M 3.8% Average
                                              Annual Growth Since
            $6,000                                                                                            Operations & Maintenance
                                                     2001
                                                                                                              2012 FAA Reauthorization

            $4,000                                                                                            Shortfall



            $2,000


                $0
                                                                                                         ‡ Actuals
                                                                                                         *Estimated
                                                                                                         **Requested
                                                                                                         ***Projected

                      The information contained within this correspondence may be privileged, confidential or copyrighted. Distribution of this correspondence in
                     whole or part to other than those specifically addressed in the original correspondence is prohibited. Violations are subject to civil and criminal
November 16, 2012                                                  penalties as prescribed by U.S. State and Federal Law.                                                  Viewgraph 8
                                                                              Aviation Management
                                                                        ....a six sigma company established 1984...


   FAA ATO & NextGen Funding and Financing

  •        FAA Facilities & Equipment
                                                                                                                      Projected Budget Shortfalls
            $3,500                                                                                                               FY2012     $126 M
                                                                                                                                 FY2013     $211 M
            $3,000                                                                                                               FY2014     $232 M
                                                                                                                                 FY2015     $233 M
            $2,500

                                         F&E 1.2% Average Annual
            $2,000                          Growth Since 2001
                                                                                                                  Facilities and Equipment
                                                                                                                  Authorized
            $1,500                                                                                                Shortfall
                                                                                                                 FY2011 & FY2012
            $1,000                                                                                               FAA Budget Requests

                                                                                                                 Including NextGen Needs
                                                                                                                 FAA Capital Funding Plan
              $500                                                                                               FY2008 – FY 2014

                                                                                                            ‡ Actuals
                $0                                                                                          *Estimated
                      2008‡     2009‡      2010‡     2011‡      2012* 2013** 2014*** 2015***                **Requested
                                                                                                            ***Projected
                      The information contained within this correspondence may be privileged, confidential or copyrighted. Distribution of this correspondence in
                     whole or part to other than those specifically addressed in the original correspondence is prohibited. Violations are subject to civil and criminal
November 16, 2012                                                  penalties as prescribed by U.S. State and Federal Law.                                                  Viewgraph 9
                                                                             Aviation Management
                                                                       ....a six sigma company established 1984...


   FAA ATO & NextGen Funding and Financing

  •        FAA Research & Development
           $200                                                                                                        Projected Budget Shortfalls
           $180
                                                                                                                                  FY2012     $7 M
                                                                                                                                  FY2013     $19 M
           $160                                                                                                                   FY2014     $20 M
           $140
                                                                                                                                  FY2015     $21 M

           $120
                                      R&D 1.5% Average
           $100                                                                                          Research and Development
                                     Annual Growth Since
                                                                                                         Authorized
            $80                             2001                                                                                     FAA Percentage of ATO & NextGen
                                                                                                         Shortfall                   Budget Expended on Research 1.5%
            $60                                                                                         FY2011 & FY2012
                                                                                                        FAA Budget Requests          Percentage of US GDP Expended on
            $40                                                                                                                      Research is 2.62%

            $20                                                                                                                      Industrial Companies Budgets Expended
                                                                                                                                     on Research is 3.5%
             $0
                                                                                                    ‡ Actuals
                                                                                                    *Estimated                       High Technology Companies Budgets
                                                                                                    **Requested                      Expended on Research is 7%
                                                                                                    ***Projected
                     The information contained within this correspondence may be privileged, confidential or copyrighted. Distribution of this correspondence in
                    whole or part to other than those specifically addressed in the original correspondence is prohibited. Violations are subject to civil and criminal
November 16, 2012                                                 penalties as prescribed by U.S. State and Federal Law.                                                  Viewgraph 10
                                                                               Aviation Management
                                                                         ....a six sigma company established 1984...


   FAA ATO & NextGen Funding and Financing

  •            FAA Airport and Airway Trust Fund
   $20,000
                                                                                                                                Source of AATF Revenues
   $18,000
                                                                                                                                       2000 - 2010
   $16,000                                                                                                                                    70%                    Persons
   $14,000                                                                                                                                                           Property

   $12,000                                                                            Trust Fund Revenue                                                             Fuel and Gasoline

   $10,000                                                                                                                                                  5%
                                                                                      End of Year Balance                       18%                                  International Facilities
                                                                                                                                                       7%
      $8,000                                                                         End of Year Uncommitted

      $6,000
                                                                                     Balance                                                FY2010 AATF
                                                                                                                                            Contributions
      $4,000
                                                                                                                                         $4,000                                          R&D
      $2,000
                                                                                                                                                                                         F&E
                                                                                                                                                                     $5,500
         $0                                                                                                                                                                              AIP
                                                                                                                               $3,500
               2008 2009‡ 2010* 2011* 2012* 2013* 2014* 2015*                                                                                                                            OPS
               ‡ Actuals                                                                                                                      $2,900          $190                       GF
               *Estimated based on a 31% General Fund Contribution
                       The information contained within this correspondence may be privileged, confidential or copyrighted. Distribution of this correspondence in
                      whole or part to other than those specifically addressed in the original correspondence is prohibited. Violations are subject to civil and criminal
November 16, 2012                                                   penalties as prescribed by U.S. State and Federal Law.                                                      Viewgraph 11
                                                                              Aviation Management
                                                                        ....a six sigma company established 1984...


   FAA ATO & NextGen Funding and Financing

  • Traditional Budget Priorities                                                                                                                    Funding Pull
         •      ATC Operations
               •      Pay, Compensation and Benefits (Retain and Sustain Resources)
               •      Sustain Infrastructure with Service Life Extension Programs
               •      Replace Non-supportable Infrastructure

         •      NextGen Planning
               •      Pay, Compensation and Benefits (Retain and Sustain Resources)
               •      System Engineering and Integration Planning
               •      Requirements Development
               •      Demonstration Verification and Validation
               •      Technology Innovation
         •          Research
               •      Pay, Compensation and Benefits (Retain and Sustain Resources)
               •      Safety and Regulatory Support
                      The information contained within this correspondence may be privileged, confidential or copyrighted. Distribution of this correspondence in
                     whole or part to other than those specifically addressed in the original correspondence is prohibited. Violations are subject to civil and criminal
November 16, 2012                                                  penalties as prescribed by U.S. State and Federal Law.                                                  Viewgraph 12
                                                                                Aviation Management
                                                                          ....a six sigma company established 1984...


   FAA ATO & NextGen Funding and Financing
  • Alternative Funding
         •    Internationally Market ATO Data and Services
               •       Section 207 FAA Modernization and Reform Act of 2012: Assistance to Foreign Aviation Authorities
               •       Potential Recurrent Annual Revenue Value: $100 - $500 million
         •    Surplus and Sell Excess FAA Assets
               •       Section 210 FAA Modernization and Reform Act of 2012: Improved Management of Property Inventory
               •       Potential Annual Revenue Value Over the Next 5 Years: $350 million
               •       Potential Recurrent Annual Revenue Value: $110 million
         •    Implement Public-Private Partnerships
               •       Section 221 FAA Modernization and Reform Act of 2012: Public-Private Partnerships
               •       Potential Annual Revenue Value Over the Next 5 Years: $350 million
         •    Borrowing
               •       Requires Legislative Action
               •       Potential Annual Revenues for NextGen Investments Over the Next 5 Years: $5 Billion
         •    Legislative Revision to FAA Authorization
                   •   Expend Any Growing AATF Uncommitted Funds: $1 Billion Annually over the Next 5 Years
                        The information contained within this correspondence may be privileged, confidential or copyrighted. Distribution of this correspondence in
                       whole or part to other than those specifically addressed in the original correspondence is prohibited. Violations are subject to civil and criminal
November 16, 2012                                                    penalties as prescribed by U.S. State and Federal Law.                                                  Viewgraph 13
                                                                             Aviation Management
                                                                       ....a six sigma company established 1984...


   FAA ATO & NextGen Funding and Financing

  • Internationally Market ATO Data and Services
         •    Partner with Iridium to gain access to and resell global ADS-B surveillance
              data to ANSPs around the world

         •    Team with US companies to build second and third world ATC systems
              using satellite based communications and surveillance leveraging aircraft
              equipped with satellite navigation




                     The information contained within this correspondence may be privileged, confidential or copyrighted. Distribution of this correspondence in
                    whole or part to other than those specifically addressed in the original correspondence is prohibited. Violations are subject to civil and criminal
November 16, 2012                                                 penalties as prescribed by U.S. State and Federal Law.                                                  Viewgraph 14
                                                                             Aviation Management
                                                                       ....a six sigma company established 1984...


   FAA ATO & NextGen Funding and Financing

  • Surplus and Sell Excess FAA Assets
         •     FAA Real Estate Management System (REMS) list 63,800 pieces of land,
               building or structures valued at $9.1 Billion
               •    9,500 of these facilities are estimated to have a viable commercial use and value estimated
                    at $1.4 Billion
               •    Liquidation of these facilities would save $98 million is planned refurbishment costs
               •    Liquidation of these facilities would save $99 million annually in reduced maintenance costs
         •      FAA Facility Service and Equipment Profile (FSEP) lists 75,200 ATC
               equipment assets with an estimated value of $12 Billion
               •    Of the 75,200 assets, 12,700 would be recoverable from consolidation of facilities or
                    functions
               •    Decommissioning of assets no longer needed under NextGen would yield an estimated $294
                    Million
               •    Equipment decommissioning enabled through consolidation would save $10 million in
                    annual maintenance costs
                     The information contained within this correspondence may be privileged, confidential or copyrighted. Distribution of this correspondence in
                    whole or part to other than those specifically addressed in the original correspondence is prohibited. Violations are subject to civil and criminal
November 16, 2012                                                 penalties as prescribed by U.S. State and Federal Law.                                                  Viewgraph 15
                                                                             Aviation Management
                                                                       ....a six sigma company established 1984...


   FAA ATO & NextGen Funding and Financing
  •      Implement Public-Private Partnerships
        •     As a corollary to P3 aircraft equipage, develop public-private partnerships to support
              FAA NextGen capital investments similar to the models used by the US DOT for toll
              roads development and operation

        •     Private companies would provide capital for NextGen system development,
              deployment, sustainment and operations in exchange for long term contracts (e.g., 20
              year lease to own) in exchange for competitive rates of return on capital investments
  • Borrowing
        •     Congress needs provide authority for flexible long-term borrowing from US Treasury
              or from private capital markets

                “Borrowing is not an option but a necessity for capital intensive enterprises, especially in technology transitions.”
                                                1997 National Civil Aviation Review Commission




                     The information contained within this correspondence may be privileged, confidential or copyrighted. Distribution of this correspondence in
                    whole or part to other than those specifically addressed in the original correspondence is prohibited. Violations are subject to civil and criminal
November 16, 2012                                                 penalties as prescribed by U.S. State and Federal Law.                                                  Viewgraph 16
                                                                             Aviation Management
                                                                       ....a six sigma company established 1984...


   FAA ATO & NextGen Funding and Financing
  •          Conclusions
         •     Alternative Means of Funding and Financing could provide FAA with an annual
               effective supplement to its budget of up to $1.2 billion annually through 2015

         •     Of the $1.2 Billion, $850 M is represented by new revenues and $350 M is
               represented by reduced capital outlays

         •     If AATF Uncommitted Funds Grow Congress could Authorize an Additional $1
               Billion per Year for Operations and NextGen through 2015 in Lieu of Reducing
               General Fund Contributions

         •     FAA Leadership Must Decide What Course of Action it Will Recommend and Take



                     The information contained within this correspondence may be privileged, confidential or copyrighted. Distribution of this correspondence in
                    whole or part to other than those specifically addressed in the original correspondence is prohibited. Violations are subject to civil and criminal
November 16, 2012                                                 penalties as prescribed by U.S. State and Federal Law.                                                  Viewgraph 17
2012 FAA Budget Briefing
      to Industry




      May 7, 2012
Thanks to Our Sponsors




2012 FAA Budget Briefing
      to Industry

				
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