NextGen Next Steps

Last month we talked about redeeming the promise that NextGen holds for hoisting our air traffic control system out of the 1950s and into the 21st century. Satellite-based tracking technology would replace ground-based radar, enabling planes to fly more direct routes, fly closer together, and respond more quickly to changing weather patterns and other flight conditions. Anyway, that's been the plan.

NextGen is, by most estimates a multi-billion-dollar program—MarketWatch cites one estimate of $40 billion. It is supposed to save the airlines many tens of millions; but it is also supposed to cut flight delays, cut fuel costs (and, ideally, airfares), and reduce air pollution.

Just recently U.S. Transportation Secretary Ray LaHood once again said the federal government is "committed" to funding NextGen. Of course, the feds have been "committed" to NextGen, by some accounts, for the last 20 years. It's not really news to hear the government say it again. At this point, the proof is in the pudding.

Here's the big surprise in the story: The airlines are unhappy that they've been told over the past several years to make major investments in expensive cockpit equipment and other technology that they are not actually using. They're not using it (or much of it) because the federal government hasn't followed through on its end.

I told you you'd be surprised.

So here the government is calling on the airlines to make yet more investments in NextGen. It says it will even help with the financing.

Naturally, the big carriers are a bit skeptical. As Delta Air Lines CEO Richard Anderson recently told reporters, "Many carriers—Delta, Southwest, American, United—all [have] made significant investments in equipage for our existing fleets that we are not using." Anderson went on to say that the carriers want to start making use of what they've bought before they buy even more stuff that they are unable to use. Which sounds like a not unreasonable request to me.

I guess it wouldn't surprise anyone to learn that the U.S Department of Transportation's own inspector general also recently came down hard on the FAA for failing to develop a "master schedule" that pulls all of the pieces of the NextGen puzzle together in a logical way.

When you are dealing with a program that could, by some estimates, cost $160 billion over the next 15 years, you'd hope someone at the FAA could come up with a master plan. Some airlines have ponied up tens of millions already for NextGen equipment and training related to making a jet's landing approach more efficient. But of these airlines, only a small fraction are using the advanced landing system, which sounds like a pretty inefficient resource allocation to me. These carriers—and their passengers, including business travelers like you and me—are getting a return on only a tiny piece of their investment. That has got to change, especially in a market in which fuel costs are going out of sight.

It's time for NextGen to become NowGen.

Road Warrior • Miami • Madrid • www.amadeus.comTwitter: @tentofortysix

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