Periodic reorganisations of the cumbersome USFAA are often flagged as major initiatives, but achieve little. The latest looks a little different

The announcement of yet another FAA reorganisation usually wins plenty of yawns and shrugs. But the agency's latest move represents far more than shuffling boxes in a bureaucratic waltz. This time the new Air Traffic Organization (ATO), and the processes that will be adopted by the ATO, have won strong backing from those usually most sceptical: FAA unions and critics.

In fact, some critics say that they are deeply hopeful of change now that for the first time in its history, the FAA's air traffic services, research and acquisitions and Free Flight programme activities will be overseen by one man - Russell Chew, a former American Airlines captain and operations executive. The ATO will be operated as a PBO or "performance-based organisation".

In theory, that means that the ATO is to be run like a business, answerable to its "customers", who are the users of the system, says FAA administrator Marion Blakey. In introducing Chew, she said the ATO will be "lean, mean and efficient", and that "this team will bring a business-like focus to running their respective service units and will be held accountable for results".

In June, transportation secretary Norm Mineta and Blakey announced Chew as the FAA's first chief operating officer. He brings nearly two decades of experience at American, as a line-qualified captain on the Boeing 757, 767, 727, and on the McDonnell Douglas DC-10 and MD-80. He was managing director of American's strategic operations planning, and manager of technical flight operations and system support technologies. He often served as an industry spokesman and is well known in Congress and throughout the industry.

Rob Poole, a long-time proponent of FAA reform at the Reason Foundation think tank, says the creation of the ATO and the appointment of Chew "are the most encouraging developments in air traffic control in years". Poole notes that the creation of a PBO was first recommended by the so-called Mineta Commission in 1997.

Mineta, then an executive at Lockheed Martin after having served for decades in Congress and having chaired the House aviation subcommittee and the full House transportation committee, headed the commission. He became the transportation secretary in 2001.Formally the National Civil Aviation Review Commission (NCARC), the committee represented a significant public-private effort to make structural changes to address the congestion that was plaguing the US airspace system. Congress, which had representation on the panel, took the commission's recommendations seriously, writing some into law in April 2000 with the so-called AIR-21 Act. That created the chief operating officer position for the FAA.

In late 2000, just before he left office, President Bill Clinton signed an executive order setting up the ATO and designating the chief operating officer as its head. Takers for the post were few as many candidates met labour opposition over fears that they were stalking horses for air traffic control (ATC) privatisation. Few candidates were willing to take on the FAA, a widely feared empire of civil servants, until Congress had given the agency both personnel and acquisition reform.

That has helped shift the focus of the FAA as a whole, Poole says: "They have really started using the word customer, instead of user, but I think it may be much more than lip-service: they may be starting to think in those terms. Having Chew there is important because he knows what it is to be a customer." Chew himself points out that "just three months ago I was a customer of this organisation".

Five service units

The ATO concept is intended to make FAA operate its air traffic services along the lines of a private-sector business rather than as part of a government agency, says Chew. The ATO will consist of five major service units: en route and oceanic; terminal; flight services; system operations; and technical operations. Also included in its top level are five staff-level business groups: safety; communications; operations planning; finance and acquisition; and business services.

Ken Mead, the transportation department's inspector general, a long-time critic of the agency and its repeated reorganisations, says he is "really encouraged" by the ATO and that "this time we will see something different".

By putting acquisitions and air traffic control in the same organisation, Mead says, "we will see accountability". In the past, he adds, the FAA "has been like several different plantations, each growing its own crop. Now, we can make sure we grow just a few crops to fruition."

The new ATO has drawn on some of the best-known names in the FAA. Charlie Keegan, currently associate administrator for research and acquisitions, becomes vice-president of en route and oceanic services; Bruce Johnson, director of air traffic service, becomes vice-president of terminal services; James Washington, director of air traffic systems requirements service, will head flight services; Linda Schuessler, deputy director of the air traffic service, will run systems operations; Steven Zaidman, director of airway facilities and a former acquisition-reform specialist, will run technical operations; Steven Brown, associate administrator for air traffic services, is to be vice-president of operations planning; Dennis DeGaetano, deputy associate administrator for research and acquisitions, will run acquisition and business services; and Peter Challan, deputy associate administrator for air traffic services, will be vice-president in charge of the ATO transition.

Some of these executives are veterans of the FAA's Free Flight initiative. Poole says their roles in the new ATO make it likely that Free Flight would regain its momentum despite some recent setbacks such as a postponement of a key controller-pilot data link programme.

In addition to the ATO units, a new Air Traffic Service Safety Oversight Office will be created under the direction of Nick Sabatini, now the FAA associate administrator for regulation and certification, to provide an independent safety overview of the ATO. Blakey says: "We realised that we can't have the organisation overseeing itself."

The ATO is now in charge of about 38,000 of the 48,000 FAA employees. That includes active controllers and technicians who install and maintain ATC equipment. Changes will not be evident immediately to FAA's customers, but Chew says the important factor is "the process underneath" the surface. "We're going to go through a very intense process in the coming months of activity analysis and process re-engineering. This is not easy because it generally involves interviewing every single employee here in the Washington area, he says, but notes that there is value in the exercise. "It teaches our people what value is and it teaches us what we're spending our money on. And how it produces value for our customers. It's just not been done before."

Blakey said labour contracts with the air traffic controllers and other related unions will be signed off at the corporate FAA level, although the ATO would be involved.

The National Air Traffic Controllers Association (NATCA), representing the 15,000 controllers, gave a surprisingly strong endorsement of Chew and his mission. NATCA had held up final agreement on a four-year FAA reauthorisation bill for months to show its opposition to even a partial privatisation of ATC services. But the union called the ATO plan "bold and smart" and called Chew "innovative and thoughtful". NATCA president John Carr says many, including himself, "thought the chief operating officer was just here to rearrange the deck chairs on the Titanic. Russ's plan gives us a realistic chance at missing the iceberg".

Union participation

He says the ATO "rightly resists the temptation to split air traffic from the FAA organisational chart and astutely proposes a bottom-up structure that corrects the current overly complicated management structure". He also praises the fact that the structure calls for union participation. Carr, who has grown pointed and sometimes abusive in battling Blakey over privatisation, adds: "Under Russ's leadership, we have a once-in-a-lifetime chance to make real and lasting change to the organisation."

Blakey says performance metrics will apply right down to the individual ATO units so that FAA customers and Congress will be able to measure performance. Chew noted his familiarity with dealing with unit costs when he was working for American and said a basic unit of measurement for the new ATO is likely to be something along the lines of a "cost per flight-hour" of control services. Chew and Blakey both say that the ATO depends heavily on DELPHI, a new accounting and financial management program that links FAA to the overall Transportation Department budget.

Blakey says that having such a "strong cost accounting system where we really know what our unit costs are" would make it much easier for FAA to make its case for the resources needed to run the ATO. Chew adds that "if we don't know the cost we can't determine the value" of the services ATO provides.

Knowing its costs intimately suggests that the organisation would eventually move from costing to charging, and the ATO and the FAA would be in a strong position to charge for services eventually. Blakey insists such a move is not under consideration: "The basic philosophy is and will remain the same, that we provide the service." It is paid for by the user through fees and taxes, she says.

During the ATO announcement, Chew stressed that it would take several more months to get the new service units organised and operating. "You are not going to see something you are going to be able to write a big story about until later," he told reporters.


Source: Airline Business