AeroNav Smackdown

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With its approval ratings hovering in the single digits, the U.S. Congress doesn't come immediately to mind as a towering institution for common sense and wisdom. Nonetheless, the Senate Appropriations Committee deserves props for reining in the FAA's AeroNav division, which launched an inept and ill-thought-out effort to begin charging airspace users for navigation data last December.

Not so fast, said the committee. It looks like it will order AeroNav to restore its practice of releasing nav data revisions two weeks ahead of the effective date, rather than the 24 hours it abruptly converted to last year, throwing the burgeoning nav app industry into a tither. While the good Senators have their spotlight focused on this minor little corner of the FAA, I hope they will order the GAO to conduct a full, out-in-the-open audit of AeroNav. Heretofore, our questions about its economics have been deflected by the FAA because it insists that because AeroNav is a so-called high performing organization, that's all we need to know.

But all that really means is that AeroNav falls back on business speak and pretends that it works like a for-profit company. We can be reasonably sure it doesn't, because when for-profit companies run into revenue shortfalls, they don't ask their customers for more money, they cut costs and become more efficient. It's quite possible that AeroNav has done this. They just refuse to give us enough information to make any kind of determination. A GAO audit could address this. As I've said before, if the user fees are justified, so be it. But first, prove it.

While we're on the subject, one more request of the committee. How about putting a little pressure on the FAA to release the findings and recommendations of its unleaded fuels transition ARC committee. I keep hearing that this group has done great things but no one will offer any details nor go on the record, so excuse me for being skeptical of what this committee has done. I think aircraft owners—especially those contemplating writing a check for $600,000 or more for a new airplane, deserve to know what their government is doing to encourage the development of new fuels standards. Why we accept this kind of secrecy—the AeroNav meeting was closed to the press, too—just baffles me. Every week that goes by without some revelation of what this ARC has accomplished, just chips away at buyer confidence. The party line from the FAA and the alphabets is pretty close to saying no such lack of confidence exists. Everything is just hunky dory and don't worry about it.

Maybe they're right. Maybe I'm the sole remaining inhabitant of the alternate universe where people actually worry about future fuel supplies.

Really, guys. All it takes is to show us what you've got.

Comments (32)

AeroNav's strategy for reining in costs must include efficiencies via payroll reductions ... and with this Administration, that ain't gonna happen.

Posted by: Phil Derosier | April 23, 2012 5:51 PM    Report this comment

I don't know why we would expect anything useful out of an Unleaded Fuels Transition ARC. They don't make fuel, they don't distribute fuel and they don't have any fuel to sell. I think it would be more instructive to watch what the actual producers are doing; that includes those in other parts of the world.

Posted by: Stephen Phoenix | April 24, 2012 10:06 AM    Report this comment

Lead is bad for votes and has been since lead poisoning was identified as the reason why some children are mentally handicapped. To expect politicians to put their names to a document touching these issues when they do not have to, is to expect too much.

Posted by: Brian McCulloch | April 25, 2012 3:40 AM    Report this comment

"I don't know why we would expect anything useful out of an Unleaded Fuels Transition ARC."

The first thing that you, as potential buyer of fuel--need to understand is that the producers of fuel haven't and won't do anything meaningful until they have a framework for specs and certification. That will come from FAA/ASTM.

Even the smaller companies--there are five of these, three that you've heard about, two that you haven't--can't do a thing without the approvals. (There may be other companies none of us know about. There's little evidence that at least two of the majors have a fuel ready for ASTM approval. If they have such, they've kept it guarded.)

All of the major producers are represented on the ARC.

Posted by: Paul Bertorelli | April 25, 2012 5:18 AM    Report this comment

It's way past time for a definitive progress report on avgas "transition". I'm glad to hear that Michael Kraft is quite the expert now, but we have no way of knowing what that means, other than your report on Aero 2012 and a brief podcast on the subject.. The alphabets have been totally silent on the subject for months.

Posted by: James Grant | April 25, 2012 7:07 AM    Report this comment

"when for profit companies run into revenue shortfalls, they don't ask their customers for more money"

What about Cessna's price hike on the skycatcher? Don't get me wrong I agree that your point is generally the norm, I just had to point it out because that was the first thing that came to mind when I read that.

Posted by: Phillip Winfrey | April 25, 2012 8:55 AM    Report this comment

It's a good point, but one that will causing wincing in Wichita, where Cessna has laid off half of its workforce.

Do you think the AeroNav division has made similar cuts? I tend to think not.

Posted by: Paul Bertorelli | April 25, 2012 9:13 AM    Report this comment

No disagreement here. On the unleaded fuels transition issue, the Senate Appropriations Committee ought to simply direct the FAA to release the ARC's final report, but I suspect AOPA and the other committee members not only haven't asked for that, but might actually oppose action by Congress to force its release to preserve the "sanctity" of a process that never should have been shielded from the public.

". . . because when for-profit companies run into revenue shortfalls, they don't ask their customers for more money, they cut costs and become more efficient."

It seems worth pointing out that one of the ways this analogy fails is that when for-profit companies run into revenue shortfalls one of the things they can do is to discontinue unprofitable products and services or halt development of new products. Under any given presidential administration there are things that government agencies would stop doing if they had their choice, but they don't have that ability because they are required by law to do them, even if Congress fails to provide sufficient money to do everything it insists must be done.

Posted by: Robert Davison | April 25, 2012 12:56 PM    Report this comment

"but they don't have that ability because they are required by law to do them, even if Congress fails to provide sufficient money to do everything it insists must be done."

That's true but it implicitly ignores a critical fact: AeroNav is in the information processing business, which has benefitted from evolutionary advances in technology that make it possible to disseminate data more efficiently. Across the board, that means fewer people can do the same or more work than was true a decade ago.

We have a pretty good sense that AeroNav has duplicative systems and methods in place and when it was asked at the December meeting how it had cut costs to meet its budget shortfalls, it declined to answer at all, much less offer any detail.

The company line was that there was a $5 million shortfall and they proposed to recover it by dividing the sum among the users. Now it may turn out that this is justified. But are we, as taxpayers, willing to accept the claim at face value without a rigorous external audit? I know I'm not and I'd bet you aren't either.

I've just finished reading Michael Lewis's Boomerang, which traces how the entire globe got itself into an interlaced debt crisis that is probably Irresolvable. The reasons are complex, but one of them is that governments overcommitted to services and, especially, to large payrolls and benefits for public employees.

Posted by: Paul Bertorelli | April 26, 2012 5:10 AM    Report this comment

This is right down the center of the lane for the federal government generally and the FAA specifically. As all bureaucracies naturally do, it will seek to have the most people and the most stuff to build its empire irrespective of efficient completion of the mission.

There may be FAA managers who actually seek to reduce staff and perform their functions with fewer rather than more resources. I can't recall having encountered one.

In my dealings with people who work with the the FAA on various projects--vendors, companies seeking cert approval and the like--I hear a lot about the "retirement" culture. That is, managers and employees are hanging in there and maintaining the empire until they can reach retirement age and pull out with generous lifetime benefits. This is not a culture bent on efficiency.

As taxpayers, I think it's our duty to push back against this. Personally, I'm not one to want services without paying for them. But like everyone else, I want to know that I'm not overpaying or paying twice for the same thing.

In order to affect such changes, the only thing that seems to work is to elevate them to the Congressional level, which is what has happened here. One can only hope it sticks.

Posted by: Paul Bertorelli | April 26, 2012 5:21 AM    Report this comment

I have two comments on the AeroNav situation:

1. Paul B, I don't agree with your announcement that technology advances means fewer people can do the same work. This may be true in some cases, but I think automation has generally led to more employment rather than less. It does change the tasks people do to be more thought based rather than focused on book keeping.

Posted by: Paul Mulwitz | April 26, 2012 5:33 AM    Report this comment

AeroNav should be able to prove why they need the extra dollars - period.

As far as the 100LL issue, I'm with you: let us know what is really going on! Of course, if they continue to stall which results in GA aircraft using less and less 100LL the problem will solve itself: Producers will reach a point where the market does not support production and distribution so they quit producing 100LL. Problem solved!

As to the SkyCatcher, just think of what it would have cost if produced in Wichita! I also note they have pulled back from the European market because EASA won't plan nice with them (which is the same issue every USA LSA producer faces if they want to sell in Europe).

Posted by: Richard Norris | April 26, 2012 5:35 AM    Report this comment

2. The whole AeroNav situation seems to focus around the new practice of storing chart images in general purpose electronic devices such as smart phones and tablet computers. While this is the latest rave I don't think it is a wonderful idea. This practice has cut the sales of paper charts and precipitated the financial problems for FAA chart distributors and creators.

Aeronautical charts such as sectionals cram an immense amount of information into a limited space on paper. They use intense color coding of information and still the data block for a given installation is a long way away from its symbol on the chart. I find these charts hard to read on the ground let alone while trying to fly an airplane.

Many of the more expensive approaches to aero data display in the cockpit can be found in the latest GPS devices as well as proprietary electronic chart techniques in EFBs. These use a hierarchical database approach to make only the information desired by the pilot at any given time rather than the "One size fits all" approach required by the paper chart medium. The database approach works a lot better. That means I think promoting distribution of paper images on devices conceived and manufactured for other purposes is just not the best way pilots can get up to date data for cockpit use.

I don't know how to discourage use of paper chart images and encourage use of the more modern database approaches. This is a central issue in the whole AeroNav situation.

Posted by: Paul Mulwitz | April 26, 2012 5:37 AM    Report this comment

"I don't know how to discourage use of paper chart images and encourage use of the more modern database approaches. This is a central issue in the whole AeroNav situation."

You don't have to. Market forces will take care of it. See Ipad. See Android. See major airlines and Boeing. If you can't see this sea change, click around a little and it will come into focus. We're not going to revert back to the growth of paper.

As for automation, you're thinking of the manufacturing model, not information processing. These are different paradigms. Here's a good example and it relates directly. I mentioned it before.

When I started working in newspapers, I wrote my story, handed it to an editor, who handed it to a layout artist, who handed it to a compositor, who handed it to a platemaker who handed it to a pressman. Now I write the story into a layout and it goes right to the plate. That information processing revolution eliminated whole classes of jobs, but it produced a few in related technologies. Bottom line: In publishing, we produce far more pages and far more information with fewer people. Those people have to do more and have broader skills.

I

Posted by: Paul Bertorelli | April 26, 2012 7:29 AM    Report this comment

n AeroNav's case, must they be doing the same? And if they aren't, why not? Have they eliminated the costs and the additional staff? For example, I showed you a month ago that the division actually designing the procedures already has automation that nearly produces the finished product. (Plates only.) Yet the Maryland division appears to duplicate this, repeating all the steps because...it always did it that way?

Pray tell why? We're not making fuel injection nozzles or flat screen TVs, we're pushing pixels. Big difference. And very much unlike publishing in general, the switch to electronic flight display is strongly defined and people will pay for it. Not as true in publishing, if it's true at all.

If what you said about automation was universally true, high volume products suitable for automation would go up in price, not down. But the trend for many--especially electronics--is downward, even if some people are added. The point is overall cost and efficiency, not necessarily head count.

It is quite possible, I suppose, that AeroNav has some unique characteristics that make these global economics moot. If that's true, show us.

Posted by: Paul Bertorelli | April 26, 2012 7:30 AM    Report this comment

Paul B. - I buy your arguments about publication manpower. There will be some new automation support jobs but you deserve credit as "Expert" in this field. (My background is in electronics manufacturing.)

Electronics is a special case because of Moore's law.

In government there doesn't seem to be any motivation to reduce manpower under any circumstance. There is no profit motive to measure success. Government managers measure success by how much turf they control. For government, loss of head count is equivalent to total failure for the managers above. If we don't find a way to fix this fundamental problem our government will fail, and it won't take long from this point. We already have as much debt to GDP as Greece.

Posted by: Paul Mulwitz | April 26, 2012 7:41 AM    Report this comment

“This is right down the center of the lane for the federal government generally and the FAA specifically. As all bureaucracies naturally do, it will seek to have the most people and the most stuff to build its empire irrespective of efficient completion of the mission.”

If the FAA and the U.S. federal government generally seek to have the most people to build its empire irrespective of mission completion, then they haven’t been very successful. The FAA has 3% fewer employees (actually FTE’s) than it did 25 years ago, and the number of civilian federal employees is a whopping 3% greater than the number 60 years ago when the U.S. population was one-half what it is today.

As I said in my original post, I have no disagreement with the blog. At the decision of the Chairman of either the Senate or House Appropriations Committee the FAA could, and should, be directed in the Committee’s Report to provide to the information that the FAA says warrants the fees. Agencies routinely ignore or stonewall requests from the chairmen of congressional committees, but not the requests by chairmen of the Appropriations Committees. That it could so easily be done makes me wonder why the request has not been made.

Posted by: Robert Davison | April 26, 2012 10:54 AM    Report this comment

"The FAA has 3% fewer employees (actually FTE’s) than it did 25 years ago, and the number of civilian federal employees is a whopping 3% greater than the number 60 years ago when the U.S. population was one-half what it is today."

What you didn't address with that observation, Bob, is the explosive growth in government contracting. So much of the work is outsourced, the taxpayer pays that rising bill and the government workforce appears admirably stable or even smaller.

Just in the last decade, expenditures on outside contractors have gone from $208 billion to $540 billion in 2009. The most visible example in the FAA is the FSS contract. Outside contracting has become the method of choice of proxy growth of government at all levels.

I'm not saying this is bad or good. I imagine in some cases its more efficient. A study done by New York University in 2006 estimated that more than half of the total federal workforce was composed of contractors and/or grantees. There is no reason to believe the FAA isn't similarly disposed for its share.

So if we add those numbers to your 60-years-ago figure, we have quite a different story, no? Governments agencies will find ways to grow, however you chose to describe or conceal it.

Posted by: Paul Bertorelli | April 26, 2012 11:21 AM    Report this comment

Paul, it occurred to me that Moore's law effects everything.

Two examples. When I was at the Rotax plant last month, they showed us the engine line--not for aircraft engines, but the BRP and snowmobile line; V-twins. The line had maybe 20 stations starting with a new crankshaft at one end and an engine headed for the test cell at the other end.

Each station had a black box on the rail above the line. The box is connected to tools--torque wrenches, screwdrivers and so on. If the assembler doesn't install the required number of fasteners and torque them correctly, it stops the line until the error is corrected. Statistical process control is running constantly in the background.

This is clearly a result of relatively cheap and powerful processors--automation. I don't have the metrics for that plant, but I bet they would show a slight increase in employment in the last decade, but sharper increases in revenue per worker and unit output per worker.

The price of the products have paced inflation. A modern motorcycle is only a bit more expensive than it was 10 years ago, adjusted for inflation. But it's more capable and of higher build quality. Bottom line, the company builds more stuff, of better quality and capability with just a few more people and at about at the same price.

Posted by: Paul Bertorelli | April 26, 2012 11:39 AM    Report this comment

"How about putting a little pressure on the FAA to release the findings and recommendations of its unleaded fuels transition ARC committee."

Wouldn't a Freedom of Information request serve this purpose?

Posted by: Mark Lawton | April 26, 2012 12:01 PM    Report this comment

Fair enough, Paul, but now you’re counting private businesses receiving federal contract dollars as part of the federal bureaucracy. I rather doubt that Lockheed Martin sees itself as part of the federal bureaucracy. We pay tax dollars to private companies because the prevailing political view is that by not being part of the federal bureaucracy those companies are more cost-effective and generally superior to government, though the evidence on that score is mixed. Any federal agency empire builder worth his or her salt would spend money allocated to the agency on increasing the number staff numbers within his or her direct supervision and control, not shipping it out the door. That hasn’t happened, for better or worse.

If we’re now talking about the level of federal spending by the FAA or other federal agencies, rather than the number of people, then whatever inflation-adjusted growth in federal spending has occurred to fund agencies and all these contract services and products hasn’t come from us handing over to the federal government a higher percentage of our incomes because the effective tax rate (the percentage our income paid as personal income, social insurance, corporate income and excise taxes), generally has declined or remained stable over the past 30 years. That doesn’t mean less money could have been spent or that it couldn’t have been spent more effectively, which was your point re AeroNav. Anyway, I've enjoyed the debate. Thanks.

Posted by: Robert Davison | April 26, 2012 12:41 PM    Report this comment

Nice try, Bob.

Federal government turf = headcount + dollars + facilities and/or equipment.

Any way you figure, federal spending is now $1.40 for every $1 taken in. This just can't continue forever.

When considering percentage of national income you need to consider the population of the USA has tripled in the last few decades. So even if each person is paying the same amount the government gets three times as much as before.

Government is the biggest growth "Business" in this country. Unfortunately, it doesn't produce anything. So with each increase in government the actual production for the country is reduced.

Posted by: Paul Mulwitz | April 26, 2012 1:00 PM    Report this comment

Just one example of the dysfunction of having so much government and regulation.

The little airport where my plane is hangared wanted to expand the runway and fix the taxiway so it met federal safety standards (at one end the taxiway is too close to the runway). The FAA wanted to pay for the upgrade along with the state aviation department. Local government (port district) would pay less than 10 percent of the cost for this desirable improvement.

So what happened? Millions of dollars were spent on an "Environmental impact study". This took several years and numerous meetings with local government commissioners. In the end it was found that there were no significant impacts on the environment by extending the runway a couple of hundred feet. However, by the time this worthless process was completed the port district commissioners were replaced with newly elected ones who didn't want to expand the runway. Net result: millions of dollars spent trying to comply with federal regulations and no real progress accomplished at all. The only winners were the contractors who got paid all the money to do the environmental impact statement. The airport is just the same as it was before this outrageous effort that accomplished nothing.

Posted by: Paul Mulwitz | April 26, 2012 1:07 PM    Report this comment

Paul Mulwitz, my comment was directed at Paul Bertorelli's comment, "What you didn't address with that observation, Bob, is the explosive growth in government contracting."

By the way, the U.S. population has not tripled in the past few decades, it has almost doubled in the past 60 years (157,552,740 to 312,780,968).

Posted by: Robert Davison | April 26, 2012 1:13 PM    Report this comment

Bob, I think if you posit the fact that the FAA is essentially the same size as it was 20 or even 30 years ago as a means of saying it hasn't grown much, you have to look at the money, too. Whiffing it to the prevailing political winds contaminates the spending analysis.

In 1960, the FAA per-capita spending was about $4. Now it's $51. The spending has increased by a factor of 12 against a population that hasn't quite doubled. To be fair, the FAA does more. It has more facilities, provides more services, does more stuff. If you further said they're doing that with about the same staff, you'd say...bully. So would I.

But when you add up all the permanent contract players and consider them as head count, a different and fairer picture emerges. We definitely get more out of the 2012 FAA than we did out of the 1960 FAA, but it also costs an order of magnitude more.

Maybe you disagree, but this is exactly on point with AeroNav. It's fair to ask if this agency has capitalized on efficiencies due to technological innovation that might reduce its staffing while delivering equivalent services. My point is that government agencies tend not to do this the way private enterprise does.

Secondarily, why shouldn't we ask to be shown the books?

Posted by: Paul Bertorelli | April 26, 2012 2:28 PM    Report this comment

As for the tax and income part, you are correct and that is at the heart of the current debt/deficit mess. Long term since World War II, taxation has averaged 18 percent of GDP. After 2002, it slowly declined to a little less than 16 percent, depending on whose figures you want to believe.

So we have been and are living in the fool's paradise, spending but not taxing appropriately. In that context, the plaintive cry over AeroNav is so utterly meaningless it makes me want to slit my wrists.

Posted by: Paul Bertorelli | April 26, 2012 2:35 PM    Report this comment

Paul B - I have a problem with your arithmetic. Even if spending was 18 percent of GDP your numbers suggest the deficit would be the difference between 16 and 18 percent. However, the federal spending is at 24 percent of GDP.

That tells me spending is completely out of control. Even the Senate won't pass a budget because they can continue the outrageous spending level by not doing so. If they actually passed a budget it would have to be much smaller than the one they keep active with "Continuing Resolutions".

Posted by: Paul Mulwitz | April 26, 2012 2:45 PM    Report this comment

It's not my arithmetic, Paul, it's the Tax Foundation's and the OMBs. They agree on the numbers. You may be leaping to the conclusion that if taxation had been at 18 percent all along, we wouldn't have the deficit/public debt.

If you read that into my comments, I didn't intend it. It just wouldn't be as huge as it is and public debt would be similarly smaller. In 2000, taxation was at nearly 19 percent. Public debt then was at 58 percent GDP. It's now at 103 percent GDP. Recession made it far worse due to depressed receipts.

I thought everyone accepted that spending is out of control. There's just no societal will to stop it.

Posted by: Paul Bertorelli | April 26, 2012 3:38 PM    Report this comment

"Maybe you disagree, but this is exactly on point with AeroNav. It's fair to ask if this agency has capitalized on efficiencies due to technological innovation that might reduce its staffing while delivering equivalent services. My point is that government agencies tend not to do this the way private enterprise does."

Paul, I absolutely agree that it's not only fair to ask that, but that we, the Congress and OMB should ask and expect the FAA to make its case, if it can. That's how we get better government.

Posted by: Robert Davison | April 26, 2012 5:55 PM    Report this comment

Bob, at this stage I think the only way we will get better government is if we reduce the size of it in a drastic manner.

I have dreams that the Supreme Court in their ruling that Obamacare is unconstitutional will go further and define "Interstate Commerce" as only transactions where the parties are in different states at the time of exchange of money for goods or services. That would make perhaps 80 percent of all federal activities unconstitutional. I think it will take something like that to reduce the federal government to a manageable size - perhaps with a constitutional cap that it can never exceed 10 percent of GDP. Nice dream, huh?

Posted by: Paul Mulwitz | April 26, 2012 6:08 PM    Report this comment

I don't seem to understand what all the hububs about...we paid for paper charts before digicharts.......we paid for approach plates....the FAA is not double charging us here...we as a community of aviation have switched from paper to iPad, or self printed charts....I find it ironic that many comment on governmental cost over runs and spending taxpayer money, yet decry the new charge....we paid for paper..but...then we bellied up to the free of charge table to pig out, and pig out we did. Revenues from paper charts dropped like our economy...so would you like the tax payers to subsidize our charts...or would you like to live by the personal responsibility mantra I keep hearing so much about, and pay for charts..like we have always done....either you want to belly up to the tax payer subsidy table..or you don't...and if you don't...stop complaining about our deficit...because like it or not...aeronav is not allowed to make money off these charts, but they are authorized to be able to recoup the cost of data collection, production, dissemination and the cost associated with charting. If selling the paper doesn't recoup the cost...it comes from somewhere...we should be eager to pay for our charts while we rail about deficits, and out of control gubmint spending lest we become hipocrites fir decrying out of control government spending wilst we add to it

Posted by: rob haschat | April 26, 2012 8:32 PM    Report this comment

On the other hand, it occurred to me to run the FAA budget through an inflation calculator. In 1960, the agency's budget was about $700M. Now it's about $15.5B. It has risen at three times the rate of inflation.

However, during that period--and especially post de-regulation--the number of airline enplanements increased more than 12 fold. If my math is right, in 1960, the rate was $12.20 per enplanement. In 2011, it was $19. That's substantially under the rate of inflation, for whatever it's worth. (Maybe nothing.)

Posted by: Paul Bertorelli | April 27, 2012 8:13 AM    Report this comment

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