FAA ramps up billions in spending as ‘down payment’ for air traffic overhaul
The Federal Aviation Administration has been working to update its aging air traffic control system, literally, for decades now. But 2026 is looking to be a big year on the FAA modernization front. The One Big Beautiful Bill Congress passed earlier this year puts more than $ 12 billion toward air traffic control modernization, and the FAA’s new administrator expects to obligate about half of that by the end of this fiscal year.
The agency is on an aggressive schedule to completely replace the air traffic control system within the next three years, and the billions of dollars in reconciliation funding targeted for expenditure in fiscal 2026 is meant to lay the foundation for that long-term plan. The agency says it is using the funds to modernize its telecommunications and air surveillance systems, including by replacing aging copper circuits with fiber optics.
“When we talk about modernizing telco, most people think about moving from copper to fiber, going from analog to digital. And that’s all true, but there’s another element of modernization that we aren’t doing today,” Bryan Bedford, the FAA’s administrator, told the Senate Commerce Committee this month. “The second round of funding that we’re asking for will be to re-architect how the fiber is laid. For example, Dallas-Fort Worth recently had a significant outage. There, the system theoretically was modernized, but the architecture of that system had not been modernized. So there’s really a two-step process here. There is still another step that has to happen to get from analog to digital, which will drive the resilience and our capabilities to increase bandwidth in our facilities.”
Bedford told lawmakers the telco modernization work is now about 35% complete, and that portion of the overall project should be finished by the third quarter of fiscal 2027.
New prime integrator
But to finish all the work the agency believes will fully modernize the system, officials say they’ll need another $ 20 billion on top of the $ 12.5 billion they refer to as a “down payment.” And to manage the overall project, the FAA earlier this month hired Peraton to serve as the prime integrator for the new system.
In order to meet that three-year target, Bedford said the agency built in specific incentives to reward performance and on-time delivery across 14 areas the FAA has identified as “critical needs.”
“We set up a series of needs packages that clearly articulate what the work streams are and the estimated timeline to completion,” he said. “Peraton’s profit is essentially broken into three different elements. There’s a fixed profit element of 3% and then there’s a variable element of 6%. The variable element is contingent upon completing the plan on budget and on time with our satisfaction, and we will hold back 3% of the potential profits for any potential damages that might happen for failure to comply with our work packages. So it’s a very strenuous agreement, and we have vigilant oversight on it.”
Unsustainable legacy systems
Meanwhile, the agency says it will also need additional funding to keep the current system up and running while the new one is being built. The Government Accountability Office has identified 105 individual components of the overall system that it’s deemed unsustainable as those subsystems, many of them decades old, continue to age.
And so, Bedford said, the $ 5 billion in annual “modernization” funding Congress is considering as part of the standard appropriations process is more about operating and sustaining those legacy systems than modernizing them.
“As you read many of these audit reports, you learn the same thing that I have, which is 80% of our infrastructure is considered obsolete and/or unsustainable,” he said. “So the vast majority of that $ 5 billion doesn’t actually go to build new brick and mortar. 85 to 90% of those funds actually go to repairing, painting or replacing elevators and HVAC systems and plumbing and roofs. Frankly, we’re putting lipstick on a pig. So you may think you’re buying brand new infrastructure with the $ 5 billion but what you’re buying is sustainment of the old system.”
The overall modernization project is broken down into five categories: communications, surveillance, automation, facilities, and broad updates across the state of Alaska.
Workforce concerns
Sen. Tammy Duckworth (D-Ill.), the ranking Democrat on the transportation subcommittee on aviation, space, and innovation, argued there needs to be one more: workforce.
“We must remember that the recent aviation safety crisis was driven by decades of the FAA pouring billions into unproven technologies and costly service contracts as it pursued, in vain, modernization projects with overly ambitious goals and constantly changing requirements,” she said. “These shiny objects lured the FAA into neglecting the health, capabilities and capacity of our system’s most important assets, its people. Under Presidents of both parties and across multiple Congresses, ATC shed critical expertise and experience. And between 2013 and 2023, the FAA only hired two thirds of the controllers that the FAA’s own staffing model called for. So today, we find ourselves short 3,500 air traffic controllers, while air travel rises to record highs and controllers are forced to regularly work 60 hour weeks because well over 90% of airports are understaffed. Placing the lives of our constituents in the hands of civil servants who are overworked and utterly exhausted was and remains unfair, unacceptable and ultimately dangerous.”
Bedford said the agency is taking workforce issues seriously under a separate initiative, called Flight Plan 2026. He said the FAA has plans to hire 8,900 new controllers between now and 2028.
But the recent government shutdown didn’t help matters. An estimated 500 people withdrew from the FAA’s controller training programs while they were waiting for the government to resume normal operations. And for controllers already on the job, staffing shortages caused an unprecedented number of safety-related air traffic slowdowns.
“Staffing triggers reached unprecedented levels, rising from mere single digits prior to the lapse to more than 80 in a single day,” Bedford said. “Applying the hard lessons we’ve learned from the DCA accident, the FAA safety team identified controller workload and system demand as emerging risk factors. And as a response to this increased risk, we temporarily reduced operations at 40 high traffic airports. The connection between controller workload, system demand and operational risk was unmistakable, and it reinforced the need for the FAA to act decisively when the data demanded it, and underscored the importance of stable controller funding.”
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