The financial and operational benefits of the NextGen modernization effort will be slower to emerge than previously expected, according to the latest progress report from the FAA.

There is no doubt that NextGen will eventually deliver impressive savings and greater efficiency. However, due to a combination of factors the FAA has shifted out its forecast for achieving these benefits by two years. The latest guidance is part of the agency’s NextGen implementation plan, which is issued annually.

According to the FAA, the breakeven point for NextGen investment will occur in 2020, while last year’s version of the plan estimated a 2018 breakeven. The breakeven is defined as the year when cumulative benefits – to the FAA and airspace users – equal the cumulative implementation costs.

The new report estimates that NextGen will reduce delays by 38% by 2020, compared to the expected delay level absent any further NextGen improvements. The 38% delay reduction would yield $24 billion in cumulative savings by 2020 to the public, aircraft operators and the FAA. There would be a cumulative saving of 1.4 billion gallons of fuel and 14 million metric tons of carbon monoxide emissions over this period.

While those figures are impressive, they also represent a slight slip from previous estimates. The FAA says the benefits are essentially the same as those forecast last year for 2018.

One of the main causes is that the “no further improvements” baseline case has shifted due to new and expanded runways at Chicago O’Hare, Fort Lauderdale and Philadelphia airports. In addition, the soft economy and reduced passenger demand have led to airline schedule cuts, which has also meant fewer delays.

There are also internal reasons for the slower emergence of benefits. The FAA acknowledges “challenges in deploying complex systems” such as the en route automation modernization (ERAM) effort, as well as “refinements to our modeling inputs and budget pressures.”

Estimates of benefits will continue to be “highly sensitive” to changes in traffic and fuel price forecasts, the FAA says. Because of this, the delay reduction estimates will fluctuate within a range of 25-40%.

It is necessary to look beyond 2020 to see the full effects of NextGen, says the FAA. Some new systems will just be coming on line by then. Looking out to 2030, the agency estimates a benefit-to-cost ratio of two-to-one.

NextGen’s importance goes far beyond the benefits and savings outlined in its forecast, FAA notes. “Recognizing that NextGen provides improvements is not enough … we must also understand that without NextGen we will not be able to sustain the performance of the U.S. airspace system and economy will suffer.”

The NextGen implementation plan outlines the program’s extensive achievements over the past year, as well as describing the specific actions planned in the next few years. The mid-term strategy remains essentially the same, the agency says.

The full implementation plan can be downloaded here. For the first time, the plan is available in e-book format as well as pdf.