Industry experts from Thales and Karen Walker discuss the priorities and challenges of making sweeping changes across the national air traffic control system.
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Karen Walker (00:10): Hello everyone, and a very warm welcome onboard Window Seat, Aviation Week air transport podcast. Thank you for joining us. I'm ATW and Aviation Week air transport editor-in-chief Karen Walker. Today, we are going to talk about what's happening with efforts to modernize the US National Air Transport Management System. It's a long overdue and critically important project, so I'm delighted to be joined in this discussion by two industry experts that I first met in June at the Paris Air Show, and we talked a bit about this subject. They are Thales North America CEO Alan Pellegrini, and Thales North America vice president, sales and business development, Antonio, or Tony, Lo Brutto. Alan, Tony, thank you so much for joining me again and great to see you both again.
Alan Pellegrini (00:58): Likewise, Karen, thank you for having us.
Tony Lo Brutto (01:00): Yes, thank you very much for giving us this opportunity.
Karen Walker (01:03): Almost a year ago, US secretary of transportation Sean Duffy announced a major campaign to modernize the US ATM system. The announcement was applauded by industry and stakeholders across the entire sector, including lawmakers across the aisle, airlines, labor unions, and more. Since then, of course, a lot has happened. Importantly, Congress approved the provision of $12.5 billion to initiate work such as replacing antiquated radars. Bryan Bedford came in as the new FAA administrator, and he made clear his support for Duffy and that ATM modernization was a top priority. But we've also had a full government shutdown during which air traffic controllers were mandated to work, but their pay was withheld, followed by a partial shutdown that affected the Transportation Security Administration or TSA, which put TSA screening officers in the same position a second time, and that led to lengthy queues at some US airports. Then tragically, there was the collision of an Air Canada regional jet with an emergency rescue truck on a Washington Reagan National Airport runway that killed both pilots and seriously injured a flight attendant and others.
(02:18): That accident investigation continues, but what was happening in the air traffic control tower that night is, of course, under scrutiny. Finally, the US went to war with Iran, a massively expensive and distracting operation at a time when DOT and FAA are still looking to Congress for another $20 billion to fully fund the ATM modernization project. So where do things stand and what are the things to watch out for now? That's what I hope, and I'm sure, Alan and Tony can help shed some light on here. Alan, can we just start with you, please? Let's just begin with what, in brief, as to what Thales is as a company knows about ATM system modernization and management. You've got a lot of experience worldwide in such things, so give us a couple of examples, please.
Alan Pellegrini (03:09): Yeah, thank you, Karen. Thales is deeply embedded in aviation solutions from ATM, like you just mentioned, but also the cockpit. So we understand both what pilots are doing, but also what controllers are having to deal with at the same time. I think it's worth noting that in the air traffic management area, we provide solutions that handle automation like ATC, which we'll talk about, but also surveillance when we talk about radars and navigation. So we are kind of an all-encompassing air traffic management organization. Our automation system is called TopSky. It's really a portfolio of solutions we've deployed in over 85 countries worldwide. It's a platform that addresses—and this is important—both strategic and tactical aspects of ATC, meaning it helps with upfront planning and optimization, and in addition, handles the real-time minute-to-minute decision-making that controllers need to perform. Just to give you a specific example, Australia is a country that comes to mind where we've deployed TopSky.
(04:24): I bring it up because it's a very large airspace comparable to the size of the United States and a few important aspects of that implementation—it's replacing, in this case, both civil and military air traffic control systems. It's also combining functionality of what controllers use at the terminal, in route, and to manage oceanic air traffic. So it kind of demonstrates as a platform its flexibility and scalability. Finally, I would say it includes advanced functions and features, which again, emphasize the upfront planning and decision assistance, which really help optimize controllers' workload and their effectiveness.
Tony Lo Brutto (05:09): I think another example for us is we have a consortium called COOPANS in Europe, where there's a number of countries like Portugal, Croatia, Sweden, Norway, Denmark, where they've come together and formed a consortium with the goal of having a common platform across their nations. And they've selected Thales as the provider of that. And what they do is not only do they deploy obviously the same platform, but they also come together on a yearly basis and make determination of what new features and functions do they want to see in their system. And then we provide that on a timely basis. So, there's a continuous improvement, so to speak, a continuous upgrade of the system. So, you're not necessarily stuck in a configuration that was developed and designed many, many years ago. It's an evolution that keeps going. And with that, we're introducing concepts like cloud-based processing.
(06:14): We're introducing AI in order to help with improvement in capacity and improvement in prediction, especially when it comes to long-term weather conditions and that kind of stuff. So, it's another application of a common platform which brings out a lot of benefits to not only the providers of that service and the ANSPs, but also the flying public.
Karen Walker (06:43): Right. So the big takeaways I'm getting there is the importance of being able to continuously improve, particularly when you've seen what's happened with the US system, that it just became so antiquated that even being able to update things has been incredibly challenging. But also, this is a very simplistic way of putting it, but there's really two main parts here. One is the equipment, the physical equipment, and the other is the sort of management of the whole system and bringing it all together. So given your experience that you just laid out, Alan, maybe you could start this one. Where do you see some parallels with sorts of things, other systems that you've worked with and the US ATM system, and what are the differences?
Alan Pellegrini (07:32): When we're talking about modern ATC systems like Tony and I just discussed, like in Australia and you compare it to the current US systems, I mean, let me start by saying, I mean, they both put safety first. There's no doubt about that and no compromise in that regard. We could also say that there's similarities in terms of the overall functionality. If you just looked at it from a 100,000 ft kind of level, they appear to do similar things, but that belies some of the very important differences. And we like to compare modern systems to legacy systems in the way you would compare your iPhone today to a flip phone that we all used two decades ago. They're very different. Modern systems, as Tony mentioned, it's one common cloud-friendly architecture that can support all aspects of ATC from in route to oceanic to the terminal. This provides enormous flexibility to an ANSP like the FAA on how they utilize the system and where they put their controllers and such.
(08:34): So, it improves flexibility, it's easier to configure, it's easier to integrate. It allows for upgrades that Tony mentioned. It's a platform that will evolve over time with reduced investment, and that's important. And I think Tony mentioned advanced features that really serve the purpose of improving efficiency and capacity utilization of the airspace. We want more aircraft flying and arriving, more aircraft arriving on time while continuing to emphasize safety. So tools like AI that help do a better job with upfront strategic planning and use of the airspace, all the way to helping to deconflict tactical operations, these are going to help the airlines and the FAA optimize routes, help deconflict potential issues. And so we firmly believe, I think that the FAA and Department of Transportation under Secretary Duffy and Administrator Bedford, they really have a great vision for how to transform this legacy airspace management using modern tools for the national airspace and to maximize all the use of this new functionality.
(09:48): Once deployed, it's going to help all constituents. Airlines are going to be able to better plan and optimize the utility of their fleets, increasing capacity in the number of flights they offer. Controllers are going to have state-of-the-art tools that help them focus on the most critical, serious aspects of their job and not be distracted. And passengers, all of us are going to enjoy more on-time departures and arrivals. So, I think we can agree it will be a win-win-win situation.
Karen Walker (10:18): Yeah. Tony, can you pick up on a couple of points there, really? Those are all the good points that everyone I talk to just says, "This is why we have to have a modern system." So, they're good points. And the US has an advantage in that it's all one country. It's big, but it's all one country, but it's also a massive system that, as I said earlier, is very antiquated. There's been a lot of what I would call Band-Aids applied for a long time. So Tony, what are the main challenges with this system, getting it to that point that Alan has just said?
Tony Lo Brutto (10:50): I think you're right. We are a large country, but we're also very bespoke in terms of how the current system is deployed. We have one system for terminal, one system for in route, another system for oceanic, which is very cumbersome from a standpoint, especially with handoffs. It's not very flexible, doesn't allow you to make changes based upon the traffic, based upon weather, based upon a number of other potential attributes that are going on. So what's required obviously is a common automation platform, which is what the administration has deemed to be forward, which is what we talked about earlier, Australia is moving to as well. So the challenges with anything is not only is the combination of the technology, bringing the technology to bear to the forefront, and then it's how you transition that from which you currently are operating to the new system. The old adage, you got to drive the bus and change the tire at the same time.
(11:52): I'm not sure that does it justice, to be frank. The reality is—I think the technology part doing a sense is the easy portion of that problem. The question associated, what does that transition plan look like? How do we ensure that all the users primarily here, let's talk about controllers, how are they going to be trained? And it's not just the training of the new look and feel of the system, because obviously that would be different, but it's also the new procedures that are now you can come to bear because you have new functionality that you can get a lot of these benefits. So, the procedures have to be, you could talk about airspace redesign. All those things require obviously a well-thought-out plan. How are you collaborate more with the airlines? With the airlines, as Alan talked about earlier, are going to be part of this, especially in the planning, right?
(12:48): Not that they're not today, but it's going to be more of a collaborative effort. So all those things require very coordinated planning. Of course, there's obviously real estate where you're going to put the equipment, and I think that's part of what the administration wants to do as well, is bring to bear some new facilities, state of the art. Alan mentioned the concept of flip phone versus iPhone. Well, another, besides the look and feel, there's also the 5G versus 2G. So, is the whole communication network required with the new application with cloud-based and everything else? So yes, it is a lot to think about, but it's also something that gets done every day around the world where ANSPs are constantly updating their systems.
Alan Pellegrini (13:43): Karen, I just want to add one point to that. Tony talked about that the other things that need to be done in implementing a new ATC system, we also need to put a special emphasis on security, in particular cybersecurity. When we're talking about cloud-based solutions, that becomes even more important. From a Thales perspective, it's an area of extreme focus for us. We are a leading cyber company in our own right. We apply that to all of our critical businesses, whether it's equipment that goes in the cockpit of an aircraft, to defense solutions, to managing financial transactions. And we certainly apply that to our ATC system. So, I would just add that's another important topic that needs to be addressed during this modernization.
Karen Walker (14:26): Good point. And Alan, also, obviously you mentioned safety, of course it's a given, it's right up there, top priority with all of this. But you also mentioned about an efficient system. And my takeaway from that is the benefit to the passenger in that hopefully fewer delays, fewer congestion points like we've been seeing of late, but also that can bring something to aviation sustainability surely. I mean, that's also important, yes?
Alan Pellegrini (14:55): I think absolutely. The case, I mean, the aviation industry I think has been kind of on the forefront of addressing sustainability topics. We are part of that discussion as we build avionics and flight management systems that help airlines optimize how they fly their aircraft for sustainability or other reasons. And likewise, as the ATC systems become modernized, those same kind of capabilities now get incorporated. It will give the airlines better upfront strategic capability to optimize their routes the way they like and give an ANSP like the FAA the ability to do the same from their perspective. So, it certainly has the potential to help address that topic.
Karen Walker (15:42): Let's move to the money. I mentioned that DOT and FAA are seeking another $20 billion on top of the $12.5 billion to fund the whole system. Does that sound like ... I mean, it's a lot of money, but is it a realistic budget, do you think, for all that's needed, Alan, maybe?
Alan Pellegrini (16:02): Well, look, we don't know exactly how they've built that, but as we look at the figures, they seem consistent with the scope of this modernization project. And I think what we have to remember is while this number may appear to be big, they are big figures, traditionally the FAA has funded upgrades and evolution of systems in a year-over-year budget process, and it kind of masked a little bit the totality of the investment. I think the administration is being bold and innovative and aggressive in saying, "Hey, we want to do this in an efficient, effective way, get upfront funding, and let's go roll this out as quickly as we can, effectively as we can, and let's start to maximize the safety and economic benefits at the earliest possible way." That ultimately will provide a better return on this fairly significant investment. So the overall number appears to be in the range required, and the fact that they want to do this upfront, we strongly endorse because that's how the United States will maximize the benefit from it.
Karen Walker (17:11): That's a very big difference from where, as you say, we've been forever with FAA. Each time states, "We need to do this, need to do that." But when you're just going from a year-to-year budget and no guarantee that it's going to stay, that's often been a big obstacle to all of this. As I said earlier, when this campaign was announced last year, there was a huge support across everywhere for this. Do you still sense at the moment that there is, particularly among Congress, a strong commitment to that and that amount of money, given the distractions and costs of the war and other things going on?
Tony Lo Brutto (17:54): Yeah, Karen, I'll take that because obviously that's part of my job. Yes, we actually see continuous bipartisan support across obviously the two parties, but across regions. So it's not just ... I think because everybody sort of realizes the economic impact that air traffic has across the US—not only that, but also we're in spring training week, everybody's going on vacation. It's just such an integral part of our daily lives, so to speak, that everybody wants to have the most efficient, safe system out there—and also on time, because nobody wants to get to their appointment late. So ,we do see there may be a difference maybe how to go about funding it, not to get in a lot of it into the weeds to, as Alan pointed out, should we do it all at once? Should we do it on a year-by-year basis?
(18:55): There's a whole reconciliation versus supplemental, all these other inside Beltway discussions about funding. But nobody's talking about, "No, we should not do this." Everybody's talking about how we're going to do it. And obviously want to make sure that the money is well spent, which I think the administration has shown a lot of evidence in the short period of time that they are making progress in transitioning and modernizing the air traffic system.
Karen Walker (19:24): Yeah, and Secretary Duffy has remarked a couple of times at least that on the funding side, creativity will be part of the solution. He's sort of thrown that challenge to Congress to say, "Just work it out, but make it happen, but work it out how you do it." So one final question for you both, if I may, FAA and DOT, as I said, we have seen movement, we are moving along. They've begun purchasing some hardware replacements like radars, and they've awarded a contract to an integrator for system construction. I'd be interested to hear your take on, does that mean this will all still need a system manager with a role that's different from an integrator?
Alan Pellegrini (20:10): Yeah, this really is for the FAA and the Department of Transportation to determine. I would say this, in our experience working with the secretary and the administrator, we have complete confidence they're going to structure this program correctly and with the right partners. It's hard to overemphasize how personally active they are in this process, how deeply engaged they are on a day-to-day basis. And I would say passionate about this mission. I really believe that when you sit across the table from them, I think we're fortunate at this moment in time to have this kind of leadership addressing such a vital part of our daily lives. So we will rely on the FAA and DOT to make that determination of how they want to structure this program. We will do everything we can to support them.
Tony Lo Brutto (21:02): Yeah, I will sort of echo that and state that my observation of the last 12 months is that first of all, nothing necessarily seems to be off the table for them. If there is a potential issue or problem, they do seem to be innovative in a way of trying to figure out how to solve that. So, the sort of going back, "Oh, you can't do that because that's the way we would do it before”—that doesn't seem to exist, which is a very refreshing thing to hear. And I've also seen a tremendous amount of collaboration and cooperation across various stakeholders, whether it be airlines, airports, controllers’ union, maintenance people's union, or industry. So the details on overall how to execute this, as Alan said, we'll leave that up to the FAA, but we are seeing very strong evidence that the mission is to get this done, and that seems to be what's a driving force behind it, which we welcome, and I'm happy to be part of that mission.
Karen Walker (22:09): Of course, for optimism, and it's more than optimism all we need here. It's such an important project. So yes, absolutely. I know that Administrator Bedford is just deadly keen focused on this, the importance of it, and he also understands the enormity of it and what's needed. So, I think you're right. I think we've got the right leadership and hopefully the right backing from Congress for all of this. Alan, Tony, thank you so much for your time and expert perspectives today. I really appreciate you giving me this time on Window Seat. Thank you so much. Thank you also to our producer, Cory Hitt, and of course a huge thank you to our listeners. Subscribe to Apple Podcasts or wherever you like to listen to make sure you catch every episode. This is Karen Walker disembarking from Window Seat.
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