Jetrader - May/June 2011 - 19

So what will be your return on your investment in NextGen? As appraisers, you have to know that NextGen-equipped aircraft will be worth more on the secondary market than airliners without it. The time is coming—quickly—when NextGen-compatible equipment will be standard equipment on new aircraft. Values of aircraft not equipped will begin to drop. By 2020 all aircraft ﬂying in the busier airspace in the United States will need to be equipped with Automatic Dependent Surveillance-Broadcast (ADS-B). This technology is GPS-based and is more precise than our traditional radar systems. President Obama’s budget requests $285 million for the FAA’s piece of the ADS-B system. We are installing about 800 ground transceiver stations nationwide. This makes up the ADS-B network. We plan to ﬁnish that work in 2013. Companies that want to remain competitive will have to take advantage of the beneﬁts of NextGen. They will beneﬁt from better routes, added capacity, improved ontime performance and lower fuel bills. On the East Coast, JetBlue has partnered with us to equip some of its aircraft with ADS-B. This technology allows air trafﬁc controllers to follow the aircraft out over the water—off the coast where there is no radar. As a result, the company’s A320s will fly more direct routes, not unlike HOV lanes over the water. JetBlue will be able to take advantage of new NextGen routes from Boston and New York down to Florida and into the Caribbean that bypass the congestion. You here at ISTAT are honoring David Neeleman for his entrepreneurial spirit in creating JetBlue and other airlines. JetBlue is keeping that entrepreneurial, forwardthinking attitude alive. This is a trial period during which JetBlue will share ﬂight data with us to see how and where the GPS-based technology is saving time, distance and fuel. It will likely lead JBU to add equipage of the balance of the JetBlue ﬂeet—and meanwhile provide concrete data that may inspire other carriers to equip their ﬂeets as well. And on the other side of the world, on those long, 14-hour ﬂights across the

Paciﬁc Ocean, several airlines are beneﬁting by using more ﬂexible routes that save fuel. This is because of better data communications and excellent cooperation among international users. Planes can safely change paths in order to catch a good tail wind across the ocean. We are doing all that we can to promote new technologies to reduce fuel burn and fuel costs and to decrease our carbon footprint. Fuel represents about 40 percent of an airline’s total expenses, on average. And it’s rising. The cost of jet fuel has increased signiﬁcantly in the last six months due to a number of factors. We need to ﬁnd alternatives to petroleum, and at the FAA, we are doing just that. For the past ﬁve years, the FAA has been hard at work with industry, academia and other government agencies to ﬁnd alternatives. We are a principal sponsor of the Commercial Aviation Alternative Fuels Initiative, known as CAAFI. And we are taking a comprehensive approach to addressing the barriers to using sustainable alternative jet fuels. Already the group has secured approval for an alternative drop-in fuel that can be made out of coal, natural gas or biomass. It was approved for use at a 50 percent blend. This is the ﬁrst time in 20 years that a new standard for jet fuel has been certiﬁed. And by the end of this year, we should have approval for a renewable biofuel for commercial aircraft made from plants, algae or other sustainable sources. These alternative jet fuels are dropin fuels. There’s no need to change the engines or equipment. The source would be renewable and would reduce greenhouse gases. Sustainable alternative jet fuels offer beneﬁts for both our environment and our economy. They can help stabilize supply and the cost volatility in the jet fuel market. Consider that last year U.S. airlines spent $36 billion on jet fuel. That’s $21 billion more than in 2000, even though the airlines consumed three billion gallons less. Even a decrease of 10 cents per gallon could mean an industry savings of $1.7 billion per year. We can’t overlook the fuel savings from NextGen nor the beneﬁts from initiatives

like CAAFI. This is the wave of the future. In fact, innovation is affecting all aspects of ﬂight. Who would have thought 15 years ago that you could have an electronic ﬂight bag on your iPad? And that this small tablet could dispense with about 25 pounds of aeronautical charts in the cockpit? This is happening right now. Fostering innovation in the aviation industry and transforming our air trafﬁc control system for the Next Generation will require the FAA to change too. And we’re willing to do it. We have already begun. We have started to streamline the approval and certiﬁcation for NextGen procedures for Performance Based Navigation. These procedures include the precision approaches I mentioned up in Alaska. We’re calling the effort “NAV Lean.” We are looking to cut inefﬁciencies and delays in approving these procedures. We want to make the process lean. An FAA group worked for almost six months and made nearly two dozen recommendations this year for streamlining the approval process to ensure that users get navigation beneﬁts as quickly as possible. We expect to cut processing time by about 40 percent. The FAA is also working constantly to improve safety. That will always be our top priority. But we do recognize that there is innovation in the marketplace. And we want to certify new aircraft and new equipment as expeditiously as possible. We don’t want to be the choke-hold in the assembly line. As we move forward with NextGen, our goal is to reach the next level of safety and prepare our workforce for the future. We want to work closely with the industry to implement new technologies and procedures that are sustainable. And we want to work with other countries to establish uniform standards around the globe. This is a very exciting time in aviation. Together we are creating the template for a new system. The companies that get on board ﬁrst will beneﬁt. The best equipped will be the best served. I appreciate your help, your investment and your bright ideas as we mold the Next Generation air transportation system. Jetrader 19

Jetrader - May/June 2011

Table of Contents for the Digital Edition of Jetrader - May/June 2011