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  • Best Case Yet
    Posted by Tony Velocci 1:23 AM on Nov 07, 2011


    You don’t have to be a rocket scientist to understand the value proposition underpinning NextGen, given the reams of information backing up proponents’ claims of how it would benefit airlines, the flying public, and the country. One of the most compelling cases for NextGen is a recent study produced by Deloitte Consulting. Even discounting that the exhaustive analysis was done on behalf of organizations who would build and maintain the satellite-based positioning, navigation and timing system, you are left wondering after reading the report why Congress continues to do little more than trickle out funding for this transformational program.

    The explanation, of course, is that the nation’s largely dysfunctional governing body has all but lost the capacity to rise above partisan politics and act responsibly on something that makes as much sense as NextGen.

    The study examined three implementation timetables: by 2025, as now scheduled, accelerating it to 2020, and stretching it out to 2030. In each case, the study estimated the present value of the benefits, costs and the net present value—all based on relatively conservative assumptions. It projected estimated annual savings to include 3 billion gallons of fuel, elimination of 29 million metric tons of carbon emissions and reduction of 4 million hours of delay. Other benefits include improving safety and air system capacity.

    Here’s where the cost begins to fit the profile of an investment: The estimated value of the significant fuel and time savings along with the lower emissions amount to $29 billion of net benefits annually in the U.S. alone and $135 billion globally in the first year of full system deployment in 2026. Through 2035, the net present value is $281 billion. The EU Eurocontrol air traffic system agencies are modernizing through NextGen and Single European Sky Air Traffic Management Research (SESAR) programs. The estimated net present value of those programs is $266 billion.

    Anyone inclined to think that Deloitte merely delivered a finished product that fit industry’s preconceived expectations should think again. Its aerospace/defense consulting practice has been among the most outspoken critics of industry on everything from program execution to supply chain management.  

    As strident as industry has been in trying to persuade Congress to fund NextGen more aggressively, industry has not done nearly as good a job as they should in promulgating the Deloitte study on Capitol Hill. About a month or so ago, at an aerospace/aviation gathering practically in the shadows of the U.S. Capitol, I asked the head of legislative affairs of one of the industry’s principle lobbying groups whether the study has been put in the hands of every member of Congress. Industry professionals in attendance seemed genuinely surprised when the answer came back, ‘No.’

    Congress isn’t the only group that needs to get their act together.

     

    Tags: AWEIC

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