ICYMI: Modernizing Air Traffic Control is Going Back to the Drawing Board

The White House hosted a meeting of the President’s Cabinet on the afternoon of Monday, March 24, 2025, during which the subject of America’s aging air traffic control (ATC) system came up. The President himself, referring to the terrible tragedy that occurred near Washington, DC’s National Airport on January 29, complained, “we have a system that’s 40-years-old.” He then added, “They spent tens of billions of dollars trying to patch it up and, you know, make it work, but it doesn’t work. … we’re going to have to get a brand new, modern, top-of-the-line air traffic system.”

This is the kind of statement that should make industry sit up and pay attention. The President then stated, “I’ve been working a little bit with [Transportation Secretary] Sean [Duffy] on it, but Sean’s been working hard on it.” Trump then turned the meeting over to Duffy, who offered more details. It is worth quoting the Secretary at length because of the importance his comments have to contractors working at the Federal Aviation Administration (FAA).

Secretary Duffy: “We had a conversation on Friday. Again, our air traffic control system, as we talked about maybe privately, or I don't know, [or] publicly with all of you, but we have decades of ideas and billions of dollars, and no progress is ever made on any of these initiatives. Air traffic control is the same thing. (35:20) And so we’re having a conversation about building a state-of-the-art, brand new, best technology, envy of the world, air traffic control system. And what’s interesting from the DOGE team is they’ll look and say, well, what’s the problem? Why hasn’t this been built? … And the problem is, in government, it takes way too long. So, technology changes, and money changes, and administrations change. We have to do this fast, which is why we need the partnership from the Congress to give us the money up front. The best ideas and the best technology available in the world we’re going to build in the system. I think, Mr. President, we can do it in three years. I think Trump Tower was built in three or three-and-a-half years. I think we could match the Trump Tower time frame.”

Secretary Duffy revealed several key things for industry to know about the effort to modernize the nation’s ATC system.

1. The White House is prioritizing the modernization effort.
2. The Department of Transportation will be requesting funding in FY 2026 for the modernization effort. Presumably, that funding will appear in the Federal Aviation Administration’s budget request. We’ll learn that in May.
3. The new system is likely to be built from scratch despite the fact that (or perhaps because) the FAA has been working on its replacement, the Next Generation Air Transportation System (NGATS) since FY 2006-2007.
4. It appears that the Department of Governmental Efficiency, or at least Elon Musk personally, will be involved in developing the technology roadmap for the new ATC system.
5. If new technology is procured for the new system, that acquisition is likely to begin before the end of this fiscal year. I don’t see how it can’t be given the aggressive 3-year time frame for completing the work Secretary Duffy mentioned.

While more information on the shape this effort will take is not currently available, one might reasonably assume that bypassing NGATS, if that is what’s planned, will affect dozens of contractors at the FAA. The agency requested $702M for NGATS in FY 2024. I am using this figure because of the funding levels set in the latest full year Continuing Resolution. The FAA actually has more funding now than it would have received in an approved FY 2025 budget. FY 2026 will likely look entirely different.

Given this evolving situation, contractors working on NGATS at the FAA should keep their ears to the ground. The sooner you learn the anticipated fate of the NGATS work the better. A final thing to remember is that the FAA makes extensive use of Other Transaction Authority (OTA). The speed with which the administration wants to modernize the ATC strongly suggests it could leverage OTA to quickly procure solutions from non-traditional contractors.