Dorothy Robyn and Kevin Neels present an economic perspective on space-based ADS-B technology.
The decision earlier this year by aviation authorities to abandon the search for Malaysian Airlines Flight 370 came just days after a SpaceX Falcon 9 rocket lifted off from Vandenberg Air Force Base in California carrying the first payload of next-generation Iridium Communications satellites. The irony was not lost on the aviation industry.
Iridium’s new satellites feature Automatic Dependent Surveillance-Broadcast (ADS-B) receivers capable of tracking the GPS position of ADS-B-equipped aircraft in real time anywhere above the earth’s surface. In 18 months, when Iridium’s new constellation is fully in place, MH370-type mysteries should become a thing of the past.
The global organisation that represents air navigation service providers (ANSP) has said that space-based ADS-B can ‘revolutionise’ air traffic surveillance, and many ANSPs are acting on that belief. Four ANSPs now own equity in Aireon, the Iridium joint venture created to provide space-based ADS-B as a service, and another six have signed long-term contracts. Although the US Federal Aviation Administration (FAA) has signed a MOU with Aireon, it is still analysing whether to adopt space-based ADS-B to supplement its radar and ground-based ADS-B systems.
In an effort to help inform the FAA’s decision, we looked at space-based ADS-B from the standpoint of economic efficiency. This research grew out of discussions with Aireon but we ultimately chose to pursue it independently. Our report: identifies shortfalls in the current surveillance system and describes the potential efficiency benefits of space-based ADS-B; tries to reconcile the widely varying estimates of fuel savings in oceanic airspace that competing analyses of space-based ADS-B have generated; and makes recommendations on how the FAA should carry out a comprehensive cost-benefit analysis of space-based ADS-B. We describe in this article the shortfalls addressed by space-based ADS-B and highlight key recommendations to the FAA.
Shortfalls addressed by space-based ADS-B
Although radar and ADS-B track aircraft in real time, allowing aircraft to be separated by only 3-5 nautical miles (NM), their coverage is limited to the airspace over land. In the airspace above oceans and remote land areas, which cover 70 per cent of the earth, controllers rely instead on infrequent position reports from the aircraft, which requires that aircraft be separated by 30-120 NM. With space-based ADS-B, satellites equipped with ADS-B receivers will take the place of ground-based infrastructure, making it possible to track aircraft with radar-like precision anywhere above the earth’s surface.*
By providing radar-like surveillance on a global basis, space-based ADS-B will allow for reduced aircraft separation in oceanic and other airspace that lacks coverage by radar or ADS-B (i.e., procedural airspace). In this way among others, space-based ADS-B can address shortfalls in the current approach to air traffic tracking and surveillance, yielding a range of benefits.
Capacity Limits The need for large separation minima in areas not covered by radar or ADS-B limits available airspace capacity, which reduces operators’ ability to obtain their preferred profile – altitude, speed and lateral track – at the start of the flight and their flexibility to make en route adjustments. By allowing for reduced separation minima, space-based ADS-B can increase airspace capacity in areas not covered by radar or ADS-B. Under conditions of higher traffic density, having additional capacity will increase operators’ ability to fly their optimal profiles, generating concrete benefits, including fuel savings, incremental cargo revenue, reduced greenhouse gas emissions, improved schedule predictability, and longer-distance flights and/or shorter flight times.
Bottlenecks in Upstream Regions The inefficiencies caused by large separation minima are not confined to procedural airspace. They spill over to ‘upstream’ regions, both adjacent and non-adjacent, because of the bottlenecks created when traffic gets funneled from radar-controlled airspace into procedural airspace – equivalent to cars moving from a crowded six-lane interstate on to a two-lane country road. For example, in New York, the need to space out flights bound for Europe or the Caribbean contributes to local congestion, which in turn can delay flights departing for, say, the West Coast. By reducing the differential between separation minima – in effect, widening the funnel – space-based ADS-B can ease these bottlenecks.
Failure to Use Oceanic Airspace to Relieve Terrestrial Delays Large separation minima also limit the use of oceanic airspace to relieve terrestrial delays. For example, when radar-controlled routes along the East Coast are blocked by convective weather, the FAA institutes ground stops and diverts traffic inland – actions that can propagate delays for hundreds of miles. If procedural separations were reduced, the FAA could instead divert traffic out over the Atlantic Ocean. Although operators would need to train their pilots and equip their aircraft for over-water operations, those expenses could well be justified by the reduction in delays.
High Cost of FANS Although the Future Air Navigation System’s automated position reporting capability, ADS-Contract (ADS-C), enables reduced separations in procedural airspace, FANS is expensive to install and operate, and there are limits on ADS-C’s ability to cost-effectively support significantly lower separation minima. Space-based ADS-B may give some operators – particularly those with narrow-body aircraft, many of which are not FANS-equipped – an alternative way to take advantage of reduced oceanic separations.
Challenge of Oceanic Search and Rescue Operations Although the 120,000 sq km search area for MH370 was unusually large, the ‘standard’ search area for a commercial aircraft traveling at 493 knots and reporting its position every 15 minutes (the common ADS-C update interval) is a still-vast 55,000 sq km. With its planned 8-second update interval, space-based ADS-B will reduce the search area to a mere 4 sq km.
Challenges to Terrestrial Surveillance Even in terrestrial areas, there are challenges to achieving comprehensive real-time surveillance, including the expense of installing and maintaining ground-based systems (radar and ADS-B), gaps in coverage, and lack of redundancy. Although the United States has an extensive ground-based surveillance infrastructure, the FAA may be able to reduce its future investment in that infrastructure at the margin by relying on space-based ADS-B. For example, satellite surveillance could reduce the resources that the FAA spends securing leases to keep ADS-B ground stations positioned on oil platforms in the Gulf of Mexico.
Limits on Regional/International Co-operation Despite significant progress, the management of international air traffic is far from seamless: ANSPs do not share information routinely and their use of different tools and procedures adds to the inherent difficulty of handing off traffic across airspace regions. Because of its global coverage, space-based ADS-B will facilitate shared situational awareness making it easier for ANSPs to exchange information, engage in collaborative traffic flow management, and jointly implement programmes to upgrade airspace capabilities.
Surveillance and National Security From a national security perspective, the current, global approach to ATC surveillance is lacking in ways that space-based ADS-B is well suited to address. For example, the Department of Defense and US intelligence agencies will be able to monitor global traffic flows in real time, more easily land military aircraft in war zones and disaster areas that lack functioning air traffic control infrastructure, and support joint civil-military aviation during critical post-conflict restoration and stabilisation efforts.
Long-Term Transformative Impact – Improved Competition in Aviation and ATC Provision By facilitating more direct routing and allowing aircraft to fly farther on the fuel they can carry, space-based ADS-B – together with new, longer-range aircraft – may help upstart new entrant airlines to challenge the existing hub-and-spoke market for transatlantic service with long-haul point-to-point service, much as low cost carriers challenged traditional domestic air service in the United States and Europe. In addition to upsetting the airline order, space-based ADS-B could facilitate fundamental changes in the current, national approach to the provision of air traffic control: armed with a common, global air picture, monopoly ANSPs could conceivably compete as well as collaborate in the same airspace.
Recommendations to the FAA
Expand the CONOPS The concept of operations on which the FAA is basing its analysis of space-based ADS-B incorporates largely incremental changes in existing oceanic procedures. Such an approach seems self-defeating: current air traffic management procedures are designed to work within the significant limitations of existing surveillance technologies – limitations that space-based ADS-B lessens or removes altogether. Unless it considers some of the new concepts that this potentially transformative technology makes possible e.g. variable speed operations, more direct routing, and relaxation of the requirement that aircraft be equipped with automated position reporting technology to take advantage of reduced oceanic separations, the FAA is destined to undervalue the benefits of space-based ADS-B.
Account for the Full Range of Potential Benefits The FAA analysis focuses principally on the impact of reduced separation standards on fuel burn in oceanic airspace. However, a comprehensive evaluation should account for all of the benefits that could flow from a decision by the FAA to adopt space-based ADS-B. Although many of these potential benefits – including reduced bottleneck delays and oceanic diversion – would be difficult to analyse with the same degree of rigour that the FAA brings to its evaluation of decreased fuel burn, the test for whether a potential benefit is both real and quantitatively important ought not be the ability to measure it using airspace modelling and simulation tools.
Account for all Affected Parties The FAA has framed its task as one of evaluating the ‘business case’ for space-based ADS-B – a term that typically refers to an investment analysis that considers only private costs and returns. By contrast, a ‘cost-benefit analysis’ considers the gains and losses to all potential stakeholders, regardless of where they occur. Precisely because space-based ADS-B can provide a broad range of benefits, it will affect multiple parties, including the Departments of Defense and Homeland Security and US intelligence agencies. The FAA’s analysis should take those impacts into account.
Consider Costs as well as Benefits Whether it adopts space-based ADS-B or retains ADS-C – with reduced oceanic separations – the FAA’s action will impose some costs, and those too should be considered in the FAA analysis. With space-based ADS-B, the service provider would charge the FAA an annual subscription fee, whereas with ADS-C, operators would incur most of the cost – for equipage, pilot training, and ongoing communications charges. The subscription charge – tens of millions of dollars a year, depending on the scope of the geographic coverage – while not trivial, is not a budget buster in the context of the FAA’s $2.8 billion annual facilities and equipment budget.
Focus on the Magnitude, not the Incidence, of Costs and Benefits Because of its inability to pass on the costs of a new service, the FAA would bear the direct costs of space-based ADS-B whereas operators would enjoy most of the benefits. This disparity may be relevant to the budgetary ‘politics’ of the FAA’s decision on space-based ADS-B, but it should not affect the economic analysis. Generally speaking, a cost-benefit analysis should ignore the incidence of costs and benefits and focus on the relative magnitude of gains and losses. This reflects a fundamental tenet of economics: if the overall net benefits are positive, it should be possible to devise an institutional structure and payment scheme that leaves all parties better off. Potential options, not all of them politically feasible, include: shifting to user-fee funding of the FAA; having aircraft operators pay for space-based ADS-B directly even though the service (i.e. data) would be delivered to the FAA; and having other federal agencies that would benefit from the service share the cost with the FAA.
Heed the Lessons of Iridium Introduced with much fanfare in 1998, Iridium – like competitor Globalstar – went bankrupt in less than a year, and its parent company Motorola, worried about future liability, came within hours of deorbiting the entire constellation. The federal government, by then a major user of satellite phones, quietly facilitated the acquisition of Iridium by private investors, who upended the business model and succeeded where Motorola had failed. Since then, Iridium phones have saved tens of thousands of lives and proved indispensable in war zones, disaster areas, and for hundreds of commercial and scientific uses – almost none of them anticipated by the federal government at the time.
Recognising how difficult it is to predict the value of new technology, the FAA should approach its task of evaluating space-based ADS-B with humility – and a sense of history.
Dorothy Robyn is an independent policy analyst who worked on policy issues involving Iridium as a member of President Clinton’s White House economic team. Kevin Neels is an economist who heads the transportation practice of The Brattle Group. Their report is available at http://ow.ly/eCEE308xMRT
¹ In addition to Iridium, Globalstar plans to offer space-based ADS-B service. Globalstar’s system – unlike Iridium’s – will require aircraft to install additional equipment and will lack complete global coverage. Although our research focused largely on Aireon because of its greater appeal to ANSPs, we view the potential for competition in the market for space-based ADS-B as highly desirable.
Dorothy Robyn and Kevin Neels present an economic perspective on space-based ADS-B technology.