FAA's Mr_ Chew Tackles High Costs, Chronic Lateness
To Negotiate Capitol Hill;
A Job Nobody Wanted
Staff Reporter of THE WALL STREET JOURNAL
January 30, 2006; Page A1
WASHINGTON -- Russell Chew sat on an early-morning plane to Texas staring out the window at nearby snow banks. His plane, already 45 minutes late in leaving, needed to be de-iced.
For Mr. Chew, a dentist turned pilot who now runs the nation's air traffic control system, the delay was more than an inconvenience: It was a source of professional frustration. Glancing at his watch, he fretted that his plane's late departure would ripple through the congested system all day. "This is why it's impossible to run on time when it snows," he said.
Mr. Chew can't control the weather, but it's his job to deal with it -- along with an array of man-made problems plaguing the Federal Aviation Administration's overburdened air traffic control system. A former top executive at American Airlines, Mr. Chew, 53 years old, was tapped two and a half years ago to bring business principles and discipline to a sprawling operation dogged by cost overruns and outdated technology.
The FAA, created in 1958, oversees air safety, inspects airplanes and aids airports. But its biggest job is running the air traffic control system, a nationwide network of navigation aids, computers and 36,000 employees who guide 34,000 aircraft carrying 2.2 million travelers from one airport to another every day.
In 2000, amid growing frustration over flight delays, the Clinton administration proposed privatizing air traffic control. Rejecting that approach, Congress instead created a semiautonomous unit within the FAA, called the Air Traffic Organization, to be headed by a chief operating officer. The job was considered so thankless that it went begging for three years until Mr. Chew finally agreed to take it.
The former corporate insider found an operation with a host of challenges. The agency had no good way to track its costs. Billions of dollars had been wasted over the previous two decades on technology upgrades that often didn't work. Gridlock loomed as air travel grew ever more popular.
Since taking the job, Mr. Chew can point to several successes. He has overhauled the FAA's accounting system to more closely track costs and saved money by eliminating middle managers and closing offices. He has won respect for his mastery of the system's nuts and bolts.
But as a numbers man in a political and bureaucratic world, he has been frustrated as well. Congress has blunted his cost-cutting efforts by ordering spending on projects the FAA considers low-priority, such as a $3 million volcano-monitoring system in Hawaii. Even Mr. Chew's boss says he needs to get better at schmoozing Washington's power brokers to achieve savings.
Meanwhile, relations with the union of air-traffic controllers have hit one of the lowest points since 1981, when President Ronald Reagan fired striking controllers. The union's chief has branded Mr. Chew a failure.
Still ahead is perhaps the biggest challenge of all: updating the system under which controllers monitor planes in the air via tracking beacons on the ground. Mr. Chew and the FAA want to switch to satellite-based tracking but must persuade Congress to greenlight the multibillion-dollar program.
When Mr. Chew was at American Airlines, he expressed doubt that the FAA could ever be successfully overhauled. "The agency suffers from structural problems that even the best management team in the world would have difficulty fixing," he told Congress in 1999. "Little did I know," he says today, "that I would be here, trying to deal with it."
Mr. Chew grew up in Thousand Oaks, Calif., the grandson of Chinese immigrants. His father, a dentist, pressured him to choose a stable career and Mr. Chew followed him into dentistry. But he took up flying, ferrying freight and celebrities on weekends, and eventually decided to pursue his passion for aviation full time.
His love for flight is matched by a fascination with logistics. Years ago, when he visited Disney World with his wife Jill, he marveled at the shuttle-bus system that carried visitors around the park. "Wouldn't it be fun to visit Disney operations," he remembers saying. "You're nuts!" she replied.
In 1985, Mr. Chew joined American Airlines as a pilot. After flying for a few years, he did so well on a training test that he was tapped to help run the pilot-testing program. He rose quickly through management ranks to become chief of operations where he had a bird's-eye view of the aviation system's troubles. His duties included rerouting flights delayed by bad weather and tackling congestion.
Early on, he realized that airlines needed efficient air-traffic control at the FAA if they wanted planes to arrive on time and an ability to add more flights. Yet industry officials saw the FAA merely as a passive provider of services rather than as a partner. Agency employees, for their part, knew the airlines didn't have any alternative to dealing with the FAA -- and acted that way, Mr. Chew and others say.
In 2003, Mr. Chew, with some trepidation, took the chief operating job at the Air Traffic Organization. He took a salary cut (the job paid him $174,000 last year). He says he was motivated by a sense of public service. "I was thinking my company and no company had a future unless we fix this," he says.
He began by putting in place practices that are commonplace in the corporate world. He ordered the agency's first inventory of equipment and eliminated a dozen mid-level management jobs, saying there were too many deputies for anyone to feel accountable. He began weekly meetings with top managers to try to instill a sense of shared purpose. "In business, if one element of the company does poorly, everyone suffers," he says. In government, "if one does poorly, the other says, 'I did my job.' "
A few months into the job, Mr. Chew was dismayed to learn that a new computer display system for controllers was set to be deployed to more than 160 sites at a cost of $3 billion. Terry Bristol, who runs the program, says the attitude at the FAA was "you don't just put it at one location, you put it at every location." But after Mr. Chew objected, Ms. Bristol's team deployed the equipment to just 47 sites, saving $1.5 billion.
Constant Concern
On-time performance is another constant concern. Mr. Chew begins each day with a 7:30 a.m. operations call where he and his top managers review a spreadsheet showing how many planes were delayed or cancelled the previous day and what caused the problems. The FAA never had this rich source of data, Mr. Chew says, until he insisted on measuring everything. Now, he says proudly, "all the metrics fill up our scorecard." To reduce hours-long delays at airports from bad weather, Mr. Chew devised a system that spread the pain. Airplanes destined for the troubled city are now held at their home airports, even if the weather there is good, to relieve pressure on the affected area.
The cost-accounting system Mr. Chew developed told the FAA for the first time how much it costs to handle a single airplane or install a piece of technology. The new accounting showed it cost $457 to handle one jet on one flight in 2003. Mr. Chew's cost cuts helped bring that down to $440 the next year, the FAA says.
Proving that the FAA can spend its budget wisely is critical to getting Congress to sign off on the satellite-based air traffic control system. Land-based beacons are unable to pinpoint a plane's location with complete accuracy. To avoid midair collisions, controllers have to allow extra space between planes in case the beacon data are slightly off. A network of satellites would allow more planes to fly at once and make it easier to handle the projected 25% increase in air traffic over the next decade.
Some FAA managers are pleased by Mr. Chew's efficiency drive. Barbara Cogliandro, an air traffic manager at a facility in Vint Hill, Va., knows for the first time the cost of operating her facility, which she says was $42 million in 2004. And she now knows the price of "strips" -- paper forms carrying key data for a given flight that get passed from one controller to the next. A box of 13,000 strips costs $134.
"Before I'd call and say, 'I need strips,' and the people at the regional office would say, 'OK, we'll send you 100,000 strips,' " says Ms. Cogliandro.
But Mr. Chew also faces resistance. He isn't the first outsider to show up at the FAA with a plan for change. Agency employees "feel if they don't like something, they can simply wait it out," says Norm Fujisaki, who retired last year after three decades with the agency.
More than two years ago, Mr. Chew hatched a plan to consolidate nine regional offices into three, saving up to $460 million over 10 years. Some FAA officials who work outside of Mr. Chew's unit appealed to FAA Administrator Marion Blakey to block the plan. The consolidation was finally announced last month but hasn't yet been implemented. Many FAA employees "see any kind of change as very threatening," says Ms. Blakey.
Other battles are on the horizon. The FAA has 43 centers that handle air traffic when planes are outside the immediate vicinity of an airport. The Government Accountability Office, the congressional watchdog group, and others have said the FAA could save money and operate more efficiently by slashing the number of centers. But lawmakers are sure to fight the closing of facilities in their districts.
Pushing through the change will require political savvy, which Mr. Chew, by many accounts, has in short supply. "To be successful as an executive over any significant part of government, you're going to have to be able to operate in a politically strategic way," says Ms. Blakey, who hired Mr. Chew. "It may be fair to say he's still learning that."
A Hard Lesson
He got a hard lesson in the politics of closing facilities when the FAA proposed consolidating and contracting out flight service stations. These small offices give private pilots in small planes weather information and a place to file their flight plans. These pilots supported the plan, which promised to save $2 billion over a decade. But because it eliminated some federal jobs, lawmakers and labor unions balked. The Republican-controlled House of Representatives followed the lead of liberal Rep. Bernie Sanders of Vermont to scrap the plan.
The plan eventually was restored after negotiations with the Senate. Still, the debacle showed that Mr. Chew "doesn't get the politics," says Phil Boyer, executive director of the Aircraft Owners and Pilots Association. He remembers telling Mr. Chew early on, "I think you're underestimating the role that Congress plays as the board of directors of this FAA." Says Mr. Chew: "I'm not a salesperson in that way."
He also has been frustrated by the power of Congress to force the FAA to spend money on lawmakers' pet projects such as the volcano-monitoring system and multimillion-dollar instrument-landing systems for tiny airports in Nebraska, Iowa and Alaska. Backers of these projects describe them as necessary for safety but they aren't FAA priorities.
Mr. Chew says he's committed to serving out his term, which expires in 2008, despite rumors that he is about to quit. "He pulls his hair out in big clumps because it drives him crazy," says John Carr, who heads the National Air Traffic Controllers Association, the controllers' union.
The union has posed its own problems for Mr. Chew. NATCA initially welcomed him. As recently as last fall, Mr. Carr praised him in an interview as someone with an "engineer's mind" who likes to solve problems. Occasionally, the two met for coffee near their homes in Virginia. But the relationship unraveled amid angry talks over a new contract for controllers. Mr. Carr was furious when he saw Mr. Chew participating in a November news conference at which FAA officials portrayed controllers, who make an average of $128,000 a year, as overpaid.
Mr. Carr wrote Mr. Chew a bitter letter, four and a half pages long, that reads like the breakup of a romance. "Your call for union participation as a priority was a joke, a hollow shell, a charade, a cruel hoax," he wrote. Talks on replacing the expired contract are continuing.
In an interview, Mr. Chew brushed off the letter. "Here's the reality," he said. "Labor can't divorce from management and management can't divorce from labor."
Mr. Chew isn't letting up on his cost-control drive. At a recent meeting at the FAA's Fort Worth regional office -- his destination on the day his plane was delayed by bad weather in Washington -- Mr. Chew exhorted employees to pay attention to spending. He clicked through PowerPoint slides to prove that the FAA will run out of money on its present course.
With a "metrics driven, data driven, performance driven" organization, he argued, "you can always make the case for more money." The alternative, he said, is aviation gridlock. "We need to take control," he told the FAA employees. "We need to dictate our future."
No comments:
Post a Comment