The Federal Aviation Administration’s ambitious Next Generation Air Transportation System, known as NextGen, was once billed as a sweeping transformation of U.S. air traffic control. Launched in 2003, the program set out to replace the nation’s radar-based system with satellite navigation, automation, and digital communications.
More than two decades and roughly $36 billion later, a growing body of oversight reports paints a different picture: a modernization effort that ran over budget, fell behind schedule, and achieved only a small share of its expected gains.
That isn’t to downplay the benefits the program has brought so far; it does have measurable benefits we enjoy today that were not always a given. Digital communications generally allow for faster and more accurate communication. Satellite-based surveillance adds more clarity and precision to determining aircraft locations. Performance Based Navigation helps pilots and operators take shorter flight paths, in turn cutting their fuel burn and emissions. Automation tools help controllers simplify the complexity of their jobs, to a certain extent.
Agency officials say these improvements represent meaningful progress toward the long-term vision of a Trajectory Based Operations system nationwide.
That is unfortunately not, of course, the full picture.
The Department of Transportation’s Office of Inspector General (OIG) concluded that the FAA has delivered a delayed, over budget, and less transformational modernization effort than originally planned. Through the end of 2024, the agency had achieved only about 16 percent of the total expected benefits from the initiative that began in 2003. Many of the system’s key technologies—intended to cut delays, lower fuel burn, and increase airspace capacity—are now postponed until the next decade.
Lofty Goals, Limited Results
NextGen began life as a multi-decade project to overhaul much of the existing air traffic control system. The basic premise was to move air traffic control from ground-based radar to a satellite-driven network capable of handling growing volumes of air travel. Through fiscal 2022, the FAA said it spent more than $14 billion on the project, with total public and private investments projected to exceed $35 billion by 2030, according to the Government Accountability Office (GAO).
GAO auditors found that while the agency met some milestones—such as deploying new digital communications in towers—it missed others by years. Key automation and sequencing systems, including Time Based Flow Management and the Terminal Flight Data Manager (TFDM), have been repeatedly delayed. The TFDM program, an automation tool introducing electronic flight strips to replace paper ones, is now behind schedule and will not be added to a series of airports until 2030, Reuters reported.
Reuters also reported that the FAA reduced the number of airport deployments by nearly half, scaled back planned capabilities, and saw program costs rise by more than 20 percent.
The FAA attributed a lot of those roll backs to the pandemic and ensuing workforce shortages. Fair enough, to a point.
But GAO investigators also found a fairly significant lack of planning and documentation. The agency has not updated its life-cycle cost estimates for NextGen since 2017, for example. It also still lacks a key risk mitigation plan to identify and prioritize major program risks. Both shortcomings make it a vastly greater challenge for the FAA to assess its own performance, refine its annual budget requests, or manage long-term goals effectively.
Accounting for Outside Forces
Auditors have also pointed to external factors—including airline equipage, weather, and fuel prices—that continue to affect NextGen’s implementation. In its July 2025 report, the OIG said the FAA’s limited analysis of those factors “impacts the overall reliability of FAA’s projections of NextGen’s benefits and costs.”
The office recommended that the agency develop a formal process to identify and refine key external influences, a step the FAA agreed to complete by September 2026.
The same report noted that FAA’s benefit projections have fallen sharply over time. In 2013, the agency maintained that NextGen would produce as much as $199 billion in benefits by 2030. By 2024, the projection had dropped to $63 billion by 2040. The OIG attributed that eye watering plummet to deployment delays, economic shifts, and uneven airline adoption of required avionics.
Structural and Cultural Challenges
The modernization effort has also been constrained by workforce shortages and institutional strain. Reuters reported that the FAA is short of its staffing requirements by around 3,500 controllers. Lasting gaps have forced controllers into situations requiring them to work mandatory overtime and six-day weeks as a result. Meanwhile, overtime costs have risen more than 300 percent since 2013, totaling $200 million last year.
Transportation Secretary Sean Duffy has urged lawmakers to continue funding modernization despite the setbacks. After Congress approved $12.5 billion in July to overhaul the air traffic system, Duffy called on lawmakers to award an additional $19 billion for the project.
GAO officials have said that updating NextGen’s life-cycle cost estimate and developing a detailed risk mitigation plan would help the agency manage its modernization efforts more effectively. The FAA concurred with both recommendations.
A Program in Transition
Under the FAA Reauthorization Act of 2024, the agency’s NextGen offices are set to close in 2025, with responsibilities shifting to a new Airspace Modernization Office. The OIG said that as the FAA begins new modernization efforts, developing realistic and achievable long-term plans—including comprehensive risk assessments—will be critical to success.
In a written response to auditors, FAA officials said the agency remains committed to “developing and implementing a cost-effective system” and intends to apply lessons from NextGen to future modernization initiatives.
After more than 20 years of investment, NextGen is certainly still a foundation for what comes next—but also a cautionary tale. The FAA insists that its lessons will guide a new era of air traffic modernization. Whether that next chapter delivers the transformation envisioned two decades ago remains to be seen.
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