Posted January 12, 2023
By Ray Blanco
FAA Outage Opens Door for AI Improvements
If you thought the worst of holiday travel was over, unfortunately, that has not been the case.
This week, a problem with the Federal Aviation Administration’s (FAA) Notice to Air Missions (NOTAMS) system brought air travel around the US to a screeching halt.
When all was said and done, thousands of flights had been canceled or rescheduled, leaving customers stranded.
For some, this situation was more of an inevitability than an unlikely glitch…
FAA regulators, lawmakers, and air safety advocates have been raising red flags about the outdated technology, amongst other issues, with the pilot-alert system for years.
Current technology in use by the FAA has been referred to as “failing vintage hardware” that is in dire need of replacement.
Even the recent breakdown of the NOTAMS systems was predated by months of back-and-forth debate between federal officials and airlines over technology and personnel issues.
Transportation Secretary Pete Buttigieg has stated in recent appearances that airlines have been underprepared to serve the influx of travelers that not only come with the holidays but year-round now that the Covid-19 pandemic is in the rear-view mirror.
And coincidentally enough, this is a great example of the coming automation technology and AI integration boom that I’ve been writing about recently.
Just like other industries, the FAA and airliners stand to benefit greatly from investments in new technologies like AI.
So, how would AI help prevent situations like this? Let’s take a look…
Automating Airlines with AI
AI systems can help the FAA in a number of ways that will hopefully prevent further outages.
For starters, AI can be utilized for predictive maintenance, where AI algorithms analyze data from aircraft and other equipment to identify potential issues before they occur.
This would allow for proactive maintenance to reduce the likelihood of equipment failure.
Then, you have real-time monitoring and decision-making systems, which can help the FAA identify issues or incidents to quickly respond to them, minimizing the impact of outages.
Moreover, AI-powered systems can be used to optimize air traffic control operations, reducing delays and increasing overall efficiency.
And while switching over to new systems is easier said than done, it’s becoming increasingly clear that something needs to change or travelers will continue to run into issues.
Investors are already starting to turn bullish on the prospect of expanded budgets for airliners, with many of these companies flying higher in the market this week.
Moreover, the FAA has been working to renew its technology and systems in recent years, there’s likely more to be approved given the nature of the issues facing airliners.
One example of the FAA's efforts to update its technology is the FAA Reauthorization Act of 2018.
The act included provisions to improve the FAA's technology and infrastructure, such as funding for the NextGen program, which aims to boost the efficiency, safety, and capacity of the national airspace system by installing new hardware and implementing new procedures.
The program is still being implemented too, NextGen is expected to bring significant benefits to the national airspace system, including reducing delays, improving safety, and reducing environmental impact.
Currently, the program is expected to be completed by 2025.
And while the FAA is still in the middle of this program, there are other names that stand to benefit from a deeper investment into automation technologies for airlines.
For example, Lockheed Martin Corp. (NYSE: LMT) is one of the primary contractors for the FAA's En Route Automation Modernization (ERAM) program, which is a key component of NextGen.
The company has provided hardware and software for the new air traffic control system, including the ERAM computer system which is being used to process flight data.
Another supplier is Raytheon Technologies Corp. (NYSE: RTX).
Raytheon has provided hardware and services including the development and implementation of new communication systems for the NextGen program.
The company has also developed Data Communications (DataComm) systems, which allow controllers and pilots to communicate via text messages instead of voice.
As we continue to work our way out of the Covid-19 pandemic hangover that plagued stocks for the majority of 2022, I expect to see plenty of investment into the revitalization of services and production means throughout the year.
And now is a great time to start getting into some of these defense/automation names.