The Federal Aviation Administration needs another $574 million from Congress just to finish the first phase of its $10.6 billion plan to rebuild the nation's aging air traffic control system, according to a new government watchdog report. Congress had already approved $9 billion for that first phase, and the FAA is tapping $1 billion from its current-year budget to help cover the gap, but the agency still hasn't nailed down a detailed schedule for finishing the work.
The findings come from the Government Accountability Office, as reported by Reuters, which found that the FAA underestimated the total costs of operating its new air traffic control system. The GAO said that shortfall increases the likelihood of repeated cost overruns, delays, and unmet performance targets — a blunt assessment of an initiative the agency has billed as its most ambitious infrastructure push in decades. The watchdog put it plainly: the FAA is buying delivery speed at the risk of cost uncertainty and potential disruptions.
What the Brand New Air Traffic Control System Was Supposed to Fix
The rebuild, officially called the Brand New Air Traffic Control System, or BNATCS, launched in May 2025 with an accelerated target of finishing Phase 1 by December 2028, according to a Government Accountability Office report. It was born out of necessity. A September 2024 GAO operational assessment, triggered by a 2023 national airspace system outage, found that 51 of the FAA's 138 air traffic control systems, or 37 percent, were classified as unsustainable, with another 54 systems, or 39 percent, rated potentially unsustainable, per Nextgov/FCW's reporting on that earlier assessment.
Those unsustainable systems were plagued by obsolete parts, a lack of vendor support, and maintenance requirements so specialized that keeping them running had become its own liability. In July 2025, Congress appropriated $12.5 billion in total funding to support the BNATCS effort across its multi-year rollout, with the FAA directing the bulk of that money toward Phase 1 projects, the GAO report notes.
Fiber Optic Progress, But Phase 2 Has No Timeline
On the physical infrastructure side, the FAA has made tangible headway. As of May 2026, the agency had replaced 2,560 of 5,170 aging copper network lines with high-speed fiber-optic cables, work meant to cut down on the data and voice outages that have plagued control facilities running on 1960s-era wiring, the GAO report states. In December 2025, the FAA also awarded a $1.5 billion contract to defense IT contractor Peraton, owned by Veritas Capital, to serve as prime integrator managing the overhaul, according to KFGO.
But Phase 2, which will build the automation systems that track aircraft and optimize flight traffic, remains a bigger unknown. The FAA estimates it will need roughly $10.2 billion for that phase, not counting facility costs, but the agency has not set a start date or a completion date, according to the same GAO report. The report notes that Phase 2 will involve automation software.
Local Radar and Tower Work Continues Alongside the Funding Fight
Even as the funding gap surfaces in Washington, on-the-ground work tied to the broader modernization push has been visible around the country. In June, the FAA installed its first ground-based replacement surveillance radar under BNATCS in Putnam, Oklahoma, part of a planned 612-radar rollout contracted to RTX and Indra, as Hoodline reported at the time. That installation serves as a direct backup for Oklahoma City air traffic controllers, replacing radar units dating to the 1980s.
In May, the Department of Transportation committed more than $750 million to replace eight aging control towers and radar facilities nationwide, including the main towers at San Jose Mineta and Sacramento International airports, addressing physical problems like failing HVAC systems and line-of-sight constraints at major airports. And in January, the FAA and DOT announced a sweeping administrative reorganization, establishing a dedicated Airspace Modernization office to oversee the rollout under what officials called Flight Plan 2026 — described at the time as the largest administrative restructuring in FAA history.
Staffing Shortages Add Pressure to an Already Strained System
The funding shortfall lands on top of a persistent controller staffing crisis that has already disrupted flights in multiple cities this year, including ground delay programs in Nashville and a pause on LAX arrivals tied to a Southern California controller shortage. The FAA hired 2,028 air traffic controller trainees in fiscal year 2025, beating its 2,000-hire target, but lost 1,460 workers to retirements and attrition, resulting in a net gain of just 568 controllers, according to the agency's own workforce data. More than 100 facilities remained below their staffing goals as a result, and certification for new controllers can take up to six years, meaning the shortage will not resolve quickly even as hardware upgrades roll out.
Taken together, the GAO's findings paint a picture of an agency trying to compress decades of delayed modernization into a compressed timeline without fully accounting for what it will cost to keep the new system running once it's built. The watchdog's warning about repeated cost overruns and unmet performance targets suggests the funding fight over the current $574 million gap may not be the last one Congress faces before BNATCS is finished.
