What to know about the air traffic control overhaul and the company FAA hired to manage it

The U.S. government has selected Peraton, a company with limited Federal Aviation Administration experience, to oversee the $31.5 billion modernization of America’s aging air traffic control system. Transportation Secretary Sean Duffy announced the decision Thursday evening, citing Peraton’s innovative approach as key to completing the upgrades within the next three years, before the end of President Donald Trump’s term.

“Working together, we are going to build on the incredible progress we’ve already made and deliver a state-of-the-art air traffic control system that the American traveling public — and our hard-working air traffic controllers — deserve,” Duffy said in the announcement.

The selection surprised industry observers as Peraton was chosen over Parsons Corp., a firm with extensive FAA contract experience. The decision reflects the administration’s desire to accelerate a process that previous estimates suggested could take more than a decade.

Congress has already approved $12.5 billion as a down payment on the project, with Duffy indicating an additional $20 billion will be needed to complete the modernization. The funding push followed several high-profile aviation incidents, including radar outages at Newark Liberty International Airport and a catastrophic collision between an airliner and an Army helicopter over Washington D.C. earlier this year that killed 67 people.

The FAA has not yet disclosed Peraton’s contract value but noted it includes performance incentives and penalty provisions. The agreement aims to avoid the shortcomings of the previous NextGen initiative, which began around 2000 and consumed $36 billion without delivering all promised benefits.

The current air traffic control system’s vulnerability has been highlighted by recent technical failures that relied on outdated technology—including copper wires and floppy disks. These outages caused hundreds of flight cancellations and delays at Newark when the Philadelphia facility controlling Newark flights experienced staffing shortages after the radar failures.

Industry experts view the upgrade as critical for handling increasing air traffic volumes and integrating new aviation technologies such as drones and flying taxis into the national airspace.

John Rose, chief risk adviser for global travel management company ALTOUR, characterized the three-year timeline as “extremely aggressive” but partially realistic. “If the project gets to the core structure in three years, I think we’ve accomplished the mission,” Rose said. He suggested that building a robust foundation would allow for future capability upgrades, similar to smartphone software updates.

Air Traffic Control Association President Stephen Creamer offered optimism about the timeline, noting that much of the needed technology has been tested globally. “The technology that’s needed in the system is not cutting edge technology. It’s been tested and trialed all over the world in various places. We know what the capabilities of it are,” Creamer said.

Duffy justified the decision to place a private company in charge by emphasizing that Peraton’s expertise with complex technical systems and artificial intelligence would accelerate implementation. Peraton has suggested that its lack of previous FAA work could be advantageous, preventing bias toward systems that have underperformed in the past.

The arrangement allows Peraton to award contracts to other companies more quickly than the FAA could through standard government procurement processes. Creamer expressed confidence that despite the expedited process, “there’s plenty of checks and balances in the administrative system” to prevent waste or fraud.

Peraton brings significant experience with multibillion-dollar technology contracts for various government agencies including the Department of Homeland Security, U.S. Special Operations Command, and the National Park Service. The privately-held company, owned by Veritas Capital, is led by a board that includes former military and intelligence officials.

“Our highly-skilled, dedicated, and talented team of engineers, technologists, and mission experts stands ready to hit the ground running to deliver a system Americans can count on — one that is more secure, more reliable, and a model for the world to follow,” said Peraton CEO Steve Schorer in a statement.

The FAA reports that modernization efforts are already underway, with more than one-third of the old copper wires replaced with fiber optic lines or other modern connections. However, substantial work remains, including installing over 27,600 new radios, 612 new radar systems, upgrading connections at thousands of facilities, and constructing six new air traffic control centers.

The ambitious project represents one of the largest infrastructure overhauls in recent U.S. aviation history, with significant implications for national air travel safety and efficiency in the coming decades.