STEVE INSKEEP, host:

Now, it may not be at the top of the agenda for the next president, but Barack Obama's incoming team has some challenges at the Federal Aviation Administration. During the Bush administration, some FAA inspectors and air traffic controllers blew the whistle on their own agency. In congressional hearings, there were accusations that the FAA had cozied up to the airlines that they're supposed to regulate. NPR's Wade Goodwyn has this memo to the incoming president on the state of the nation's air travel system.

WADE GOODWYN: By any measure, 2008 was a rough year for acting FAA Administrator Bobby Sturgell. Being dragged before a congressional committee to defend your own and your agency's integrity has to be pretty high up on anyone's list of activities to try to avoid in the new year.

(Soundbite of congressional hearings)

Mr. ROBERT STURGELL ( FAA Administrator): Senator Biden, I just want to be very clear. I'm not making any excuses for what happened on behalf of the FAA. It was not appropriate. We're going to take action, and we're going to fix it.

GOODWYN: Bobby Sturgell was responding to accusations made by his own inspectors in Dallas that the FAA had gotten too cozy with Southwest Airlines. That FAA supervisors had, in essence, allowed Southwest executives to cherry pick which FAA inspectors they would work with. The whistleblowers said it was emblematic of the way the FAA had started doing business during the Bush administration.

Congressman JAMES L. OBERSTAR (Democrat, Minnesota; Head, Transportation and Infrastructure Committee): The problem was - is that instead of being the overseer of airlines, the FAA considered airlines their customer.

GOODWYN: Congressman Jim Oberstar heads the Transportation and Infrastructure Committee, which held the hearings and put the FAA through the wringer.

Congressman OBERSTAR: If there is a customer - and I don't think there is - but if there is a customer for the FAA, it is the air traveling public, not the airlines. Not corporate interest, but the public interest.

GOODWYN: FAA Administrator Bobby Sturgell disagrees, and says in an industry this technically complex, the federal government and the airlines must be in a cooperative relationship, not cop versus bad guy. But the coziness allegation is just one FAA issue among several, equally pressing, that the new administration must cope with. Another is what to do about the capacity limitations in Los Angeles, Atlanta, Chicago, and most of all, New York City. Sturgell says delays in and out of New York spread through the air traffic control system like a contagion.

Mr. STURGELL: You can pull up Life magazine from 1968 and see New York, LaGuardia on the cover. You know, the same issues have been facing that airport for many, many years.

GOODWYN: The Bush administration wanted to try a little capitalism. Make the airlines pay higher fees for prime-time departure and arrival slots. But the airlines hated that proposal. Most domestic carriers are staggering along, while many foreign carriers are in far better shape and could afford the higher fees easier. The FAA administrator knows this approach will likely be completely scrapped by the new administration and Congress.

Mr. STURGELL: What we ended up doing was restricting the number of operations to what the airport could actually handle. And that has really cut delays substantially.

GOODWYN: That's helped, but capacity problems in New York and elsewhere will pose a major challenge going forward. Then there's the aging controller issue. Remember back in 1981, when then-President Ronald Reagan fired all the air traffic controllers when they went on strike? PATCO, the union was called. After that happened, a whole new batch had to be hired, and if you were a newly minted 30-year-old controller back in 1981, you're almost 57 years old now, which just happens to be the mandatory retirement age for air traffic controllers. So the question is, knowing as it did the inescapable fact of federal law and their aging bubble of controllers, did the FAA prepare for this day, which is now here, for their retirement? And the answer is...

Mr. ADRIAN SCOFIELD (Senior Editor, Aviation Week) They probably are behind the eight ball. It's happening a bit late.

GOODWYN: Adrian Scofield is a senior editor at Aviation Week.

Mr. SCOFIELD: We're sort of approaching the peak of the bubble now, I think, when there's going to be a lot of veterans leaving.

GOODWYN: Instead of a gradual transition, steely-nerved air traffic controllers with decades of experience are going to be replaced en masse with rookies still learning how to turn up the volume in their headsets. Add to that a bitter contract dispute with the FAA and its controllers, and you've got a recipe for serious agency morale problems. Let it fester as long as it has, and you get whistleblowers outing your agency and a real challenge for the next administration. Wade Goodwyn, NPR News, Dallas.

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