FAA Bets $875M on AI to Fix America's Overcrowded Skies

The Federal Aviation Administration is making one of its biggest bets yet on artificial intelligence to fix a problem that's frustrated travelers for years: an air traffic control system that hasn't kept pace with how much the country actually flies. The agency awarded a 12-year, $875 million contract to Air Space Intelligence, a small Seattle-based startup, to build what it's calling the SMART system, short for Strategic Management of Airspace, Routes, and Trajectories.

The pitch is straightforward even if the technology underneath it isn't: instead of controllers and dispatchers reacting to congestion after it forms, the AI system is designed to crunch data on air traffic, weather, and airport conditions in real time and predict bottlenecks before they happen, then suggest more efficient routes to prevent them.

A system already tested by a major airline

This isn't untested technology. Alaska Airlines has been running a version of Air Space Intelligence's software, called Flyways, since 2021, using it to help dispatchers pick more fuel-efficient and less congested routes than a human working alone could reliably calculate. The airline says the tool saves it tens of thousands of flight hours and roughly a million gallons of fuel every year. The FAA is essentially betting that what worked for one airline's dispatch desk can scale up to manage the entire national airspace.

Federal officials involved in the project have described the current system in blunt terms. The airspace is safe, they say, because controllers keep aircraft separated at every stage of a flight, but the broader system for managing traffic flow is fragmented, with no single facility able to see the entire national picture at once. That's the gap the SMART system is meant to close.

Part of a much bigger, and more expensive, overhaul

The AI contract is only one piece of a far larger modernization push. Congress set aside $12.5 billion for the broader air traffic control overhaul, and Transportation Secretary Sean Duffy has said the full effort, covering everything from new radar and communications equipment to replacing aging control towers, will ultimately cost more than $31 billion. Earlier this year, the FAA separately awarded $835.8 million to build new control towers and upgrade equipment at dozens of airports across two dozen states, and the agency has said it plans to install 5,000 new high-speed fiber, satellite, and wireless network connections by 2028.

An industry coalition that includes Boeing, Airbus, and major airline and pilot groups has pushed Congress for another $20 billion on top of what's already been approved, arguing that chronic delays and an aging patchwork of facilities pose a growing safety and efficiency risk. Duffy has said the Department of Transportation is aiming to have the broader modernization effort substantially complete within four years, though officials have acknowledged some parts of the timeline are running behind schedule.

Why critics remain skeptical

Not everyone is convinced new software solves the underlying problem. The government has tried, and largely failed, to modernize the national airspace system since 2003, and critics of the current push argue that an AI routing tool doesn't address the FAA's long-running air traffic controller shortage, a staffing gap that has contributed to mandatory overtime and, at times, temporary flight restrictions at understaffed facilities. Predictive software can suggest a more efficient route, in other words, but it can't put a qualified controller in an empty seat.

For now, the SMART system is expected to begin rolling out in phases, with the FAA and Air Space Intelligence using Alaska's Flyways deployment as a proof of concept for the wider rollout. Whether an AI tool built for one airline's dispatch desk can actually bring order to the entire country's airspace is likely to become clearer only once it's tested at that scale.