Commentary

FAA Lifts Flight Ban – Travel Chaos, Mass Confusion, & Finger Pointing Starts

Flights have resumed. But a blame game on AI and contractors has started.

The Washington Post reports FAA lifts ground stop at U.S. airports, leaving travel chaos

A rare nationwide ground stop that delayed and canceled thousands of flights Friday finally ended at about 8:15 p.m. Eastern after nearly 4½ hours following the resolution of problems the Federal Aviation Administration initially blamed on a “temporary telecommunications outage.”

“It’s an old system that went down. It went down everywhere,” Transportation Secretary Sean P. Duffy said at a news conference Friday night.

Duffy said the outage, which disrupted travel plans from coast to coast, was limited to legacy equipment and that the problem had been sparked in the process of upgrading the old, analog system, which caused it to be overloaded.

The centerpieces of the problem were the Air Route Traffic Control Centers, which help manage planes traveling between airports, guiding them along their routes and ensuring they maintain enough distance between one another, according to Tom Lintner, a former safety official at the FAA.

The timing system on the FAA’s internal telecommunications network was having problems, meaning messages might not reach their intended destination, according to a person briefed on the outage. It was not clear what the cause was, the person said, speaking on the condition of anonymity because they were not authorized to discuss the situation publicly. On a typical day, the system might see 8,000 alerts for problems. On Friday, there were 16,000, the person said.

The Pentagon and U.S. Northern Command, which oversees domestic military operations, did not immediately respond to questions Friday evening.

New SMART AI Rollout

On Tuesday, the FAA announced that a new AI tool for advising air traffic controllers was being rolled out nationwide.

The $875 million SMART system, launched in September, was going to be used at all 22 major air route control centers “to reduce delays, reduce fuel consumption and improve the travel experience for the flying public,” the agency said.

The agency has called the system “a cutting-edge tool.” It was first implemented at D.C.-area airports.

In early October, a group of House and Senate Democrats sent a letter to the FAA asking the agency to pause the AI tool’s use “until the agency answers questions about safety testing, implementation, and oversight.”

FAA Rollout Yesterday

Don’t Blame US Says SMART

It seems there is a bit of skepticism on X.

Friday Upgrade

Question of the Day

Blame the Contractors

Let’s return to WAPO for more blame games.

The Notice to Air Missions system, or NOTAMs, began having trouble the night before that ground stop.FAA technicians tried backup systems, but officials decided to stop flights until it was resolved.

The FAA later blamed the issue on contract workers who mistakenly deleted files while working on the primary and backup databases.

What About Football?

Duffy said that college football teams traveling on chartered flights would be given priority by the FAA to “make sure they can move to, make sure we have games going off tomorrow.”

Was DOGE Involved in FAA Layoffs?

  • Probationary Terminations. According to statements from Transportation Secretary Sean Duffy and reporting by Time, the Trump administration and DOGE terminated just under 400 probationary FAA employees—workers with less than a year of tenure—starting around February 14, 2025.
  • Early Retirements. Alongside direct firings, PBS News reported that workforce reduction efforts included early retirement offers, with over 1,300 FAA employees expressing interest.
  • Impacted Roles. Unions such as the Professional Aviation Safety Specialists (PASS) and the National Air Traffic Controllers Association (NATCA) confirmed that dismissed staff worked in support and technical roles. These included aviation safety assistants, maintenance mechanics, telecommunications specialists, legal instruments examiners, and aeronautical information specialists who update airspace maps.
  • Union and Critic Concerns. During a March 2025 House Aviation Subcommittee hearing covered by The Hill, PASS President Dave Spero stated that DOGE fired 332 essential employees without conducting impact assessments.
  • Worker Reinstatement. Following the court ruling, Simple Flying reported that 132 fired probationary FAA employees were ordered to return to work on March 20, 2025, with back pay

Have They Tried Blaming Pete Buttigieg Yet?

Trump did in 2023.

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Trump in 2025

Bring Back Pete?

Investigating All Loose Ends

But Hey!

Have you seen the ballroom?

Everyone has their priorities.

The ballroom will be magnificent, I am told.

About Those FAA Upgrades

The “brand new” air traffic control system contracts was handed in December 2025 to a single prime contractor, Peraton, a company owned by the private equity firm Veritas Capital, and chosen despite limited FAA experience.

The full program is priced at around $31 billion dollars. Congress has so far put up only $12 billion as a “down payment.” The rest is still UNFUNDED. So Friday’s breakdown arrives as the pressure to approve the rest of the SAME program already promised to the SAME private contractor; Peraton.

Most US airports are public, owned by cities and airport authorities, but the terminals and the systems get built by private firms, and that is where the billions flow, out of public failure and public money into private hands. So who are those PRIVATE HANDS benefiting most? Who ultimately gets the money?

The prime contract went to Peraton, a private company owned by the private equity firm Veritas Capital. And who funds Veritas? Its investors are Israeli institutions: Clal Insurance $100M, Migdal Insurance $60M, Menora Mivtachim $50M, plus ~$150M from private Israeli investors, all in its at least $15.3 billion fund.

Peraton’s lobbyist is Mark Bednar also sits on the board of the “nonprofit” that funded Sean Duffy’s TV show “The Great American Road Trip”.

This is the question, and it needs to be examined by EVERYONE. A pressure tactic to MOVE public money into private hands, while America and Americans pay for it with 5,000 cancelled flights and the economic fallout from that many cancelled flights…

The proximity is on the public record too, lobbying and personnel links running between the contractor and the officials now asking you to fund it.

FAA Still Using Floppy Disks and DOS Screens

As of January 2025, the FAA was still using floppy disks and DOS-like screens.

Please recall my January 30, 2025 post, December FAA Report Cites “Urgent Need to Modernize Air Traffic Systems”

Yesterday, over 60 people died in a preventable plane crash.

Aging Components of Systems

  •  73 systems were deployed over 20 years ago, with 40 being deployed over 30 years ago, and six of those deployed over 60 years ago.
  • 32 systems were implemented within the past 20 years
  • Only four systems as recently as 2020.

GAO Summary

In summary, FAA’s reliance on a large percentage of aging and unsustainable or potentially unsustainable ATC systems introduces risks to FAA’s ability to ensure the safe, orderly, and expeditious flow of up to 50,000 flights per day.

Yesterday we saw the result.

Outdated technology has plagued the FAA for decades. Notoriously, US air-traffic controllers still use strips of paper to track planes in their vicinity. The agency chronically struggles to hire technical staff. Its main system for preventing collisions between planes and ground traffic is decades old, short of spare parts, and prone to prolonged failures. An outage last year almost led to tragedy when a truck ambled onto the runway at Connecticut’s Bradley International Airport and narrowly missed an incoming plane.

Not Exaggerations

The online systems look like the antiquated game of asteroids.

Rep. Thomas Massie provides this Tragic Video.

Please give it a play. A portion of the lead image is from that video.

A friend writes “Almost nobody realizes we are relying on a dinosaur technology when they step on a plane.”

But hey, have you seen the ballroom?

Article posted with permission from Mish Shedlock

Mish Shedlock

Mike Shedlock / Mish is a registered investment advisor for SitkaPacific Capital Management. On “MishTalk,” global economics blog, he writes several articles a day on the global economy. Topics include interest rates, central bank policy, gold and precious metals, jobs, and economic reports, all from an Austrian Economic perspective.

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