The R&D Tax Credit Aspects of Video Enhanced Remote Airport Control Towers



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Remote-Airfield-Towers
        The airline industry continues to expand rapidly, which calls for new and improved technologies.  With the growth of technology and handheld devices, passengers are turning to their mobile phones to accomplish self-service capabilities in airports. Whether it be checking into flights or displaying boarding passes, it is anticipated that the airport industry will see a turn towards automation and self-service technology.  The same holds true for airport control towers.

        For decades, enormous control towers have been considered obstructions in the airfields and as a result, they have become one of the first tasks on the agenda for airport technology improvements. Inexpensive and safer remote-controlled towers are becoming more popular. This has the potential to uproot the older collision avoidance systems that ruled the airfields in the form of tall control towers.

        The newer, low-rise control towers offer features unparalleled in existing airfield technology.  For example, live, 360° video footage can be displayed and monitored on floor-to-ceiling screens that comprise the towers. These towers can be miles away from an airfield and yield more precise monitoring than traditional on-location towers. The FAA (Federal Aviation Administration) already issued plans instigating development of up to 200 remote control towers that are intended to enhance passenger safety and provide more cost-effective travel.

        Architectural and engineering firms as well as audiovisual designers  engaging in research and development efforts to create video enhanced control towers are now eligible for R&D tax credits.


The Research & Development Tax Credit

        Enacted in 1981, the federal Research and Development (R&D) Tax Credit allows a credit of up to 13% of eligible spending for new and improved products and processes. Qualified research must meet the following four criteria:

  • New or improved products, processes, or software
  • Technological in nature
  • Elimination of uncertainty
  • Process of experimentation

        Eligible costs include employee wages, cost of supplies, cost of testing, contract research expenses, and costs associated with developing a patent.  On December 18, 2015, President Obama signed the bill making the R&D Tax Credit permanent. Beginning in 2016, the R&D credit can be used to offset Alternative Minimum tax and start-up businesses can utilize the credit against $250,000 per year in payroll taxes.


How Remote-Controlled Airport Towers Work

        Airports around the world are interested in adopting remote towers that are located miles away from the monitored location. These new locations include ordinary, low-rise buildings that are inexpensive to build and maintain in comparison to traditional, tall control towers situated directly on airfields.  Although the traditional towers carry an aesthetic beauty that sets airports apart from each other, a shift towards remote towers will provide more long term benefits for airports.

        The remote towers receive live video feeds from countless cameras situated at a designated airfield. The computer software stitches together the images and displays them on a screen that mimics a virtual view of the runway and taxiways. Facilities can incorporate separate screens to monitor different airfields at the same time, especially if one remote tower is employed to control inbound and outbound flights from a number of airports.  

        When an aircraft descends into a non-towered airport, it remains under the control of an approach control facility until it is under radar coverage. When under radar control, the controller is responsible for maintaining the aircraft separation from other aircrafts. The controller must also provide advisories concerning how the aircraft is operating around the airport traffic patterns while complying with the visual flight rules.  

        It is expected that the remote-control towers would utilize surface radar and ADS-B (automatic dependent surveillance – broadcast) data alongside that from camera , infrared, and other sensors . All these resources can be pooled and consolidated into one facility, which several airports can share. This will result in costly savings for the airports and improve safety and security features, as will be discussed in the proceeding sections.
       
 

Advantages to Remote-Control Air Traffic Towers

        The primary reason American airports are seeking alternatives via remote-controlled towers is because of the continuous fiscal negotiations and budget cuts instigated by the FAA. Implementing remote-controlled towers can decrease the cost of managing air traffic by 20-30%, according to FinancialTimes.com (May 2017). The towers permit airport traffic control to better monitor flights and save money during production as well as operation.

        Furthermore, adopting the remote traffic towers may reduce expenses for airports to build and maintain tall control structures. Presently, the operation of a single tower amounts to approximately $500,000 per year. Multiply that by the number of airports in the U.S. as evidence to why the FAA keeps scrutinizing and minimizing airport budgets. In June 2016, the FAA committed to investing in a new air traffic control tower at the Charlotte Douglas, N.C., international airport. Constructing the new, 370-foot tower with radar approach control and demolishing the old one totaled for a $60 million contract. The budget was expanded to $112 million to also cover equipment, installation and training costs, and demolition of the old tower. The project begins in 2018 and the tower should be operating by 2020.  This expensive price tag can be eliminated by resorting to remote control towers.

        Returns of investment on developing remote control towers are high. ROI is anticipated to amount to $1.3 million annually in direct revenue generation. Whereas all maintenance costs for traditional control towers amount to $500,000 per year, it is anticipated that an airport will only have to cover maintenance and support costs after implementing a remote-control tower. These costs are significantly less, at approximately $190,000 per year.  

        Towers at large airports require elevators, HVAC units, fire suppression systems, and space for all of the controllers as well as staff. Tower development ranges in the millions, depending on the extent of the renovation or building itself. For example, in 2013, Oakland, CA opened a new tower for $51 million. Fort Lauderdale Executive Airport, a smaller facility, created a new tower for significantly less, at $15.4 million. Regardless of these costs, SAAB, an innovator of remote-control towers, ensures its system is “significantly less,” although it will not release the price tag to the public.

        Remote-controlled towers may be more feasible to maintain for low-activity airports, especially since these new towers centralize and consolidate operations so the airport is not concerned with operational costs for on-premise towers. This would especially be the case for the 147 airport control towers in America that were slated for closure during sequestration.  Many of these towers are not required for their respected airports to function safely, successfully, and effectively. That is why a viable middle ground of a remote-controlled tower serving several airports would be the most beneficial alternative.

        Safety is expected to improve from utilizing remote control towers. Naturally, remote towers have a more enhanced view of not only the airport but also the surrounding area. This is because the towers rely on an abundance of cameras placed strategically around the airfield. The cameras have different features, such as panning or zooming, and infrared capabilities. The infrared cameras are beneficial to detect temperature differences that will determine if an animal is on the runway, especially at night when visibility is significantly limited. Finally, laser rangefinders are incorporated to determine the distance of approaching aircrafts. This prevents collisions or wing clippings. After all, images from the many cameras are superimposed on the screens alongside audio to create a dynamic, real-time 360-degree view of the airfield.i

        A 2016 Remote Towers Conference in London, England, defined several of the impacts resulting from the use of remote air traffic control towers.  They can be found in the lists below.

Social Impacts
  • Probable reduction in jobs/positions for ATCOs, ATSEPs, Technicians, & Administrative Support
  • Relocations (less desirable community, displaced families)
  • Flags of convenience

Safety Concerns
  • Training/certification/licensing
  • Different layouts and weather patterns when ATCOs are required to certify on multiple aerodromes
  • Simultaneous operations
  • Maintenance responsibilities
  • Equipment reliability, resilience, redundancy
  • Fall-back mode/contingency
  • Visual quality, frame rate
  • Lack of global regulation from ICAO

Positive Effects on Remote Tower Center
  • Improved working environment (it becomes a center rather than single-person operation)
  • More desirable community/geographic location to live in
  • Increased pay (a direct result of multiple aerodrome ratings and certifications)

Positive Effects on Airports
  • Enhanced service and safety
  • Increased available positions
  • Provision of cost-efficient Air Traffic Services
  • Greatly benefits airports with low traffic density
  • Good alternative to new construction/refurbishment
  • ATS on demand (flexible hours to meet customer requirements)
  • Low cost contingency solutions

Airports Incorporating Remote Control Towers

        Various airports around the world are beginning to install remote control towers that provide less expensive and safer means of air traffic control. In America, the infrastructure program proposed by President Trump includes a plan to privatize the FAA.  If accomplished, FAA privatization should accelerate implementation of the invaluable video technology of remote control towers throughout the U.S.

        Already, NASA and the Department of Transportation’s John A. Volpe National Transportation Systems Center are researching the prospect of staffing these virtual towers and improving remote tower sensing capabilities. Other airports in the world are engaging in similar R&D efforts.

Sweden
        In 2015, the Ornskoldsvik airport became one of the first in the world to implement a virtual control tower. The tower was built in conjunction with Sweden’s air-navigation agency, called LFV Group, and Saab, a large Swedish technology firm. The original tower was closed down as the controllers relocated to a remote tower about 80 miles from the facility. In 2016, the tower began monitoring another airfield at a local airport, Sundsvall-Timra. Sweden eventually plans to utilize this tower to monitor several larger airports in the country.  

        The Sundsvall Remote Tower Center passed the Single European Sky ATM Research acceptance testing back in February, 2013.viii By 2016, this tower was not only monitoring the Sundsvall-Timra airport, but also the Harnosand and Ornskoldsvik airports. It became the first remote tower certified for operational use.

Ireland
        Beginning in June 2016, Ireland invested in Saab engineered remote tower technology to provide air traffic control services for the Cock and Shannon airports. These remote sites were connected to the centralized control room in Dublin. The IAA, Irish Aviation Authority, conducted 50 demonstrations to test the effectiveness and efficiency of remote towers. They concluded that “the tests were highly successful and with carefully designed procedures, it will almost certainly be possible to allow one controller to simultaneously provide services for more than one low volume aerodrome.”viii

Norway
        The Bodo tower, located a couple miles above the Arctic Circle, monitors 32 of the 45 airports run by Norway’s state-owned airport operator.i Norway, known for its strong storms, has continuous difficulty monitoring flights from the old control towers, which forces many flight cancellations. With the new tower, Norway consolidated air traffic control to a single location that is capable of dealing with extreme weather conditions while more effectively monitoring flight and airport conditions. This ensures safer travel for all monitored airports. Norway boasts a 30-40% reduction in overall air traffic service expenses, which trickles into lowering fees for airlines and making fares more inexpensive for passengers.i

United States
        The remote tower test located in Leesburg, Virginia is the first of its kind to be introduced in the United States. Swedish company Saab teamed with the Virginia Department of Aviation to demonstrate and evaluate its remote air traffic control tower. The FAA is currently evaluating the technology in the tower, which may eventually lead to remote tower services being adopted in airports throughout the country.

        This tower employs a high definition camera and sensors to control airports that are offsite. This will be especially beneficial for airports that do not have their own towers. Testing of this new tower will occur throughout the summer of 2017.

        Another remote tower test is anticipated for Ft. Collins Airport in Colorado, 50 miles from Denver. The airport currently has no air traffic control tower nor scheduled commercial air service. However, it has 100,000 operations per year, with 96% being general aviation traffic, and traffic from 3 flight schools.viii This is an ideal location to test the effectiveness of remote air traffic control towers.


Companies Involved in Remote Control Tower R&D

Saab, Sweden
        Saab, the Swedish technology company, dedicated a sub-division to the production of towers in Saab Digital Air Traffic Solutions. The company is transforming the entire landscape of air traffic control and airport technologies. Their systems incorporate cameras with advanced night vision capability, image processing, target tracking, and overlay of information on high definition monitors.

        The CEO of Saab Digital Air Traffic Solutions explains, “We can drive the whole process forward from planning to commissioning remote air traffic control. We offer smart digital solutions so that data can be used in several locations to streamline traffic flows around an airport, both in the air and on the ground.”  Similarly, Saab was contracted by NATS, the UK’s leading provider of air traffic control, to install a demo remote tower at the Swanwick Control Centre. The company has also brought test installations to locations in Australia, the US, Netherlands, Norway, and Ireland. The different features of the remote towers were tested in each of these locations to determine the towers’ effectiveness in handling an array of adverse conditions. For example, in Australia, the tower was located in Adelaide but serviced an airport in Alice Springs, 1,500 kilometers, or 932 miles, away.

Avinor, Norway
        Avinor Air Navigation Services is a Norwegian company geared to provide aerodrome control and approach control services to airports.  Recently, it has begun efforts to build remote towers that specifically benefit numerous Norwegian airports from a single location.

        Avinor already operates 46 small and large airports in the country. The airport traffic per facility varies, but Avinor is convinced that once it builds the remote towers, airports with limited traffic would greatly benefit from these services. Furthermore, the new towers will have more flexible opening hours than in today’s control towers. This will greatly benefit the airports and their customers.

Searidge Technologies Inc, Canada
        Searidge Technologies is a Canadian-based technology company that emerged as a leader in air navigation control. Its primary goal is to reduce cost and safely manage air travel. It also developed the first surface surveillance system for air traffic control. The system processes video footage from a series of sensors networked together. This provides targeting guidance for all flight-related objects. The real-time targeting provides a new level of awareness that increases safety. The modular design of the tower is scalable to grow with the airport as well.


Conclusion

        The evolution of air traffic control enables increasing amounts of airports to reduce their costs of operation as well as provide ease of mind for passengers aboard remotely monitored flights. The remote systems provide quality traffic control at a fraction of the production and operation costs, also providing consumers with the potential opportunity of diminished travel costs. Airport architectural, engineering, and audiovisual designers engaging in research and development efforts to revolutionize American transport hubs with video enhanced remote air traffic control towers are now eligible for R&D federal tax credits.  

Article Citation List

   


Authors

Charles R Goulding Attorney/CPA, is the President of R&D Tax Savers.

Chloe Margulis is a Tax Analyst with R&D Tax Savers.

Ryan Donley is a Tax Analyst with R&D Tax Savers.


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