By David Shepardson, Trevor Hunnicutt
WASHINGTON (Reuters) -President Donald Trump said on Wednesday that Raytheon Technologies (NYSE:RTX) and IBM (NYSE:IBM) may get the contract to modernize the U.S. air traffic control system.
"We have very obsolete equipment for air traffic control," Trump during a cabinet meeting at the White House, adding there are five companies who could do the work. "We want to put a brand new air traffic control system in."
IBM declined to comment, while Raytheon (NYSE:RTN) did not immediately comment.
Calls to modernize the nation’s air traffic control system intensified after a mid-air collision on January 29 between a U.S. Army helicopter and an American Airlines (NASDAQ:AAL) jet near Washington Reagan National Airport. All 67 people aboard the aircraft died.
The U.S. House of Representatives Transportation and Infrastructure Committee is considering on Wednesday a proposal to spend $12.5 billion through 2029 to replace aging facilities, including air traffic control towers, radar systems and telecommunications infrastructure, as well as $1 billion for air traffic control hiring.
Transportation Secretary Sean Duffy said last month he plans to ask Congress for tens of billions of dollars for a multi-year effort to revamp Federal Aviation Administration air traffic control infrastructure and boost hiring.
Duffy previously criticized Verizon (NYSE:VZ) for "not moving fast enough" in its $2.4 billion, 15-year telecom contract with the FAA.
In March, Elon Musk’s Starlink unit denied it wanted to take over Verizon’s FAA contract. Verizon said it is working with the FAA on solutions to create an advanced, safer national air traffic control.
"Starlink is a possible partial fix to an aging system," Musk’s SpaceX said.
The Government Accountability Office says the FAA must take urgent action to address aging air traffic control systems, saying that one-third of them are unsustainable.
One-quarter of all FAA facilities are 50 years old or older and aging systems have repeatedly sparked delays, including major issues at Newark Liberty International Airport on Monday.
A persistent shortage of controllers has delayed flights and many controllers are working mandatory overtime and six-day weeks. The FAA is about 3,500 air traffic controllers short of targeted staffing levels.