Al Root and Anita Hamilton

America's air-traffic control system is set for an overhaul. That's good news for airlines and flyers. It will help some companies, too.

On Thursday, amid the backdrop of a fatal crash in January, and recent travel chaos at Newark airport, Transportation Secretary Sean Duffy announced a new "state of the art" air-traffic control system. The new system, which is expected to take three to four years to build, will feature new telecommunications systems, radios, and ground radar. "We want to make sure air-traffic controllers have the tools to keep aircraft separated," Duffy said. "All front-facing systems and back-end systems will be brand new."

New radios, radars, and telecom means new revenue for companies. To be sure, there are no massive winners. The total overhaul isn't large enough.

Airlines for America, an industry lobbying group, believes the overhaul will cost $30 billion to $40 billion, wrote TD Cowen analyst Tom Fitzgerald in a recent report. Some of the funding will go to staffing and facilities, with roughly 50% going to upgraded telecommunications and technology.

Some $20 billion amounts to about 5% of annual sales for Verizon Communications, AT&T, Cisco Systems, Thales, and L3Harris Technologies. What's more, the $20 billion will be spent over a few years, and those are only five companies potentially benefitting from the upgrades.

Verizon and AT&T operate telecom networks. Verizon won a 2023 contract worth $2 billion to "design, build, operate, and maintain the FAA's next-generation communications platform."

The status of that contract could be up in the air. Any change or cutback is a negative, but again, it would only be a very small one. Verizon didn't immediately respond to a request for comment.

Verizon didn't appear to be impacted at all. Shares were up 0.4% in early trading Friday, while the S&P 500 and Dow Jones Industrial Average were down 0.3%.

Cisco makes telecom equipment. Thales and L3Harris are experts in radio communications. The government could also look at SpaceX's space-based solutions. Elon Musk's rocket company operates a constellation of more than 7,000 satellites, delivering high-speed Wi-Fi service to millions.

There are other suppliers of communications equipment. Those are only a few names for investors to consider. The biggest winners of all might be American passengers facing fewer delays and headaches arising from an antiquated system.

Write to Al Root at allen.root@dowjones.com and Anita Hamilton at anita.hamilton@barrons.com

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May 09, 2025 11:21 ET (15:21 GMT)

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