FAA Expects $100M Tariff Cost on $12.5B Upgrade

The Federal Aviation Administration expects tariffs to add about $100 million to its more than $12.5 billion air-traffic-control modernization program, primarily through higher costs for radar systems. The expense comes as the program faces broader overruns: phase one is projected at roughly $16 billion, while telecommunications upgrades have increased from $4.75 billion to $5.91 billion, and the FAA is seeking at least $10 billion for a second phase. RTX’s Collins Aerospace and Spain’s Indra Group, which received $780 million in contracts to replace up to 612 aging ground-based radars, are moving production to facilities in Florida and Kansas. RTX is investing $26.5 million to expand its Largo, Florida, plant, while Indra is investing $7.5 million at its Kansas facility. Lawmakers criticized tariffs for raising the cost of a modernization effort intended to address obsolete equipment, congestion and delays, while analysts noted that the tariff expense is relatively small compared with the program’s total budget but highlights broader cost and execution risks.