FAA Awards $875M AI Air Traffic Contract to ASI

The Federal Aviation Administration (FAA) has awarded an $875 million, 12-year contract to technology firm Air Space Intelligence (ASI) to deploy artificial intelligence-driven air traffic management software across the United States National Airspace System (NAS).

Announced in a press release on June 22, 2026, the agreement centers on two new platforms: Flow Management Data and Services (FMDS) and Strategic Management of Airspace, Routes, and Trajectories (SMART). The initiative aims to shift the agency’s traffic management from reactive to proactive predictive modeling, addressing chronic airspace congestion and reducing flight delays.

Modernizing the National Airspace System

The contract represents a major step in overhauling the technology used by air traffic controllers. In 2025, Congress awarded the FAA $12.5 billion to replace outdated technology and bolster understaffed air traffic control facilities. The agency has faced ongoing challenges with airspace congestion, rising demand, and severe weather, which recently prompted flight cuts at major hubs including Chicago O’Hare International Airport (ORD) and New York-area airports.

U.S. Transportation Secretary Sean P. Duffy highlighted the operational goals of the new software platforms.

“We’re already making remarkable progress on upgrading the radars, radios, and telecom wires air traffic controllers rely on thanks to the Working Families Tax Cut. But to really improve the flying experience for the traveling public, we must change how flights are managed. We’re thrilled to partner with ASI to begin developing these two new software platforms. Once implemented, we will fundamentally reshape how the airspace is managed, slashing thousands of delays and cancellations in the process.”

FAA Administrator Bryan Bedford noted that air traffic professionals manage thousands of scheduling conflicts daily, which cascade into delays for the traveling public. Bedford stated that FMDS and SMART will help address these challenges by improving airspace management before flights depart, thereby reducing congestion and easing controller workload.

The National Air Traffic Controllers Association (NATCA) clarified to FLYING Magazine that the new predictive systems will not handle safety-critical functions involving the separation of aircraft.

Air Space Intelligence secures major federal contract

To secure the contract, ASI reportedly beat out major defense and technology contractors Palantir Technologies Inc. and Thales SA, according to Bloomberg. ASI’s Flyways AI platform is already in operational use by major commercial carriers, including Alaska Airlines (AS), Delta Air Lines (DL), and United Airlines (UA), as well as the U.S. Air Force.

ASI CEO Phillip Buckendorf stated that the FAA is embracing commercially proven technology that is already helping the aviation community operate more efficiently. Prior to the contract award, the company invested heavily in the platform’s development.

“ASI has spent years building and proving our technology in the most demanding operational environments in American aviation with the major airlines and the Department of War. We have invested nearly $100 million of our own resources to develop a platform that is operational today, and we are honored to bring that same proven capability to the FAA and to the American people at national scale,” said Bernard Asare, President of Civil Aviation at ASI.

Implementation timeline and industry reception

The FAA and ASI are targeting an initial operational deployment of the SMART system for fall 2026. The full transition and rollout of the new technologies are expected to be completed by the end of 2028.

Despite the anticipated benefits, the aggressive timeline has generated some skepticism. According to reporting by Investing.com, airlines have expressed private concerns regarding the rapid deployment schedule and how the agency will manage conflict resolution when flights need to be moved or rescheduled under the new system.

AirPro News analysis

The FAA’s decision to award an $875 million contract to Air Space Intelligence rather than established aerospace defense contractors like Thales or Palantir signals a distinct shift in federal procurement strategy. By selecting a company whose software is already integrated into the dispatch and routing operations of major US carriers, the FAA is prioritizing commercially proven, agile technology over ground-up custom builds.

The targeted fall 2026 initial deployment for the SMART system is highly ambitious for a federal aviation IT project. The private concerns voiced by airlines are well-founded, as integrating predictive AI into the National Airspace System requires seamless coordination between airline operations centers and FAA flow management. We expect the primary hurdle will not be the software’s capability, but rather the procedural integration and controller adoption required to make proactive flight rerouting a standard operational practice without disrupting airline schedules.

Sources: Federal Aviation Administration