The Federal Aviation Administration awarded a contract which could be worth almost $2 billion to ITT Corporation, a leading U.S. defense contractor. ITT is to start to replace the current analog air traffic system which has become outdated. The entire replacement will cost at least $15 billion over 20 years or more.

The new system will significantly reduce congestion on runways and in the skies, increase safety and reduce operating costs. The system will use a combined satellite and radar technology and allow for a triple capacity than the current system. The FAA chose the ITT team over teams led by Lockheed Martin Corp. and Raytheon Co.

At the core of the state-of-the-art system is the Automatic Dependent Surveillance-Broadcast, or ADS-B, which relies on the Global Positioning System and ground systems to pinpoint aircraft locations ten times more accurately than traditional radar systems.

"We certainly felt like we put together, and now the FAA is confirming that we put together, the best technical solution," ITT spokesman Andy Hilton said. "It's literally the foundation, the backbone, if you will, of the next-generation air transportation system," FAA administrator Marion Blakey, said. "It's going to take us from a system that was put in place back in the 1950s and '60s."

The contract awarded by the FAA to ITT is expected to be completed by 2013 in two phases, the first of which will consist of installing about 300 communications stations in Philadelphia, Louisville and Juneau, Alaska, as well as some on oil and gas platforms in the Gulf of Mexico. The outdated communications network was installed 20 years ago and has created problems which made critics say that it should have been updated a decade ago.

The U.S. Congress may allow the raising of taxes and fees to cover the cost of the new air traffic control system.