FAA Awards $875M Contract to Scale AI Flight Routing Nationwide

The Federal Aviation Administration has awarded an $875 million contract to Air Space Intelligence to modernize the entire U.S. airspace using artificial intelligence—a dramatic scaling of technology already proving its worth at major airlines.

The contract tasks the startup with building SMART (Strategic Management of Airspace, Routes, and Trajectories), a system designed to bring predictive analytics to national air traffic management. The award represents one of the most significant technology investments in the FAA's modernization efforts and forms part of the Trump administration's push for what it calls a "Brand New Air Traffic Control System."

Why it matters

The U.S. manages the world's busiest and most complex airspace, but current systems lack a unified view of national air traffic. Predictive AI could prevent bottlenecks before they form, reducing delays and fuel consumption across thousands of daily flights. Success at this scale would mark a fundamental shift from reactive to anticipatory airspace management—though skeptics question whether technology that works for individual airlines can handle the complexity of coordinating the entire national system.

Proven results at Alaska Airlines

Air Space Intelligence built its credibility through Flyways AI, a dispatch assistance tool that Alaska Airlines adopted in 2021. The system analyzes real-time data on air traffic, weather, and wind patterns to suggest optimized flight routes to human dispatchers working in Alaska's Network Operations Center near Seattle-Tacoma International Airport.

According to Alaska, Flyways now saves the airline tens of thousands of flight hours and roughly one million gallons of fuel annually across its approximately 1,500 daily flights. The system doesn't make routing decisions autonomously but provides dispatchers with data-driven options they can evaluate and modify.

"It doesn't decide the route or waypoints that a dispatcher uses to get an airplane from A to B, but it does help provide suggestions that might be more efficient," explained Capt. Bret Peyton, managing director of Alaska's network operations control, according to NPR.

The company has since expanded to work with Delta Air Lines, United Airlines, and the U.S. Army and Air Force.

The national challenge

FAA Administrator Bryan Bedford outlined the agency's rationale at an industry conference in May, describing the current system as "woefully unorganized" despite being safe. The problem isn't separation standards—controllers effectively keep aircraft apart—but rather the lack of a unified national view that could enable more efficient routing and scheduling.

"We don't have in any of our facilities the ability to see the entire national airspace picture in a unified way," Bedford said, as reported by NPR.

The FAA emphasizes that SMART is designed to assist air traffic controllers, not replace them. However, the transition from static displays to predictive systems represents what Air Space Intelligence CEO Phillip Buckendorf called "a really fundamental change, a massive behavior change" for professionals who have made decisions against static information for decades.

Alaska Airlines dispatchers initially showed skepticism but came around relatively quickly after seeing measurable results, according to Peyton. Whether that acceptance pattern can replicate across the far more complex national system remains an open question as Air Space Intelligence begins work on its largest contract to date.

These details were first reported by NPR, with additional reporting from KNKX's Izzy Ross in Seattle.