This report discusses the results of our review of (1) the status of the Federal Aviation Administration's (FAA) efforts to implement free flight, including a planned operational demonstration formerly known as Flight 2000 and now called the Free Flight Operational Enhancement Program, and (2) the views of the aviation community and FAA on the challenges that must be met to implement free flight in a cost-effective manner. The predicted growth in air traffic and the aging of air traffic control equipment led the Federal Aviation Administration (FAA) to undertake a multibillion-dollar modernization effort in 1981 to improve the safety, capacity, and efficiency of the nation's air traffic control system. Since that time, this program has experienced substantial cost overruns, lengthy schedule delays, and significant performance shortfalls. To get the modernization effort back on track and thereby address the limitations of the present system and satisfy users' growing demands, FAA-in consultation with the aviation community-is developing a phased approach to modernization, including a new way of managing air traffic known as "free flight." Under the modernization program, FAA plans to introduce a host of new technologies and procedures that will enable free flight-allowing the agency to move gradually from its present use of highly structured rules and procedures for air traffic operations to a more flexible system in which decisions for conducting flight operations will be based increasingly on collaboration between FAA and users. For example, these technologies and associated procedures will give pilots and controllers more precise information about the location of aircraft and allow them to exchange information more efficiently.