While Elon Musk hacks away at the federal bureaucracy in the name of “efficiency,” his company Starlink appears poised to steal a multi-billion dollar government contract away from Verizon.
The Federal Aviation Administration is on the cusp of canceling a $2.4 billion contract to overhaul the communication system for the nation’s air traffic control system, and handing it to the SpaceX subsidiary instead, the Washington Post reports, citing two unnamed sources briefed on the plans. The news was also confirmed by Bloomberg and the AP.
It’s unclear exactly how this would unfold, whether the FAA hands some of the work to Starlink while allowing Verizon to continue its own effort, or simply cancels the contract with Verizon and awards it to Starlink. Whatever the outcome, it is sure to raise accusations of favoritism, cronyism, and conflict of interest, as Musk continues to serve as the face of the DOGE-run effort to slash spending and lay off federal workers, despite the structural damage that causes.
It is sure to raise serious accusations of favoritism and conflict of interest.
Musk has been sowing doubt about the Verizon system for several days, claiming without evidence that it’s “not working and so is putting air travelers at serious risk.” Earlier today, he posted on X that the Verizon communication system is “breaking down very rapidly” and that the “FAA assessment is single digit months to catastrophic failure, putting air traveler safety at serious risk.” He also claimed that Starlink terminals would be provided at “NO COST to the taxpayer on an emergency basis to restore air traffic control connectivity.”
This, of course, follows a pattern, in which Musk posts on X about something regarding the FAA, and then seems to will it into existence. Previously, the billionaire called for FAA Administrator Michael Whitaker’s resignation, after the agency fined SpaceX for failing to get approval for rocket launch changes. After his repeated comments, Whitaker resigned on the day of Donald Trump’s inauguration.
A team from SpaceX, Starlink’s parent company, has been working within the FAA in recent weeks to help modernize the agency’s aging technology system. US Department of Transportation Secretary Sean Duffy said they were tasked with developing “a new, better, modern and safer system.”
Several SpaceX employees now have FAA email addresses, the Post reports. One SpaceX employee posted a photo of the team on X, with the statement, “Working to improve the safety of the national air space system.”
The FAA was scheduled to make a decision to start paying out the Verizon contract next month. But the SpaceX team reportedly recommended it be awarded to Starlink instead, the Post reports, citing an unnamed source with knowledge of the plans. So far, the formal process of unwinding one contract and awarding it to another company has reportedly not been followed. Several senior FAA officials have refused to sign the contract, leading Musk’s team to seek help from a Trump appointee within the agency.
Much of Musk’s wealth comes from government largesse. According to the Post, his companies have received approximately $38 billion in government contracts, loans, subsidies, and tax credits over the years.
There have been four commercial aircraft crashes globally in the last 11 weeks, as well as a handful of private plane crashes and several near misses. Meanwhile, the air traffic control system appears to be in chaos, with hundreds of employees cut. Despite air travel being safer than it ever has been before, many people are left with the perception of a global aviation system coming apart at the seams.
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
