FAA Awards SMART Air Traffic Contract to Air Space Intelligence, Beating Palantir and Thales

The Federal Aviation Administration awarded a 12-year, $875 million contract to Air Space Intelligence to build the predictive air traffic management software it has been developing in stealth for the better part of a year. The Boston startup beat two larger competitors, Palantir Technologies and Thales, for the work. Transportation Secretary Sean Duffy and FAA Administrator Bryan Bedford announced the award on June 22, 2026.

The FAA detailed the award in a June 22 newsroom release, with ASI confirming the 12-year term and contract value in its own announcement the same day.

The contract covers two systems. Flow Management Data and Services, or FMDS, replaces the FAA’s existing Traffic Flow Management System and becomes the data backbone of the agency’s Air Traffic Control System Command Center. Strategic Management of Airspace, Routes, and Trajectories, or SMART, runs as a capability inside FMDS and flags congestion before aircraft leave the ground. Initial SMART operations are planned for this fall.

When we first reported the three-way SMART competition in April, ASI was the smallest and least obvious pick. It is also the one that already had working software in production.

ASI Brought Production Software Instead of a Development Promise

ASI separated itself from Palantir and Thales by walking in with a platform already running at scale. Its Flyways AI system supports flight routing and traffic management for Alaska Airlines, Delta, and United, and the company claims it touches more than 40 percent of U.S. air traffic. Flyways also runs operational planning for the U.S. Air Force and Indo-Pacific Command.

That 40 percent figure is ASI’s own marketing number, and it deserves a closer look than the headlines gave it. Being available to dispatchers at three large carriers is not the same as actively routing 40 percent of national traffic. The claim describes reach, not control. It is a real differentiator over a pure development bid, but the gap between a tool dispatchers can consult and a tool that manages the airspace is exactly the gap this contract has to close.

The track record is still the whole pitch. ASI says it invested close to $100 million of its own money building the platform before the FAA award, which let it enter the program with deployable technology rather than a multi-year custom build. The company is headquartered in Boston and backed by Andreessen Horowitz. FAA modernization programs have historically died in exactly the gap ASI claims to skip: the years between contract signing and a working system. NextGen took two decades and still is not finished.

The Manned Traffic Layer Is the Real Blocker for Drone Integration

SMART is a tool for managing airliners, not drones, but the downstream effect on uncrewed flight is what makes it matter to this audience. Routine BVLOS operations at scale depend on an air traffic system that can see conflicts coming hours out instead of minutes. Today’s reactive structure cannot absorb thousands of daily drone flight plans on top of manned traffic. A predictive layer can.

This is the same integration problem that sits underneath every delayed piece of drone policy, from the Part 108 BVLOS rule to UTM and low-altitude corridors. Operators like Reliable Robotics, which is pushing the FAA toward its first commercial uncrewed cargo certification, are betting on the manned side of the house modernizing on roughly the same timeline. SMART is a piece of that.

DroneXL’s Take

I’ll take the win on this one, and I’ll be honest about the part I got wrong. In April, I wrote that by the end of Q3 2026 the FAA would name a single prime contractor for SMART, not a split award, and that it would be Palantir or ASI rather than the establishment pick Thales. The award landed in June, ahead of schedule, single prime, ASI. Bedford broke from the traditional FAA procurement playbook, exactly as the pattern suggested he would. The second half of that April call, that the winner would be handed UTM-to-ATC integration scope within 18 months, has not happened and is not in this contract. That piece is still outstanding, and I’m not going to pretend the prediction was cleaner than it was.

Here is the part the celebration press releases skip. ASI’s own statements and the trade coverage both flag what the FAA has not explained: there is no public account of how an AI routing system gets certified for safety before it runs national airspace, and no detail on how controllers’ existing workflows survive a 12-to-24-month transition. “Move fast with production software” is a genuine advantage over NextGen-style paralysis. It is also a phrase that should make anyone pause when the software in question sits inside safety-critical infrastructure that planes and, eventually, drones depend on.

There is one more stakeholder the announcement talks past. Every official quote praises software that “eases controller workload,” and that language has historically preceded fights over headcount and automation. The controllers’ union has an obvious interest in how this rolls out, and treating the efficiency framing as politically neutral is a mistake. It isn’t.

One vendor, one airspace, one company to hold accountable. That was the bet in April, and the FAA just placed it. The fall 2026 initial deployment is the first real test. Watch whether that date holds, because the safety validation work behind it will tell you far more than the contract value does. Now ASI has to prove the production-software story scales from a number on a slide to the entire National Airspace System without breaking the gold-standard safety record everyone keeps invoking.

Sources: FAA Newsroom, Air Space Intelligence (PR Newswire), Reuters.

DroneXL uses automated tools to support research and source retrieval. All reporting and editorial perspectives are by Haye Kesteloo.