Just before the industry was de-regulated a decade ago, this nation's airlines were carrying 243-million passengers a year.

This year, an estimated 487-million travelers will board airlines in the U.S. By 1997, the figure is expected to reach 705-million.But it's hard to see how air travel can expand as rapidly or operate as safely as it should unless the Federal Aviation Administration starts functioning much more effectively.

Just ask James Burnley. He's secretary of the U.S. Department of Transportation, which oversees the FAA. And he's understandably tired of the foot-dragging bureaucracy at the FAA.

As a case in point, Burnley cites a 15-foot-long flow chart showing the FAA plods through 377 separate administrative steps before it finally gets around to turning an aviation safety proposal into an official rule.

Or just ask the U.S. General Accounting Office about the FAA. A few days ago, the GAO issued a report showing that the FAA's ambitious efforts to modernize the air traffic control system will cost billions of dollars more than the FAA estimates. Why? Because the FAA under-estimated how long it would take to invent the new technology involved. And because the FAA lacks enough workers to install new equipment when it's available. As a result, hundreds of pieces of equipment that are being delivered to FAA facilities across the country are simply sitting in sheds. This slipshod performance is the result of not just under-funding but of sloppy management.

No wonder that Burnley and others want to break up the FAA and hand its various functions over to other government agencies. But Congress is resisting on the grounds that it's better to try to make the FAA less cumbersome and more responsive before taking such a drastic step as dismembering it.

Certainly there are ways to streamline the FAA. For instance, its procurement system is so slow that equipment purchased to modernize air traffic control is often obsolete by the time it is delivered and installed. A look at just about any major private firm should show how to improve this part of the FAA operation.

Likewise, the FAA is hamstrung by civil service rules that prohibit it from paying cost-of-living differentials to employees living in high-cost areas. As a result, it is often difficult to obtain the best controllers for the busiest airports. Since Congress made those misguided rules, it can and should change them.

But there comes a point where more than just cosmetic surgery is needed. Specifically, the FAA has long been saddled with an incompatible assignment that of enforcing air safety while trying to promote the air transportation industry. It's hard to be a policeman and a cheerleader at the same time.

The very least that should be done is to turn promotion of the airline industry over to some other agency and let the FAA concentrate on safety. Though Congress briefly considered such a step in 1980, the bill got nowhere. It needs to be pushed again.

In any event, as faster and better planes bring more travelers into the skies, the FAA needs to operate faster and better, too.