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**LAAS Benefits Analysis**

**Executive Summary**

**of the**

**Update to the Preliminary Findings of**

**LAAS Safety and Societal Benefits**

**August 31, 2004**

# Background

The Federal Aviation Administration (FAA) is transforming its navigation
infrastructure, from a ground-based to a Global Positioning System
(GPS)-based architecture. Part of this transformation entails the
acquisition of augmentation systems to improve the reliability and
integrity of the GPS signals. The Local Area Augmentation System (LAAS)
is one of these systems, specifically designed to support aircraft
operations in the terminal, approach, departure, and surface operational
domains.

The FAA contracted with IBM Business Consulting Services to provide an
independent analysis that estimates the benefits attributable to LAAS
beyond those provided by existing and planned navigation services. The
results of this analysis will be used to support FAA, airline, and other
industry stakeholders in their procurement and implementation decisions
related to LAAS. A separate cost study is being conducted internally
within the FAA.

The first stage of the benefits analysis, completed in November 2003,
involved the establishment of the navigation capabilities baseline
against which all LAAS benefits would be measured. The second stage,
completed in December 2003, entailed determining the incremental
capabilities provided by LAAS, above and beyond this baseline. In
February 2004, IBM completed a preliminary analysis of the LAAS
benefits, and the findings were documented in a report. This was
followed by an update of the efficiency section of the report in June
2004. In the interim, IBM and the LAAS Program Office actively solicited
comments on the February report from numerous stakeholders and conducted
visits to 5 airports (Memphis, Seattle, Bradley, Newark, and Chicago
O'Hare) and 5 airlines (FedEx, Alaska, United, Continental, and
Southwest). The purpose of these visits was to share preliminary
findings and to validate the input data, assumptions, and analysis
results with airport, airline, aircraft manufacturer, and air traffic
representatives.

This current document is an update of the safety and societal portion of
the preliminary analysis. It reflects several changes since the February
2004 report, including additional societal benefits areas, and IBM's
responses to comments received both on the earlier report and during the
airport and airline visits. A final report containing LAAS efficiency,
safety, and societal benefits is scheduled to be completed in October
2004.

# Update of Preliminary Findings

The updated benefits discussed in this report include the following:

-   Safety Benefits

    -   Precision approach benefits

    -   Airport surface navigation benefits

-   Societal Benefits

    -   Qualitative description of the continuation and possible
        enhancement of U.S. technology leadership in air navigation

    -   Quantitative estimate of international LAAS Ground Facility
        (LGF) and LAAS avionics sales revenue to U.S. manufacturers

    -   Qualitative description of noise abatement and mitigation

    -   Qualitative description of the reduced impact on environmentally
        sensitive areas

    -   Qualitative description of how LAAS complements Homeland
        Security

    -   Qualitative description of how LAAS and Joint Precision Approach
        and Landing System (JPALS) offer civilian and military
        compatibility

    -   Qualitative description of the expansion of air commerce to
        smaller communities

    -   Quantitative analysis of increased reliability of air service

We recognize that the quantitative societal benefits included in this
report are speculative, and are included here only to illustrate the
importance of the economic impact that LAAS may provide. These benefits
estimates will not be incorporated in the total benefits derived from
the efficiency benefits analysis.

Many of these quantitative and qualitative potential benefits may also
be achieved through current or emerging procedures (*e.g.*, RNAV/RNP) or
technologies (*e.g.*, WAAS). Therefore, further investigation should be
considered to determine if, and by how much, LAAS may uniquely provide
these benefits.

## Safety

The LAAS Safety Analysis report, of which this section is a summary, was
produced by the Flight Safety Foundation (FSF), a recognized authority
in the field of aviation safety analysis. The full FSF report is
available separately.

Currently, there are many different kinds of navigation-based approaches
to runways at the more than 4,000 public use airports with paved
runways.[^1] These airports have well over 10,000 runways, of which more
than 1,150 have instrument landing system (ILS) precision
approaches[^2]. The remaining runways have no instrument approaches or
use a variety of less precise non-precision instrument approaches. It is
generally acknowledged that a precision approach is safer than a
non-precision approach. This is supported by research conducted by FSF
which indicated that the risk of an accident among air carrier airplanes
is five times greater during a non-precision approach than a precision
approach.[^3]

The underlying hypothesis of this study is that LAAS will provide safety
benefits above and beyond those provided by other systems, including
WAAS, by providing precision approach service. To evaluate the safety
benefits of LAAS implementation, the study relied heavily on a
retrospective evaluation of past accidents and incidents. The underlying
rates of these accidents were used to project anticipated losses if LAAS
were not implemented. Once the benefits of LAAS implementation were
determined, they were used to estimate the monetary benefit of the
expected reduction in accidents. Estimated benefits associated with
airport surface navigation were developed similarly.

A number of data sources were used for this analysis, including the
National Transportation Safety Board (NTSB) accident and incident
investigation database, the FAA's National Airspace Incidents Monitoring
System (NAMIS)[^4], and the National Aeronautical and Space
Administration's (NASA) Aviation Safety Reporting System (ASRS).

After a thorough review of the aviation safety data, eleven relevant
accidents and incidents were identified for study. Projections of
accidents to the 2009-2028 study period resulted in an estimated
reduction from 34 accidents without LAAS to 3 with LAAS implementation.
The following tables summarize the study's findings for LAAS benefits
for the two operator equipage scenarios: 0% equipage with WAAS, and 100%
equipage with WAAS.

Table 1 shows that the estimated LAAS precision approach benefits, for
the scenario in which operators do not equip with WAAS is \$38.1
million. For the scenario in which operators do equip with WAAS, LAAS
benefits are estimated to be \$14.9 million.

Surface navigation benefits for LAAS are most likely shared with some
enabling technology, like ADS-B, or moving map. To reflect this
dependency, Table 2 shows LAAS surface navigation benefits of \$20.1
million, which is half that reported by FSF. Additionally, although FSF
research found that LAAS is the most likely system to provide surface
navigation positioning information, we concluded that other systems,
like WAAS or multilateration, may also be able to provide this service.
Therefore, our LAAS surface navigation benefit for the 100% WAAS
equipage scenario was determined to be zero.

[Table 1: LAAS Safety-Related Monetary Benefits During Precision
Approaches]{.smallcaps}

+----------------+--------------+-----------+-------------+-----------+
|                | **Accidents  | **Fatal   | **Serious   | **Total** |
|                | Prevented    | Injuries  | Injuries    |           |
|                | (Hull loss   | Pr        | Prevented** |           |
|                | and          | evented** |             |           |
|                | damage)**    |           |             |           |
+----------------+--------------+-----------+-------------+-----------+
| **LAAS         | \$37,569,000 | \$0       | \$555,000   | \$3       |
| Benefits**     |              |           |             | 8,124,000 |
|                |              |           |             |           |
| **(Assuming 0% |              |           |             |           |
| WAAS           |              |           |             |           |
| equipage)**    |              |           |             |           |
+----------------+--------------+-----------+-------------+-----------+
| **LAAS         | \$14,636,000 | \$0       | \$240,000   | \$1       |
| Benefits**     |              |           |             | 4,876,000 |
|                |              |           |             |           |
| **(Assuming    |              |           |             |           |
| 100% WAAS      |              |           |             |           |
| equipage)**    |              |           |             |           |
+----------------+--------------+-----------+-------------+-----------+

[Table 2: LAAS Safety-Related Monetary Benefits from Enhanced Surface
Guidance]{.smallcaps}

+----------------+-------------+--------------+----------+-----------+
|                | **Accidents | **Fatal      | *        | **Total** |
|                | Prevented   | Injuries     | *Serious |           |
|                | (Hull loss  | Prevented**  | Injuries |           |
|                | and         |              | Pre      |           |
|                | damage)**   |              | vented** |           |
+----------------+-------------+--------------+----------+-----------+
| **LAAS         | \$5,122,000 | \$14,634,000 | \        | \$2       |
| Benefits**     |             |              | $419,500 | 0,175,500 |
|                |             |              |          |           |
| **(Assuming 0% |             |              |          |           |
| WAAS           |             |              |          |           |
| equipage)**    |             |              |          |           |
+----------------+-------------+--------------+----------+-----------+
| **LAAS         | \$0         | \$0          | \$0      | \$0       |
| Benefits**     |             |              |          |           |
|                |             |              |          |           |
| **(Assuming    |             |              |          |           |
| 100% WAAS      |             |              |          |           |
| equipage)**    |             |              |          |           |
+----------------+-------------+--------------+----------+-----------+

## [Societal]{.smallcaps}

## [Continuation and possible enhancement of U.S. technology leadership in air navigation]{.smallcaps}

The FAA's Flight Plan 2004-2008[^5] specifically identifies GNSS
augmentation systems as one tool to help reach the goal of "seamless
operations around the globe...", and advocates that the agency promote
the "commercial proliferation, interoperability and use" of these
systems. The U.S. has historically taken a lead role in promoting
satellite navigation around the world as the standard for 21st Century
air navigation.

LAAS implementation will encourage a single standard for global
navigation and help in areas lacking CNS-ATM coverage. International
implementation of LAAS could bring high-precision navigation service to
areas now served by minimal or outdated equipment, allowing expansion of
air service by both U.S. and foreign carriers.

International sales and implementation can also help U.S. companies
remain at the cutting edge of new technologies, ensuring continued
innovation and economic growth. In the Final Report of the Commission on
the Future of the United States Aerospace Industry[^6], the Aerospace
Commission noted that "the United States must enable U.S. companies to
retain their position at the forefront of technology innovation". They
also noted that "revenues generated through export sales \[have\] helped
companies to fund development of new technology, and a broad customer
base \[has\] enabled U.S. companies to achieve economies of scale
necessary to incorporate new technology into new generations of
products"

## [Quantitative estimate of international sales]{.smallcaps}

Our discussions with U.S. carriers revealed two important goals: 1) to
simplify the number and variety of landing systems and procedures
currently in use, and 2) to operate globally with the same set of
simplified systems and procedures. A single navigation and landing
system, capable of global implementation, can contribute to achieving
these goals.

If domestic carriers equip with LAAS, they will want to use this
capability throughout their networks, including at overseas airports.
Therefore, we explored the potential market for international LAAS
Ground Facility (LGF) sales to these airports. Similarly, if domestic
airports serving international carriers equip with LAAS, foreign
carriers operating to the U.S. will have an incentive to also equip with
LAAS. Therefore, we explored the potential market for international
(Part 129) avionics sales to such carriers.

A detailed analysis of the most likely extent of international sales
would be a significant undertaking, and is out of the scope of this
project. Instead, we estimated the market size and potential benefit of
international sales of both LGFs and LAAS avionics, consistent with the
assumptions above.

**Results: Market Estimate and Potential Benefit**

A.  International LGF Sales

    a.  Market Estimate is 157 airports

> Note: Estimate is the number of international airports served by U.S.
> carriers, less
>
> current and potential MLS airports.

b.  Potential Benefit is \$94,200,000.

```{=html}
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```
B.  International (Part 129) Avionics Sales

    a.  Market Estimate is 846 aircraft.

> Note: Estimate is based on the number of international carriers
> serving the 120 airports studied.

b.  Potential Benefit is \$ 8,460,000.

## [Noise abatement and mitigation]{.smallcaps}

The LAAS capabilities that may have a direct impact on noise issues are
those that offer increased control over the flight path taken. The
ability to consistently provide defined, repeatable (laterally and
vertically contained) flight tracks during all weather conditions allows
for greater control over noise distribution and can offer potential cost
savings for noise related programs and issues.

Noise abatement and mitigation, may be possible with RNAV capabilities
through the use of existing systems, including Global Positioning System
(GPS), and potentially with WAAS. For aircraft with such RNAV
capabilities, LAAS may show little to no benefit for noise abatement and
mitigation.

## [Reduced impact on environmentally sensitive areas]{.smallcaps}

The LAAS capabilities that may have a direct impact on environmentally
sensitive areas are those that offer increased control over the flight
path taken. The ability to consistently provide defined, repeatable
(laterally and vertically contained) flight tracks during all weather
conditions allows for reduced impact of aviation activity on
environmentally sensitive areas.

Reduced impact to environmentally sensitive areas may be possible with
RNAV capabilities through the use of existing systems, including GPS,
and potentially with WAAS. For aircraft with such RNAV capabilities,
LAAS may show little to no benefit.

## [Role of LAAS in Homeland Security]{.smallcaps}

Increased emphasis on aviation security requires increased navigation
and surveillance capabilities. In some cases, the ability of LAAS to
provide a high level of control over flight paths may be crucial to
Homeland Security. For example, in areas of heightened security, such as
operations into and out of DCA in our nation's capital, LAAS, in
conjunction with other technologies such as ADS-B, may enable Air
Traffic to more precisely anticipate the expected terminal area flight
path, and to more readily detect and react to any deviation from that
flight path.

RNAV capabilities provided by existing systems, including GPS, and
potentially WAAS, combined with other technologies, such as ADS-B, may
also enable Air Traffic to precisely anticipate the expected terminal
area flight path, and to more readily detect and react to any deviation
from that flight path. In these cases, LAAS may show little to no
benefit. Situations in which LAAS can uniquely contribute to increased
security have not been established.

## [LAAS and JPALS offer cilvan and military compatibility]{.smallcaps}

The Department of Defense (DoD) currently operates a variety of
precision approach systems, including the Instrument Landing System
(ILS), Microwave Landing System (MLS), and Precision Approach Radar
(PAR). No single system currently available meets all of the DoD's
precision approach needs. In order to standardize on a single-system
solution, the DoD is developing a Joint Precision Approach and Landing
System (JPALS), a military-use differential GPS system designed to be
interoperable with the civilian-use LAAS. Interoperability of civil and
military landing systems is the primarily benefit. A JPALS transmitter
is designed to broadcast a signal meeting the requirements of civil LAAS
avionics, and a JPALS receiver is designed to use the LAAS broadcast
signal.

Twenty of the 120 airports studied have a military presence that
comprises greater than ten percent of total airport operations. In
addition, the DoD conducts operations at many NAS airports, including
over 95% of the 120 airports in this study. Because of the
interoperability of LAAS and JPALS, taxpayers may be able to forgo
installing two compatible systems at one location. At the 20 sites with
substantial military operations, this could potentially save taxpayers
at least \$24M.

## [Expansion of air commerce to smaller communities]{.smallcaps}

The expansion of air service to smaller communities can be important for
economic development. Allowing reliable, precision guidance to all
runways may increase economic development through increased air service
and passenger utilization at smaller community airports.

The expansion of air commerce into smaller communities may have multiple
beneficiaries. However, many of the benefits of expansion of air service
may be achievable with RNAV capabilities through the use of existing
systems, such as GPS, and potentially WAAS, or achieved through ILS
precision approach. For aircraft with such RNAV capabilities, or in
cases in which ILS is present, LAAS may provide little to no benefit.
However, in some terrain challenged areas that may either have ILS
siting issues or inadequate WAAS coverage (accuracy, availability,
integrity, and continuity), LAAS benefits may be significant.

## [Quantitative analysis of increased reliability of air service]{.smallcaps}

Studies have suggested that infrastructure changes that lead to
increased quality of air service (e.g. reduced flight times, increased
reliability) may lead to increased passenger load factors[^7]. By
reducing flight disruptions, and increasing the reliability of air
service, LAAS may offer this benefit. Increased load factors result in
additional tax revenue available for aviation improvements from the
Domestic Passenger Ticket Tax and increased revenues for the airlines.

This quantification is for illustrative purposes only, and no claim is
made that LAAS, or any other precision approach system will lead to
these specific benefits. Rather, this shows the benefits that may be
obtained for every 1% increase in load factor in 1% of the domestic
major and regional carrier flights, by improving the reliability of
all-weather flight operations.

Table 3 shows that the estimated benefits for the 0%, and 100% WAAS
equipage scenarios are \$96.0M, and \$22.1M, respectively, as a result
of a one percent (1%) increase in load factor on one percent (1%) of
domestic major and regional operations among the 120 airports studied.

[Table 3: Discounted 20 year Laas Benefits for Each 1% Increase in Load
Factor on Each 1% of Domestic Major and Regional Airline]{.smallcaps}
Operations

+----------------------+----------------+------------------+----------+
|                      | **Increased    | **Increased      | *        |
|                      | Tax Rev**      | Airline Rev**    | *Total** |
+----------------------+----------------+------------------+----------+
| **LAAS Benefits**    | \$6,701,000    | \$89,348,000     | \$96     |
|                      |                |                  | ,049,000 |
| **(Assuming 0% WAAS  |                |                  |          |
| equipage)**          |                |                  |          |
+----------------------+----------------+------------------+----------+
| **LAAS Benefits**    | \$1,653,000    | \$20,478,000     | \$22     |
|                      |                |                  | ,131,000 |
| **(Assuming 100%     |                |                  |          |
| WAAS equipage)**     |                |                  |          |
+----------------------+----------------+------------------+----------+

# Notes and References

[^1]: Number derived from the following FAA website
    (<http://www.api.faa.gov/strategic/docs/sup-sys-40-arpaccessgoal.html>).

[^2]: FAA Navigation & Landing Transition Strategy Report:
    ([http://www1.faa.gov/asd/briefings/NavReport8-02.pdf).]{.underline}

[^3]: Enders et al, *Airport Safety: A Study of Accidents and Available
    Approach-and-landing Aids*, Flight Safety Digest, Flight Safety
    Foundation, Alexandria, VA., March 1996.

[^4]: FAA. (2002). The National Aviation Safety Data Analysis Center.
    ([https://extranet.nasdac.faa.gov).]{.underline}

[^5]: FAA Flight Plan 2004-2008, p34;
    (http://www2.faa.gov/apo/strategicplan/FAA_Flight_Plan.pdf)

[^6]: Final Report of the Commission on the Future of the United States
    Aerospace Industry
    (http://www.ita.doc.gov/td/aerospace/aerospacecommission/AeroCommissionFinalReport.pdf).

[^7]: Homan, Ph.D, Anthony C. (January 200). Improved Methods for
    Measuring the Benefits of Air Traffic Control Improvements (Paper
    No. 00-0573). Center for Advanced Aviation System Development.