# Presentation: 477285

## Aviation Forecastsand Regional Jets

**Recent Forecasts and Trends**

**Notes:**
Talk about the forecast assumptions and how they have changed over the past year.  March forecast 2002 was optimistic for 2003.
By Fall optimism for 2003 was gone.  The war in Iraq, has changed our assumptions again.  

## Items for Discussion

**National Forecast**** **
**Effect of the War**** **
**TAF Summary Results**** **
**Trends Related to Regional Jets**** **

**Notes:**
Cover summary level results for large hubs include 30 airports that  range from Atlanta’s 38.4 million in 2001 to San Diego with 7.8 million enplanements in 2001.  Medium hubs include 34 facilities ranging from Nation (DCA) with 7.4 million enplanements to Louisville (SFD) with 1.95 million passengers.  Small Hubs include 65 airports ranging from Tucson with 1.8 million enplanements to Fairbanks, Alaska with 375,000 enplanements.

## Enplanements Growth Rates 

**Notes:**
Growth rates have remained relatively constant.   These are the 12 year growth rates forecasted in the past 3 years.  The changes are in the base year level.  This drop in the base year pushes our forecast out.  

## Domestic Large Carrier Enplanements return to pre 9/11 levels in 2006

**Millions**

**Notes:**
Our forecast of domestic enplanements for mainline carriers is lower than previous forecasts.  Instead of a sharp recovery in traffic next year, we are now projecting a modest recovery of only 2.0%.  For the 12 year forecast period, average growth in passengers is 3.5% per year which is a full point lower than last year’s forecast for the period 2002-13.  In the current forecast, passengers don’t reach the 2000 level until 2006.  

## Commuter EnplanementsDon’t Miss a Beat

**Millions**

**Notes:**
Commuters activity has not fallen of as the large carrier.  This is because main line carriers have used commuters to serve markets that have dropped in demand.  Commuters will continue to grow at a 5. 5 percent rate.  Although total commuter traffic is relatively small the number of operations that this traffic generates is much larger.  

## Operational Factor Forecast

**Notes:**
Load factors will continue to grow in all categories.  Likewise, seating capacity will increase for all.  The most dramatic increase is among the commuters where seating is expected to increase to just above 50 seats by 2014.  This of course is the result of the increase in RJs and decline in turbo prop service.

## Recent Headlines Tell a Story

**Airlines Make Flight Cuts at War Start  (Reuters**)

**Aviation facing another blow  Airports: A Hit To Economy Could Delay Expansion Plans (The San Jose (CA) Mercury News)**

**Travelers keep eye on war news (The Amarillo (TX) Globe-News)**

**Airlines likely to trim foreign flights for war (The Washington (DC) Times)**

**Notes:**
This is a sampling of headlines from across the country.  They tell a consistent story on the war’s effect on the industry.

## Demand Plummets

**Domestic traffic off  5 to 10 % in 1****st**** week of war**** **
**Pacific routes off 10 to 20 %**** **
**Transatlantic traffic down 20 to 30 %**** **
**Bookings off by as much as 100 % in some markets  **

**Notes:**
These data were reported in the Aviation Daily last week.  The data is consistently bad with international hit worse than domestic travel.

## How the War Might Affect Traffic

**Quick conclusion to the conflict (Gulf War I)**
** ****2003 forecast down**
**2004 forecast remains the same**** **
**War drags on**
** ****2003 forecast down even more**
** ****2004 forecast down**

**Notes:**
Short conflict may imply a 3 to 5 % drop off the national forecast
Longer war might approach an 8 % decline off the forecast or more

## Enplanements at Large Hubs

**Notes:**
Note the sharp dip caused by the double whammy of the recession and the terrorist events of 9/11.  At the large hubs in aggregate we don’t get back to the 2000 level for 5 to 6 years.  Note that commuter activity did not skip a beat as major carriers began serving some routes with RJs as passenger traffic thinned.    

## Operations at Large Hubs

**Notes:**
Operations (departures and arrivals) among the large carriers fell of just as rapidly while operations among smaller aircraft type that make up commuters hardly a beat was missed.

## Enplanements at Medium Hubs

**Notes:**
Note that this picture for medium hubs looks a great deal like the chart for large hubs with the scall on the side

## Operations at Medium Hubs

## Enplanements at Small Hubs

**Notes:**
Ditto for small hub enplanements

## Operations at Small Hubs

**Notes:**
Commuters are the important players at the small hubs.

## Enplanements at ANM HubsBOI, COS, DEN, EUG, GEG, PDX, SEA, and SLC

## Operations at ANM HubsBOI, COS, DEN, EUG, GEG, PDX, SEA, and SLC

## Trends Affecting Forecasts

- Greater use regional jets
- Reduction in turbo-prop regional service
- Larger than average drop in short haul trips

**Notes:**
Under lying these forecast are several significant structural changes in the industry.  

## Commuter Enplanements Share  By Hub Size

**Notes:**
Among large and medium hub airports the share of passengers on commuter aircraft has come close to doubling.  This trend is even further pronounced at small hubs.

## Commuter Operations Share by Hub Size

**Notes:**
This chart helps to described the difficulty for the NAS system with the rapid  growth in commuter activity.  Even though commuter passengers make up only 10 % total at large and medium hubs, the operations make up more than a third of all commercial activity.  The ration jumps to higher than 50 percent at small hubs.

## Enplanements at Airports with Less Than 100K Enplanements

## Commercial Operations at Airports with Less Than 100K Enplanements 

## Commuter Flights by Equipment Type at FAA Towered Airports

- Source: OAG

**Notes:**
Undoubtedly the region airline industry is changing in significant ways.  Over the past 5 years we have witnessed at steady decline in scheduled flights by turbo prop aircraft marked in counterpoint with an inexorable rise in the use of RJs.  This responds to the needs of the air travelers who perfer to fly on a jet than on a turbo prop.  The RJs allow airlines to more easily substitute larger aircraft for the smaller jets.  

## TOTAL FLEET

**TOTAL FLEET**

**U.S. REGIONALS/COMMUTERS**

**Notes:**
In 2002 there was 194 RJs delivered
RJs now make up xx % of the fleet
In 1991, three regional/commuter air carriers operated a total of 20 jets, accounting for one percent of the total fleet and 4.0 percent of seats offered for sale.  It was not until 1997 that the introduction of the regional jets started to accelerate, increasing by over 100 aircraft annually (194 aircraft in 2002) over the next 5 years 

## AVERAGE STAGE LENGTH

**AVERAGE STAGE LENGTH**

**COMMUTER DEPARTURES*******

- *Departures from the 48 contiguous U.S. on scheduled commercial passenger aircraft with 70 or less seats.

-   Source:  Official Airline Guide

**Notes:**
The growth in ASMs flown is indicative of the fact that regional jets are being operated on routes significantly longer, on average, than traditional regional/commuter routes.  Since 1994, following the introduction of the 50-seat regional jet, the average stage length flown by regional jets has generally exceeded 400 miles.  By comparison, the average stage length for all other regional/commuter aircraft departing from the U.S. has remained at around 200 miles 

## U.S. DEPARTURES

**U.S. DEPARTURES**

**BY JET AIRCRAFT***

-   *48 contiguous states.

- **

- Total scheduled commercial  passenger departures by aircraft with 70 or less seats.

-     Source:  Official Airline Guide

## Share of Departures Performed by RJs: US vs. ANM

- Source: OAG

## Year Over Year Change in O & D By Trip Length(2002 2nd Qtr. Vs. 2001 2nd qtr.)

- Source: Aviation Daily

**Notes:**
Chart shows the particularly strong reduction I the number of short-haul trips.  These, of course, are the trips most easily replaced by auto trips.  So we have  a paradox  in a sense.  That is, short trips are dropping off rapidly yet commuter enplanements have increased.  The answer lies in the rapid increase in the average trip length among the commuter carriers.  Between 2001 and 2002 the average trip length among commuter carriers increased from 301 to 339 miles.  Another large increase is expected for 2003.