Report to the Ranking Democratic

Member, Committee on Transportation

and Infrastructure, House of

Representatives

United States General Accounting Office

GAO

September 2001 AVIATION AND THE

ENVIRONMENT

Transition to Quieter

Aircraft Occurred as

Planned, but Concerns

About Noise Persist

GAO-01-1053
Page i GAO-01-1053 Aviation and the Environment

Letter 1

Results in Brief 2

Background 4

Transition to Quieter Aircraft Was Expected to Benefit

Communities, Airports, and Airlines 9

Expectations Were Partially Realized 11

Transition Raises Two Key Issues 17

Agency Comments 20

Appendix I Development and Implementation of U.S. Aircraft

Noise Standards 22

Appendix II Development of International Aircraft Noise

Standards 29

Appendix III Objectives, Scope, and Methodology 35

Appendix IV Methodology for Estimating Airlines’ Costs to

Transition to Stage 3 Aircraft Noise Standards 36

Appendix V GAO Contacts and Staff Acknowledgments 42

Tables

Table 1: Issues Raised by the Transition to Quieter Aircraft Noise

Standards 19

Table 2: Options for Compliance With Stage 3 Aircraft Noise

Standards 23

Table 3: Methodology for Estimating the Cost to Meet Stage 3

Noise Standards 39

Contents
Page ii GAO-01-1053 Aviation and the Environment

Figures

Figure 1: Federally Authorized Noise Abatement Funding Since the

Passage of ANCA, Fiscal Years 1991-2000 14

Figure 2: Noise Standards for Stage 3 Aircraft by Number of

Engines—Takeoff 26

Figure 3: Noise Standards for Stage 3 Aircraft Regardless of the

Number of Engines—Sideline 27

Figure 4: Noise Standards for Stage 3 Aircraft Regardless of the

Number of Engines—Approach 28

Figure 5: Developing and Implementing New Aircraft Noise

Standards in the International Civil Aviation Organization 33

Abbreviations

ANCA Airport Noise and Capacity Act of 1990

CAEP Committee on Aviation Environmental Protection

FAA Federal Aviation Administration

ICAO International Civil Aviation Organization

MAGENTA Model for Assessing Global Exposure to the Noise of

Transport Aircraft
Page 1 GAO-01-1053 Aviation and the Environment

September 28, 2001

The Honorable James L. Oberstar

Ranking Democratic Member

Committee on Transportation

 and Infrastructure

House of Representatives

Dear Mr. Oberstar:

Aircraft noise is a major concern in communities around airports despite

considerable reductions in such noise and a corresponding decrease in the

population exposed to it. Moreover, concern about noise remains a

constraint on efforts to expand airport capacity to meet the growing

demand for air travel. The Congress has authorized the Federal Aviation

Administration (FAA) to regulate aircraft noise. The Airport Noise and

Capacity Act (ANCA) of 1990 established December 31, 1999, as the

deadline for airlines to phase out the use of existing jet aircraft weighing

more than 75,000 pounds that had not been modified to comply with

current aircraft noise standards, called “Stage 3.”1

 Until ANCA’s passage,

only newly designed or newly manufactured aircraft were required to

comply with the Stage 3 aircraft noise standards. Recently, the United

States participated with other countries in the International Civil Aviation

Organization (ICAO) to develop a more stringent aircraft noise standard

for subsonic jets and large propeller-driven aircraft. On June 27, 2001, the

ICAO Council approved the adoption of a new noise certification standard

called “Chapter 4.”

Because the United States is considering moving to a new, more stringent

noise standard, you asked us to provide a retrospective analysis of the

transition to our current Stage 3 aircraft noise standards. This report

discusses expectations, results, and issues raised by the transition.2

 To

determine expectations and results, we reviewed the legislative history of

 1

In the United States, noise standards are referred to as “Stages,” whereas the International

Civil Aviation Organization, the international body that sets international noise standards

for aircraft, refers to them by the chapter of the ICAO document in which the standard

appears. Unless otherwise noted, we refer to the standards in terms of Stages.

2

The transition to more stringent noise standards involves technological and economic

circumstances different than those that existed during the transition to Stage 3; therefore,

the results from that transition may not be directly applicable.

United States General Accounting Office

Washington, DC 20548
Page 2 GAO-01-1053 Aviation and the Environment

ANCA, as well as interviewed agency officials, industry representatives,

and other aviation experts. Appendixes I and II discuss how noise

standards are developed in the United States and internationally. To assess

the reliability of the computerized model FAA uses to estimate the number

of people exposed to various noise levels, we also interviewed agency

officials, industry representatives, and other aviation experts. To estimate

the airlines’ costs to transition to the current aircraft noise standards, we

developed a cost model. We compared and analyzed expectations with

results to identify issues raised by the transition. See appendix III for more

detailed information on our scope and methodology and appendix IV for a

discussion of our model for estimating the costs to the airlines of the

transition to the current U.S. standards.

The transition to quieter aircraft required by ANCA was expected to

benefit communities, airports, and airlines. According to agency officials

and aviation experts, the levels of noise affecting communities near

airports were expected to decline, providing a better quality of life for

those communities. That decline was, in turn, expected to reduce

community opposition to airport operations and expansion and to reduce

the demand for funds provided for noise abatement through federal grants

and user charges. The airlines expected the transition to facilitate their

long-term planning for investment and fleet operations because the law

mandating the transition to quieter aircraft resolved two key issues: (1)

determining whether existing aircraft would have to comply with the

quieter noise standards and (2) establishing guidelines to prevent the

development of a “patchwork quilt” of airport access restrictions—such as

limits on the number of Stage 2 aircraft that can land. However,

expectations varied concerning the extent to which the airlines would

replace rather than convert old aircraft to comply with the new noise

requirements. Expectations of the airlines’ transition costs also varied,

ranging from as little as $17 million to as much as $175 billion. In 1991, we

estimated that these costs would range between $2.1 billion and $4.6

billion in 1990 dollars.3

The results expected from the transition to quieter aircraft were partially

realized. The transition occurred as planned and considerably reduced the

population exposed to levels of noise that FAA considers incompatible

 3

See Aviation Noise: Costs of Phasing Out Noisy Aircraft (GAO/RCED-91-128, July 2,

1991).

Results in Brief
Page 3 GAO-01-1053 Aviation and the Environment

with residential living. FAA estimated a decline from 2.7 million people in

1990 to about 440,000 people in 2000. Nevertheless, noise concerns remain

an impediment to airport expansion, and the demand for federally

authorized support for noise abatement efforts has continued.

Furthermore, the airlines’ long-term plans for their fleets may be in

jeopardy because an association representing major airports and some

individual airports are recommending the early retirement of aircraft

within 5 decibels of Stage 3 noise standards. Many of these aircraft have

engines that were technologically converted, “hushkitted,” to comply with

current standards. The law mandating the transition did, however, limit

the implementation of new airport access restrictions. We currently

estimate that the airlines’ costs directly attributable to complying with the

transition to quieter aircraft noise standards ranged from $3.8 billion to

$4.9 billion in 2000 dollars.

The results of the transition, especially compared with the expectations,

raise some issues that may be relevant to the future consideration of new

aircraft noise standards. In particular, we identified two key issues for

review by the aviation community. First, why does concern about noise

continue to generate substantial opposition to airport operations and

expansion after such a major decline in the number of people living in

areas exposed to incompatible levels of noise? Even though fewer people

are exposed to aircraft noise, according to 35 of the 50 busiest commercial

passenger airports we surveyed in the 1999-2000 period, over half of the

noise complaints in the preceding year came from persons living in areas

exposed to noise levels that FAA considers compatible with residential

living. Second, as noise levels decrease, how can local governments be

encouraged to take responsibility for minimizing the exposure of residents

to noise by preventing new residential development from encroaching on

airports, when such areas may later become incompatible as airport

operations and noise increase? If people are allowed to move into areas

close to an airport, they may later find themselves exposed to noise levels

that FAA considers incompatible with residential living as the airport’s

operations grow to meet the rise in demand. Furthermore, residential

development in such areas could generate new opposition to airports

operations and future expansion plans.

We provided the Department of Transportation, the Environmental

Protection Agency, the National Aeronautics and Space Administration,

Airports Council International-North America, the Air Transport

Association of America, and the American Association of Airport

Executives with copies of a draft of this report for their review and

comment. The Environmental Protection Agency, the National
Page 4 GAO-01-1053 Aviation and the Environment

Aeronautics and Space Administration, and the American Association of

Airport Executives provided no comments.

We received oral comments from the Department of Transportation, the

Airports Council International-North America, and the Air Transport

Association. Officials from these organizations generally agreed with the

facts presented in the report. FAA's Office of Energy and Environment,

Department of Transportation, provided a revised estimate of the number

of people exposed to noise levels that FAA considers incompatible with

airport operations. This estimate is based on recent updates to the model

used for this purpose. The Senior Vice President of Technical and

Environmental Affairs, Airports Council International, clarified the

Airports Council's position with respect to phasing out older, noisier

aircraft. The Airports Council called for retiring aircraft on the basis of the

noise they produce (those that are within 5 decibels of the Stage 3 noise

standards) rather than on a design feature such as hushkitted engines.

The Air Transport Association's Assistant General Counsel cautioned that

the results of the transition from Stage 2 to Stage 3 aircraft are not directly

applicable to a transition from Stage 3 to Stage 4 because of different

economic and technological circumstances. We revised the report to

incorporate these comments and other clarifying and technical comments

as appropriate.

Aircraft noise standards establish the noise limits that civil subsonic jet

aircraft are permitted to generate for takeoff, landing, and sideline

measurements.4

 These standards are based on an aircraft’s weight and

number of engines. In general, they allow heavier aircraft and those with

more engines to generate more noise than lighter aircraft and those with

fewer engines. The noise generated by an aircraft generally correlates to

the thrust powering the aircraft. The heavier the aircraft, the more thrust it

needs.

In the United States, the Federal Aviation Act of 1958, as amended in 1968,

gives FAA the authority to regulate aircraft noise.5

 (See app. I for a

description of the development and implementation of U.S. aircraft noise

standards.) Under that act, FAA issued regulations in 1969 that established

 4

Sideline noise is measured at a point parallel to the flight path where the noise level is the

greatest.

5

49 U.S.C. 44715.

Background
Page 5 GAO-01-1053 Aviation and the Environment

noise standards for new designs of civil subsonic jet aircraft. In 1973, FAA

amended its regulations to apply the noise standards to all newly

manufactured aircraft, no matter when the aircraft were designed. In 1977,

additional amendments established lower noise standards for all new

aircraft, as well as the concept of “noise Stages.” Aircraft meeting the

original 1969 standards were categorized as “Stage 2” aircraft; those

meeting the more stringent 1977 standards, the current standards, were

categorized as “Stage 3” aircraft; and aircraft meeting neither standard

were categorized as “Stage 1” aircraft.

In 1976, FAA prohibited all Stage 1 subsonic jet aircraft weighing more

than 75,000 pounds from flying into or out of U.S. airports after January 1,

1985, unless the aircraft had been converted to meet the quieter noise

standards.6

 In 1990, ANCA required all existing civil subsonic jet aircraft

weighing more than 75,000 pounds to comply with the current U.S. Stage 3

noise standards by December 31, 1999, or be retired from service. To meet

this requirement, the engines on Stage 2 aircraft could be modified or

replaced. The Stage 3 standards for takeoff, landing, and sideline

measurements range from 89 to 106 decibels, depending on the aircraft’s

weight and number of engines. 7

FAA regulations governing the transition to meet Stage 3 noise standards

went into effect on September 25, 1991, and offered two options for

meeting the December 31, 1999, deadline. One option permitted a phased

reduction in Stage 2 aircraft (phaseout), while the other called for a

phased increase in the proportion of Stage 3 aircraft in the total fleet

(phase-in). According to FAA, these options would result in significant

cost savings for the industry while still preserving environmental gains.

Although the greatest environmental gains would occur near the end of the

phase-out period, FAA noted that both approaches offered steady progress

throughout the decade toward an all-Stage-3 fleet. Phaseout of older,

noisier Stage 1 and 2 aircraft was possible, in part, because the National

Aeronautics and Space Administration, in cooperation with the aviation

industry, developed new, quieter engines. The National Aeronautics and

 6

However, the Aviation Safety and Noise Abatement Act of 1979 directed FAA to grant

exemptions from compliance until January 1, 1988, to civil subsonic jet aircraft with two

engines and fewer than 100 passenger seats.

7

The noise measurement level is defined in terms of the “effective perceived noise level,”

which includes a correction for tones and takes into account the duration of the noise

event. A food blender makes about 88 decibels of noise, while a rock band playing indoors

makes about 108 to 114 decibels of noise.
Page 6 GAO-01-1053 Aviation and the Environment

Space Administration, in cooperation with FAA and the aviation industry,

is continuing to develop new technologies to reduce the impact of aircraft

noise, although they have indicated that there are no significant

breakthroughs in sight.

FAA has several federal programs that address noise issues associated

with civilian airports. Through one of these programs, FAA controls

aircraft noise by regulating aircraft operations. FAA also administers two

programs that fund noise mitigation projects. The Airport Improvement

Program provides federal grants—funded by congressional appropriations

from the Airport and Airway Trust Fund—for developing airport

infrastructure, including projects that reduce airport-related noise or

mitigate its effects. Grants are made using either funds subject to

apportionment or discretionary funds. Funds subject to apportionment are

distributed by a statutory formula to commercial service airports

according to the number of passengers served and the volume of cargo

moved,8

 and to the states according to a percentage of the total amount of

the appropriated funds. Discretionary funds are, for the most part, those

funds remaining after funds subject to apportionment are allotted and

certain other amounts are “set aside” for special categories, including

noise-related projects. The Passenger Facility Charge program is a

voluntary program that enables airports to impose a fee of up to $4.50 on

each boarding passenger. The airports retain the money for airport

infrastructure projects. Airports wishing to participate in the program

must seek FAA’s approval both to levy the fee and to use the revenues for

particular development projects. Both programs include noise reduction

projects such as soundproofing buildings (including homes and schools)

and land acquisition, which includes acquiring homes and relocating the

people displaced to quieter communities.

ANCA required FAA to establish regulations on airport noise and access

restrictions on the operations of Stage 2 and Stage 3 aircraft.9

 Existing

access restrictions were grandfathered, permitting them to remain in

effect. To restrict the access of Stage 2 aircraft, an airport has to publish

the proposed restrictions at least 180 days before they go into effect. The

airport is also required to publish other information with the restrictions

such as cost-benefit analyses of the proposed restrictions and any

 8

Commercial service airports handle all regularly scheduled commercial airline traffic and

have at least 2,500 enplanements (boarding by passengers) annually.

9

FAA established these regulations in 1991 with the promulgation of 14 C.F.R. Part 161.
Page 7 GAO-01-1053 Aviation and the Environment

alternatives considered. If the restrictions are to apply to Stage 3 aircraft,

they must be approved by FAA or agreed to by the airport and all the

aircraft operators at an airport. To approve restrictions, FAA must find

that the proposed restrictions (1) are reasonable, nonarbitrary, and

nondiscriminatory; (2) do not create an undue burden on interstate or

foreign commerce; (3) are not inconsistent with maintaining the safe and

efficient utilization of the navigable airspace; (4) do not conflict with any

existing federal statute or regulations; (5) have been adequately provided

to the public for comment; and (6) do not create an undue burden on the

national aviation system.10

The primary responsibility for integrating airport considerations into local

land-use planning rests with local governments—presenting a difficult

problem for many airports, because they often do not have control over

development in surrounding communities. However, airports are held

accountable by these communities when aircraft noise adversely affects

uses such as schools and residences built close to airports. FAA set the

standards that airports use to measure the level of noise to which

communities around airports are exposed over time and had issued

guidelines that identify land uses that would and would not be compatible

with the noise generated by a nearby airport’s operations.

ICAO is the international body charged with ensuring the safe and orderly

growth of international civil aviation throughout the world. One of ICAO’s

functions is to set international noise standards for aircraft. The primary

purpose of establishing noise standards is to reduce aircraft noise. This

noise reduction, when combined with other noise reduction measures, can

reduce the number of people exposed to significant levels of aircraft noise.

Any new standard must receive the approval of two-thirds of the members

of ICAO’s Council, one of whom is the United States, and the standard

becomes effective unless it is then disapproved by a majority of ICAO’s

members through the Assembly.11 (See app. II for a description of the

development of international aircraft noise standards.) Member nations

then implement the new standards through their own political and legal

 1049 USC 47524 (c) (2).

11The Assembly, composed of representatives from all 187 member countries, is the

sovereign body of ICAO. It meets at least once every 3 years, reviewing in detail the work

of ICAO and setting policy for the coming years. Each member country is entitled to one

vote, and decisions of the Assembly are taken by a majority of the votes cast except when

otherwise provided in the Convention. In practice, according to an FAA official, the

Assembly usually reaches decisions by consensus.
Page 8 GAO-01-1053 Aviation and the Environment

processes. International recognition of aircraft noise standards is a

cornerstone of the international system of air travel, enabling airlines to

plan and operate their fleets more efficiently than if there were a

patchwork of national noise standards or operating restrictions.

In January 2001, ICAO’s Committee on Aviation Environmental Protection

(CAEP), a technical body that recommends international aircraft noise

standards for the organization, endorsed a balanced approach to noise

management that included such things as the reduction of noise from

aircraft, improved land-use planning and control around airports, and the

use of aircraft noise abatement procedures and aircraft operating

restrictions. To reduce aircraft noise, CAEP recommended, and the

Council adopted,12 new Chapter 4 noise standards that are 10 decibels

lower, on a cumulative basis, than the Chapter 3 standards.13 The standards

will apply to new designs submitted on or after January 1, 2006. On the

basis of a cost-benefit analysis, CAEP recommended that there be no

global phaseout of aircraft meeting Chapter 3 noise standards. CAEP

considered the question of operating restrictions on Chapter 3 aircraft but

reached no final conclusion. ICAO’s members are expected to make a final

decision on these issues when the Assembly meets from September 25 to

October 5, 2001. FAA is the official U.S. representative to CAEP.

Representatives from the State Department, the Environmental Protection

Agency, the U.S. aviation industry, and environmental groups also

participate in CAEP’s work.

 12Because it is up to each member country to adopt noise standards, FAA has begun the

rulemaking process to adopt the new standard.

13This cumulative noise basis is the total difference between the measured noise level and

the Chapter 3 noise limits at three different points: takeoff, approach, and sideline. The

new standard requires at least a 2 decibel reduction at each of these points. For example, if

the takeoff noise level is 3 decibels below the takeoff limit, the approach noise level is 3

decibels below the approach limit, and the sideline noise level is 4 decibels below the

sideline limit, then the cumulative margin would be 10 decibels.
Page 9 GAO-01-1053 Aviation and the Environment

The mandated transition to quieter aircraft was expected to reduce the

number of people exposed to noise levels that FAA considers

incompatible with residential living, to facilitate needed airport expansion,

and to enable airlines to embark on long-term planning for investing in and

operating their fleets. Expectations concerning how the airlines would

comply with the mandated transition, and what that transition might cost

the airlines, varied.

The mandated transition to quieter aircraft was expected to reduce the

overall levels of noise to which nearby communities were exposed,

thereby reducing the annoyance caused by airport-generated noise and

improving the quality of life for people living in those communities.

Communities near airports are exposed to noise directly attributable to

airport operations—primarily from aircraft taking off and landing.14 The

impact of such noise on communities is usually analyzed in terms of the

extent to which the noise annoys people by interfering with their normal

activities, such as sleep, relaxation, speech, television, school, and

business operations. According to FAA’s final rulemaking implementing

the transition, the number of people living in areas exposed to noise levels

that were incompatible with residential living was expected to fall from

about 2.7 million in 1990 to about 400,000 in 2000, when the mandated

transition to quieter aircraft was complete.15

Less noise from airport operations was expected to reduce community

opposition to airport expansion. ANCA, in particular, acknowledged that

aviation noise was linked to airport expansion and community opposition

to that expansion. The findings of ANCA state that aviation noise

management is crucial to the continued increase in airport capacity and

that community noise concerns can be alleviated, in part, through the use

of quieter aircraft and revenues for noise management. At the time the

transition was mandated, aircraft noise was a major impediment to

increasing airport capacity, particularly if the increase was to be provided

by constructing new runways. New capacity was needed at the time

because the demand for air travel was causing increasing delays—in 1988,

21 airports experienced more than 20,000 hours of delays. Airports were

thus expected to benefit from the transition to quieter aircraft by being

able to plan for growth and develop the capacity needed to meet the rising

 14Engine maintenance and the taxiing of aircraft on runways are other activities that

contribute to airport noise.

1556 Fed. Reg. 48628, Sept. 25, 1991.

Transition to Quieter

Aircraft Was

Expected to Benefit

Communities,

Airports, and Airlines
Page 10 GAO-01-1053 Aviation and the Environment

demand for air travel. The lower noise levels were also expected to reduce

the airports’ need for federal investments in noise abatement programs.

ANCA’s passage was also expected to provide a stable environment that

would enable the airlines to develop long-term business plans for their

fleets. Ongoing uncertainty about whether existing aircraft would be

required to comply with Stage 3 noise standards and the promulgation of a

plethora of airport access restrictions had been impeding the airlines’

development of long-term investment and operating plans. By 1990, many

communities had established restrictions on the use of their airports—

such as limits on the number of Stage 2 aircraft that could land—to reduce

the amount of noise the airports were generating. Additionally, before

ANCA’s passage, many airports were planning to adopt use restrictions in

the absence of a federally mandated phaseout of Stage 2 aircraft.16 The

airlines believed that a resulting “patchwork quilt” of restrictions would

likely produce a de facto phaseout of Stage 2 aircraft by 2000.

ANCA settled both of these issues in 1990 by mandating that heavier

aircraft meet Stage 3 standards by December 31, 1999, and by establishing

an FAA review process that airports had to follow if they wanted to adopt

new noise or access restrictions. With these decisions made, the airlines

expected to be able to develop long-term fleet plans that could include

operating Stage-3-compliant aircraft for their useful lives.

At the time of ANCA’s passage, there were varying assumptions as to how

the airlines would comply with the transition. Some in the aviation

community thought the airlines would comply with the transition largely

by purchasing new aircraft rather than converting existing aircraft to meet

Stage 3 noise standards. Conversion could be achieved by replacing an

aircraft’s engines or by installing a noise reduction technology known as a

“hushkit.”17 Because new aircraft were generally quieter than aircraft with

hushkits, replacing aircraft was expected to provide a greater reduction in

aircraft noise. Some anticipated that aircraft replacement would be the

primary means for complying with Stage 3 standards because of high fuel

prices at the time the law was passed; new Stage 3 aircraft were generally

 16See GAO/RCED-91-128, July 2, 1991.

17An airline representative told us that at the time ANCA was passed, hushkits had not yet

been certified for most models of Stage 2 aircraft and there was concern that hushkits

might affect the weight and performance of the aircraft as had occurred with hushkits used

to meet the Stage 2 standards.
Page 11 GAO-01-1053 Aviation and the Environment

more fuel efficient than existing Stage 2 aircraft. Others in Congress and

the aviation community, however, noted that hushkitting was as likely an

expectation for compliance as aircraft replacement.

At the time the transition was mandated, estimates of the airlines’ cost to

comply with the transition ranged from $17 million to $175 billion. The

wide variation depended largely on whether an analysis assumed

modification, full cost for replacement, and/or fleet growth. In 1991, we

reported on the assumptions and methodologies of four major studies.18

Two of the studies were limited to a single segment of the aviation

community—one to major passenger airlines and the other to freight

aircraft. A third study used the purchase price of an aircraft as the cost of

meeting Stage 3 noise standards—a cost we considered excessive. A

fourth study, the one offered by FAA, was more comprehensive—

including the domestic jet fleet for both passenger and cargo air traffic—

and incorporated generally reasonable assumptions in its methodology.

Using FAA’s methodology as a base and making certain changes in the

assumptions, such as the discount rate used to compute future

expenditures and costs savings, we estimated at the time that complying

with the Stage 3 noise standards would cost the airlines from $2.1 to $4.6

billion in 1990 dollars.19 Our low estimate assumed all aircraft owners

would adopt the least expensive approach to compliance for each aircraft,

whereas our high estimate assumed premature replacement of all

aircraft.20

The results anticipated from the transition to meet Stage 3 noise standards

were partially realized. The transition to quieter aircraft worked smoothly

and was achieved within the required time frame. Also, FAA estimates that

the transition to aircraft compliant with Stage 3 noise standards

considerably reduced the population exposed to levels of noise from

 18The estimates from these studies ranged from $17 million to $59.6 billion. The estimate of

$175 billion was presented by the Air Transport Association of America, Inc. (hereafter

referred to as the Air Transport Association) in testimony on October 2, 1990, as the total

cost to be borne in the United States to achieve an all-Stage-3 fleet, including growth (see

Statement of Robert J. Aaronson, President, Air Transport Association Before the

Subcommittee on Aviation, House Committee on Public Works and Transportation,

House of Representative (Oct. 2, 1990)).

19GAO/RCED-91-128, July 2, 1991.

20The premature replacement cost used in our estimate was $2.2 million per aircraft in 1990

dollars. Premature replacement costs are substantially less than the price of a new aircraft.

Expectations Were

Partially Realized
Page 12 GAO-01-1053 Aviation and the Environment

airport operations that FAA considers incompatible with residential living.

Nevertheless, community opposition remains the primary impediment to

airport expansion, and concern about noise is the reason most frequently

cited as the basis for such opposition. Despite the significant decrease in

the population exposed to incompatible noise, the demand continues for

federally authorized support for noise mitigation efforts that are provided

through a federal grant program and a federally authorized passenger

boarding fee. Furthermore, while the adoption of new airport noise and

access restrictions has been limited since the law was passed,21 the

airlines’ long-term plans for their fleets may nevertheless be jeopardized

by challenges to the continued use of older Stage 3 aircraft that are noisier

than those newly manufactured. We currently estimate that the airlines’

costs directly attributable to complying with the transition to quieter

aircraft noise standards (i.e., the cost of hushkitting or the incremental

cost of financing a new aircraft early, whichever was lower) ranged from

$3.8 billion to $4.9 billion in 2000 dollars.

According to FAA, expectations for the reduction in the number of people

living in areas incompatible with airport-generated noise levels have

essentially been met. 22 FAA estimates that in 2000 there were about

440,000 people living in areas exposed to incompatible noise levels, only a

slightly higher number than FAA originally estimated, and a considerable

reduction from FAA’s 1990 estimate of 2.7 million. FAA’s current

population exposure estimates are based on the use of what FAA and

ICAO consider to be a substantially credible model that is used to project

the number of people exposed to various airport-generated noise levels—

the Model for Assessing Global Exposure to the Noise of Transport

Aircraft (MAGENTA).

We discussed the MAGENTA model with FAA to assure ourselves that the

model’s estimate of the number of people living in areas exposed to

incompatible noise levels was reliable. According to a FAA official, the

model was extensively reviewed and vetted through ICAO’s MAGENTA

Working Group. This official also said that it is the only model that is

available to do this type of estimate. The development and testing phases

 21No Stage 3 restrictions have been implemented under ANCA.

22See Aviation and the Environment: FAA’s Role in Major Airport Noise Programs

(GAO/RCED-00-98, Apr. 28, 2000) for a discussion of the issues concerning the definition of

incompatible land use and the measurement methods used to identify community exposure

and annoyance levels.
Page 13 GAO-01-1053 Aviation and the Environment

of the model were completed last year and used by ICAO’s environmental

technical experts to evaluate various noise issues. FAA’s estimates using

MAGENTA were based on the best available data, which FAA is currently

updating. FAA recently updated the U.S. version of MAGENTA with new

airport operational data and 2000 census data. The net effect of this update

is a new estimate of 440,000 people exposed in 2000 instead of 448,000 as

estimated earlier. FAA is also updating two other data inputs to further

improve the accuracy of the estimate. These data inputs are the type of

aircraft using each airport and new runways or runway extensions added

since the mid-1990s. While the updated data may produce some changes

in the estimated number of persons exposed to incompatible levels of

noise, FAA and others believe these changes are not likely to be

significant.

Although it is unclear whether community annoyance declined with lower

noise levels, opposition to airport expansion continues. In our 1999-2000

survey of the 50 busiest commercial passenger airports, noise issues were

identified as the primary environmental concern and challenge for

airports.23 We found that although airports had implemented various

measures to reduce the impact of aircraft noise, community concerns

persisted.

While the extent to which areas around airports have been built up since

the transition to an all-Stage-3 fleet is not known, strong pressure exists to

develop residential areas around heavily used airports, particularly in

metropolitan areas with more than 50,000 people. Our 1999-2000 survey

found that officials from 13 of the nation’s 50 busiest commercial service

airports view increases in the residential population near their airport as a

major concern. Thirty-five of the airports reported that over half of the

noise complaints in the preceding year had come from persons living in

areas whose noise levels FAA considers compatible with residential

development. According to an October 2000 report by the Airports Council

International-North America, an association representing airports, noise

remains the single biggest impediment to increasing airport capacity

across the country.24 More recently, FAA found that public opposition to

 23Aviation and the Environment: Airport Operations and Future Growth Present

Environmental Challenges (GAO/RCED-00-153, Aug. 30, 2000).

24The Next Stage in Noise Abatement Policy: ACI-NA’s Plan for A Quieter Environment

(Airports Council International-North America, Oct. 2000).
Page 14 GAO-01-1053 Aviation and the Environment

airport expansion continues to rise, with noise cited as the primary

reason.25

The reduction in the population exposed to incompatible noise levels, as

defined by FAA, has also not led to a decrease in the demand for federally

authorized funding for noise projects. As figure 1 shows, the demand for

funds for noise abatement continued throughout the decade, albeit at

varying levels from year to year.

Figure 1: Federally Authorized Noise Abatement Funding Since the Passage of

ANCA, Fiscal Years 1991-2000

Note: Data for Airport Improvement Program funds are the grant amounts for noise abatement

projects by fiscal year. These grant amounts are primarily determined by the amount set aside each

year for noise abatement from FAA’s appropriations. For fiscal year 2001, 34 percent of the Airport

Improvement Program’s funds available for discretionary airport grants (or $315 million) was targeted

for noise abatement projects. Data for passenger facility charge funds represent the amount

approved for collection for noise abatement in a given fiscal year. Peaks and valleys occur in the data

because of differences in the amount of funds that airports happen to request for noise abatement in

a given year. While FAA approves a project only once, funds are generally collected and spent over

many years. FAA first approved passenger facility charge collections in fiscal year 1992.

Source: GAO’s compilation of data from FAA.

ANCA did limit the implementation of new airport noise and access

restrictions. According to FAA, since ANCA’s passage in 1990, no formal

 25Report to the U.S. Congress on Environmental Review of Airport Improvement Projects,

(U.S. Department of Transportation, May 2001).
Page 15 GAO-01-1053 Aviation and the Environment

proposals for new Stage 3 restrictions have been completed under ANCA’s

implementing regulations.26 FAA has been asked to review draft analyses

of proposed restrictions at (1) Pease Airport in New Hampshire to restrict

the nighttime scheduling of Stage 3 aircraft, (2) Burbank Airport in

California to implement a nighttime curfew affecting all aircraft operating

at the airport, and (3) Kahului Airport in Hawaii to phase out Stage 2

aircraft.27 FAA is currently reviewing a proposed restriction by the Naples

Municipal Airport in Florida to ban Stage 2 aircraft that weigh less than

75,000 pounds.28 In addition, two new proposed restrictions on Stage 2

aircraft were withdrawn.29

The airlines have met the deadline for completing their transition to meet

Stage 3 noise standards. According to the draft 1999 Progress Report on

the Transition to Quieter Airplanes, FAA is satisfied that all known

affected aircraft operators are in compliance with the December 31, 1999,

statutory requirements. By the end of 1999, the 221 active operators’ fleets

included only Stage-3-compliant aircraft.

Despite full compliance with the transition to Stage 3, the airlines’ longterm fleet plans may now be in jeopardy. Some in the aviation community

have called for the retirement of aircraft that are within 5 decibels of Stage

3 standards, many of which are hushkitted, even though the aircraft meet

Stage 3 standards. The Airports Council International-North America

reports that the noise levels produced by hushkitted aircraft meet the

Stage 3 standard or are 1 to 5 decibels quieter than it, while newly

manufactured Stage 3 aircraft are as much as 10 to more than 20 decibels

quieter than the standard.30 As a result, Airports Council officials noted

 2614 C.F.R. 161 establishes the process for FAA’s review of airport access and noise

restrictions.

27Hawaii and Alaska are exempt from the ANCA Stage 2 aircraft phaseout requirements.

28ANCA did not require a mandatory transition of aircraft weighing less than 75,000 pounds

to meet Stage 3 noise standards.

29The Minneapolis-St. Paul International Airport and the San Francisco International

Airport proposed restrictions on Stage 2 aircraft weighing over 75,000 pounds before the

ANCA phaseout date of December 31, 1999. Both airports withdrew their proposals. In late

1999, the Minneapolis-St. Paul International Airport banned any Stage 2 aircraft that might

receive phaseout waivers under ANCA. This restriction had no effect because FAA did not

grant waivers.

30For example, a hushkitted Boeing 727 is about 2 decibels quieter than the Stage 3

standard, while a newer Boeing 757 is up to 20 decibels quieter than the Stage 3 standard.
Page 16 GAO-01-1053 Aviation and the Environment

that while noise levels declined following the transition, they did not

decline as much as they would have if aircraft had been replaced rather

than converted. Noise is still a problem in part because of these older,

noisier aircraft. Therefore, the Airports Council and some individual

airports are recommending retiring aircraft within 5 decibels of Stage 3

limits.

Airline representatives have noted that there have been an increasing

number of requests for “voluntary” phaseouts of hushkitted aircraft at

individual airports, along with operating procedures or runway use

restrictions that target hushkitted aircraft. According to these

representatives, this is a major concern for commercial passenger airlines

because they developed their Stage 3 compliance strategies and long-term

fleet plans with the expectation that those aircraft would be available for

their useful lives; therefore, any premature retirement of hushkitted

aircraft would have a further economic impact on the industry.

Additionally, a cargo industry representative noted that cargo airlines are

currently dependent on older aircraft that are hushkitted to stay in

business.

More recently, two estimates of the cost of complying with the mandated

transition to Stage 3 noise standards have been completed. In 1999, the Air

Transport Association, an association representing major U.S. commercial

airlines, commissioned an analysis of the airlines’ costs for complying with

the mandated transition. That analysis concluded that these costs were

about $32 billion in 1999 dollars, not including the cost of fleet growth.

Another estimate by a major aircraft engine manufacturer placed the costs

to airlines at about $15.5 billion. Both of these cost analyses, however,

included the full cost of aircraft purchased to replace older Stage 2

aircraft. We believe that including the full replacement cost of an aircraft

exceeds the cost directly attributable to compliance with the mandated

transition. An airline representative noted that some carriers chose to

incur the additional cost of replacing their aircraft, in part, to respond to

their customers’ environmental concerns.

On the basis of a model we developed, we estimated that the airlines’ costs

directly attributable to the mandated transition ranged from a low of $3.8

billion to a high of $4.9 billion in 2000 dollars. We determined that the

appropriate cost that could be attributed to compliance with the noise

standards was the cost for the conversion of an aircraft—that is, by
Page 17 GAO-01-1053 Aviation and the Environment

hushkitting the engines--or the incremental capital cost of financing the

early replacement of an aircraft, whichever cost was lower.31 This estimate

is based on 2,372 Stage 2 aircraft over 75,000 pounds in the U.S. fleet on

November 5, 1990, the date ANCA became law. We applied the actual

hushkit cost, or range of costs, for a particular model of aircraft and the

cost of installing the hushkit.32 (See app. IV for a more detailed discussion

of our cost methodology.) We adopted this approach as the way to reflect

only the cost of compliance, although many carriers opted to exceed

FAA’s requirement and incurred significant additional costs in so doing. 33

Since hushkitting was expected and proved to be available for almost all

types of aircraft, when the airlines chose more costly methods to achieve

compliance—such as replacing the engines or purchasing new aircraft—

we attributed that choice to other economic reasons or benefits, such as

improved fuel efficiency, lower maintenance costs, and tax advantages.

The transition to quieter aircraft worked smoothly, was achieved within

the required time frame, and was successful in reducing the number of

residents living in areas FAA considered incompatible for residential use.

However, concerns about aircraft noise continue to be a constraint on

future airport expansion. Also, FAA and other officials are concerned that

as flights increase to meet the expected growth in travel, the population

exposed to incompatible noise levels may rise again around some airports.

Thus some of the gains obtained by the transition to quieter aircraft may

be eliminated.

Our review of the results of the transition, however, especially compared

with the expectations, raises two key issues: (1) Why does concern about

noise continue to generate substantial opposition to airport operations and

 31We estimated that the cost of capital to the airline industry in 1999 was 7.8 percent. Our

capital cost estimate was calculated using a weighted average of the costs of receiving

financing from both the debt and equity markets where the weights are the proportion of

total capital obtained from each. This estimate relied on information from Value Line, a

common financial information source, for a representative firm (United Airlines) in the

airline industry.

32For those aircraft for which we could not obtain specific hushkit model cost data, we

applied the average cost, or range of costs, of those hushkits available for the aircraft

model and type.

33We did not include the cost savings associated with a new aircraft due to factors such as

better fuel economy or a smaller crew. We also did not include increased costs associated

with hushkitting an aircraft such as downtime and fuel burn increases.

Transition Raises Two

Key Issues
Page 18 GAO-01-1053 Aviation and the Environment

expansion after such a major decline in the number of people living in

areas exposed to incompatible levels of noise? and (2) As noise levels

decrease, how can local governments be encouraged to take responsibility

for minimizing the exposure of residents to noise by preventing new

residential development from encroaching on airports, when such areas

may later become incompatible as airport operations and noise increase?

Table 1 discusses these issues and identifies some specific questions for

the aviation community to explore to address these issues.
Page 19 GAO-01-1053 Aviation and the Environment

Table 1: Issues Raised by the Transition to Quieter Aircraft Noise Standards

Issue Context of issue Discussion

1. Why does

concern about

noise continue to

generate

substantial

opposition to

airport operations

and expansion

after such a major

decline in the

number of people

living in areas

exposed to

incompatible

levels of noise?

As required by law, FAA has selected a

single method for measuring the noise

exposure of communities near airports and

determined what kinds of development are

compatible with various noise exposure

levels. FAA’s selection was reinforced by

an interagency review of noise

measurement options. Federal agencies

can use additional information when

implementing programs that use measures

of noise exposure levels. FAA’s

designation of when noise levels are

compatible with residential development

helps the agency set priorities for funding

noise abatement activities through the

Airport Improvement Program and

passenger facility charges.

Although the number of people living in areas exposed to

incompatible noise levels, according to FAA’s designation, has

dropped substantially since the transition to quieter aircraft, aircraft

noise continues to be a major impediment to airport expansion.

Moreover, complaints not only continue but also emanate from areas

exposed to noise levels FAA considers compatible with residential

dwelling—35 of the 50 busiest commercial passenger airports

reported to us in a 1999-2000 survey that over half of the noise

complaints in the preceding year came from persons living in

compatible areas.

• Can noise reduction alone, or reduction to a specific level,

substantially mitigate opposition to airport expansion?

• Is there a standard, other than the standard FAA currently uses to

measure noise levels, that would better gauge opposition to

aircraft noise?

2. As noise levels

decrease, how

can local

governments be

encouraged to

take responsibility

for minimizing the

exposure of

residents to noise

by preventing new

residential

development from

encroaching on

airports, when

such areas may

later become

incompatible as

airport operations

and noise

increase?

Zoning authority lies with states and

communities, not the federal government.

While FAA regulations establish noise

exposure levels compatible with various

kinds of development, FAA has no

authority to decide what development is

authorized. However, FAA policy prohibits

using Airport Improvement Program funds

for remedial noise mitigation—such as

soundproofing buildings—for buildings that

were known to be located in areas

incompatible with prevailing noise

exposure levels before they were built.

FAA uses noise exposure levels to set

priorities for funding noise abatement

projects. This results in the approval of few

noise abatement projects in areas where

land uses are considered compatible with

residential development.

Areas once considered incompatible with residential development

under FAA’s designation of compatible noise levels may now be

quiet enough for residential development. Many in the aviation

community are concerned that new residential development has

occurred and may continue to occur in those areas. However, as the

demand for air travel grows, increasing the number of takeoffs and

landings at airports, noise exposure levels may begin to rise around

some airports. People moving closer to an airport may then find

themselves living in areas whose noise levels FAA considers

incompatible with residential development. Residential development

in those areas could also generate new opposition to airport

operations and future airport expansion plans. Furthermore, such

development could create a demand for additional noise abatement

efforts funded through federally authorized programs. While FAA has

launched a land-use planning initiative to help communities consider

airport issues in their planning efforts, that initiative has focused on

improving the communication of the agency’s noise policies and

noise compatibility information in order to help communities and

airports work together to minimize the noise impact of airports.a

 The

extent to which areas around airports have built up since the

transition to an all-Stage-3 fleet is not known. However, two limited

studies prior to this transition show that land-use control measures

around airports had not been fully implemented despite the airports’

participation in FAA’s program designed to prevent the development

of new noncompatible land use. In one study this was true for 7 of 16

airports and in another study it was true for 6 of 10 airports.

• How can communities be encouraged to adopt zoning and other

land-use measures to restrict noise-sensitive development around

airports?

• What, if anything, can the federal government do to help

communities address this issue?

a

See Aviation and the Environment: FAA’s Role in Major Airport Noise Programs (GAO/RCED-00-98

Apr. 28, 2000) for a discussion of FAA’s land-use initiative.
Page 20 GAO-01-1053 Aviation and the Environment

We provided the Department of Transportation, the Environmental

Protection Agency, the National Aeronautics and Space Administration,

the Airports Council International-North America, the Air Transport

Association of America, and the American Association of Airport

Executives with copies of a draft of this report for their review and

comment.

The Environmental Protection Agency, the National Aeronautics and

Space Administration, and the American Association of Airport Executives

provided no comments.

We received oral comments from the Department of Transportation,

specifically from FAA’s Office of Environment and Energy.These officials

generally agreed with the facts in the report. They provided updated

information on their MAGENTA model, which was used to estimate the

number of people exposed to noise levels that FAA considers

incompatible with airport operations. In the draft report, we noted that

some of the data used in the model were not the most current and that

FAA's estimates of the number of people exposed to incompatible noise

levels may be affected by this limitation. FAA officials provided us with

updated information on the population exposed to incompatible noise

levels. They noted that two of four key data inputs to the model have been

updated and that FAA is updating the other two. FAA agreed that the

updated data would improve the accuracy of the data. We revised the

report to reflect this information. FAA officials also provided us with

technical comments, which we incorporated as appropriate.

The Airports Council International-North America provided oral

comments. The Senior Vice President of Technical and Environmental

Affairs complimented our staff on expertly capturing the complex issues

raised by the subject. He clarified the Airports Council’s position with

respect to phasing out older, noisier aircraft. The draft report stated that

the organization had recommended phasing out the operation of aircraft

whose engines were technologically converted, or hushkitted, to comply

with current standards. The Airports Council has called for retiring aircraft

that are within 5 decibels of the Stage 3 standard rather than retiring an

aircraft based on a design feature such as a hushkit. On a related note, the

Airports Council believes that part of the reason for the continuing

concern about noise is that these older aircraft are generally noisier and a

significant number of them are still in operation. We revised the report to

clarify their position on this subject. The Airports Council provided other

technical comments, which we incorporated as appropriate.

Agency Comments
Page 21 GAO-01-1053 Aviation and the Environment

The Air Transport Association also provided oral comments. The Assistant

General Counsel noted that we did a good job of capturing the important

factors that went into the transition from Stage 2 to Stage 3. However, the

Association cautioned that not all of the results would be directly

applicable as the industry transitions from Stage 3 to Stage 4. In particular,

the Association noted that the technological and economic circumstances

are much different now than they were back in 1990, when the Congress

mandated the transition to Stage 3. Although the report states that our

objective is to provide a retrospective analysis of the transition to Stage 3,

we agree that the transition to Stage 4 needs to be viewed apart from the

transition to Stage 3. We revised the report to clarify this point. The

Association also made other technical comments, which we incorporated

as appropriate.

We conducted our review from January 2001 through August 2001 in

accordance with generally accepted government auditing standards.

As agreed with your office, unless you publicly release its contents earlier,

we plan no further distribution of this report until 14 days after the date of

this letter. At that time, we will send copies of the report to the

appropriate congressional committees; the Secretary of Transportation;

the Administrator, FAA; the Administrator, Environmental Protection

Agency; and the Administrator, National Aeronautics and Space

Administration. We will also make copies available to other interested

parties upon request. Please call me at (202)-512-2834 if you have any

questions about this report. Key contributors to this report are listed in

appendix V.

Sincerely yours,

Gerald L. Dillingham, Ph. D.

Director, Physical Infrastructure Issues
Appendix I: Development and Implementation

of U.S. Aircraft Noise Standards

Page 22 GAO-01-1053 Aviation and the Environment

In the United States, responsibility for aircraft noise standards resides

with the Federal Aviation Administration (FAA). The Federal Aviation Act

of 1958, as amended in 1968, gave FAA the authority to regulate aircraft

noise through the aircraft type certification process. FAA can implement

new aircraft noise standards through the standard federal rulemaking

process. Under that process, FAA must consult with the Environmental

Protection Agency, but the final decision lies with FAA. However, the

Environmental Protection Agency may also initiate new aircraft standards

by submitting proposed regulations to FAA, which FAA is required to

initiate through the federal rulemaking process. As part of the federal

rulemaking process, FAA must consider whether a proposed standard is

economically reasonable, technologically practicable, and consistent with

the highest degree of safety in air transportation or commerce.

Under the Federal Aviation Act, as amended, FAA issued regulations in

1969 that established noise standards for new designs of civil subsonic jet

aircraft. Initially, these regulations prescribed noise standards that applied

only to new types or designs of aircraft. In 1973, FAA amended its

regulations to apply the noise standards to all newly manufactured

aircraft, whether or not the aircraft design was new. In 1976, FAA

prohibited any subsonic jet aircraft weighing over 75,000 pounds from

flying into or out of U. S. airports after January 1, 1985, unless their

engines had been modified or replaced to meet the new standards.1

 In

1977, additional amendments to the regulations established more stringent

noise standards for all new aircraft, as well as the concept of noise

“Stages.” Aircraft meeting the original 1969 standards were categorized as

“Stage 2” aircraft; those meeting the more stringent 1977 standards were

categorized as “Stage 3” aircraft; and aircraft meeting neither set of

standards were categorized as “Stage 1” aircraft.

 1

However, the Aviation Safety and Noise Abatement Act of 1979 directed FAA to grant

exemptions from compliance until January 1, 1988, to jet aircraft with two engines and

fewer than 100 passenger seats.

Appendix I: Development and

Implementation of U.S. Aircraft Noise

Standards
Appendix I: Development and Implementation

of U.S. Aircraft Noise Standards

Page 23 GAO-01-1053 Aviation and the Environment

Under the Airport Noise and Capacity Act (ANCA) of 1990, civil subsonic

jet aircraft weighing more than 75,000 pounds that did not meet the Stage 3

standards were required to comply with these standards by December 31,

1999, or be retired from service in the United States.2

 Regulations

implementing the transition went into effect on September 25, 1991. The

regulations provided two options for the transition, which are described in

table 2.

Table 2: Options for Compliance With Stage 3 Aircraft Noise Standards

Phased transition deadlines

Option

December 31,

1994

December 31,

1996

December 31,

1998

December 31,

1999

1—Reduction in the

percentage of Stage

2 aircraft in a

carrier’s fleet

25% 50% 75% 100%

2—Increase in the

percentage of Stage

3 aircraft in a

carrier’s fleet

55% 65% 75% 100%

Source: 14 C.F.R. 91.865.

FAA stated that this combination of methods would result in significant

cost savings for the industry while still preserving environmental gains.

Since the greatest environmental gains would occur near the end of the

phase-out period, according to FAA, there was no ultimate difference in

the two approaches. FAA expected both approaches to achieve steady

progress toward an all-Stage-3 fleet throughout the decade.

Each domestic and foreign aircraft operator of large civil subsonic jet

aircraft in the United States was required to submit an annual report on its

progress toward compliance with the phased elimination of Stage 2

aircraft weighing over 75,000 pounds. Each report was required to contain

information on the operator’s fleet composition. Domestic carriers were

required to provide initial compliance plans in 1992, followed by annual

updates. Each airline had to provide FAA with the following information

annually: (1) any Stage 2 aircraft added to its fleet; (2) any Stage 2 aircraft

removed from U.S. operations and either transferred to another recipient

 2

Under the statute, jet aircraft weighing 75,000 pounds or less may continue to operate

without meeting the Stage 3 aircraft noise standards.

Transition to Current

Noise Standard

Mandated by Statute

FAA Monitored

Compliance Through

Annual Progress

Reports
Appendix I: Development and Implementation

of U.S. Aircraft Noise Standards

Page 24 GAO-01-1053 Aviation and the Environment

or retired, destroyed, or put into storage; (3) any Stage 2 aircraft returned

to or imported from a foreign source; (4) any Stage 2 aircraft modified to

meet Stage 3 noise standards; (5) all Stage 3 aircraft meeting U.S.

operations requirements; and (6) the date for achieving full compliance

with Stage 3 noise standards.3

According to an FAA official, FAA monitored each aircraft operator’s

progress toward meeting the statutory compliance date of December 31,

1999. The agency also monitored domestic operators’ progress in meeting

their compliance plans through direct communications and provided for

contact with foreign operators and foreign civil aviation officials to ensure

that they were aware of and prepared to meet the statutory compliance

deadline. FAA reviewed all annual reports to ensure accuracy and

completeness and followed up by contacting operators when necessary.

Compliance monitoring was an ongoing effort with the goal, according to

an FAA official, of monitoring and reminding operators about the statutory

compliance deadline. FAA is satisfied that all known affected operators

are in compliance with the December 31, 1999, statutory requirements.

The ANCA statute allowed a domestic carrier to apply for a limited waiver

that would extend the date by which compliance was required. To be

eligible for consideration, a petitioner was required to have a fleet mix of

85 percent Stage 3 aircraft by July 1, 1999, and show, among other criteria,

that a waiver would be in the public interest. A petitioner was also

required to show that a good faith effort had been made to comply. A plan,

providing for compliance by December 31, 2003, was required.4

FAA received 10 petitions for waivers from the Stage 3 transition rule. No

waivers were granted. One petitioner requested that it be allowed to

operate Stage 2 airplanes after December 31, 1999; that petition was

denied. The other nine petitioners requested permission to operate

nonrevenue flights for purposes of Stage 3 modifications, storage,

maintenance, and/or exportation. FAA notified these petitioners that it did

not have the authority to authorize such operations under the provisions

of the law. For a limited time, foreign carriers were also allowed to apply

for a waiver from the final compliance deadline for transition to Stage 3

 3

14 C.F.R. 891.875.

4

49 U.S.C. 47528(6).

No Waivers Were

Granted
Appendix I: Development and Implementation

of U.S. Aircraft Noise Standards

Page 25 GAO-01-1053 Aviation and the Environment

noise standards, but according to an FAA official, FAA received no

requests for such waivers.

In November 1999, the Congress amended ANCA to allow the operation of

Stage 2 aircraft in nonrevenue service after December 31, 1999, under

specific conditions.5 FAA chose to implement the provision by issuing

special flight authorizations. An operator of a Stage 2 airplane that wanted

to operate in the contiguous United States for any of the purposes listed in

the revised statute had to apply in advance. Applications are due 30 days

in advance of the planned flight and must provide the information

necessary for FAA to determine that the planned flight is within the limits

prescribed by law.

Figures 2 through 4 show the Stage 3 aircraft noise standards and the

increases in noise allowed as aircraft weight increases.6

 As figure 2

illustrates, the noise standards for takeoff operations also vary with the

number of engines.

 5

See Section 1000(a)(5) of P. L. 106-113.

6

Aircraft must be tested in accordance with the conditions established in appendix A of 14

C.F.R. part 36. This appendix sets the test requirements for such things as weather

conditions, test procedures, and the noise measurement systems to be used. Appendix B

describes how to translate those measurements into a measure of the “effective perceived

noise level,” which includes a correction for tones and takes into account the duration of

the noise event. The noise standards are established in appendix C, and are defined in

terms of the effective perceived noise level.

Stage 3 Aircraft Noise

Standards
Appendix I: Development and Implementation

of U.S. Aircraft Noise Standards

Page 26 GAO-01-1053 Aviation and the Environment

Figure 2: Noise Standards for Stage 3 Aircraft by Number of Engines—Takeoff

Note: The noise measurement level is defined in terms of the “effective perceived noise level,” which

includes a correction for tones and takes into account the duration of the noise event. The weight

scale in the figure is a logarithmic scale.

Source: GAO’s compilation of data from FAA.
Appendix I: Development and Implementation

of U.S. Aircraft Noise Standards

Page 27 GAO-01-1053 Aviation and the Environment

Figure 3: Noise Standards for Stage 3 Aircraft Regardless of the Number of

Engines—Sideline

Note: The noise measurement level is defined in terms of the “effective perceived noise level,” which

includes a correction for tones and takes into account the duration of the noise event. The weight

scale in the figure is a logarithmic scale.

Source: GAO’s compilation of data from FAA.
Appendix I: Development and Implementation

of U.S. Aircraft Noise Standards

Page 28 GAO-01-1053 Aviation and the Environment

Figure 4: Noise Standards for Stage 3 Aircraft Regardless of the Number of

Engines—Approach

Note: The noise measurement level is defined in terms of the “effective perceived noise level,” which

includes a correction for tones and takes into account the duration of the noise event. The weight

scale in the figure is a logarithmic scale.

Source: GAO’s compilation of data from FAA.
Appendix II: Development of International

Aircraft Noise Standards

Page 29 GAO-01-1053 Aviation and the Environment

The International Civil Aviation Organization (ICAO) develops

international noise standards to provide consistent aircraft noise

standards across nations. ICAO, the international body charged with

ensuring the safe and orderly growth of international civil aviation

throughout the world, operates under the Convention on International

Civil Aviation, ratified in 1947. Although not a regulatory body, ICAO

promulgates standards and recommends practices for international civil

aviation. According to the terms of the Convention, ICAO makes its

decisions through an Assembly and a Council with various subordinate

committees, commissions, and panels, including the Committee on

Aviation Environmental Protection (CAEP), which conducts most of

ICAO’s technical environmental work. CAEP does its technical work

through various working groups relying on the participation and technical

expertise of its member countries.

The Assembly, composed of representatives from ICAO’s 187 member

countries, is ICAO’s ultimate decisionmaking body. It meets at least once

every 3 years to review ongoing work and set policy for the coming years.

Each member country is entitled to one vote, and decisions of the

Assembly are taken by a majority of the votes cast except when otherwise

provided in the Convention. According to FAA, in practice, most Assembly

decisions are made by consensus.

The Council, composed of representatives from 33 countries, is elected by

the Assembly for a 3-year term. The Assembly chooses the members of the

Council with representation from three categories: (1) major air transport

countries, (2) countries making the largest contribution to the provision of

air navigation facilities for international civil air navigation, and (3)

countries from major areas of the world not represented by members

selected in the first two categories.1

 Member nations are selected to

represent only one of these three categories. The Council is the governing

body that provides continuing direction to the organization’s activities,

 1

The 32nd session of the Assembly in 1998 elected the states listed below as members of

the Council for the 1998-2001 period. The election process was divided into three parts,

with the following states elected:

Part 1 – States of chief importance to air transport: Australia, Brazil, Canada, France,

Germany, Italy, Japan, the Russian Federation, the United Kingdom, and the United States.

Part 2 – States that make the largest contribution to the provision of facilities for

international air navigation: Argentina, China, Colombia, Egypt, India, Mexico, the

Netherlands, Nigeria, Norway, Saudi Arabia, and Spain.

Part 3 – States ensuring geographic representation: Algeria, Botswana, Cameroon, Cuba,

Indonesia, Kenya, Lebanon, Pakistan, Panama, Senegal, Slovakia, and Uruguay.

Appendix II: Development of International

Aircraft Noise Standards
Appendix II: Development of International

Aircraft Noise Standards

Page 30 GAO-01-1053 Aviation and the Environment

and it is responsible for adopting standards and recommended practices

that govern all aspects of international civil aviation, ranging from safety

and security to the noise and environmental aspects of aircraft operations.

Proposed new aviation standards submitted to the Council require a twothirds majority vote for adoption. After adoption, the standards are

submitted to the member countries. The new standards become effective

unless a majority of the member countries disapprove them through the

Assembly. According to FAA, the Council also reaches most decisions

through consensus. If a government organization within a member

country, like FAA, certifies that an aircraft meets ICAO’s standards, then

all ICAO member countries must recognize that certification as valid. An

ICAO member that does not adopt ICAO’s standards must provide a

written explanation to ICAO. If an ICAO member files such an explanation,

other ICAO members are absolved from their obligation to recognize that

country’s certification of aircraft—they do not have to allow such aircraft

into their country. Furthermore, if a member country fails to file a written

notification, it will be in default of its obligation, and will risk the

exclusion of its aircraft from travel in other ICAO member countries and

the loss of its voting power in the Assembly and Council.

The Council accomplishes its work through committees and commissions

that provide technical expertise for the review of issues the Council

considers. CAEP conducts most of ICAO’s environmental work, from

reviewing aircraft noise issues and developing aircraft noise standards and

recommended practices to recommending actions for the Council’s

adoption. CAEP is responsible for striking a balance among conflicting

objectives for aircraft technical specifications, since every change made to

an aircraft or its engines can affect its safety performance, emissions

performance, noise level, and fuel efficiency. CAEP is the only committee

that reports directly to the Council, unlike other ICAO technical groups,

which report through either the Air Navigation Commission or the Air

Transport Committee.2

 CAEP’s membership is established by the Council

and specific members are nominated by member nations and international

 2

The primary mandate of the Air Navigation Commission is to recommend to the ICAO

Council the most appropriate course of action in the process of developing and amending

aviation standards and recommended practices. The Air Navigation Commission is

composed of 15 technical experts appointed by the Council on the basis of their experience

and expertise. Although the experts are nominated by member nations, they are

independent experts rather than official representatives of their respective nations. The Air

Transport Committee advises the Council on problems associated with air transport.

Membership is open to any Council member willing to take an active and continuous part

in the Committee’s work.
Appendix II: Development of International

Aircraft Noise Standards

Page 31 GAO-01-1053 Aviation and the Environment

observer organizations. CAEP is currently composed of experts from 19

ICAO member countries and observers from 12 organizations representing

all major sectors of the aviation industry, including airports, airlines,

aircraft manufacturers, environmental organizations, and two countries

(Norway and Greece). The U.S. government, industry, and environmental

representatives participate in or observe CAEP.

ICAO develops aviation standards, including aircraft noise standards,

through the amendment of annexes to the Convention on International

Civil Aviation.3

 The main parts of each annex are the international

standards and recommended practices. A standard is defined as a

specification, the uniform application of which is necessary for the safety

or regularity of international civil air navigation. A recommended practice,

on the other hand, is defined as a specification, the uniform application of

which is desirable in the interest of safety, regularity, or the efficiency of

international civil aviation.

As figure 5 shows, proposals to amend or add either new standards or

recommended practices may come from any ICAO members, observers,

committees, commissions, panels, or other ICAO units. The Council

establishes CAEP’s work program and must approve the initiation of any

work to amend or add new environmental standards. According to the

Council’s mandate, CAEP imposes conditions for adopting environmental

standards. The proposed standard must be economically reasonable,

technologically feasible, and environmentally beneficial. Proposed new

standards recommended for adoption by CAEP are submitted to the

Council, where a two-thirds majority vote is required for adoption.

Depending on the issue, the Council refers CAEP’s recommendations to

either the Air Navigation Commission, the Air Transport Committee, or

other appropriate body for review before acting on the recommendations.

Technical standards are adopted by the Council unless a majority of ICAO

members disapprove them. Policy issues are usually forwarded by the

Council to the Assembly for resolution, where a majority vote is required

for final action. If any member nation finds it impossible to comply, the

country is required to notify ICAO of any differences that will exist at the

time the standards or practices take effect. ICAO then publishes those

notifications of differences in supplements to the annexes. For policy

issues covered by an Assembly resolution, there is no requirement to file a

 3

An annex is an appendix to the main part of an agreement.

ICAO’s Development

of Aircraft Noise

Standards
Appendix II: Development of International

Aircraft Noise Standards

Page 32 GAO-01-1053 Aviation and the Environment

difference if the nation chooses not to comply with any or all of the

provisions.
Appendix II: Development of International

Aircraft Noise Standards

Page 33 GAO-01-1053 Aviation and the Environment

Figure 5: Developing and Implementing New Aircraft Noise Standards in the

International Civil Aviation Organization

Source: GAO’s compilation from ICAO documents.

Proposals to develop new aircraft noise standards come from various

sources, including ICAO members, observers, committees, commissions, 

panels, other ICAO units, the United Nations, or other interested international 

organizations.

The Council must approve the proposals for the study of possible new aircraft

noise standards.

CAEP develops a recommendation for a new noise standard and submits it

to the Council.

The recommendation is referred by the Council to the Air Navigation

Commission, Air Transport Committee, and/or other appropriate body for

review as appropriate.

Standards recommended by CAEP are submitted to the Council, where a twothirds majority vote is required for adoption; however, most actions by the 

Council are made through consensus.

New ICAO noise standards are adopted unless a majority of ICAO members

disapprove them. The standards must then be implemented by member

countries.

Any member country that cannot comply with an ICAO standard must inform

ICAO of any differences that will apply when the standards go into effect.

ICAO publishes these differences in supplements to the annexes. A member

whose aircraft do not meet ICAO's standards risk exclusion of those aircraft

from international travel.
Appendix II: Development of International

Aircraft Noise Standards

Page 34 GAO-01-1053 Aviation and the Environment

International aircraft noise standards adopted by ICAO are published as

Chapters in Volume I of Annex 16 to the Convention on International

Civil Aviation. Chapter 2 of Annex 16, Volume I, contains the aircraft

noise standards that apply to jet aircraft designed prior to October 1977.

Chapter 3 contains more stringent noise standards that apply to aircraft

designed after that date. Chapter 4 contains ICAO’s new noise standards,

adopted in June 2001. The primary purpose of establishing noise standards

is to reduce aircraft noise. This noise reduction, when combined with

other measures, is intended to reduce the number of people exposed to

significant levels of aircraft noise.

On January 17, 2001, CAEP recommended the adoption of new aircraft

noise standards. The new standards, incorporated into a Chapter 4 of

Annex 16, Volume 1, are 10 decibels quieter than the Chapter 3 standards,

on a cumulative basis, from aircraft noise measurements at takeoff,

approach, and sideline.4

 The Chapter 4 standards apply to new aircraft

designed after January 1, 2006. The new standards do not apply to the

current fleet or to current designs in production. On June 27, 2001, the

ICAO Council unanimously approved the adoption of the new Chapter 4.

CAEP also recommended procedures for recertifying existing aircraft to

meet the new standards. According to FAA, based on the cost and

environmental impact information reviewed by CAEP, there was

unanimous agreement within CAEP that there should be no global

phaseout of existing aircraft. The committee remained divided, however,

over whether or not to recommend a regional phaseout of existing aircraft.

The Assembly will consider this issue at its meeting from September 25 to

October 5, 2001. CAEP also endorsed a balanced approach to noise

management, which is an airport-by-airport approach to managing noise

using all available measures–aircraft noise reduction, land use planning

and noise mitigation measures, noise abatement operational procedures,

and operating restrictions on aircraft–to address specific noise problems

in a very targeted way.

 4

Sideline noise is measured at a point parallel to the flight path where the noise level is the

greatest.

ICAO’s Consideration

of New Aircraft Noise

Standards
Appendix III: Objectives, Scope, and

Methodology

Page 35 GAO-01-1053 Aviation and the Environment

Because the United States is moving to a new, more stringent noise

standard, we were asked to provide a retrospective analysis of the

transition to current aircraft noise standards, including a discussion of

expectations, results, and issues raised by the transition.

To identify expectations and results and to discuss issues raised by the

transition of existing aircraft to the current U.S. noise standards, known as

“Stage 3,” we (1) reviewed the legislative history of the Airport Noise and

Capacity Act of 1990; (2) conducted interviews and gathered information

from the following agencies and organizations: FAA, the Environmental

Protection Agency, the National Aeronautics and Space Administration,

the International Civil Aviation Organization, the Aerospace Industries

Association, the Airports Council International-North America, the Air

Transport Association of America, Inc. (hereafter referred to as the Air

Transport Association), the American Association of Airport Executives,

the Cargo Airline Association, the General Aviation Manufacturers

Association, the National Association of State Aviation Officials, the

National Business Aviation Association, the Natural Resources Defense

Council, Pratt & Whitney, and the Regional Airline Association; (3)

conducted a literature search through the Internet and Lexis-Nexis and

reviewed key documents; (4) discussed the Model for Assessing Global

Exposure to the Noise of Transport Aircraft with FAA to assess the

reliability of the model’s estimate of the number of people living in areas

exposed to incompatible noise levels; (5) developed our own model for

estimating the costs to airlines of moving to the current aircraft noise

standards; and (6) compared results with expectations and analyzed the

results to identify issues raised by the transition. We provided a written

summary of our findings to the organizations listed under (2) above for

their review and comment before completing the final draft report.

Appendix III: Objectives, Scope, and

Methodology
Appendix IV: Methodology for Estimating

Airlines’ Costs to Transition to Stage 3

Aircraft Noise Standards

Page 36 GAO-01-1053 Aviation and the Environment

We identified two recent estimates—one by the Air Transport Association1

and one by Pratt & Whitney2—of the costs to airlines to comply with

current Stage 3 aircraft noise standards. Because both of these estimates

attributed the full cost of new replacement aircraft to the noise

requirements, we developed an estimate that focuses on the costs of the

transition that are directly attributable to compliance with the noise

standards (i.e., the cost of hushkitting or the incremental cost of financing

a new aircraft early, whichever was lower). We estimated that the cost to

comply with Stage 3 noise standards ranged from $3.8 billion to $4.9

billion in 2000 dollars.

In 1999, the Air Transport Association commissioned the Campbell-Hill

Aviation Group, a consulting firm, to estimate the airlines’ costs to

transition to the current Stage 3 aircraft noise standards.3

 Campbell-Hill

estimated that the costs attributable to compliance were about $32 billion

in 1999 dollars, not including fleet growth. This estimate covers the cost of

replacing Stage 2 aircraft (including both the interest expense associated

with the acquisition of replacement aircraft and the depreciation for new

aircraft acquired prior to the end of the useful lives of the aircraft they

replaced) and the cost of hushkitting or reengining Stage 2 aircraft to meet

Stage 3 standards. Air Transport Association officials said that some

airlines, depending on their fleet composition, were faced with significant

commercial risk in deciding how to comply with ANCA if they chose to

wait for the development and certification of the now retrospectively less

expensive hushkits. These kits are now readily available, but the airlines

did not have the advantage of a perfect forecast of the availability of

hushkit solutions for their aircraft affected by the phaseout. In cases

where aircraft replacement actually was chosen during the phase-out

 1

The Air Transport Association is a trade organization for major U.S. airlines.

2

Pratt & Whitney designs and manufactures engines for commercial, military, and general

aviation aircraft.

3

In 1990, the Air Transport Association originally estimated that the cost to U.S. airlines to

transition to an all Stage 3 fleet, including aircraft purchased for fleet growth, would be

about $175 billion. According to an association official, this figure includes the costs to the

airlines that were directly attributable to the Stage 3 transition, as well as the costs of

additional investments made by the air carriers. Since details of the methodology used to

generate this estimate are no longer available, the Air Transport Association commissioned

a new analysis by the Campbell-Hill Aviation Group to provide a current estimate of the

costs after the transition. The Campbell-Hill analysis estimated that with the inclusion of

fleet growth, the airlines’ costs were about $110 billion in 1999 dollars.

Appendix IV: Methodology for Estimating

Airlines’ Costs to Transition to Stage 3

Aircraft Noise Standards

Two Estimates

Include the Full Cost

of Replacement

Aircraft
Appendix IV: Methodology for Estimating

Airlines’ Costs to Transition to Stage 3

Aircraft Noise Standards

Page 37 GAO-01-1053 Aviation and the Environment

period, the Campbell-Hill analysis gives the airlines credit for the entire

replacement cost of a new aircraft because of this commercial risk, even if

hushkitting would have been an option.

Pratt & Whitney also estimated the cost to the airlines of making their

fleets compliant with the Stage 3 noise standards—about $15.5 billion in

1999 dollars. About $4 billion of this estimate was attributed to the cost of

converting existing aircraft to meet the standard. The remaining $11.5

billion was the estimated cost to purchase replacement aircraft to comply

with Stage 3 noise standards. The estimate includes the full purchase price

of the new aircraft—an average price of $40 million each for 287 narrowbody jets designated as being replaced because of the phaseout of Stage 2

aircraft. This represents one-third of the total number of narrow-body jets

that were replaced between 1990 and 1999.4

We developed our own estimate of the airlines’ transition costs directly

attributable to compliance with the Stage 3 noise standards. We estimated

that the appropriate cost directly attributable to requirements to comply

with the Stage 3 noise standards ranged from $3.8 billion to $4.9 billion in

2000 dollars. We determined that the appropriate cost that could be

attributed to compliance with the Stage 3 noise standards was either the

cost for the conversion of an aircraft—the cost to retrofit an aircraft with a

hushkit--or the incremental capital cost to finance the early purchase of a

replacement aircraft, whichever cost was lower.

Since hushkitting was expected and proved to be available for almost all

types of aircraft,5

 when the airlines chose more costly methods to achieve

compliance—such as replacing the engines or purchasing new aircraft—

we attributed that choice to other economic reasons or benefits, such as

 4

Pratt & Whitney assumed that one-third of the narrow-body aircraft replaced in the 1990s

were replaced because of the Stage 2 phaseout. They assumed that the others were

replaced for economic reasons.

5

Hushkits were not available for five types of aircraft (16 aircraft in total), primarily Boeing

720s. The primary reason for this was that only a few of these older aircraft were in

existence and they were to be retired soon. Thus, there was no demand for the

development of a hushkit for them.

In addition, while a hushkitting alternative known as the Raisbeck method was less costly,

it could only be applied to 727s and was not available until 1996. Many airlines had to plan

for ANCA well before the Raisbeck method was available. We only used the cost of the

Raisbeck method when it was actually used to comply with Stage 3 noise standards.

Cost to Airlines of the

Transition Ranged

From $3.8 Billion to

$4.9 Billion
Appendix IV: Methodology for Estimating

Airlines’ Costs to Transition to Stage 3

Aircraft Noise Standards

Page 38 GAO-01-1053 Aviation and the Environment

improved fuel efficiency, lower maintenance costs, and tax advantages.

For example, changing an aircraft’s engines instead of hushkitting them

would provide added fuel benefits not available simply by hushkitting the

engines.6

To develop our estimate, we purchased data from AvSoft Limited, which

provided the list of Stage 2 aircraft over 75,000 pounds in the U.S. fleet on

November 5, 1990, the day that ANCA was passed. Using the 1990

database, we identified 2,372 Stage 2 aircraft in the U.S. fleet as of that

date. Matching the AvSoft database to 2001 FAA data, we were able to

directly identify 1,051 aircraft as being hushkitted (or reengined) and still

in the fleet. For 689 of these 1,051 aircraft, FAA data indicated the exact

hushkit used on the aircraft by Supplemental Type Certificate code.7

 The

FAA data indicated that another 362 of these 1,051 aircraft had been

hushkitted or reengined but did not identify the exact hushkit used or

indicate whether the aircraft had been reengined. For these 362 aircraft,

since we did not know the exact hushkit used, we used the average of the

cost for all the hushkits available for that model aircraft. In addition, we

found that another 272 aircraft were Stage 3, so most likely had been

hushkitted or reengined as well, although there was no direct match (the

average cost of all hushkits available was also used for these 272 aircraft).

Thus, we determined that at least 1,323 aircraft were modified (primarily

hushkitted) to meet Stage 3 standards.

 6

Air Transport Association officials noted that our approach differs from that of the

Campbell-Hill study, which took into account the cost of replacing an aircraft rather than

hushkitting it even when the replacement cost was greater than the hushkitting cost. The

officials also said that there was risk involved to the airlines in waiting for the full

development of hushkit technology.

7

Supplemental Type Certificate codes are used by FAA to identify types of hushkits.
Appendix IV: Methodology for Estimating

Airlines’ Costs to Transition to Stage 3

Aircraft Noise Standards

Page 39 GAO-01-1053 Aviation and the Environment

Table 3: Methodology for Estimating the Cost to Meet Stage 3 Noise Standards

How aircraft met Stage 3 noise

standards Type of cost used in estimate

Number of

aircraft

Hushkitted or reengineda Hushkit cost 1,323

Replaced Hushkit cost, capital cost (if less

than hushkit cost), or no cost (if

aircraft beyond retirement age)

1,049

Total 2,372

a

Of these aircraft, 1,051 were verified with FAA data to have been hushkitted or reengined. The other

272 were known to be either hushkitted or reengined because the most recent aircraft record

indicates they are Stage 3 aircraft.

Source: GAO.

We developed cost estimates for the remaining 1,049 aircraft. We found

that 386 aircraft were beyond retirement age on December 31, 1999. To

make this judgment, we assumed that the typical life span of a passenger

aircraft was 30 years, while the typical life span of a cargo aircraft was 40

years.8

 We assigned a hushkitting cost of zero to these aircraft. Next, we

assumed that the cost of replacing an aircraft earlier than it would have

otherwise been retired was the incremental cost of retiring the aircraft

early–that is, the cost of borrowing the capital for the replacement aircraft

earlier than would have normally occurred.9

 In 54 cases, we found that the

aircraft were so close to retirement that the lowest cost option to comply

with Stage 3 noise standards was the cost of capital expended before the

anticipated retirement date to purchase a new aircraft. Lastly, for 611

 8

According to our database, 26 years was the approximate average age of passenger

aircraft. We rounded this figure up to 30 years to be conservative. Additionally, according

to our database, 31 years was the average age of cargo aircraft. We rounded up from the

average cargo aircraft age of 31 years to 40 years because 41 years was the maximum age

of cargo aircraft and cargo aircraft typically fly many fewer cycles (a cycle is defined as

one departure and landing of an aircraft) per day than passenger aircraft. Cargo aircraft

therefore typically have longer life spans in years, although their life span measured in

cycles are frequently similar.

9

If the interest cost associated with replacing an aircraft early exceeded the cost of

hushkitting an aircraft, we used the hushkit value. We did not include the cost savings

associated with a new aircraft due to factors such as better fuel economy or a smaller

crew. Including these factors likely would have decreased our estimate of the cost to the

airlines slightly. We estimated that the cost of capital to the airline industry in 1999 was 7.8

percent. Our capital cost estimate was calculated using a weighted average of the costs of

receiving financing from both the debt and equity markets where the weights are the

proportion of total capital obtained from each. This estimate relied on information from

Value Line, a common financial information source, for a representative firm (United

Airlines) in the airline industry.
Appendix IV: Methodology for Estimating

Airlines’ Costs to Transition to Stage 3

Aircraft Noise Standards

Page 40 GAO-01-1053 Aviation and the Environment

aircraft, we determined that the cost of hushkitting was an appropriate

estimate for the cost of complying with ANCA because the incremental

capital cost to finance the early purchase of aircraft was greater.

To estimate the cost of hushkitting an aircraft, we obtained data on

hushkit base prices or a range of base prices,10 installation costs, additional

maintenance costs and hours, and performance gains or losses from

hushkit manufacturers. These data were generally available by aircraft

model type. We applied the actual hushkit cost, or range of costs, for a

particular model of aircraft and the cost of installing the hushkit. For the

aircraft whose specific hushkit model cost data we could not obtain, we

applied the average cost, or range of costs, of those hushkits available for

the aircraft model and type.

Because all hushkit manufacturers reported that increased maintenance

was negligible, we did not include any cost in our estimate for changes in

maintenance once an aircraft was compliant with Stage 3 noise standards.

In addition, we did not include costs for downtime to install the hushkit.

Although several airlines stated that hushkitting could not be scheduled

during regular maintenance, we only received downtime cost information

from one airline. An Air Transport Association official indicated that such

information was not available for other airlines because of business

confidentiality concerns. The one airline estimated that the cost to their

business as the result of downtime amounted to $31 million, about 7

percent of the total cost to hushkit their fleet. As a result, our estimate of

the cost to the airlines to meet Stage 3 noise standards may be slightly

higher if information on downtime costs was universally available.

Generally, hushkit manufacturers also reported that performance changes

after an aircraft was hushkitted were negligible, so we did not include a

cost estimate of these factors in our calculations. Some hushkit

manufacturers, however, did report slight speed decreases, weight

 10The range of the estimate is due to the availability of different hushkitting options for

some types of aircraft (we could not be certain which option was selected for an individual

aircraft).
Appendix IV: Methodology for Estimating

Airlines’ Costs to Transition to Stage 3

Aircraft Noise Standards

Page 41 GAO-01-1053 Aviation and the Environment

increases, and/or fuel burn increases. The use of engine upgrades for

Boeing 747 aircraft to meet Stage 3 noise standards also resulted in slight

fuel burn increases.
Appendix V: GAO Contacts and Staff

Acknowledgments

Page 42 GAO-01-1053 Aviation and the Environment

Gerald L. Dillingham (202) 512-3650

Belva Martin (202) 512-4285

In addition to those named above, Beverly Ann Bendekgey, David K.

Hooper, Arthur L. James, Kieran E. McCarthy, Mark E. Stover, and John A.

Thomson made key contributions to this report.

Appendix V: GAO Contacts and Staff

Acknowledgments

GAO Contacts

Staff

Acknowledgments

(390004)
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